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Joseph Zanco
Chief Financial Officer
(337) 237-1960
investor@home24bank.com
Home Bank News
Oct 23, 2018

Home Bancorp, Inc. (Nasdaq: "HBCP") (the "Company"), the parent company for Home Bank, N.A. (the "Bank") (www.home24bank.com), reported record net income of $8.3 million for the third quarter of...

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Home Bancorp Announces Third Quarter 2018 Results And Increases Quarterly Dividend By 5%

LAFAYETTE, La., Oct. 23, 2018 /PRNewswire/ -- Home Bancorp, Inc. (Nasdaq: "HBCP") (the "Company"), the parent company for Home Bank, N.A. (the "Bank") (www.home24bank.com), reported record net income of $8.3 million for the third quarter of 2018, an increase of $486,000, or 6%, compared to the second quarter of 2018 and an increase of $4.2 million, or 102%, compared to the third quarter of 2017.   The second quarter of 2018 includes merger expenses, net of taxes, totaling $894,000 related to the acquisition of St. Martin Bancshares, Inc. ("SMB"), which was consummated on December 6, 2017.

Home Bank Logo. (PRNewsFoto/Home Bancorp, Inc.) (PRNewsFoto/)

Diluted earnings per share were a record $0.89 for the third quarter of 2018, an increase of $0.05, or 6%, compared to the second quarter of 2018, and an increase of $0.33, or 59%, compared to the third quarter of 2017.

"2018 has been a remarkable year for Home Bank thus far as we marked our third consecutive record net income quarter," stated John W. Bordelon, President and Chief Executive Officer of the Company and the Bank. "We posted loan growth of 2% on an annualized basis during the quarter and are seeing continuous success attracting new customers to Home Bank."

The Company also announced that its Board of Directors increased the quarterly cash dividend on shares of its common stock to $0.20 per share payable on November 16, 2018, to shareholders of record as of November 5, 2018.

Loans and Credit Quality

Loans totaled $1.6 billion at September 30, 2018, an increase of $7.3 million from June 30, 2018.  Commercial real estate loan growth during the third quarter of 2018 was spread across most of our market areas.                

The following table sets forth the composition of the Company's loan portfolio as of the dates indicated. 










September 30,


June 30,


Increase/(Decrease)


(dollars in thousands)


2018


2018


Amount

Percent


Real estate loans:









     One- to four-family first mortgage

$

456,797

$

458,430

$

(1,633)

-

%

     Home equity loans and lines


86,405


90,230


(3,825)

(4)


     Commercial real estate


629,297


604,739


24,558

4


     Construction and land


174,573


180,635


(6,062)

(3)


     Multi-family residential


56,153


47,921


8,232

17


        Total real estate loans


1,403,225


1,381,955


21,270

2


Other loans:









     Commercial and industrial


173,938


185,016


(11,078)

(6)


     Consumer


55,856


58,708


(2,852)

(5)


        Total other loans


229,794


243,724


(13,930)

(6)


Total loans

$

1,633,019

$

1,625,679

$

7,340

-

%










Nonperforming assets ("NPAs"), excluding purchased credit impaired loans, totaled $21.4 million at September 30, 2018, a decrease of $1.3 million, or 6%, compared to June 30, 2018.  The ratio of NPAs to total assets was 1.00% at September 30, 2018, compared to 1.05% at June 30, 2018.  

The Company recorded net loan charge-offs of $15,000 during the third quarter of 2018, compared to net loan recoveries of $123,000 for the second quarter of 2018. The Company's provision for loan losses for the third quarter of 2018 was $786,000, compared to $581,000 for the second quarter of 2018. 

The ratio of the allowance for loan losses to total loans was 0.96% at September 30, 2018, compared to 0.92% at June 30, 2018.  Excluding acquired loans, the ratio of the allowance for loan losses to total loans was 1.38% at September 30, 2018, compared to 1.40% at June 30, 2018.   

Direct Energy Exposure

The outstanding balance of direct loans to borrowers in the energy sector totaled $46.9 million, or 3% of total outstanding loans, at September 30, 2018, compared to $49.6 million at June 30, 2018.  Unfunded loan commitments to customers in the energy sector totaled $10.2 million at September 30, 2018, compared to $7.1 million at June 30, 2018.    At September 30, 2018, loans constituting 97% of the balance of our direct energy-related loans were performing in accordance with their original loan agreements. The Company holds no shared national credits.

