SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20594
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1997 Commission File No. 0-22376
HOME BANCORP
------------------------------------------------------
(exact name of registrant as specified in its charter)
Indiana 35-1906765
- --------------------------------------------------------------------------------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
132 East Berry Street, P.O. Box 989, Fort Wayne, Indiana 46801-0989
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (219) 422-3502
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of June 30, 1997, there were 3,381,385 shares of common stock issued and
2,524,779 shares outstanding.
<PAGE>
HOME BANCORP
Fort Wayne, Indiana
FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements of Home Bancorp
Consolidated Balance Sheets as of June 30, 1997
and September 30, 1996
Consolidated Statements of Income for the three months
and nine months ended June 30, 1997 and 1996
Consolidated Statements of Cash Flows for the
nine months ended June 30, 1997 and 1996
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
SIGNATURES
<PAGE>
HOME BANCORP
And wholly owned subsidiary
HOME LOAN BANK fsb
Fort Wayne, Indiana
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1997 (unaudited) and SEPTEMBER 30, 1996
(unaudited)
ASSETS June 30, September 30,
1997 1996
------------- -------------
<S> <C> <C>
Cash on hand and in other banks .................................. $ 1,367,828 $ 1,206,753
Interest earning deposits in other banks ......................... 6,304,393 4,615,815
Federal funds sold ............................................... 12,100,000 6,100,000
------------- -------------
Cash and cash equivalents ........................................ 19,772,221 11,922,568
Investment securities available for sale ......................... 5,993,750 3,969,375
Investment securities held to maturity
(Market value $29,178,438; $49,272,500) ..................... 28,919,630 48,818,448
Loans receivable, net
(Allowance for loan losses $1,387,389; $1,385,589) .......... 272,465,993 250,305,646
Federal Home Loan Bank stock ..................................... 2,449,100 2,054,200
Accrued interest receivable ...................................... 2,037,188 2,260,499
Bank premises & equipment ........................................ 2,737,562 2,594,917
Intangible assets ................................................ -- --
Foreclosed real estate, net ...................................... -- --
Deferred & current income taxes .................................. 266,456 514,781
Other assets ..................................................... 219,765 261,480
------------- -------------
TOTAL ASSETS ..................................................... $ 334,861,665 $ 322,701,914
============= =============
LIABILITIES
Deposits ......................................................... $ 287,705,109 $ 271,185,467
Borrowings ....................................................... -- --
Advances from borrowers for taxes and insurance .................. 1,294,382 1,886,859
Accrued interest payable ......................................... 1,060,367 950,694
Other liabilities ................................................ 310,849 1,987,566
------------- -------------
TOTAL LIABILITIES ................................................ 290,370,707 276,010,586
------------- -------------
</TABLE>
<PAGE>
HOME BANCORP
And wholly owned subsidiary
HOME LOAN BANK fsb
Fort Wayne, Indiana
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1997 (unaudited) and SEPTEMBER 30, 1996
(continued)
(unaudited)
June 30, September 30,
1997 1996
------------- -------------
<S> <C> <C>
STOCKHOLDERS' EQUITY
Preferred stock, no par value, 5,000,000 shares authorized,
none issued ................................................. -- --
Common stock, no par value, 10,000,000 shares authorized,
3,381,385; 3,381,505 issued, 2,524,779; 2,762,350 outstanding 33,917,996 33,758,217
Retained earnings, substantially restricted ...................... 27,029,742 25,181,166
Unearned ESOP compensation ....................................... (1,827,329) (2,001,177)
Unearned RRP compensation ........................................ (774,807) (955,589)
Treasury stock 856,606; 619,155 shares, at cost .................. (13,867,153) (9,294,413)
Net unrealized (loss) gain on securities available for sale ...... 12,509 3,124
------------- -------------
TOTAL STOCKHOLDERS' EQUITY ....................................... 44,490,958 46,691,328
------------- -------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY ......................... $ 334,861,665 $ 322,701,914
============= =============
</TABLE>
<PAGE>
HOME BANCORP
And wholly owned subsidiary
HOME LOAN BANK fsb
Fort Wayne, Indiana
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS AND NINE MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996
(unaudited)
3 Months Ended: June 30, 9 Months Ended: June 30,
--------------------------- ---------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans receivable ....................... $ 5,222,926 $ 4,599,424 $15,209,567 $13,338,504
Investment securities .................. 933,903 1,109,164 2,885,711 3,739,989
----------- ----------- ----------- -----------
Total interest income .................. 6,156,829 5,708,588 18,095,278 17,078,493
INTEREST EXPENSE
Deposits ............................... 3,769,116 3,373,381 10,997,246 10,280,685
Borrowings ............................. -- -- -- --
----------- ----------- ----------- -----------
Total interest expense ................. 3,769,116 3,373,381 10,997,246 10,280,685
Net interest income .................... 2,387,713 2,335,207 7,098,032 6,797,808
