LAFAYETTE, La., July 23, 2019 /PRNewswire/ — Home Bancorp, Inc. (Nasdaq: “HBCP”) (the “Company”), the parent company for Home Bank, N.A. (the “Bank”) (www.home24bank.com), reported results for the second quarter of 2019.  Net income for the second quarter of 2019 was $6.6 million, or $0.71 per diluted common share (“EPS”), compared to $7.9 million, or $0.85 EPS, for the first quarter of 2019.

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

Key performance metrics for the second quarter of 2019 include:

  • Loans grew by $44.0 million, or 11% annualized;
  • Total deposits increased $11.6 million, or 3% annualized;
  • Nonperforming assets decreased $1.1 million, or 4%;
  • Return on average assets, return on average equity and return on average tangible common equity were 1.20%, 8.48% and 11.25%, respectively;
  • Net income declined $1.3 million, or 17%, compared to the previous quarter, due primarily to facilities-related charges of $504,000 (net of tax), higher compensation and benefits expense and provisioning for loan growth;
  • The net interest margin was 4.36%, a decline of 5 basis points as higher deposit costs outpaced an increase in loan yields;
  • Share repurchases totaled 83,188 shares at an average price of $36.17 per share; and
  • Bank capital remained strong with a common equity ratio of 14.12% at quarter end.

“The Home Bank team is focused on adding value to our customers’ financial lives,” stated John W. Bordelon, President and Chief Executive Officer of the Company and the Bank, “That focus provided loan portfolio growth in the second quarter at an annualized rate of 11% as our customers made significant investments in their businesses.”

“Our team opened a new branch and relocated another branch in Baton Rouge to better serve our customers and to expand on the growth opportunities we see in that region,” added Bordelon, “These new locations are off to a great start as more businesses and individuals learn of our commitment to helping them prosper.”

The Company also announced that its Board of Directors declared a quarterly cash dividend on shares of its common stock of $0.21 per share payable on August 16, 2019, to shareholders of record as of August 5, 2019.

Loans and Credit Quality

Loans totaled $1.7 billion at June 30, 2019, an increase of $44.0 million, or 3%, from March 31, 2019.  Loan growth for the second quarter, which totaled 11% on an annualized basis, was primarily driven by increases in commercial real estate loans (up $30.5 million), construction and land loans (up $6.6 million) and commercial and industrial loans (up $5.0 million). Commercial real estate loan growth was spread across our Louisiana markets in a variety of industries. Construction and land loans increased primarily due to growth in existing real estate development relationships located in the Baton Rouge and Northshore (of Lake Pontchartrain) markets. Commercial and industrial loan growth was due primarily to increases in agriculture production and farm-related loans in the southwest Acadiana market.

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

June 30,

March 31,

Increase/(Decrease)

(dollars in thousands)

2019

2019

Amount

Percent

Real estate loans:

     One- to four-family first mortgage

$

442,896

$

441,921

$

975

%

     Home equity loans and lines

81,794

80,598

1,196

1

     Commercial real estate

691,939

661,446

30,493

5

     Construction and land

200,153

193,541

6,612

3

     Multi-family residential

47,827

46,055

1,772

4

        Total real estate loans

1,464,609

1,423,561

41,048

3

Other loans:

     Commercial and industrial

179,394

174,405

4,989

3

     Consumer

48,945

51,002

(2,057)

(4)

        Total other loans

228,339

225,407

2,932

1

Total loans

$

1,692,948

$

1,648,968

$

43,980

3

%

Nonperforming assets (“NPAs”), excluding purchased credit impaired loans, totaled $28.0 million at June 30, 2019, a decrease of $1.1 million, or 4%, compared to March 31, 2019. The ratio of NPAs to total assets was 1.26% at June 30, 2019, compared to 1.32% at March 31, 2019.      

The Company recorded net loan charge-offs of $96,000 during the second quarter of 2019, compared to net loan charge-offs of $168,000 for the first quarter of 2019.  The Company’s provision for loan losses for the second quarter of 2019 was $765,000, compared to $390,000 for the first quarter of 2019.  The increase in the provision for loan losses during the second quarter was primarily due to loan growth. 

The ratio of the allowance for loan losses to total loans was 1.02% at June 30, 2019, compared to 1.00% at March 31, 2019.  Excluding acquired loans, the ratio of the allowance for loan losses to total loans was 1.33% at June 30, 2019, compared to 1.34% at March 31, 2019.   

