Home Bancorp Announces 2011 First Quarter Results

LAFAYETTE, La., April 26, 2011 /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 $795,000 for the first quarter of 2011, a decrease of $670,000 compared to the fourth quarter of 2010 and a decrease of $51,000 compared to the first quarter of 2010.  Diluted earnings per share were $0.11 for the first quarter of 2011 and the fourth quarter of 2010, compared to $0.20 first quarter of 2010.

"Although loan demand was modest to start the year," stated John W. Bordelon, President and Chief Executive Officer of the Company and the Bank, "we continue to enjoy excellent core deposit growth, which increased at an annualized rate of over 14% during the first quarter."

"We finished the quarter by announcing our expansion into Orleans and Jefferson Parishes through the acquisition of Guaranty Savings Bank," added Mr. Bordelon.  "We are confident that Guaranty's talented team of bankers and Home Bank's commitment to enhancing the long-term success of our customers will set us apart in New Orleans just as it has in our other markets."

Acquisition of GS Financial Corp.

As previously disclosed on March 30, 2011, the Company entered into a definitive agreement to merge with GS Financial Corp. (Nasdaq: GSLA), the holding company of the 74-year-old Guaranty Savings Bank.  Under the terms of the agreement, GS Financial will be merged with and into Home Bancorp in a two-step transaction and Guaranty Savings Bank will be merged with and into the Bank.  Shareholders of GS Financial will receive $21.00 per share in cash upon completion of the merger.  The merger, which is expected to be completed in the third quarter of 2011, is subject to GS Financial Corp. shareholder approval, regulatory approval and other customary conditions.  The Company anticipates that the transaction will be over 10% accretive to earnings once savings are fully phased in by 2012.  The dilution to tangible book value is expected to be minimal.  Upon completion of the merger, the combined company will have total assets of approximately $950 million, $625 million in loans and $750 million in deposits.  The Company incurred $191,000 in pre-tax merger-related expenses during the first quarter of 2011.

Loans and Credit Quality

The Company's total loans were $442.0 million at March 31, 2011, an increase of $2.1 million, or 1%, from December 31, 2010, and a decrease of $8.3 million, or 2%, from March 31, 2010.  During the first quarter of 2011, Noncovered Loans increased $6.5 million, while Covered Loans decreased $4.5 million.  Growth in the Noncovered Loan portfolio was in commercial and industrial (up $6.2 million) and commercial real estate (up $1.3 million) loans.  Growth in these portfolios was partially offset by decreases in Noncovered one- to four-family first mortgage (down $933,000) and construction and land (down $918,000) loans.

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





(dollars in thousands)

March 31,
2011

December 31,
2010

Total Loans
Increase/(Decrease)

Noncovered real estate loans:





    One- to four-family first mortgage

$104,224

$ 105,157

$ (933)

(1)%

    Home equity loans and lines

24,796

24,898

(102)

-

    Commercial real estate

117,264

115,946

1,318

1

    Construction and land

44,259

45,177

(918)

(2)

    Multi-family residential

4,634

4,493

141

3

       Total noncovered real estate loans

295,177

295,671

(494)

-

Noncovered other loans:





    Commercial

48,440

42,247

6,193

15

    Consumer

22,386

21,546

840

4

       Total noncovered other loans

70,826

63,793

7,033

11

       Total noncovered loans

366,003

359,464

6,539

2

Covered loans

75,996

80,447

(4,451)

(6)

       Total loans

$441,999

$ 439,911

$    2,088

1




Credit quality statistics remained exceptional during the first quarter of 2011. Nonperforming assets, excluding Covered Assets, were $1.2 million at March 31, 2011, an increase of $34,000, or 3%, from December 31, 2010, and a decrease of $712,000, or 38%, from March 31, 2010.  The ratio of nonperforming assets, excluding Covered Assets, to total assets was 0.19% at March 31, 2011 and December 31, 2010, compared to 0.32% at March 31, 2010.

