Results

Home Bancorp Inc.

01/28/2020 | Press release | Distributed by Public on 01/28/2020 06:35

Home Bancorp Announces 2019 Fourth Quarter Results And Declares Quarterly Dividend

Home Bancorp Announces 2019 Fourth Quarter Results And Declares Quarterly Dividend

LAFAYETTE, La., Jan. 28, 2020/PRNewswire / -- Home Bancorp, Inc. (Nasdaq: 'HBCP') (the 'Company'), the parent company for Home Bank, N.A. (the 'Bank') (www.home24bank.com), reported financial results for the fourth quarter of 2019. For the quarter, the Company reported net income of $6.6 million, or $0.73per diluted common share ('EPS'), compared to $6.9 million, or $0.75EPS, for the third quarter of 2019.

Key performance metrics for the fourth quarter of 2019 (compared to the third quarter of 2019) include:

  • Loans increased $6.9 million, or 2% annualized;
  • Nonperforming assets increased $944,000, or 3%, primarily due to one commercial loan relationship in Baton Rouge;
  • Return on average assets, return on average equity and return on average tangible common equity were 1.18%, 8.31 and 10.93%, respectively;
  • The net interest margin increased two basis points;
  • The Company repurchased 78,403 shares of common stock at an average price of $38.60per share; and
  • Bank capital remained strong with a common equity ratio of 14.38% at quarter end.

'We finished the year with another quarter of solid loan growth, which brought our 2019 loan growth total to over $64 million,' said John W. Bordelon, President and Chief Executive Officer of the Company and the Bank. 'We expect 2020 to be a year of strong loan and deposit growth as the investments we've made in our lending systems and processes have made us more responsive than ever.'

The Company also announced that its Board of Directors declared a quarterly cash dividend on shares of its common stock of $0.22per share payable on February 21, 2020, to shareholders of record as of February 10, 2020.

Loans and Credit Quality

Loans totaled $1.7 billionat December 31, 2019, up $6.9 millionfrom September 30, 2019. Fourth quarter loan growth was focused in the following areas: construction and land loans (up $6.9 million), commercial and industrial loans (up $4.4 million) and commercial real estate loans (up $3.4 million). Construction and land loan growth was primarily driven by commercial building construction, residential development, and multi-family projects spread across our major Louisianamarkets. Commercial and industrial loan growth was strongest in the Acadiana and Baton Rougemarkets. Commercial real estate loan growth was primarily due to loans secured by investment properties and retail stores.

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

December 31,

September 30,

Increase/(Decrease)

(dollars in thousands)

2019

2019

Amount

Percent

Real estate loans:

One- to four-family first mortgage

$

430,820

$

432,964

$

(2,144)

-

%

Home equity loans and lines

79,812

81,835

(2,023)

(2)

Commercial real estate

722,807

719,392

3,415

-

Construction and land

195,748

188,879

6,869

4

Multi-family residential

54,869

56,733

(1,864)

(3)

Total real estate loans

1,484,056

1,479,803

4,253

-

Other loans:

Commercial and industrial

184,701

180,264

4,437

2

Consumer

45,604

47,375

(1,771)

(4)

Total other loans

230,305

227,639

2,666

1

Total loans

$

1,714,361

$

1,707,442

$

6,919

-

%

The outstanding balance of direct loans to borrowers in the energy sector totaled $33.5 million, or 2% of total outstanding loans, at December 31, 2019, compared to $40.1 million, or 2% of total outstanding loans, at September 30, 2019. At December 31, 2019, loans constituting 95% of the balance of the direct energy-related portfolio were performing in accordance with their original loan agreements.

Nonperforming assets ('NPAs'), excluding purchased credit impaired loans, totaled $28.5 millionat December 31, 2019, up $944,000, or 3%, compared to September 30, 2019. The increase in NPAs was primarily due to one commercial loan relationship in the Baton Rougemarket. The ratio of NPAs to total assets was 1.30% at December 31, 2019, compared to 1.24% at September 30, 2019.

The Company recorded net loan charge-offs of $443,000during the fourth quarter of 2019, compared to net loan charge-offs of $787,000for the third quarter of 2019. The Company's provision for loan losses for the fourth quarter of 2019 was $713,000, compared to $1.1 millionfor the third quarter of 2019.

The ratio of the allowance for loan losses to total loans was 1.04% at December 31, 2019, compared to 1.03% at September 30, 2019. Excluding acquired loans, the ratio of the allowance for loan losses to total loans was 1.29% at December 31, 2019 and September 30, 2019. The allowance for loan losses attributable to originated direct energy-related loans totaled 2.11% of the outstanding balance of originated energy-related portfolio at December 31, 2019, compared to 2.40% at September 30, 2019.

