HOME BANCORP, INC. - FORM 10-Q

HOME BANCORP, INC. - FORM 10-Q - May 9, 2016

Attached files

Attached files

HOME BANCORP, INC. Reports

file	filename
EX-32.0 - EX-32.0 - HOME BANCORP, INC.	d164216dex320.htm
EX-31.2 - EX-31.2 - HOME BANCORP, INC.	d164216dex312.htm
EX-31.1 - EX-31.1 - HOME BANCORP, INC.	d164216dex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: March 31, 2016

¨	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 001-34190

HOME BANCORP, INC.

(Exact name of Registrant as specified in its charter)


Louisiana		71-1051785
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification Number)

503 Kaliste Saloom Road, Lafayette, Louisiana		70508
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (337) 237-1960

Not Applicable

(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 and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ¨ NO x

At May 3, 2016, the registrant had 7,260,671 shares of common stock, $0.01 par value, outstanding.

HOME BANCORP, INC. and SUBSIDIARY

TABLE OF CONTENTS


		Page
PART I

Item 1.	Financial Statements (unaudited)

	Consolidated Statements of Financial Condition		1

	Consolidated Statements of Income		2

	Consolidated Statements of Comprehensive Income		3

	Consolidated Statements of Changes in Shareholders’ Equity		4

	Consolidated Statements of Cash Flows		5

	Notes to Unaudited Consolidated Financial Statements		6

Item 2.	Managements’ Discussion and Analysis of Financial Condition and Results of Operations		25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		37

Item 4.	Controls and Procedures		37

PART II

Item 1.	Legal Proceedings		37

Item 1A.	Risk Factors		37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		37

Item 3.	Defaults Upon Senior Securities		38

Item 4.	Mine Safety Disclosures		38

Item 5.	Other Information		38

Item 6.	Exhibits		38

SIGNATURES			39

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


	(Unaudited) March 31, 2016			(Audited) December 31, 2015
Assets
Cash and cash equivalents	$	17,960,269		$	24,797,599
Interest-bearing deposits in banks		4,653,585			5,143,585
Investment securities available for sale, at fair value		178,533,171			176,762,200
Investment securities held to maturity (fair values of $14,144,886 and $14,120,842, respectively)		13,845,761			13,926,861
Mortgage loans held for sale		11,504,158			5,651,250
Loans, net of unearned income		1,218,059,238			1,224,365,916
Allowance for loan losses		(10,397,231	)		(9,547,487	)

Total loans, net of unearned income and allowance for loan losses		1,207,662,007			1,214,818,429

Office properties and equipment, net		42,190,686			40,815,744
Cash surrender value of bank-owned life insurance		19,787,613			19,666,900
Accrued interest receivable and other assets		47,983,954			50,329,032

Total Assets	$	1,544,121,204		$	1,551,911,600

Liabilities
Deposits:
Noninterest-bearing	$	292,410,344		$	296,616,693
Interest-bearing		951,288,494			947,599,823

Total deposits		1,243,698,838			1,244,216,516
Short-term Federal Home Loan Bank (FHLB) advances		28,157,593			39,939,375
Long-term Federal Home Loan Bank (FHLB) advances		84,853,020			85,213,222
Accrued interest payable and other liabilities		18,247,985			17,496,133

Total Liabilities		1,374,957,436			1,386,865,246

Shareholders’ Equity
Preferred stock, $0.01 par value—10,000,000 shares authorized; none issued		—			—
Common stock, $0.01 par value—40,000,000 shares authorized; 7,256,671 and 7,239,821 shares issued and outstanding, respectively		72,568			72,399
Additional paid-in capital		77,389,045			76,948,914
Unallocated common stock held by:
Employee Stock Ownership Plan (ESOP)		(4,463,400	)		(4,552,670	)
Recognition and Retention Plan (RRP)		(156,678	)		(158,590	)
Retained earnings		94,542,265			91,864,543
Accumulated other comprehensive income		1,779,968			871,758

Total Shareholders’ Equity		169,163,768			165,046,354

Total Liabilities and Shareholders’ Equity	$	1,544,121,204		$	1,551,911,600

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)


	For the Three Months Ended
	March 31,
	2016		2015
Interest Income
Loans, including fees	$	16,018,095	$	12,360,963
Investment securities:
Taxable interest		798,352		735,637
Tax-exempt interest		172,732		174,484
Other investments and deposits		59,382		33,752

Total interest income		17,048,561		13,304,836

Interest Expense
Deposits		931,853		684,979
Securities sold under repurchase agreement		—		18,429
Short-term FHLB advances		43,598		6,071
Long-term FHLB advances		350,629		103,235

Total interest expense		1,326,080		812,714

Net interest income		15,722,481		12,492,122
Provision for loan losses		850,000		538,487

Net interest income after provision for loan losses		14,872,481		11,953,635

Noninterest Income
Service fees and charges		1,036,410		892,118
Bank card fees		601,201		565,584
Gain on sale of loans, net		300,673		373,173
Income from bank-owned life insurance		120,712		132,359
Other income		508,282		115,450

Total noninterest income		2,567,278		2,078,684

Noninterest Expense
Compensation and benefits		7,201,036		5,760,787
Occupancy		1,309,597		1,171,280
Marketing and advertising		257,664		110,328
Data processing and communication		1,543,715		943,332
Professional services		294,207		238,175
Forms, printing and supplies		177,292		144,810
Franchise and shares tax		219,773		147,272
Regulatory fees		322,691		280,467
Foreclosed assets, net		118,377		235,782
Other expenses		896,836		686,853

Total noninterest expense		12,341,188		9,719,086

Income before income tax expense		5,098,571		4,313,233
Income tax expense		1,748,893		1,465,469

Net Income	$	3,349,678	$	2,847,764

Earnings per share:
Basic	$	0.49	$	0.43

Diluted	$	0.47	$	0.41

Cash dividends declared per common share	$	0.09	$	0.07

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)


	For the Three Months Ended
	March 31,
	2016			2015
Net Income	$	3,349,678		$	2,847,764

Other Comprehensive Income
Unrealized gains on investment securities	$	1,397,246		$	616,469
Tax effect		(489,036	)		(215,764	)

Other comprehensive income, net of taxes	$	908,210		$	400,705

Comprehensive Income	$	4,257,888		$	3,248,469

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)


	Common Stock			Additional Paid-in Capital			Treasury Stock			Unallocated Common Stock Held by ESOP			Unallocated Common Stock Held by RRP			Retained Earnings			Accumulated Other Comprehensive Income		Total
Balance, December 31, 2014⁽¹)	$	90,088		$	93,332,108		$	(28,572,891	)	$	(4,909,750	)	$	(202,590	)	$	93,101,915		$	1,304,876	$	154,143,756
Net income																	2,847,764					2,847,764
Other comprehensive income																				400,705		400,705
Purchase of Company’s common shares at cost, 83,193 shares								(1,800,042	)													(1,800,042	)
Cash dividends declared, $0.07 per share																	(500,383	)				(500,383	)
Exercise of stock options		1,234			1,425,616																	1,426,850
ESOP shares released for allocation					141,619						89,270											230,889
Share-based compensation cost					32,940																	32,940

Balance, March 31, 2015	$	91,322		$	94,932,283		$	(30,372,933	)	$	(4,820,480	)	$	(202,590	)	$	95,449,296		$	1,705,581	$	156,782,479

Balance, December 31, 2015⁽¹)	$	72,399		$	76,948,914		$	—		$	(4,552,670	)	$	(158,590	)	$	91,864,543		$	871,758	$	165,046,354
Net income																	3,349,678					3,349,678
Other comprehensive income																				908,210		908,210
Purchase of Company’s common shares at cost, 1,250 shares		(13	)		(12,488	)											(19,949	)				(32,450	)
Cash dividends declared, $0.09 per share																	(652,007	)				(652,007	)
Exercise of stock options		182			207,064																	207,246
ESOP shares released for allocation					180,813						89,270											270,083
Restricted stock vesting					(1,594	)								1,912								318
Share-based compensation cost					66,336																	66,336

Balance, March 31, 2016	$	72,568		$	77,389,045		$	—		$	(4,463,400	)	$	(156,678	)	$	94,542,265		$	1,779,968	$	169,163,768

⁽¹⁾	Balances as of December 31, 2014 and December 31, 2015 are audited.

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	For the Three Months Ended March 31,
	2016			2015
Cash flows from operating activities:
Net income	$	3,349,678		$	2,847,764
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		850,000			538,487
Depreciation		456,262			447,898
Amortization of purchase accounting valuations and intangibles		532,980			1,214,457
Net amortization of mortgage servicing asset		65,745			31,270
Federal Home Loan Bank stock dividends		(19,900	)		(3,900	)
Net amortization of premium on investments		370,778			354,341
Gain on loans sold, net		(300,673	)		(373,173	)
Proceeds, including principal payments, from loans held for sale		27,923,041			35,200,887
Originations of loans held for sale		(33,475,276	)		(35,933,388	)
Non-cash compensation		295,441			226,961
Deferred income tax (benefit) provision		117,024			(43,135	)
Decrease (increase) in interest receivable and other assets		946,840			(316,553	)
Increase in cash surrender value of bank-owned life insurance		(120,713	)		(132,359	)
Increase (decrease) in accrued interest payable and other liabilities		810,030			(494,581	)

Net cash provided by operating activities		1,801,257			3,564,976

Cash flows from investing activities:
Purchases of securities available for sale		(7,968,779	)		(3,126,663	)
Purchases of securities held to maturity		—			(2,273,910	)
Proceeds from maturities, prepayments and calls on securities available for sale		7,305,376			6,767,654
Net change in loans		6,303,936			(14,586,858	)
Reimbursement from FDIC for covered assets		—			130,933
Decrease in interest bearing deposits in other banks		490,000			—
Proceeds from sale of repossessed assets		105,760			496,798
Purchases of office properties and equipment		(1,831,792	)		(67,570	)
Proceeds from sale of properties and equipment		595			500
Purchases of Federal Home Loan Bank stock		—			(722,500	)
Proceeds from redemption of Federal Home Loan Bank stock		—			1,272,900

Net cash provided by (used in) investing activities		4,405,096			(12,108,716	)

Cash flows from financing activities:
(Decrease) increase in deposits		(483,612	)		33,015,266
Borrowings on Federal Home Loan Bank advances		1,176,750,000			1,038,050,000
Repayments of Federal Home Loan Bank advances		(1,188,832,860	)		(1,060,550,000	)
Purchase of Company’s common stock		(32,450	)		(1,800,042	)
Proceeds from exercise of stock options		207,246			1,426,850
Payment of dividends on common stock		(652,007	)		(500,383	)

Net cash (used in) provided by financing activities		(13,043,683	)		9,641,691

Net change in cash and cash equivalents		(6,837,330	)		1,097,951
Cash and cash equivalents at beginning of year		24,797,599			29,077,907

Cash and cash equivalents at end of period	$	17,960,269		$	30,175,858

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of Home Bancorp, Inc. (the “Company”) were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in shareholders’ equity and cash flows in conformity with accounting principles generally accepted in the United States of America. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial statements have been included. The results of operations for the three-month period ended March 31, 2016 are not necessarily indicative of the results which may be expected for the entire fiscal year. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) for the year ended December 31, 2015.

