HBCP 10-Q Quarter ended June 30, 2019

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: June 30, 2019

or

☐	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 Incorporation or Organization)		(I.R.S. Employer 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 (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    YES  ☒    NO  ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    YES  ☒    NO  ☐

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

Large accelerated filer		☐		Accelerated filer		☒
Non-accelerated filer		☐		Smaller reporting company		☐
				Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock		HBCP		Nasdaq Stock Market

At August 2, 2019, the registrant had 9,407,142 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			6
		Notes to Unaudited Consolidated Financial Statements			7
Item 2.		Managements’ Discussion and Analysis of Financial Condition and Results of Operations			27
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			39
Item 4.		Controls and Procedures			39
PART II
Item 1.		Legal Proceedings			40
Item 1A.		Risk Factors			40
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			40
Item 3.		Defaults Upon Senior Securities			40
Item 4.		Mine Safety Disclosures			40
Item 5.		Other Information			40
Item 6.		Exhibits			40
SIGNATURES					41

i

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in thousands)		(Unaudited) June 30, 2019				(Audited) December 31, 2018
Assets
Cash and cash equivalents		$	71,325			$	59,618
Interest-bearing deposits in banks			694				939
Investment securities available for sale, at fair value			261,626				260,131
Investment securities held to maturity (fair values of $8,207 and $10,841, respectively)			8,163				10,872
Mortgage loans held for sale			4,501				2,086
Loans, net of unearned income			1,692,948				1,649,754
Allowance for loan losses			(17,239	)			(16,348	)
Total loans, net of unearned income and allowance for loan losses			1,675,709				1,633,406
Office properties and equipment, net			47,698				47,124
Cash surrender value of bank-owned life insurance			39,927				29,560
Goodwill and core deposit intangibles			65,247				66,055
Accrued interest receivable and other assets			45,496				43,867
Total Assets			2,220,386				2,153,658
Liabilities
Deposits:
Noninterest-bearing			449,402				438,146
Interest-bearing			1,379,767				1,335,071
Total Deposits			1,829,169				1,773,217
Other borrowings			5,539				5,539
Long-term Federal Home Loan Bank advances			54,615				58,698
Accrued interest payable and other liabilities			17,569				12,164
Total Liabilities			1,906,892				1,849,618
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; 9,441,800 and 9,459,050 shares issued and outstanding, respectively			94				95
Additional paid-in capital			169,233				168,243
Unallocated common stock held by:
Employee Stock Ownership Plan (ESOP)			(3,303	)			(3,481	)
Recognition and Retention Plan (RRP)			(48	)			(58	)
Retained earnings			146,348				141,447
Accumulated other comprehensive income (loss)			1,170				(2,206	)
Total Shareholders’ Equity			313,494				304,040
Total Liabilities and Shareholders’ Equity		$	2,220,386			$	2,153,658

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

1

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
(Dollars in thousands)		2019				2018				2019				2018
Interest Income
Loans, including fees		$	23,812			$	23,527			$	47,010			$	46,331
Investment securities:
Taxable interest			1,601				1,531				3,254				2,839
Tax-exempt interest			128				179				283				365
Other investments and deposits			380				338				743				765
Total interest income			25,921				25,575				51,290				50,300
Interest Expense
Deposits			3,735				1,927				7,066				3,829
Other borrowings expense			53				—				106				—
Short-term Federal Home Loan Bank advances			—				16				—				33
Long-term Federal Home Loan Bank advances			258				296				521				597
Total interest expense			4,046				2,239				7,693				4,459
Net interest income			21,875				23,336				43,597				45,841
Provision for loan losses			765				581				1,155				1,545
Net interest income after provision for loan losses			21,110				22,755				42,442				44,296
Noninterest Income
Service fees and charges			1,413				1,520				2,880				3,174
Bank card fees			1,212				1,196				2,273				2,295
Gain on sale of loans, net			248				201				403				408
Income from bank-owned life insurance			202				164				367				324
(Loss) gain on sale of assets, net			(327	)			—				(328	)			145
Other income			229				264				547				481
Total noninterest income			2,977				3,345				6,142				6,827
Noninterest Expense
Compensation and benefits			9,613				9,222				18,711				18,164
Occupancy			2,008				1,719				3,614				3,394
Marketing and advertising			308				329				579				610
Data processing and communication			1,596				2,344				3,018				4,023
Professional services			218				306				457				592
Forms, printing and supplies			181				274				342				631
Franchise and shares tax			398				363				797				729
Regulatory fees			283				343				590				722
Foreclosed assets, net			40				87				281				190
Amortization of acquisition intangible			398				455				808				957
Other expenses			909				880				2,046				1,900
Total noninterest expense			15,952				16,322				31,243				31,912
Income before income tax expense			8,135				9,778				17,341				19,211
Income tax expense			1,555				2,002				2,871				3,972
Net Income		$	6,580			$	7,776			$	14,470			$	15,239
Earnings per share:
Basic		$	0.72			$	0.85			$	1.58			$	1.68
Diluted		$	0.71			$	0.83			$	1.56			$	1.64
Cash dividends declared per common share		$	0.21			$	0.17			$	0.41			$	0.32

