Home Bancorp Announces 2012 Second Quarter Results and Approval of Share Repurchase Program

LAFAYETTE, La., July 24,2012 /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 $1.8 million for the second quarter of 2012, a decrease of $308,000, or 15%, compared to the first quarter of 2012 and an increase of $485,000, or 38%, compared to the second quarter of 2011. Diluted earnings per share were $0.24 for the second quarter of 2012, a decrease of $0.05, or 17%, compared to the first quarter of 2012 and an increase of $0.07, or 41%, compared to the second quarter of 2011.

The Company also announced its Board of Directors approved a new program to repurchase up to 383,598 shares, or approximately 5%, of the Company's outstanding common stock. Repurchases may be made by the Company in open-market or privately-negotiated transactions as, in the opinion of management, market conditions warrant. The Company completed a previously announced repurchase program (the "May 2011" program) earlier this month.

The Company's common stock was added to the Russell 3000 Index in June 2012. The index measures the performance of the 3,000 largest companies in the United States based on market capitalization.

"Louisiana businesses continue to discover the value we add to their companies," stated John W. Bordelon, President and Chief Executive Officer of the Company and the Bank. "In addition to making their banking more affordable, Home Bank is committed to helping businesses and individuals effectively navigate the financial landscape by providing sound advice, reliable solutions and an unmatched level of service."

Loans and Credit Quality

The Company's loans totaled $679.8 million at June 30, 2012, an increase of $1.1 million, or 0.2%, from March 31, 2012, and an increase of $230.2 million, or 51%, from June 30, 2011. Second quarter 2012 loan growth related primarily to commercial real estate ("CRE") loans, which were up $30.4 million. The majority of CRE loan growth during the quarter resulted from the completion of construction projects financed by the Company. Conversely, construction and land loans were down $20.1 million during the quarter. The increase in loans compared to June 30, 2011 relates primarily to the $182.4 million in loans added as a result of the acquisition of GS Financial Corp. ("GSFC") in July 2011.

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










June 30,


December 31,


Increase/(Decrease)


(dollars in thousands)


2012


2011


Amount

Percent


Real estate loans:









    One- to four-family first mortgage

$

173,227

$

182,817

$

(9,590)

(5)

%

    Home equity loans and lines


41,535


43,665


(2,130)

(5)


    Commercial real estate


268,445


226,999


41,446

18


    Construction and land


66,042


78,994


(12,952)

(16)


    Multi-family residential


20,141


20,125


16

-


        Total real estate loans


569,390


552,600


16,790

3


Other loans:









    Commercial and industrial


77,951


82,980


(5,029)

(6)


    Consumer


32,431


30,791


1,640

5


        Total other loans


110,382


113,771


(3,389)

(3)


        Total loans

$

679,772

$

666,371

$

13,401

2

%

Nonperforming assets ("NPAs"), which includes $12.8 million in assets covered under loss sharing agreements with the FDIC ("Covered Assets") and $10.3 million acquired from GSFC, totaled $30.3 million at June 30, 2012, a decrease of $3.8 million compared to March 31, 2012 and an increase of $10.2 million compared to June 30, 2011. The ratio of total NPAs to total assets was 3.06% at June 30, 2012, compared to 3.48% at March 31, 2012 and 2.80% at June 30, 2011. Excluding acquired assets, the ratio of NPAs was 0.90% at June 30, 2012, compared to 1.16% at March 31, 2012 and 0.19% at June 30, 2011.

The Company recorded net loan charge-offs of $1.7 million during the second quarter of 2012, compared to net loan charge-offs of $3,000 and $227,000 in the first quarter of 2012 and second quarter of 2011, respectively. The increase in net charge-offs for the second quarter of 2012 resulted primarily from a $1.4 million partial charge-off on a $5.4 million CRE loan which was downgraded further during the quarter.

The Company's provision for loan losses for the second quarter of 2012 was $1.2 million, compared to $712,000 for the first quarter of 2012 and $265,000 for the second quarter of 2011. The elevated level of provision during the second quarter of 2012 relates primarily to the same $5.4 million CRE loan mentioned above.

Excluding acquired loans, the ratio of allowance for loan losses to total loans was 1.05% at June 30, 2012, compared to 1.22% at March 31, 2012 and 1.06% at June 30, 2011. Including acquired loans, the ratio of allowance for loan losses to total loans was 0.78% at June 30, 2012, compared to 0.86% and 0.90% at March 31, 2012 and June 30, 2011, respectively.

Investment Securities Portfolio

The Company's investment securities portfolio totaled $155.1 million at June 30, 2012, a decrease of $8.9 million, or 5%, from March 31, 2012, and an increase of $6.9 million, or 5%, from June 30, 2011. At June 30, 2012, the Company had a net unrealized gain position on its investment securities portfolio of $4.1 million, compared to net unrealized gains of $4.0 million and $1.9 million at March 31, 2012 and June 30, 2011, respectively. At June 30, 2012, the investment securities portfolio had a modified duration of 3.6 years.

During the second quarter of 2012, the Company sold securities with an aggregate book value of $11.2 million and realized a gain of $59,000 on the transactions. The securities were sold due to their low book yields and prepayment risk.

