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Home Bancorp of Elgin, Inc. announces fourth quarter and year end operating results.

ELGIN, Ill.--(BUSINESS WIRE)--Jan. 21, 1997--Home Bancorp of Elgin, Inc. (Nasdaq: HBEI) ("Home Bancorp" or the "Company"), the holding company for Home Federal Savings and Loan Association of Elgin ("Home Federal" or the "Association"), today reported its results of operations for the three months and the year ended December 31, 1996.

For the fourth quarter of 1996, the Company reported net income of $731,000, or $0.11 per share, as compared to net income of $500,000 for the fourth quarter of 1995. For the year ended December 31, 1996, the Company reported net income of $642,000, or $0.10 per share, as compared to net income of $2,364,000 for the year ended December 31, 1995. Home Bancorp's results for the year ended December 31, 1996 includes a one time after-tax charge of $1,077,000 resulting from the recently-enacted assessment to recapitalize the Savings Association Insurance Fund (the "SAIF") and a one time after-tax charge of $512,000 resulting from the termination of the Association's pension plan. The operating results for the year ended December 31, 1996 are primarily those of the Association, since Home Bancorp became the Association's holding company in connection with the Association's conversion from the mutual to the stock form in September 26, 1996. The operating results for the three months and the year ended December 31, 1995 are those of Home Federal only, since Home Bancorp was not in existence during such time.

"The most significant event in the fourth quarter was the relocation and grand opening of the new South Elgin Office," said George Perucco, President and Chief Executive Officer. "The new location is in the heart of the area that has experienced commercial and residential growth recently. 1996 has certainly been an exciting year of change with the successful completion of the conversion from mutual to stock ownership, the well received initial public offering and the recapitalization of SAIF."

The $231,000 increase in Home Bancorp's net income for the fourth quarter of 1996 as compared to the corresponding period in 1995, was due primarily to an increase in interest income and a decrease in interest expense, which was partially offset by an increase in non-interest expense. The increase in interest income was due to an increase in the average balance of interest-earning assets, related primarily to the conversion, which was partially offset by a decrease in the average yield on interest earning assets. The decrease in interest expense was due primarily to a decrease in the average balance of interest-bearing liabilities. The increase in non-interest expense was due primarily to increases in compensation and benefits expense, advertising and promotion expense and other expense. The increase in compensation and benefits expense was due to the new Employee Stock Ownership Plan (the "ESOP") which was established as part of the conversion to the stock form of ownership. The increase in advertising and promotion expense was primarily due to the promotion expense associated with the opening of the newly relocated South Elgin office. The increase in other expense was primarily due to increases in real estate expense, legal expense, office supply expense and postage expense.

Home Bancorp's net income for the year ended December 31, 1996, excluding the one-time after-tax charge of $1,077,000 for the recapitalization of the SAIF and excluding the one-time after-tax charge of $512,000 for the termination of the Association's pension plan, was $2,231,000, or $0.35 per share, as compared to net income of $2,364,000 for the year ended December 31, 1995. The decrease of $133,000 was due primarily to the increase in non-interest expense which was partially offset by increases in interest income. The increase in non-interest expense was primarily in compensation and benefits and was the result of normal salary increases and the adoption of the ESOP. The increase in interest income was primarily due to an increase in the average balance of interest earning assets, related primarily to the conversion, which was partially offset by a decrease in average yield on interest earning assets.

Asset quality remained strong at December 31, 1996. Non-performing loans as a percentage of total loans increased slightly to 0.36% at December 31, 1996 from 0.34% at December 31, 1995. The allowance for loan losses as a percentage of total loans increased to 0.36% at December 31, 1996 from 0.31% at December 31, 1995. The allowance for loan losses as a percentage of non-performing loans increased from 90.17% at December 31, 1995 to 100.85% at December 31, 1996. The Company's loan portfolio is comprised primarily of real estate loans secured by single-family homes in portions of Cook, Kane, Lake, McHenry, DuPage and DeKalb counties in Illinois.

