Home Bancorp Announces 2010 Third Quarter Results

Oct 26, 2010, 07:00 ET from Home Bancorp, Inc.

LAFAYETTE, La., Oct. 26 /PRNewswire-FirstCall/ -- 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 $911,000 for the third quarter of 2010, a decrease of $556,000, or 38%, compared to the second quarter of 2010 and a decrease of $586,000, or 39%, compared to the third quarter of 2009. The third quarter of 2010 was negatively impacted by an $870,000 charge for the other-than-temporary impairment ("OTTI") of investment securities. Excluding the impact of the OTTI charge, net income for the third quarter of 2010 was $1.5 million, an increase of $19,000, or 1%, compared to the second quarter of 2010 and a decrease of $12,000, or 1%, compared to the third quarter of 2009.  Diluted earnings per share were $0.12 for the third quarter of 2010, a decrease of 37% compared to the second quarter of 2010 and the third quarter of 2009. Excluding the impact of the OTTI charge, diluted earnings per share were $0.20 for the third quarter of 2010, an increase of 5% compared to the second quarter of 2010 and the third quarter of 2009.

"We expect many changes in our industry over the next 12 to 24 months," stated John W. Bordelon, President and Chief Executive Officer of the Company and the Bank. "Our team is focused on positioning our company to grow amidst the many regulatory and economic challenges facing our industry."

"Our loan quality remains strong and core deposit growth continues to be outstanding," added Mr. Bordelon. "Although our reported earnings are down this quarter due to an OTTI charge, our core earnings have been enhanced in 2010 with the acquisition of our Northshore franchise and growth in our Acadiana and Baton Rouge markets."

Loans and Credit Quality

The Company's market areas, which are located in southern Louisiana, have been affected by the Deepwater Horizon oil spill in the Gulf of Mexico and the recently lifted deep-water drilling moratorium. The Company's direct exposure to borrowers with significant operations linked to deep-water drilling in the Gulf amounted to $5.6 million in outstanding loan balances as of September 30, 2010, or 1% of total loans at such date. The Company has remained in contact with each of the impacted borrowers. All such loans are performing in accordance with their terms and, based on our discussions with the borrowers and internal reviews, the Company does not believe it will suffer losses on these loans.  

As previously reported, Home Bank entered into a purchase and assumption agreement with the Federal Deposit Insurance Corporation ("FDIC") on March 12, 2010 to purchase certain assets and to assume deposits and certain other liabilities of Statewide Bank, a full service community bank formerly headquartered in Covington, Louisiana. As a result of the transaction, the Company acquired loans with contractual balances totaling $157.0 million. After fair value adjustments, the book value of the loans acquired totaled $110.4 million. Home Bank entered into loss sharing agreements with the FDIC which cover the acquired loan portfolio ("Covered Loans") and other repossessed assets (collectively referred to as "Covered Assets"). Under the terms of the loss sharing agreements, the FDIC will absorb 80% of the first $41 million of losses incurred on Covered Assets and 95% of losses on Covered Assets exceeding $41 million. The Company distinguishes between Covered Loans and loans not covered by the loss sharing agreements ("Noncovered Loans") due to the differing risk exposure relating to the loans.  

Total loans were $446.2 million at September 30, 2010, a decrease of $8.9 million, or 2%, from June 30, 2010, and an increase of $106.0 million, or 31%, from September 30, 2009. During the third quarter of 2010, Noncovered Loans decreased $298,000, while Covered Loans decreased $8.6 million. Growth in Noncovered construction and land (up $5.0 million during the third quarter) and commercial and industrial (up $1.8 million) loans was offset by a decrease in the Noncovered 1-4 family first mortgage loans (down $8.7 million). The third quarter decrease in Covered Loans related primarily to 1-4 family first mortgage (down $4.0 million) and construction and land (down $2.9 million) loans due primarily to loan repayments and foreclosures.

