Home Bancorp Announces 2011 Second Quarter Results

Jul 26, 2011, 08:00 ET from Home Bancorp, Inc.

LAFAYETTE, La., July 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 $1.3 million for the second quarter of 2011, an increase of $473,000, or 60%, compared to the first quarter of 2011 and a decrease of $199,000, or 14%, compared to the second quarter of 2010.  Diluted earnings per share were $0.17 for the second quarter of 2011, compared to $0.11 for the first quarter of 2011 and $0.19 for the second quarter of 2010.  

"The South Louisiana banking landscape is changing rapidly due to acquisitions and regulatory and financial pressures on many institutions," stated John W. Bordelon, President and Chief Executive Officer of the Company and the Bank.  "This transition had led many to question their current relationships.  Our reputation for serving our associates and customers continues to foster opportunities to attract exceptional bankers and customers into our family."

"Although loan demand was relatively light during the first half of the year," added Mr. Bordelon, "the loan pipeline began to build late in the second quarter.  We expect to have opportunities to deepen and add new relationships over the remainder of 2011."  

Acquisition of GS Financial Corp.

As previously reported, the Company completed the acquisition of GS Financial Corp., the holding company of Guaranty Savings Bank of Metairie, Louisiana on July 15, 2011.  As of the July 15th closing date, the combined company had total assets of approximately $975 million, $640 million in loans and $720 million in deposits.  

The Company plans to convert operating systems at the former Guaranty Savings Bank to those of Home Bank in September 2011.  The Company expects to realize cost savings of approximately $1.5 million on a pre-tax basis, and 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.  Merger-related expenses are expected to total approximately $2.5 million on a pre-tax basis.  Following the merger, Home Bank's capital position remains one of the strongest in the industry with total risk-based capital near 19%. No additional capital was needed to complete the transaction.  

Shareholders of GS Financial received $21.00 per share in cash, resulting in a total purchase price of $26.4 million.

Loans and Credit Quality

Loans totaled $449.5 million at June 30, 2011, an increase of $7.5 million, or 2%, from March 31, 2011, and a decrease of $5.6 million, or 1%, from June 30, 2010.  During the second quarter of 2011, Noncovered Loans increased $15.1 million, while Covered Loans decreased $7.6 million.  Growth in the Noncovered Loan portfolio was primarily driven by commercial real estate (up $6.2 million) and commercial and industrial (up $5.8 million) loans.  

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

(dollars in thousands)

June 30, 2011

December 31, 2010

Total Loans Increase/(Decrease)

Noncovered real estate loans:

    One- to four-family first mortgage

$103,680

$ 105,157

$ (1,477)

(1)%

    Home equity loans and lines

25,976

24,898

1,078

4

    Commercial real estate

123,509

115,946

7,563

7

    Construction and land

45,319

45,177

142

-

    Multi-family residential

4,562

4,493

69

2

       Total noncovered real estate loans

303,046

295,671

7,375

3

Noncovered other loans:

    Commercial and industrial

54,219

42,247

11,972

28

    Consumer

23,854

21,546

2,308

11

       Total noncovered other loans

78,073

63,793

14,280

22

       Total noncovered loans

381,119

359,464

21,655

6

Covered loans

68,422

80,447

(12,025)

(15)

       Total loans

$449,541

$ 439,911

$    9,630

2%

Credit quality statistics remained strong during the second quarter of 2011. Nonperforming assets, excluding Covered Assets, were $1.2 million at June 30, 2011, an increase of $37,000, or 3%, from March 31, 2011, and a decrease of $894,000, or 42%, from June 30, 2010.  The ratio of nonperforming assets, excluding Covered Assets, to total assets was 0.19% at June 30, 2011 and March 31, 2011, compared to 0.30% at June 30, 2010.  

The Company recorded net charge-offs of $227,000 during the second quarter of 2011, compared to net charge-offs of $3,000 in the first quarter of 2011 and $76,000 in the second quarter of 2010. The increase was primarily attributable to a $240,000 commercial loan charged off during the second quarter of 2011. The Company's loan loss provision for the second quarter of 2011 was $265,000, compared to $102,000 and $200,000 for the first quarter of 2011 and the second quarter of 2010, respectively.  