At December 31, 1996, the Company had total assets of $356.3 million, which included net loans of $261.3 million. Total savings deposits at December 31, 1996 was $251.8 million. The increase in total assets of $51.8 million was primarily due to net proceeds from the conversion of $68.0 million, which was partially offset by the purchase of $5.6 million of stock by the ESOP, the repayment of $4.0 million of borrowed funds and the disbursement of funds resulting from the decrease in savings deposits of $8.2 million. Stockholders' equity increased $63.2 million from $36.7 million at December 31, 1995 to $99.9 million at December 31, 1996. The increase was primarily due to the conversion and 1996 net income of $0.6 million. At December 31, 1996, the Association exceeded all of the regulatory capital requirements of its primary regulator (Office of Thrift Supervision) and had regulatory core and tangible capital ratios each equal to 20.05% and a total risk-based capital ratio of 41.09%.

The Company also announced today that it had established April 17, 1997 as the date of the 1997 Annual Stockholders Meeting. The voting record date has been set as February 21, 1997. Home Bancorp of Elgin, Inc., with $356.3 million in assets at December 31, 1996, is the holding company for Home Federal Savings and Loan Association of Elgin, a federally-chartered stock savings and loan association. Home Federal was established in 1883 and is a community-oriented institution serving the area northwest of Chicago through its main office in Elgin, Illinois and through four full service branches located in Crystal Lake, Roselle, Bartlett and South Elgin, Illinois. Home Federal's deposits are insured by the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation.

TABLES FOLLOW -0-

 HOME BANCORP OF ELGIN, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF EARNINGS

 For the Three For the Year
 Months Ended Ended
 December 31, December 31,
 1996 1995 1996 1995
 ____ ____ ____ ____
 (In thousands, except per share amounts)
 (Unaudited)

INTEREST INCOME
 Loans secured by real estate $5,175 $5,380 $20,936 $21,719
 Other loans 15 16 56 60
 Mortgage-backed securities
 held to maturity 3 3 11 15
 Investment securities
 held to maturity 510 90 780 360
 Interest-earning deposits 447 112 1,089 569
 FHLB of Chicago stock 47 54 187 202
 ________ ________ ________ ________
 Total interest income 6,197 5,655 23,059 22,925

INTEREST EXPENSE
 Savings deposits 2,622 2,752 10,844 10,773
 Borrowed funds 0 60 37 77
 ________ ________ ________ ________
 Total interest expense 2,622 2,812 10,881 10,850
 ________ ________ ________ ________
 Net interest income before
 provision for loan losses 3,575 2,843 12,178 12,075
 Provision for loan losses 30 45 120 180
 ________ ________ ________ ________
 Net interest income after
 provision for loan losses 3,545 2,798 12,058 11,895
 ________ ________ ________ ________
NON-INTEREST INCOME
 Service fee income 283 306 1,176 1,129
 Gain on sale of real
 estate owned 0 0 21 0
 Gain on sale of office
 properties and equipment 0 0 1 0
 Other income 6 5 23 21
 ________ ________ ________ ________
 Total non-interest income 289 311 1,221 1,150
NON-INTEREST EXPENSE
 Compensation and benefits 1,156 930 4,907 3,692
 Occupancy expense 419 423 1,557 1,608
 Federal deposit insurance
 premiums 152 174 2,441 709
 Advertising and promotion 170 101 440 371
 Automated teller machines 90 90 416 314
 Data processing 225 225 946 950
 Other 423 350 1,513 1,425
 ________ ________ ________ ________
 Total non-interest expense 2,635 2,293 12,220 9,069
 ________ ________ ________ ________
Income before income tax
 expense 1,199 816 1,059 3,976
Income tax expense 468 316 417 1,612
 ________ ________ ________ ________
 Net income $ 731 $500 $642 $2,364
 ________ ________ ________ ________
 ________ ________ ________ ________
Earnings per share: Income $0.11 NA $0.10 NA
 ________ ________ ________ ________
 ________ ________ ________ ________


 HOME BANCORP OF ELGIN, INC. AND SUBSIDIARY
 CONSOLIDATED BALANCE SHEETS

 Dec. 31, Dec. 31,
 1996 1995
 ____ ____
 (In thousands)
 (Unaudited)

ASSETS
 Cash and due from banks $ 5,661 $ 10,021
 Interest-earning deposits 22,341 8,588
 Investment securities held-to-maturity 53,786 5,948
 Loans receivable, net 261,306 267,153
 Government National Mortgage Association
 mortgage-backed securities held-to-maturity 142 187
 Accrued interest receivable 1,701 1,484
 Real estate owned and in judgement,
 at lower of cost or fair value 550 496
 FHLB of Chicago stock, at cost 2,678 3,056
 Office properties and equipment, net 7,564 6,817
 Prepaid expenses and other assets 606 770
 ________ ________
 Total assets $356,335 $304,520
 ________ ________
 ________ ________

