HOME BANCORP, INC. ANNOUNCES 2024 THIRD QUARTER RESULTS AND INCREASES QUARTERLY DIVIDEND BY 4%
LAFAYETTE, La., Oct. 17, 2024 /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 third quarter of 2024. For the quarter, the Company reported net income of $9.4 million, or $1.18 per diluted common share ("diluted EPS"), up $1.3 million from $8.1 million, or $1.02 diluted EPS, for the second quarter of 2024.
"We are pleased with the financial results for the current quarter," said John W. Bordelon, President and Chief Executive Officer of the Company and the Bank. "While loan growth has slowed from second quarter, deposit growth continues to improve reducing our loan to deposit ratio down to 96%. Our net interest margin remains strong at 3.71% and continued to move upward through the quarter."
Third Quarter 2024 Highlights
Loans totaled $2.7 billion at September 30, 2024, up $6.9 million, or less than 1%, (an increase of 1% on an annualized basis) from June 30, 2024.
Deposits totaled $2.8 billion at September 30, 2024, up $54.6 million, or 2% (8% on an annualized basis), from June 30, 2024.
Net interest income in the third quarter of 2024 totaled $30.4 million, up $989,000, or 3% from the prior quarter.
The net interest margin ("NIM") was 3.71% in the third quarter of 2024 compared to 3.66% in the second quarter of 2024.
Nonperforming assets totaled $18.4 million, or 0.53% of total assets, at September 30, 2024 compared to $17.0 million, or 0.50% of total assets, at June 30, 2024.
The Company recorded a $140,000 provision to the allowance for loan losses in the third quarter of 2024, compared to a $1.3 million provision in the second quarter of 2024.
Net loan charge-offs were $74,000 for the third quarter of 2024, compared to net loan charge-offs of $510,000 during the second quarter of 2024. Annualized year-to-date net loan charge offs to average loans was 0.04%.
Loans
Loans totaled $2.7 billion at September 30, 2024, up $6.9 million, or less than 1%, from June 30, 2024. The following table summarizes the changes in the Company's loan portfolio, net of unearned income, from June 30, 2024 through September 30, 2024.
(dollars in thousands)
9/30/2024
6/30/2024
Increase (Decrease)
Real estate loans:
One- to four-family first mortgage
$ 502,784
$ 446,255
$ 56,529
13 %
Home equity loans and lines
80,935
70,617
10,318
15
Commercial real estate
1,143,152
1,228,757
(85,605)
(7)
Construction and land
329,787
328,938
849
—
Multi-family residential
169,443
126,922
42,521
34
Total real estate loans
2,226,101
2,201,489
24,612
1
Other loans:
Commercial and industrial
412,753
427,339
(14,586)
(3)
Consumer
29,432
32,518
(3,086)
(9)
Total other loans
442,185
459,857
(17,672)
(4)
Total loans
$ 2,668,286
$ 2,661,346
$ 6,940
— %
The average loan yield was 6.43% for the third quarter of 2024, up 15 basis points from the second quarter of 2024. Loans grew in the third quarter of 2024 across most of our markets, with New Orleans and Houston leading the net growth.
Credit Quality and Allowance for Credit Losses
Nonperforming assets ("NPAs") totaled $18.4 million, or 0.53% of total assets, at September 30, 2024, up $1.3 million, or 8%, from $17.0 million, or 0.50% of total assets, at June 30, 2024. The increase in NPAs during the third quarter of 2024 was primarily due to two loan relationships which were put on nonaccrual during the third quarter of 2024. During the third quarter of 2024, the Company recorded net loan charge-offs of $74,000, compared to net loan charge-offs of $510,000 during the second quarter of 2024.
The Company provisioned $140,000 to the allowance for loan losses in the third quarter of 2024. At September 30, 2024, the allowance for loan losses totaled $32.3 million, or 1.21% of total loans, compared to $32.2 million, or 1.21% of total loans, at June 30, 2024. Provisions to the allowance for loan losses are based upon, among other factors, our estimation of current expected losses in our loan portfolio, which we evaluate on a quarterly basis. Changes in expected losses consider various factors including the changing economic activity, potential mitigating effects of governmental stimulus, borrower specific information impacting changes in risk ratings, projected delinquencies and the impact of industry-wide loan modification efforts, among other factors.
The following tables present the Company's loan portfolio by credit quality classification as of September 30, 2024 and June 30, 2024.
