Home Bancorp Reports 2015 Third Quarter Results And Declares A Quarterly Dividend

LAFAYETTE, La., Oct. 27, 2015 /PRNewswire/ -- Home Bancorp, Inc. (Nasdaq:  "HBCP") (the "Company"), the parent company of the 107-year-old Home Bank, N.A. (the "Bank") (www.home24bank.com), reported net income of $2.9 million for the third quarter of 2015, an increase of $60,000, or 2%, compared to the second quarter of 2015 and an increase of $23,000, or 1%, compared to the third quarter of 2014.  The second and third quarters of 2015 include merger-related expenses, net of taxes, totaling $232,000 and $527,000, respectively, related to the acquisition of Louisiana Bancorp, Inc. ("Louisiana Bancorp").  Excluding merger-related expenses, net income for the third quarter of 2015 increased 12% and 19%, respectively, compared to the second quarter of 2015 and third quarter of 2014. 

Diluted earnings per share were $0.41 for the third quarter of 2015, equal to the second quarter of 2015 and the third quarter of 2014.  Excluding merger-related expenses, diluted earnings per share were $0.49 for the third quarter of 2015, an increase of 11% and 20%, respectively, compared to the second quarter of 2015 and the third quarter of 2014. 

"We crossed the $1.5 billion asset threshold during the quarter as we completed our acquisition of Bank of New Orleans ahead of schedule," stated John W. Bordelon, President and Chief Executive Officer of the Company and the Bank.  "We are hard at work ensuring our new customers understand our commitment to adding value to their banking relationship."

The Company also announced that its Board of Directors declared a cash dividend of $0.08 per share, payable on November 20, 2015, to shareholders of record as of November 9, 2015. 

Acquisition of Louisiana Bancorp, Inc.

On September 15, 2015, the Company completed its acquisition of Louisiana Bancorp, the former holding company of Bank of New Orleans ("BNO") of Metairie, Louisiana.  Shareholders of Louisiana Bancorp received $24.25 per share in cash, yielding an aggregate purchase price of $70.0 million.     

The assets and liabilities from Louisiana Bancorp were recorded at their estimated fair values as of the acquisition date, September 15, 2015. Such fair values are preliminary estimates and are subject to adjustment for up to one year after the acquisition date. A summary of the assets and liabilities acquired and estimated fair value adjustments follows.

Loans and Credit Quality

Loans totaled $1.2 billion at September 30, 2015, an increase of $292.2 million, or 32%, from June 30, 2015, and an increase of $300.3 million, or 33%, from September 30, 2014. Louisiana Bancorp added $280.4 million in loans at acquisition date. During the third quarter of 2015, organic loan growth of $11.7 million related primarily to construction and land loans (up $7.2 million) and commercial real estate loans (up $4.2 million).

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

Nonperforming assets ("NPAs") totaled $20.8 million at September 30, 2015, an increase of $2.6 million, or 14%, compared to June 30, 2015 and a decrease of $1.7 million, or 8%, compared to September 30, 2014.  Of the $20.8 million in total NPAs at September 30, 2015, $13.6 million related to our acquisitions of Statewide Bank, GS Financial Corp, Britton & Koontz Capital Corporation and Louisiana Bancorp.  The ratio of total NPAs to total assets was 1.34% at September 30, 2015, compared to 1.48% at June 30, 2015 and 1.79% at September 30, 2014.  Excluding acquired assets, the ratio of NPAs to total assets was 0.65% at September 30, 2015, compared to 0.44% at June 30, 2015 and September 30, 2014. 

The Company recorded net loan charge-offs of $103,000 during the third quarter of 2015, compared to net loan charge-offs of $100,000 and $1.2 million in the second quarter of 2015 and the third quarter of 2014, respectively.  The Company's provision for loan losses for the third quarter of 2015 was $569,000, compared to $294,000 for the second quarter of 2015 and $892,000 for the third quarter of 2014. 

The ratio of allowance for loan losses to total loans was 0.74% at September 30, 2015, compared to 0.92% and 0.82% at June 30, 2015 and September 30, 2014, respectively.  Excluding acquired loans, the ratio of the allowance for loan losses to total loans was 1.12% at September 30, 2015, compared to 1.09% and 1.01% at June 30, 2015 and September 30, 2014, respectively.       