In preparing the financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s financial condition, results of operations, comprehensive income, changes in shareholders’ equity and cash flows for the interim periods presented. These adjustments are of a normal recurring nature and include appropriate estimated provisions.

Certain amounts reported in prior periods have been reclassified to conform to the current period presentation. Such reclassifications had no effect on previously reported shareholders’ equity or net income.

2. Recent Accounting Pronouncements

In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities”. The ASU amendments include changes related to how certain equity investments are measured, recognize changes in the fair value of certain financial liabilities measured under the fair value option, and disclose and present financial assets and liabilities on the Company’s consolidated financial statements. Additionally, the ASU will also require entities to present financial assets and financial liabilities separately, grouped by measurement category and form of financial asset in the statement of financial position or in the accompanying notes to the financial statements. Entities will also no longer have to disclose the methods and significant assumptions for financial instruments measured at amortized cost, but will be required to measure such instruments under the “exit price” notion for disclosure purposes. The ASU is effective for annual and interim periods beginning after December 15, 2017. The adoption of this ASU is not expected to have a material effect on our Consolidated Financial Statements.

In February 2016, the FASB issued ASU 2016-02, “Conforming Amendments Related to Leases”. This ASU amends the codification regarding leases in order to increase transparency and comparability. The ASU requires companies to recognize lease assets and liabilities on the statement of condition and disclose key information about leasing arrangements. A lessee would recognize a liability to make lease payments and a right-of-use asset representing its right to use the leased asset for the lease term. The ASU is effective for annual and interim periods beginning after December 15, 2018. The adoption of this ASU is not expected to have a material effect on our Consolidated Financial Statements.

In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting”. The ASU amends the codification to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification in the statement of cash flows. This ASU is effective for annual and interim periods beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on the Consolidated Financial Statements.

3. Investment Securities

Summary information regarding the Company’s investment securities classified as available for sale and held to maturity as of March 31, 2016 and December 31, 2015 is as follows.


(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses				Fair Value
March 31, 2016					Less Than 1 Year		Over 1 Year
Available for sale:
U.S. agency mortgage-backed	$	135,724	$	2,161	$	38	$	150	$	137,697
Non-U.S. agency mortgage-backed		5,857		29		8		57		5,821
Municipal bonds		22,131		592		2		—		22,721
U.S. government agency		12,085		214		5		—		12,294

Total available for sale	$	175,797	$	2,996	$	53	$	207	$	178,533

Held to maturity:
Municipal bonds	$	13,846	$	316	$	—	$	17	$	14,145


(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses				Fair Value
December 31, 2015					Less Than 1 Year		Over 1 Year
Available for sale:
U.S. agency mortgage-backed	$	134,748	$	1,464	$	287	$	447	$	135,478
Non-U.S. agency mortgage-backed		6,055		51		—		41		6,065
Municipal bonds		22,453		490		10		—		22,933
U.S. government agency		12,166		145		25		—		12,286

Total available for sale	$	175,422	$	2,150	$	322	$	488	$	176,762

Held to maturity:
Municipal bonds	$	13,927	$	239	$	45	$	—	$	14,121

The estimated fair value and amortized cost by maturity of the Company’s investment securities as of March 31, 2016 are shown in the following tables. Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments or call options. The expected maturity of a security may differ from its contractual maturity because of prepayments or the exercise of call options. Accordingly, actual maturities may differ from contractual maturities.


(dollars in thousands)	One Year or Less		One Year to Five Years		Five to Ten Years		Over Ten Years		Total
Fair Value
Securities available for sale:
U.S. agency mortgage-backed	$	1,902	$	5,914	$	35,834	$	94,047	$	137,697
Non-U.S. agency mortgage-backed		—		—		—		5,821		5,821
Municipal bonds		2,600		8,235		10,123		1,763		22,721
U.S. government agency		—		8,114		—		4,180		12,294

Total available for sale	$	4,502	$	22,263	$	45,957	$	105,811	$	178,533

Securities held to maturity:
Municipal bonds	$	236	$	1,104	$	9,350	$	3,455	$	14,145

Total investment securities	$	4,738	$	23,367	$	55,307	$	109,266	$	192,678


(dollars in thousands)	One Year or Less		One Year to Five Years		Five to Ten Years		Over Ten Years		Total
Amortized Cost
Securities available for sale:
U.S. agency mortgage-backed	$	1,902	$	5,818	$	35,405	$	92,599	$	135,724
Non-U.S. agency mortgage-backed		—		—		—		5,857		5,857
Municipal bonds		2,584		7,987		9,912		1,648		22,131
U.S. government agency		—		7,989		—		4,096		12,085

Total available for sale	$	4,486	$	21,794	$	45,317	$	104,200	$	175,797

Securities held to maturity:
Municipal bonds	$	236	$	1,080	$	9,100	$	3,430	$	13,846

Total investment securities	$	4,722	$	22,874	$	54,417	$	107,630	$	189,643

Management evaluates securities for other-than-temporary impairment at least quarterly, and more frequently when economic and market conditions warrant such evaluations. Consideration is given to (1) the extent and length of time the fair value has been below cost; (2) the reasons for the decline in value; and (3) the Company’s intent to sell a security or whether it is more likely than not the Company will be required to sell the security before the recovery of its amortized cost, which may extend to maturity.

The Company performs a process to identify securities that could potentially have a credit impairment that is other-than-temporary. This process involves evaluating each security for impairment by monitoring credit performance, collateral type, collateral geography, bond credit support, loan-to-value ratios, credit scores, loss severity levels, pricing levels, downgrades by rating agencies, cash flow projections and other factors as indicators of potential credit issues. When the Company determines that a security is deemed to be other-than-temporarily impaired, an impairment loss is recognized.

As of March 31, 2016, 26 of the Company’s debt securities had unrealized losses totaling 0.8% of the individual securities’ amortized cost basis and 0.1% of the Company’s total amortized cost basis of the investment securities portfolio. At such date, 12 of the 26 securities had been in a continuous loss position for over 12 months. The 12 securities had an aggregate amortized cost basis of $15.3 million and unrealized loss of $224,000 at March 31, 2016. Management has the intent and ability to hold these debt securities until maturity, or until anticipated recovery; hence, no declines in these 12 securities were deemed to be other-than-temporary.

As of March 31, 2016 and December 31, 2015, the Company had $97,464,000 and $94,661,000, respectively, of securities pledged to secure public deposits.

4. Earnings Per Share

Earnings per common share were computed based on the following:


	Three Months Ended March 31,
(in thousands, except per share data)	2016		2015
Numerator:
Net income available to common shareholders	$	3,350	$	2,848
Denominator:
Weighted average common shares outstanding		6,784		6,634
Effect of dilutive securities:
Restricted stock		3		3
Stock options		265		325

Weighted average common shares outstanding – assuming dilution		7,052		6,962

Basic earnings per common share	$	0.49	$	0.43

Diluted earnings per common share	$	0.47	$	0.41

Options on 69,096 and 9,500 shares of common stock were not included in the computation of diluted earnings per share for the three months ended March 31, 2016 and March 31, 2015, respectively, because the effect of these shares was anti-dilutive.

5. Credit Quality and Allowance for Loan Losses

The following briefly describes the distinction between originated and acquired loans and certain significant accounting policies relevant to each category.

Originated Loans

Loans originated for investment are reported at the principal balance outstanding net of unearned income. Interest on loans and accretion of unearned income are computed in a manner that approximates a level yield on recorded principal. Interest on loans is recorded as income is earned. The accrual of interest on an originated loan is discontinued when it is probable the borrower will not be able to meet payment obligations as they become due. The Company maintains an allowance for loan losses on originated loans that represents management’s estimate of probable losses incurred in this portfolio category.

Acquired Loans

Loans that were acquired as a result of our acquisitions of certain assets and liabilities of Statewide Bank (“Statewide”) of Covington, Louisiana, on March 12, 2010, and the acquisitions of GS Financial Corp. (“GSFC”), the former holding company of Guaranty Savings Bank of Metairie, Louisiana, on July 15, 2011, Britton & Koontz Capital Corporation (“Britton & Koontz”), the former holding company of Britton & Koontz Bank, N.A. (“Britton & Koontz Bank”) of Natchez, Mississippi on February 14, 2014, and Louisiana Bancorp, Inc. (“Louisiana Bancorp”), the former holding company of Bank of New Orleans (“BNO”) of Metairie, Louisiana on September 15, 2015 are referred to as “Acquired Loans.”

Acquired Loans were recorded at estimated fair value at the acquisition date with no carryover of the related allowance for loan losses. The acquired loans were segregated between those considered to be performing (“acquired performing”) and those with evidence of credit deterioration (“acquired impaired”), and then further

segregated into loan pools designed to facilitate the estimation of expected cash flows. The fair value estimate for each pool of acquired performing and acquired impaired loans was based on the estimate of expected cash flows, both principal and interest, from that pool, discounted at prevailing market interest rates.

The difference between the fair value of an acquired performing loan pool and the contractual amounts due at the acquisition date (the “fair value discount”) is accreted into income over the estimated life of the pool. Management estimates an allowance for loan losses for acquired performing loans using a methodology similar to that used for originated loans. The allowance determined for each loan pool is compared to the remaining fair value discount for that pool. If the allowance amount calculated under the Company’s methodology is greater than the Company’s remaining discount, the additional amount called for is added to the reported allowance through a provision for loan losses. If the allowance amount calculated under the Company’s methodology is less than the Company’s recorded discount, no additional allowance or provision is recognized. Actual losses first reduce any remaining nonaccretable discount for the loan pool. Once the nonaccretable discount is fully depleted, losses are applied against the allowance established for that pool. Acquired performing loans are placed on nonaccrual status and considered and reported as nonperforming or past due using the same criteria applied to the originated portfolio.

The excess of cash flows expected to be collected from an acquired impaired loan pool over the pool’s estimated fair value at acquisition is referred to as the accretable yield and is recognized in interest income using an effective yield method over the remaining life of the pool. Each pool of acquired impaired loans is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows.

Management recasts the estimate of cash flows expected to be collected on each acquired impaired loan pool periodically. If the present value of expected cash flows for a pool is less than its carrying value, an impairment is recognized by an increase in the allowance for loan losses and a charge to the provision for loan losses. If the present value of expected cash flows for a pool is greater than its carrying value, any previously established allowance for loan losses is reversed and any remaining difference increases the accretable yield which will be taken into interest income over the remaining life of the loan pool. Acquired impaired loans are generally not subject to individual evaluation for impairment and are not reported with impaired loans, even if they would otherwise qualify for such treatment.

The allowance for loan losses and recorded investment in loans as of the dates indicated are as follows.