Deposits

Total deposits were $1.8 billionat December 31, 2019, down $10.4 million, or 1%, from September 30, 2019. The following table sets forth the composition of the Company's deposits as of the dates indicated.

December 31,

September 30,

Increase/(Decrease)

(dollars in thousands)

2019

2019

Amount

Percent

Demand deposits

$

437,828

$

446,742

$

(8,914)

(2)

%

Savings

201,887

204,807

(2,920)

(1)

Money market

273,741

272,489

1,252

-

NOW

512,054

513,440

(1,386)

-

Certificates of deposit

395,465

393,928

1,537

-

Total deposits

$

1,820,975

$

1,831,406

$

(10,431)

(1)

%

Share Repurchases

The Company repurchased 78,403 shares of its common stock during the fourth quarter of 2019 at an average price per share of $38.60under the Company's 2019 Repurchase Plan. An additional 386,584 shares remain eligible for purchase under the 2019 Repurchase Plan. The book value per share and tangible book value per share of the Company's common stock was $34.19and $27.22, respectively, at December 31, 2019.

Net Interest Income

Net interest income for the fourth quarter of 2019 was $21.3 million, up $117,000, or 1%, from the third quarter of 2019. The net interest margin was 4.14% for the fourth quarter of 2019, up two basis points from the third quarter of 2019. Net interest income increased primarily due to the absence of a $680,000(pre-tax) third quarter 2019 write-off of the Company's FDIC loss sharing indemnification receivable. Loan accretion income totaled $982,000during the fourth quarter of 2019 and $420,000during the third quarter of 2019.

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 marginal tax rate of 21%.

For the Three Months Ended

December 31, 2019

September 30, 2019

(dollars in thousands)

Average
Balance

Interest

Average
Yield/ Rate

Average
Balance

Interest

Average
Yield/ Rate

Interest-earning assets:

Loans receivable

$

1,712,035

$

23,842

5.48

%

$

1,698,046

$

23,562

5.46

%

Investment securities (TE)

259,531

1,341

2.11

261,778

1,515

2.36

Other interest-earning assets

49,750

261

2.08

58,878

397

2.68

Total interest-earning assets

$

2,021,316

$

25,444

4.96

%

$

2,018,702

$

25,474

4.98

%

Interest-bearing liabilities:

Deposits:

Savings, checking, and money market

$

989,177

$

2,042

0.82

%

$

991,248

$

2,215

0.89

%

Certificates of deposit

395,073

1,892

1.90

392,214

1,835

1.86

Total interest-bearing deposits

1,384,250

3,934

1.13

1,383,462

4,050

1.16

Other borrowings

5,539

54

3.80

5,550

53

3.80

FHLB advances

43,570

198

1.82

51,166

230

1.80

Total interest-bearing liabilities

$

1,433,359

$

4,186

1.16

%

$

1,440,178

$

4,333

1.19

%

Net interest spread (TE)

3.80

%

3.79

%

Net interest margin (TE)

4.14

%

4.12

%

Noninterest Income

Noninterest income for the fourth quarter of 2019 was $3.5 million, down $1.3 million, or 27%, from the third quarter of 2019 due primarily to a decrease in income from bank-owned life insurance. The Company received a non-taxable life insurance benefit of $1.2 millionfrom its bank-owned life insurance policy ('BOLI') following the death of a former employee during the third quarter of 2019.

Noninterest Expense

Noninterest expense for the fourth quarter of 2019 totaled $15.8 million, down $858,000, or 5%, compared to the third quarter of 2019. The decrease in noninterest expense was primarily due to lower compensation and benefits expense. The decline in compensation and benefits (down $828,000, or 8%) was primarily due to a decrease in employee health care costs and the absence of $287,000(pre-tax) in costs related to the departure of a former executive during the third quarter of 2019.

Income Tax Expense

Income tax expense for the fourth quarter of 2019 totaled $1.7 million, up $383,000, or 29%, from the third quarter of 2019. The Company's effective tax rate was 20% for the fourth quarter of 2019, compared to 16% for the third quarter of 2019. Income tax expense increased primarily due to a reduction in the amount of non-taxable earnings from BOLI recognized in the fourth quarter of 2019 compared to the third quarter. As previously indicated, the Company received a $1.2 millionnon-taxable BOLI death benefit in the third quarter of 2019.