September 30, 2024
(dollars in thousands)
Pass
Special Mention
Substandard
Total
One- to four-family first mortgage
$ 494,180
$ 859
$ 7,745
$ 502,784
Home equity loans and lines
80,729
—
206
80,935
Commercial real estate
1,125,331
—
17,821
1,143,152
Construction and land
323,751
308
5,728
329,787
Multi-family residential
168,513
—
930
169,443
Commercial and industrial
409,388
1,248
2,117
412,753
Consumer
29,302
—
130
29,432
Total
$ 2,631,194
$ 2,415
$ 34,677
$ 2,668,286
June 30, 2024
(dollars in thousands)
Pass
Special Mention
Substandard
Total
One- to four-family first mortgage
$ 437,753
$ 1,417
$ 7,085
$ 446,255
Home equity loans and lines
70,394
—
223
70,617
Commercial real estate
1,207,421
3,469
17,867
1,228,757
Construction and land
324,729
310
3,899
328,938
Multi-family residential
125,689
65
1,168
126,922
Commercial and industrial
423,673
1,493
2,173
427,339
Consumer
32,273
—
245
32,518
Total
$ 2,621,932
$ 6,754
$ 32,660
$ 2,661,346
Investment Securities
The Company's investment securities portfolio totaled $421.8 million at September 30, 2024, an increase of $8.3 million, or 2%, from June 30, 2024. At September 30, 2024, the Company had a net unrealized loss position on its investment securities of $32.2 million, compared to a net unrealized loss of $46.6 million at June 30, 2024. The Company's investment securities portfolio had an effective duration of 3.7 years and 4.0 years at September 30, 2024 and June 30, 2024, respectively. During the third quarter of 2024, the Company made securities purchases of $4.9 million. No other purchases or sales of securities were made during the year.
The following table summarizes the composition of the Company's investment securities portfolio at September 30, 2024.
(dollars in thousands)
Amortized Cost
Fair Value
Available for sale:
U.S. agency mortgage-backed
$ 296,894
$ 273,581
Collateralized mortgage obligations
77,351
75,438
Municipal bonds
53,568
47,770
U.S. government agency
18,139
17,490
Corporate bonds
6,984
6,444
Total available for sale
$ 452,936
$ 420,723
Held to maturity:
Municipal bonds
$ 1,065
$ 1,066
Total held to maturity
$ 1,065
$ 1,066
Approximately 66% of the investment securities portfolio was pledged as of September 30, 2024 to secure public deposits and borrowings with the Federal Reserve Bank Term Funding Program ("BTFP"). The Company had $142.0 million of securities pledged to secure public deposits and $135.0 million pledged to the BTFP borrowings at September 30, 2024 and June 30, 2024.
Deposits
Total deposits were $2.8 billion at September 30, 2024, up $54.6 million, or 2%, from June 30, 2024. Non-maturity deposits increased $45.2 million, or 2%, during the third quarter of 2024 to $2.1 billion. The following table summarizes the changes in the Company's deposits from June 30, 2024 to September 30, 2024.
(dollars in thousands)
9/30/2024
6/30/2024
Increase (Decrease)
Demand deposits
$ 740,854
$ 746,504
$ (5,650)
(1) %
Savings
215,815
218,307
(2,492)
(1)
Money market
452,456
427,406
25,050
6
NOW
644,061
615,809
28,252
5
Certificates of deposit
724,301
714,889
9,412
1
Total deposits
$ 2,777,487
$ 2,722,915
$ 54,572
2 %
The average rate on interest-bearing deposits increased 9 basis points from 2.69% for the second quarter of 2024 to 2.78% for the third quarter of 2024. At September 30, 2024, certificates of deposit maturing within the next 12 months totaled $680.8 million.
We obtain most of our deposits from individuals, small businesses and public funds in our market areas. The following table presents our deposits per customer type for the periods indicated.
September 30, 2024
June 30, 2024
Individuals
52 %
53 %
Small businesses
38
37
Public funds
7
8
Broker
3
2
Total
100 %
100 %
The total amounts of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) were $818.7 million at September 30, 2024 and $780.1 million at June 30, 2024. Public funds in excess of the FDIC insurance limits are fully collateralized.
Net Interest Income
The net interest margin ("NIM") increased 5 basis points from 3.66% for the second quarter of 2024 to 3.71% for the third quarter of 2024 primarily due to the increase in average interest-earning assets outpacing the increase in average interest-bearing liabilities.
The average loan yield was 6.43% for the third quarter of 2024, up 15 basis points from the second quarter of 2024, primarily due to new loan originations at higher market rates during the third quarter.
The average cost of interest-bearing deposits increased by 9 basis points in the third quarter of 2024 compared to the second quarter of 2024. The increase in deposit costs reflects the rise in market rates of interest as well as a migration to interest-bearing deposits from non-interest bearing deposits.