Provision for loan losses .............. 600 600 1,800 12,600
----------- ----------- ----------- -----------
Net interest income after provision .... 2,387,113 2,334,607 7,096,232 6,785,208
NON-INTEREST INCOME
Net gain-sale of interest earning assets -- -- -- 2,112
Net gain-sale of real estate ........... -- -- -- --
Fees and service charges ............... 64,407 55,141 178,933 167,727
----------- ----------- ----------- -----------
Total non-interest income .............. 64,407 55,141 178,933 169,839
NON-INTEREST EXPENSE
Compensation & employee benefits ....... 658,607 624,120 2,019,839 1,856,015
Net occupancy & equipment .............. 156,035 130,804 440,180 393,541
FDIC insurance premiums ................ 44,886 147,692 207,566 438,879
Other general & administrative expenses 306,332 293,668 872,115 865,089
----------- ----------- ----------- -----------
Total non-interest expense ............. 1,165,860 1,196,284 3,539,700 3,553,524
Earnings before income tax ............. 1,285,660 1,193,464 3,735,465 3,401,523
Income tax expense ..................... 547,660 486,464 1,546,465 1,400,523
----------- ----------- ----------- -----------
NET INCOME ............................. $ 738,000 $ 707,000 $ 2,189,000 $ 2,001,000
=========== =========== =========== ===========
Earnings per share ..................... $ 0.31 $ 0.26 $ 0.90 $ 0.68
Average number of shares ............... 2,357,672 2,727,997 2,432,723 2,946,246
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HOME BANCORP
Fort Wayne, Indiana
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 1997 AND 1996
(unaudited)
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net Income ................................................................ $ 2,189,000 $ 2,001,000
Adjustments to reconcile net income to net cash from operating activities
Depreciation ......................................................... 153,787 132,061
Provision for loan losses ............................................ 1,800 12,632
Gain on sale of securities ........................................... -- --
Gain of sale of loans ................................................ -- (2,112)
Gain on sale of foreclosed real estate ............................... -- --
Loans originated for sale ............................................ -- (121,388)
Proceeds from loan sales ............................................. -- 123,500
ESOP expense ......................................................... 257,329 259,117
Amortization of RRP contribution ..................................... 178,952 179,173
Loss on disposal of premises and equipment ........................... 770 --
Amortization of premiums and accretion of discounts, net ............. (41,493) (145,192)
Change in
Accrued interest receivable ........................................ 223,311 108,892
Other liabilities .................................................. (1,567,044) (41,671)
Other assets ....................................................... 408,380 454,290
------------ ------------
Net cash from operating activities .............................. 1,804,792 2,960,302
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of securities held to maturity .............. 28,000,000 19,000,000
Proceeds from sales of securities available for sale ................. -- --
Purchase of securities available for sale ............................ (2,006,094) (5,992,813)
Purchase of securities held to maturity .............................. (8,063,750) --
Purchase of Federal Home Loan Bank stock ............................. (394,900) (86,700)
Net change in loans .................................................. (22,160,347) (25,417,439)
Purchase of premises and equipment ................................... (296,432) (83,337)
------------ ------------
Net cash from investing activities .............................. (4,921,523) (12,580,289)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HOME BANCORP
Fort Wayne, Indiana
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 1997 AND 1996
(unaudited)
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOW FROM FINANCING ACTIVITIES
Net change in deposit ................................................ 16,519,642 8,223,573
Decrease in advance payments by borrowers for taxes and insurance .... (592,477) (501,299)
Purchase of treasury stock, net of reissuance of shares .............. (4,569,115) (7,349,206)
Cash dividends paid .................................................. (391,666) (146,966)
------------ ------------
Net cash provided by financing activities ....................... 10,966,384 226,102
Net change in cash and cash equivalents ................................... 7,849,653 (9,393,885)
Cash and cash equivalents, beginning of period ............................ 11,922,568 21,389,727
------------ ------------
Cash and cash equivalents, end of period .................................. $ 19,772,221 $ 11,995,842
============ ============
Supplemental disclosures of cash flow information
Cash paid for
Interest on deposits ............................................... $ 10,913,319 $ 10,306,049
Income taxes ....................................................... 1,302,976 1,156,000
</TABLE>
<PAGE>
Home Bancorp
Fort Wayne, IN
Notes to Consolidated Financial Statements
(Unaudited)
Item 1
Summary of Significant Accounting Policies
A. Basis of Presentation
The interim financial statements for Home Bancorp (the "Company") and its
wholly-owned subsidiary, Home Loan Bank fsb (the "Bank"), have been prepared in
accordance with the instructions to Form 10-Q; and, therefore, do not include
all information and footnotes normally shown for full annual financial
statements.