Investment Securities Portfolio

The Company's investment securities portfolio totaled $205.2 million at September 30, 2015, an increase of $12.6 million, or 7%, from June 30, 2015, and an increase of $12.7 million, or 7%, from September 30, 2014.  The Company acquired $36.4 million of investment securities from Louisiana Bancorp at acquisition date, and subsequently sold $8.1 million of the acquired investments during the third quarter.   

At September 30, 2015, the Company had a net unrealized gain on its investment securities portfolio of $2.9 million, compared to net unrealized gains of $1.7 million and $1.4 million at June 30, 2015 and September 30, 2014, respectively.  The Company's investment securities portfolio had a modified duration of 3.5 years at September 30, 2015, compared to 3.7 and 3.8 years at June 30, 2015 and September 30, 2014, respectively.  

Deposits

Total deposits were $1.2 billion at September 30, 2015, an increase of $190.7 million, or 19%, from June 30, 2015, and an increase of $238.3 million, or 24%, from September 30, 2014.  The acquisition of Louisiana Bancorp added $208.7 million in deposits as of the acquisition date.   During the third quarter of 2015, core deposits (i.e., checking, savings and money market accounts) increased $106.4 million, or 13%, from June 30, 2015, and increased $167.3 million, or 22%, from September 30, 2014. Core deposits acquired from Louisiana Bancorp totaled $118.1 million at the acquisition date.           

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

Net Interest Income

Net interest income for the third quarter of 2015 totaled $13.5 million, an increase of $766,000, or 6%, compared to the second quarter of 2015, and an increase of $318,000, or 2%, compared to the third quarter of 2014.  The Company's net interest margin was 4.55% for the third quarter of 2015, eight basis points higher than the second quarter of 2015 and eight basis points lower than the third quarter of 2014.  The increase in the net interest margin in the third quarter of 2015 compared to the second quarter of 2015 was primarily the result of mix changes in interest-earning assets.  The decrease in the net interest margin in the third quarter of 2015 compared to the third quarter of 2014 was primarily the result of lower loan yields reflecting the effects of the continuing low interest rate environment.  

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 tax rate of 35%.

Noninterest Income

Noninterest income for the third quarter of 2015 totaled $2.2 million, an increase of $158,000, or 8%, compared to the second quarter of 2015 and an increase of $37,000, or 2%, compared to the third quarter of 2014.  The increase in noninterest income in the third quarter of 2015 compared to the second quarter of 2015 resulted primarily from increases in gains on the sale of mortgage loans (up $211,000) and service fees and charges (up $73,000), which were partially offset by decreases in other income (down $111,000 due primarily to a net loss incurred on the sale of a fixed asset).

The increase in noninterest income in the third quarter of 2015 compared to the third quarter of 2014 resulted primarily from increases in gains on the sale of mortgage loans (up $170,000), bank card fees (up $44,000) and service fees and charges (up $20,000), which were partially offset by decreases in other income (down $207,000 due primarily to a net loss incurred on the sale of a fixed asset).

Noninterest Expense

Noninterest expense for the third quarter of 2015 totaled $10.5 million, an increase of $294,000, or 3%, compared to the second quarter of 2015 and an increase of $554,000, or 6%, compared to the third quarter of 2014. Noninterest expense for the third and second quarters of 2015 includes $593,000 and $256,000, respectively, of merger-related expenses related to the acquisition of Louisiana Bancorp.

The increase in noninterest expense in the third quarter of 2015 compared to the second quarter of 2015 resulted primarily from increases in compensation and benefits (up $205,000), professional fees (up $173,000), other expenses (up $84,000) and data processing and communications (up $59,000), which were partially offset by decreases in expenses on foreclosed assets (down $278,000). Excluding merger-related expenses, noninterest expense for the third quarter of 2015 totaled $9.9 million, a decrease of $43,000, or less than 1%, compared to the second quarter of 2015. 

The increase in noninterest expense for the third quarter of 2015 compared to the third quarter of 2014 resulted primarily from increases in compensation and benefits (up $482,000) and professional fees (up $438,000), which were partially offset by decreases in marketing and advertising (down $115,000), expenses on foreclosed assets (down $110,000) and other expenses (down $88,000). Excluding merger-related expenses, noninterest expense for the third quarter of 2015 decreased $35,000, or less than 1%, compared to the second quarter of 2014.

Non-GAAP Reconciliation 

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, intangible assets and the impact of merger-related expenses.  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 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."

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, 2014, 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.