Home Bancorp Announces 2017 Annual And Fourth Quarter Results And Increases Quarterly Dividend

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PR Newswire

LAFAYETTE, La., Jan. 30, 2018

LAFAYETTE, La., Jan. 30, 2018 /PRNewswire/ -- Home Bancorp, Inc. (Nasdaq: "HBCP") (the "Company"), the parent company for Home Bank, N.A. (the "Bank") (www.home24bank.com), reported results for the fourth quarter and full year ended December 31, 2017.

Home Bank Logo. (PRNewsFoto/Home Bancorp, Inc.) (PRNewsFoto/)

Net income for the year ended December 31, 2017 was a record $17.8 million, an increase of $1.8 million, or 11%, compared to 2016. Diluted earnings per share ("EPS") for 2017 were $2.41, an increase of 7% compared to $2.25 in 2016.

"Despite a challenging economy in several of our markets, 2017 was our fourth straight record net income year," stated John W. Bordelon, President and Chief Executive Officer of the Company and the Bank, "we owe this incredible run to the tremendous bankers on our team who seek to better our company day in and day out."

"The conversion of St. Martin Bank's systems remains on track," added Mr. Bordelon, "We're looking forward to introducing our new customers to an expanded branch network and enhanced technology."

Net income for the fourth quarter of 2017 was $4.2 million, or $0.54 EPS, compared to $4.1 million, or $0.56 EPS, for the third quarter of 2017, and $4.3 million, or $0.60 EPS, for the fourth quarter of 2016. The fourth and third quarters of 2017 include merger-related expenses relating to our acquisition of St. Martin Bancshares, Inc. ("St. Martin") totaling $610,000 and $225,000, respectively, net of taxes. The fourth quarter of 2017 also includes a deferred tax asset ("DTA") re-measurement charge of $1.8 million related to the recently enacted Tax Cuts and Jobs Act of 2017 (the "Tax Act").

The Company also announced that its Board of Directors increased the quarterly cash dividend on shares of common stock to $0.15 per share payable on February 16, 2018, to shareholders of record as of February 6, 2018.

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Acquisition of St. Martin Bancshares, Inc.

On December 6, 2017, the Company completed its acquisition of St. Martin, the former holding company of St. Martin Bank & Trust Company of St. Martinville, Louisiana. Shareholders of St. Martin received 9.2839 shares of Home Bancorp common stock for each share of St. Martin common stock. In addition, immediately prior to the closing of the merger, St. Martin paid a special cash distribution of $94.00 per share to its shareholders. This acquisition added approximately $596.0 million in assets, $446.5 million in loans, $533.5 million in deposits and estimated goodwill of $46.2 million.

Loans and Credit Quality

Loans totaled $1.7 billion at December 31, 2017, an increase of $437.0 million, or 36%, from September 30, 2017, and an increase of $436.6 million, or 36%, from December 31, 2016. The increases resulted from the addition of St. Martin's loan portfolio.

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

		December 31,		December 31,		Increase/(Decrease)
*(dollars in thousands)*		2017		2016		Amount	Percent
Real estate loans:
One- to four-family first mortgage	$	477,188	$	341,883	$	135,305	40	%
Home equity loans and lines		94,436		88,821		5,615	6
Commercial real estate		613,636		427,515		186,121	44
Construction and land		180,294		141,167		39,127	28
Multi-family residential		50,978		46,369		4,609	10
Total real estate loans		1,416,532		1,045,755		370,777	35
Other loans:
Commercial and industrial		185,974		139,810		46,164	33
Consumer		61,884		42,268		19,616	46
Total other loans		247,858		182,078		65,780	36
Total loans	$	1,664,390	$	1,227,833	$	436,557	36	%

Nonperforming assets ("NPAs"), excluding purchased credit impaired loans, totaled $25.8 million at December 31, 2017, an increase of $7.6 million, or 42%, compared to September 30, 2017 and an increase of $9.1 million, or 55%, compared to December 31, 2016. The increase in NPAs during the fourth quarter of 2017 was primarily related to two loan relationships totaling $7.7 million. The ratio of total NPAs to total assets was 1.16% at December 31, 2017, compared to 1.14% at September 30, 2017 and 1.07% at December 31, 2016.

The Company recorded net loan recoveries of $184,000 during the fourth quarter of 2017, compared to net loan charge-offs of $246,000 and $182,000 for the third quarter of 2017 and fourth quarter of 2016, respectively. The Company's provision for loan losses for the fourth quarter of 2017 was $1.2 million, compared to $660,000 for the third quarter of 2017 and $500,000 for the fourth quarter of 2016. The increase in the provision for loan losses for the fourth quarter of 2017 resulted primarily from the increase in NPAs.

The ratio of the allowance for loan losses to total loans was 0.89% at December 31, 2017, compared to 1.09% and 1.02% at September 30, 2017 and December 31, 2016, respectively. The ratio declined in the fourth quarter due to the addition of St. Martin's loans. Excluding acquired loans, the ratio of the allowance for loan losses to total loans was 1.52% at December 31, 2017, compared to 1.40% and 1.38% at September 30, 2017 and December 31, 2016, respectively.

Direct Energy Exposure

The outstanding balance of direct loans to borrowers in the energy sector totaled $58.8 million, or 4% of total outstanding loans, at December 31, 2017, compared to $32.5 million and $34.0 million at September 30, 2017 and December 31, 2016, respectively. Unfunded loan commitments to customers in the energy sector totaled $9.3 million at December 31, 2017, compared to $5.0 million and $6.7 million at September 30, 2017 and December 31, 2016, respectively. The acquisition of St. Martin added $30.1 million of direct loans to borrowers in the energy sector and $3.8 million in unfunded loan commitments to such customers at the acquisition date. At December 31, 2017, loans constituting 96% of the balance of our direct energy-related loans were performing in accordance with their original loan agreements. The remaining 4%, or $2.2 million, have been restructured and were paying in accordance with their restructured terms as of December 31, 2017. The Company holds no shared national credits.

The allowance for loan losses attributable to originated direct energy-related loans totaled 2.49% of the outstanding balance of energy-related loans at December 31, 2017, compared to 3.13% and 3.20% at September 30, 2017 and December 31, 2016, respectively.

Deposits

Total deposits were $1.9 billion at December 31, 2017, an increase of $546.5 million, or 41%, from September 30, 2017, and an increase of $618.2 million, or 50%, from December 31, 2016. The increases resulted from the addition of St. Martin's deposits.

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

December 31,

Increase / (Decrease)

(dollars in thousands)

2017

2016

Amount

Percent

Demand deposits

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