The interim financial statements at June 30, 1997 and for the interim periods
ended June 30, 1997, and 1996 are unaudited, but reflect all adjustments
(consisting of only normal recurring adjustments) which are, in the opinion of
management, necessary to present fairly the financial position, results of
operations and cash flows for such periods.
These interim financial statements should be read in conjunction with the
Company's most recent annual financial statements and footnotes. The results of
the periods presented are not necessarily representative of the results of
operations and cash flows which may be expected for the entire year.
B. Conversion
The Bank completed a conversion from a mutual to a stock savings bank on March
29, 1995 through a holding company structure incorporated in the State of
Indiana. The initial issuance of shares of common stock in Home Bancorp on March
29, 1995 was 3,303,178 shares at $10 per share, resulting in net proceeds of
$32,400,000. Costs associated with the conversion and stock offering amounted to
$631,780, and were accounted for as a reduction of the proceeds from the
issuance of common stock of the Holding Company. Upon closing of the stock
offering, Home Bancorp purchased all common shares issued by the Bank. This
transaction was accounted for at historical cost in a manner similar to the
pooling of interests method.
Federal regulations require that, upon conversion from a mutual to stock form of
ownership, a "liquidation account" be established by restricting a portion of
net worth for the benefit of eligible and supplemental eligible account holders
who maintain their savings accounts with the Bank after conversion. In the event
of a complete liquidation (and only in such event), each such savings account
holder who continues to maintain his savings account shall be entitled to
receive a distribution from the liquidation account after payment to all
creditors, but before any liquidation distribution with respect to capital
stock. This account will be proportionately reduced for any subsequent reduction
in the eligible and supplemental eligible account holder's savings accounts.
<PAGE>
Home Bancorp
Fort Wayne, IN
Notes to Consolidated Financial Statements
(Unaudited)
Item 1 Continued
Federal regulations impose limitations on the payment of dividends and other
capital distributions, including, among others, that the Company may not declare
or pay a cash dividend on any of its stock if the effect thereof would cause the
Bank's capital to be reduced below the minimum amount required for the
liquidation account or capital requirements imposed by the Financial
Institutions Reform Recovery and Enforcement Act (FIRREA) and the Office of
Thrift Supervision (the "OTS").
C. Employee Stock Ownership Plan (ESOP)
The ESOP, a tax qualified employee benefit plan for officers and employees of
the Company and the Bank, purchased 231,209 shares of common stock offered in
the conversion. The ESOP purchased the shares with funds borrowed for such
purpose from the Company. The ESOP will repay the loan through periodic
tax-deductible contributions from the Bank over a 12-year period with interest
at the applicable Federal Rate as set forth under the Internal Revenue Code of
1986, as amended.
D. Stock Option and Incentive Plan (SOP) and Recognition and Retention Plan
(RRP)
On October 10, 1995 at a special meeting of the shareholders, a stock option and
incentive plan (SOP) and recognition and retention plan (RRP) were approved.
Both benefit plans are administered by the compensation committee of the
Company. This committee selects recipients and terms of awards pursuant to the
plan. The maximum total shares intended to be made available under the SOP and
RRP plans are 330,317 and 115,611, respectively. Of the shares available under
the SOP, 228,504 shares have been awarded to directors and officers, subject to
certain vesting requirements over a 5 year period, and exercisable over a term
not to exceed ten years from the date of the grant, October 10, 1995. A total of
78,207 shares under the RRP have been awarded to directors, officers and
employees of the Company subject to certain vesting and employment requirements
over a five year period commencing one year from the date of the grant on
October 10, 1995. All options and grants will be priced at $15.25, equal to the
fair market value of the shares on the date of the grants.