	As of March 31, 2016
	Originated Loans
(dollars in thousands)	Collectively Evaluated for Impairment		Individually Evaluated for Impairment		Acquired Loans		Total
Allowance for loan losses:
One- to four-family first mortgage	$	1,391	$	34	$	92	$	1,517
Home equity loans and lines		575		—		318		893
Commercial real estate		3,180		86		—		3,266
Construction and land		1,372		—		57		1,429
Multi-family residential		175		—		—		175
Commercial and industrial		2,031		418		113		2,562
Consumer		555		—		—		555

Total allowance for loan losses	$	9,279	$	538	$	580	$	10,397


	As of March 31, 2016
	Originated Loans
(dollars in thousands)	Collectively Evaluated for Impairment		Individually Evaluated for Impairment		Acquired Loans⁽¹⁾		Total
Recorded investment in loans:
One- to four-family first mortgage	$	189,371	$	81	$	198,838	$	388,290
Home equity loans and lines		44,527		—		51,529		96,056
Commercial real estate		294,389		165		113,612		408,166
Construction and land		112,289		—		4,958		117,247
Multi-family residential		15,141		—		22,286		37,427
Commercial and industrial		113,564		1,053		9,846		124,463
Consumer		44,486		—		1,924		46,410

Total loans	$	813,767	$	1,299	$	402,993	$	1,218,059


	As of December 31, 2015
	Originated Loans
(dollars in thousands)	Collectively Evaluated for Impairment		Individually Evaluated for Impairment		Acquired Loans		Total
Allowance for loan losses:
One- to four-family first mortgage	$	1,338	$	34	$	92	$	1,464
Home equity loans and lines		536		—		224		760
Commercial real estate		3,066		86		—		3,152
Construction and land		1,360		—		57		1,417
Multi-family residential		173		—		—		173
Commercial and industrial		1,977		33		—		2,010
Consumer		571		—		—		571

Total allowance for loan losses	$	9,021	$	153	$	373	$	9,547


	As of December 31, 2015
	Originated Loans
(dollars in thousands)	Collectively Evaluated for Impairment		Individually Evaluated for Impairment		Acquired Loans⁽¹⁾		Total
Recorded investment in loans:
One- to four-family first mortgage	$	185,802	$	78	$	205,386	$	391,266
Home equity loans and lines		40,251		—		53,809		94,060
Commercial real estate		285,856		181		119,342		405,379
Construction and land		109,007		—		7,768		116,775
Multi-family residential		14,962		—		28,901		43,863
Commercial and industrial		115,360		707		9,041		125,108
Consumer		45,641		—		2,274		47,915

Total loans	$	796,879	$	966	$	426,521	$	1,224,366

⁽¹⁾	$17.4 million and $20.0 million in acquired loans were accounted for under ASC 310-30 at March 31, 2016 and December 31, 2015, respectively.

A summary of activity in the allowance for loan losses during the three months ended March 31, 2016 and March 31, 2015 follows.


	For the Three Months Ended March 31, 2016
(dollars in thousands)	Beginning Balance		Charge-offs			Recoveries		Provision		Ending Balance
Originated loans:
Allowance for loan losses:
One- to four-family first mortgage	$	1,372	$	(3	)	$	—	$	56	$	1,425
Home equity loans and lines		536		—			1		38		575
Commercial real estate		3,152		—			—		114		3,266
Construction and land		1,360		—			—		12		1,372
Multi-family residential		173		—			—		2		175
Commercial and industrial		2,010		(47	)		10		476		2,449
Consumer		571		(56	)		1		39		555

Total allowance for loan losses	$	9,174	$	(106	)	$	12	$	737	$	9,817

Acquired loans:
Allowance for loan losses:
One- to four-family first mortgage	$	92	$	—		$	—	$	—	$	92
Home equity loans and lines		224		—			—		94		318
Commercial real estate		—		—			—		—		—
Construction and land		57		—			—		—		57
Multi-family residential		—		—			—		—		—
Commercial and industrial		—		—			94		19		113
Consumer		—		—			—		—		—

Total allowance for loan losses	$	373	$	—		$	94	$	113	$	580

Total loans:
Allowance for loan losses:
One- to four-family first mortgage	$	1,464	$	(3	)	$	—	$	56	$	1,517
Home equity loans and lines		760		—			1		132		893
Commercial real estate		3,152		—			—		114		3,266
Construction and land		1,417		—			—		12		1,429
Multi-family residential		173		—			—		2		175
Commercial and industrial		2,010		(47	)		104		495		2,562
Consumer		571		(56	)		1		39		555

Total allowance for loan losses	$	9,547	$	(106	)	$	106	$	850	$	10,397


	For the Three Months Ended March 31, 2015
(dollars in thousands)	Beginning Balance		Charge-offs			Recoveries		Provision		Ending Balance
Originated loans:
Allowance for loan losses:
One- to four-family first mortgage	$	1,136	$	—		$	—	$	96	$	1,232
Home equity loans and lines		442		—			3		18		463
Commercial real estate		2,922		—			—		146		3,068
Construction and land		968		—			—		52		1,020
Multi-family residential		192		—			—		35		227
Commercial and industrial		1,161		(44	)		30		160		1,307
Consumer		521		(15	)		—		31		537

Total allowance for loan losses	$	7,342	$	(59	)	$	33	$	538	$	7,854


Acquired loans:
Allowance for loan losses:
One- to four-family first mortgage	$	174	$	—		$	—	$	—	$	174
Home equity loans and lines		111		—			—		—		111
Commercial real estate		—		—			—		—		—
Construction and land		133		—			—		—		133
Multi-family residential		—		—			—		—		—
Commercial and industrial		—		—			—		—		—
Consumer		—		—			—		—		—

Total allowance for loan losses	$	418	$	—		$	—	$	—	$	418

Total loans:
Allowance for loan losses:
One- to four-family first mortgage	$	1,310	$	—		$	—	$	96	$	1,406
Home equity loans and lines		553		—			3		18		574
Commercial real estate		2,922		—			—		146		3,068
Construction and land		1,101		—			—		52		1,153
Multi-family residential		192		—			—		35		227
Commercial and industrial		1,161		(44	)		30		160		1,307
Consumer		521		(15	)		—		31		537

Total allowance for loan losses	$	7,760	$	(59	)	$	33	$	538	$	8,272

The following tables present the Company’s loan portfolio by credit quality classification as of the dates indicated.


	March 31, 2016
(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Originated loans:
One- to four-family first mortgage	$	187,617	$	427	$	1,408	$	—	$	189,452
Home equity loans and lines		43,689		367		471		—		44,527
Commercial real estate		291,532		974		2,048		—		294,554
Construction and land		111,583		30		676		—		112,289
Multi-family residential		15,141		—		—		—		15,141
Commercial and industrial		112,312		—		2,305		—		114,617
Consumer		44,020		64		402		—		44,486

Total originated loans	$	805,894	$	1,862	$	7,310	$	—	$	815,066

Acquired loans:
One- to four-family first mortgage	$	194,438	$	759	$	3,641	$	—	$	198,838
Home equity loans and lines		51,111		102		316		—		51,529
Commercial real estate		107,719		4,048		1,845		—		113,612
Construction and land		3,828		—		1,130		—		4,958
Multi-family residential		21,347		10		929		—		22,286
Commercial and industrial		7,570		—		2,276		—		9,846
Consumer		1,863		30		31		—		1,924

Total acquired loans	$	387,876	$	4,949	$	10,168	$	—	$	402,993

Total:
One- to four-family first mortgage	$	382,055	$	1,186	$	5,049	$	—	$	388,290
Home equity loans and lines		94,800		469		787		—		96,056
Commercial real estate		399,251		5,022		3,893		—		408,166
Construction and land		115,411		30		1,806		—		117,247
Multi-family residential		36,488		10		929		—		37,427
Commercial and industrial		119,882		—		4,581		—		124,463
Consumer		45,883		94		433		—		46,410

Total loans	$	1,193,770	$	6,811	$	17,478	$	—	$	1,218,059


	December 31, 2015
(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Originated loans:
One- to four-family first mortgage	$	183,863	$	439	$	1,578	$	—	$	185,880
Home equity loans and lines		39,736		394		121		—		40,251
Commercial real estate		282,963		988		2,086		—		286,037
Construction and land		107,901		—		1,106		—		109,007
Multi-family residential		14,962		—		—		—		14,962
Commercial and industrial		113,108		585		2,374		—		116,067
Consumer		45,133		38		470		—		45,641

Total originated loans	$	787,666	$	2,444	$	7,735	$	—	$	797,845

Acquired loans:
One- to four-family first mortgage	$	200,966	$	791	$	3,629	$	—	$	205,386
Home equity loans and lines		53,352		20		437		—		53,809
Commercial real estate		112,802		4,085		2,455		—		119,342
Construction and land		4,573		1,819		1,376		—		7,768
Multi-family residential		27,931		12		958		—		28,901
Commercial and industrial		7,071		1,191		779		—		9,041
Consumer		2,160		51		63		—		2,274

Total acquired loans	$	408,855	$	7,969	$	9,697	$	—	$	426,521

Total:
One- to four-family first mortgage	$	384,829	$	1,230	$	5,207	$	—	$	391,266
Home equity loans and lines		93,088		414		558		—		94,060
Commercial real estate		395,765		5,073		4,541		—		405,379
Construction and land		112,474		1,819		2,482		—		116,775
Multi-family residential		42,893		12		958		—		43,863
Commercial and industrial		120,179		1,776		3,153		—		125,108
Consumer		47,293		89		533		—		47,915

Total loans	$	1,196,521	$	10,413	$	17,432	$	—	$	1,224,366

The above classifications follow regulatory guidelines and can generally be described as follows:

•

Pass loans are of satisfactory quality.

•

Special mention loans have an existing weakness that could cause future impairment, including the deterioration of financial ratios, past due status, questionable management capabilities and possible reduction in the collateral values.

•

Substandard loans have an existing specific and well-defined weakness that may include poor liquidity and deterioration of financial performance. Such loans may be past due and related deposit accounts experiencing overdrafts. Immediate corrective action is necessary.

•

Doubtful loans have specific weaknesses that are severe enough to make collection or liquidation in full highly questionable and improbable.

In addition, residential loans are classified using an inter-agency regulatory methodology that incorporates the extent of delinquencies and loan-to-value ratios. These classifications were the most current available as of the dates indicated and were generally updated within the quarter.

Age analysis of past due loans as of the dates indicated are as follows.


