SPENCER, Ind.--(BUSINESS WIRE)--Home Financial Bancorp (“Company”) (OTCQB: HWEN), an Indiana corporation which is the holding company for Our Community Bank, (“Bank”) based in Spencer, Indiana, announces unaudited results for the fourth quarter and twelve months ended June 30, 2015.
Fourth Quarter Highlights:
- Net interest income decreased 7%, or $48,000;
- Expenses related to a change in estimate related to the useful lives of long-lived assets totaled $292,000;
- Net income decreased from $90,000, to net loss of $83,000;
- Excluding the previously mentioned $292,000 of expenses related to a change in estimate and the related tax benefit of $92,000, net income would have been $117,000.
Twelve Month Highlights:
- Shareholders’ equity was $8.7 million, or 13.4% of total assets;
- Non-performing assets improved 23%, or $349,000 to $1,145,000 or 1.76% of total assets;
- Net interest income declined 8%, or $235,000;
- Net income decreased from $379,000, to $177,000;
- Excluding the previously mentioned $292,000 of expenses related to a change in estimate and the related tax benefit of $92,000, net income would have been $377,000.
Change in Accounting Principle - During the quarter ended June 30, 2015, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2014-01, “Accounting for Investments in Qualified Affordable Housing Projects”. The ASU is required to be applied retrospectively to all periods presented. As a result, the Company recorded a cumulative-effective adjustment to beginning retained earnings (June 30, 2013). In addition, the balance sheet as of June 30, 2014 and income statement for the twelve months ended June 30, 2014 have been adjusted to reflect impact of the adoption of this ASU. The impact related to the income statement for the twelve month periods ended June 30, 2015 and 2014 has been reflected as fourth quarter activity as the adoption of this ASU did not have a significant impact on the consolidated financial statements.
For the quarter ended June 30, 2015, the Company reported net loss of $83,000, or $(.07) basic and diluted loss per common share. During the quarter ended June 30, 2015, the Company made a change in estimate related to the useful life of a non-bank property held for future bank use. This change in estimate resulted in additional depreciation expense of approximately $292,000 for the year ended June 30, 2015. Excluding $292,000 of expenses related to change in estimate and the related tax benefit of $92,000, net income would have been $117,000 or $.10 basic and diluted earnings per common share. For the same period last year, the Company reported net income of $90,000, or $.08 basic and diluted earnings per common share.
Total interest income for the quarter was down due to a $72,000, or 8% decrease in loan interest income. This decrease was partially offset by a $25,000, or 17% decline in total interest expense. Net interest income before provisions for loan losses fell $48,000, or 7% for the three months ended June 30, 2015, compared to fourth quarter 2014.
Provisions for loan losses were $60,000 during fourth quarter 2015, compared to $32,000 for the same period a year earlier. Net loan losses totaled $43,000, compared to $67,000 a year ago. A regular analysis of the allowance for loan losses indicated the reserve was adequate at June 30, 2015. This analysis included reviewing changes in volume, composition and quality of the loan portfolio, as well as actual loan loss experience.
Non-interest income was $236,000, compared to $221,000 for the year-earlier period. Non-interest expense increased $236,000, or 28%, to $1,009,000 primarily due to the change in estimate mentioned previously. Limiting the overall increase, salaries and employee benefits decreased $37,000, or 11% and repossessed property expense decreased $35,000, or 54%.
For the twelve-month period ended June 30, 2015, the Company reported net income of $177,000, or $.15 basic and diluted earnings per common share. Excluding expenses of approximately $200,000, net of tax, related to the change in estimate mentioned previously, net income from operations was $377,000, or $.32 basic and diluted earnings per common share. The Company reported earnings of $379,000 or $.32 basic and diluted earnings per common share for fiscal 2014. Net interest income before the provision for loan losses decreased $235,000 to $2.8 million for fiscal year 2015. Total interest income decreased $320,000, or 9%, but was only partially offset by a $86,000, or 14% decline in interest expense for the year. Loan loss provisions increased to $220,000, compared to $186,000 for the prior year. Net loan charge-offs totaled $179,000 for fiscal year 2015, compared to $364,000 for fiscal year 2014.
Non-interest income increased $124,000 or 22%, to $682,000 for fiscal 2015. Non-interest income in the current year included $100,000 of non-recurring life insurance proceeds associated with the January, 2015 death of Company’s CFO and Executive Vice President, Mike Monnett.