At June 30, 2011, the Company's ratio of allowance for loan losses to total Noncovered Loans was 1.06%, compared to 1.10% and 1.07% at March 31, 2011 and June 30, 2010, respectively.  

Investment Securities Portfolio

The Company's investment securities portfolio totaled $148.2 million at June 30, 2011, an increase of $6.5 million, or 5%, from March 31, 2011, and an increase of $11.9 million, or 9%, from June 30, 2010.  At June 30, 2011, the Company had a net unrealized gain position on its investment securities portfolio of $1.9 million, compared to net unrealized gains of $1.6 million and $786,000 as of March 31, 2011 and June 30, 2010, respectively.

As previously reported, the Company sold $3.6 million of its non-agency mortgage-backed securities portfolio during the first quarter of 2011.  All of the remaining securities in the Company's portfolio of non-agency mortgage-backed securities, which had an amortized cost of $15.6 million at June 30, 2011, are rated investment grade by Standard & Poor's and/or Moody's.      

Deposits

Core deposits (i.e., checking, savings and money market accounts) increased for the eighth consecutive quarter, posting growth of $1.3 million, or 0.4%, during the second quarter of 2011.  Total deposits were $527.4 million at June 30, 2011, a decrease of $16.2 million, or 3%, from March 31, 2011, and a decrease of $9.1 million, or 2%, from June 30, 2010.    

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

June 30,

December 31,

Increase / (Decrease)

(dollars in thousands)

2011

2010

Amount

Percent

Demand deposit

$   102,663

$  100,579

$   2,084

2%

Savings

31,370

29,258

2,112

7

Money market

144,944

133,245

11,699

9

NOW

65,800

68,398

(2,598)

(4)

Certificates of deposit

182,626

221,738

(39,112)

(18)

       Total deposits

$ 527,403

$ 553,218

$(25,815)

(5)%

Net Interest Income

Net interest income for the second quarter of 2011 totaled $7.0 million, an increase of $87,000, or 1%, compared to the first quarter of 2011, and a decrease of $535,000, or 7%, compared to the second quarter of 2010.  The Company's net interest margin was 4.55% for the second quarter of 2011, 12 basis points lower than the first quarter of 2011 and 35 basis points lower than the second 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

June 30, 2011

June 30, 2010

March 31, 2011

(dollars in thousands)

Average Balance

Average Yield/Rate

Average Balance

Average Yield/Rate

Average Balance

Average Yield/Rate

Earning assets:

Loans receivable

$445,947

6.53%

$455,574

6.73%

$439,490

6.59%

Investment securities

145,624

2.24

137,175

3.97

130,607

2.94

Other interest-earning assets

21,371

0.66

20,362

0.69

24,423

0.61

Total earning assets

$612,942

5.31

$613,111

5.91

$594,520

5.55

Interest-bearing liabilities:

Deposits:

Savings, checking, and money market

$241,960

0.48

$193,271

0.73

$233,440

0.53

Certificates of deposit

191,038

1.56

255,856

1.62

209,734

1.69

Total interest-bearing deposits

432,998

0.96

449,127

1.24

443,174

1.08

FHLB advances

41,011

1.12

27,436

2.27

15,280

2.64

Total interest-bearing liabilities

$474,009

0.97

$476,563

1.29

$458,454

1.13

Net interest spread

4.34%

4.62%

4.42%

Net interest margin

4.55%

4.90%

4.67%

Noninterest Income

Noninterest income for the second quarter of 2011 totaled $2.1 million, an increase of $860,000, or 69%, compared to the first quarter of 2011 and an increase of $708,000, or 51%, compared to the second quarter of 2010.  During the second 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 settlement payment is included in "other income" during the quarter.    

The increase in noninterest income in the second quarter of 2011 compared to the first quarter of 2011 resulted primarily from the litigation settlement in the second quarter of 2011 and a net loss of $166,000 on the sale of a sizeable portion of the Company's non-agency mortgage-backed securities portfolio in the first quarter of 2011.      