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

2

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
(Dollars in thousands)		2019				2018				2019				2018
Net Income		$	6,580			$	7,776			$	14,470			$	15,239
Other Comprehensive Income (Loss)
Unrealized gains (losses) on investment securities			2,502				(1,013	)			4,274				(3,009	)
Tax effect			(526	)			213				(898	)			632
Other comprehensive income (loss), net of taxes			1,976				(800	)			3,376				(2,377	)
Comprehensive Income		$	8,556			$	6,976			$	17,846			$	12,862

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

3

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands)		Common stock				Additional Paid-in capital				Unallocated Common Stock Held by ESOP				Unallocated Common Stock Held by RRP				Retained Earnings				Accumulated Other Comprehensive (Loss) Income				Total
Balance, December 31, 2017		$	94			$	165,341			$	(3,838	)		$	(84	)		$	117,313			$	(955	)		$	277,871
Net income																			15,239								15,239
Other comprehensive loss																							(2,377	)			(2,377	)
Reclassification of stranded tax effects in accumulated other comprehensive income (1)																			206				(206	)			—
Purchase of Company’s common stock at cost, 1,077 shares			—				(11	)											(38	)							(49	)
Cash dividends declared, $0.32 per share																			(3,011	)							(3,011	)
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax tax benefit, 16,528 shares			—				170												(64	)							106
Exercise of stock options			—				339																				339
RRP shares released for allocation							(4	)							7												3
ESOP shares released for allocation							719				178																897
Share-based compensation cost							343																				343
Balance, June 30, 2018		$	94			$	166,897			$	(3,660	)		$	(77	)		$	129,645			$	(3,538	)		$	289,361
Balance, December 31, 2018		$	95			$	168,243			$	(3,481	)		$	(58	)		$	141,447			$	(2,206	)		$	304,040
Net income																			14,470								14,470
Other comprehensive income																							3,376				3,376
Purchase of Company’s common stock at cost, 217,193 shares			(2	)			(2,170	)											(5,623	)							(7,795	)
Cash dividends declared, $0.41 per share																			(3,882	)							(3,882	)
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax benefit, 19,321 shares			—				103												(64	)							39
Exercise of stock options			1				2,085																				2,086
RRP shares released for allocation							(10	)							10												—
ESOP shares released for allocation							604				178																782
Share-based compensation cost							378																				378
Balance, June 30, 2019		$	94			$	169,233			$	(3,303	)		$	(48	)		$	146,348			$	1,170			$	313,494

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

4

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - CONTINUED

(Unaudited)