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 and intangible assets. 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 operating results. This non-GAAP financial information should not be viewed as a substitute for financial information determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP financial information presented by other companies. A reconciliation on non-GAAP information included herein to GAAP is presented below.

For the Three Months Ended

(dollars in thousands, except per share data)

December 31,
2019

September 30,
2019

December 31,
2018

Reported net income

$

6,606

$

6,856

$

8,089

Add: Core deposit intangible amortization, net tax

302

311

346

Non-GAAP tangible income

$

6,908

$

7,167

$

8,435

Total Assets

$

2,200,465

$

2,218,040

$

2,153,658

Less: Intangible assets

64,472

64,854

66,055

Non-GAAP tangible assets

$

2,135,993

$

2,153,186

$

2,087,603

Total shareholders' equity

$

316,329

$

314,677

$

304,040

Less: Intangible assets

64,472

64,854

66,055

Non-GAAP tangible shareholders' equity

$

251,857

$

249,823

$

237,985

Originated loans

$

1,251,201

$

1,215,539

$

1,095,160

Acquired loans

463,160

491,903

554,594

Total loans

$

1,714,361

$

1,707,442

$

1,649,754

Originated allowance for loan losses

$

16,091

$

15,694

$

14,860

Acquired allowance for loan losses

1,777

1,904

1,488

Total allowance for loan losses

$

17,868

$

17,598

$

16,348

Return on average equity

8.31

%

8.64

%

10.72

%

Add: Average intangible assets

2.62

2.75

3.64

Non-GAAP return on average tangible common equity

10.93

%

11.39

%

14.36

%

Common equity ratio

14.38

%

14.19

%

14.12

%

Less: Intangible assets

2.59

2.59

2.72

Non-GAAP tangible common equity ratio

11.79

%

11.60

%

11.40

%

Book value per share

$

34.19

$

33.72

$

32.14

Less: Intangible assets

6.97

6.95

6.98

Non-GAAP tangible book value per share

$

27.22

$

26.77

$

25.16

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, 2018, 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.

HOME BANCORP, INC. AND SUBSIDIARY

CONDENSED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

(dollars in thousands)

December 31,
2019

December 31,
2018

%
Change

September 30,
2019

Assets

Cash and cash equivalents

$

39,847

$

59,618

(33)

%

$

61,289

Interest-bearing deposits in banks

449

939

(52)

449

Investment securities available for sale, at fair value

257,321

260,131

(1)

255,114

Investment securities held to maturity

7,149

10,872

(34)

7,193

Mortgage loans held for sale

6,990

2,086

235

6,909

Loans, net of unearned income

1,714,361

1,649,754

4

1,707,442

Allowance for loan losses

(17,868)

(16,348)

9

(17,598)

Total loans, net of allowance for loan losses

1,696,493

1,633,406

4

1,689,844

Office properties and equipment, net

46,425

47,124

(1)

46,362

Cash surrender value of bank-owned life insurance

39,466

29,560

34

39,228

Goodwill and core deposit intangibles

64,472

66,055

(2)

64,854

Accrued interest receivable and other assets

41,853

43,867

(5)

46,798

Total Assets

$

2,200,465

$

2,153,658

2

$

2,218,040

Liabilities

Deposits

$

1,820,975

$

1,773,217

3

%

$

1,831,406

Other Borrowings

5,539

5,539

-

5,539

Federal Home Loan Bank advances

40,620

58,698

(31)

47,853

Accrued interest payable and other liabilities

17,002

12,164

40

18,565

Total Liabilities

1,884,136

1,849,618

2

1,903,363

Shareholders' Equity

Common stock

93

95

(2)

%

93

Additional paid-in capital

168,545

168,243

-

168,822

Common stock acquired by benefit plans

(3,159)

(3,539)

11

(3,260)

Retained earnings

150,158

141,447

6

147,841

Accumulated other comprehensive income (loss)

692

(2,206)

131

1,181

Total Shareholders' Equity

316,329

304,040

4

314,677

Total Liabilities and Shareholders' Equity

$

2,200,465

$

2,153,658

2

$

2,218,040

HOMEBANCORP, INC. AND SUBSIDIARY

CONDENSED STATEMENTS OF INCOME

(Unaudited)

For the Three Months Ended
December 31,

For the Years Ended
December 31,

(dollars in thousands, except per share data)

2019

2018

%
Change

2019

2018

%
Change

Interest Income

Loans, including fees

$

23,842

$

23,855

-

%

$

94,414

$

94,303

-

%

Investment securities

1,341

1,758

(24)

6,393

6,656

(4)

Other investments and deposits

261

290

(10)