The increase in noninterest income in the second quarter of 2011 compared to the second quarter of 2010 resulted primarily from the litigation settlement, higher levels of bank card fees and a charge of $141,000 for the other-than-temporary impairment of securities during the second quarter of 2010.

Noninterest Expense

Noninterest expense for the second quarter of 2011 totaled $6.8 million, an increase of $84,000, or 1%, compared to the first quarter of 2011 and an increase of $321,000, or 5%, compared to the second quarter of 2010.  

The increase in noninterest expense in the second quarter of 2011 compared to the first quarter of 2011 resulted primarily from an increase in marketing and advertising expenses and data processing and communication expenses.  These increases were partially offset by decreases in compensation and benefits expenses and regulatory fees.

The increase in noninterest expense in the second quarter of 2011 compared to the second quarter of 2010 was primarily due to $157,000 of professional merger-related expenses recorded during the second quarter of 2011.  

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, 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. In addition, statements regarding the timing and success of the integration of GS Financial Corp., anticipated cost savings, earnings accretion, book value dilution and merger-related expenses are also forward-looking.  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

June 30,

June 30,

%

March 31,

December 31,

2011

2010

Change

2011

2010

Assets

Cash and cash equivalents

$   21,588,068

$   21,976,535

(2)

%

$   22,466,923

$   36,970,638

Interest-bearing deposits in banks

8,273,000

7,112,000

16

8,857,000

7,867,000

Investment securities available for sale, at fair value

140,969,334

115,131,224

22

133,933,288

111,962,331

Investment securities held to maturity

7,253,356

21,218,038

(66)

7,764,023

15,220,474

Mortgage loans held for sale

2,773,616

2,662,100

4

560,991

2,436,986

Loans covered by loss sharing agreements

68,421,716

99,984,239

(32)

75,996,118

80,446,859

Noncovered loans, net of unearned income

381,119,264

355,180,759

7

366,003,288

359,464,400

    Total loans

449,540,980

455,164,998

(1)

441,999,406

439,911,259

Allowance for loan losses

(4,057,044)

(3,804,560)

7

(4,019,285)

(3,919,745)

    Total loans, net of allowance for loan losses

445,483,936

451,360,438

(1)

437,980,121

435,991,514

FDIC loss sharing receivable

30,709,836

34,673,627

(11)

31,030,272

32,012,783

Office properties and equipment, net

23,015,352

23,452,816

(2)

23,216,809

23,371,915

Cash surrender value of bank-owned life insurance

16,485,001

15,872,609

4

16,338,064

16,192,645

Accrued interest receivable and other assets

20,848,648

15,858,555

31

18,327,587

18,396,806

Total Assets

$ 717,400,147

$ 709,317,942

1

$ 700,475,078

$ 700,423,092

Liabilities

Deposits

$ 527,402,695

$ 536,485,853

(2)

%

$ 543,619,256

$ 553,217,853

Federal Home Loan Bank advances

52,500,000

29,744,891

77

21,000,000

13,000,000

Accrued interest payable and other liabilities

3,740,456

10,349,392

(64)

3,281,323

2,675,297

Total Liabilities

583,643,151

576,580,136

1

567,900,579

568,893,150

Shareholders' Equity

Common stock

89,312

$          89,270

-

%

89,270

$          89,270

Additional paid-in capital

88,922,459

88,064,013

1

89,183,147

88,818,862

Treasury stock

(11,849,932)

(5,734,469)

(107)

(11,028,575)

(10,425,725)

Common stock acquired by benefit plans

(8,813,501)

(9,949,096)

11

(9,676,562)

(9,770,556)

Retained earnings

64,187,699

59,749,653

7

62,920,252

62,125,568

Accumulated other comprehensive income (loss)

1,220,959

518,435

136

1,086,967

692,523

Total Shareholders' Equity

133,756,996

132,737,806

1

132,574,499

131,529,942

Total Liabilities and Shareholders' Equity

$ 717,400,147

$ 709,317,942

1

$ 700,475,078

$ 700,423,092

HOME BANCORP, INC. AND SUBSIDIARY

CONDENSED STATEMENTS OF INCOME

For The Three Months Ended

For The Six Months Ended

June 30,

%

June 30,

%

2011

2010

Change

2011

2010

Change

Interest Income

Loans, including fees

$ 7,265,525

$ 7,643,662

(5)