	March 31, 2016
(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current Loans		Total Loans
Originated loans:
Real estate loans:
One- to four-family first mortgage	$	1,000	$	354	$	521	$	1,875	$	187,577	$	189,452
Home equity loans and lines		574		12		195		781		43,746		44,527
Commercial real estate		—		—		596		596		293,958		294,554
Construction and land		—		—		87		87		112,202		112,289
Multi-family residential		—		—		—		—		15,141		15,141

Total real estate loans		1,574		366		1,399		3,339		652,624		655,963

Other loans:
Commercial and industrial		687		—		754		1,441		113,176		114,617
Consumer		398		41		196		635		43,851		44,486

Total other loans		1,085		41		950		2,076		157,027		159,103

Total originated loans	$	2,659	$	407	$	2,349	$	5,415	$	809,651	$	815,066

Acquired loans:
Real estate loans:
One- to four-family first mortgage	$	1,805	$	693	$	1,895	$	4,393	$	194,445	$	198,838
Home equity loans and lines		378		54		96		528		51,001		51,529
Commercial real estate		19		—		1,449		1,468		112,144		113,612
Construction and land		5		—		41		46		4,912		4,958
Multi-family residential		—		—		—		—		22,286		22,286

Total real estate loans		2,207		747		3,481		6,435		384,788		391,223

Other loans:
Commercial and industrial		7		—		438		445		9,401		9,846
Consumer		10		15		9		34		1,890		1,924

Total other loans		17		15		447		479		11,291		11,770

Total acquired loans	$	2,224	$	762	$	3,928	$	6,914	$	396,079	$	402,993

Total loans:
Real estate loans:
One- to four-family first mortgage	$	2,805	$	1,047	$	2,416	$	6,268	$	382,022	$	388,290
Home equity loans and lines		952		66		291		1,309		94,747		96,056
Commercial real estate		19		—		2,045		2,064		406,102		408,166
Construction and land		5		—		128		133		117,114		117,247
Multi-family residential		—		—		—		—		37,427		37,427

Total real estate loans		3,781		1,113		4,880		9,774		1,037,412		1,047,186

Other loans:
Commercial and industrial		694		—		1,192		1,886		122,577		124,463
Consumer		408		56		205		669		45,741		46,410

Total other loans		1,102		56		1,397		2,555		168,318		170,873

Total loans	$	4,883	$	1,169	$	6,277	$	12,329	$	1,205,730	$	1,218,059


	December 31, 2015
(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current Loans		Total Loans
Originated loans:
Real estate loans:
One- to four-family first mortgage	$	2,174	$	435	$	890	$	3,499	$	182,381	$	185,880
Home equity loans and lines		87		—		121		208		40,043		40,251
Commercial real estate		438		—		602		1,040		284,997		286,037
Construction and land		117		—		87		204		108,803		109,007
Multi-family residential		—		—		—		—		14,962		14,962

Total real estate loans		2,816		435		1,700		4,951		631,186		636,137

Other loans:
Commercial and industrial		411		15		707		1,133		114,934		116,067
Consumer		533		277		358		1,168		44,473		45,641

Total other loans		944		292		1,065		2,301		159,407		161,708

Total originated loans	$	3,760	$	727	$	2,765	$	7,252	$	790,593	$	797,845

Acquired loans:
Real estate loans:
One- to four-family first mortgage	$	1,976	$	885	$	2,582	$	5,443	$	199,943	$	205,386
Home equity loans and lines		327		40		317		684		53,125		53,809
Commercial real estate		140		6		1,441		1,587		117,755		119,342
Construction and land		592		7		48		647		7,121		7,768
Multi-family residential		—		14		12		26		28,875		28,901

Total real estate loans		3,035		952		4,400		8,387		406,819		415,206

Other loans:
Commercial and industrial		14		7		429		450		8,591		9,041
Consumer		64		4		48		116		2,158		2,274

Total other loans		78		11		477		566		10,749		11,315

Total acquired loans	$	3,113	$	963	$	4,877	$	8,953	$	417,568	$	426,521

Total loans:
Real estate loans:
One- to four-family first mortgage	$	4,150	$	1,320	$	3,472	$	8,942	$	382,324	$	391,266
Home equity loans and lines		414		40		438		892		93,168		94,060
Commercial real estate		578		6		2,043		2,627		402,752		405,379
Construction and land		709		7		135		851		115,924		116,775
Multi-family residential		—		14		12		26		43,837		43,863

Total real estate loans		5,851		1,387		6,100		13,338		1,038,005		1,051,343

Other loans:
Commercial and industrial		425		22		1,136		1,583		123,525		125,108
Consumer		597		281		406		1,284		46,631		47,915

Total other loans		1,022		303		1,542		2,867		170,156		173,023

Total loans	$	6,873	$	1,690	$	7,642	$	16,205	$	1,208,161	$	1,224,366

Excluding Acquired Loans with deteriorated credit quality, as of March 31, 2016 and December 31, 2015, the Company did not have any loans greater than 90 days past due and accruing.

The following is a summary of information pertaining to Originated Loans which were deemed to be impaired loans as of the dates indicated.


	As of Period Ended March 31, 2016
(dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
One- to four-family first mortgage	$	—	$	—	$	—	$	—	$	—
Home equity loans and lines		—		—		—		—		—
Commercial real estate		—		—		—		—		—
Construction and land		—		—		—		—		—
Multi-family residential		—		—		—		—		—
Commercial and industrial		—		—		—		—		—
Consumer		—		—		—		—		—

Total	$	—	$	—	$	—	$	—	$	—

With an allowance recorded:
One- to four-family first mortgage	$	81	$	81	$	34	$	81	$	1
Home equity loans and lines		—		—		—		—		—
Commercial real estate		165		173		86		173		2
Construction and land		—		—		—		—		—
Multi-family residential		—		—		—		—		—
Commercial and industrial		1,053		1,079		418		822		15
Consumer		—		—		—		—		—

Total	$	1,299	$	1,333	$	538	$	1,076	$	18

Total impaired Originated Loans:
One- to four-family first mortgage	$	81	$	81	$	34	$	81	$	1
Home equity loans and lines		—		—		—		—		—
Commercial real estate		165		173		86		173		2
Construction and land		—		—		—		—		—
Multi-family residential		—		—		—		—		—
Commercial and industrial		1,053		1,079		418		822		15
Consumer		—		—		—		—		—

Total	$	1,299	$	1,333	$	538	$	1,076	$	18


	As of Period Ended December 31, 2015
(dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
One- to four-family first mortgage	$	—	$	—	$	—	$	72	$	—
Home equity loans and lines		—		—		—		—		—
Commercial real estate		—		—		—		—		—
Construction and land		—		—		—		—		—
Multi-family residential		—		—		—		—		—
Commercial and industrial		—		—		—		213		—
Consumer		—		—		—		—		—

Total	$	—	$	—	$	—	$	285	$	—

With an allowance recorded:
One- to four-family first mortgage	$	78	$	78	$	34	$	6	$	5
Home equity loans and lines		—		—		—		—		—
Commercial real estate		181		181		86		461		11
Construction and land		—		—		—		—		—
Multi-family residential		—		—		—		—		—
Commercial and industrial		707		707		33		729		39
Consumer		—		—		—		—		—

Total	$	966	$	966	$	153	$	1,196	$	55


Total impaired Originated Loans:
One- to four-family first mortgage	$	78	$	78	$	34	$	78	$	5
Home equity loans and lines		—		—		—		—		—
Commercial real estate		181		181		86		461		11
Construction and land		—		—		—		—		—
Multi-family residential		—		—		—		—		—
Commercial and industrial		707		707		33		942		39
Consumer		—		—		—		—		—

Total	$	966	$	966	$	153	$	1,481	$	55

A summary of information pertaining to nonaccrual loans as of dates indicated is as follows.


	March 31, 2016						December 31, 2015
(dollars in thousands)	Originated		Acquired⁽¹⁾		Total		Originated		Acquired⁽¹⁾		Total
Nonaccrual loans:
One- to four-family first mortgage	$	734	$	2,578	$	3,312	$	928	$	2,649	$	3,577
Home equity loans and lines		471		289		760		121		412		533
Commercial real estate		1,638		1,866		3,504		1,671		2,526		4,197
Construction and land		87		81		168		87		121		208
Multi-family residential		—		—		—		—		763		763
Commercial and industrial		2,304		859		3,163		2,374		610		2,984
Consumer		401		41		442		470		81		551

Total	$	5,635	$	5,714	$	11,349	$	5,651	$	7,162	$	12,813

⁽¹⁾	Nonaccrual acquired loans accounted for under ASC 310-30 totaled $4.2 million and $4.6 million as of March 31, 2016 and December 31, 2015, respectively.

As of March 31, 2016, the Company had no outstanding commitments to lend additional funds to any customer whose loan was classified as impaired.

Troubled Debt Restructurings

During the course of its lending operations, the Company may periodically grant concessions to its customers in an attempt to protect as much of its investment as possible and to minimize risk of loss. These concessions may include restructuring the terms of a customer loan to alleviate the burden of the customer’s near-term cash requirements. The Company adopted the provisions of ASU No. 2011-02, Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring, which provides clarification on the determination of whether loan restructurings are considered troubled debt restructurings (“TDRs”). In accordance with the ASU, in order to be considered a TDR, the Company must conclude that the restructuring of a loan to a borrower who is experiencing financial difficulties constitutes a “concession”. The Company defines a concession as a modification of existing terms granted to a borrower for economic or legal reasons related to the borrower’s financial difficulties that the Company would otherwise not consider. The concession is either granted through an agreement with the customer or is imposed by a court or by a law. Concessions include modifying original loan terms to reduce or defer cash payments required as part of the loan agreement, including but not limited to:

•

a reduction of the stated interest rate for the remaining original life of the debt,

•

an extension of the maturity date or dates at an interest rate lower than the current market rate for new debt with similar risk characteristics,

•

a reduction of the face amount or maturity amount of the debt, or

•

a reduction of accrued interest receivable on the debt.

In its determination of whether the customer is experiencing financial difficulties, the Company considers numerous indicators, including, but not limited to:

•

whether the customer is currently in default on its existing loan, or is in an economic position where it is probable the customer will be in default on its loan in the foreseeable future without a modification,

•

whether the customer has declared or is in the process of declaring bankruptcy,

•

whether there is substantial doubt about the customer’s ability to continue as a going concern,

•

whether, based on its projections of the customer’s current capabilities, the Company believes the customer’s future cash flows will be insufficient to service the debt, including interest, in accordance with the contractual terms of the existing agreement for the foreseeable future, and

•

whether, without modification, the customer cannot obtain sufficient funds from other sources at an effective interest rate equal to the current market rate for similar debt for a non-troubled debtor.

If the Company concludes that both a concession has been granted and the concession was granted to a customer experiencing financial difficulties, the Company identifies the loan as a TDR. For purposes of the determination of an allowance for loan losses on TDRs, such loans are reviewed for specific impairment in accordance with the Company’s allowance for loan loss methodology. If it is determined that losses are probable on such TDRs, either because of delinquency or other credit quality indicators, the Company specifically allocates a portion of the allowance for loan losses to these loans.

Information about the Company’s TDRs is presented in the following tables.


