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 March 31, 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
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 219-422-3502
- --------------------------------------------------------------------------------
------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
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 March 31, 1997, there were 3,381,385 shares of common stock issued and
2,623,213 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 March 31, 1997
and September 30, 1996
Consolidated Statements of Income for the three months
and six months ended March 31, 1997 and 1996
Consolidated Statements of Cash Flows for the
six months ended March 31, 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>
<TABLE>
<CAPTION>
HOME BANCORP
And wholly owned subsidiary
HOME LOAN BANK fsb
Fort Wayne, Indiana
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 1997 (unaudited) and SEPTEMBER 30, 1996
(unaudited)
ASSETS March 31, 1997 September 30, 1996
-------------- ------------------
<S> <C> <C>
Cash on hand and in other banks .................................... $ 1,349,307 $ 1,206,753
Interest earning deposits in other banks ........................... 8,478,648 4,615,815
Federal funds sold ................................................. 11,800,000 6,100,000
------------- -------------
Cash and cash equivalents .......................................... 21,627,955 11,922,568
Investment securities available for sale ........................... 3,939,375 3,969,375
Investment securities held to maturity
(Market value $34,085,313; $49,272,500) ....................... 33,889,321 48,818,448
Loans receivable, net
(Allowance for loan losses $1,386,789; $1,385,589) ............ 260,774,179 250,305,646
Federal Home Loan Bank stock ....................................... 2,054,200 2,054,200
Accrued interest receivable ........................................ 1,988,440 2,260,499
Bank premises & equipment .......................................... 2,763,476 2,594,917
Intangible assets .................................................. -- --
Foreclosed real estate, net ........................................ -- --
Deferred & current income taxes .................................... 485,217 514,781
Other assets ....................................................... 267,082 261,480
------------- -------------
TOTAL ASSETS ....................................................... $ 327,789,245 $ 322,701,914
============= =============
LIABILITIES
Deposits ........................................................... $ 278,751,145 $ 271,185,467
Borrowings ......................................................... -- --
Advances from borrowers for taxes and insurance .................... 2,074,861 1,886,859
Accrued interest payable ........................................... 976,441 950,694
Other liabilities .................................................. 274,146 1,987,566
------------- -------------
TOTAL LIABILITIES .................................................. 282,076,593 276,010,586
------------- -------------
<PAGE>
<CAPTION>
HOME BANCORP
And wholly owned subsidiary
HOME LOAN BANK fsb
Fort Wayne, Indiana
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 1997 (unaudited) and SEPTEMBER 30, 1996
(continued)
(unaudited)
STOCKHOLDERS' EQUITY March 31, 1997 September 30, 1996
-------------- ------------------
<S> <C> <C>
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, 2,623,213; 2,762,350 outstanding . 33,855,702 33,758,217
Retained earnings, substantially restricted ........................ 26,408,160 25,181,166
Unearned ESOP compensation ......................................... (1,885,278) (2,001,177)
Unearned RRP compensation .......................................... (834,405) (955,589)
Treasury stock 758,172; 619,155 shares, at cost .................... (11,812,784) (9,294,413)
Net unrealized (loss) gain on securities available for sale ........ (18,743) 3,124
------------- -------------
TOTAL STOCKHOLDERS' EQUITY ......................................... 45,712,652 46,691,328
------------- -------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY ........................... $ 327,789,245 $ 322,701,914
============= =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HOME BANCORP
And wholly owned subsidiary
HOME LOAN BANK fsb
Fort Wayne, Indiana
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS AND SIX MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996
(unaudited)
3 Months Ended: March 31, 6 Months Ended: March 31,
------------------------- -------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans receivable ....................... $ 5,015,720 $ 4,427,347 $ 9,986,641 $ 8,739,080
Investment securities .................. 952,725 1,228,639 1,951,807 2,630,825
----------- ----------- ----------- -----------
Total interest income .................. 5,968,445 5,655,986 11,938,448 11,369,905
INTEREST EXPENSE
Deposits ............................... 3,608,685 3,415,525 7,228,130 6,907,304
Borrowings ............................. -- -- --
----------- ----------- ----------- -----------
Total interest expense ................. 3,608,685 3,415,525 7,228,130 6,907,304
Net interest income .................... 2,359,760 2,240,461 4,710,318 4,462,601
Provision for loan losses .............. 600 6,000 1,200 12,000
----------- ----------- ----------- -----------
Net interest income after provision .... 2,359,160 2,234,461 4,709,118 4,450,601
----------- ----------- ----------- -----------
NON-INTEREST INCOME
Net gain-sale of interest earning assets -- -- -- 2,112
Net gain-sale of real estate ........... -- -- -- --
