Business Context and Reporting Period
Hoyne Bancorp, Inc. (HYNE) is a Delaware corporation serving as the holding company for Hoyne Savings Bank, an Illinois-chartered savings bank. The company completed a mutual-to-stock conversion on December 3, 2025, and began trading on the NASDAQ Capital Market on December 4, 2025. This Form 10-Q covers the quarterly period ended March 31, 2026. The company operates six full-service banking offices and one loan production office in Cook County, Illinois, focusing on commercial real estate, commercial and industrial, and residential mortgage loans.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Assets | $477.2 million | $461.4 million (Average) |
| Total Deposits | $312.0 million | $366.8 million (Average) |
| Net Loans Receivable | $288.6 million | $243.0 million (Average) |
| Net Interest Income | $4.2 million | $3.0 million |
| Net Interest Margin | 3.76% | 2.85% |
| Noninterest Expense | $4.5 million | $3.4 million |
| Net Income (Loss) | ($0.12 million) | ($0.17 million) |
| Earnings Per Share (Basic/Diluted) | ($0.02) | N/A (Pre-IPO) |
| Tier 1 Leverage Ratio | 27.8% | N/A |
Material Changes vs. Prior Period
- Net Loss Reduction: The net loss decreased by $48,000 (28.7%) to $118,000 in Q1 2026 compared to $166,000 in Q1 2025. This improvement was driven by a $578,000 increase in interest income and a $614,000 decrease in interest expense.
- Loan Growth: Net loans receivable increased by $20.7 million (7.7%) from December 31, 2025, reflecting a strategic emphasis on growing the commercial loan portfolio.
- Deposit Outflow: Total deposits decreased by $9.6 million (3.0%) from the prior quarter, primarily due to the maturity of certificates of deposit that did not renew in the current interest rate environment.
- Expense Increase: Noninterest expense rose by $1.1 million (32.3%) year-over-year, largely attributed to increased compensation expenses, including bonuses and adjustments.
- Liquidity Shift: Cash and cash equivalents decreased by $34.1 million from the prior quarter, as liquidity was deployed to fund loan originations and the purchase of additional Bank-Owned Life Insurance (BOLI).
Guidance, Outlook, and Risks
- Capital Position: The Bank is considered "well capitalized" under the Community Bank Leverage Ratio Framework (CBLRF), with a Tier 1 leverage ratio of 27.8%, significantly exceeding the 9.0% requirement.
- Interest Rate Sensitivity: Management models indicate that a 300 basis point increase in interest rates would decrease Net Portfolio Value (NPV) by 13.2% and reduce Net Interest Income by 6.3% over the next twelve months.
- Remediation of Material Weakness: A material weakness in internal controls regarding deferred tax assets and expense timing identified in the 2025 audit has been remediated as of the filing date.
- Future Expenses: Management anticipates noninterest expenses will continue to increase due to operational growth and the implementation of new stock benefit plans over the next 12 to 18 months.
- Commitments: As of March 31, 2026, the company had $57.5 million in outstanding commitments to originate loans and $14.0 million in unfunded construction loans.
Investor Verification Checklist
- Verify the sustainability of the 3.76% Net Interest Margin given the sensitivity analysis showing potential declines in rising rate scenarios.
- Monitor the renewal rate of the $147.4 million in certificates of deposit maturing within one year to assess funding stability.
- Review the trajectory of noninterest expenses, specifically compensation, to ensure they do not erode the improved net loss position.
- Confirm the continued "well capitalized" status under the CBLRF framework in subsequent filings.
- Assess the credit quality of the rapidly growing commercial loan portfolio, which now represents a significant portion of total assets.