Investor Relations

LAFAYETTE, La., April 27, 2021 /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 first quarter of 2021.  For the quarter, the Company reported net income of $11.9 million, or $1.41 per diluted common share ("diluted EPS"), up $1.3 million from $10.6 million, or $1.24 diluted EPS, for the fourth quarter of 2020.

"Our first quarter results were strong, reflecting improved credit quality, increasing gain on sale of loans due to the low interest rate environment and a reversal of loan loss provisions as a result of the improving economic outlook", said John W. Bordelon, Chairman, President and Chief Executive Officer of the Company and the Bank.  "We have actively participated in the second round of PPP authorized earlier this year.  We originated $111.5 million under the second round of PPP in the quarter and assisted in the forgiveness of first round PPP loans."

"Our economy is still feeling some effects of COVID, but for the most part, a large segment of the region is very productive.  The New Orleans region is still struggling to return to pre-COVID levels. Government stimulus money created a rapid rise in liquidity for our customers and the Bank. Our strong capital position enables us to support the needs of our customers as the pandemic becomes less of a threat.  Our employees have remained committed to supporting customers and their communities throughout this past year and stand ready for what we expect to be a strong second half of the year."

COVID-19 Impacts

Banking operations remain unencumbered by state and local government COVID-19 restrictions. We have continued to protect our employees and customers by working remotely, enhancing cleaning procedures, and enacting several other measures to reduce the risk of transmission of the virus. State government imposed COVID-19 restrictions were relaxed in March 2021 within our Louisiana and Mississippi markets. Nearly all restrictions were removed in Mississippi, while Louisiana moved to Phase 3 of its reopening plan. Restrictions in Louisiana primarily include mask mandates and place capacity limits for certain businesses.

During the first quarter of 2021, the Company funded 1,451 loans totaling $111.5 million under the Small Business Administration's ("SBA") Paycheck Protection Program ("PPP"). During 2020, the Company funded 3,072 PPP loans totaling $262.2 million. At March 31, 2021, the total recorded net investment in PPP loans was $235.7 million, of which  2,533 loans with an aggregate outstanding balance of $79.1 million were for amounts of $150,000 or less.

To give immediate financial support to our customers, the Company began providing principal and/or interest payment deferral options in March 2020. At March 31, 2021,  $27.7 million, or 1% of total loans were under deferral agreements. The level of COVID-19 related deferrals formerly totaled $558.8 million, or 28% of total loans, at June 30, 2020. Of the loans that have exited deferral agreements, $443.0 million, or 99%, were current and performing as of March 31, 2021.

First Quarter 2021 Highlights

• Net income totaled $11.9 million, up $1.3 million, or 13%, from the prior quarter primarily due to the release of $1.7 million from the allowance for loan losses during the first quarter of 2021.

• Return on average assets, return on average equity and return on average tangible common equity were 1.85%, 14.80% and 18.70%, respectively.

• The Company recorded a $1.7 million reversal to the allowance for loan losses primarily due to improvements in our assessment of the economic impact of the COVID-19 pandemic on our loan portfolio.

• Loan income from the recognition of deferred PPP lender fees totaled $3.3 million, up $1.1 million from the prior quarter.

• Loans totaled $2.0 billion at March 31, 2021, down $86,000, or less than 1%, from December 31, 2020. PPP loans totaled $235.7 million at March 31, 2021, up $14.5 million, or 7%, from December 31, 2020.

• The allowance for loan losses totaled $30.0 million, or 1.51% of total loans, at March 31, 2021. Excluding PPP loans, the ratio of allowance for loan losses to total loans was 1.72%, at such date. 

• Nonperforming assets totaled $17.3 million, or 0.64% of total assets, down $2.7 million, or 14%, from December 31, 2020.

• Preliminary Tier 1 leverage capital and total risk-based capital ratios were 9.89% and 15.37%, respectively, at March 31, 2021, compared to 9.68% and 15.18%, respectively, at December 31, 2020.

• The net interest margin was 4.14% for the first quarter of 2021, up three basis points from the fourth quarter of 2020 primarily due to a decrease in the average cost of interest-bearing deposits.

• The average yield on total interest-bearing deposits was 0.42% for the first quarter of 2021, down eight basis points from the fourth quarter of 2020.

Loans

Loans totaled $2.0 billion at March 31, 2021, down $86,000, or less than 1%, from December 31, 2020. PPP loans, included in commercial and industrial loans, increased $14.5 million, or 7%, from  December 31, 2020. The following table summarizes the changes in the Company's loan portfolio from December 31, 2020 to March 31, 2021. 

During the first quarter of 2021, construction and land ("C&D") loan growth was offset by pay-downs across certain other segments of the loan portfolio. In particular, the Company continued to experience declines in residential mortgages primarily due to refinances as borrowers sought to acquire lower interest rates. C&D loan growth was primarily driven by non-residential construction projects in our New Orleans and Northshore markets.  

Credit Quality and Allowance for Credit Losses

At March 31, 2021, loans under interest and/ or principal payment deferral agreements due to the COVID-19 crisis totaled $27.7 million, or 1% of total loans, down from $36.0 million, or 2% of total loans, at December 31, 2020. Of the loans that have exited deferral agreements, $443.0 million, or 99%, were current and performing as of March 31, 2021.