Fees and service charges ............... 55,455 57,778 114,526 112,585
----------- ----------- ----------- -----------
Total non-interest income .............. 55,455 57,778 114,526 114,697
<PAGE>
<CAPTION>
HOME BANCORP
And wholly owned subsidiary
HOME LOAN BANK fsb
Fort Wayne, Indiana
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS AND SIX MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996
(unaudited) (continued)
3 Months Ended: March 31, 6 Months Ended: March 31,
------------------------- -------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NON-INTEREST EXPENSE
Compensation & employee benefits ....... 655,517 605,325 1,361,232 1,231,895
Net occupancy & equipment .............. 140,657 129,489 284,145 262,737
FDIC insurance premiums ................ 10,342 147,050 162,679 291,187
Other general & administrative expenses 268,523 275,909 565,783 571,421
----------- ----------- ----------- -----------
Total non-interest expense ............. 1,075,039 1,157,773 2,373,839 2,357,240
Earnings before income tax ............. 1,339,576 1,134,466 2,449,805 2,208,058
Income tax expense ..................... 539,576 469,466 998,805 914,058
----------- ----------- ----------- -----------
NET INCOME ............................. $ 800,000 $ 665,000 $ 1,451,000 $ 1,294,000
=========== =========== =========== ===========
Earnings per share ..................... $ 0.33 $ 0.22 $ 0.59 $ 0.43
Average number of shares ............... 2,440,266 2,966,988 2,474,875 3,039,780
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HOME BANCORP
Fort Wayne, Indiana
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1997 AND 1996
(unaudited)
1997 1996
---- ----
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net Income ................................................................ $ 1,451,000 $ 1,294,000
Adjustments to reconcile net income to net cash from operating activities
Depreciation ......................................................... 95,604 87,297
Provision for loan losses ............................................ 1,200 12,000
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 ......................................................... 171,608 173,699
Amortization of RRP contribution ..................................... 119,355 120,150
Loss on disposal of premises and equipment ........................... 770 --
Amortization of premiums and accretion of discounts, net ............. (41,736) (78,833)
Change in
Accrued interest receivable ........................................ 272,059 196,390
Other liabilities .................................................. (1,687,673) 53,930
Other assets ....................................................... (913,945) 55,173
------------ ------------
Net cash from operating activities .............................. (531,758) 1,913,806
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of securities held to maturity .............. 24,000,000 15,000,000
Proceeds from investment securities .................................. -- --
Proceeds from sales of securities available for sale ................. -- --
Purchase of securities available for sale ............................ -- --
Purchase of securities held to maturity .............................. (8,000,000) --
Purchase of investment securities .................................... -- --
Purchase of Federal Home Loan Bank stock ............................. -- --
Net change in loans .................................................. (10,468,533) (16,001,966)
Purchase of premises and equipment ................................... (264,163) (31,775)
------------ ------------
Net cash from investing activities .............................. 5,267,304 (1,033,741)
<PAGE>
<CAPTION>
HOME BANCORP
Fort Wayne, Indiana
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1997 AND 1996
(unaudited)
(continued)
1997 1996
---- ----
<S> <C> <C>
CASH FLOW FROM FINANCING ACTIVITIES
Net change in deposit ................................................ 7,565,678 1,895,720
Increase in advance payments by borrowers for taxes and insurance .... 188,002 466,974
Purchase of treasury stock ........................................... (2,518,371) (4,273,470)
Cash dividends paid .................................................. (265,468) --
------------ ------------
Net cash provided by financing activities ....................... 4,969,841 (1,910,776)
Net change in cash and cash equivalents ................................... 9,705,387 (1,030,711)
Cash and cash equivalents, beginning of period ............................ 11,922,568 21,389,727
------------ ------------
Cash and cash equivalents, end of period .................................. $ 21,627,955 $ 20,359,016
============ ============
Supplemental disclosures of cash flow information
Cash paid for
Interest on deposits ............................................... $ 7,202,383 $ 6,921,929
Income taxes ....................................................... 957,976 679,000
</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 March 31, 1997 and for the interim
periods ended March 31, 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 Home Bancorp
Fort Wayne, IN 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>
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, 227,704 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 78,327 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"
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.
<PAGE>
Home Bancorp
Fort Wayne, IN
Notes to Consolidated Financial Statements
(Unaudited)
Item 1
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
a 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.