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

September 30, 2010

(dollars in thousands)

Covered

Loans

Noncovered

Loans

Total

Loans

December 31,

2009

Increase/(Decrease)

Real estate loans:

    One- to four-family first mortgage

$ 20,734

$112,000

$132,734

$ 120,044

$ 12,690

11%

    Home equity loans and lines

7,082

25,149

32,231

24,678

7,553

31

    Commercial real estate

36,767

109,637

146,404

97,513

48,891

50

    Construction and land

15,299

47,212

62,511

35,364

27,147

77

    Multi-family residential

1,233

4,210

5,443

4,089

1,354

33

       Total real estate loans

81,115

298,208

379,323

281,688

97,635

35

Other loans:

    Commercial

7,275

36,683

43,958

38,340

5,618

15

    Consumer

2,957

19,992

22,949

16,619

6,330

38

       Total other loans

10,232

56,675

66,907

54,959

11,948

22

       Total loans

$ 91,347

$354,883

$446,230

$ 336,647

$109,583

33

Nonperforming assets, excluding Covered Assets, were $1.4 million at September 30, 2010, a decrease of $723,000, or 34%, from June 30, 2010, and a decrease of $1.3 million, or 49%, from September 30, 2009.  The decrease in the third quarter of 2010 was due to the sale of other real estate owned and a loan relationship which was brought current by the borrower and was returned to performing status.  The ratio of nonperforming assets to total assets (excluding Covered Assets) was 0.23% at September 30, 2010, compared to 0.35% at June 30, 2010 and 0.51% at September 30, 2009.  Total nonperforming assets, including Covered Assets, were $24.0 million at September 30, 2010 and June 30, 2010.  The ratio of total nonperforming assets to total assets (including Covered Assets) was 3.42% at September 30, 2010, compared to 3.38% at June 30, 2010.  

The Company recorded net loan charge-offs of $48,000 during the third quarter of 2010, compared to $76,000 in the second quarter of 2010 and $37,000 in the third quarter of 2009. The Company's loan loss provision for the third quarter of 2010 was $168,000, compared to $200,000 for the second quarter of 2010 and $287,000 for the third quarter of 2009.    

At September 30, 2010, the Company's allowance for loan losses to Noncovered Loans ratio was 1.11%, compared to 1.07% and 0.96% at June 30, 2010 and September 30, 2009, respectively.  The allowance for loan losses to total loans ratio was 0.88% at September 30, 2010, compared to 0.84% and 0.96% at June 30, 2010 and September 30, 2009, respectively.

Investment Securities Portfolio

The Company's investment securities portfolio totaled $132.4 million at September 30, 2010, a decrease of $3.9 million, or 3%, from June 30, 2010, and an increase of $16.0 million, or 14%, from September 30, 2009.  The increase in investment securities from September 30, 2009 resulted primarily from the addition of $24.8 million of U.S. agency mortgage-backed securities acquired from Statewide Bank.  At September 30, 2010, the Company had a net unrealized gain position on its investment securities portfolio of $1.1 million, compared to a net unrealized gain of $786,000 at June 30, 2010 and a net unrealized loss of $2.7 million at September 30, 2009.  Due to increasing delinquencies and defaults in the mortgage loans underlying certain non-agency mortgage-backed securities, the Company recorded an OTTI charge of $870,000 during the third quarter of 2010.

The amortized cost of the Company's non-agency mortgage-backed securities portfolio has decreased $8.4 million, or 21%, during 2010 primarily due to paydowns.  The following table summarizes the Company's non-agency mortgage-backed securities portfolio as of September 30, 2010 (in thousands).

Collateral

Tranche

S&P

Rating

Amortized

Cost

Unrealized

Gain/(Loss)

Prime

Super Senior

AAA

$    7,918

$         530

Prime

Senior

  AAA (1)

15,610

(423)

Prime

Senior

Below investment grade

2,636

(394)

Prime

Senior support

Below investment grade

1,486

(578)

Alt-A

Super senior

Below investment grade

1,557

(241)

Alt-A

Senior

AAA

619

28

Alt-A

Senior

  Below investment grade (2)

1,516

(61)

Total non-agency mortgage-backed securities

$   31,342

$      (1,139)

(1) Includes one security with an amortized cost of $1.6 million and an unrealized gain of $10,000 not rated by S&P.  This security is rated "Aaa" by Moody's.

(2) This security is not rated by S&P.   This security is rated "Caa2" by Moody's.

The Company holds no Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) preferred stock, equity securities, corporate bonds, trust preferred securities, hedge fund investments, collateralized debt obligations or structured investment vehicles.

Deposits

The Company's strong growth in core deposits (i.e., checking, savings and money market) continued during the third quarter of 2010, increasing $21.1 million during the quarter.  Excluding the core deposits acquired from Statewide Bank, core deposits have increased $45.0 million in 2010 (a 28% annualized growth rate).  Total deposits, which includes certificates of deposit, were $546.7 million at September 30, 2010, an increase of $10.2 million, or 2%, from June 30, 2010, and an increase of $170.0 million, or 45%, from September 30, 2009.  The Statewide Bank acquisition added $206.9 million in deposits during the first quarter of 2010, including $46.2 million of higher-cost, out-of-state brokered deposits which the Company elected to re-price.  Consistent with management's expectations, the vast majority of out-of-state depositors elected to withdraw their deposits.  