Direct Energy Exposure 

The outstanding balance of direct loans to borrowers in the energy sector totaled $40.5 million, or 2% of total outstanding loans, at June 30, 2019, compared to $43.0 million, or 3% of total outstanding loans, at March 31, 2019.  Unfunded loan commitments to customers in the energy sector totaled $7.3 million at June 30, 2019, compared to $7.4 million at March 31, 2019.    At June 30, 2019, loans constituting 94% of the balance of our direct energy-related portfolio 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 2.58% of the outstanding balance of originated energy-related portfolio at June 30, 2019, compared to 2.43% at March 31, 2019.

Deposits

Total deposits increased $11.6 million, or 1%, during the second quarter of 2019 to $1.8 billion at June 30, 2019. The following table sets forth the composition of the Company’s deposits as of the dates indicated.

June 30,

March 31,

Increase/(Decrease)

(dollars in thousands)

2019

2019

Amount

Percent

Demand deposits

$

449,402

$

442,940

$

6,462

1

%

Savings

205,798

202,762

3,036

1

Money market

278,514

291,747

(13,233)

(5)

NOW

506,025

501,126

4,899

1

Certificates of deposit

389,430

378,973

10,457

3

        Total deposits

$

1,829,169

$

1,817,548

$

11,621

1

%

Share Repurchases

The Company repurchased 83,188 shares of its common stock during the second quarter of 2019 at an average price per share of $36.17 under the Company’s outstanding share repurchase plan.  An additional 118,889 shares remain eligible for purchase under the current repurchase plan.  The book value per share and tangible book value per share of the Company’s common stock was $33.20 and $26.29, respectively, at June 30, 2019.    

Net Interest Income

Net interest income for the second quarter of 2019 totaled $21.9 million, an increase of $153,000, or 1%, compared to the first quarter of 2019. Net interest income increased primarily due to a $614,000, or 3%, increase in loan income, which was partially offset by a $404,000, or 12%, increase in the cost of deposits. The Company’s net interest margin was 4.36% for the second quarter of 2019, five basis points lower than the first quarter of 2019, as the cost of deposits outpaced an increase in loan yields.

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

June 30, 2019

March 31, 2019

(dollars in thousands)

Average
Balance

Interest

Average
Yield/
Rate

Average

Balance

Interest

Average
Yield/
Rate

Interest-earning assets:

Loans receivable

   Originated loans

$

1,136,566

$

15,841

5.53

%

$

1,106,230

$

14,943

5.42

%

   Acquired loans

529,275

7,971

5.99

543,396

8,255

6.11

        Total loans receivable

1,665,841

23,812

5.68

1,649,626

23,198

5.64

Investment securities (TE)

271,267

1,729

2.60

272,745

1,808

2.71

Other interest-earning assets

55,959

380

2.72

55,550

363

2.65

Total interest-earning assets

$

1,993,067

$

25,921

5.18

%

$

1,977,921

$

25,369

5.15

%

Interest-bearing liabilities:

Deposits:

Savings, checking, and money market

$

985,349

$

2,097

0.85

%

$

983,184

$

2,006

0.83

%

Certificates of deposit

383,345

1,638

1.71

367,614

1,325

1.46

Total interest-bearing deposits

1,368,694

3,735

1.09

1,350,798

3,331

1.00

Other borrowings

5,539

53

3.84

5,539

53

3.89

FHLB advances

57,182

258

1.80

58,195

263

1.81

Total interest-bearing liabilities

$

1,431,415

$

4,046

1.13

%

$

1,414,532

$

3,647

1.04

%

Net interest spread (TE)

4.05

%

4.11

%

Net interest margin (TE)

4.36

%

4.41

%

Noninterest Income

Noninterest income for the second quarter of 2019 totaled $3.0 million, a decrease of $188,000, or 6%, from the first quarter of 2019. Write-downs of three buildings acquired through mergers and two relocating branch locations totaled $347,000 (pre-tax) during the quarter. The decrease in noninterest income was partially offset by an increase in bank card fees.

Noninterest Expense

Noninterest expense for the second quarter of 2019 totaled $16.0 million, an increase of $661,000, or 4%, compared to the first quarter of 2019. The increase primarily resulted from higher compensation and benefits and occupancy expenses. The rise in compensation and benefits (up $515,000, or 6%) was driven primarily by routine annual salary adjustments and elevated employee health care claims. The increase in occupancy expenses (up $402,000, or 25%) was primarily due to $291,000 of costs incurred to terminate lease space acquired through a previous merger.

