SPENCER, Ind.--(BUSINESS WIRE)--Home Financial Bancorp (“Company”) (OTCPink: 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, 2018.
Fourth Quarter Highlights:
- Non-interest expense increased 33%, or $234,000;
- Net loss was $84,000, compared to year-earlier net income of $86,000;
- Excluding $265,000 of non-recurring expenses and related tax benefit of $81,000, net income would have been $100,000.
Twelve Month Highlights:
- Total loans grew 10%, or $4.6 million;
- Non-interest income decreased 23%, or $129,000;
- Non-interest expense increased 7%, or $188,000;
- Net income decreased 53% to $159,000, from $336,000;
- Excluding $265,000 of non-recurring expenses and related tax benefit of $31,000, net income would have been $346,000.
For the quarter ended June 30, 2018, the Company reported net loss of $84,000, or ($.07) basic and diluted earnings per common share. Excluding $265,000 of non-recurring costs and related tax benefit, net income would have been $100,000 or $.09 basic and diluted earnings per common share. For the same period last year, the Company reported net income of $86,000, or $.07 basic and diluted earnings per common share. The quarterly net loss resulted from non-recurring conversion-related expenses which generated much higher non-interest expense.
Total interest income for the quarter was down $3,000, or less than 1%. Total interest expense increased $30,000, or 27%. Consequently, net interest income before provisions for loan losses decreased $34,000, or 5% for the three months ended June 30, 2018, compared to the same quarter in 2017.
Provision for loan losses was $12,000 during fourth quarter 2018, compared to $20,000 for the same period a year earlier. Net loan losses totaled $2,000 for the most recent quarter, and were $18,000 a year ago. A regular analysis of the allowance for loan losses indicated the reserve was adequate at June 30, 2018. 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 $118,000 for the 3 months ended June 30, 2018. Non-interest income was $132,000 for the same period a year earlier. Service charges on deposit accounts decreased $10,000 compared to the same period in 2017.
Non-interest expense increased $234,000, or 33%, to $944,000. A number of non-recurring expenses led to higher non-interest expense. One-time data system conversion-related charges and associated expenses totaled $182,000. In addition, during the quarter-ended June 30, 2018, the Company recognized $83,000 of impairment and depreciation expense for assets no longer in use. These non-recurring expense items are not expected to adversely impact Company financial statements in future periods.
For the twelve-month period ended June 30, 2018, the Company reported net income of $159,000, or $.14 basic and diluted earnings per common share. Excluding $265,000 of non-recurring expenses and related tax benefit, net income would have been $346,000 or $.30 basic and diluted earnings per common share. The Company reported earnings of $336,000 or $.29 basic and diluted earnings per common share for fiscal 2017.
Net interest income before provisions for loan losses increased $6,000, or less than 1% for fiscal year 2018. Total interest income increased nearly $75,000, or 2%, but was substantially offset by a $69,000, or 16% increase in interest expense for the year. Loan loss provisions decreased to $52,000, compared to $80,000 for the prior year. Net loan charge-offs totaled $36,000 for fiscal year 2018, compared to $66,000 for fiscal year 2017.
Non-interest income decreased $129,000 or 23%, to $438,000 for fiscal 2018. Service charges on deposit accounts decreased $74,000, or 29%, compared to the prior year. Also contributing to this change, $39,000 from gain on investment sales and $17,000 from gain on sale of loans was recognized in 2017. For 2018, no gains on investment sales were realized and gains on sales of loans totaled $6,000.
Non-interest expense increased $188,000 or 7%, to $3.0 million. As mentioned above, non-recurring expenses led to higher non-interest expense. One-time data system conversion-related charges and associated expenses totaled $182,000. In addition, during the quarter-ended June 30, 2018, the Company recognized $83,000 of impairment and depreciation expense for assets no longer in use. These non-recurring expense items are not expected to adversely impact Company financial statements in future periods.
At June 30, 2018, total assets were $73.3 million, compared to $69.7 million at June 30, 2017. During the twelve months ended June 30, 2018, loans outstanding increased $4.6 million, or 10%, to $52.3 million. Cash and cash equivalents and interest-bearing time deposits increased $963,000, from $5.5 million at June 30, 2017 to $6.5 million at June 30, 2018. Investment securities decreased $2.1 million, or 18% during the year.