	As of March 31, 2016
(dollars in thousands)	Current		Past Due Greater Than 30 Days		Nonaccrual TDRs		Total TDRs
Originated loans:
Real estate loans:
One- to four-family first mortgage	$	280	$	—	$	212	$	492
Home equity loans and lines		367		—		287		654
Commercial real estate		106		—		1,042		1,148
Construction and land		30		—		87		117
Multi-family residential		—		—		—		—

Total real estate loans		783		—		1,628		2,411

Other loans:
Commercial and industrial		—		—		1,911		1,911
Consumer		—		—		205		205

Total other loans		—		—		2,116		2,116

Total originated loans	$	783	$	—	$	3,744	$	4,527

Acquired loans:
Real estate loans:
One- to four-family first mortgage	$	411	$	72	$	393	$	876
Home equity loans and lines		—		—		—		—
Commercial real estate		—		—		1,187		1,187
Construction and land		—		—		13		13
Multi-family residential		—		—		—		—

Total real estate loans		411		72		1,593		2,076

Other loans:
Commercial and industrial		—		—		—		—
Consumer		—		—		—		—

Total other loans		—		—		—		—

Total acquired loans	$	411	$	72	$	1,593	$	2,076


Total loans:
Real estate loans:
One- to four-family first mortgage	$	691	$	72	$	605	$	1,368
Home equity loans and lines		367		—		287		654
Commercial real estate		106		—		2,229		2,335
Construction and land		30		—		100		130
Multi-family residential		—		—		—		—

Total real estate loans		1,194		72		3,221		4,487

Other loans:
Commercial and industrial		—		—		1,911		1,911
Consumer		—		—		205		205

Total other loans		—		—		2,116		2,116

Total loans	$	1,194	$	72	$	5,337	$	6,603


	As of December 31, 2015
(dollars in thousands)	Current		Past Due Greater Than 30 Days		Nonaccrual TDRs		Total TDRs
Originated loans:
Real estate loans:
One- to four-family first mortgage	$	281	$	—	$	38	$	319
Home equity loans and lines		383		—		3		386
Commercial real estate		107		—		1,069		1,176
Construction and land		—		—		87		87
Multi-family residential		—		—		—		—

Total real estate loans		771		—		1,197		1,968

Other loans:
Commercial and industrial		—		—		2,374		2,374
Consumer		27		—		142		169

Total other loans		27		—		2,516		2,543

Total originated loans	$	798	$	—	$	3,713	$	4,511

Acquired loans:
Real estate loans:
One- to four-family first mortgage	$	419	$	73	$	15	$	507
Home equity loans and lines		—		—		—		—
Commercial real estate		—		—		1,192		1,192
Construction and land		—		—		52		52
Multi-family residential		—		—		—		—

Total real estate loans		419		73		1,259		1,751

Other loans:
Commercial and industrial		—		—		—		—
Consumer		—		—		—		—

Total other loans		—		—		—		—

Total acquired loans	$	419	$	73	$	1,259	$	1,751

Total loans:
Real estate loans:
One- to four-family first mortgage	$	700	$	73	$	53	$	826
Home equity loans and lines		383		—		3		386
Commercial real estate		107		—		2,261		2,368
Construction and land		—		—		139		139
Multi-family residential		—		—		—		—

Total real estate loans		1,190		73		2,456		3,719

Other loans:
Commercial and industrial		—		—		2,374		2,374
Consumer		27		—		142		169

Total other loans		27		—		2,516		2,543

Total loans	$	1,217	$	73	$	4,972	$	6,262

None of the above referenced TDRs defaulted subsequent to the restructuring through the date the financial statements were issued. The Company restructured, as a TDR, loans totaling $1.8 million during the first quarter of 2016.

6. Fair Value Measurements and Disclosures

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company groups assets and liabilities measured or disclosed at fair value in three levels as required by ASC 820, Fair Value Measurements and Disclosures. Under this guidance, fair value should be based on the assumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritizes the inputs used to develop those assumptions and measure fair value. The hierarchy requires companies to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels used to measure fair value are as follows:

•

Level 1 – Quoted prices in active markets for identical assets or liabilities.

•

Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level that is significant to the fair value measurement. Management reviews and updates the fair value hierarchy classifications of the Company’s assets and liabilities quarterly.

Recurring Basis

Investment Securities Available for Sale

Fair values of investment securities available for sale are primarily measured using information from a first-party pricing service. This pricing service provides pricing information by utilizing pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities bids, offers and other reference data from market research publications. If quoted prices are available in an active market, investment securities are classified as Level 1 measurements. If quoted prices are not available in an active market, fair values are estimated primarily by the use of pricing models. Level 2 investment securities are primarily comprised of mortgage-backed securities issued by government agencies and U.S. government-sponsored enterprises. In certain cases, where there is limited or less transparent information provided by the Company’s first-party pricing service, fair value is estimated by the use of secondary pricing services or through the use of non-binding first-party broker quotes. Investment securities are classified within Level 3 when little or no market activity supports the fair value.

Management primarily identifies investment securities which may have traded in illiquid or inactive markets by identifying instances of a significant decrease in the volume and frequency of trades, relative to historical levels, as well as instances of a significant widening of the bid-ask spread in the brokered markets. Investment securities that are deemed to have been trading in illiquid or inactive markets may require the use of significant

unobservable inputs. For example, management may use quoted prices for similar investment securities in the absence of a liquid and active market for the investment securities being valued. As of March 31, 2016, management did not make adjustments to prices provided by the first-party pricing service as a result of illiquid or inactive markets.

The following tables present the balances of assets and liabilities measured for fair value on a recurring basis as of March 31, 2016 and December 31, 2015.


	Fair Value Measurements Using
(dollars in thousands)	March 31, 2016		Level 1		Level 2		Level 3
Available for sale securities:
U.S. agency mortgage-backed	$	137,697	$	—	$	137,697	$	—
Non-U.S. agency mortgage-backed		5,821		—		5,821		—
Municipal bonds		22,721		—		22,721		—
U.S. government agency		12,294		—		12,294		—

Total	$	178,533	$	—	$	178,533	$	—


	Fair Value Measurements Using
(dollars in thousands)	December 31, 2015		Level 1		Level 2		Level 3
Available for sale securities:
U.S. agency mortgage-backed	$	135,478	$	—	$	135,478	$	—
Non-U.S. agency mortgage-backed		6,065		—		6,065		—
Municipal bonds		22,933		—		22,933		—
U.S. government agency		12,286		—		12,286		—

Total	$	176,762	$	—	$	176,762	$	—

The Company did not record any liabilities at fair value for which measurement of the fair value was made on a recurring basis.

Nonrecurring Basis

In accordance with the provisions of ASC 310, Receivables, the Company records loans considered impaired at fair value. A loan is considered impaired if it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Fair value is measured at the fair value of the collateral for collateral-dependent loans. For non-collateral-dependent loans, fair value is measured by present valuing expected future cash flows. Impaired loans are classified as Level 3 assets when measured using appraisals from external parties of the collateral less any prior liens and when there is no observable market price. Repossessed assets are initially recorded at fair value less estimated costs to sell. The fair value of repossessed assets is based on property appraisals and an analysis of similar properties available. As such, the Company classifies repossessed assets as Level 3 assets.

Acquired loans and the FDIC loss sharing receivable are measured on a nonrecurring basis using significant unobservable inputs (Level 3).

The Company has segregated all financial assets that are measured at fair value on a nonrecurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below.


			Fair Value Measurements Using
(dollars in thousands)	March 31, 2016		Level 1		Level 2		Level 3
Assets
Acquired loans with deteriorated credit quality	$	17,272	$	—	$	—	$	17,272
Impaired loans, excluding acquired loans		760		—		—		760
Repossessed assets		2,379		—		—		2,379

Total	$	20,411	$	—	$	—	$	20,411


			Fair Value Measurements Using
(dollars in thousands)	December 31, 2015		Level 1		Level 2		Level 3
Assets
Acquired loans with deteriorated credit quality	$	19,859	$	—	$	—	$	19,859
Impaired loans, excluding acquired loans		813		—		—		813
Repossessed assets		3,128		—		—		3,128

Total	$	23,800	$	—	$	—	$	23,800

ASC 820, Fair Value Measurements and Disclosures, requires the disclosure of each class of financial instruments for which it is practicable to estimate. The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. ASC 820 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statements. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates included herein are based on existing on- and off-balance-sheet financial instruments without attempting to estimate the value of anticipated future business and the fair value of assets and liabilities that are not required to be recorded or disclosed at fair value like premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

The carrying value of cash and cash equivalents and interest-bearing deposits in banks approximate their fair value.

The fair value for investment securities is determined from quoted market prices when available. If a quoted market price is not available, fair value is estimated using first party pricing services or quoted market prices of securities with similar characteristics.

The carrying value of mortgage loans held for sale approximates their fair value.

The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturity.

The cash surrender value of bank-owned life insurance (“BOLI”) approximates its fair value.

The fair value of customer deposits, excluding certificates of deposit, is the amount payable on demand. The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities.

The fair value of short-term FHLB advances is the amount payable at maturity. The fair value of long-term FHLB advances is estimated by discounting the future cash flows using the rates currently offered for advances of similar maturities.

The following table presents estimated fair values of the Company’s financial instruments as of the dates indicated.


			Fair Value Measurements at March 31, 2016
(dollars in thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	17,960	$	17,960	$	17,960	$	—	$	—
Interest-bearing deposits in banks		4,654		4,654		4,654		—		—
Investment securities available for sale		178,533		178,533		—		178,533		—
Investment securities held to maturity		13,846		14,145		—		14,145		—
Mortgage loans held for sale		11,504		11,504		—		11,504		—
Loans, net		1,218,059		1,221,034		—		—		1,221,034
Cash surrender value of BOLI		19,788		19,788		19,788		—		—
Financial Liabilities
Deposits	$	1,243,699	$	1,244,461	$	—	$	1,244,461	$	—
Short-term FHLB advances		28,158		28,158		28,158		—		—
Long-term FHLB advances		84,853		85,395		—		85,395		—

			Fair Value Measurements at December 31, 2015
(dollars in thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	24,798	$	24,798	$	24,798	$	—	$	—
Interest-bearing deposits in banks		5,144		5,144		5,144		—		—
Investment securities available for sale		176,762		176,762		—		176,762		—
Investment securities held to maturity		13,927		14,121		—		14,121		—
Mortgage loans held for sale		5,651		5,651		—		5,651		—
Loans, net		1,214,818		1,216,370		—		—		1,216,370
Cash surrender value of BOLI		19,667		19,667		19,667		—		—
Financial Liabilities
Deposits	$	1,244,217	$	1,243,698	$	—	$	1,243,698	$	—
Short-term FHLB advances		39,939		39,939		39,939		—		—
Long-term FHLB advances		85,213		84,711		—		84,711		—

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of Home Bancorp, Inc. (the “Company”) and its wholly owned subsidiary, Home Bank, N. A. (the “Bank”), from December 31, 2015 through March 31, 2016 and on its results of operations for the three months ended March 31, 2016 and March 31, 2015. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this quarterly report on Form 10-Q, particularly the consolidated financial statements and related notes appearing in Item 1.

Forward-Looking Statements

To the extent that statements in this Form 10-Q relate to future plans, objectives, financial results or performance of the Company or Bank, these statements are deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, which are based on management’s current information, estimates and assumptions and the current economic environment, are generally identified by the use of words such as “plan”, “believe”, “expect”, “intend”, “anticipate”, “estimate”, “project” or similar expressions, or by future or conditional terms such as “will”, “would”, “should”, “could”, “may”, “likely”, “probably”, or “possibly”. The Company’s or the Bank’s actual strategies and results in future periods may differ materially from those currently expected due to various risks and uncertainties. Factors that may cause actual results to differ materially from these forward-looking statements include, but are not limited to, the risk factors described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities Exchange Commission (“SEC”) for the year ended December 31, 2015. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

EXECUTIVE OVERVIEW

During the first quarter of 2016, the Company earned $3.3 million, an increase of $502,000, or 17.6%, compared to the first quarter of 2015. Diluted earnings per share for the first quarter of 2016 were $0.47, an increase of $0.06, or 14.6%, compared to the first quarter of 2015. The three months ended March 31, 2016 included $398,000 of merger-related expenses net of taxes related to the acquisition of Louisiana Bancorp, Inc. (“Louisiana Bancorp”). Excluding merger-related expenses, net income for the first quarter of 2016 increased 31.6% compared to the first quarter of 2015 (see the “Non-GAAP Reconciliation” on page 26). Excluding merger-related expenses, diluted earnings per share for the first quarter of 2016 increased 29.3% compared to the first quarter of 2015.

Key components of the Company’s performance during the three months ended March 31, 2016 include:

•

Assets totaled $1.5 billion as of March 31, 2016, down $7.8 million, or 0.5%, from December 31, 2015.