The Company recorded net charge-offs of $3,000 during the first quarter of 2011, compared to net charge-offs of $151,000 in the fourth quarter of 2010 and $21,000 in the first quarter of 2010. The Company's loan loss provision for the first quarter of 2011 was $102,000, compared to $147,000 and $350,000 for the fourth quarter of 2010 and the first quarter of 2010, respectively.

At March 31, 2011, the Company's ratio of allowance for loan losses to total Noncovered Loans was 1.10%, compared to 1.09% and 1.08% at December 31, 2010 and March 31, 2010, respectively.

Investment Securities Portfolio

Due to more favorable market pricing, the Company sold $3.6 million of its non-agency mortgage-backed securities portfolio during the first quarter of 2011.  The sale of these securities, which included the below-investment-grade securities held by the Company, resulted in a $166,000 pre-tax net loss.  The remaining portfolio of non-agency mortgage-backed securities, which had an amortized cost of $16.5 million at March 31, 2011, are all rated AAA or Aaa by Standard & Poor's or Moody's.

The Company's investment securities portfolio totaled $141.7 million at March 31, 2011, an increase of $14.5 million, or 11%, from December 31, 2010, and an increase of $3.5 million, or 3%, from March 31, 2010.  At March 31, 2011, the Company had a net unrealized gain position on its investment securities portfolio of $1.6 million, compared to a net unrealized gain of $1.0 million and a net unrealized loss of $191,000 at December 31, 2010 and March 31, 2010, respectively.

Deposits

Core deposits (i.e., checking, savings and money market accounts) increased for the seventh consecutive quarter, posting growth of $12.0 million, or 4%, during the first three months of 2011.  Total deposits were $543.6 million at March 31, 2011, a decrease of $9.6 million, or 2%, from December 31, 2010, and an increase of $3.7 million, or 1%, from March 31, 2010.

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





March 31,

December 31,

Increase / (Decrease)

(dollars in thousands)

2011

2010

Amount

Percent

Demand deposit

$   102,335

$  100,579

$   1,756

2%

Savings

31,264

29,258

2,006

7

Money market

143,088

133,245

9,843

7

NOW

66,757

68,398

(1,641)

(2)

Certificates of deposit

200,175

221,738

(21,563)

(10)

       Total deposits

$ 543,619

$ 553,218

$  (9,599)

(2)%




Net Interest Income

Net interest income for the first quarter of 2011 totaled $6.9 million, a decrease of $265,000, or 4%, compared to the fourth quarter of 2010, and an increase of $1.0 million, or 17%, compared to the first quarter of 2010.  The Company's net interest margin was 4.67% for the first quarter of 2011, three basis points lower than the fourth quarter of 2010 and two basis points lower than the first quarter of 2010.  

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.









For the Three Months Ended


March 31, 2011

December 31, 2010

March 31, 2010

(dollars in thousands)

Average Balance

Average Yield/Rate

Average Balance

Average Yield/Rate

Average Balance

Average Yield/Rate

Earning-assets:







Loans receivable

$439,490

6.59%

$448,172

6.61%

$360,963

6.61%

Investment securities

130,607

2.94

124,561

3.39

123,183

4.30

Other interest-earning assets

24,423

0.61

32,045

0.47

20,049

0.55

Total earning-assets

$594,520

5.55

$604,778

5.62

$504,195

5.81








Interest-bearing liabilities:







Deposits:







Savings, checking, and money market

$233,440

0.53

$220,556

0.56

$153,003

0.72

Certificates of deposit

209,734

1.69

228,848

1.70

181,861

2.15

Total interest-bearing deposits

443,174

1.08

449,404

1.14

334,864

1.50

FHLB advances

15,280

2.64

14,027

3.17

17,897

3.53

Total interest-bearing liabilities

$458,454

1.13

$463,431

1.20

$352,761

1.60








Net interest spread


4.42%


4.42%


4.21%

Net interest margin


4.67%


4.70%


4.69%




Noninterest Income

Noninterest income for the first quarter of 2011 totaled $1.2 million, a decrease of $232,000, or 16%, compared to the fourth quarter of 2010 and an increase of $246,000, or 25%, compared to the first quarter of 2010.

