Home Bancorp Announces 2019 Fourth Quarter Results And Declares Quarterly Dividend

LAFAYETTE, La., Jan. 28, 2020 /PRNewswire/ -- Home Bancorp, Inc. (Nasdaq: "HBCP") (the "Company"), the parent company for Home Bank, N.A. (the "Bank") (www.home24bank.com), reported financial results for the fourth quarter of 2019.  For the quarter, the Company reported net income of $6.6 million, or $0.73 per diluted common share ("EPS"), compared to $6.9 million, or $0.75 EPS, for the third quarter of 2019.

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

Key performance metrics for the fourth quarter of 2019 (compared to the third quarter of 2019) include: 

  • Loans increased $6.9 million, or 2% annualized;
  • Nonperforming assets increased $944,000, or 3%, primarily due to one commercial loan relationship in Baton Rouge;
  • Return on average assets, return on average equity and return on average tangible common equity were 1.18%, 8.31 and 10.93%, respectively;
  • The net interest margin increased two basis points;
  • The Company repurchased 78,403 shares of common stock at an average price of $38.60 per share; and
  • Bank capital remained strong with a common equity ratio of 14.38% at quarter end.

"We finished the year with another quarter of solid loan growth, which brought our 2019 loan growth total to over $64 million," said John W. Bordelon, President and Chief Executive Officer of the Company and the Bank. "We expect 2020 to be a year of strong loan and deposit growth as the investments we've made in our lending systems and processes have made us more responsive than ever."

The Company also announced that its Board of Directors declared a quarterly cash dividend on shares of its common stock of $0.22 per share payable on February 21, 2020, to shareholders of record as of February 10, 2020.

Loans and Credit Quality

Loans totaled $1.7 billion at December 31, 2019, up $6.9 million from September 30, 2019.  Fourth quarter loan growth was focused in the following areas:  construction and land loans (up $6.9 million), commercial and industrial loans (up $4.4 million) and commercial real estate loans (up $3.4 million). Construction and land loan growth was primarily driven by commercial building construction, residential development, and multi-family projects spread across our major Louisiana markets. Commercial and industrial loan growth was strongest in the Acadiana and Baton Rouge markets. Commercial real estate loan growth was primarily due to loans secured by investment properties and retail stores.

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










December 31,


September 30,


Increase/(Decrease)

(dollars in thousands)


2019


2019


Amount


Percent

Real estate loans:









One- to four-family first mortgage


$

430,820



$

432,964



$

(2,144)



%

Home equity loans and lines


79,812



81,835



(2,023)



(2)


Commercial real estate


722,807



719,392



3,415




Construction and land


195,748



188,879



6,869



4


Multi-family residential


54,869



56,733



(1,864)



(3)


Total real estate loans


1,484,056



1,479,803



4,253




Other loans:









Commercial and industrial


184,701



180,264



4,437



2


Consumer


45,604



47,375



(1,771)



(4)


Total other loans


230,305



227,639



2,666



1


Total loans


$

1,714,361



$

1,707,442



$

6,919



%

The outstanding balance of direct loans to borrowers in the energy sector totaled $33.5 million, or 2% of total outstanding loans, at December 31, 2019, compared to $40.1 million, or 2% of total outstanding loans, at September 30, 2019.  At December 31, 2019, loans constituting 95% of the balance of the direct energy-related portfolio were performing in accordance with their original loan agreements.

Nonperforming assets ("NPAs"), excluding purchased credit impaired loans, totaled $28.5 million at December 31, 2019, up $944,000, or 3%, compared to September 30, 2019. The increase in NPAs was primarily due to one commercial loan relationship in the Baton Rouge market. The ratio of NPAs to total assets was 1.30% at December 31, 2019, compared to 1.24% at September 30, 2019.

The Company recorded net loan charge-offs of $443,000 during the fourth quarter of 2019, compared to net loan charge-offs of $787,000 for the third quarter of 2019.  The Company's provision for loan losses for the fourth quarter of 2019 was $713,000, compared to $1.1 million for the third quarter of 2019.

The ratio of the allowance for loan losses to total loans was 1.04% at December 31, 2019, compared to 1.03% at September 30, 2019.  Excluding acquired loans, the ratio of the allowance for loan losses to total loans was 1.29% at December 31, 2019 and September 30, 2019.  The allowance for loan losses attributable to originated direct energy-related loans totaled 2.11% of the outstanding balance of originated energy-related portfolio at December 31, 2019, compared to 2.40% at September 30, 2019.