•

Investment securities totaled $192.4 million as of March 31, 2016, an increase of $1.7 million, or 0.9%, from December 31, 2015.

•

Loans as of March 31, 2016 were $1.2 billion, a decrease of $6.3 million, or 0.5%, from December 31, 2015. Growth in originated loans of 10.0% (on an annualized basis) was offset by declines in acquired loans.

•

Deposits as of March 31, 2016 were $1.2 billion, a decrease of $518,000, or 0.04%, from December 31, 2015. Core deposits (i.e., checking, savings, and money market accounts) totaled $972.3 million as of March 31, 2016, an increase of $4.9 million, or 0.5%, from December 31, 2015.

•

Interest income increased $3.7 million, or 28.1%, in the first quarter of 2016, compared to the first quarter of 2015. Interest income increased primarily due to higher loan volume as a result of the Louisiana Bancorp acquisition in the third quarter of 2015.

•

Interest expense increased $513,000, or 63.2%, in the first quarter of 2016 compared to the first quarter of 2015. Interest expense increased primarily due to a higher volume of interest-bearing liabilities as a result of the Louisiana Bancorp acquisition.

•

The provision for loan losses totaled $850,000 for the first quarter of 2016, an increase of $312,000, or 57.9%, compared to the first quarter of 2015. Of the $850,000 in provision for the first quarter of 2016, $461,000 was associated with one energy-related borrower. At March 31, 2016, the Company’s ratio of the allowance for loan losses to total loans was 0.85%, compared to 0.90% at March 31, 2015. Excluding acquired loans, the ratio of the allowance for loan losses to total loans was 1.20% at March 31, 2016, compared to 1.07% at March 31, 2015. The Company recorded virtually no net loan charge-offs during the first quarter of 2016, compared to net loan charge-offs of $26,000 during the first three months of 2015.

•

Noninterest income for the first quarter of 2016 increased $489,000, or 23.5%, compared to the first quarter of 2015, due primarily to increases in other income and service fees and charges, which were partially offset by a decrease in gains on the sale of mortgage loans.

•

Noninterest expense for the first quarter of 2016 increased $2.6 million, or 27.0%, compared to the first quarter of 2015. Noninterest expense includes merger-related expenses related to the acquisition of Louisiana Bancorp of $613,000 for the three months ended March 31, 2016. Excluding merger-related expenses, noninterest expense increased $2.0 million, or 20.7%, for the first quarter of 2016 compared to the first quarter of 2015. Excluding merger-related expenses, the increase in noninterest expense in the first quarter of 2016 compared to the first quarter of 2015 relates primarily to the growth of the Company due to the addition of Louisiana Bancorp branches and employees.

The discussion and analysis contains financial information prepared other than in accordance with generally accepted accounting principles (“GAAP”). The Company uses these non-GAAP financial measures in their analysis of the Company’s performance. Management believes that the non-GAAP information provides useful data in understanding the Company’s operations and in comparing the Company’s results of operation to peers. This non-GAAP information should be considered in addition to the Company’s financial information prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. Reconciliation of GAAP to non-GAAP disclosures is included in the table below.

Non-GAAP Reconciliation


	For the Three Months Ended
(dollars in thousands)	March 31, 2016		March 31, 2015
Reported noninterest expense	$	12,341	$	9,719
Less: Merger-related expenses		613		—

Non-GAAP noninterest expense	$	11,728	$	9,719

Reported net income	$	3,350	$	2,848
Add: Merger-related expenses (after tax)		398		—

Non-GAAP net income	$	3,748	$	2,848

Diluted EPS	$	0.47	$	0.41
Add: Merger-related expenses		0.06		—

Non-GAAP diluted EPS	$	0.53	$	0.41

FINANCIAL CONDITION

Loans, Asset Quality and Allowance for Loan Losses

Loans – Loans outstanding as of March 31, 2016 were $1.2 billion, a decrease of $6.3 million, or 0.5%, from December 31, 2015. Growth in originated loans of 10% (on an annualized basis) was offset by declines in acquired loans. Loan decreases during the first quarter of 2016 related primarily to multi-family residential (down $6.4 million), residential mortgages (down $3.0 million) and consumer loans (down $1.5 million). Commercial real estate and home equity loans increased by $2.8 million and $2.0 million, respectively, during the quarter.

The following table summarizes the composition of the Company’s loan portfolio as of the dates indicated.


	March 31,		December 31,		Increase/(Decrease)
(dollars in thousands)	2016		2015		Amount			Percent
Real estate loans:
One- to four-family first mortgage	$	388,290	$	391,266	$	(2,976	)		(0.8	)%
Home equity loans and lines		96,056		94,060		1,996			2.1
Commercial real estate		408,166		405,379		2,787			0.7
Construction and land		117,247		116,775		472			0.4
Multi-family residential		37,427		43,863		(6,436	)		(14.7	)

Total real estate loans		1,047,186		1,051,343		(4,157	)		(0.4	)

Other loans:
Commercial and industrial		124,463		125,108		(645	)		(0.5	)
Consumer		46,410		47,915		(1,505	)		(3.1	)

Total other loans		170,873		173,023		(2,150	)		(1.2	)

Total loans	$	1,218,059	$	1,224,366	$	(6,307	)		(0.5	)%

The balance of loans to companies in the energy sector totaled $36.8 million, or 3.0% of outstanding loans, at March 31, 2016. We also had unfunded loan commitments to energy companies amounting to $8.9 million at such date. At March 31, 2016, 91% of the balance of our energy-related loans were performing in accordance with their original loan agreements. Of the remaining 9%, $2.1 million has been restructured and are paying in accordance with the restructured terms. The Company holds no shared national credits.

The following table illustrates the composition of the Company’s energy-related loans at March 31, 2016.


(dollars in thousands)	Total		Percent
Real estate loans:
Commercial real estate	$	16,027		44	%
Construction and land		393		1

Total real estate loans		16,420		45

Commercial and industrial:
Equipment		6,288		17
Marine vessels		6,066		16
Accounts receivable		5,050		14
Unsecured		1,707		5
Other		1,238		3

Total commercial and industrial loans		20,349		55

Total energy-related loans	$	36,769		100	%

Asset Quality – One of management’s key objectives has been, and continues to be, maintaining a high level of asset quality. In addition to maintaining credit standards for new loan originations, we proactively monitor loans and collection and workout processes of delinquent or problem loans. When a borrower fails to make a scheduled payment, we attempt to cure the deficiency by making personal contact with the borrower. Initial contacts are generally made within 10 days after the date payment is due. In most cases, deficiencies are promptly resolved. If the delinquency continues, late charges are assessed and additional efforts are made to collect the deficiency. All loans which are designated as “special mention,” classified or which are delinquent 90 days or more are reported to the Board of Directors of the Bank monthly. For loans where the collection of principal or interest payments is doubtful, the accrual of interest income ceases. It is our policy, with certain limited exceptions, to discontinue accruing interest and reverse any interest accrued on any loan which is 90 days or more past due. On occasion, this action may be taken earlier if the financial condition of the borrower raises significant concern with regard to their ability to service the debt in accordance with the terms of the loan agreement. Interest income is not accrued on these loans until the borrower’s financial condition and payment record demonstrate an ability to service the debt.

Repossessed assets which are acquired as a result of foreclosure are classified as repossessed assets until sold. First party property valuations are obtained at the time the asset is repossessed and periodically until the property is liquidated. Repossessed assets are recorded at the lesser of the balance of the loan or fair value less estimated selling costs, at the date acquired or upon receiving new property valuations. Costs associated with acquiring and improving a foreclosed property are usually capitalized to the extent that the carrying value does not exceed fair value less estimated selling costs. Holding costs are charged to expense. Gains and losses on the sale of repossessed assets are charged to operations, as incurred.

An impaired loan generally is one for which it is probable, based on current information, that the lender will not collect all the amounts due under the contractual terms of the loan. Large groups of smaller balance, homogeneous loans are collectively evaluated for impairment. Loans collectively evaluated for impairment include smaller balance commercial loans, residential real estate loans and consumer loans. These loans are evaluated as a group because they have similar characteristics and performance experience. Larger (i.e., loans with balances of $100,000 or greater) commercial real estate loans, multi-family residential loans, construction and land loans and commercial and industrial loans are individually evaluated for impairment. First party property valuations are obtained at the time of origination for real estate secured loans. When a determination is made that a loan has deteriorated to the point of becoming a problem loan, updated valuations may be ordered to help determine if there is impairment, which may lead to a recommendation for partial charge off or appropriate allowance allocation. Property valuations are ordered through, and are reviewed by, an appraisal officer. The Company typically orders an “as is” valuation for collateral property if the loan is in a criticized loan classification. The Board of Directors is provided with monthly reports on impaired loans. As of March 31, 2016 and December 31, 2015, loans individually evaluated for impairment, excluding acquired loans, amounted to $1.3 million and $966,000, respectively. As of March 31, 2016 and December 31, 2015, acquired impaired loans, loans considered to have deteriorated credit quality at the time of acquisition, amounted to $17.4 million and $20.0 million, respectively. As of March 31, 2016 and December 31, 2015, substandard loans, excluding acquired loans, amounted to $7.3 million and $7.7 million, respectively. The amount of the allowance for loan losses allocated to impaired or substandard loans originated by Home Bank totaled $538,000 as of March 31, 2016 and $153,000 as of December 31, 2015. The amount of allowance for loan losses allocated to acquired loans totaled $580,000 and $373,000, respectively, at such dates. There were no assets classified as doubtful or loss as of March 31, 2016 or December 31, 2015.

Federal regulations and our policies require that we utilize an internal asset classification system as a means of reporting problem and potential problem assets. We have incorporated an internal asset classification system, substantially consistent with Federal banking regulations, as a part of our credit monitoring system. Federal banking regulations set forth a classification scheme for problem and potential problem assets as “substandard,” “doubtful” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.

A bank’s determination as to the classification of its assets and the amount of its valuation allowances is subject to review by Federal bank regulators which can order the establishment of additional general or specific loss allowances. The Federal banking agencies have adopted an interagency policy statement on the allowance for loan and lease losses. The policy statement provides guidance for financial institutions on both the responsibilities of management for the assessment and establishment of allowances and guidance for banking agency examiners to use in determining the adequacy of general valuation guidelines. Generally, the policy statement recommends that institutions have effective systems and controls to identify, monitor and address asset quality problems; that management analyzes all significant factors that affect the collectability of the portfolio in a reasonable manner; and that management establishes acceptable allowance evaluation processes that meet the objectives set forth in the policy statement. Our management believes that, based on information currently available, our allowance for loan losses is maintained at a level which covers all known and inherent losses that are both probable and reasonably estimable as of each reporting date. However, actual losses are dependent upon future events and, as such, further additions to the level of allowance for loan losses may become necessary.

Real estate, or other collateral, which is acquired as a result of foreclosure is classified as a foreclosed asset until sold. Foreclosed assets are recorded at the lesser of the balance of the loan or fair value less estimated selling costs, at the date acquired or upon receiving new property valuations. Holding costs are charged to expense. Gains and losses on the sale of real estate owned are charged to operations, as incurred.

The following table sets forth the composition of the Company’s nonperforming assets (“NPAs”) and performing troubled debt restructurings as of the dates indicated.