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

September 30,

December 31,

Increase / (Decrease)

(dollars in thousands)

2010

2009

Amount

Percent

Demand deposit

$   96,734

$   66,956

$   29,778

45%

Savings

27,765

21,009

6,756

32

Money market

119,932

80,810

39,122

48

NOW

64,313

48,384

15,929

33

Certificates of deposit

237,914

154,434

83,480

54

       Total deposits

$ 546,658

$ 371,593

$175,065

47

Net Interest Income

Net interest income for the third quarter of 2010 totaled $7.3 million, a decrease of $235,000, or 3%, compared to the second quarter of 2010, and an increase of $1.2 million, or 20%, compared to the third quarter of 2009.  The Company's net interest margin was 4.75% for the third quarter of 2010, 15 basis points lower than the second quarter of 2010 and eight basis points lower than the third quarter of 2009.  The decreases in net interest margin were primarily due to lower average yields on interest-earning assets as a result of the current low rate environment.  

The following table sets forth the Company's average balance and average yields earned and rates paid on its interest-earning assets and interest-bearing liabilities for the periods indicated.

For the Three Months Ended

September 30, 2010

June 30, 2010

September 30, 2009

(dollars in thousands)

Average Balance

Average Yield/Rate

Average Balance

Average Yield/Rate

Average Balance

Average Yield/Rate

Earning-assets:

Loans receivable

$456,262

6.58%

$455,574

6.73%

$343,618

6.50%

Investment securities

133,074

3.69

137,175

3.97

118,990

5.79

Other interest-earning assets

18,813

0.67

20,362

0.69

36,861

3.21

Total earning-assets

$608,149

5.76

$613,111

5.91

$499,469

6.09

Interest-bearing liabilities:

Deposits:

Savings, checking, and money market

$204,939

0.72

$193,271

0.73

$146,643

0.74

Certificates of deposit

243,240

1.68

255,856

1.62

161,017

2.71

Total interest-bearing deposits

448,179

1.24

449,127

1.24

307,660

1.77

FHLB Advances

22,570

2.48

27,436

2.27

20,809

3.59

Total interest-bearing liabilities

$470,749

1.30

$476,563

1.29

$328,469

1.88

Net interest spread

4.46%

4.62%

4.21%

Net interest margin

4.75

4.90

4.83

Noninterest Income

Noninterest income for the third quarter of 2010 totaled $613,000, a decrease of $722,000, or 54%, compared to the second quarter of 2010 and a decrease of $337,000, or 35%, compared to the third quarter of 2009.  Excluding the impact of the OTTI charge incurred in the third quarter of 2010, noninterest income for the third quarter of 2010 was $1.5 million, an increase of $148,000, or 11%, compared to the second quarter of 2010 and $534,000, or 56%, compared to the third quarter of 2009.

The increase in pre-OTTI noninterest income in the third quarter of 2010 compared to the second quarter of 2010 was primarily the result of increased gains on the sale of mortgage loans and higher levels of service fees and charges.  These increases were partially offset by a decrease in bank card fees and an OTTI charge of $141,000 incurred in the second quarter of 2010.

The increase in pre-OTTI noninterest income in the third quarter of 2010 compared to the third quarter of 2009 was primarily the result of increased gains on the sale of mortgage loans, higher levels of service fees and charges and bank card fees, and discount accretion related to the FDIC loss sharing receivable. The increase in gains on the sale of mortgage loans was the result of increased loan originations and refinancing due to the current low interest rate environment.  The increase in service fees and charges and bank card fees was primarily the result of the addition of accounts through the Statewide Bank acquistion.

Noninterest Expense

Noninterest expense for the third quarter of 2010 totaled $6.4 million, a decrease of $78,000, or 1%, compared to the second quarter of 2010 and an increase of $1.7 million, or 36%, compared to the third quarter of 2009.  

The decrease in noninterest expense in the third quarter of 2010 compared to the second quarter of 2010 was primarily attributable to decreases in compensation and benefits and occupancy expenses resulting from efficiencies gained from the conversion of the former Statewide Bank loan and deposit accounts into Home Bank's operating system during the third quarter of 2010.

