Investor Relations

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.

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. 

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.

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%.

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.

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.