Deposits

Total deposits were $1.8 billion at December 31, 2019, down $10.4 million, or 1%, from September 30, 2019. The following table sets forth the composition of the Company's deposits as of the dates indicated.










December 31,


September 30,


Increase/(Decrease)

(dollars in thousands)


2019


2019


Amount


Percent

Demand deposits


$

437,828



$

446,742



$

(8,914)



(2)

%

Savings


201,887



204,807



(2,920)



(1)


Money market


273,741



272,489



1,252




NOW


512,054



513,440



(1,386)




Certificates of deposit


395,465



393,928



1,537




Total deposits


$

1,820,975



$

1,831,406



$

(10,431)



(1)

%

Share Repurchases

The Company repurchased 78,403 shares of its common stock during the fourth quarter of 2019 at an average price per share of $38.60 under the Company's 2019 Repurchase Plan. An additional 386,584 shares remain eligible for purchase under the 2019 Repurchase Plan.  The book value per share and tangible book value per share of the Company's common stock was $34.19 and $27.22, respectively, at December 31, 2019.

Net Interest Income

Net interest income for the fourth quarter of 2019 was $21.3 million, up $117,000, or 1%, from the third quarter of 2019. The net interest margin was 4.14% for the fourth quarter of 2019, up two basis points from the third quarter of 2019. Net interest income increased primarily due to the absence of a $680,000 (pre-tax)  third quarter 2019 write-off of the Company's FDIC loss sharing indemnification receivable.  Loan accretion income totaled $982,000 during the fourth quarter of 2019 and $420,000 during the third quarter of 2019.

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



December 31, 2019


September 30, 2019

(dollars in thousands)


Average
Balance


Interest

Average
Yield/ Rate


Average
Balance


Interest

Average
Yield/ Rate

Interest-earning assets:











Loans receivable


$

1,712,035



$

23,842


5.48

%


$

1,698,046



$

23,562


5.46

%

Investment securities (TE)


259,531



1,341


2.11



261,778



1,515


2.36


Other interest-earning assets


49,750



261


2.08



58,878



397


2.68


Total interest-earning assets


$

2,021,316



$

25,444


4.96

%


$

2,018,702



$

25,474


4.98

%












Interest-bearing liabilities:











Deposits:











Savings, checking, and money market


$

989,177



$

2,042


0.82

%


$

991,248



$

2,215


0.89

%

Certificates of deposit


395,073



1,892


1.90



392,214



1,835


1.86


Total interest-bearing deposits


1,384,250



3,934


1.13



1,383,462



4,050


1.16


Other borrowings


5,539



54


3.80



5,550



53


3.80


FHLB advances


43,570



198


1.82



51,166



230


1.80


Total interest-bearing liabilities


$

1,433,359



$

4,186


1.16

%


$

1,440,178



$

4,333


1.19

%












Net interest spread (TE)





3.80

%





3.79

%

Net interest margin (TE)





4.14

%





4.12

%

Noninterest Income

Noninterest income for the fourth quarter of 2019 was $3.5 million, down $1.3 million, or 27%, from the third quarter of 2019 due primarily to a decrease in income from bank-owned life insurance. The Company received a non-taxable life insurance benefit of $1.2 million from its bank-owned life insurance policy ("BOLI") following the death of a former employee during the third quarter of 2019.

Noninterest Expense

Noninterest expense for the fourth quarter of 2019 totaled $15.8 million, down $858,000, or 5%, compared to the third quarter of 2019. The decrease in noninterest expense was primarily due to lower compensation and benefits expense. The decline in compensation and benefits (down $828,000, or 8%) was primarily due to a decrease in employee health care costs and the absence of $287,000 (pre-tax) in costs related to the departure of a former executive during the third quarter of 2019.

Income Tax Expense

Income tax expense for the fourth quarter of 2019 totaled $1.7 million, up $383,000, or 29%, from the third quarter of 2019. The Company's effective tax rate was 20% for the fourth quarter of 2019, compared to 16% for the third quarter of 2019. Income tax expense increased primarily due to a reduction in the amount of non-taxable earnings from BOLI recognized in the fourth quarter of 2019 compared to the third quarter.  As previously indicated, the Company received a $1.2 million non-taxable BOLI death benefit in the third quarter of 2019.