1,401

1,353

4

Total interest income

25,444

25,903

(2)

102,208

102,312

-

Interest Expense

Deposits

3,934

2,934

34

%

15,050

9,076

66

%

Other borrowings

54

47

15

213

46

363

Federal Home Loan Bank advances

198

267

(26)

949

1,184

(20)

Total interest expense

4,186

3,248

29

16,212

10,306

57

Net interest income

21,258

22,655

(6)

85,996

92,006

(7)

Provision for loan losses

713

1,612

(56)

3,014

3,943

(24)

Net interest income after provision for loan losses

20,545

21,043

(2)

82,982

88,063

(6)

Noninterest Income

Service fees and charges

1,544

1,558

(1)

%

5,940

6,370

(7)

%

Bank card fees

1,102

1,089

1

4,516

4,494

-

Gain on sale of loans, net

316

258

22

1,074

872

23

Income from bank-owned life insurance

238

166

43

2,069

656

215

Gain (loss) on sale of assets, net

1

(130)

101

(335)

(52)

(544)

Other income

298

338

(12)

1,151

1,107

4

Total noninterest income

3,499

3,279

7

14,415

13,447

7

Noninterest Expense

Compensation and benefits

9,438

9,304

1

%

38,415

36,796

4

%

Occupancy

1,713

1,603

7

7,118

6,658

7

Marketing and advertising

579

370

56

1,576

1,309

20

Data processing and communication

1,829

1,819

1

6,611

7,646

(14)

Professional fees

172

263

(35)

856

1,119

(24)

Forms, printing and supplies

169

162

4

683

973

(30)

Franchise and shares tax

248

(61)

507

1,444

1,030

40

Regulatory fees

113

382

(70)

830

1,559

(47)

Foreclosed assets, net

228

150

52

556

397

40

Amortization of acquisition intangible

382

438

(13)

1,583

1,845

(14)

Other expenses

881

1,187

(26)

3,933

3,893

1

Total noninterest expense

15,752

15,617

1

63,605

63,225

1

Income before income tax expense

8,292

8,705

(5)

33,792

38,285

(12)

Income tax expense

1,686

616

174

5,860

6,695

(12)

Net income

$

6,606

$

8,089

(18)

$

27,932

$

31,590

(12)

Earnings per share - basic

$

0.74

$

0.89

(17)

%

$

3.08

$

3.48

(11)

%

Earnings per share - diluted

$

0.73

$

0.87

(16)

$

3.05

$

3.40

(10)

Cash dividends declared per common share

$

0.22

$

0.20

10

%

$

0.84

$

0.71

18

%

HOME BANCORP, INC. AND SUBSIDIARY

SUMMARY FINANCIAL INFORMATION

(Unaudited)

For the Three Months Ended
December 31,

For The Three
Months Ended

(dollars in thousands, except per share data)

2019

2018

%
Change

September 30,
2019

%
Change

EARNINGS DATA

Total interest income

$

25,444

$

25,903

(2)

%

$

25,474

-

%

Total interest expense

4,186

3,248

29

4,333

(3)

Net interest income

21,258

22,655

(6)

21,141

1

Provision for loan losses

713

1,612

(56)

1,146

(38)

Total noninterest income

3,499

3,279

7

4,774

(27)

Total noninterest expense

15,752

15,617

1

16,610

(5)

Income tax expense

1,686

616

174

1,303

29

Net income

$

6,606

$

8,089

(18)

$

6,856

(4)

AVERAGE BALANCE SHEET DATA

Total assets

$

2,219,049

$

2,137,770

4

%

$

2,217,178

-

%

Total interest-earning assets

2,021,316

1,954,242

3

2,018,702

-

Total loans

1,712,035

1,633,927

5

1,698,046

1

Total interest-bearing deposits

1,384,250

1,324,774

4

1,383,462

-

Total interest-bearing liabilities

1,433,359

1,388,676

3

1,440,178

-

Total deposits

1,835,026

1,771,539

4

1,827,689

-

Total shareholders' equity

315,487

299,339

5

314,773

-

SELECTED RATIOS (1)

Return on average assets

1.18

%

1.50

%

(21)

%

1.23

%

(4)

%

Return on average equity

8.31

10.72

(22)

8.64

(4)

Common equity ratio

14.38

14.12

2

14.19

1

Efficiency ratio (2)

63.63

60.22

6

64.09

(1)

Average equity to average assets

14.22

14.00

2

14.20

-

Tier 1 leverage capital ratio (3)

11.17

11.15

-

11.12

-

Total risk-based capital ratio (3)