Non-interest expense rose $226,000, or 8% to $3,197,000 for the current year. Expenses related to change in estimate mentioned previously totaled approximately $292,000. Salaries and employee benefits decreased $125,000, or 9% and repossessed property expense, including net loss on sale of foreclosed property, decreased $49,000, or 28% as compared to the prior year. Each of those items limited the increase in non-interest expense for the year.
At June 30, 2015, total assets were $64.9 million compared to $67.7 million at June 30, 2014. During the twelve months ended June 30, 2015, loans outstanding decreased $3.7 million, or 8%, to $45.7 million. The change in loans was the largest factor leading to the decline in total assets. Stock in Federal Home Loan Bank of Indianapolis decreased by $465,000 or 45%. Also, premises and equipment decreased by $342,000 or 18%. Investment securities increased $2.0 million, or 30% during the year.
Loans delinquent 90 days or more decreased 26%, to $862,000, or 1.9% of total loans at June 30, 2015. Total non-performing assets declined 23%, to $1.2 million, or 1.8% of total assets. Non-performing assets included $283,000 in other real estate owned (“OREO”) and repossessed properties at June 30, 2015, compared to $330,000 at June 30, 2014.
Allowances for loan losses were $526,000 at June 30, 2015, and $484,000 at June 30, 2014. Loan loss allowances were 1.15% of total loans at June 30, 2015, and 0.98% of total loans a year earlier. Periodic provisions to allowances for loan losses reflect management’s view of risk in the Company’s entire loan portfolio due to a number of dynamic factors, including current economic conditions, quantity of outstanding loans, and loan delinquency trends. Management considered the level of allowances for loan losses at June 30, 2015 to be adequate to cover probable incurred losses inherent in the loan portfolio at that date.
At June 30, 2015, total deposits were $44.6 million, compared to $48.7 million twelve months earlier. Total borrowings increased to $10.5 million at June 30, 2015, compared to $10.0 million a year earlier.
Shareholders’ equity was $8.7 million, or 13.4% of total assets at June 30, 2015, compared to $8.6 million, or 12.8% of total assets at June 30, 2014. Factors impacting shareholder equity during fiscal 2015 included net income, four quarterly cash dividends totaling $.125 per share, $39,000 net decrease in unrealized loss on securities available for sale, and a $15,000 decrease in equity components associated with a stock-based employee benefit plan. During the twelve months ended June 30, 2015, the Company repurchased 4,500 shares of its stock. At June 30, 2015, the Company’s book value per share was $7.30 based on 1,191,583 shares outstanding compared to $7.23 per share based on 1,196,083 at June 30, 2014. The last reported price per share on June 30, 2015 was $5.70.
Home Financial Bancorp and Our Community Bank, an FDIC-insured, Indiana stock commercial bank, operate from headquarters in Spencer, Indiana, and a branch office in Cloverdale, Indiana. Further information concerning Home Financial Bancorp and its subsidiaries is available at www.hfbancorp.com or www.ocbconnect.com.
HOME FINANCIAL BANCORP
FOR THREE MONTHS ENDED JUNE 30:
|Net Interest Income||
|Provision for Loan Losses||60||32|
|Basic and Diluted (Loss) Earnings Per Share:||$||(.07||)||$||.08|
|Average Shares Outstanding - Basic||1,184,614||1,189,114|
|Average Shares Outstanding - Diluted||1,184,614||1,190,800|
FOR TWELVE MONTHS ENDED JUNE 30:
|Net Interest Income||$||2,805||$||3,040|
|Provision for Loan Losses||220||186|
|Income Tax (Benefit)||(107||)||62|
|Basic and Diluted Earnings Per Share:||$||.15||$||.32|
|Average Shares Outstanding - Basic||1,190,719||1,187,564|
|Average Shares Outstanding - Diluted||1,192,367||1,189,616|
|Allowance for Loan Losses||526||484|
|Non-Performing Assets to Total Assets||1.76||%||2.20||%|
|Non-Performing Loans to Total Loans||1.89||%||2.35||%|
|Book Value Per Share*||$||7.30||$||7.23|
*Based on 1,191,583 Shares at June 30, 2015 and 1,196,083 Shares at June 30, 2014.