The Company maintains a portfolio of non-agency mortgage-backed securities, which had an amortized cost of $13.7 million at June 30, 2012. Each of these securities is 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 twelfth consecutive quarter, growing $44.5 million, or 10%, during the second quarter of 2012. Total deposits were $779.2 million at June 30, 2012, an increase of $43.1 million, or 6%, from March 31, 2012, and an increase of $251.8 million, or 48%, from June 30, 2011. The Company added $193.5 million in deposits through the acquisition of GSFC in July 2011.

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)


2012


2011


Amount

Percent


Demand deposit

$

151,770

$

127,828

$

23,942

19

%

Savings


47,018


43,671


3,347

8


Money market


185,768


180,790


4,978

3


NOW


118,550


93,679


24,871

27


Certificates of deposit


276,128


284,766


(8,638)

(3)


        Total deposits

$

779,234

$

730,734

$

48,500

7

%

Share Repurchases

The Company completed the May 2011 share repurchase program earlier this month. Under the May 2011 program, the Company acquired 402,835 shares of the Company's common stock at an average price of $15.15 per share.

On July 23, 2012, the Company's Board of Directors approved a new program to repurchase up to 383,598 shares, or approximately 5%, of the Company's outstanding common stock. Repurchases may be made by the Company in open-market or privately-negotiated transactions as, in the opinion of management, market conditions warrant.

Net Interest Income

Net interest income for the second quarter of 2012 totaled $10.0 million, essentially unchanged compared to the first quarter of 2012, and an increase of $3.0 million, or 43%, compared to the second quarter of 2011. The addition of GSFC's interest-earning assets and interest-bearing liabilities accounted for the vast majority of the increase compared to the same quarter last year. The Company's net interest margin was 4.70% for the second quarter of 2012, one basis point higher than the first quarter of 2012 and 14 basis points higher than the second quarter of 2011.

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, 2012



March 31, 2012



June 30, 2011



(dollars in thousands)


Average Balance

Average Yield/Rate



Average Balance

Average Yield/Rate



Average Balance

Average Yield/Rate



Interest-earning assets:














Loans receivable

$

674,244

6.19

%

$

672,713

6.20

%

$

445,947

6.53

%


Investment securities


152,916

2.12



155,476

2.21



145,624

2.25



Other interest-earning assets


26,504

0.53



25,160

0.55



21,371

0.65



Total interest-earning assets


853,664

5.29



853,349

5.31



612,942

5.31

















Interest-bearing liabilities:














Deposits:














Savings, checking, and money market


329,371

0.39



316,004

0.45



241,960

0.50



Certificates of deposit


276,800

1.11



282,476

1.11



191,038

1.54



Total interest-bearing deposits


606,171

0.72



598,480

0.76



432,998

0.96



FHLB advances


73,488

0.97



101,473

0.71



41,010

1.12



Total interest-bearing liabilities

$

679,659

0.75


$

699,953

0.75


$

474,008

0.97

















Net interest spread



4.54

%



4.56

%



4.34

%


Net interest margin



4.70

%



4.69

%



4.56

%


























Noninterest Income

Noninterest income for the second quarter of 2012 totaled $1.9 million, an increase of $200,000, or 12%, compared to the first quarter of 2012 and a decrease of $202,000, or 10%, compared to the second quarter of 2011. The increase in noninterest income in the second quarter of 2012 compared to the first quarter of 2012 resulted primarily from higher gains on the sale of mortgage loans of $92,000 and gains on the sale of securities of $59,000.

The decrease in noninterest income in the second quarter of 2012 compared to the second quarter of 2011 resulted primarily from a litigation settlement of $525,000 received in the second quarter of 2011. Excluding the litigation settlement and securities gains, noninterest income increased 17% compared to the same quarter last year due primarily to higher gains on the sale of mortgage loans. Additionally, service fees and charges and bank card fees increased compared to the same quarter last year as a result of the accounts added through the acquisition of GSFC and organic customer growth.

Noninterest Expense

Noninterest expense for the second quarter of 2012 totaled $8.0 million, an increase of $234,000, or 3%, compared to the first quarter of 2012 and an increase of $1.2 million, or 18%, compared to the second quarter of 2011. The increase in noninterest expense in the second quarter of 2012 compared to the first quarter of 2012 resulted primarily from an increase in compensation and benefits of $131,000 and higher marketing and advertising, professional services and other expenses.

The increase in noninterest expense in the second quarter of 2012 compared to the second quarter of 2011 was primarily due to higher compensation and benefits, occupancy and data processing and communication expenses resulting from the addition of GSFC's offices and employees. Additionally, expenses related to foreclosed assets increased during the second quarter of 2012 compared to the same quarter a year ago due primarily due to resolution costs related to NPAs acquired from GSFC.

This news release contains financial information determined by methods other than in accordance with generally accepted accounting principles ("GAAP"). The Company's management uses this non-GAAP financial information in its analysis of the Company's performance. In this news release, information is included which excludes acquired loans and nonrecurring noninterest income. Management believes the presentation of this non-GAAP financial information provides useful information that is essential to a proper understanding of the Company's financial position and core operating results. This non-GAAP financial information should not be viewed as a substitute for financial information determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial information presented by other companies.

This news release contains certain forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may."