Non-GAAP Reconciliation 

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 and intangible assets. 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 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.  A reconciliation on non-GAAP information included herein to GAAP is presented below.









For the Three Months Ended

(dollars in thousands, except per share data)


December 31,
2019


September 30,
2019


December 31,
2018








Reported net income


$

6,606



$

6,856



$

8,089


Add: Core deposit intangible amortization, net tax


302



311



346


Non-GAAP tangible income


$

6,908



$

7,167



$

8,435









Total Assets


$

2,200,465



$

2,218,040



$

2,153,658


Less: Intangible assets


64,472



64,854



66,055


Non-GAAP tangible assets


$

2,135,993



$

2,153,186



$

2,087,603









Total shareholders' equity


$

316,329



$

314,677



$

304,040


Less: Intangible assets


64,472



64,854



66,055


Non-GAAP tangible shareholders' equity


$

251,857



$

249,823



$

237,985









Originated loans


$

1,251,201



$

1,215,539



$

1,095,160


Acquired loans


463,160



491,903



554,594


Total loans


$

1,714,361



$

1,707,442



$

1,649,754









Originated allowance for loan losses


$

16,091



$

15,694



$

14,860


Acquired allowance for loan losses


1,777



1,904



1,488


Total allowance for loan losses


$

17,868



$

17,598



$

16,348









Return on average equity


8.31

%


8.64

%


10.72

%

Add: Average intangible assets


2.62



2.75



3.64


Non-GAAP return on average tangible common equity


10.93

%


11.39

%


14.36

%








Common equity ratio


14.38

%


14.19

%


14.12

%

Less: Intangible assets


2.59



2.59



2.72


Non-GAAP tangible common equity ratio


11.79

%


11.60

%


11.40

%








Book value per share


$

34.19



$

33.72



$

32.14


Less: Intangible assets


6.97



6.95



6.98


Non-GAAP tangible book value per share


$

27.22



$

26.77



$

25.16


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, 2018, 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

(Unaudited)










(dollars in thousands)


December 31,
2019


December 31,
2018


%
Change


September 30,
2019

Assets









Cash and cash equivalents


$

39,847



$

59,618



(33)

%


$

61,289


Interest-bearing deposits in banks


449



939



(52)



449


Investment securities available for sale, at fair value


257,321



260,131



(1)



255,114


Investment securities held to maturity


7,149



10,872



(34)



7,193


Mortgage loans held for sale


6,990



2,086



235



6,909


Loans, net of unearned income


1,714,361



1,649,754



4



1,707,442


Allowance for loan losses


(17,868)



(16,348)



9



(17,598)


Total loans, net of allowance for loan losses


1,696,493



1,633,406



4



1,689,844


Office properties and equipment, net


46,425



47,124



(1)



46,362


Cash surrender value of bank-owned life insurance


39,466



29,560



34



39,228


Goodwill and core deposit intangibles


64,472



66,055



(2)



64,854


Accrued interest receivable and other assets


41,853



43,867



(5)



46,798


Total Assets


$

2,200,465



$

2,153,658



2



$

2,218,040




















Liabilities









Deposits


$

1,820,975



$

1,773,217



3

%


$

1,831,406


Other Borrowings


5,539



5,539





5,539


Federal Home Loan Bank advances


40,620



58,698



(31)



47,853


Accrued interest payable and other liabilities


17,002



12,164



40



18,565


Total Liabilities


1,884,136



1,849,618



2



1,903,363











Shareholders' Equity









Common stock


93



95



(2)

%


93


Additional paid-in capital


168,545



168,243





168,822


Common stock acquired by benefit plans


(3,159)



(3,539)



11



(3,260)


Retained earnings


150,158



141,447



6



147,841


Accumulated other comprehensive income (loss)


692



(2,206)



131



1,181


Total Shareholders' Equity


316,329



304,040



4



314,677


Total Liabilities and Shareholders' Equity


$

2,200,465



$

2,153,658



2



$

2,218,040


 

HOMEBANCORP, INC. AND SUBSIDIARY

CONDENSED STATEMENTS OF INCOME

(Unaudited)
















For the Three Months Ended
December 31,




For the Years Ended
December 31,



(dollars in thousands, except per share data)


