Investor Relations

LAFAYETTE, La., Jan. 28, 2014 /PRNewswire/ -- Home Bancorp, Inc. (Nasdaq:  "HBCP") (the "Company"), the parent company for Home Bank (www.home24bank.com), a Federally chartered savings bank headquartered in Lafayette, Louisiana (the "Bank"), announced net income of $1.7 million for the fourth quarter of 2013, a decrease of $777,000, or 31%, compared to the third quarter of 2013 and a decrease of $619,000, or 27%, compared to the fourth quarter of 2012.  The fourth quarter of 2013 includes $307,000 of pre-tax expenses related to the acquisition of Britton & Koontz Capital Corporation (OTCQB: "BKBK") ("Britton & Koontz").  Excluding merger-related expenses, net income for the fourth quarter of 2013 was $1.9 million, a decrease of 23% and 18% compared to the third quarter of 2013 and the fourth quarter of 2012, respectively. Diluted earnings per share were $0.25 for the fourth quarter of 2013, a decrease of $0.12, or 32%, compared to the third quarter of 2013 and a decrease of $0.08, or 24%, compared to the fourth quarter of 2012.  Excluding merger-related expenses, diluted earnings per share were $0.28 for the fourth quarter of 2013, decreases of 24% and 15% compared to the third quarter of 2013 and the fourth quarter of 2012, respectively.

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Net income for the year ended December 31, 2013 was $7.3 million, a decrease of $1.9 million, or 21%, compared to 2012.  Excluding pre-tax merger-related expenses of $307,000 incurred during 2013, net income for the year ended December 31, 2013 was $7.5 million, a decrease of 18% compared to 2012. Diluted earnings per share for 2013 were $1.06, a decrease of 17% compared to $1.28 in 2012.  Excluding merger-related expenses, diluted earnings per share were $1.09, a decrease of 15% compared to 2012. 

"Our fourth quarter was highlighted by the announcement of our pending entry into Mississippi through the Britton & Koontz acquisition and the resulting addition of several outstanding bankers to our team," stated John W. Bordelon, President and Chief Executive Officer of the Company and the Bank. "The B&K deal is on pace to close during the first quarter of 2014 and our bankers had an outstanding quarter of loan growth."

Acquisition of Britton & Koontz

As previously disclosed on November 5, 2013, the Company entered into a definitive agreement to merge with Britton & Koontz Capital Corporation, the holding company of the 147-year-old Britton & Koontz Bank, N.A. ("Britton & Koontz Bank").  Under the terms of the agreement, Britton & Koontz will be merged with and into Home Bancorp in a two-step transaction and Britton & Koontz Bank will be merged with and into the Bank.  Shareholders of Britton & Koontz will receive $16.14 per share in cash upon completion of the merger.  The merger, which is expected to be completed in the first quarter of 2014, was approved by BKBK's shareholders earlier this month and remains subject to regulatory approvals and the satisfaction of all other customary conditions.  Upon completion of the merger, the combined company will have total assets of approximately $1.2 billion, $873 million in loans and $964 million in deposits. 

Loans and Credit Quality

Loans totaled $707.5 million at December 31, 2013, an increase of $26.6 million, or 4%, from September 30, 2013, and an increase of $34.3 million, or 5%, from December 31, 2012.  During the fourth quarter, commercial real estate (up $16.2 million) and construction and land (up $11.1 million) loans led our growth.   

The following table sets forth the composition of the Company's loan portfolio (including Covered Loans) as of the dates indicated. 

Nonperforming assets ("NPAs"), which includes $8.2 million in assets covered under loss sharing agreements with the FDIC ("Covered Assets") and $14.1 million acquired from GS Financial Corp. ("GSFC"), totaled $29.3 million at December 31, 2013, an increase of $1.9 million compared to September 30, 2013 and an increase of $924,000 compared to December 31, 2012.  The ratio of total NPAs to total assets was 2.98% at December 31, 2013, compared to 2.85% at September 30, 2013 and 2.95% at December 31, 2012.  Excluding acquired assets, the ratio of NPAs was 0.81% at December 31, 2013, compared to 0.69% at September 30, 2013 and 0.62% at December 31, 2012. 

The Company recorded net loan recoveries of $24,000 during the fourth quarter of 2013, compared to net loan charge-offs of $84,000 and $70,000 in the third quarter of 2013 and fourth quarter of 2012, respectively.  The Company's provision for loan losses for the fourth quarter of 2013 was $431,000, compared to $453,000 for the third quarter of 2013 and $483,000 for the fourth quarter of 2012.  The provision for loan losses in the fourth quarter of 2013 relates primarily to loan growth and modest downgrades of certain loans in the Company's organic loan portfolio.

The ratio of allowance for loan losses to total loans was 0.98% at December 31, 2013, compared to 0.95% and 0.79% at September 30, 2013 and December 31, 2012, respectively.  Excluding acquired loans, the ratio of the allowance for loan losses to total loans was 1.12% at December 31, 2013, compared to 1.09% at September 30, 2013 and 1.01% at December 31, 2012.           