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
<PAGE>
Home Bancorp
Fort Wayne, IN
Management's Discussion and Analysis of
Financial Condition and Results of Operation
Item 2 Continued
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 $327.8 million as of March 31, 1997
compared to $322.7 million as of September 30, 1996, an increase of
$5.1 million. For the same period, equity decreased from $46.7 million
as of September 30, 1996 to $45.7 million as of March 31, 1997. The
modest growth in total assets and the net decrease in equity for the
period ended March 31, 1997 was primarily the result of the repurchase
of 140,117 shares of the Company's common stock held as treasury
stock. The treasury stock purchases represented $2.5 million.
Deposits increased $7.6 million for the six months ended March 31,
1997 from $271.2 million as of September 30, 1996 to $278.8 million as
of March 31, 1997.
Cash and cash equivalents increased from $11.9 million as of September
30, 1996 to $21.6 million as of March 31, 1997, an increase of $9.7
million. Investment securities held to maturity decreased $14.9
million, from $48.8 million as of September 30, 1996 to $33.9 million
as of March 31, 1997. As of March 31, 1997 and September 30, 1996, the
Company had $4.0 million in securities held as available for sale. 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.
Loans receivable increased $10.5 million, primarily from 1-4 family
residential originations, from $250.3 million at September 30, 1996 to
$260.8 million at March 31, 1997. Accrued interest receivable
decreased from $2.3 million to $2.0 million as of March 31, 1997, as a
decrease on accrued investment securities more than offset increases
from loan receivables during the period. Bank premises and equipment
during the six month period increased $0.2 million primarily from
<PAGE>
Home Bancorp
Fort Wayne, IN
Management's Discussion and Analysis
Financial Condition and Results of Operation
Item 2 Continued
construction expenditures associated with the Bank's ninth branch
office located north of Fort Wayne.
Advances from borrowers for taxes and insurance increased from $1.9
million as of September 30, 1996 to $2.1 million as of March 31, 1997
due to growth in the loan portfolio and 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 March 31, 1997 from
$2.0 million as of September 30, 1996, primarily from the
establishment of a $1.6 million payable as of September 30th 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 March 31, 1997
increased by $135,000, or 20.3%, to $800,000 from $665,000 for the
same period in 1996. For the six months ended March 31, 1997 net
income was $1,451,000, an increase of $157,000, or 12.1% 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 $312,000 and the $569,000 increases in
total interest income for the three and six month periods ended March
31, 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 six month periods ended March 31,
1997 to 7.44% and 7.42%, respectively, compared to 7.28% and 7.29% 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 three and six months ended March 31,
1997, cost of interest-bearing liabilities were 5.31% and 5.28%,
respectively, compared to 5.33% and 5.37% for the prior year like
periods. These improvements were attributed to customer preferences
for shorter-term deposits relative to yields on longer terms of
deposits.
<PAGE>
Home Bancorp
Fort Wayne, IN
Management's Discussion and Analysis of
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 $5,400 for the three months
ended March 31, 1997 and $10,800 for the six months ended that date
compared to the corresponding periods in 1996. These changes are
attributed to management's analysis of the adequacy of the allowance
for loan losses to both recognizable and unforeseen losses. At March
31, 1997, the Company's allowance for loan losses totaled $1.4 million
or .53% of net loans receivable and 468% 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.
<PAGE>
Home Bancorp
Fort Wayne, IN
Management's Discussion and Analysis of
Financial Condition and Results of Operation
Item 2 Continued
Non-Interest Income. Non-interest income consists primarily of service
fees on deposit accounts and loan servicing fees. Non-interest income
increased approximately $2,000 for the six month period ended March
31,1997 in comparison to the like period in 1996. The three month
period ended March 31, 1997 saw a comparable decrease from the like
period 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.
Non-Interest Expense. Non-interest expenses for the three and six
month periods ended March 31, 1997 were approximately $1,075,000 and
$2,374,000, respectively, compared to $1,158,000 and $2,357,000
reported from the same prior year periods. For the periods ended March
31, 1997, compensation and employee benefits increased approximately
$50,000 and $129,000 for the respective three and six 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 March 31, 1997, compared to like periods in 1996,
reflected an increase of approximately $11,000 for the three month
period, and an increase of $21,000 for the six month period primarily
from operating expenses associated with that additional office and
non-recurring charges and equipment purchases.
FDIC insurance premiums decreased by approximately $137,000 for the
three month period ended March 31, 1997 when compared to results for
1996, and approximately $129,000 for the like six month period. These
decreases were the result of the full capitalization of the SAIF fund
and associated reduction in premiums. The three month expense as of
March 31, 1997 reflects credits by the FDIC for overcharges in the
previous quarter ended December 31, 1996.
