HBCP Home Bancorp Inc

LAFAYETTE, La., July 27 /PRNewswire-FirstCall/ -- 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 $1.5 million for the second quarter of 2010, an increase of $621,000, or 74%, compared to the first quarter of 2010 and an increase of $30,000, or 2%, compared to the second quarter of 2009.  Net income for the first and second quarters of 2010 includes acquisition-related costs (after tax) of $378,000 and $236,000, respectively.  Excluding the impact of acquisition-related costs, net income increased $764,000, or 71%, compared to the first quarter of 2010 and $408,000, or 28%, compared to the second quarter of 2009.  Diluted earnings per share were $0.19 for the second quarter of 2010, an increase of 73% compared to the first quarter of 2010 and an increase of 6% compared to the second quarter of 2009.    Excluding the impact of acquisition-related costs, diluted earnings per share were $0.24 for the second quarter of  2010, an increase of 71% compared to the first quarter of 2010 and an increase of 33% compared to the second quarter of 2009.

The Company also announced that its Board of Directors approved a new program to repurchase up to 424,027 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 "October 2009" program) during the second quarter of 2010.  Under the October 2009 program, the Company acquired 446,344 shares of the Company's common stock at an average price of $12.85 per share.  

"We are excited about our financial performance this quarter and continued strong credit quality," stated John W. Bordelon, President and Chief Executive Officer of the Company and the Bank.  "The strength of our results was driven by the incremental earnings created by our Northshore acquisition and robust core deposit growth."

"In mid-July, we completed the conversion of Northshore loan and deposit accounts to Home Bank's operating system," added Mr. Bordelon.  "I admire the diligence and teamwork our staff displayed during the integration and conversion process.  We expect our momentum on the Northshore and our other markets to continue building throughout the remainder of the year as our bankers introduce Home Bank's outstanding service quality to new customers."

Loans and Credit Quality

The Company's market areas, which are located in southern Louisiana, have been affected by the recent oil spill in the Gulf of Mexico.  The Company's direct exposure to borrowers with significant operations linked to deep-water drilling in the Gulf amounted to $5.6 million in outstanding loan balances as of June 30, 2010, or 1% of total loans at such date.  The Company has remained in contact with each of the impacted borrowers.  All such loans are performing in accordance with their terms and, based on our discussions with the borrowers and internal reviews, the Company does not believe it will suffer losses on these loans.  "Despite our minimal direct exposure to deep-water drilling," stated Mr. Bordelon, "the oil and gas industry is a key employer in South Louisiana.  We are continuing to carefully monitor the effects of the oil spill on our customers and the markets we serve.  We will continue to support local, state and national efforts aimed at preserving jobs across the Gulf coast."

As previously reported, Home Bank entered into a purchase and assumption agreement with the Federal Deposit Insurance Corporation ("FDIC") on March 12, 2010 to purchase certain assets and to assume deposits and certain other liabilities of Statewide Bank, a full service community bank formerly headquartered in Covington, Louisiana.  As a result of the transaction, the Company acquired loans with contractual balances totaling $157.0 million.  After fair value adjustments, the book value of the loans acquired totaled $110.4 million.  Home Bank entered into loss sharing agreements with the FDIC which cover the acquired loan portfolio ("Covered Loans") and other repossessed assets (collectively referred to as "Covered Assets").  Under the terms of the loss sharing agreements, the FDIC will absorb 80% of the first $41 million of losses incurred on Covered Assets and 95% of losses on Covered Assets exceeding $41 million.  The Company distinguishes between Covered Loans and loans not covered by the loss sharing agreements ("Noncovered Loans") due to the differing risk exposure relating to the loans.  

Total loans were $455.2 million at June 30, 2010, an increase of $4.9 million, or 1%, from March 31, 2010, and an increase of $112.5 million, or 33%, from June 30, 2009.  The following table sets forth the composition of the Company's loan portfolio as of the dates indicated.  

Excluding acquired loans, loan growth during 2010 has been focused in our commercial real estate and construction and land portfolios in Acadiana and Baton Rouge.    

Nonperforming assets, excluding Covered Assets, were $2.1 million at June 30, 2010, an increase of $219,000, or 12%, from March 31, 2010, and a decrease of $325,000, or 13%, from June 30, 2009.  The ratio of nonperforming assets, excluding Covered Assets, to total assets was 0.30% at June 30, 2010, compared to 0.27% at March 31, 2010 and 0.46% at June 30, 2009.  At June 30, 2010, total nonperforming assets, including Covered Assets, were $24.0 million.  The ratio of total nonperforming assets to total assets was 3.38% at June 30, 2010.

The Company recorded net charge-offs of $76,000 during the second quarter of 2010, compared to net charge-offs of $21,000 in the first quarter of 2010 and $7,000 in the second quarter of 2009. The Company's loan loss provision for the second quarter of 2010 was $200,000, compared to $350,000 for the first quarter of 2010 and $248,000 for the second quarter of 2009.    