E. Changes in Method of Accounting
Effective October 1, 1996 the Company adopted the following Statements of
Accounting Financial Standards (SFAS):
1) SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of"
2) SFAS No. 122, "Accounting for Mortgage Servicing Rights"
3) SFAS No. 123, "Accounting for Stock-Based Compensation"
<PAGE>
Home Bancorp
Fort Wayne, IN
Notes to Consolidated Financial Statements
(Unaudited)
Item 1 Continued
Effective January 1, 1997, the Company adopted SFAS No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of Liabilities"
Management determined that the current impact of the adoption of these
statements on the financial position or results of operations of the Company was
not material.
F. Earnings Per Share
Earnings per common share are calculated by dividing net earnings by the average
number of common shares outstanding (total shares issued less unallocated shares
in the Employee Stock Ownership Plan and less treasury shares).
Management's Discussion and Analysis of
Financial Condition and Results of Operation
Item 2
General
Home Bancorp (the "Company") was formed as an Indiana corporation on December
14, 1993 for the purpose of issuing Common Stock and owning all of the
outstanding common stock of Home Loan Bank (the "Bank") as an unitary holding
company.
On March 29, 1995, Home Bancorp acquired all the capital stock of the Bank upon
its Conversion from a mutual to stock institution. Prior to the conversion, the
Company had no operating history. The principal business of savings banks,
including Home Loan, has historically consisted of attracting deposits from the
general public and making loans secured by residential real estate. The
Company's earnings are primarily dependent on net interest income, the
difference between interest income and interest expense. This is a function of
the yield on interest-earning assets less the cost of interest-bearing
liabilities. Earnings are also affected by provisions for loan losses, service
charges and fee income, operating expenses and income taxes.
The most significant outside factors influencing the operations of the Bank and
other savings institutions include general economic conditions, competition in
the local market place and the related monetary and fiscal policies of agencies
that regulate financial institutions. More specifically, the cost of funds
(deposits) is influenced by interest rates on competing investments and general
market rates of interest, while lending activities are influenced by the demand
for real estate financing, which in turn is affected by the interest rates at
which such loans may be offered and other factors affecting loan demand and
funds availability.
<PAGE>
Home Bancorp
Fort Wayne, IN
Management's Discussion and Analysis of
Financial Condition and Results of Operation
Item 2 Continued
When used in this Form 10-Q or future filings by the Company with the Securities
and Exchange Commission, in the Company's press releases or other public or
shareholder communications, or in oral statements made with the approval of an
authorized executive officer, the words or phrases "will likely result", "are
expected to", "will continue", "is anticipated", "estimated", "project",
"believe" or similar expressions are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. The Company wishes to caution readers not to place undue reliance on
any such forward-looking statements, which speak only as of the date made, and
to advise readers that various factors, including regional and national economic
conditions, changes in the levels of market interest rates, credit risks of
lending activities, and competitive and regulatory factors, could affect the
Company's financial performance and could cause the Company's actual results for
future periods to differ materially from those anticipated or projected.
The Company does not undertake, and specifically disclaims any obligation, to
publicly release the result of revisions which may be made to forward-looking
statements to reflect the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements.
Financial Condition
The Company's total assets were $334.9 million as of June 30, 1997 compared to
$322.7 million as of September 30, 1996, an increase of $12.2 million. For the
same period, equity decreased from $46.7 million as of September 30, 1996 to
$44.5 million as of June 30, 1997. The growth in total assets reflects the
Company's disposition toward residential lending funded by consumer deposits.
The net decrease in equity for the period ended June 30, 1997 was primarily the
result of the repurchase of shares of the Company's common stock held as
treasury stock. The treasury stock purchases represented $4.6 million.
Deposits increased $16.5 million for the nine months ended June 30, 1997 from
$271.2 million as of September 30, 1996 to $287.7 million as of June 30, 1997.
Cash and cash equivalents increased from $11.9 million as of September 30, 1996
to $19.8 million as of June 30, 1997, an increase of $7.9 million. Investment
securities available for sale increased $2.0 million to $6.0 million as of June
30, 1997 while securities held to maturity decreased $19.9 million, from $48.8
million as of September 30, 1996 to $28.9 million as of June 30, 1997. The
balance in Federal Home Loan Bank stock increased by approximately $0.4 million
during the period in fulfillment of minimum stock requirements. The decrease in
investment securities was the result of investment maturities during the period
used to fund the increase in cash and cash equivalents, to fund the stock
repurchase program, and to fund loan portfolio growth.