The allowance for loan losses attributable to originated direct energy-related loans totaled 2.50% of the outstanding balance of originated energy-related loans at September 30, 2018, compared to 2.69% at June 30, 2018.

Deposits

Total deposits were $1.8 billion at September 30, 2018, a decrease of $17.2 million, or 1%, from June 30, 2018.   Deposits have decreased $94.9 million, or 5%, thus far in 2018.  To reverse the trend in deposit outflows, management has begun to raise interest rates on deposit accounts and is currently offering several special rates to attract new deposits. 

The following table sets forth the composition of the Company's deposits as of the dates indicated.










September 30,


June 30,


Increase/(Decrease)


(dollars in thousands)


2018


2018


Amount

Percent


Demand deposits

$

447,422

$

455,676

$

(8,254)

(2)

%

Savings


207,379


210,715


(3,336)

(2)


Money market


293,313


291,262


2,051

1


NOW


474,250


478,843


(4,593)

(1)


Certificates of deposit


348,948


352,049


(3,101)

(1)


        Total deposits

$

1,771,312

$

1,788,545

$

(17,233)

(1)

%










Net Interest Income

Net interest income for the third quarter of 2018 totaled $23.5 million, an increase of $173,000, or 1%, compared to the second quarter of 2018.  The increase resulted from a $534,000 increase in interest income, which was primarily driven by higher income on loans.  Loan income increased $551,000 primarily due to the collection of nonaccrual interest on loan payoffs during the quarter.    Funding costs increased $361,000 during the quarter.  The Company's net interest margin was 4.74% for the third quarter of 2018, five basis points higher than the second quarter of 2018, primarily due to the reasons noted above.

The following table sets forth the Company's average volume and rate of its interest-earning assets and interest-bearing liabilities for the periods indicated.  Taxable equivalent ("TE") yields on investment securities are calculated using a marginal tax rate of 21%. 



For the Three Months Ended



September 30, 2018



June 30, 2018

(dollars in thousands)


Average

Balance


Interest

Average
Yield/

Rate



Average
Balance


Interest

Average

Yield/
Rate


Interest-earning assets:













Loans receivable













   Originated loans

$

961,917

$

14,365

5.87

%

$

938,453

$

13,061

5.53

%

   Acquired loans


669,922


9,753

5.74



695,857


10,466

5.98


        Total loans receivable


1,631,839


24,118

5.82



1,634,310


23,527

5.72


Investment securities (TE)


278,353


1,694

2.50



281,998


1,710

2.49


Other interest-earning assets


47,759


297

2.47



65,402


338

2.07


Total interest-earning assets

$

1,957,951

$

26,109

5.27

%

$

1,981,710

$

25,575

5.14

%














Interest-bearing liabilities:













Deposits:













Savings, checking, and money market

$

979,919

$

1,379

0.56

%

$

992,449

$

1,029

0.42

%

Certificates of deposit


350,308


933

1.06



354,597


897

1.02


Total interest-bearing deposits


1,330,227


2,312

0.69



1,347,046


1,926

0.57


FHLB advances


64,209


287

1.79



70,276


312

1.78


Total interest-bearing liabilities

$

1,394,436

$

2,599

0.74

%

$

1,417,322

$

2,238

0.63

%














Net interest spread (TE)





4.53

%





4.51

%

Net interest margin (TE)





4.74

%





4.69

%

Noninterest Income

Noninterest income for the third quarter of 2018 totaled $3.3 million, which was virtually unchanged compared to the second quarter of 2018.  Increases in service fees and charges were offset by decreases in bankcard fees and the additional writedown of a closed branch location.

Noninterest Expense

Noninterest expense for the third quarter of 2018 totaled $15.7 million, a decrease of $625,000, or 4%, compared to the second quarter of 2018. The decrease resulted primarily from the absence of merger-related expenses in the third quarter.  Such expenses totaled $1.1 million in the second quarter. 