The decrease in noninterest income in the first quarter of 2011 compared to the fourth quarter of 2010 resulted primarily from lower gains on the sale of mortgage loans and a net loss on the sale of a sizeable portion of the Company's non-agency mortgage-backed securities portfolio.  The sale of securities, which included the Company's holdings of below-investment-grade securities, resulted in a $166,000 pre-tax net loss.

The increase in noninterest income in the first quarter of 2011 compared to the first quarter of 2010 resulted primarily from higher levels of bank card fees and the discount accretion of the FDIC loss sharing receivable associated with the acquisition of Statewide Bank late in the first quarter of 2010. The increase in bank card fees was primarily the result of the addition of accounts through the Statewide acquisition.

Subsequent to the end of the first quarter of 2011, the Company entered into a settlement agreement with respect to litigation brought by the Company against a counterparty for losses reported by the Company in 2008 relating to the Company's former business line of providing cash to third-party ATM providers.  Under the terms of the settlement agreement, the Company received $525,000 in April 2011 and has foregone its right to pursue future claims related to any unrecovered loss.  The $525,000 will be reported as noninterest income in the second quarter of 2011.  The Company ceased providing cash to third-party ATM providers in 2009.

Noninterest Expense

Noninterest expense for the first quarter of 2011 totaled $6.7 million, an increase of $459,000, or 7%, compared to the fourth quarter of 2010 and an increase of $1.5 million, or 28%, compared the first quarter of 2010.

The increase in noninterest expense in the first quarter of 2011 compared to the fourth quarter of 2010 resulted primarily from an increase in franchise and shares taxes, compensation and benefits expense and $191,000 of merger-related expenses.  These increases were partially offset by a $101,000 decrease in repossessed asset expenses (reported in other noninterest expenses).

The increase in noninterest expense in the first quarter of 2011 compared to the first quarter of 2010 was primarily due to 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 mid-March 2010.  Additionally, regulatory fees increased during the quarter ended March 31, 2011 compared to the same quarter a year ago as a result of an increase in base insurance premium assessments on deposits by the FDIC.

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.  Home Bancorp's Annual Report on Form 10-K for the year ended December 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 and risks of competition. 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













March 31,


March 31,


%



December 31,


2011


2010


Change



2010

Assets









Cash and cash equivalents

$   22,466,923


$   17,841,146


26%



$   36,970,638

Interest-bearing deposits in banks

8,857,000


5,652,000


57



7,867,000

Investment securities available for sale, at fair value

133,933,288


123,608,320


8



111,962,331

Investment securities held to maturity

7,764,023


14,628,588


(47)



15,220,474

Mortgage loans held for sale

560,991


2,411,700


(77)



2,436,986

Loans covered by loss sharing agreements

75,996,118


108,056,686


(30)



80,446,859

Noncovered loans, net of unearned income

366,003,288


342,247,448


7



359,464,400

    Total loans

441,999,406


450,304,134


(2)



439,911,259

Allowance for loan losses

(4,019,285)


(3,680,819)


9



(3,919,745)

    Total loans, net of allowance for loan losses

437,980,121


446,623,315


(2)



435,991,514

FDIC loss sharing receivable

31,030,272


34,422,039


(10)



32,012,783

Office properties and equipment, net

23,216,809


17,386,998


34



23,371,915

Cash surrender value of bank-owned life insurance

16,338,064


15,710,189


4



16,192,645

Accrued interest receivable and other assets

18,327,587


18,455,796


(1)



18,396,806

Total Assets

$ 700,475,078


$ 696,740,091


1



$ 700,423,092



















Liabilities









Deposits

$ 543,619,256


$ 539,934,197


1%



$ 553,217,853

Federal Home Loan Bank advances

21,000,000


19,259,424


9



13,000,000

Accrued interest payable and other liabilities

3,281,323


4,681,109


(30)