%

$ 14,426,178

$ 13,550,892

6

%

Investment securities

817,359

1,363,142

(40)

1,778,180

2,686,360

(34)

Other investments and deposits

34,542

34,729

(1)

71,263

62,052

15

Total interest income

8,117,426

9,041,533

(10)

16,275,621

16,299,304

-

Interest Expense

Deposits

1,035,004

1,382,667

(25)

%

2,212,053

2,618,864

(16)

%

Federal Home Loan Bank advances

115,087

156,391

(26)

215,726

314,050

(31)

Total interest expense

1,150,091

1,539,058

(25)

2,427,779

2,932,914

(17)

Net interest income

6,967,335

7,502,475

(7)

13,847,842

13,366,390

4

Provision for loan losses

264,673

199,750

33

366,949

549,782

(33)

Net interest income after provision for loan losses

6,702,662

7,302,725

(8)

13,480,893

12,816,608

5

Noninterest Income

Service fees and charges

545,599

526,884

4

%

1,020,423

994,273

3

%

Bank card fees

444,093

385,972

15

842,188

669,029

26

Gain on sale of loans, net

121,293

101,902

19

225,687

180,295

25

Income from bank-owned life insurance

146,937

162,420

(10)

292,356

311,666

(6)

Other-than-temporary impairment of securities

-

(140,517)

100

-

(140,517)

100

Gain (loss) on the sale of securities, net

-

39,131

(100)

(166,082)

39,131

(524)

Discount accretion of FDIC loss sharing receivable

231,263

251,588

(8)

469,932

251,588

87

Other income

614,275

67,936

804

662,311

87,473

657

Total noninterest income

2,103,460

1,395,316

51

3,346,815

2,392,938

40

Noninterest Expense

Compensation and benefits

3,915,112

3,871,379

1

%

7,913,520

6,883,516

15

%

Occupancy

559,165

648,080

(14)

1,124,426

1,036,063

9

Marketing and advertising

215,145

202,200

6

376,195

403,937

(7)

Data processing and communication

572,000

633,397

(10)

1,113,507

1,012,779

10

Professional fees

427,520

228,889

87

847,252

696,951

22

Franchise and shares tax

180,501

141,636

27

361,001

342,707

5

Regulatory fees

200,642

122,352

64

430,382

233,256

85

Other expenses

742,963

644,391

15

1,375,342

1,129,600

22

Total noninterest expense

6,813,048

6,492,324

5

13,541,625

11,738,809

15

Income before income tax expense

1,993,074

2,205,717

(10)

3,286,083

3,470,737

(5)

Income tax expense

725,627

738,923

(2)

1,223,952

1,158,528

6

Net income

$ 1,267,447

$ 1,466,794

(14)

%

$   2,062,131

$   2,312,209

(11)

%

Earnings per share - basic

$          0.18

$          0.19

(5)

%

$            0.29

$            0.30

(3)

%

Earnings per share - diluted

$          0.17

$          0.19

(11)

$            0.28

$            0.30

(3)

HOME BANCORP, INC. AND SUBSIDIARY

SUMMARY FINANCIAL INFORMATION

For The Three Months Ended

For The Three  

June 30,

%  

Months Ended

%  

2011

2010

Change

March 31, 2011

Change

(dollars in thousands except per share data)

EARNINGS DATA

Total interest income

$      8,117

$      9,042

(10)

%

$               8,159

(1)

%

Total interest expense

1,150

1,539

(25)

1,278

(10)

Net interest income

6,967

7,503

(7)

6,881

1

Provision for loan losses

265

200

33

102

160

Total noninterest income

2,103

1,395

51

1,243

69

Total noninterest expense

6,812

6,492

5

6,729

1

Income tax expense

726

739

(2)

498

46

Net income

$      1,267

$      1,467

(14)

$                  795

59

Earnings per share - diluted

$        0.17

$        0.19

(11)