Non-GAAP Reconciliation 












For the Three Months Ended


(dollars in thousands, except  per share data)


September 30,

2018



June 30,

2018



September 30,

2017


Reported noninterest expense

$

15,696


$

16,322


$

11,341


Less: Merger-related expenses


-



1,132



247


Non-GAAP noninterest expense

$

15,696


$

15,190


$

11,094












Reported net income

$

8,262


$

7,776


$

4,090


Add: Merger-related expenses, net tax


-



894



225


Non-GAAP net income

$

8,262


$

8,670


$

4,315












Diluted EPS

$

0.89


$

0.84


$

0.56


Add: Merger-related expenses, net tax


-



0.09



0.03


Non-GAAP diluted EPS

$

0.89


$

0.93


$

0.59












Reported net income

$

8,262


$

7,776


$

4,090


Add: CDI amortization, net tax


355



359



110


Non-GAAP tangible income

$

8,617


$

8,135


$

4,200












Total Assets

$

2,140,530


$

2,159,976


$

1,587,362


Less: Intangible assets


66,493



67,035



12,234


Non-GAAP tangible assets

$

2,074,037


$

2,092,941


$

1,575,128












Total shareholders' equity

$

295,688


$

289,361


$

192,625


Less: Intangible assets


66,493



67,035



12,234


Non-GAAP tangible shareholders' equity

$

229,195


$

222,326


$

180,391












Originated loans

$

1,042,198


$

987,642


$

928,770


Acquired loans


590,821



638,037



298,623


Total loans

$

1,633,019


$

1,625,679


$

1,227,393












Originated allowance for loan losses

$

14,392


$

13,828


$

13,040


Acquired allowance for loan losses


1,351



1,145



384


Total allowance for loan losses

$

15,743


$

14,973


$

13,424












Return on average assets


1.53

%


1.44

%


1.04

%

Add: Merger-related expenses, net tax


-



0.17



0.06


Adjusted return on average assets


1.53

%


1.61

%


1.10

%











Return on average equity


11.17

%


10.89

%


8.54

%

Add: Intangible assets


3.92



4.00



0.83


Non-GAAP return on tangible common equity


15.09

%


14.89

%


9.37

%











Return on average equity


11.17

%


10.89

%


8.54

%

Add: Merger-related expenses, net tax


-



1.25



0.47


Adjusted return on average equity


11.17



12.14



9.01


Add: Average intangible assets


3.92



4.38



0.86


Adjusted return on average tangible common equity


15.09

%


16.52

%


9.87

%











Common equity ratio


13.81

%


13.40

%


12.13

%

Less: Intangible assets


2.76



2.78



0.68


Non-GAAP tangible common equity ratio


11.05

%


10.62

%


11.45

%











Efficiency ratio


58.46

%


61.17

%


62.14

%

Less: Merger-related expenses


-



4.24



1.35


Adjusted efficiency ratio


58.46

%


56.93

%


60.79

%











Book value per share

$

31.19


$

30.66


$

25.99


Less: Intangible assets


7.01



7.10



1.65


Non-GAAP tangible book value per share

$

24.18


$

23.56


$

24.34
























This news release contains financial information determined by methods other than in accordance with generally accepted accounting principles ("GAAP"). The Company's management uses this non-GAAP financial information in its analysis of the Company's performance. In this news release, information is included which excludes acquired loans, intangible assets and the impact of merger-related expenses.  Management believes the presentation of this non-GAAP financial information provides useful information that is helpful to a full understanding of the Company's financial position and core operating results. This non-GAAP financial information should not be viewed as a substitute for financial information determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP financial information presented by other companies. 

This news release contains certain forward‑looking statements. Forward‑looking statements can be identified by the fact that they do not relate strictly to historical or current facts.  They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may."

Forward‑looking statements, by their nature, are subject to risks and uncertainties.  A number of factors ‑ many of which are beyond our control ‑ could cause actual conditions, events or results to differ significantly from those described in the forward‑looking statements.  Home Bancorp's Annual Report on Form 10-K for the year ended December 31, 2017, describes some of these factors, including risk elements in the loan portfolio, the level of the allowance for losses on loans, risks of our growth strategy, geographic concentration of our business, dependence on our management team, risks of market rates of interest and of regulation on our business and risks of competition. Forward‑looking statements speak only as of the date they are made.  We do not undertake to update forward‑looking statements to reflect circumstances or events that occur after the date the forward‑looking statements are made or to reflect the occurrence of unanticipated events.

