Home Bancorp Announces 2013 Second Quarter Results

LAFAYETTE, La., July 23, 2013 /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 $1.2 million for the second quarter of 2013, a decrease of $618,000, or 33%, compared to the first quarter of 2013 and a decrease of $509,000, or 29%, compared to the second quarter of 2012.  Diluted earnings per share were $0.18 for the second quarter of 2013, a decrease of $0.08, or 31%, compared to the first quarter of 2013 and a decrease of $0.06, or 25%, compared to the second quarter of 2012. 

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"Second quarter performance was significantly impacted by the write down of one problem loan relationship in our Baton Rouge market," stated John W. Bordelon, President and Chief Executive Officer of the Company and the Bank. "We remain committed to early identification of problem loans and are working aggressively to resolve nonperforming assets as quickly as the legal process allows."

"While we had a relatively strong quarter of loan production," added Mr. Bordelon, "the effect was muted by anticipated reductions in our Covered Loan portfolio."

Loans and Credit Quality

Loans totaled $675.9 million at June 30, 2013, a decrease of $2.7 million, or 0.4%, from March 31, 2013, and a decrease of $3.9 million, or 0.6%, from June 30, 2012.  During the second quarter, decreases in residential mortgage loans (down $5.0 million), multi-family loans (down $1.6 million) and construction and land loans (down $3.0 million) were largely offset by increases in commercial and industrial loans (up $7.0 million).  Loans covered under loss sharing agreements with the FDIC ("Covered Loans") totaled $27.4 million as of June 30, 2013, a decrease of $14.2 million, or 34.1%, compared to March 31, 2013.  The decrease in Covered Loans was primarily the result of principal repayments.   

The following table sets forth the composition of the Company's loan portfolio (including Covered Loans) as of the dates indicated. 

Nonperforming assets ("NPAs"), which include $9.7 million in assets covered under loss sharing agreements with the FDIC ("Covered Assets") and $12.2 million in assets acquired from GS Financial Corp. ("GSFC"), totaled $27.5 million at June 30, 2013, a decrease of $2.9 million compared to March 31, 2013 and a decrease of $2.8 million compared to June 30, 2012.  The ratio of total NPAs to total assets was 2.83% at June 30, 2013, compared to 3.12% at March 31, 2013 and 3.06% at June 30, 2012.  Excluding acquired assets, the ratio of NPAs to total assets was 0.68% at June 30, 2013, compared to 0.80% at March 31, 2013 and 0.90% at June 30, 2012. 

The Company recorded net loan charge-offs of $1.8 million during the second quarter of 2013, compared to net loan charge-offs of $165,000 in the first quarter of 2013 and $1.7 million in the second quarter of 2012.  The increase in net charge-offs for the second quarter of 2013 resulted primarily from a $1.7 million charge-off on a $1.9 million accounts receivable line of credit which was downgraded and placed on nonaccrual status during the quarter.

The Company's provision for loan losses for the second quarter of 2013 was $2.2 million, compared to $520,000 for the first quarter of 2013 and $1.2 million for the second quarter of 2012.  The elevated level of provision during the second quarter of 2013 relates primarily to the accounts receivable line of credit mentioned above. 

The ratio of allowance for loan losses to total loans was 0.90% at June 30, 2013 compared to 0.84% and 0.78% at March 31, 2013 and June 30, 2012, respectively.  Excluding acquired loans, the ratio of the allowance for loan losses to total loans was 1.08% at June 30, 2013 compared to 1.05% at March 31, 2013 and June 30, 2012.           

Investment Securities Portfolio

The Company's investment securities portfolio totaled $155.9 million at June 30, 2013, a decrease of $3.8 million, or 2%, from March 31, 2013, and an increase of $752,000, or 1%, from June 30, 2012.  At June 30, 2013, the Company had a net unrealized gain position on its investment securities portfolio of $1.4 million, compared to net unrealized gains of $4.6 million and $4.1 million at March 31, 2013 and June 30, 2012, respectively. The decrease in the unrealized gain primarily reflects the increasing market interest rates.  The investment securities portfolio had a modified duration of 4.2 years at June 30, 2013, compared to 3.7 and 3.6 years at March 31, 2013 and June 30, 2012, respectively.