%

$                 0.11

55

%

AVERAGE BALANCE SHEET DATA

Total assets

$  709,360

$  702,783

1

%

$           692,755

2

%

Total interest-earning assets

612,942

613,111

-

594,520

3

Loans

445,947

455,574

(2)

439,490

1

Interest-bearing deposits

432,998

449,127

(4)

443,174

(2)

Interest-bearing liabilities

474,009

476,563

(1)

458,454

3

Total deposits

533,640

538,380

(1)

543,323

(2)

Total shareholders' equity

133,344

132,988

-

131,994

1

SELECTED RATIOS (1)

Return on average assets

0.71

%

0.83

%

(14)

%

0.46

%

54

%

Return on average equity

3.80

4.41

(14)

2.41

58

Efficiency ratio (2)

75.11

72.78

3

82.82

(9)

Average equity to average assets

18.80

18.92

(1)

19.05

(1)

Tier 1 leverage capital ratio (3)

15.44

14.88

4

15.59

(1)

Total risk-based capital ratio (3)

27.44

22.29

23

28.26

(3)

Net interest margin (4)

4.55

4.90

(7)

4.67

(3)

PER SHARE DATA

Basic earnings per share

$        0.18

$        0.19

(5)

%

$0.11

64

%

Diluted earnings per share

0.17

0.19

(11)

0.11

55

Book value at period end

16.65

15.65

6

16.39

2

PER SHARE DATA

Shares outstanding at period end

8,033,204

8,480,531

(5)

%

8,087,159

(1)

%

Weighted average shares outstanding

  Basic

7,191,476

7,620,257

(6)

%

7,177,377

-

%

  Diluted

7,337,358

7,678,378

(4)

7,277,013

1

(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)  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.

HOME BANCORP, INC. AND SUBSIDIARY

SUMMARY CREDIT QUALITY INFORMATION

June 30, 2011

March 31, 2011

June 30, 2010

Covered

Noncovered

Total

Covered

Noncovered

Total

Covered

Noncovered

Total

(dollars in thousands)

CREDIT QUALITY (1)  (2)

Nonaccrual loans

$ 11,668

$ 1,127

$ 12,795

$ 15,479

$ 1,090

$ 16,569

$ 19,214

$ 1,668

$ 20,882

Accruing loans past due 90 days and over

  -

  -

  -

  -

  -

  -

  -

  -

  -

Total nonperforming loans

11,668

1,127

12,795

15,479

1,090

16,569

19,214

1,668

20,882

Other real estate owned

7,178

92

7,270

5,281

92

5,373

2,643

445

3,088

Total nonperforming assets

18,846

1,219

20,065

20,760

1,182

21,942

21,857

2,113

23,970

Performing troubled debt restructurings

30

922

952

  -

1,067

1,067

  -

743

743

Total nonperforming assets and troubled

debt restructurings

$ 18,876

$ 2,141

$ 21,017

$ 20,760

$ 2,249

$ 23,009

$ 21,857

$ 2,856

$ 24,713

Nonperforming assets to total assets

0.19

%

0.19

%

0.30

%

Nonperforming loans to total assets

0.18

0.18

0.24

Nonperforming loans to total loans

0.30

0.30

0.37

Allowance for loan losses to nonperforming assets

332.80

340.12

180.04

Allowance for loan losses to nonperforming loans

360.00

368.80

228.16

Allowance for loan losses to total loans

1.06

1.10

1.07

Year-to-date loan charge-offs

$       -

$    260

$      260

$       -

$        9

$      9

$       -

$    124

$      124

Year-to-date loan recoveries

  -

30

30

  -

  6

  6

  -

27

27

Year-to-date net loan charge-offs

$       -

$    230

$      230

$       -

$        3

$      3

$       -

$      97

$        97

Annualized YTD net loan charge-offs to total loans

-

%

0.12

%

0.10

%

-

%

-

%

-

%

-

%

0.05

%

0.04

%

(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. Such assets covered by FDIC loss sharing agreements are referred to as "Covered" assets.  All other assets are referred to as "Noncovered".

SOURCE Home Bancorp, Inc.



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