Investment Securities Portfolio

The Company's investment securities portfolio totaled $159.0 million at December 31, 2013, a decrease of $1.4 million, or 1%, from September 30, 2013, and an increase of $116,000, or 0.1%, from December 31, 2012.  At December 31, 2013, the Company had a net unrealized gain position on its investment securities portfolio of $300,000, compared to net unrealized gains of $1.1 million and $5.0 million at September 30, 2013 and December 31, 2012, respectively.  The investment securities portfolio had a modified duration of 4.2 years at December 31, 2013, compared to 4.7 and 3.7 years at September 30, 2013 and December 31, 2012, respectively.  

Deposits

Total deposits were $741.3 million at December 31, 2013, a decrease of $24.5 million, or 3%, from September 30, 2013, and a decrease of $30.1 million, or 4%, from December 31, 2012.  Certificate of deposits ("CD") declined as higher-priced CDs matured.  During the fourth quarter of 2013, core deposits (i.e., checking, savings and money market accounts) decreased $7.6 million, or 1%, from September 30, 2013, and increased $30.4 million, or 6%, from December 31, 2012.         

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

Net Interest Income

Net interest income for the fourth quarter of 2013 totaled $10.0 million, a decrease of $369,000, or 4%, compared to the third quarter of 2013, and a decrease of $338,000, or 3%, compared to the fourth quarter of 2012.  The decline in net interest income in the fourth quarter of 2013 compared to the third quarter of 2013 was due largely to a decline in loan interest income resulting primarily from lower average yields earned on loans covered under loss sharing agreements with the FDIC ("Covered Loans"). 

The net interest margin was 4.60% for the fourth quarter of 2013, 19 basis points lower than the third quarter of 2013 and 15 basis points lower than the fourth quarter of 2012.  The decrease in the net interest margin compared to the third quarter of 2013 resulted primarily from lower-yielding new loans originated during the fourth quarter and lower yields on the Covered Loan portfolio.  The decrease in net interest margin compared to the fourth quarter of 2012 related primarily to lower yields on the loan portfolio (including Covered Loans), which were partially offset by lower costs on interest bearing liabilities. 

The Covered Loan portfolio yielded 13.66% during the fourth quarter of 2013, compared to 15.32% and 10.28% during the third quarter of 2013 and fourth quarter of 2012, respectively.  Excluding Covered Loans, the yield on loans would have been 5.46% during the fourth quarter of 2013, compared to 5.72% and 6.28% during the third quarter of 2013 and fourth quarter of 2012, respectively.  A portion of the decline in interest income and yield on the Covered Loan portfolio during the third and fourth quarters of 2013 was primarily due to higher levels of FDIC loss sharing receivable asset ("FDIC Asset") amortization during those periods. Amortization of the FDIC Asset totaled $904,000 and $913,000 during the third and fourth quarters of 2013, respectively.  The increase in FDIC Asset amortization is the result of improved cash flow expectations related to Covered Loans.    

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 35%.

Noninterest Income

Noninterest income for the fourth quarter of 2013 totaled $1.8 million, an increase of $17,000, or 1%, compared to the third quarter of 2013 and a decrease of $71,000, or 4%, compared to the fourth quarter of 2012.  The increase in noninterest income in the fourth quarter of 2013 compared to the third quarter of 2013 resulted primarily from an increase in other income of $108,000 (related to recoveries on the acquired GSFC loan portfolio), which was partially offset by decreases in gains on the sale of mortgage loans (down $51,000) and bank card fees (down $29,000). 

The decrease in noninterest income in the fourth quarter of 2013 compared to the fourth quarter of 2012 resulted primarily from decreases in gains on the sale of mortgage loans (down $304,000), which was partially offset by increases in service fees and charges (up $148,000) and other income of $105,000.

Noninterest Expense

Noninterest expense for the fourth quarter of 2013 totaled $8.8 million, an increase of $770,000, or 10%, compared to the third quarter of 2013 and an increase of $459,000, or 6%, compared to the fourth quarter of 2012.  The increase in noninterest expense in the fourth quarter of 2013 compared to the third quarter of 2013 resulted primarily from higher other expenses (up $365,000 as a result of $147,000 in net deposit account charge-offs and other loan fee expenses of $208,000), compensation and benefits (up $318,000), professional services (up $219,000, which includes $285,000 related to the acquisition of Britton & Koontz) and foreclosed asset expenses (up $195,000), which was partially offset by lower franchise and share tax expense (down $382,000 primarily from lower than anticipated Louisiana shares tax payments). 

The increase in noninterest expense in the fourth quarter 2013 compared to the fourth quarter 2012 resulted primarily from higher professional services (up $ 248,000, which includes $285,000 related to the acquisition of Britton & Koontz), compensation and benefits (up $218,000), other expenses (up $179,000 primarily from net deposit account charge-offs), which were partially offset by lower data processing and communication (down $168,000) and franchise and share tax expense (down $65,000 primarily from lower than anticipated Louisiana shares tax payments).

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 the impact of merger-related expenses. Management believes the presentation of this non-GAAP financial information provides useful information that is essential to a proper 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 are they 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, 2012, 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.

SOURCE Home Bancorp, Inc.