The increase in noninterest expense in the third quarter of 2010 compared to the third quarter of 2009 was driven by higher compensation and benefits, occupancy and data processing and communications expenses related to the Statewide Bank acquisition and the addition of our Baton Rouge headquarters location in March 2010.  The Company began 2010 with 11 full-service banking offices.  The acquisition of six Statewide Bank locations and the opening of our Baton Rouge headquarters has increased our total number of full-service banking offices to 18.  Additionally, other expenses increased due to the amortization of the core deposit intangible resulting from the Statewide Bank acquisition, which amounted to $64,000 and $143,000 during the quarter and nine months ended September 30, 2010, respectively.

Non-GAAP Reconciliation

(dollars in thousands)

Third

Quarter

2010

First Nine

Months of

2010

Reported noninterest income

$    613

$ 2,946

Add: OTTI charge

870

1,011

Non-GAAP noninterest income

$ 1,483

$ 3,957

Reported net income

$   911

$ 3,223

Add: OTTI charge (after tax)

574

667

Non-GAAP net income

$1,485

$3,890

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 the impact of other-than-temporary impairment charges.  Management believes the presentation of this non-GAAP financial information provides useful information that is essential to a proper understanding of the Company's core operating results. This non-GAAP financial information should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial information presented by other companies.

This news release contains certain forwardlooking statements. Forwardlooking 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."

Forwardlooking 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 forwardlooking statements.  The Company's Annual Report on Form 10-K for the year ended December 31, 2009 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, 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, risks of competition, risks of our decisions regarding the fair value of assets acquired and risks regarding our ability to obtain reimbursement under the loss sharing agreements on Covered Assets. Forwardlooking statements speak only as of the date they are made.  We do not undertake to update forwardlooking statements to reflect circumstances or events that occur after the date the forwardlooking statements are made or to reflect the occurrence of unanticipated events.

HOME BANCORP, INC. AND SUBSIDIARY

CONDENSED STATEMENTS OF FINANCIAL CONDITION

September 30,

September 30,

%

June 30,

December 31,

2010

2009

Change

2010

2009

Assets

Cash and cash equivalents

$   23,771,777

$   37,352,620

(36)

%

$   21,976,535

$   25,709,597

Interest-bearing deposits in banks

6,387,000

3,150,000

103

7,112,000

3,529,000

Cash invested at other ATM locations

-

8,802,596

-

-

-

Investment securities available for sale, at fair value

111,607,433

105,049,877

6

115,131,224

106,752,131

Investment securities held to maturity

20,793,424

11,372,044

83

21,218,038

13,098,847

Mortgage loans held for sale

6,400,335

2,060,453

211

2,662,100

719,350

Loans covered by loss sharing agreements

91,346,684

-

-

99,984,239

-

Noncovered loans, net of unearned income

354,883,203

340,222,334

4

355,180,759

336,647,292

    Total loans

446,229,887

340,222,334

31

455,164,998

336,647,292

Allowance for loan losses

(3,923,826)

(3,271,926)

20

(3,804,560)

(3,351,688)

    Total loans, net of allowance for loan losses

442,306,061

336,950,408

31

451,360,438

333,295,604

FDIC loss sharing receivable

32,262,081

-

-

34,673,627

-

Office properties and equipment, net

23,621,092

15,309,879

54

23,452,816

16,186,690

Cash surrender value of bank-owned life insurance

16,034,149

5,461,662

194

15,872,609

15,262,645

Accrued interest receivable and other assets

15,297,599

7,900,029

94

15,858,555

10,081,885

Total Assets

$ 698,480,951

$ 533,409,568

31

$ 709,317,942

$ 524,635,749

Liabilities

Deposits

$ 546,657,570

$ 376,635,513

45

%

$ 536,485,853

$ 371,592,747

Federal Home Loan Bank advances

16,000,000

19,879,026

(20)

29,744,891

16,773,802

Accrued interest payable and other liabilities

3,744,475

4,302,342

(13)

10,349,392

3,519,896

Total Liabilities

566,402,045

400,816,881

41

576,580,136

391,886,445

Shareholders' Equity

Common stock

$          89,270

$          89,270

-

%

$          89,270

$          89,270

Additional paid-in capital

88,437,391

87,714,515

1

88,064,013

88,072,884

Treasury stock

(7,955,813)

-

-

(5,734,469)

(1,848,862)

Common stock acquired by benefit plans

(9,859,826)

(10,841,597)

9

(9,949,096)

(10,913,470)

Retained earnings

60,660,647

57,415,818

6

59,749,653

57,437,444

Accumulated other comprehensive income (loss)

