HBCP Short Sellers Win, Bulls Regroup Before October 23 Print

HBCP has handed short sellers their clearest victory of the year, and the question now is whether the post-earnings reset has done enough to bring buyers back before the next scheduled print on October 23.

The earnings reaction was decisive. The stock dropped 9.8% on October 20, the day Q3 results crossed, erasing the entire thesis of the call buyers who had crowded into options ahead of the release. As flagged in prior previews, the put/call ratio had collapsed to 0.25, the 52-week low and nearly three standard deviations below the 20-day mean of 1.33, a concentrated bet on a positive print. Short sellers had simultaneously been adding positions. The two camps lined up on opposite sides, and the bears won. HBCP now trades at $59.47, down 13% over the past month, and the options market has offered no signal of renewed call enthusiasm since the drop.

The borrow market is telling a different story from the pre-earnings setup. Availability remains extraordinarily loose at roughly 3,967%, meaning shares to borrow are plentiful relative to what is actually shorted. Short interest has barely moved on a net basis, edging up just 0.3% over the week to 3.4% of the free float, well below the elevated readings seen in early September. Cost to borrow jumped sharply, rising nearly 400% on the week to 1.63%, but even at that level it is negligible in absolute terms. There is no sign of a borrow squeeze, and the lending market does not reflect any rush to press the short side further after the earnings drop. Peer community banks told the opposite story over the same period: GSBC, CTBI and EQBK each gained 2% or more on the week, making HBCP's 9.6% weekly decline an outlier rather than a sector-wide move.

The Street's reaction to the result is visible in Piper Sandler's target cut filed today. Analyst Stephen Scouten lowered his price objective from $71 to $64 while keeping a Neutral rating, a move that reflects the post-earnings reset rather than a shift in directional view. The consensus mean target sits at $68, implying roughly 14% upside from current levels, though the distance between that target and the $59.47 close narrows the bull case significantly after the trim. Valuation multiples have compressed in line with the price: the trailing P/E has contracted to 9.8x and price-to-book has slipped below 1.0x to 0.96x. The 12-month forward EPS estimate trend scores in the 93rd percentile, suggesting analysts still expect earnings to grow year-on-year, but EPS surprise ranks in only the 17th percentile, consistent with a quarter that disappointed.

FDIC call report data from the Federal Deposit Insurance Corporation adds some texture, though the relationship between this data and HBCP's reported figures has not yet been measured as a lead. Total deposits have risen for eight consecutive quarters, reaching $3.08 billion as of Q2 2026. Net loans and leases set a record for any second quarter in the data history at $2.75 billion. These are the operational figures the bull case rests on. The bear case has consistently pointed to margin pressure from deposit competition and a loan-to-deposit ratio already stretched above the bank's stated target range. The October 23 print will offer the Q3 update on both series.

With a second scheduled earnings event two days away, the debate has shifted from whether the Q3 miss was real to what Q3 figures actually showed and what management says about Q4 trajectory. The PCR at 0.25 is still at the 52-week low, but this now reflects a market with thin post-earnings options flow rather than pre-result conviction. The cost-to-borrow spike on October 20, if it persists, will be worth watching as a signal of whether fresh short interest is being established at lower prices or whether existing holders are simply holding.