SPENCER, Ind.--(BUSINESS WIRE)--Home Financial Bancorp (“Company”) (OTC Pink Symbol “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, 2017.
Third Quarter Highlights:
- Provision for Loan Losses declined 33% or $10,000;
- Non-interest income increased 3% or $4,000;
- Net income rose 5%, from $87,000 to $91,000.
Nine Month Highlights:
- Total assets increased 9% to $70.0 million;
- Non-performing assets decreased 39%, or $366,000;
- Non-interest income increased 13%, or $49,000;
- Net income improved 62%, from $154,000 to $250,000.
For the quarter ended March 31, 2017, the Company reported net income of $91,000 or $.08 basic and diluted earnings per share. For the same period last year, the Company reported net income of $87,000 or $.07 per share. Net income was higher, compared to third quarter 2016 results, due to an increase in non-interest income, lower provisions for loan losses and lower non-interest expense.
Due to declining interest income on loans, total interest income was lower by $15,000 or 2%, while interest expense fell $1,000 or 1% during the quarter ended March 31, 2017, compared to the quarter ended March 31, 2016. As a result, net interest income decreased $14,000, or 2%, for the three months ended March 31, 2017, compared to the same period in 2016.
Loan loss provisions for third quarter 2017 totaled $20,000. Loan loss provisions were $30,000 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 charge-offs totaled $1,000 for the three months ended March 31, 2017, compared to $71,000 for third quarter 2016. 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.
Third quarter 2017 non-interest income totaled $124,000 compared to $120,000 a year earlier. Non-interest expense for the quarter ended March 31, 2017 totaled $674,000, compared to $677,000 for the same period a year earlier.
For the nine-month period ended March 31, 2017, the Company reported net income of $250,000 or $.21 earnings per share. Net income was $154,000 or $.13 earnings per share for the year-earlier period. Net income improved due to an increase in non-interest income and a decline in non-interest expense.
Total interest income decreased $60,000, or 3%. Interest expense fell $19,000 or 6%. Consequently, net interest income before provisions for loan losses dropped $42,000 or 2%, compared to the same period in 2016.
For the nine-month period ended March 31, 2017, loan loss provisions were $60,000, which represents a $10,000 or 14% decline from $70,000 recorded for the nine-month period ended March 31, 2016. 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 charge-offs totaled $46,000 during the first three quarters of fiscal 2017, compared to $105,000 for the year-earlier period.
Total non-interest income increased $49,000, or 13%. Accounting for most of the change, gain on sale of securities increased $39,000 for the nine-month period ending March 31, 2017, compared to the year-earlier period. Total non-interest expense decreased $145,000, or 7%, compared to the same nine-months during the prior year. Repossessed property expense fell $111,000 or 83%, compared to the same period a year earlier. Also contributing to the change from last year, rental expense dropped $41,000 or 100%, net occupancy expense declined $24,000 or 24%, and deposit insurance expense decreased $22,000 or 59%. Partially offsetting these decreases, legal and professional fees increased $38,000 or 21%.
As of March 31, 2017, total assets increased 9% to $70.1 million, from $64.5 million at June 30, 2016; the end of the prior fiscal year. Cash and interest-bearing deposits totaled $3.9 million at March 31, 2017. Investment securities available for sale increased $1.0 million, or 9%, to $12.7 million at March 31, 2017 from $11.7 million at June 30, 2016. Total loans increased 5% to $46.6 million, from $44.3 million at June 30, 2016.
Loans delinquent 90 days or more decreased 37% and totaled $437,000, or 0.9% of total loans at March 31, 2017. At June 30, 2016, non-performing loans were $692,000, or 1.6% of total loans. Total non-performing assets were $581,000, or 0.8% of total assets at March 31, 2017, compared to $947,000, or 1.5% of total assets at June 30, 2016. Non-performing assets included $145,000 in Other Real Estate Owned (“OREO”) and other repossessed properties at March 31, 2017, compared to $255,000 nine months earlier.
The balance of the loan loss allowance decreased 3% to $467,000, or 1.0% of total loans at March 31, 2017, compared to $454,000, or 1.0% of total loans at June 30, 2016. Management considered the level of loan loss allowances at March 31, 2017 to be adequate to cover estimated losses inherent in the loan portfolio at that date.
Total deposits increased 13% to $52.8 million as of March 31, 2017, from $46.7 million nine months earlier. Total borrowings declined $500,000, or 6%, to $8.0 million.
Shareholders’ equity was $8.7 million, or 12.5% of total assets at March 31, 2017, compared to $8.8 million or 13.7% of total assets at June 30, 2016. Factors impacting shareholder equity during the first three quarters of fiscal 2017 included net income, three quarterly cash dividends totaling $.115 per share, repurchase of 9,701 shares of company common stock, and a shift from $98,000 accumulated other comprehensive income at June 30, 2016 to $52,000 accumulated other comprehensive loss at March 31, 2017. At March 31, 2017, the Company’s book value per share was $7.50 based on 1,166,002 shares outstanding. The last reported price per share on March 31, 2017 was $6.80.
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|
(Dollars in thousands, except per share and book value amounts)
FOR THREE MONTHS ENDED MARCH 31:
|Net Interest Income||$674||$688|
|Provision for Loan Losses||20||30|
|Basic and Diluted Earnings Per Share:||$ .08||$.07|
|Average Shares Outstanding - Basic||1,165,968||1,190,737|
|Average Shares Outstanding - Diluted||1,165,977||1,190,827|
FOR NINE MONTHS ENDED MARCH 31:
|Net Interest Income||$1,991||$2,034|
|Provision for Loan Losses||60||70|
|Basic and Diluted Earnings Per Share:||$ .21||$ .13|
|Average Shares Outstanding - Basic||1,168,922||1,189,641|
|Average Shares Outstanding - Diluted||1,168,984||1,190,087|
|Allowance for Loan Losses||467||454|
|Non-Performing Assets to Total Assets||0.83||%||1.47||%|
|Non-Performing Loans to Total Loans||0.94||1.56|
|Book Value Per Share*||$7.50||$7.52|
*Based on 1,166,002 shares at March 31, 2017 and 1,175,703 shares at June 30, 2016.