707,237

(1,785,319)

140

518,435

(87,962)

Total Shareholders' Equity

132,078,906

132,592,687

-

132,737,806

132,749,304

Total Liabilities and Shareholders' Equity

$ 698,480,951

$ 533,409,568

31

$ 709,317,942

$ 524,635,749

HOME BANCORP, INC. AND SUBSIDIARY

CONDENSED STATEMENTS OF INCOME

For The Three Months Ended

For The Nine Months Ended

September 30,

%

September 30,

%

2010

2009

Change

2010

2009

Change

Interest Income

Loans, including fees

$ 7,549,667

$ 5,616,351

34

%

$ 21,100,559

$ 16,734,665

26

%

Investment securities

1,226,765

1,722,460

(29)

3,913,125

5,211,929

(25)

Other investments and deposits

32,899

296,759

(89)

94,226

960,011

(90)

Total interest income

8,809,331

7,635,570

15

25,107,910

22,906,605

10

Interest Expense

Deposits

1,403,060

1,371,889

2

%

4,021,924

4,219,932

(5)

%

Federal Home Loan Bank advances

139,521

186,168

(25)

453,571

639,343

(29)

Total interest expense

1,542,581

1,558,057

(1)

4,475,495

4,859,275

(8)

Net interest income

7,266,750

6,077,513

20

20,632,415

18,047,330

14

Provision for loan losses

167,580

287,061

(42)

717,362

709,210

1

Net interest income after provision for loan losses

7,099,170

5,790,452

23

19,915,053

17,338,120

15

Noninterest Income

Service fees and charges

541,538

471,925

15

%

1,535,811

1,370,769

12

%

Bank card fees

343,906

277,375

24

1,012,935

820,635

23

Gain on sale of loans, net

198,522

105,149

89

378,817

420,441

(10)

Income from bank-owned life insurance

161,540

66,082

144

473,206

192,845

145

Other-than-temporary impairment of securities

(870,254)

-

-

(1,010,771)

-

-

Gains on the sale of securities, net

-

-

-

39,131

-

-

Other income

237,932

29,159

716

516,689

110,280

369

Total noninterest income

613,184

949,690

(35)

2,945,818

2,914,970

1

Noninterest Expense

Compensation and benefits

3,824,287

2,849,756

34

%

10,707,803

7,788,637

37

%

Occupancy

615,972

325,581

89

1,652,035

971,983

70

Marketing and advertising

184,179

131,119

40

588,116

453,051

30

Data processing and communication

635,382

328,686

93

1,648,161

1,048,884

57

Professional fees

198,482

267,118

(26)

895,433

729,053

23

Franchise and shares tax

98,397

226,250

(57)

441,104

678,750

(35)

Regulatory fees

159,026

155,559

2

392,282

490,725

(20)

Other expenses

638,575

384,392

66

1,707,145

1,155,912

48

Total noninterest expense

6,354,300

4,668,461

36

18,032,079

13,316,995

35

Income before income tax expense

1,358,054

2,071,681

(34)

4,828,792

6,936,095

(30)

Income tax expense

447,061

574,244

(22)

1,605,589

2,278,120

(30)

Net income

$    910,993

$ 1,497,437

(39)

%

$   3,223,203

$   4,657,975

(31)

%

Earnings per share - basic

$          0.12

$          0.19

(37)

%

$            0.42

$            0.57

(26)

%

Earnings per share - diluted

$          0.12

$          0.19

(37)

$            0.42

$            0.57

(26)

HOME BANCORP, INC. AND SUBSIDIARY

SUMMARY FINANCIAL INFORMATION

For The Three Months Ended

For The Three  

September 30,

%  

Months Ended

%  

2010

2009

Change

June 30, 2010

Change

(dollars in thousands except per share data)

EARNINGS DATA

Total interest income

$                   8,809

$                  7,636

15

%

$                      9,042

(3)

%

Total interest expense

1,542

1,558

(1)

1,539

-

Net interest income

7,267

6,078

20

7,503

(3)

Provision for loan losses

168

287

(41)

200

(16)

Total noninterest income

613

949

(35)

1,335

(54)

Total noninterest expense

6,354

4,669

36

6,432

(1)

Income tax expense

447

574

(22)

739

(40)

Net income

$                      911

$                  1,497

(39)

$                      1,467

(38)

AVERAGE BALANCE SHEET DATA

Total assets

$               703,812

$              529,462

33

%

$                  702,783

-

%

Total interest-earning assets

608,149

499,469

22

613,111

(1)