Income Tax Expense

Income tax expense for the second quarter of 2019 totaled $1.6 million, an increase of $239,000, or 18%, compared to the first quarter of 2019. The Company’s effective tax rate was 19.1% for the second quarter of 2019, compared to 14.3% for the first quarter of 2019. The rise in income taxes was due primarily to reduced levels of stock option exercises. During the first quarter of 2019, elevated levels of stock option exercises decreased income tax expense by $514,000. These options were associated with the 2009 stock option plan and were scheduled to expire in May 2019. 

Non-GAAP Reconciliation 

For the Three Months Ended

(dollars in thousands, except  per share data)

June 30,

2019

March 31,

2019

June 30,

2018

Reported net income

$

6,580

$

7,890

$

7,776

Add: CDI amortization, net tax

314

324

359

Non-GAAP tangible income

$

6,894

$

8,214

$

8,135

Total Assets

$

2,220,386

$

2,202,675

$

2,159,976

Less: Intangible assets

65,247

65,645

67,035

Non-GAAP tangible assets

$

2,155,139

$

2,137,030

$

2,092,941

Total shareholders’ equity

$

313,494

$

308,935

$

289,361

Less: Intangible assets

65,247

65,645

67,035

Non-GAAP tangible shareholders’ equity

$

248,247

$

243,290

$

222,326

Originated loans

$

1,177,630

$

1,108,655

$

987,642

Acquired loans

515,318

540,313

638,037

Total loans

$

1,692,948

$

1,648,968

$

1,625,679

Originated allowance for loan losses

$

15,635

$

14,829

$

13,828

Acquired allowance for loan losses

1,604

1,741

1,145

Total allowance for loan losses

$

17,239

$

16,570

$

14,973

Return on average equity

8.48

%

10.45

%

10.89

%

Add: Average intangible assets

2.77

3.41

4.00

Non-GAAP return on average tangible common equity

11.25

%

13.86

%

14.89

%

Common equity ratio

14.12

%

14.03

%

13.40

%

Less: Intangible assets

2.60

2.65

2.78

Non-GAAP tangible common equity ratio

11.52

%

11.38

%

10.62

%

Book value per share

$

33.20

$

32.62

$

30.66

Less: Intangible assets

6.91

6.93

7.10

Non-GAAP tangible book value per share

$

26.29

$

25.69

$

23.56

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, write down on bank properties, early termination cost for office lease, merger expenses 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. 

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)

June 30,

December 31,

%

June 30,

March 31,

(dollars in thousands)

2019

2018

Change

2018

2019

Assets

Cash and cash equivalents

$     71,325

$        59,618

20

%

$     80,489

$   103,786

Interest-bearing deposits in banks

694

939

(26)

1,429

694

Investment securities available for sale, at fair value

261,626

260,131

1

264,259

267,310

Investment securities held to maturity

8,163

10,872

(25)

12,869

9,110

Mortgage loans held for sale

4,501

2,086

116

9,711

1,986

Loans, net of unearned income

1,692,948

1,649,754

3

1,625,679

1,648,968

Allowance for loan losses

(17,239)

(16,348)

5

(14,973)

(16,570)

     Total loans, net of allowance for loan losses

1,675,709

1,633,406

3

1,610,706

1,632,398

Office properties and equipment, net

47,698

47,124

1

45,192

47,030

Cash surrender value of bank-owned life insurance

39,927

29,560

35

29,228

29,725

Goodwill and core deposit intangibles

65,247

66,055

(1)

67,035

65,645

Accrued interest receivable and other assets

45,496

43,867

4

39,058

44,991

Total Assets

$ 2,220,386

$   2,153,658

3

$ 2,159,976

$ 2,202,675

Liabilities

Deposits

$ 1,829,169

$   1,773,217

3

%

$ 1,788,545

$ 1,817,548

Other borrowings

5,539

5,539

5,539

Federal Home Loan Bank advances

54,615

58,698

(7)

69,974

57,889

Accrued interest payable and other liabilities

17,569

12,164

44

12,096

12,764

Total Liabilities

1,906,892

1,849,618

3

1,870,615

1,893,740

Shareholders’ Equity

Common stock

94

95

(1)

%

94

95

Additional paid-in capital

169,233

168,243

1

166,897

169,091

Common stock acquired by benefit plans

(3,351)