(Dollars in thousands)		Common stock				Additional Paid-in capital				Unallocated Common Stock Held by ESOP				Unallocated Common Stock Held by RRP				Retained Earnings				Accumulated Other Comprehensive (Loss) Income				Total
Balance, March 31, 2018		$	94			$	165,991			$	(3,749	)		$	(80	)		$	123,571			$	(2,738	)		$	283,089
Net income																			7,776								7,776
Other comprehensive loss																							(800	)			(800	)
Purchase of Company’s common stock at cost, 1,036 shares			—				(11	)											(36	)							(47	)
Cash dividends declared, $0.17 per share																			(1,602	)							(1,602	)
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax tax benefit, 15,814 shares			—				152												(64	)							88
Exercise of stock options			—				186																				186
RRP shares released for allocation							(1	)							3												2
ESOP shares released for allocation							375				89																464
Share-based compensation cost							205																				205
Balance, June 30, 2018		$	94			$	166,897			$	(3,660	)		$	(77	)		$	129,645			$	(3,538	)		$	289,361
Balance, March 31, 2019		$	95			$	169,091			$	(3,392	)		$	(51	)		$	143,998			$	(806	)		$	308,935
Net income																			6,580								6,580
Other comprehensive income																							1,976				1,976
Purchase of Company’s common stock at cost, 83,188 shares			(1	)			(831	)											(2,178	)							(3,010	)
Cash dividends declared, $0.21 per share																			(1,988	)							(1,988	)
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax benefit, 17,881 shares			—				68												(64	)							4
Exercise of stock options			—				409																				409
RRP shares released for allocation							(3	)							3												—
ESOP shares released for allocation							307				89																396
Share-based compensation cost							192																				192
Balance, June 30, 2019		$	94			$	169,233			$	(3,303	)		$	(48	)		$	146,348			$	1,170			$	313,494

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

5

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		For the Six Months Ended June 30,
(Dollars in thousands)		2019				2018
Cash flows from operating activities:
Net income		$	14,470			$	15,239
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses			1,155				1,545
Depreciation			1,375				1,200
Amortization and accretion of purchase accounting valuations and intangibles			3,254				4,212
Net amortization of mortgage servicing asset			55				75
Federal Home Loan Bank stock dividends			(78	)			(56	)
Net amortization of discount on investments			962				983
Gain on loans sold, net			(403	)			(408	)
Proceeds, including principal payments, from loans held for sale			42,246				43,425
Originations of loans held for sale			(44,258	)			(46,855	)
Non-cash compensation			1,160				1,240
Deferred income tax expense			213				318
Increase in accrued interest receivable and other assets			(2,100	)			(3,183	)
Increase in cash surrender value of bank-owned life insurance			(367	)			(324	)
Change in accrued interest payable and other liabilities			5,405				(157	)
Net cash provided by operating activities			23,089				17,254
Cash flows from investing activities:
Purchases of securities available for sale			(31,332	)			(58,268	)
Proceeds from maturities, prepayments and calls on securities available for sale			33,266				25,174
Proceeds from maturities, prepayments and calls on securities held to maturity			2,593				—
(Increase) decrease in loans, net			(47,074	)			27,288
Reimbursement from FDIC for covered assets			142				—
Decrease in interest-bearing deposits in banks			245				992
Proceeds from sale of repossessed assets			801				540
Purchases of office properties and equipment			(2,300	)			(1,500	)
Purchase of bank-owned life insurance			(10,000	)			—
Proceeds from sale of office properties and equipment			24				839
Net cash used in investing activities			(53,635	)			(4,935	)
Cash flows from financing activities:
Increase (decrease) in deposits, net			55,925				(77,728	)
Borrowings on Federal Home Loan Bank advances			4,010				—
Repayments of Federal Home Loan Bank advances			(8,130	)			(1,905	)
Proceeds from exercise of stock options			2,086				339
Issuance of stock under incentive plans			39				106
Dividends paid to shareholders			(3,882	)			(3,011	)
Purchase of Company’s common stock			(7,795	)			(49	)
Net cash provided by (used in) financing activities			42,253				(82,248	)
Net change in cash and cash equivalents			11,707				(69,929	)
Cash and cash equivalents at beginning of year			59,618				150,418
Cash and cash equivalents at end of period		$	71,325			$	80,489

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

6

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. Certain reclassifications have been made to prior period balances to conform to the current period presentation. The results of operations for the three- and six-month periods ended June 30, 2019 and 2018 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, 2018.

Critical Accounting Policies and Estimates

There were no material changes or developments during the reporting period with respect to methodologies the Company uses when applying critical accounting policies and developing critical accounting estimates as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2018.

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.

2. Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, “Conforming Amendments Related to Leases”. This ASU amends the codification regarding leases in order to increase transparency and comparability. Under former GAAP, the recognition of lease assets and lease liabilities by lessees was not required if the terms of the lease qualify it as an operating lease. ASU No. 2016-02 requires companies to recognize lease assets and liabilities on the statement of condition and disclose key information about leasing arrangements, for both operating and capital or finance leases. A lessee must 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 Company implemented an accounting policy election to keep leases with an initial term of 12 months or less off the Company’s consolidated balance sheet. As of June 30, 2019, the Company’s right-of-use assets and liabilities, net of amortization, was $5.5 million. The Company reports its right-of-use assets and liabilities within accrued interest receivable and other assets and accrued interest payable and other liabilities on the Consolidated Statements of Financial Condition. The ASU did not have material impact on the consolidated income statement.

In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments”. The standard introduces a new impairment model known as CECL (Current Expected Credit Losses). The ASU requires a financial asset (or a group of financial assets) measured on an amortized cost basis to be presented at an amount net of an allowance for credit losses, which reflects expected losses for the full life of the financial asset. Under current GAAP, credit losses are not recognized until the occurrence of the loss is probable and entities, in general, only consider past events and current conditions when measuring incurred losses. ASU No. 2016-13 will require entities to recognize a current estimate of all expected credit losses, thus eliminating the “probable” recognition threshold. To produce a current estimate of expected credit losses, the standard will require entities to incorporate forecasted information along with relevant information about past events, including historical experience, and current conditions that affect the collectability of the reported amount of financial assets. The ASU also amends the accounting model for purchased financial assets with a more-than-insignificant

7

amount of credit deterioration since origination. The initial estimate of expected credit losses for the related purchased financial assets will be recognized through the allowance for credit losses with an offset to the cost basis of the purchased asset. Off-balance-sheet arrangements, such as commitments to extend credit, guarantees and standby letters of credit that are not unconditionally cancellable, are also within the scope of this amendment. In addition, ASU 2016-13 will require expected credit related losses for debt securities to be recorded through an allowance for credit losses, while non-credit related losses will continue to be recognized through Other Comprehensive Income (“OCI”). This ASU is effective for fiscal years beginning after December 31, 2019. An entity will apply the amendments in this update on a modified retrospective basis, through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is testing several models to determine the potential impact to our Consolidated Financial Statements upon the implementation of CECL. Currently, the Company expects the adoption of the ASU to increase the allowance for loan losses and the provision for loan losses. The extent of the impact upon adoption is not known and will depend on the characteristics of the Company’s loan portfolio and economic conditions on that date as well as forecasted conditions thereafter.

In January 2017, FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other, Simplifying the Test for Goodwill Impairment”. The amendment in this ASU eliminates the requirement to calculate the implied fair value of goodwill in order to measure a goodwill impairment charge. An entity will record an impairment charge based on the excess of the carrying amount over its fair value. This ASU is effective for fiscal and interim testing periods beginning after December 15, 2019. The Company does not anticipate it will have a material impact on our Consolidated Financial Statements.

In August 2018, the FASB issued ASU No. 2018-13, “Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” The ASU removes, modifies and adds certain disclosure requirements for fair value measurements. For example, public entities will no longer be required to disclose the valuation processes for Level 3 fair value measurements, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU No. 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019. In addition, entities may early adopt the modified or eliminated disclosure requirements and delay adoption of the additional disclosure requirements until their effective date. The Company does not believe ASU No. 2018-13 will have a material impact on our Consolidated Financial Statements, as the update only revises disclosure requirements.

3. Investment Securities

Summary information regarding the Company’s investment securities classified as available for sale and held to maturity as of June 30, 2019 and December 31, 2018 is as follows.

