Home Financial Bancorp Announces Third Quarter Results

Business Wire

SPENCER, Ind.--(BUSINESS WIRE)--

Home Financial Bancorp (“Company”) (HWEN), an Indiana corporation which is the holding company for Our Community Bank, (“Bank”) based in Spencer, Indiana, announces results for the third quarter and nine months ended March 31, 2014.

Third Quarter Highlights:

  • Net Interest Income declined 7%, or $60,000;
  • Non-interest income fell 25%, or $29,000;
  • Net income decreased 37%, from $166,000 to $105,000.

Nine Month Highlights:

  • Non-performing loans decreased 22%, or $295,000;
  • Repossessed property expense increased 49%, or $37,000;
  • Gain on sale of investments dropped $147,000;
  • Net income fell 32%, from $422,000 to $289,000.

For the quarter ended March 31, 2014, the Company reported net income of $105,000 or $.09 earnings per share. For the same period last year, the Company reported net income of $166,000 or $.13 per share. Net income was lower, compared to third quarter 2013 results, due to a decrease in interest income on loans and a reduction in gains realized on the sale of investment securities.

Due to declining interest income on loans, total interest income was lower by $79,000 or 8%, while interest expense declined $20,000 or 12%. As a result, net interest income decreased $60,000, or 7%, for the three months ended March 31, 2014, compared to the same period in 2013. Loan loss provisions for third quarter 2014 totaled $34,000. Loan loss provisions were $45,000 for the same period a year earlier.

A regular assessment of loan loss allowance adequacy indicated that these provisions were necessary to maintain an appropriate allowance level. Net loan losses totaled $224,000, compared to $13,000 for third quarter 2013. Changes in volume, composition and quality of the loan portfolio, as well as actual loan loss experience, will influence the need for future loss provisions.

Non-interest income totaled $87,000 for the third quarter 2014, compared to $116,000 a year earlier. Valuation write-downs on real estate acquired for development totaled $20,000. Investment securities sales activity produced loss of $7,000, compared to $17,000 gain during the same period a year earlier.

Non-interest expense totaled $698,000, compared to $668,000 for the same period a year earlier. Repossessed property expense increased $11,000 or 54%.

For the nine-month period ended March 31, 2014, the Company reported net income of $289,000 or $.24 earnings per share. Net income was $422,000 or $.32 earnings per share for the year-earlier period. Net income declined due to a reduction in gain on sale of investment securities, lower interest income, and valuation write-downs on real estate acquired for development.

Interest income decreased $235,000, or 8%. Interest expense fell $91,000 or 16%. Consequently, net interest income before provisions for loan losses dropped $144,000 or 6%, compared to the same period in 2013.

Loan loss provisions decreased $91,000, or 37%, and totaled $154,000 for the nine-month period ended March 31, 2014. Loan loss provisions reflect management’s assessment of various risk factors including, but not limited to, the level and trend of loan delinquencies and losses. Net loan losses totaled $298,000 during the first three quarters of fiscal 2014, compared to $239,000 for the year-earlier period.

Non-interest income fell $138,000, or 29%. Gain on sale of securities dropped from $138,000 for the nine-month period ended March 31, 2013, to a $9,000 loss for the same period this year. Additionally, in preparation for liquidation of BSF, Inc., the Company’s real estate development subsidiary, the book value of certain real estate holdings were substantially reduced; resulting in $60,000 expense. Operations of BSF, Inc. will be terminated prior to July 1, 2014, as a condition of the Bank’s conversion to an Indiana-chartered commercial bank effective July 1, 2011.

Non-interest expense increased $53,000, or 2%. Repossessed property expense rose $37,000 or 49%. Salaries and employee benefits increased $23,000, or 2%. Partially offsetting these, and other smaller changes, legal and professional fees decreased $24,000 or 17%, compared to the same period a year earlier.