2019


2018


%
Change


2019


2018


%
Change

Interest Income













Loans, including fees


$

23,842



$

23,855



%


$

94,414



$

94,303



%

Investment securities


1,341



1,758



(24)



6,393



6,656



(4)


Other investments and deposits


261



290



(10)



1,401



1,353



4


Total interest income


25,444



25,903



(2)



102,208



102,312

















Interest Expense













Deposits


3,934



2,934



34

%


15,050



9,076



66

%

Other borrowings


54



47



15



213



46



363


Federal Home Loan Bank advances


198



267



(26)



949



1,184



(20)


Total interest expense


4,186



3,248



29



16,212



10,306



57


Net interest income


21,258



22,655



(6)



85,996



92,006



(7)


Provision for loan losses


713



1,612



(56)



3,014



3,943



(24)


Net interest income after provision for loan losses


20,545



21,043



(2)



82,982



88,063



(6)















Noninterest Income













Service fees and charges


1,544



1,558



(1)

%


5,940



6,370



(7)

%

Bank card fees


1,102



1,089



1



4,516



4,494




Gain on sale of loans, net


316



258



22



1,074



872



23


Income from bank-owned life insurance


238



166



43



2,069



656



215


Gain (loss) on sale of assets, net


1



(130)



101



(335)



(52)



(544)


Other income


298



338



(12)



1,151



1,107



4


Total noninterest income


3,499



3,279



7



14,415



13,447



7















Noninterest Expense













Compensation and benefits


9,438



9,304



1

%


38,415



36,796



4

%

Occupancy


1,713



1,603



7



7,118



6,658



7


Marketing and advertising


579



370



56



1,576



1,309



20


Data processing and communication


1,829



1,819



1



6,611



7,646



(14)


Professional fees


172



263



(35)



856



1,119



(24)


Forms, printing and supplies


169



162



4



683



973



(30)


Franchise and shares tax


248



(61)



507



1,444



1,030



40


Regulatory fees


113



382



(70)



830



1,559



(47)


Foreclosed assets, net


228



150



52



556



397



40


Amortization of acquisition intangible


382



438



(13)



1,583



1,845



(14)


Other expenses


881



1,187



(26)



3,933



3,893



1


Total noninterest expense


15,752



15,617



1



63,605



63,225



1


Income before income tax expense


8,292



8,705



(5)



33,792



38,285



(12)


Income tax expense


1,686



616



174



5,860



6,695



(12)


Net income


$

6,606



$

8,089



(18)



$

27,932



$

31,590



(12)















Earnings per share - basic


$

0.74



$

0.89



(17)

%


$

3.08



$

3.48



(11)

%

Earnings per share - diluted


$

0.73



$

0.87



(16)



$

3.05



$

3.40



(10)















Cash dividends declared per common share


$

0.22



$

0.20



10

%


$

0.84



$

0.71



18

%

 

HOME BANCORP, INC. AND SUBSIDIARY

SUMMARY FINANCIAL INFORMATION

(Unaudited)














For the Three Months Ended
December 31,




For The Three
Months Ended



(dollars in thousands, except per share data)


2019


2018


%
Change


September 30,
2019


%
Change












EARNINGS DATA











Total interest income


$

25,444



$

25,903



(2)

%


$

25,474



%

Total interest expense


4,186



3,248



29



4,333



(3)


Net interest income


21,258



22,655



(6)



21,141



1


Provision for loan losses


713



1,612



(56)



1,146



(38)


Total noninterest income


3,499



3,279



7



4,774



(27)


Total noninterest expense


15,752



15,617



1



16,610



(5)


Income tax expense


1,686



616



174



1,303



29


Net income


$

6,606



$

8,089



(18)



$

6,856



(4)













AVERAGE BALANCE SHEET DATA











Total assets


$

2,219,049



$

2,137,770



4

%


$

2,217,178



%

Total interest-earning assets


2,021,316



1,954,242



3



2,018,702




Total loans


1,712,035



1,633,927



5



1,698,046



1


Total interest-bearing deposits


1,384,250



1,324,774



4



1,383,462




Total interest-bearing liabilities


1,433,359



1,388,676



3



1,440,178




Total deposits


1,835,026



1,771,539



4



1,827,689




Total shareholders' equity


315,487



299,339



5



314,773















SELECTED RATIOS (1)