At June 30, 2010, the Company's ratio of loan loss reserves to Noncovered Loans was 1.07%, compared to 1.08% and 0.88% at March 31, 2010 and June 30, 2009, respectively.  The ratio of loan loss reserves to total loans was 0.84% at June 30, 2010, compared to 0.82% and 0.88% at March 31, 2010 and June 30, 2009, respectively.

Investment Securities Portfolio

The Company's investment securities portfolio totaled $136.3 million at June 30, 2010, a decrease of $1.9 million, or 1%, from March 31, 2010, and an increase of $23.0 million, or 20%, from June 30, 2009.  The increase in investment securities from June 30, 2009 resulted primarily from the addition of $24.8 million of U.S. agency mortgage-backed securities acquired from Statewide Bank.  At June 30, 2010, the Company had a net unrealized gain position on its investment securities portfolio of $786,000, compared to net unrealized losses of $191,000 and $4.9 million at March 31, 2010 and June 30, 2009, respectively.

Due to increasing delinquencies and defaults in the mortgage loans underlying certain non-agency mortgage-backed securities we own, the Company recorded other-than-temporary impairment ("OTTI") charges of $141,000 (pre-tax) during the second quarter of 2010.  Based on management's review of the remaining investment portfolio, no other declines in the market value of the Company's investment securities are deemed to be other than temporary at June 30, 2010.

The following table summarizes the Company's non-agency mortgage-backed securities portfolio as of June 30, 2010 (in thousands).

The Company holds no Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) preferred stock, equity securities, corporate bonds, trust preferred securities, hedge fund investments, collateralized debt obligations or structured investment vehicles.

Deposits

The Company experienced strong core deposit (i.e., checking, savings and money market) growth during the second quarter of 2010.  Core deposits increased $16.3 million during the quarter (an annualized growth rate of 24%).  Total deposits, which includes certificates of deposit, were $536.5 million at June 30, 2010, a decrease of $3.4 million, or 1%, from March 31, 2010, and an increase of $164.9 million, or 44%, from June 30, 2009.  The Statewide Bank acquisition added $206.9 million in deposits during the first quarter of 2010, including $46.2 million of higher-cost, out-of-state brokered deposits which the Company elected to re-price.  Consistent with management's expectations, the vast majority of out-of-state depositors elected to withdraw their deposits.  

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

Net Interest Income

Net interest income for the second quarter of 2010 totaled $7.8 million, an increase of $1.9 million, or 32%, compared to the first quarter of 2010, and an increase of $1.7 million, or 27%, compared to the second quarter of 2009.  The increase was driven primarily by the full quarter impact of the Statewide Bank acquisition.  The Company's net interest margin was 4.82% for the second quarter of 2010, 13 basis points higher than the first quarter of 2010 and five basis points lower than the second quarter of 2009.  

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.

Noninterest Income

Noninterest income for the second quarter of 2010 totaled $1.1 million, an increase of $87,000, or 9%, compared to the first quarter of 2010 and an increase of $78,000, or 8%, compared to the second quarter of 2009.  The increases resulted primarily from higher levels of service fees and charges and bank card fees due to the Statewide Bank acquisition.  These increases were partially offset by OTTI charges of $141,000 related to certain non-agency mortgage-backed securities recorded during the second quarter of 2010.  The Company also recorded gains during the second quarter of 2010 of $39,000 on the sale of certain investment securities acquired from Statewide Bank.  

Noninterest Expense

Noninterest expense for the second quarter of 2010 totaled $6.4 million, an increase of $1.2 million, or 23%, compared to the first quarter of 2010 and an increase of $1.8 million, or 39%, compared to the second quarter of 2009.  The primary reasons for the increase in noninterest expense during the second quarter of 2010 was higher compensation and benefits, occupancy and data processing and communications expenses related to the full quarter impact of the Statewide Bank acquisition, the addition of our Baton Rouge headquarters location in March 2010 and acquisition-related costs.  The Company began 2010 with 11 full-service banking offices.  The acquisition of six Statewide Bank locations and the opening of our Baton Rouge headquarters has increased our total number of full-service banking offices to 18.      

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 the impact of acquisition-related charges.  Management believes the presentation of this non-GAAP financial information provides useful information that is essential to a proper understanding of the Company's core operating results. This non-GAAP financial information should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial information presented by other companies.

This news release contains certain forwardlooking statements. Forwardlooking 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."

Forwardlooking 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 forwardlooking statements.  Home Bancorp's Annual Report on Form 10-K for the year ended December 31, 2009, 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. Forwardlooking statements speak only as of the date they are made.  We do not undertake to update forwardlooking statements to reflect circumstances or events that occur after the date the forwardlooking statements are made or to reflect the occurrence of unanticipated events.