HOME BANCORP, INC. AND SUBSIDIARY

CONDENSED STATEMENTS OF FINANCIAL CONDITION






















September 30,


December 31,


%



September 30,

June 30,

(dollars in thousands)

2018


2017


Change



2017

2018

Assets










Cash and cash equivalents

$        61,724


$      150,418


(59)

%


$        51,626

$     80,489

Interest-bearing deposits in banks

1,184


2,421


(51)



1,191

1,429

Investment securities available for sale, at fair value

258,948


234,993


10



202,196

264,259

Investment securities held to maturity

10,942


13,034


(16)



13,118

12,869

Mortgage loans held for sale

3,470


5,873


(41)



5,617

9,711

Loans, net of unearned income

1,633,019


1,657,795


(1)



1,227,393

1,625,679

Allowance for loan losses

(15,743)


(14,807)


6



(13,424)

(14,973)

     Total loans, net of allowance for loan losses

1,617,276


1,642,988


(2)



1,213,969

1,610,706

Office properties and equipment, net

45,758


45,605


-



38,700

45,192

Cash surrender value of bank-owned life insurance

29,394


28,904


2



20,510

29,228

Goodwill and core deposit intangibles

66,493


68,033


(2)



12,234

67,035

Accrued interest receivable and other assets

45,341


35,852


26



28,201

39,058

Total Assets

$    2,140,530


$   2,228,121


(4)



$    1,587,362

$ 2,159,976





















Liabilities










Deposits

$    1,771,312


$   1,866,227


(5)

%


$    1,319,713

$ 1,788,545

Federal Home Loan Bank advances

59,577


71,825


(17)



64,804

69,974

Accrued interest payable and other liabilities

13,953


12,198


14



10,220

12,096

Total Liabilities

1,844,842


1,950,250


(5)



1,394,737

1,870,615











Shareholders' Equity










Common stock

95


94


1

%


74

94

Additional paid-in capital

167,942


165,341


2



81,376

166,897

Common stock acquired by benefit plans

(3,648)


(3,922)


(7)



(4,034)

(3,737)

Retained earnings 

135,848


117,313


16



115,130

129,645

Accumulated other comprehensive income 

(4,549)


(955)


(376)



79

(3,538)

Total Shareholders' Equity

295,688


277,871


6



192,625

289,361

Total Liabilities and Shareholders' Equity

$    2,140,530


$   2,228,121


(4)



$    1,587,362

$ 2,159,976

 

HOME BANCORP, INC. AND SUBSIDIARY

CONDENSED STATEMENTS OF INCOME


























 For The Three Months Ended 





 For the Nine Months Ended 





 September 30, 

%



 September 30, 


%


(dollars in thousands except per share data)

2018

2017


Change



2018

2017


Change


Interest Income












Loans, including fees

$   24,118

$   16,336


48

%


$    70,449

$    48,747


45

%

Investment securities

1,694

1,135


49



4,898

3,278


49


Other investments and deposits

297

194


53



1,063

403


164


Total interest income

26,109

17,665


48



76,410

52,428


46














Interest Expense












Deposits

2,312

1,396


66

%


6,141

3,538


74

%

Federal Home Loan Bank advances

287

313


(8)



916

1,067


(14)


Total interest expense

2,599

1,709


52



7,057

4,605


53


Net interest income

23,510

15,956


47



69,353

47,823


45


Provision for loan losses

786

660


19



2,331

1,117


109


Net interest income after provision for loan losses

22,724

15,296


49



67,022

46,706


43














Noninterest Income












Service fees and charges

1,638

1,056


55

%


4,812

2,983


61

%

Bank card fees

1,110

718


55



3,405

2,168


57


Gain on sale of loans, net

206

303


(32)



614

919


(33)


Income from bank-owned life insurance

166

121


37



490

361


36


Gain (loss) on the closure or sale of assets, net

(68)

(43)


(58)



77

(147)


152


Other income

289

138


109



768

999


(23)


Total noninterest income

3,341

2,293


46



10,166

7,283


40














Noninterest Expense












Compensation and benefits

9,328

7,062


32

%


27,492

20,730


33

%

Occupancy

1,661

1,219


36



5,056

3,711


36


Marketing and advertising

286

287


-



852

802


6


Data processing and communication

1,804

928


94



5,827

3,076


89


Professional fees

265

407


(35)