(dollars in thousands)		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses								Fair Value
										Less Than 1 Year				Over 1 Year
June 30, 2019
Available for sale:
U.S. agency mortgage-backed		$	79,789			$	1,101			$	2			$	131			$	80,757
Collateralized mortgage obligations			158,181				941				54				551				158,517
Municipal bonds			13,892				171				—				—				14,063
U.S. government agency			8,282				23				—				16				8,289
Total available for sale		$	260,144			$	2,236			$	56			$	698			$	261,626
Held to maturity:
Municipal bonds		$	8,163			$	50			$	—			$	6			$	8,207
Total held to maturity		$	8,163			$	50			$	—			$	6			$	8,207

8

(dollars in thousands)		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses								Fair Value
										Less Than 1 Year				Over 1 Year
December 31, 2018
Available for sale:
U.S. agency mortgage-backed		$	86,487			$	485			$	171			$	892			$	85,909
Collateralized mortgage obligations			145,814				129				161				2,191				143,591
Municipal bonds			21,453				52				16				12				21,477
U.S. government agency			9,169				29				19				25				9,154
Total available for sale		$	262,923			$	695			$	367			$	3,120			$	260,131
Held to maturity:
Municipal bonds		$	10,872			$	11			$	5			$	37			$	10,841
Total held to maturity		$	10,872			$	11			$	5			$	37			$	10,841

The estimated fair value and amortized cost by contractual maturity of the Company’s investment securities as of June 30, 2019 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				After One Year through Five Years				After Five Years through Ten Years				After Ten Years				Total
Fair Value
Securities available for sale:
U.S. agency mortgage-backed		$	46			$	17,460			$	34,000			$	29,251			$	80,757
Collateralized mortgage obligations			—				4,898				29,837				123,782				158,517
Municipal bonds			1,520				7,740				3,396				1,407				14,063
U.S. government agency			3,998				—				3,515				776				8,289
Total securities available for sale		$	5,564			$	30,098			$	70,748			$	155,216			$	261,626
Securities held to maturity:
Municipal bonds		$	—			$	3,943			$	4,264			$	—			$	8,207
Total securities held to maturity		$	—			$	3,943			$	4,264			$	—			$	8,207
(dollars in thousands)		One Year or Less				After One Year through Five Years				After Five Years through Ten Years				After Ten Years				Total
Amortized Cost
Securities available for sale:
U.S. agency mortgage-backed		$	45			$	17,360			$	33,759			$	28,625			$	79,789
Collateralized mortgage obligations			—				4,864				29,446				123,871				158,181
Municipal bonds			1,515				7,691				3,325				1,361				13,892
U.S. government agency			4,000				—				3,491				791				8,282
Total securities available for sale		$	5,560			$	29,915			$	70,021			$	154,648			$	260,144
Securities held to maturity:
Municipal bonds		$	—			$	3,927			$	4,236			$	—			$	8,163
Total securities held to maturity		$	—			$	3,927			$	4,236			$	—			$	8,163

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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 other-than-temporarily impaired, an impairment loss is recognized.

As of June 30, 2019, 76 of the Company’s investment securities had unrealized losses totaling 0.8% of the individual securities’ amortized cost basis and 0.3% of the Company’s total amortized cost basis of the investment securities portfolio. At such date, 68 of the 76 securities had been in a continuous loss position for over 12 months. The 68 securities had an aggregate amortized cost basis of $87,398,000 and an unrealized loss of $704,000 at June 30, 2019. Management has the intent and ability to hold these securities until maturity, or until anticipated recovery; hence, no declines in these securities were deemed other-than-temporary at June 30, 2019.

As of June 30, 2019 and December 31, 2018, the Company had $182,310,000 and $157,198,000, 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								Six Months Ended
		June 30,								June 30,
(in thousands, except per share data)		2019				2018				2019				2018
Numerator:
Net income available to common shareholders		$	6,580			$	7,776			$	14,470			$	15,239
Denominator:
Weighted average common shares outstanding			9,155				9,048				9,143				9,030
Effect of dilutive securities:
Restricted stock			11				20				13				22
Stock options			42				231				75				232
Weighted average common shares outstanding – assuming dilution			9,208				9,299				9,231				9,284
Basic earnings per common share		$	0.72			$	0.85			$	1.58			$	1.68
Diluted earnings per common share		$	0.71			$	0.83			$	1.56			$	1.64

Options on 96,110 and 19,172 shares of common stock were not included in the computation of diluted earnings per share for the three months ended June 30, 2019 and 2018, respectively, because the effect of these shares was anti-dilutive. Options on 85,623 and 9,808 shares of common stock were not included in the computation of diluted earnings per share for the six months ended June 30, 2019 and 2018, respectively, because the effect of these shares was anti-dilutive.

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