	March 31, 2016							December 31, 2015
(dollars in thousands)	Originated		Acquired⁽¹⁾		Total			Originated		Acquired⁽¹⁾		Total
Nonaccrual loans:
Real estate loans:
One- to four-family first mortgage	$	734	$	2,578	$	3,312		$	928	$	2,649	$	3,577
Home equity loans and lines		471		289		760			121		412		533
Commercial real estate		1,638		1,866		3,504			1,671		2,526		4,197
Construction and land		87		81		168			87		121		208
Multi-family residential		—		—		—			—		763		763
Other loans:
Commercial and industrial		2,304		859		3,163			2,374		610		2,984
Consumer		401		41		442			470		81		551

Total nonaccrual loans		5,635		5,714		11,349			5,651		7,162		12,813
Accruing loans 90 days or more past due		—		—		—			—		—		—

Total nonperforming loans		5,635		5,714		11,349			5,651		7,162		12,813
Foreclosed assets		180		2,199		2,379			116		3,012		3,128

Total nonperforming assets		5,815		7,913		13,728			5,767		10,174		15,941
Performing troubled debt restructurings		783		483		1,266			798		492		1,290

Total nonperforming assets and troubled debt restructurings	$	6,598	$	8,396	$	14,994		$	6,565	$	10,666	$	17,231

Nonperforming loans to total loans						0.93	%						1.05	%
Nonperforming loans to total assets						0.73	%						0.83	%
Nonperforming assets to total assets						0.89	%						1.03	%

⁽¹⁾

Includes $1.5 million and $2.6 million in acquired loans accounted for under ASC 310-30 at March 31, 2016 and December 31, 2015, respectively. Excluding acquired loans and assets, ratios for nonperforming loans to total loans, nonperforming loans to total assets and nonperforming assets to total assets were 0.69%, 0.49% and 0.51%, respectively, at March 31, 2016.

The Company recorded virtually no net loan charge-offs during the first quarter of 2016, compared to net loan charge-offs of $26,000 during the first three months of 2015.

Allowance for Loan Losses – The allowance for loan losses is established through provisions for loan losses. The Company maintains the allowance at a level believed, to the best of management’s knowledge, to cover all known and inherent losses in the portfolio that are both probable and reasonable to estimate at each reporting date. Management reviews the allowance for loan losses at least quarterly in order to identify those inherent losses and to assess the overall collection probability for the loan portfolio. The evaluation process includes, among other things, an analysis of delinquency trends, nonperforming loan trends, the level of charge-offs and recoveries, prior loss experience, total loans outstanding, the volume of loan originations, the type, size and geographic concentration of loans, the value of collateral securing loans, the borrower’s ability to repay and repayment performance, the number of loans requiring heightened management oversight, economic conditions and industry experience. Based on this evaluation, management assigns risk ratings to segments of the loan portfolio. Such risk ratings are periodically reviewed by management and revised as deemed appropriate. These efforts are supplemented by reviews and validations performed by independent loan reviewers. The results of the reviews are reported to the Audit Committee of the Board of Directors. The establishment of the allowance for loan losses is significantly affected by management judgment. There is likelihood that different amounts would be reported under different conditions or assumptions. Federal regulatory agencies, as an integral part of their examination process, periodically review our allowance for loan losses. Such agencies may require management to make additional provisions for estimated loan losses based upon judgments different from those of management.

With respect to acquired loans, the Company follows the reserve standard set forth in ASC 310, Receivables. At acquisition, the Company reviews each loan to determine whether there is evidence of deterioration in credit quality since origination and if it is probable that the Company will be unable to collect all amounts due according to the loan’s contractual terms. The Company considers expected prepayments and estimates the amount and timing of undiscounted expected principal, interest and other cash flows for each loan pool meeting the criteria above, and determines the excess of the loan pool’s scheduled contractual principal and interest payments in excess of cash flows expected at acquisition as an amount that should not be accreted (nonaccretable difference). The remaining amount, representing the excess of the pool’s cash flows expected to be collected over the fair value, is accreted into interest income over the remaining life of the pool (accretable yield). The Company records a discount on these loans at acquisition to record them at their estimated fair values. As a result, acquired loans subject to ASC 310 are excluded from the calculation of the allowance for loan losses as of the acquisition date. See Note 5 to the Unaudited Consolidated Financial Statements for additional information concerning our allowance for acquired loans.

Acquired loans were recorded at their acquisition date fair value, which was based on expected cash flows and included an estimation of expected future loan losses. Under current accounting principles, additional losses after the acquisition date are reflected as a provision to the allowance for loan losses. As of March 31, 2016 and December 31, 2015, $128,000 of our allowance for loan losses was allocated to acquired loans with deteriorated credit quality.

We will continue to monitor and modify our allowance for loan losses as conditions warrant. No assurance can be given that our level of allowance for loan losses will cover all of the inherent losses on our loans or that future adjustments to the allowance for loan losses will not be necessary if economic and other conditions differ substantially from the conditions used by management to determine the current level of the allowance for loan losses.

The following table presents the activity in the allowance for loan losses during the first three months of 2016.


(dollars in thousands)	Originated			Acquired		Total
Balance, December 31, 2015	$	9,174		$	373	$	9,547
Provision charged to operations		737			113		850
Loans charged off		(106	)		—		(106	)
Recoveries on charged off loans		12			94		106

Balance, March 31, 2016	$	9,817		$	580	$	10,397

At March 31, 2016, the Company’s ratio of allowance for loan losses to total loans was 0.85%, compared to 0.78% and 0.90% at December 31, 2015 and March 31, 2015, respectively. Excluding acquired loans, the ratio of allowance for loan losses to total loans was 1.20% at March 31, 2016, compared to 1.15% and 1.07% at December 31, 2015 and March 31, 2015, respectively.

The allowance for loan losses to loans ratio directly attributable to energy loans totaled 3.08% at March 31, 2016. Over the past 15 months, the Company has increased its overall allowance for loan losses to loans ratio on originated loans from 1.04% at December 31, 2014 to 1.20% at March 31, 2016 due in part to our assessment of the potential direct and indirect impact of low energy prices.

Investment Securities

The Company’s investment securities portfolio totaled $192.4 million as of March 31, 2016, an increase of $1.7 million, or 0.9%, from December 31, 2015. As of March 31, 2016, the Company had a net unrealized gain on its available for sale investment securities portfolio of $2.7 million, compared to $1.3 million as of December 31, 2015. The investment securities portfolio had a modified duration of 3.0 and 3.3 years at March 31, 2016 and December 31, 2015, respectively.

The following table summarizes activity in the Company’s investment securities portfolio during the first three months of 2016.


(dollars in thousands)	Available for Sale			Held to Maturity
Balance, December 31, 2015	$	176,762		$	13,927
Purchases		7,969			—
Sales		—			—
Principal payments and calls		(7,306	)		—
Accretion of discounts and amortization of premiums, net		(289	)		(81	)
Increase in market value		1,397			—

Balance, March 31, 2016	$	178,533		$	13,846

Funding Sources

Deposits – Deposits totaled $1.2 billion as of March 31, 2016 and December 31, 2015. Core deposits totaled $972.3 million as of March 31, 2016, an increase of $4.9 million, or 0.5%, compared to December 31, 2015.

The following table sets forth the composition of the Company’s deposits at the dates indicated.


	March 31,		December 31,		Increase (Decrease)
(dollars in thousands)	2016		2015		Amount			Percent
Demand deposit	$	292,411	$	296,617	$	(4,206	)		(1.4	)%
Savings		111,265		109,393		1,872			1.7
Money market		275,290		293,637		(18,347	)		(6.2	)
NOW		293,327		267,707		25,620			9.6
Certificates of deposit		271,406		276,863		(5,457	)		(2.0	)

Total deposits	$	1,243,699	$	1,244,217	$	(518	)		0.1	%

Federal Home Loan Bank Advances – Short-term FHLB advances decreased $11.8 million, or 29.5% from $40.0 million as of December 31, 2015 to $28.2 million as of March 31, 2016. Long-term FHLB advances totaled $84.9 million as of March 31, 2016, a decrease of $360,000, or 0.4% compared December 31, 2015.

Shareholders’ Equity – Shareholders’ equity increased $4.1 million, or 2.5%, from $165.0 million as of December 31, 2015 to $169.2 million as of March 31, 2016.

As of March 31, 2016, the Company and the Bank had regulatory capital that were well in excess of regulatory requirements. The following table details the Company’s actual levels and current regulatory capital requirements as of March 31, 2016.


	Actual					Required for Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
(dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Company
Tier 1 risk-based capital	$	153,864		13.32	%	$	69,333		6.00	%		N/A		N/A
Total risk-based capital		164,261		14.22			92,444		8.00			N/A		N/A
Tier 1 leverage capital		153,864		10.05			46,222		4.00			N/A		N/A
Bank
Common equity Tier 1 capital (to risk-weighted assets)	$	137,219		11.89	%	$	51,951		4.50	%	$	75,040		6.50	%
Tier 1 risk-based capital		137,219		11.89			69,267		6.00			92,357		8.00
Total risk-based capital		147,616		12.79			92,357		8.00			115,446		10.00
Tier 1 leverage capital		137,219		8.97			46,178		4.00			57,723		5.00

LIQUIDITY AND ASSET/LIABILITY MANAGEMENT

Liquidity Management

Liquidity management encompasses our ability to ensure that funds are available to meet the cash flow requirements of depositors and borrowers, while also ensuring adequate cash flow exists to meet the Company’s needs, including operating, strategic and capital. The Company develops its liquidity management strategies as part of its overall asset/liability management process. Our primary sources of funds are from deposits, amortization of loans, loan prepayments and the maturity of loans, investment securities and other investments, and other funds provided from operations. While scheduled payments from the amortization of loans and investment securities and maturing investment securities are relatively predictable sources of funds, deposit flows and loan prepayments can be greatly influenced by general interest rates, economic conditions and competition. The Company also maintains excess funds in short-term, interest-bearing assets that provide additional liquidity. As of March 31, 2016, cash and cash equivalents totaled $18.0 million. At such date, investment securities available for sale totaled $178.5 million.

The Company uses its liquidity to fund existing and future loan commitments, to fund maturing certificates of deposit and demand deposit withdrawals, to invest in other interest-earning assets, and to meet operating expenses. As of March 31, 2016, certificates of deposit maturing within the next 12 months totaled $136.3 million. Based upon historical experience, the Company anticipates that a significant portion of the maturing certificates of deposit will be redeposited with us. For the three months ended March 31, 2016, the average balance of outstanding FHLB advances was $126.0 million. As of March 31, 2016, the Company had $113.0 million in total outstanding FHLB advances and had $489.6 million in additional FHLB advances available.

In addition to cash flow from loan and securities payments and prepayments as well as from sales of securities available for sale, the Company has significant borrowing capacity available to fund liquidity needs. In recent years, the Company has utilized borrowings as a cost efficient addition to deposits as a source of funds. Borrowings consist of advances from the FHLB of Dallas, of which the Company is a member. Under terms of the collateral agreement with the FHLB, the Company pledges residential mortgage loans and investment securities as well as the Company’s stock in the FHLB as collateral for such advances.

Asset/Liability Management

The objective of asset/liability management is to implement strategies for the funding and deployment of the Company’s financial resources that are expected to maximize soundness and profitability over time at acceptable levels of risk. Interest rate sensitivity is the potential impact of changing rate environments on both net interest income and cash flows. The Company measures its interest rate sensitivity over the near term primarily by running net interest income simulations.