Loans delinquent 90 days or more totaled $879,000, and equaled 1.7% of total loans at June 30, 2018, compared to $694,000 and 1.5% of total loans a year earlier. Other real estate owned (“OREO”) and repossessed property was $53,000 at June 30, 2018, compared to $102,000 at June 30, 2017.
Allowances for loan losses were $485,000 at June 30, 2018, and $468,000 at June 30, 2017. Loan loss allowances equaled 0.93% of total loans at June 30, 2018, 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, 2018 adequate to cover probable incurred losses inherent in the loan portfolio at that date.
At June 30, 2018, total deposits were $50.1 million, compared to $50.2 million twelve months earlier. Total borrowings increased to $14.0 million at June 30, 2018, compared to $10.0 million a year earlier.
Shareholders’ equity was $8.7 million, or 11.9% of total assets at June 30, 2018, compared to $8.8 million, or 12.7% of total assets at June 30, 2017. Factors impacting shareholder equity during fiscal 2018 included net income, four quarterly cash dividends totaling $.16 per share, and a decrease from $11,000 accumulated other comprehensive income at June 30, 2017 to $91,000 accumulated other comprehensive loss at June 30, 2018. At June 30, 2018, the Company’s book value per share was $7.48 based on 1,166,002 shares outstanding compared to $7.59 per share at June 30, 2017. The last reported price per share on June 30, 2018 was $7.70.
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. Additional information concerning Home Financial Bancorp and its subsidiaries is available at www.hfbancorp.com or www.ocbconnect.com.
| HOME FINANCIAL BANCORP | |||||
| (Unaudited) | |||||
| Consolidated Financial Highlights | |||||
| (Dollars in thousands, except per share and book value amounts) | |||||
| FOR THREE MONTHS ENDED JUNE 30: |
2018 |
2017 |
|||
| Net Interest Income | $ 654 | $ 687 | |||
| Provision for Loan Losses | 12 | 20 | |||
| Non-interest Income | 118 | 132 | |||
| Non-interest Expense | 944 | 710 | |||
| Income Tax | (100 | ) | 3 | ||
| Net Income | (84 | ) | 86 | ||
| Basic and Diluted (Loss) Earnings Per Share: |
($ .07 |
) | $ .07 | ||
| Average Shares Outstanding - Basic | 1,165,594 | 1,165,458 | |||
| Average Shares Outstanding - Diluted | 1,165,594 | 1,165,614 | |||
| FOR TWELVE MONTHS ENDED JUNE 30: |
2018 |
2017 |
|||
| Net Interest Income |
$2,685 |
$2,679 |
|||
| Provision for Loan Losses | 52 | 80 | |||
| Non-interest Income | 438 | 567 | |||
| Non-interest Expense | 2,975 | 2,787 | |||
| Income Tax (Benefit) | (63 | ) | 43 | ||
| Net Income | 159 | 336 | |||
| Basic and Diluted Earnings Per Share: | $ .14 | $ .29 | |||
| Average Shares Outstanding - Basic | 1,165,526 | 1,168,028 | |||
| Average Shares Outstanding - Diluted | 1,165,713 | 1,168,127 | |||
| June 30, | June 30, | ||||
|
2018 |
2017 |
||||
| Total Assets |
$73,347 |
$69,704 |
|||
| Total Loans | 52,348 | 47,713 | |||
| Allowance for Loan Losses | 485 | 468 | |||
| Total Deposits | 50,133 | 50,199 | |||
| Borrowings | 14,000 | 10,000 | |||
| Shareholders’ Equity | 8,717 | 8,847 | |||
| 90-days Past Due Loans and OREO | 932 | 796 | |||
| 90-days Past Due Loans | 879 | 694 | |||
| 90-days Past Due Loans and OREO to Total Assets | 1.27 | % | 1.14 | % | |
| 90-days Past Due Loans to Total Loans | 1.68 | % | 1.45 | % | |
| Book Value Per Share* |
$7.48 |
$7.59 |
|||
*Based on 1,166,002 Shares at June 30, 2018 and at June 30, 2017.