(3,539)

(5)

(3,737)

(3,443)

Retained earnings 

146,348

141,447

3

129,645

143,998

Accumulated other comprehensive income 

1,170

(2,206)

153

(3,538)

(806)

Total Shareholders’ Equity

313,494

304,040

3

289,361

308,935

Total Liabilities and Shareholders’ Equity

$ 2,220,386

$   2,153,658

3

$ 2,159,976

$ 2,202,675

 

HOME BANCORP, INC. AND SUBSIDIARY

CONDENSED STATEMENTS OF INCOME

(Unaudited)

 For The Three Months Ended 

 For the Six Months Ended 

 June 30, 

%

 June 30, 

%

(dollars in thousands except per share data)

2019

2018

Change

2019

2018

Change

Interest Income

Loans, including fees

$ 23,812

$ 23,527

1

%

$ 47,010

$ 46,331

1

%

Investment securities

1,729

1,710

1

3,537

3,204

10

Other investments and deposits

380

338

12

743

765

(3)

Total interest income

25,921

25,575

1

51,290

50,300

2

Interest Expense

Deposits

3,735

1,927

94

%

7,066

3,829

85

%

Other borrowings expense

53

106

Federal Home Loan Bank advances

258

312

(17)

521

630

(17)

Total interest expense

4,046

2,239

81

7,693

4,459

73

Net interest income

21,875

23,336

(6)

43,597

45,841

(5)

Provision for loan losses

765

581

32

1,155

1,545

(25)

Net interest income after provision for loan losses

21,110

22,755

(7)

42,442

44,296

(4)

Noninterest Income

Service fees and charges

1,413

1,520

(7)

%

2,880

3,174

(9)

%

Bank card fees

1,212

1,196

1

2,273

2,295

(1)

Gain on sale of loans, net

248

201

23

403

408

(1)

Income from bank-owned life insurance

202

164

23

367

324

13

(Loss) gain on the closure or sale of assets, net

(327)

(328)

145

(326)

Other income

229

264

(13)

547

481

14

Total noninterest income

2,977

3,345

(11)

6,142

6,827

(10)

Noninterest Expense

Compensation and benefits

9,613

9,222

4

%

18,711

18,164

3

%

Occupancy

2,008

1,719

17

3,614

3,394

6

Marketing and advertising

308

329

(6)

579

610

(5)

Data processing and communication

1,596

2,344

(32)

3,018

4,023

(25)

Professional fees

218

306

(29)

457

592

(23)

Forms, printing and supplies

181

274

(34)

342

631

(46)

Franchise and shares tax

398

363

10

797

729

9

Regulatory fees

283

343

(17)

590

722

(18)

Foreclosed assets, net

40

87

(54)

281

190

48

Amortization of acquisition intangible

398

455

(13)

808

957

(16)

Other expenses

909

880

3

2,046

1,900

8

Total noninterest expense

15,952

16,322

(2)

31,243

31,912

(2)

Income before income tax expense

8,135

9,778

(17)

17,341

19,211

(10)

Income tax expense

1,555

2,002

(22)

2,871

3,972

(28)

Net income

$  6,580

$  7,776

(15)

$ 14,470

$ 15,239

(5)

Earnings per share – basic

$    0.72

$    0.85

(15)

%

$    1.58

$    1.68

(6)

%

Earnings per share – diluted

$    0.71

$    0.83

(14)

$    1.56

$    1.64

(5)

Cash dividends declared per common share

$    0.21

$    0.17

24

%

$    0.41

$    0.32

28

%

 

HOME BANCORP, INC. AND SUBSIDIARY

SUMMARY FINANCIAL INFORMATION

(Unaudited)

 For The Three Months Ended 

 For The Three  

 June 30, 

%

 Months Ended 

%

2019

2018

 Change 

 March 31, 2019 

 Change 

(dollars in thousands except per share data)

EARNINGS DATA

Total interest income

$       25,921

$       25,575

1

%

$              25,369

2

%

Total interest expense

4,046

2,239

81

3,647

11

Net interest income

21,875

23,336

(6)

21,722

1

Provision for loan losses

765

581

32

390

96

Total noninterest income

2,977

3,345

(11)

3,165

(6)

Total noninterest expense

15,952

16,322

(2)

15,291

4

Income tax expense

1,555

2,002

(22)

1,316

18

Net income

$        6,580

$        7,776

(15)

$                7,890

(17)