2,675,297

Total Liabilities

567,900,579


563,874,730


1



568,893,150










Shareholders' Equity









Common stock

89,270


$          89,270


-%



$          89,270

Additional paid-in capital

89,183,147


88,424,553


1



88,818,862

Treasury stock

(11,028,575)


(2,980,831)


(270)



(10,425,725)

Common stock acquired by benefit plans

(9,676,562)


(10,824,200)


11



(9,770,556)

Retained earnings

62,920,252


58,282,859


8



62,125,568

Accumulated other comprehensive income (loss)

1,086,967


(126,290)


961



692,523

Total Shareholders' Equity

132,574,499


132,865,361


-



131,529,942

Total Liabilities and Shareholders' Equity

$ 700,475,078


$ 696,740,091


1



$ 700,423,092



HOME BANCORP, INC. AND SUBSIDIARY

CONDENSED STATEMENTS OF INCOME














For The Three Months Ended





For The Three  





March 31,


%



Months Ended


%



2011

2010


Change



December 31, 2010


Change


Interest Income











Loans, including fees

$ 7,160,653

$ 5,907,230


21%



$               7,456,346


(4)%


Investment securities

960,821

1,323,218


(27)



1,056,751


(9)


Other investments and deposits

36,721

27,323


34



37,895


(3)


Total interest income

8,158,195

7,257,771


12



8,550,992


(5)













Interest Expense











Deposits

1,177,048

1,236,197


(5)%



1,294,223


(9)%


Federal Home Loan Bank advances

100,640

157,659


(36)



111,440


(10)


Total interest expense

1,277,688

1,393,856


(8)



1,405,663


(9)


Net interest income

6,880,507

5,863,915


17



7,145,329


(4)


Provision for loan losses

102,276

350,032


(71)



147,297


(31)


Net interest income after provision for loan losses

6,778,231

5,513,883


23



6,998,032


(3)













Noninterest Income











Service fees and charges

474,824

467,389


2%



477,547


(1)%


Bank card fees

398,094

283,057


41



405,685


(2)


Gain on sale of loans, net

104,393

78,393


33



337,435


(69)


Income from bank-owned life insurance

145,419

149,246


(3)



158,496


(8)


Other-than-temporary impairment of securities

-

-


-



(218,266)


100


Gain (loss) on the sale of securities, net

(166,082)

-


-



10,374


(1,701)


Discount accretion of FDIC loss sharing receivable

238,669

-


-



236,895


1


Other income

48,036

19,535


146



66,968


(28)


Total noninterest income

1,243,353

997,620


25



1,475,134


(16)













Noninterest Expense











Compensation and benefits

3,998,408

3,012,137


33%



3,797,201


5%


Occupancy

565,261

387,983


46



565,753


-


Marketing and advertising

161,050

201,737


(20)



238,500


(32)


Data processing and communication

541,507

379,382


43



493,814


10


Professional fees

419,732

468,062


(10)



188,737


122


Franchise and shares tax

180,500

201,071


(10)



(40,515)


546


Regulatory fees

229,739

110,904


107



228,244


1


Other expenses

632,378

485,207


30



798,210


(21)


Total noninterest expense

6,728,575

5,246,483


28



6,269,944


7


Income before income tax expense

1,293,009

1,265,020


2



2,203,222


(41)


Income tax expense

498,325

419,605


19



738,301


(33)


Net income

$    794,684

$    845,415


(6)%



$               1,464,921


(46)%













Earnings per share:











Basic

$          0.11

$          0.11


-%



$                        0.20


(45)%


Diluted

$          0.11

$          0.11


-



$                        0.20


(45)




HOME BANCORP, INC. AND SUBSIDIARY

SUMMARY FINANCIAL INFORMATION




























For The Three Months Ended





For The Three  






March 31,


%  



Months Ended



%  



2011


2010


Change



December 31, 2010



Change















AVERAGE BALANCE SHEET DATA













Total assets

$  692,755


$  559,413


24%



$                  698,683



(1)%


Total interest-earning assets

594,520


504,195


18



604,779



(2)