15.28

15.59

(2)

15.25

-

Net interest margin (4)

4.14

4.57

(9)

4.12

-

SELECTED NON-GAAP RATIOS (1)

Tangible common equity ratio (5)

11.79

%

11.40

%

3

%

11.60

%

2

%

Return on average tangible common equity (6)

10.93

14.36

(24)

11.39

(4)

PER SHARE DATA

Earnings per share - basic

$

0.74

$

0.89

(17)

%

$

0.76

(3)

%

Earnings per share - diluted

0.73

0.87

(16)

0.75

(3)

Book value at period end

34.19

32.14

6

33.72

1

Tangible book value at period end

27.22

25.16

8

26.77

2

Shares outstanding at period end

9,252,418

9,459,050

(2)

9,331,099

(1)

Weighted average shares outstanding

Basic

8,953,203

9,118,874

(2)

%

9,058,600

(1)

%

Diluted

9,018,142

9,304,636

(3)

9,107,167

(1)

__________________________________________

(1)

With the exception of end-of-period ratios, all ratios are based on average daily 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)

Estimated 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. Taxable equivalent yields are calculated using a marginal tax rate of 21%.

(5)

Tangible common equity ratio is common shareholders' equity less intangible assets divided by total assets less intangible assets. See 'Non-GAAP Reconciliation' for addtional information.

(6)

Return on average tangible common equity is net income plus amortization of core deposit intangible, net of taxes, divided by average common shareholders' equity less average intangible assets. See 'Non-GAAP Reconciliation' for additional information.

HOME BANCORP, INC. AND SUBSIDIARY

SUMMARY CREDIT QUALITY INFORMATION

(Unaudited)

December 31, 2019

September 30, 2019

December 31, 2018

(dollars in thousands)

Acquired

Originated

Total

Acquired

Originated

Total

Acquired

Originated

Total

CREDIT QUALITY (1)

Nonaccrual loans (2)

$

9,758

$

14,628

$

24,386

$

11,785

$

13,221

$

25,006

$

9,032

$

15,380

$

24,412

Accruing loans past due 90 days and over

-

-

-

-

-

-

-

-

-

Total nonperforming loans

9,758

14,628

24,386

11,785

13,221

25,006

9,032

15,380

24,412

Foreclosed assets and ORE

2,363

1,793

4,156

1,880

712

2,592

1,412

146

1,558

Total nonperforming assets

12,121

16,421

28,542

13,665

13,933

27,598

10,444

15,526

25,970

Performing troubled debt restructurings

475

1,903

2,378

213

1,712

1,925

289

1,117

1,406

Total nonperforming assets and troubled debt restructurings

$

12,596

$

18,324

$

30,920

$

13,878

$

15,645

$

29,523

$

10,733

$

16,643

$

27,376

Nonperforming assets to total assets

1.30

%

1.24

%

1.21

%

Nonperforming loans to total assets

1.11

1.13

1.13

Nonperforming loans to total loans

1.42

1.46

1.48

Allowance for loan losses to nonperforming assets

62.60

63.77

62.95

Allowance for loan losses to nonperforming loans

73.27

70.38

66.97

Allowance for loan losses to total loans

1.04

1.03

0.99

Year-to-date loan charge-offs

$

1,577

$

1,118

$

2,581

Year-to-date loan recoveries

83

67

179

Year-to-date net loan charge-offs

$

1,494

$

1,051

$

2,402

Annualized YTD net loan charge-offs to average loans

0.09

%

0.08

%

0.15

%

__________________________________

(1)

Nonperforming loans consist of nonaccruing loans and accruing loans 90 days or more past due. Purchased credit impaired loans accounted for in pools with an accretable yield are considered to be performing and are excluded from nonperforming loans. It is our policy to cease accruing interest on loans 90 days or more past due. Nonperforming assets consist of nonperforming loans, foreclosed assets and surplus real estate (ORE). Foreclosed assets consist of assets acquired through foreclosure or acceptance of title in-lieu of foreclosure. ORE consists of closed or unused bank buildings.

(2)

Nonaccrual loans include originated restructured loans placed on nonaccrual totaling $7.6 million, $8.8 million and $10.3 million at December 31, 2019, September 30, 2019 and December 31, 2018, respectively. Acquired restructured loans placed on nonaccrual totaled $2.2 million, $2.0 million and $4.2 million at December 31, 2019, September 30, 2019 and December 31, 2018, respectively.

SOURCE Home Bancorp, Inc.

For further information: John W. Bordelon, President and CEO, (337) 237-1960