At March 31, 2014, total assets were $69.7 million. Total assets were $72.8 million nine months earlier. Cash and interest-bearing deposits totaled $6.9 million. Investment securities available for sale decreased $955,000 to $6.8 million. Total loans decreased 3% to $50.9 million, from $52.6 million at June 30, 2013.

Loans delinquent 90 days or more totaled $1.1 million, or 2.1% of total loans at March 31, 2014, and $1.4 million, or 2.6% of total loans at June 30, 2013. At March 31, 2014, non-performing assets were $1.5 million, or 2.2% of total assets, compared to $1.9 million, or 2.6% of total assets at June 30, 2013. Non-performing assets included $467,000 in Other Real Estate Owned (“OREO”) and other repossessed properties at March 31, 2014, compared to $504,000 nine months earlier.

Loan loss allowances decreased to $518,000 or 1.0% of total loans at March 31, 2014, compared to $662,000 or 1.3% of total loans at June 30, 2013. Management considered the level of loan loss allowances at March 31, 2014 to be adequate to cover estimated losses inherent in the loan portfolio at that date.

Deposits decreased 4% to $49.7 million as of March 31, 2014, from $51.6 million nine months earlier. Total borrowings declined $1.5 million, or 13%, to $10.5 million.

Shareholders’ equity was $8.6 million, or 12.3% of total assets at March 31, 2014. Factors impacting shareholder equity during the first three quarters of fiscal 2014 included net income, three quarterly cash dividends totaling $.09 per share, $47,000 net decrease in unrealized loss on securities available for sale, and a $28,000 decrease in costs associated with a stock-based employee benefit plan. During the nine months ended March 31, 2014, the Company repurchased 10,102 shares of its stock. At March 31, 2014, the Company’s book value per share was $7.15 based on 1,196,083 shares outstanding.

Home Financial Bancorp and Our Community Bank, an FDIC-insured, Indiana stock commercial bank, operate from headquarters in Spencer, Indiana, and a branch office in Cloverdale, Indiana. Additional information concerning Home Financial Bancorp and its subsidiaries is available at www.hfbancorp.com or www.ocbconnect.com.

       

HOME FINANCIAL BANCORP

Consolidated Financial Highlights

(Unaudited)

(Dollars in thousands, except per share and book value amounts)

 
 

FOR THREE MONTHS ENDED MARCH 31:

2014

2013

Net Interest Income $ 756 $ 816
Provision for Loan Losses 34 45
Non-interest Income 87 116
Non-interest Expense 698 668
Income Tax 6 53
Net Income 105 166
 
Basic and Diluted Earnings Per Share: $ .09 $ .13
Average Shares Outstanding - Basic 1,188,577 1,292,637
Average Shares Outstanding - Diluted 1,190,327 1,294,442
 

FOR NINE MONTHS ENDED MARCH 31:

2014

2013

Net Interest Income $ 2,304 $ 2,447
Provision for Loan Losses 154 245
Non-interest Income 337 476
Non-interest Expense 2,198 2,145
Income Tax 0 111
Net Income 289 422
 
Basic and Diluted Earnings Per Share: $ .24 $ .32
Average Shares Outstanding - Basic 1,187,045 1,306,097
Average Shares Outstanding - Diluted 1,189,219 1,308,359
 

March 31,

June 30,

2014

2013

Total Assets $ 69,673 $ 72,820
Total Loans 50,910 52,612
Allowance for Loan Losses 518 662
Total Deposits 49,705 51,575
Borrowings 10,500 12,000
Shareholders’ Equity 8,557 8,258
 
Non-Performing Assets 1,523 1,855
Non-Performing Loans 1,056 1,351
 
Non-Performing Assets to Total Assets 2.19 % 2.55 %
Non-Performing Loans to Total Loans 2.07 2.57
 
Book Value Per Share* $ 7.15 $ 6.85
 
*Based on 1,196,083 shares at March 31, 2014 and 1,206,185 shares at June 30, 2013.

Contact:
Home Financial Bancorp
Kurt D. Rosenberger, 812-829-2095
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