LIABILITIES AND STOCKHOLDERS' EQUITY
 Savings deposits $251,795 $259,971
 Borrowed funds 0 4,000
 Advance payments by borrowers
 for taxes and insurance 2,012 1,860
 Accrued interest payable and
 other liabilities 2,647 2,006
 ________ ________
 Total liabilities $256,454 $267,837
 ________ ________
 ________ ________

Stockholders' Equity:
 Preferred stock, $.01 par value, 3,000,000
 shares authorized; none outstanding $ 0 $ 0
 Common stock, $.01 par value; 12,000,000
 shares authorized 7,009,250 shares
 issued at December 31, 1996 and none
 issued at December 31, 1995 70 0
 Additional paid-in capital 67,953 0
 Retained earnings, substantially restricted 37,325 36,683
 Unearned ESOP compensation (5,467) 0
 ________ ________
 Total stockholders' equity 99,881 36,683
 ________ ________
Total liabilities and stockholders' equity $356,335 $304,520
 ________ ________
 ________ ________

 HOME BANCORP OF ELGIN, INC.
 SELECTED CONSOLIDATED FINANCIAL RATIOS


 At or For the At or For the
 Three Months Year Ended
 Ended Dec. 31, Dec. 31,
 1996 1995 1996 1995
 ____ ____ ____ ____
 (Dollars in thousands, except shares and
 per share amounts)
 (Unaudited)
Selected Financial Ratios(1):
 Performance Ratios:
 Return on average assets(2) 0.82% 0.66% 0.20% 0.78%
 Return on average equity(2) 2.94 5.43 1.11 6.53
 Average interest rate spread(3) 3.06 3.54 3.28 3.78
 Net interest margin(4) 4.23 3.99 4.02 4.19
 Average interest-earning assets
 to average interest-bearing
 liabilities 137.78% 111.37% 120.29% 111.09%
 Non-interest expense to
 average assets(2) 2.97 3.05 3.81 2.99
Capital Ratios(1):
 Average equity to average assets 28.06 12.25 18.07 11.93
 Equity to total assets at
 end of period 28.03 12.05 28.03 12.05
 Tangible capital(5) 20.05 11.96 20.05 11.96
 Core capital(5) 20.05 11.96 20.05 11.96
 Total risk-based capital(5) 41.09 23.32 41.09 23.32
Asset Quality Ratios And Other
 Data(1):
 Total non-performing loans (6) $ 937 $ 916 $ 937 $ 916
 Real estate owned, net 550 496 550 496
 Non-performing loans to
 total loans 0.36% 0.34% 0.36% 0.34%
 Non-performing assets to
 total assets 0.42 0.46 0.42 0.46
 Allowance for loan losses to:
 Non-performing loans 100.85 90.17 100.85 90.17
 Total loans 0.36 0.31 0.36 0.31
 Number of shares outstanding 7,009,250 NA 7,009,250 NA
 Book value per share $ 14.25 NA $ 14.25 NA


(1) With the exception of end-of-period ratios, all ratios are based on average monthly balances during the indicated periods and are annualized where appropriate. Capital Ratios and Asset Quality Ratios And Other Data are end-of-period ratios and data

(2) Includes one time charge of $1,759,000 ($1,077,000 net of tax effects) associated with the recapitalization of the Savings Association Insurance Fund (the "SAIF") and a loss on termination of pension plan of $837,000 ($512,000 net of tax effects) for the year ended December 31, 1996. Excluding the SAIF recapitalization charge and the loss on termination of the pension plan, the return on average assets and average equity would have been 0.70% and 3.85%, respectively, for the year ended December 31, 1996. Likewise, the ratio of non-interest expense to average assets would have been 3.00% for the year ended December 31, 1996.

(3) The average interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities.

(4) The net interest margin represents net interest income as a percent of average interest-earning assets.

(5) These regulatory capital ratios are for Home Federal Savings and Loan Association of Elgin only.

(6) Non-performing loans consist of non-accrual loans; the Company did not have any loans that were 90 days or more past due and still accruing at any of the dates referred to in the table above.

CONTACT: Home Bancorp of Elgin, Inc.

David G. Towe, 847/742-3800
COPYRIGHT 1997 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
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