During the second quarter of 2013, the Company sold five securities with an aggregate book value of $7.3 million and realized an aggregate gain of $428,000 on the transactions.   

Deposits

During the second quarter of 2013, core deposits (i.e., checking, savings and money market accounts) increased $12.5 million, or 2%, from March 31, 2013, and increased $50.7 million, or 10%, from June 30, 2012.  Total deposits were $777.2 million at June 30, 2013, a decrease of $4.1 million, or 1%, from March 31, 2013, and a decrease of $2.0 million, or 0.3%, from June 30, 2012.

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

Share Repurchases

The Company completed its July 2012 share repurchase program at the beginning of June 2013.  Under the July 2012 program, the Company acquired 383,598 shares of the Company's common stock at an average price of $17.68 per share. 

On June 7, 2013, the Company announced the commencement of a new share repurchase program (the "June 2013 program").  Under the June 2013 program, the Company may purchase up to 370,000 shares, or approximately 5%, of the Company's outstanding common stock.  Under the June 2013 program, the Company purchased 157,700 shares of its common stock during the second quarter of 2013 at an average price per share of $17.88.  As of July 17, 2013, the Company has purchased 176,300 shares under the June 2013 plan at an average price per share of $17.95; hence, an additional 193,700 shares remain eligible for purchase under the plan.  The tangible book value per share of the Company's common stock was $19.06 at June 30, 2013.     

Net Interest Income

Net interest income for the second quarter of 2013 totaled $9.9 million, an increase of $79,000, or 1%, compared to the first quarter of 2013, and a decrease of $38,000, or 0.4%, compared to the second quarter of 2012.  The modest increase in net interest income in the second quarter of 2013 compared to the first quarter of 2013 was due largely to lower average yields paid on interest-bearing liabilities.  The decline in net interest income in the second quarter of 2013 compared to the second quarter of 2012 was due largely to lower loan interest income as a result of lower average yields earned on loans, reflecting the continuing low interest rate environment as well as the effects of competition for loans in our marketplace.    

The Company's net interest margin was 4.59% for the second quarter of 2013, four basis points lower than the first quarter of 2013 and seven basis points lower than the second quarter of 2012.  The decrease in the net interest margin related primarily to lower loan yields.    

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 35%.

Noninterest Income

Noninterest income for the second quarter of 2013 totaled $2.2 million, an increase of $416,000, or 23%, compared to the first quarter of 2013 and an increase of $297,000, or 16%, compared to the second quarter of 2012.  The increase in noninterest income in the second quarter of 2013 compared to the first quarter of 2013 resulted primarily from increases in gains on the sale of securities (up $428,000), bank card fees (up $40,000) and service fees and charges (up $33,000), which were partially offset by a decrease in gains on the sale of mortgage loans (down $122,000).     

The increase in noninterest income in the second quarter of 2013 compared to the second quarter of 2012 resulted primarily from higher gains on the sale of securities (up $369,000), which was partially offset by decreases in discount accretion on the FDIC loss sharing receivable (down $64,000), bank card fees (down $30,000) and income from bank-owned life insurance (down $13,000).      

Noninterest Expense

Noninterest expense for the second quarter of 2013 totaled $8.0 million, a decrease of $282,000, or 3%, compared to the first quarter of 2013 and a decrease of $29,000, or 0.4%, compared to the second quarter of 2012.  The decrease in noninterest expense in the second quarter of 2013 compared to the first quarter of 2013 resulted primarily from lower foreclosed asset expenses (down $210,000 primarily due to a gain of $194,000 recorded on a disposed asset), compensation and benefits expenses (down $216,000) and marketing and advertising expenses (down $67,000), which were partially offset by higher other expenses (up $169,000 primarily due to penalties incurred in prepaying long-term FHLB borrowings), occupancy expenses (up $51,000) and forms, printing and supplies expenses (up $29,000).  

The decrease in noninterest expense in the second quarter of 2013 compared to the second quarter of 2012 resulted primarily from lower foreclosed asset expenses (down $275,000), which was partially offset by higher other expenses (up $151,000) and Louisiana shares taxes (up $97,000). 

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 loans acquired from the FDIC and GSFC. 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."

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, 2012, 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.

SOURCE Home Bancorp, Inc.