856

819


5


Forms, printing and supplies

180

119


51



811

410


98


Franchise and shares tax

362

193


88



1,091

587


86


Regulatory fees

455

317


44



1,177

952


24


Foreclosed assets, net

58

(70)


183



247

(230)


207


Other expenses

1,297

879


48



4,199

2,565


64


Total noninterest expense

15,696

11,341


38



47,608

33,422


42


Income before income tax expense

10,369

6,248


66



29,580

20,567


44


Income tax expense

2,107

2,158


(2)



6,079

6,985


(13)


Net income

$    8,262

$     4,090


102



$    23,501

$    13,582


73














Earnings per share - basic

$      0.91

$       0.58


57

%


$       2.60

$       1.95


33

%

Earnings per share - diluted

$      0.89

$       0.56


59



$       2.53

$       1.88


35














Cash dividends declared per common share

$      0.19

$       0.14


36

%


$       0.51

$       0.41


24

%

 

HOME BANCORP, INC. AND SUBSIDIARY

SUMMARY FINANCIAL INFORMATION




























 For The Three Months Ended 





 For The Three  






 September 30, 


%



 Months Ended 



%



2018


2017


 Change 



 June 30, 2018 



 Change 


(dollars in thousands except per share data)













EARNINGS DATA













Total interest income

$       26,109


$       17,665


48

%


$             25,575



2

%

Total interest expense

2,599


1,709


52



2,238



16


Net interest income

23,510


15,956


47



23,337



1


Provision for loan losses

786


660


19



581



35


Total noninterest income

3,341


2,293


46



3,344



-


Total noninterest expense

15,696


11,341


38



16,322



(4)


Income tax expense

2,107


2,158


(2)



2,002



5


Net income

$        8,262


$        4,090


102



$               7,776



6















AVERAGE BALANCE SHEET DATA













Total assets

$  2,137,422


$  1,573,668


36

%


$         2,164,664



(1)

%

Total interest-earning assets

1,957,951


1,473,743


33



1,981,710



(1)


Total loans

1,631,839


1,215,985


34



1,634,310



-


Total interest-bearing deposits

1,330,227


1,024,163


30



1,347,046



(1)


Total interest-bearing liabilities

1,394,436


1,090,793


28



1,417,322



(2)


Total deposits

1,775,846


1,308,388


36



1,804,376



(2)


Total shareholders' equity

293,367


191,608


53



286,482



2















SELECTED RATIOS (1)













Return on average assets

1.53

%

1.04

%

47

%


1.44

%


6

%

Return on average equity

11.17


8.54


31



10.89



3


Common equity ratio

13.81


12.13


14



13.40



3


Efficiency ratio (2)

58.46


62.14


(6)



61.17



(4)


Average equity to average assets

13.73


12.18


13



13.23



4


Tier 1 leverage capital ratio(3) 

10.73


10.66


1



10.16



6


Total risk-based capital ratio(3) 

14.90


15.21


(2)



14.52



3


Net interest margin (4)

4.74


4.29


10



4.69



1















SELECTED NON-GAAP RATIOS (1)













Tangible common equity ratio(5)

11.05

%

11.45

%

(3)

%


10.62

%


4

%

Return on average tangible common equity(6) 

15.09


9.37


61



14.89



1


Adjusted return on average assets (7)

1.53


1.10


39



1.61



(5)


Adjusted return on average equity (7)

11.17


9.01


24



12.14



(8)


Adjusted efficiency ratio (7)

58.46


60.79


(4)



56.93



3


Adjusted return on average tangible common equity (7)

15.09


9.87


53



16.52



(9)















PER SHARE DATA













Earnings per share - basic

$          0.91


$          0.58


57



$                0.86



6

%

Earnings per share - diluted

0.89


0.56


59



0.84



6


Adjusted earnings per share - diluted (8)

0.89


0.59


51



0.93



(4)


Book value at period end

31.19


25.99


20



30.66



2


Tangible book value at period end

24.18


24.34


(1)



23.56



3


Shares outstanding at period end

9,479,611


7,412,234


28

%


9,437,654



-


Weighted average shares outstanding













   Basic

9,098,206


7,006,513


30

%


9,047,753



1

%

   Diluted

9,321,360


7,281,164


28



9,299,360



-


______________________________________________

(1)

With the exception of end-of-period ratios, all ratios are based on average monthly balances during the respective periods.