<PAGE>
Home Bancorp
Fort Wayne, IN
Management's Discussion and Analysis of
Financial Condition and Results of Operation
Item 2 Continued
Loans receivable increased $22.2 million, primarily from 1-4 family residential
originations, from $250.3 million at September 30, 1996 to $272.5 million at
June 30, 1997. Accrued interest receivable decreased from $2.3 million to $2.0
million as of June 30, 1997, as a decrease on accrued investment securities more
than offset increases from loan receivables during the period.
Advances from borrowers for taxes and insurance decreased from $1.9 million as
of September 30, 1996 to $1.3 million as of June 30, 1997 primarily from the
timing of semi-annual payments of real estate taxes and annual insurance
premiums on behalf of loan customers.
Other liabilities decreased to $0.3 million as of June 30, 1997 from $2.0
million as of September 30, 1996. The balance as of September 30, 1996 included
a $1.6 million payable for a special FDIC premium assessment to capitalize the
Savings Association Insurance Fund (SAIF).
Results of Operation
General. Net income for the three months ended June 30, 1997 increased by
$31,000, or 4.4%, to $738,000 from $707,000 for the same period in 1996. For the
nine months ended June 30, 1997 net income was $2,189,000, an increase of
$188,000, or 9.4% for the comparable prior year period. These increases were
attributed to an increase in net interest income for the periods from growth in
earning assets and improving margins over like periods in the prior year.
Net Interest Income. The Company's net income is primarily dependent upon net
interest income. The $448,000 and the $1,017,000 increases in total interest
income for the corresponding three and nine month periods ended June 30, 1997
compared to the same periods in 1996, were primarily the result of increased
balances of the Company's interest-earning assets and improving yields on those
assets. The yield on interest-earning assets increased in the three and nine
month periods ended June 30, 1997 to 7.48% and 7.44%, respectively, compared to
7.32% and 7.30% for the same periods in the preceding year. These increasing
yields were attributed to higher market interest rates and increases in
outstanding loan balances.
The improved yields on earning assets were enhanced by marginally lower costs
for deposits for the nine month period, but interest costs during the three
month period rose relative to the prior year from general market increases on
interest rates. For the three and nine months ended June 30, 1997, cost of
interest-bearing liabilities were 5.36% and 5.31%, respectively, compared to
5.24% and 5.33% for the prior year like periods. These changes can be attributed
in part to increases in short-term interest rates and a demonstrated customer
preference for these shorter-term deposits relative to yields on longer terms of
deposits.
<PAGE>
Home Bancorp
Fort Wayne, IN
Management's Discussion and Analysis
Financial Condition and Results of Operation
Item 2 Continued
While the interest rate environment of recent years has proven beneficial to
most financial institutions, including the Company, increases in market rates of
interest generally adversely affect the net income of most financial
institutions. Because the Company's liabilities generally reprice more quickly
than assets, interest margins would likely decrease if interest rates were to
rise, or the yield on repricing assets was not enhanced.
Provision for Loan Losses. The provision for loan losses is a result of
management's periodic analysis of the adequacy for loan losses. The provision
for loan losses decreased by $10,800 for the nine months ended June 30, 1997 and
was the same for the three month period compared to the corresponding periods in
1996. Changes in the provision for loan losses is attributed to management's
analysis of the adequacy of the allowance for loan losses to both recognizable
and unforeseen losses. At June 30, 1997, the Company's allowance for loan losses
totaled $1.4 million or .51% of net loans receivable and 836% of total
nonperforming loans.
The Company establishes an allowance for loan losses based on an analysis of
risk factors in the loan portfolio. This analysis includes, among other factors,
the level of the Company's classified and nonperforming assets and their
estimated value, the national economic outlook which may tend to inhibit
economic activity and depress real estate and other values in the Company's
primary market area, regulatory issues, and the levels of the allowance for loan
losses established by the Company's peers in assessing the adequacy of the loan
loss allowance. Accordingly, the calculation of the adequacy of the allowance
for loan losses is not based directly on the level of nonperforming loans.
