HOME BANCORP, INC. ANNOUNCES 2024 FIRST QUARTER RESULTS AND DECLARES QUARTERLY DIVIDEND

LAFAYETTE, La., April 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 first quarter of 2024. For the quarter, the Company reported net income of $9.2 million, or $1.14 per diluted common share ("diluted EPS"), down $186,000 from $9.4 million, or $1.17 diluted EPS, for the fourth quarter of 2023.

"Home Bank began 2024 with results similar to those in 2023. We had a solid 6% annualized loan growth rate and 8% annualized deposit growth rate for the quarter. While NIM decreased during the quarter, the pace of reduction has slowed as loans continue to reprice higher," said John W. Bordelon, President and Chief Executive Officer of the Company and the Bank. "While Houston continues to lead the majority of loan growth, most of our legacy franchise continues to show positive momentum. Deposits grew with the majority of the growth in customer CD's and Money Markets. Home Bank's talented, relationship-based bankers continue to attract new clients in all markets."

First Quarter 2024 Highlights

• Loans totaled $2.6 billion at March 31, 2024, up $40.1 million, or 1.6% (6% on an annualized basis), from December 31, 2023.
• Deposits totaled $2.7 billion at March 31, 2024, up $52.0 million, or 2% (8% on an annualized basis), from December 31, 2023.
• Net interest income totaled $28.9 million, down $381,000, or 1% from the prior quarter.
• The net interest margin ("NIM") was 3.64% in the first quarter of 2024 compared to 3.69% in the fourth quarter of 2023.
• Nonperforming assets totaled $22.0 million, or 0.65% of total assets compared to $10.4 million, or 0.31% of total assets, at December 31, 2023. This increase in nonperforming assets is primarily due to two loan relationships which were classified as nonperforming in the first quarter of 2024, for which management does not anticipate any loss.

Loans

Loans totaled $2.6 billion at March 31, 2024, up $40.1 million, or 2%, from December 31, 2023. The following table summarizes the changes in the Company's loan portfolio, net of unearned income, from December 31, 2023 through March 31, 2024.

The average loan yield was 6.18% for the first quarter of 2024, up 10 basis points, from the fourth quarter of 2023. Loan growth during the first quarter of 2024 was primarily in commercial real estate and multi-family residential loans. Loans grew in the first quarter of 2024 across most of our markets with approximately 77% of the growth attributable to the Houston market.

Credit Quality and Allowance for Credit Losses

Nonperforming assets ("NPAs") totaled $22.0 million, or 0.65% of total assets, at March 31, 2024, up $11.6 million, or 111%, from $10.4 million, or 0.31% of total assets, at December 31, 2023. The increase in NPAs during the first quarter of 2024 was primarily due to two loan relationships which were classified nonperforming, for which management does not anticipate any losses. Management expects one of the relationships over 90 days past due to be brought current or paid down significantly before the end of April 2024. During the first quarter of 2024, the Company recorded net loan charge-offs of $217,000, compared to net loan charge-offs of $250,000 during the fourth quarter of 2023.

The Company provisioned $141,000 to the allowance for loan losses in the first quarter of 2024. At March 31, 2024, the allowance for loan losses totaled $31.5 million, or 1.20% of total loans, compared to $31.5 million, or 1.22% of total loans, at December 31, 2023. 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 March 31, 2024 and December 31, 2023.

Investment Securities

The Company's investment securities portfolio totaled $422.9 million at March 31, 2024, a decrease of $12.1 million, or 3%, from December 31, 2023. At March 31, 2024, the Company had a net unrealized loss position on its investment securities of $46.6 million, compared to a net unrealized loss of $43.4 million at December 31, 2023. The Company's investment securities portfolio had an effective duration of 4.2 years at March 31, 2024 and December 31, 2023.

The following table summarizes the composition of the Company's investment securities portfolio at March 31, 2024.

Approximately 64% of the investment securities portfolio was pledged as of March 31, 2024 to secure public deposits and borrowings with the Federal Reserve Bank Term Funding Program ("BTFP"). As of March 31, 2024 and December 31, 2023, the Company had $135.5 million and $127.2 million, respectively, of securities pledged to secure public deposits and $135.0 million and none, respectively, pledged to the BTFP borrowings.

Deposits

Total deposits were $2.7 billion at March 31, 2024, up $52.0 million, or 2%, from December 31, 2023. Non-maturity deposits decreased $1.2 million, or less than 1% during the first quarter of 2024 to $2.0 billion. The following table summarizes the changes in the Company's deposits from December 31, 2023 to March 31, 2024.