Loans

439,490


360,963


22



448,172



(2)


Interest-bearing deposits

443,174


334,864


32



449,404



(1)


Interest-bearing liabilities

458,454


352,761


30



463,431



(1)


Total deposits

543,323


407,380


33



551,010



(1)


Total shareholders' equity

131,994


129,618


2



131,802



-















SELECTED RATIOS (1)













Return on average assets

0.46%


0.60%


(23)%



0.84%



(45)%


Return on average equity

2.41


2.61


(8)



4.45



(46)


Efficiency ratio (2)

82.82


76.46


8



72.18



15


Average equity to average assets

19.05


23.17


(18)



18.86



1


Tier 1 leverage capital ratio (3)

15.59


14.94


4



15.46



1


Total risk-based capital ratio (3)

24.86


21.32


17



23.65



5


Net interest margin

4.67


4.69


-



4.70



(1)















PER SHARE DATA













Basic earnings per share

$        0.11


$        0.11


-%



$                        0.20



(45)%


Diluted earnings per share

0.11


0.11


-



0.20



(45)


Book value at period end

16.39


15.30


7



16.18



1















PER SHARE DATA













Shares outstanding at period end

8,087,159


8,682,700


(7)%



8,131,002



(1)%


Weighted average shares outstanding













  Basic

7,177,377


7,707,576


(7)%



7,274,882



(1)%


  Diluted

7,277,013


7,789,451


(7)



7,347,275



(1)















(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












































March 31, 2011


March 31, 2010


December 31, 2010


Covered

Noncovered

Total


Covered

Noncovered

Total


Covered

Noncovered

Total

(dollars in thousands)












CREDIT QUALITY (1)












Nonaccrual loans

$ 15,479

$ 1,090

$ 16,569


$ 16,780

$ 1,473

$ 18,253


$ 15,988

$ 1,056

$ 17,044

Accruing loans past due 90 days and over

-

-

-


-

-

-


-

-

-

Total nonperforming loans

15,479

1,090

16,569


16,780

1,473

18,253


15,988

1,056

17,044

Other real estate owned

5,281

92

5,373


2,536

421

2,957


5,661

92

5,753

Total nonperforming assets

20,760

1,182

21,942


19,316

1,894

21,210


21,649

1,148

22,797

Performing troubled debt restructurings

-

1,067

1,067


-

762

762


-

721

721

Total nonperforming assets and troubled












debt restructurings

$ 20,760

$ 2,249

$ 23,009


$ 19,316

$ 2,656

$ 21,972


$ 21,649

$ 1,869

$ 23,518













Nonperforming assets to total assets (2)


0.19%




0.32%




0.19%


Nonperforming loans to total assets (2)


0.18




0.25




0.17


Nonperforming loans to total loans (2)


0.30




0.43




0.29


Allowance for loan losses to nonperforming assets


340.12




194.30




341.51


Allowance for loan losses to nonperforming loans


368.80




249.90




371.23


Allowance for loan losses to total loans


1.10




1.08




1.09














Year-to-date loan charge-offs

$           -

$        9

$          9


$           -

$      28

$        28


$           -

$    369

$      369

Year-to-date loan recoveries

-

6

6


-

7

7


-

72

72

Year-to-date net loan charge-offs

$         -

$        3

$          3


$         -

$      21

$        21


$         -

$    297

$      297

Annualized YTD net loan charge-offs to total loans

-%

-%

-%


-%

0.02%

0.02%


-%

0.08%

0.07%





































(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 loans 90 days or more past due.  Repossessed assets consist of assets acquired through foreclosure or acceptance of title in-lieu of foreclosure.  

(2)  Asset quality information excludes assets covered under FDIC loss sharing agreements.



SOURCE Home Bancorp, Inc.



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