Other general and administrative expenses reflect decreases 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 Six Months Ended
March 31, March 31,
FINANCIAL HIGHLIGHTS (Averages) 1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Return on assets ..................... 0.98% 0.85% 0.89% 0.83%
Return on equity ..................... 7.03% 5.17% 6.33% 4.88%
Yield on interest-earning assets ..... 7.44% 7.28% 7.42% 7.29%
Cost of interest-bearing liabilities . 5.31% 5.33% 5.28% 5.37%
Net interest spread .................. 2.13% 1.95% 2.14% 1.92%
Net interest rate margin ............. 2.90% 2.88% 2.90% 2.85%
Net interest income to operating (G&A) 219.50% 193.51% 198.43% 189.31%
expenses ............................. 1.32% 1.49% 1.46% 1.51%
Operating (G&A) expenses to assets ... 0.07% 0.08% 0.07% 0.08%
Non-interest income to assets ........ 115.19% 119.47% 115.61% 120.12%
Interest-earning assets to ........... 44.51% 50.38% 49.20% 51.50%
interest-bearing liabilities ......... 13.98% 16.53% 14.11% 16.94%
Efficiency ratio ..................... 13.98% 16.53% 14.11% 16.94%
Equity to assets ..................... $ 325,864 $ 311,490 $ 324,818 $ 312,899
Tangible equity to assets
Average assets (dollars in thousands)
ASSET QUALITY RATIOS
Non-performing assets to total assets 0.09% 0.01%
Non-performing loans to net loans .... 0.11% 0.01%
Allowance for loan losses to net loans 0.53% 0.60%
Allowance for loan losses to
non-performing loans ................. 468% 152,630%
Net charge offs to loans ............. -- --
Loans to deposits .................... 93.55% 89.30%
Loans to assets ...................... 79.56% 73.67%
PER COMMON SHARE
Net income ........................... $ 0.33 $ 0.22 $ 0.59 $ 0.43
Book value ........................... $ 17.43 $ 16.60
Tangible book value .................. $ 17.43 $ 16.60
STOCK PRICE
High ................................. $ 21.25 $ 15.25
Low .................................. $ 19.00 $ 13.75
Close ................................ $ 20.38 $ 14.50
</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 March 31, 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
March 31, 1997, the Bank's liquidity ratio was 20.73%. As of March 31,
1996, the Bank's liquidity was 26.91%.
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 March 31, 1997, the Bank had
outstanding commitments to extend credit which amounted to $15.4
million (including $9.1 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 March 31, 1997, the Bank's capital totaled $38.8
million, or 12.01% of tangible and core capital. Risk-based capital
totaled $40.2 million, or represented 26.80% 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
The annual meeting of the shareholders was held January 28, 1997
for the election of two directors and the ratification of the auditor.
Those results were included as a subsequent event and reported in the
10-Q filing as December 31, 1996.
Item 5 Other Information
None
Item 6 Exhibits and Reports on Form 8-k
Press releases filed on Form 8-k for the quarter ended March 31,
1997 include:
Date of Report Subject
-------------- -------
February 7, 1997 First 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: May 2, 1997 /s/ W. Paul Wolf
----------------
W. Paul Wolf
Chairman, President, CEO
Date: May 2, 1997 /s/ Matthew P. Forrester
------------------------
Matthew P. Forrester
Vice President, Treasurer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,349
<INT-BEARING-DEPOSITS> 8,479
<FED-FUNDS-SOLD> 11,800
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 3,939
<INVESTMENTS-CARRYING> 33,889
<INVESTMENTS-MARKET> 34,085
<LOANS> 260,774
<ALLOWANCE> 1,387
<TOTAL-ASSETS> 327,789
<DEPOSITS> 278,751
<SHORT-TERM> 0
<LIABILITIES-OTHER> 3,325
<LONG-TERM> 0
0
0
<COMMON> 33,856
<OTHER-SE> 11,857
<TOTAL-LIABILITIES-AND-EQUITY> 327,789
<INTEREST-LOAN> 9,986
<INTEREST-INVEST> 1,952
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 11,938
<INTEREST-DEPOSIT> 7,228
<INTEREST-EXPENSE> 7,228
<INTEREST-INCOME-NET> 4,710
<LOAN-LOSSES> 1
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,374
<INCOME-PRETAX> 2,450
<INCOME-PRE-EXTRAORDINARY> 2,450
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,451
<EPS-PRIMARY> 0.59
<EPS-DILUTED> 0.59
<YIELD-ACTUAL> 7.42
<LOANS-NON> 0
<LOANS-PAST> 296
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,386
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,387
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,387
</TABLE>
