Home Financial Bancorp Announces Second Quarter Results

Home Financial Bancorp (“Company”) (OTCQB Symbol “HWEN”), an Indiana corporation which is the holding company for Our Community Bank, (“Bank”) based in Spencer, Indiana, announces results for the second quarter and six months ended December 31, 2012.

Second Quarter Highlights:
  • Provisions for loan losses increased $33,000 or 36%;
  • Net loan losses rose from $140,000 to $185,000;
  • Gain on sale of securities increased $65,000;
  • Net income improved 17% to $117,000.

Six Month Highlights:
  • Shareholders’ equity totaled $8.8 million, or 12% of total assets;
  • Total loans decreased $2.1 million or 4%;
  • Net income edged up 1% to $256,000.

For the quarter ended December 31, 2012, the Company reported net income of $117,000, or $.09 basic and diluted earnings per share. Net income was $100,000 or $.08 basic and diluted earnings per share for the quarter ended December 31, 2011. Second quarter 2013 net income improved, compared to a year earlier, due to net gains on sale of securities.

Net interest income declined less than 1%, and totaled $817,000. Interest income fell $87,000 or 8%, but was substantially offset by an $82,000 or 31% decline in interest expense. Net interest margin for the quarter was 4.74%, compared to 4.62% for the same period a year earlier. Extremely low interest rates continued to bring down overall funding costs and reduce available investment returns.

Loan loss provisions were $125,000 and $92,000 for the quarters-ended December 31, 2012 and 2011, respectively. A regular assessment of loan loss allowance adequacy indicated that these provisions were necessary to maintain an appropriate allowance level. Changes in volume, composition and quality of the loan portfolio, as well as actual loan loss experience, influences the need for future loan loss provisions. Net loan losses during second quarter 2013 totaled $185,000, compared to $140,000 for second quarter 2012.

Non-interest income jumped $45,000 or 34%, to $178,000 for the quarter. Gain on sale of securities totaled $65,000. No gains on sale of securities were reported for the year-earlier period. Total non-interest expense for second quarter 2013 fell $10,000 or 1%, compared to the same period a year ago. Repossessed property expense decreased $37,000 or 50%. Salaries and employee benefit expense increased $33,000 or 10%.

For the six-month period ended December 31, 2012, the Company reported net income of $256,000, or $.20 basic and $.19 diluted earnings per share. Net income was $254,000, or $.19 basic and diluted earnings per share for the six months ended December 31, 2011. Gain on sale of securities, and lower repossessed property expense, offset the impact of higher loan loss provisions plus higher legal and professional fees; resulting in net income comparable to the same six-month period a year earlier.

Net interest income was $1.6 million for both six-month periods ending December 31, 2012 and 2011. Interest income fell $150,000 or 7%, but was more than offset by a $165,000 or 30% drop in interest expense.

Loan loss provisions were $200,000 for the six-month period ended December 31, 2012, compared to $137,000 a year earlier. 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 for the six months ended December 31, 2012 increased to $227,000, compared to $210,000 for the six months ended December 31, 2011.

Non-interest income was $356,000 for the first half of fiscal 2013, compared to $310,000 for the year-earlier period. Gain on sale of securities increased $84,000, to $121,000. Non-interest expense increased $28,000 or 2%. Repossessed property expense, including net loss on sale of foreclosed property, dropped $43,000 or 44%, to $55,000 for the six-month period ended December 31, 2012. Legal and professional fees increased $51,000 or 64% to $130,000.

At December 31, 2012, total assets decreased 4%, to $73.4 million, compared to $76.0 million at June 30, 2012. Investments available for sale declined less than 1% and totaled $7.4 million. Loans fell $2.1 million or 4%, to $53.6 million.

Loans delinquent 90 days or more totaled $1.1 million or 2.0% of total loans at December 31, 2012, compared to $1.4 million or 2.6% of total loans at June 30, 2012. At December 31, 2012, non-performing assets were $1.7 million or 2.3% of total assets, compared to $2.1 million or 2.8% of total assets at June 30, 2012. Non-performing assets included $592,000 in Other Real Estate Owned (“OREO”) and other repossessed properties at December 31, 2012, compared to $685,000 six months earlier.

Loan loss allowances were $634,000 or 1.18% of total loans at December 31, 2012, compared to $660,000 or 1.18% of total loans at June 30, 2012. Management considered the level of loan loss allowances at December 31, 2012 to be adequate to cover estimated losses inherent in the loan portfolio at that date.

Deposits decreased $1.7 million or 3%, to $51.7 million as of December 31, 2012. Total borrowings were reduced to $12.0 million, from $13.0 million at June 30, 2012.

Shareholders’ equity was $8.8 million or 12.0% of total assets at December 31, 2012. Factors impacting shareholder equity during the first half of fiscal 2013 included net income, two quarterly cash dividends totaling $.06 per share, $82,000 net decrease in unrealized gain on securities available for sale, and a $16,000 decrease in costs associated with a stock-based employee benefit plan. During the six months ended December 31, 2012, the Company repurchased 31,183 shares of its stock through a tender offer for holders of 1,000 or fewer shares which concluded in November, 2012. At December 31, 2012, the Company’s book value per share was $6.70 based on 1,306,185 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 DECEMBER 31:

2012

2011
Net Interest Income $817 $821
Provision for Loan Losses 125 92
Non-interest Income 178 133
Non-interest Expense 731 741
Income Tax 22 21
Net Income 117 100
 
Basic Earnings Per Share: $.09 $.08
Diluted Earnings Per Share: $.09 $.08
Average Shares Outstanding - Basic 1,306,966 1,315,224
Average Shares Outstanding - Diluted 1,309,658 1,315,224
 

FOR SIX MONTHS ENDED DECEMBER 31:

2012

2011
Net Interest Income $1,632 $1,617
Provision for Loan Losses 200 137
Non-interest Income 356 310
Non-interest Expense 1,474 1,446
Income Tax 58 90
Net Income 256 254
 
Basic Earnings Per Share: $.20 $.19
Diluted Earnings Per Share: $.19 $.19
Average Shares Outstanding - Basic 1,312,640 1,316,240
Average Shares Outstanding - Diluted 1,315,130 1,316,240
 

December 31,

June 30,

2012

2012
Total Assets $73,360 $76,014
Total Loans 53,640 55,711
Allowance for Loan Losses 636 663
Total Deposits 51,672 53,346
Borrowings 12,000 13,000
Shareholders’ Equity 8,754 8,798
 
Non-Performing Assets 1,683 2,133
Non-Performing Loans 1,091 1,448
 
Non-Performing Assets to Total Assets 2.30 % 2.81 %
Non-Performing Loans to Total Loans 2.03 2.60
 
Book Value Per Share* $6.70 $6.58
 

*Based on 1,306,185 shares at December 31, 2012 and 1,337,368 shares at June 30, 2012.

Copyright Business Wire 2010