Our interest rate sensitivity also is monitored by management through the use of a model which generates estimates of the change in its net interest income over a range of interest rate scenarios. Based on the Company’s interest rate risk model, the table below sets forth the results of immediate and sustained changes in interest rates as of March 31, 2016.


Shift in Interest Rates (in bps)	% Change in Projected Net Interest Income
+300		0.9	%
+200		0.9
+100		0.6

The actual impact of changes in interest rates will depend on many factors. These factors include the Company’s ability to achieve expected growth in earning assets and maintain a desired mix of earning assets and interest-bearing liabilities, the actual timing of asset and liability repricings, the magnitude of interest rate changes and corresponding movement in interest rate spreads, and the level of success of asset/liability management strategies.

Off-Balance Sheet Activities

To meet the financing needs of its customers, the Bank issues financial instruments which represent conditional obligations that are not recognized, wholly or in part, in the statements of financial condition. These financial instruments include commitments to extend credit and standby letters of credit. Such instruments expose the Company to varying degrees of credit and interest rate risk in much the same way as funded loans. The same credit policies are used in these commitments as for on-balance sheet instruments. The Company’s exposure to credit losses from these financial instruments is represented by their contractual amounts.

The following table summarizes our outstanding commitments to originate loans and to advance additional amounts pursuant to outstanding letters of credit, lines of credit and undisbursed construction loans as of March 31, 2016 and December 31, 2015.


	Contract Amount
	March 31,		December 31,
(dollars in thousands)	2016		2015
Standby letters of credit	$	4,711	$	3,764
Available portion of lines of credit		144,446		127,393
Undisbursed portion of loans in process		64,027		73,699
Commitments to originate loans		91,272		89,653

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to be drawn upon, the total commitment amounts generally represent future cash requirements.

Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing customers. These lines of credit usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Company is committed.

The Company is subject to certain claims and litigation arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these matters is not expected to have a material effect on the financial condition or results of operations of the Company.

RESULTS OF OPERATIONS

During the first quarter of 2016, the Company earned $3.4 million, an increase of $502,000, or 17.6%, compared to the first quarter of 2015. The first quarter of 2016 included $613,000 of pre-tax merger-related expenses related to the acquisition of Louisiana Bancorp. Excluding merger-related expenses, net income for the first quarter of 2016 increased 31.6% compared to the first quarter of 2015. Diluted earnings per share for the first quarter of 2016 were $0.47, an increase of 14.6% compared to the first quarter of 2015. Excluding merger-related expenses, diluted earnings per share for the first quarter of 2016 increased 29.3% compared to the first quarter of 2015.

Net Interest Income – Net interest income is the difference between the interest income earned on interest-earning assets, such as loans and investment securities, and the interest expense paid on interest-bearing liabilities, such as deposits and borrowings. The Company’s net interest income is largely determined by our net interest spread, which is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, and the relative amounts of interest-earning assets and interest-bearing liabilities. The Company’s tax-equivalent net interest spread was 4.28% and 4.40% for the three months ended March 31, 2016 and March 31, 2015, respectively. The Company’s tax-equivalent net interest margin, which is net interest income as a percentage of average interest-earning assets, was 4.40% and 4.51% for the three months ended March 31, 2016 and March 31, 2015, respectively. The decrease in the net interest spread and net interest margin related primarily to a decrease in the average yield on loans.

Net interest income totaled $15.7 million for the three months ended March 31, 2016, an increase of $3.2 million, or 25.9%, compared to the three months ended March 31, 2015. Interest income increased $3.7 million, or 28.1%, in the first quarter of 2016, compared to the first quarter of 2015. Interest expense increased $513,000, or 63.2%, in the first quarter of 2016 compared to the first quarter of 2015. The increases were the result of increased average volume of loans and deposits from the Louisiana Bancorp acquisition in the third quarter of 2015.

The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rate; (iii) net interest income; (iv) net interest spread; and (v) net interest margin. Information is based on average monthly balances during the indicated periods. Taxable equivalent (“TE”) yields are calculated using a marginal tax rate of 35%.


	Three Months Ended March 31,
	2016							2015
					Average							Average
	Average				Yield/			Average				Yield/
(dollars in thousands)	Balance		Interest		Rate ⁽¹⁾			Balance		Interest		Rate⁽¹⁾
Interest-earning assets:
Loans receivable⁽¹⁾	$	1,225,577	$	16,018		5.20	%	$	919,109	$	12,361		5.40	%
Investment securities
Taxable		153,336		798		2.08			148,820		736		1.98
Tax-exempt (TE)		35,213		173		3.02			35,511		174		3.02

Total investment securities		188,549		971		2.26			184,331		910		2.18

Other interest-earning assets		15,949		59		1.50			15,044		34		0.91

Total interest-earning assets (TE)		1,430,075		17,048		4.77			1,118,484		13,305		4.81

Noninterest-earning assets		114,835							107,736

Total assets	$	1,544,910						$	1,226,220

Interest-bearing liabilities:
Deposits:
Savings, checking and money market	$	678,682	$	400		0.24	%	$	523,535	$	291		0.23	%
Certificates of deposit		273,757		532		0.78			219,066		394		0.73

Total interest-bearing deposits		952,439		932		0.39			742,601		685		0.37
Short-term FHLB advances		41,005		43		0.42			16,576		6		0.15
Long term FHLB advances		84,986		351		1.65			18,865		103		2.19
Securities sold under repurchase agreement		—		—		—			20,295		19		0.37

Total interest-bearing liabilities		1,078,430		1,326		0.49			798,337		813		0.41

Noninterest-bearing liabilities		298,441							271,822

Total liabilities		1,376,871							1,070,159
Shareholders’ equity		168,039							156,061

Total liabilities and shareholders’ equity	$	1,544,910						$	1,226,220

Net interest-earning assets	$	351,645						$	320,147

Net interest spread (TE)			$	15,722		4.28	%			$	12,492		4.40	%

Net interest margin (TE)						4.40	%						4.51	%

⁽¹⁾	Nonperforming loans are included in the respective average loan balances, net of deferred fees, discounts and loans in process. Acquired loans were recorded at fair value upon acquisition and accrete interest income over the remaining lives of the respective loans.

The following table displays the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. The table distinguishes between (i) changes attributable to volume (changes in average volume between periods times prior year rate), (ii) changes attributable to rate (changes in average rate between periods times prior year volume) and (iii) total increase (decrease).


	For the Three Months Ended
	March 31,
	2016 Compared to 2015
	Change Attributable To
							Total
							Increase
(dollars in thousands)	Rate			Volume			(Decrease)
Interest income:
Loans receivable	$	(290	)	$	3,947		$	3,657
Investment securities (TE)		40			21			61
Other interest-earning assets		23			3			25

Total interest income		(227	)		3,971			3,743

Interest expense:
Savings, checking and money market accounts		19			90			109
Certificates of deposit		34			105			138
FHLB advances		(50	)		335			285
Securities sold under repurchase agreement		—			(19	)		(19	)

Total interest expense		3			511			513

Increase (decrease) in net interest income	$	(230	)	$	3,460		$	3,230

Provision for Loan Losses – For the quarter ended March 31, 2016, the Company recorded a provision for loan losses of $850,000, which was 57.8% higher than the $538,000 recorded for the same period in 2015. Of the $850,000 in provision for the first quarter of 2016, $461,000 was associated with one energy-related borrower. Net loan charge-offs amounted to $300 during the quarter ended March 31, 2016.

As of March 31, 2016, the Company’s ratio of allowance for loan losses to total loans was 0.85%, compared to 0.78% and 0.90% at December 31, 2015 and March 31, 2015, respectively. Excluding acquired loans, the ratio of allowance for loan losses to total loans was 1.20% at March 31, 2016, compared to 1.15% and 1.07% at December 31, 2015 and March 31, 2015, respectively. The ratio of non-performing loans to total assets was 0.73% at March 31, 2016, compared to 0.83% at December 31, 2015.

Noninterest Income – Noninterest income was $2.6 million for the three months ended March 31, 2016, $489,000, or 23.5%, higher than the $2.1 million earned for the same period in 2015. The increase in noninterest income in the first quarter of 2016 compared to the first quarter of 2015 resulted primarily from increases in other non-interest income (up $393,000 primarily from recoveries on acquired loans previously charged-off) and service fees and charges (up $144,000 due primarily to the Louisiana Bancorp acquisition and increased customer transactions), which were partially offset by a decrease in gains on the sale of mortgage loans (down $72,000).

Noninterest Expense – Noninterest expense was $12.3 million for the three months ended March 31, 2016, $2.6 million, or 27.0%, higher than the $9.7 million recorded for the same period in 2015. Noninterest expense includes merger-related expenses due to the acquisition of Louisiana Bancorp of $613,000 for the three months ended March 31, 2016. Excluding merger-related expenses, the increase in noninterest expense in the first quarter of 2016 compared to the first quarter of 2015 relates primarily to the growth of the Company due to the addition of Louisiana Bancorp branches and employees.

Income Taxes – For the quarters ended March 31, 2016 and March 31, 2015, the Company incurred income tax expense of $1.7 million and $1.5 million, respectively. The Company’s effective tax rate was 34.3% and 34.0% during the first quarters of 2016 and 2015, respectively. Differences between the effective tax rate and the statutory tax rate primarily relate to variances in items that are non-taxable or non-deductible (e.g., state tax, tax-exempt income, merger-related expenses, etc.).

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Quantitative and qualitative disclosures about market risk are presented in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2015, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Asset/Liability Management and Market Risk”. Additional information at March 31, 2016 is included herein under Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Asset/Liability Management”.

Item 4. Controls and Procedures.

Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations and are operating in an effective manner.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Securities Exchange Act of 1934) occurred during the first quarter of 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Not applicable.

Item 1A. Risk Factors.

There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for December 31, 2015 filed with the Securities and Exchange Commission.

Item 2. Unregistered Sales of Equity Securities and the Use of Proceeds.

The Company’s purchases of its common stock made during the quarter consisted of stock repurchases under the Company’s approved plan and are set forth in the following table.


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet be Purchased Under the Plan or Programs⁽¹⁾
January 1 – January 31, 2016		250	$	25.65		250		16,321
February 1 – February 29, 2016		750		25.75		750		15,571
March 1 – March 31, 2016		250		26.90		250		15,321

Total		1,250	$	25.96		1,250		15,321

⁽¹⁾	On June 7, 2013, the Company announced the commencement of a stock repurchase program. Under the plan, the Company can repurchase up to 370,000 shares, or approximately 5% of its common stock outstanding, through open market or privately negotiated transactions.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

Item 6. Exhibits and Financial Statement Schedules.


No.		Description

31.1		Rule 13(a)-14(a) Certification of the Chief Executive Officer

31.2		Rule 13(a)-14(a) Certification of the Chief Financial Officer

32.0		Section 1350 Certification

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definitions Linkbase Document

SIGNATURES

Pursuant to the requirements 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, INC.

May 9, 2016	By:	/s/John W. Bordelon
		John W. Bordelon
		President, Chief Executive Officer and Director

May 9, 2016	By:	/s/Joseph B. Zanco
		Joseph B. Zanco
		Executive Vice President and Chief Financial Officer

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company