(2)

The efficiency ratio represents noninterest expense as a percentage of total revenues.  Total revenues is the sum of net interest income and noninterest income.

(3)

Estimated capital ratios are end of period ratios for the Bank only.

(4)

Net interest margin represents net interest income as a percentage of average interest-earning assets.  Taxable equivalent yields are calculated using a marginal tax rate of 21% for 2018 and 35% for 2017.

(5)

Tangible common equity ratio is common shareholders' equity less intangible assets divided by total assets less intangible assets. See "Non-GAAP Reconciliation" for additional information.

(6)

Return on average tangible common equity is net income plus amortization of core deposit intangible, net of taxes, divided by average common  shareholders' equity less average intangible assets. See "Non-GAAP Reconciliation" for additional information.

(7)

Adjusted ratios eliminate merger-related expenses in the calculation. See "Non-GAAP Reconciliation"  for additional information.

(8) 

Adjusted diluted EPS eliminates merger-related expenses in the calculation. See "Non-GAAP Reconciliation" for additional information.

 

HOME BANCORP, INC. AND SUBSIDIARY

SUMMARY CREDIT QUALITY INFORMATION












































September 30, 2018


June 30, 2018


September 30, 2017


Acquired

Originated

Total


Acquired

Originated

Total


Acquired

Originated

Total

(dollars in thousands)





















CREDIT QUALITY(1) 





















Nonaccrual loans (2) 

$    5,070


$     15,805


$  20,875



$   3,696


$   18,548


$  22,244



$      1,220


$       16,481


$ 17,701


Accruing loans past due 90 days and over

-


-


-



-


-


-



-


-


-


Total nonperforming loans

5,070


15,805


20,875



3,696


18,548


22,244



1,220


16,481


17,701


Foreclosed assets

485


86


571



406


86


492



367


87


454


Total nonperforming assets

5,555


15,891


21,446



4,102


18,634


22,736



1,587


16,568


18,155


Performing troubled debt restructurings

288


1,338


1,626



1,054


2,717


3,771



2,928


999


3,927


Total nonperforming assets and troubled 

debt restructurings

$    5,843


$     17,229


$  23,072



$   5,156


$   21,351


$  26,507



$      4,515


$       17,567


$ 22,082























Nonperforming assets to total assets





1.00

%






1.05

%






1.14

%

Nonperforming loans to total assets 





0.98







1.03







1.12


Nonperforming loans to total loans 





1.28







1.37







1.44


Allowance for loan losses to nonperforming assets





73.41







65.85







73.94


Allowance for loan losses to nonperforming loans





75.42







67.31







75.84


Allowance for loan losses to total loans





0.96







0.92







1.09























Year-to-date loan charge-offs





$    1,564







$   1,545







$     430


Year-to-date loan recoveries





169







166







226


Year-to-date net loan charge-offs 





$    1,395







$   1,379







$     204


Annualized YTD net loan charge-offs to average loans




0.11

%






0.17

%






0.02

%


______________________________________________

(1) 

Nonperforming loans consist of nonaccruing loans and accruing loans 90 days or more past due. Purchased credit impaired loans accounted for in pools with an accretable yield are considered to be performing and are excluded from nonperforming loans. Nonperforming assets consist of nonperforming loans and repossessed assets.  It is our policy to cease accruing interest on loans 90 days or more past due. Repossessed assets consist of assets acquired through foreclosure or acceptance of title in-lieu of foreclosure.

(2) 

Nonaccrual loans include originated restructured loans placed on nonaccrual totaling $9.0 million, $10.4 million and $8.9 million at September 30, 2018, June 30, 2018 and September 30, 2017, respectively. Acquired restructured loans placed on nonaccrual totaled $868,000, $949,000 and $457,000 at September 30, 2018, June 30, 2018 and September 30, 2017, respectively.  

 

SOURCE Home Bancorp, Inc.

For further information: John W. Bordelon, President and CEO (337) 237-1960