Loans

456,262

343,618

33

455,574

-

Interest-bearing deposits

448,179

307,660

46

449,127

-

Interest-bearing liabilities

470,749

328,469

43

476,563

(1)

Total deposits

544,228

373,430

46

538,380

1

Total shareholders' equity

133,134

131,643

1

132,988

-

SELECTED RATIOS (1)

Return on average assets

0.52

%

1.13

%

(54)

%

0.83

%

(37)

%

Return on average equity

2.74

4.55

(40)

4.41

(38)

Efficiency ratio (2)

80.64

66.43

21

72.78

11

Average equity to average assets

18.92

24.86

(24)

18.92

-

Tier 1 leverage capital ratio (3)

15.27

19.86

(23)

14.88

3

Total risk-based capital ratio (3)

23.10

30.38

(24)

22.29

4

Net interest margin

4.75

4.83

(2)

4.90

(3)

PER SHARE DATA

Basic earnings per share

$                     0.12

$                    0.19

(37)

%

$                        0.19

(37)

%

Diluted earnings per share

0.12

0.19

(37)

0.19

(37)

Book value at period end

15.89

14.85

7

15.65

2

PER SHARE DATA

Shares outstanding at period end

8,311,602

8,926,875

(7)

%

8,480,531

(2)

%

Weighted average shares outstanding

  Basic

7,481,472

7,956,020

(6)

%

7,620,257

(2)

%

  Diluted

7,531,100

7,987,961

(6)

7,678,378

(2)

(1)  With the exception of end-of-period ratios, all ratios are based on average monthly balances during the respective periods and are annualized where appropriate.

(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)  Capital ratios are end of period ratios for the Bank only.

HOME BANCORP, INC. AND SUBSIDIARY

SUMMARY CREDIT QUALITY INFORMATION

September 30,

September 30, 2010

June 30, 2010

2009

Covered

Noncovered

Total

Covered

Noncovered

Total

Total (2)

(dollars in thousands)

CREDIT QUALITY (1)

Nonaccrual loans

$    19,851

$           1,391

$      21,242

$   19,214

$     1,668

$     20,882

$       2,716

Accruing loans past due 90 days and over

-

-

-

-

-

-

-

Total nonperforming loans

19,851

1,391

21,242

19,214

1,668

20,882

2,716

Other real estate owned

2,634

-

2,634

2,643

445

3,088

-

Total nonperforming assets

22,485

1,391

23,876

21,857

2,113

23,970

2,716

Performing troubled debt restructurings

-

729

729

-

743

743

-

Total nonperforming assets and troubled

debt restructurings

$    22,485

$           2,120

$      24,605

$   21,857

$     2,856

$     24,713

$       2,716

Nonperforming assets to total assets (3)

23.92

%

0.23

%

3.42

%

21.30

%

0.35

%

3.38

%

0.51

%

Nonperforming loans to total assets (3)

21.12

0.23

3.04

18.72

0.27

2.94

0.51

Nonperforming loans to total loans (3)

21.73

0.39

4.76

19.22

0.47

4.59

0.80

Allowance for loan losses to nonperforming assets

-

282.18

17.04

-

180.04

16.51

120.50

Allowance for loan losses to nonperforming loans

-

282.18

18.47

-

228.16

18.22

120.50

Allowance for loan losses to total loans

-

1.11

0.88

-

1.07

0.84

0.96

Year-to-date loan charge-offs

$             -

$              193

$           193

$            -

$        124

$          124

$            58

Year-to-date loan recoveries

-

48

48

-

27

27

15

Year-to-date net loan charge-offs

-

145

145

-

97

97

43

Annualized YTD net loan charge-offs to total loans

-

%

0.05

%

0.04

%

-

%

0.05

%

0.04

%

0.02

%

(1)  Nonperforming loans consist of nonaccruing loans and loans 90 days or more past due.  Nonperforming assets consist of nonperforming loans and repossessed assets.  It is our policy to cease accruing interest on all loans 90 days or more past due.  Repossessed assets consist of assets acquired through foreclosure or acceptance of title in-lieu of foreclosure.  

(2)  The Bank entered into loss sharing agreements with the FDIC related to the acquisition of Statewide Bank during the first quarter of 2010.  Thus, there were no loans covered under these agreements as of September 30, 2009.

(3)  The credit quality ratios are calculated with respect to the applicable assets and loan portfolios (i.e. Covered, Noncovered, and total).

SOURCE Home Bancorp, Inc.



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