Nonperforming assets ("NPAs") totaled $17.3 million, or 0.64% of total assets, at March 31, 2021,  down $2.7 million, or 14%, from $20.0 million, or 0.77% of total assets, at December 31, 2020. During the first quarter of 2021, the Company recorded net loan charge-offs of $1.3 million. Net charge-offs during the first quarter were primarily attributable to an acquired hotel loan and one originated commercial loan relationship, both of which were nonperforming prior to the COVID-19 crisis.

The Company released $1.7 million of allowance for loan losses in first quarter of 2021 primarily due to improvements in our assessment of the economic impact of the COVID-19 pandemic on our loan portfolio. At March 31, 2021, the allowance for loan losses totaled $30.0 million, or 1.51% of total loans, compared to $33.0 million, or 1.66% of total loans, at December 31, 2020. Excluding PPP loans, the ratios of allowance for loan losses to total loans were 1.72% and 1.87% at March 31, 2021 and December 31, 2020, respectively. Changes in expected losses consider various factors including the changing economic activity, potential mitigating effects of governmental stimulus, the duration of the health crisis, customer specific information impacting changes in risk ratings, projected delinquencies and the impact of industry-wide loan modification efforts, among other factors.

The following table provides a summary of the loan portfolio and related reserves at March 31, 2021. We have separately identified certain information regarding PPP loans which, due to the existence of full repayment guarantees from the SBA as well as the likelihood that the vast majority of such loans will be forgiven, we believe entail minimal credit risk to the Company.

Deposits

Total deposits were $2.3 billion at March 31, 2021, up $114.5 million, or 5%, from December 31, 2020. The following table summarizes the changes in the Company's deposits from December 31, 2020 to March 31, 2021.

The average rate on interest-bearing deposits decreased eight basis points from 0.50% for the fourth quarter of 2021 to 0.42% for the first quarter of 2021. At March 31, 2021, certificates of deposit maturing within the next 12 months totaled $289.7 million.

Net Interest Income

The net interest margin ("NIM") increased three basis points from 4.11% for the fourth quarter of 2020 to 4.14% for the first quarter of 2021 primarily due to a decrease in the cost of interest-bearing deposits. The average yield on total interest-bearing deposits was 0.42% for the first quarter of 2021, down eight basis points from the fourth quarter of 2020.

The average loan yield was 5.21% for the first quarter of 2021, up one basis point from the fourth quarter of 2020. Loan income from the recognition of deferred PPP lender fees totaled $3.3 million during the first quarter of 2021, up $1.1 million, or 52%, compared to the fourth quarter of 2020. As a result, PPP loans positively impacted the average loan yield by 18 basis points and the NIM by 26 basis points during the the first quarter of 2021. During the fourth quarter of 2020, PPP loans decreased the average loan yield by 11 basis points and increased the NIM by 5 basis points.

At March 31, 2021, the total recorded net investment in PPP loans was $235.7 million, up $14.5 million or 7% from December 31, 2020. Unrecognized PPP lender fees totaled $8.3 million at March 31, 2021, which will be amortized into interest income over the life of the loans.

Loan accretion income from acquired loans totaled $736,000 for the first quarter of 2021, down $1.0 million, or 57%, compared to $1.7 million for the fourth quarter of 2020. During the fourth quarter of 2020, the Company received pay-downs on acquired CRE and residential mortgage loans, which accelerated the accretion of discount into interest income on loans.

The following table summarizes 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 have been calculated using a marginal tax rate of 21%.

Noninterest Income

Noninterest income for the first quarter of 2021 totaled $4.1 million, up $10,000, or less than 1%, from the fourth quarter of 2020. Increases in gains on the sale of loans (up $86,000) and income from bank card fees (up $33,000), were partially offset by decreases in income from bank-owned life insurance (down $51,000) and service fees and charges on deposit accounts (down $45,000). During the fourth quarter of 2020, the Company received a life insurance benefit of $46,000 following the death of a former employee.

Noninterest Expense

Noninterest expense for the first quarter of 2021 totaled $16.0 million, down $30,000, or less than 1%, from the fourth quarter of 2020.

Compensation and benefits expense was up $247,000 from the fourth quarter of 2020 primarily due to annual bonuses paid during the first quarter of 2021 and an increase in health insurance cost.

Marketing and advertising expense was down $215,000 from the fourth quarter of 2020 primarily due to a general decrease in all marketing related activities.

Other noninterest expense was down $114,000 from the fourth quarter of 2020 primarily due to decreases in fraud losses and losses on overdrawn deposit accounts.

Dividend and Share Repurchases

The Company announced that its Board of Directors increased its quarterly cash dividend on shares of its common stock to $0.23 per share payable on May 21, 2021, to shareholders of record as of May 10, 2021. 

The Company repurchased 41,477 shares of its common stock during the first quarter of 2021 at an average price per share of $28.58.  An additional 258,603 shares remain eligible for purchase under the 2020 Repurchase Plan.  The book value per share and tangible book value per share of the Company's common stock was $37.73 and $30.52, respectively, at March 31, 2021.

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 intangible assets and PPP loans. 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, 2020 describes some of these factors, including risk elements in the loan portfolio, the level of the allowance for credit losses, the impact of the COVID-19 pandemic, 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.