Return on average assets


1.18

%


1.50

%


(21)

%


1.23

%


(4)

%

Return on average equity


8.31



10.72



(22)



8.64



(4)


Common equity ratio


14.38



14.12



2



14.19



1


Efficiency ratio (2)


63.63



60.22



6



64.09



(1)


Average equity to average assets


14.22



14.00



2



14.20




Tier 1 leverage capital ratio (3)


11.17



11.15





11.12




Total risk-based capital ratio (3)


15.28



15.59



(2)



15.25




Net interest margin (4)


4.14



4.57



(9)



4.12















SELECTED NON-GAAP RATIOS (1)











Tangible common equity ratio (5)


11.79

%


11.40

%


3

%


11.60

%


2

%

Return on average tangible common equity (6)


10.93



14.36



(24)



11.39



(4)













PER SHARE DATA











Earnings per share - basic


$

0.74



$

0.89



(17)

%


$

0.76



(3)

%

Earnings per share - diluted


0.73



0.87



(16)



0.75



(3)


Book value at period end


34.19



32.14



6



33.72



1


Tangible book value at period end


27.22



25.16



8



26.77



2


Shares outstanding at period end


9,252,418



9,459,050



(2)



9,331,099



(1)


Weighted average shares outstanding











Basic


8,953,203



9,118,874



(2)

%


9,058,600



(1)

%

Diluted


9,018,142



9,304,636



(3)



9,107,167



(1)


__________________________________________

(1)

With the exception of end-of-period ratios, all ratios are based on average daily 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%.

(5)

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

 

HOME BANCORP, INC. AND SUBSIDIARY

SUMMARY CREDIT QUALITY INFORMATION

(Unaudited)



December 31, 2019


September 30, 2019


December 31, 2018

(dollars in thousands)


Acquired


Originated


Total


Acquired


Originated


Total


Acquired


Originated


Total




















CREDIT QUALITY (1)






































Nonaccrual loans (2)


$

9,758



$

14,628



$

24,386



$

11,785



$

13,221



$

25,006



$

9,032



$

15,380



$

24,412


Accruing loans past due 90 days and over



















Total nonperforming loans


9,758



14,628



24,386



11,785



13,221



25,006



9,032



15,380



24,412


Foreclosed assets and ORE


2,363



1,793



4,156



1,880



712



2,592



1,412



146



1,558


Total nonperforming assets


12,121



16,421



28,542



13,665



13,933



27,598



10,444



15,526



25,970


Performing troubled debt restructurings


475



1,903



2,378



213



1,712



1,925



289



1,117



1,406


Total nonperforming assets and troubled debt restructurings


$

12,596



$

18,324



$

30,920



$

13,878



$

15,645



$

29,523



$

10,733



$

16,643



$

27,376





















Nonperforming assets to total assets






1.30

%






1.24

%






1.21

%

Nonperforming loans to total assets






1.11







1.13







1.13


Nonperforming loans to total loans






1.42







1.46







1.48


Allowance for loan losses to nonperforming assets






62.60







63.77







62.95


Allowance for loan losses to nonperforming loans






73.27







70.38







66.97


Allowance for loan losses to total loans






1.04







1.03







0.99





















Year-to-date loan charge-offs






$

1,577







$

1,118







$

2,581


Year-to-date loan recoveries






83







67







179


Year-to-date net loan charge-offs






$

1,494







$

1,051







$

2,402


Annualized YTD net loan charge-offs to average loans






0.09

%






0.08

%






0.15

%

__________________________________

(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. It is our policy to cease accruing interest on loans 90 days or more past due. Nonperforming assets consist of nonperforming loans, foreclosed assets and surplus real estate (ORE).  Foreclosed assets consist of assets acquired through foreclosure or acceptance of title in-lieu of foreclosure. ORE consists of closed or unused bank buildings.



(2)

Nonaccrual loans include originated restructured loans placed on nonaccrual totaling $7.6 million, $8.8 million and $10.3 million at December 31, 2019, September 30, 2019 and December 31, 2018, respectively. Acquired restructured loans placed on nonaccrual totaled $2.2 million, $2.0 million and $4.2 million at December 31, 2019, September 30, 2019 and December 31, 2018, respectively.

 

SOURCE Home Bancorp, Inc.

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