The Company will continue to monitor its allowance for loan losses and make
future additions to the allowance through the provision for loan losses as
economic conditions dictate. Although the Company maintains its allowance for
loan losses at a current level which it considers to be adequate to provide for
losses, there can be no assurance that future losses will not exceed estimated
amounts or that additional provisions for loan losses will not be required in
future periods. In addition, the Company's determination as to the amount of the
allowance for loan losses is subject to review by the OTS, as part of their
examination process, which may result in the establishment of an additional
allowance based upon their judgment of the information available to them at the
time of their examination.
Non-Interest Income. Non-interest income consists primarily of service fees on
deposit accounts and loan servicing and late fees. Non-interest income increased
approximately $9,000 in both the three and nine month periods ended June 30,
1997 in comparison to the like periods in 1996. Non-interest income for the
Company is largely a function of consumer demand for those services and
fluctuations reflect even modest changes in use of those services.
<PAGE>
Home Bancorp
Fort Wayne, IN
Management's Discussion and Analysis of
Financial Condition and Results of Operation
Item 2 Continued
Non-Interest Expense. Non-interest expenses for the three and nine month periods
ended June 30, 1997 were approximately $1,166,000 and $3,540,000, respectively,
compared to $1,196,000 and $3,554,000 reported from the same prior year periods.
For the periods ended June 30, 1997, compensation and employee benefits
increased approximately $34,000 and $164,000 for the respective three and nine
month periods as compared to 1996, primarily from normal inflationary increases
on salaries and wages and staffing requirements from the opening of an
additional branch office. Net occupancy and equipment expense for the periods
ended June 30, 1997, compared to like periods in 1996, reflected an increase of
approximately $25,000 for the three month period, and an increase of $46,000 for
the nine month period primarily from operating expenses associated with that
additional office and non-recurring charges and equipment purchases.
FDIC insurance premiums decreased by approximately $103,000 for the three month
period ended June 30, 1997 when compared to results for 1996, and approximately
$231,000 for the like nine month period. These decreases were the result of the
full capitalization of the SAIF fund and associated reduction in premiums.
Other general and administrative expenses reflect nominal increases in the
respective 1997 periods from continuing efforts at cost containment.
<PAGE>
Home Bancorp
Fort Wayne, IN
Management's Discussion and Analysis of
Financial Condition and Results of Operation
Item 2 Continued
The following table provides key ratios and balances for the periods indicated.
(For calculation purposes, month-end averages, which do not differ materially
from daily averages, have been used.)
<TABLE>
<CAPTION>
At and For the At and For the
Three Months Ended Nine Months Ended
June 30, June 30,
------------------------------ -----------------------------
FINANCIAL HIGHLIGHTS (Averages) 1997 1996 1997 1996
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Return on assets ...................................... 0.89% 0.90% 0.89% 0.85%
Return on equity ...................................... 6.61% 5.65% 6.43% 5.12%
Yield on interest-earning assets ...................... 7.48% 7.32% 7.44% 7.30%
Cost of interest-bearing liabilities .................. 5.36% 5.24% 5.31% 5.33%
Net interest spread ................................... 2.12% 2.08% 2.13% 1.97%
Net interest rate margin .............................. 2.89% 2.98% 2.86% 2.89%
Net interest income to operating (G&A) expenses ....... 204.80% 195.21% 200.53% 191.30%
Operating (G&A) expenses to assets .................... 1.41% 1.53% 1.43% 1.52%
Non-interest income to assets ......................... 0.08% 0.08% 0.07% 0.08%
Interest-earning assets to interest-bearing liabilities 115.32% 119.11% 115.87% 119.80%
Efficiency ratio ...................................... 47.54% 50.05% 48.64% 51.02%
Equity to assets ...................................... 13.50% 15.98% 13.88% 16.64%
Tangible equity to assets ............................. 13.50% 15.98% 13.88% 16.64%
Average assets (dollars in thousands) ................. $ 330,894 $ 313,342 $ 326,951 $ 313,111
ASSET QUALITY RATIOS
Non-performing assets to total assets ................. 0.05% 0.04%
Non-performing loans to net loans ..................... 0.06% 0.05%
Allowance for loan losses to net loans ................ 0.51% 0.58%
Allowance for loan losses to non-performing loans ..... 836% 1,147%
Net charge offs to loans .............................. -- --
Loans to deposits ..................................... 94.70% 90.72%
Loans to assets ....................................... 81.37% 75.91%
PER COMMON SHARE
Net income ............................................ $ 0.31 $ 0.26 $ 0.90 $ 0.68
Book value ............................................ $ 17.62 $ 16.96
Tangible book value ................................... $ 17.62 $ 16.96
STOCK PRICE
High .................................................. $ 20.875 $ 15.25
Low ................................................... $ 20.125 $ 14.25
Close ................................................. $ 20.875 $ 15.25
</TABLE>
<PAGE>
Home Bancorp
Fort Wayne, IN
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Item 2 Continued
Asset/Liability Management
The primary objective of asset/liability management is to manage interest rate
risk so as to control and limit fluctuations in net interest income. The Company
monitors its asset/liability mix on an ongoing basis and attempts to manage
interest rate risk by applying policies that provide strategic and tactical
guidance for improving net interest income. Those policies include the sale of
fixed-rate loans with terms over twenty years in the secondary market, and the
aggressive promotion of adjustable rate products. In addition, the Company
strives to match maturities of long-term deposits with that of fixed rate
portfolio loans. Management actively manages its liquidity position to achieve a
balance between the desire to minimize risk and maximize yield to fulfill its
asset/liability goals.