AVERAGE BALANCE SHEET DATA

Total assets

$  2,190,604

$  2,164,664

1

%

$          2,166,317

1

%

Total interest-earning assets

1,993,067

1,981,710

1

1,977,921

1

Total loans

1,665,841

1,634,310

2

1,649,626

1

Total interest-bearing deposits

1,368,694

1,347,046

2

1,350,798

1

Total interest-bearing liabilities

1,431,415

1,417,322

1

1,414,532

1

Total deposits

1,810,377

1,804,376

1,786,181

1

Total shareholders’ equity

311,308

286,482

9

306,240

2

SELECTED RATIOS (1)

Return on average assets

1.20

%

1.44

%

(16)

%

1.48

%

(19)

%

Return on average equity

8.48

10.89

(22)

10.45

(19)

Common equity ratio

14.12

13.40

5

14.03

1

Efficiency ratio (2)

64.19

61.17

5

61.44

5

Average equity to average assets

14.21

13.23

7

14.14

1

Tier 1 leverage capital ratio(3) 

11.15

10.16

10

10.93

2

Total risk-based capital ratio(3) 

15.75

14.52

8

15.27

3

Net interest margin (4)

4.36

4.69

(7)

4.41

(1)

SELECTED NON-GAAP RATIOS (1)

Tangible common equity ratio(5)

11.52

%

10.62

%

8

%

11.38

%

1

%

Return on average tangible common equity(6) 

11.25

14.89

(24)

13.86

(19)

PER SHARE DATA

Earnings per share – basic

$          0.72

$          0.85

(15)

$                 0.86

(17)

%

Earnings per share – diluted

0.71

0.83

(14)

0.85

(17)

Book value at period end

33.20

30.66

8

32.62

2

Tangible book value at period end

26.29

23.56

12

25.69

2

Shares outstanding at period end

9,441,800

9,437,654

%

9,471,857

Weighted average shares outstanding

   Basic

9,155,074

9,047,753

1

%

9,123,786

%

   Diluted

9,207,880

9,299,360

(1)

9,247,851

(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%.

(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 commonshareholders’ equity less average intangible assets. See “Non-GAAP Reconciliation” for additional information.

 

HOME BANCORP, INC. AND SUBSIDIARY

SUMMARY CREDIT QUALITY INFORMATION

(Unaudited)

June 30, 2019

March 31, 2019

June 30, 2018

Acquired

Originated

Total

Acquired

Originated

Total

Acquired

Originated

Total

(dollars in thousands)

CREDIT QUALITY(1) 

Nonaccrual loans (2) 

$ 10,945

$   15,027

$ 25,972

$ 11,733

$ 14,838

$ 26,571

$ 3,696

$ 18,548

$ 22,244

Accruing loans past due 90 days and over

Total nonperforming loans

10,945

15,027

25,972

11,733

14,838

26,571

3,696

18,548

22,244

Foreclosed assets

1,893

87

1,980

2,336

145

2,481

406

86

492

Total nonperforming assets

12,838

15,114

27,952

14,069

14,983

29,052

4,102

18,634

22,736

Performing troubled debt restructurings

217

1,080

1,297

219

1,131

1,350

1,054

2,717

3,771

Total nonperforming assets and troubled 

debt restructurings

$ 13,055

$   16,194

$ 29,249

$ 14,288

$ 16,114

$ 30,402

$ 5,156

$ 21,351

$ 26,507

Nonperforming assets to total assets

1.26

%

1.32

%

1.05

%

Nonperforming loans to total assets 

1.17

1.21

1.03

Nonperforming loans to total loans 

1.53

1.61

1.37

Allowance for loan losses to nonperforming assets

61.67

57.04

65.85

Allowance for loan losses to nonperforming loans

66.38

62.36

67.31

Allowance for loan losses to total loans

1.02

1.00

0.92

Year-to-date loan charge-offs

$     288

$     180

$  1,545

Year-to-date loan recoveries

24

12

166

Year-to-date net loan charge-offs 

$     264

$     168

$  1,379

Annualized YTD net loan charge-offs to average loans

0.03

%

0.04

%

0.17

%

(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 $9.9 million, $9.9 million and $10.4 million at June 30, 2019, March 31, 2019 and June 30, 2018, respectively. Acquired restructured loans placed on nonaccrual totaled $1.9 million, $1.2 million and $949,000 at June 30, 2019, March 31, 2019 and June 30, 2018, respectively.   

 

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