The average rate on interest-bearing deposits increased 28 basis points from 2.24% for the fourth quarter of 2023 to 2.52% for the first quarter of 2024. At March 31, 2024, certificates of deposit maturing within the next 12 months totaled $640.2 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.

The total amounts of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) were $781.9 million at March 31, 2024 and $748.6 million at December 31, 2023. Public funds in excess of the FDIC insurance limits are fully collateralized.

Net Interest Income

The net interest margin ("NIM") decreased 5 basis points from 3.69% for the fourth quarter of 2023 to 3.64% for the first quarter of 2024 primarily due to an increase in the average cost of interest-bearing deposits, which was partially offset by an increase in the average yield on interest-earning assets. The average cost of interest-bearing deposits increased by 28 basis points and the cost of deposits increased by $1.6 million, or 15%, in the first quarter of 2024 compared to the fourth quarter of 2023. 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.

The average loan yield was 6.18% for the first quarter of 2024, up 10 basis points from the fourth quarter of 2023, primarily reflecting increased rates on variable rate loans coupled with new loan originations at higher market rates during the period.

Average other interest-earning assets were $57.1 million for the first quarter of 2024, down $420,000, or 1%, from the fourth quarter of 2023 primarily due to a reallocation of certain other interest-earning assets.

Loan accretion income from acquired loans totaled $525,000 for the first quarter of 2024, down $58,000, or 10%, from the fourth quarter of 2023.

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%.

Noninterest Income

Noninterest income for the first quarter of 2024 totaled $3.5 million, up $71,000, or 2%, from the fourth quarter of 2023. The increase was related primarily to other income (up $70,000), gain on sale of loans (up $41,000) and service fees and charges (up $19,000), which were partially offset by bank card fees (down $71,000) for the first quarter of 2024 compared to the fourth quarter of 2023.

Noninterest Expense

Noninterest expense for the first quarter of 2024 totaled $20.9 million, up $264,000, or 1%, from the fourth quarter of 2023. The increase was primarily related to compensation and benefits expense (up $769,000) and franchise and shares tax (up $357,000), which were partially offset by other noninterest expense (down $405,000), marketing and advertising expense (down $293,000) and the absence of provision for credit losses on unfunded commitments (down $140,000) during the first quarter of 2024.

Capital and Liquidity

At March 31, 2024, shareholders' equity totaled $372.3 million, up $4.8 million, or 1%, compared to $367.4 million at December 31, 2023. The increase was primarily due to the the Company's earnings of $9.2 million during the first quarter of 2024, partially offset by increases in accumulated other comprehensive loss on available for sale investment securities, shareholder dividends and repurchases of shares of the Company's common stock. The market value of the Company's available for sale securities at March 31, 2024 decreased $3.2 million, or 7%, during the first quarter of 2024. Preliminary Tier 1 leverage capital and total risk-based capital ratios were 11.19% and 14.39%, respectively, at March 31, 2024, compared to 10.98% and 14.23%, respectively, at December 31, 2023.

The following table summarizes the Company's primary and secondary sources of liquidity which were available at March 31, 2024.

Dividend and Share Repurchases

The Company announced that its Board of Directors declared a quarterly cash dividend on shares of its common stock of $0.25 per share payable on May 10, 2024, to shareholders of record as of April 29, 2024.

In October 2023, the Board of Directors approved a new share repurchase plan (the "2023 Repurchase Plan"). Under the 2023 Repurchase Plan, the Company may purchase up to 405,000 shares, or approximately 5% of the Company's outstanding common stock. Share repurchases under the 2023 Repurchase Plan may commence upon the completion of the Company's 2021 Repurchase Plan. As of March 31, 2024, there were 415,143 shares remaining that may be repurchased under the 2021 and 2023 Repurchase Plans. The repurchase plans do not include specific price targets and may be executed through the open market or privately-negotiated transactions depending upon market conditions and other factors. The repurchase plans have no time limit and may be suspended or discontinued at any time.

The Company repurchased 21,303 shares of its common stock during the first quarter of 2024 at an average price per share of $38.78. The book value per share and tangible book value per share of the Company's common stock was $45.73 and $35.17, respectively, at March 31, 2024.

Conference Call

Executive management will host a conference call to discuss first quarter 2024 results on Thursday, April 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 the day of the presentation on 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 website, https://home24bank.investorroom.com.

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 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.

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, 2023 describes some of these factors, including risk elements in the loan portfolio, risks related to our deposit activities, the level of the allowance for credit losses, 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.

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SOURCE Home Bancorp, Inc.