Liquidity and Capital Resources
The Company's primary source of funds are deposits, principal and interest
payments on loans, and maturities of investment securities. While maturities of
investment securities and scheduled amortizations of loans are a predictable
source of funds, deposit flows and mortgage prepayments are greatly influenced
by general interest rates, economic conditions and competition. In addition, if
the Bank requires additional funds beyond its ability to acquire them locally,
it has borrowing capability through the Federal Home Loan Bank (the "FHLB") of
Indianapolis. At June 30, 1997, the Bank had no advances from the FHLB of
Indianapolis or other borrowings outstanding and has not had any such advances
or other borrowings outstanding since 1983.
Home Loan Bank is required by federal regulations to maintain specific levels of
"liquid" assets consisting of cash and other eligible investments. The standard
measure of liquidity for thrift institutions is the ratio of qualifying assets
due within one year to net withdrawable savings. Currently the minimum
requirement is 5%. At June 30, 1997, the Bank's liquidity ratio was 16.73%. As
of June 30, 1996, the Bank's liquidity was 24.53%.
The Bank uses its liquidity resources principally to meet ongoing commitments,
to fund maturing certificates of deposit and deposit withdrawals and to meet
operating expenses. The Bank anticipates that it will have sufficient funds
available to meet current loan commitments and those liquidity needs. At June
30, 1997, the Bank had outstanding commitments to extend credit which amounted
to $13.6 million (including $9.2 million in unused lines of credit). Management
believes that loan repayments and other sources of funds will be adequate to
meet the Bank's foreseeable liquidity needs.
<PAGE>
Home Bancorp
Fort Wayne, IN
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Item 2 Continued
The institution is required to maintain specific amounts of regulatory capital
pursuant to regulations of the Office of Thrift Supervision. Regulatory
standards impose the following capital requirements: a risk-based capital
expressed as a percent of risk-adjusted assets, a leverage ratio of core capital
to total adjusted assets, and a tangible capital ratio expressed as a percent of
total adjusted assets. As of June 30, 1997, the Bank's capital totaled $33.2
million, or 10.18% of tangible and core capital. Risk-based capital totaled
$34.5 million, or represented 22.30% of risk-based assets. The institution
substantially exceeded all regulatory capital standards.
<PAGE>
Home Bancorp
Fort Wayne, IN
Part II Other Information
Item 1 Legal Proceedings
There were no material proceedings to which Home Bancorp or Home Loan Bank
fsb is a party or of which any of their property is subject. From
time-to-time, the Bank is a party to various legal proceedings incident to
its business.
Item 2 Changes in Securities
None
Item 3 Defaults Upon Senior Securities
None
Item 4 Submission of Matters to a Vote of Security Holders
None
Item 5 Other Information
None
Item 6 Exhibits and Reports on Form 8-k
Press release filed on Form 8-k for the quarter ended June 30, 1997
include:
Date of Report Subject
-------------- -------
April 29, 1997 Second Quarter Fiscal Year 1997
Earnings Report, Quarterly Dividend
Declaration
<PAGE>
Home Bancorp
Fort Wayne, IN
Signatures
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Home Bancorp
Date: August 1, 1997 /s/ W. Paul Wolf
----------------
W. Paul Wolf
Chairman, President, CEO
Date: August 1, 1997 /s/ Matthew P. Forrester
------------------------
Matthew P. Forrester
Vice President, Treasurer
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<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,368
<INT-BEARING-DEPOSITS> 6,304
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0
0
<COMMON> 33,918
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