Average other interest-earning assets were $79.7 million for the third quarter of 2024, up $28.3 million, or 55%, from the second quarter of 2024 primarily due to a reallocation of certain other interest-earning assets.
Loan accretion income from acquired loans totaled $452,000 for the third quarter of 2024, down $38,000, or 8%, from the second quarter of 2024.
The following table summarizes 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 have been calculated using a marginal tax rate of 21%.
Quarter Ended
9/30/2024
6/30/2024
(dollars in thousands)
Average Balance
Interest
Average Yield/ Rate
Average Balance
Interest
Average Yield/ Rate
Interest-earning assets:
Loans receivable
$ 2,668,672
$ 43,711
6.43 %
$ 2,652,331
$ 41,999
6.28 %
Investment securities (TE)
454,024
2,677
2.38
463,500
2,740
2.38
Other interest-earning assets
79,668
991
4.95
51,355
719
5.64
Total interest-earning assets
$ 3,202,364
$ 47,379
5.82 %
$ 3,167,186
$ 45,458
5.70 %
Interest-bearing liabilities:
Deposits:
Savings, checking, and money market
$ 1,266,465
$ 5,571
1.75 %
$ 1,260,491
$ 5,108
1.63 %
Certificates of deposit
722,717
8,337
4.59
704,690
8,026
4.58
Total interest-bearing deposits
1,989,182
13,908
2.78
1,965,181
13,134
2.69
Other borrowings
140,539
1,673
4.74
140,610
1,656
4.74
Subordinated debt
54,374
844
6.21
54,322
844
6.22
FHLB advances
56,743
572
3.99
46,499
431
3.69
Total interest-bearing liabilities
$ 2,240,838
$ 16,997
3.02 %
$ 2,206,612
$ 16,065
2.93 %
Noninterest-bearing deposits
$ 741,387
$ 751,776
Net interest spread (TE)
2.80 %
2.77 %
Net interest margin (TE)
3.71 %
3.66 %
Noninterest Income
Noninterest income for the third quarter of 2024 totaled $3.7 million, down $63,000, or 2%, from the second quarter of 2024. The decrease was related primarily to bank card fees (down $138,000), which was partially offset by gain on sale of loans (up $69,000) for the third quarter of 2024 compared to the second quarter of 2024.
Noninterest Expense
Noninterest expense for the third quarter of 2024 totaled $22.3 million, up $450,000, or 2%, from the second quarter of 2024. The increase was primarily related to compensation and benefits expense (up $270,000), the absence of a reversal to the allowance for credit losses on unfunded commitments ($134,000), and occupancy expense (up $129,000), which were partially offset by professional fees (down $131,000) during the third quarter of 2024.
Capital and Liquidity
At September 30, 2024, shareholders' equity totaled $393.5 million, up $17.6 million, or 5%, compared to $375.8 million at June 30, 2024. The increase was primarily due to the the Company's earnings of $9.4 million and a decrease in the accumulated other comprehensive loss on available for sale investments securities during the third quarter of 2024, which was partially offset by shareholder dividends and repurchases of shares of the Company's common stock. Preliminary Tier 1 leverage capital and total risk-based capital ratios were 11.32% and 15.03%, respectively, at September 30, 2024, compared to 11.22% and 14.39%, respectively, at June 30, 2024.
The following table summarizes the Company's primary and secondary sources of liquidity which were available at September 30, 2024.
(dollars in thousands)
September 30, 2024
Cash and cash equivalents
$ 135,877
Unencumbered investment securities, amortized cost
59,838
FHLB advance availability
1,147,306
Amounts available from unsecured lines of credit
55,000
Federal Reserve discount window availability
500
Total primary and secondary sources of available liquidity
$ 1,398,521
Dividend and Share Repurchases
The Company announces that its Board of Directors declared a quarterly cash dividend on shares of its common stock of $0.26 per share payable on November 8, 2024, to shareholders of record as of October 28, 2024.
The Company repurchased 24,473 shares of its common stock during the third quarter of 2024 at an average price per share of $38.50. An additional 313,812 shares remain eligible for purchase under the 2023 Repurchase Plan. The book value per share and tangible book value per share of the Company's common stock was $48.75 and $38.17, respectively, at September 30, 2024.
Conference Call
Executive management will host a conference call to discuss third quarter 2024 results on Friday, October 18, 2024 at 10:30 a.m. CDT. Analysts, investors and interested parties may attend the conference call by dialing toll free 1.646.357.8785 (US Local/International) or 1.800.836.8184 (US Toll Free). The investor presentation can be accessed on the day of the presentation on the Home Bancorp, Inc. website at https://home24bank.investorroom.com.
A replay of the conference call and a transcript of the call will be posted to the Investor Relations page of the Company's ...
