Home Financial Bancorp Announces Third Quarter Results

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 results for the third quarter and nine months ended March 31, 2020.

Third Quarter Highlights:

• Non-interest expenses increased 8% or $51,000;
• Net income fell 51%, from $105,000 to $52,000.

Nine Month Highlights:

• Total shareholders’ equity totaled $8.9 million or 12% of assets;
• Non-performing assets decreased 56%, or $278,000;
• Net interest income increased 4%, or $68,000;
• Non-interest income increased 13% or $47,000;
• Net income improved 33%, from $201,000 to $267,000.

For the quarter ended March 31, 2020, the Company reported net income of $52,000 or $.04 basic and diluted earnings per share. For the same period last year, the Company reported net income of $105,000 or $.09 per share. Net income fell, compared to third quarter 2019 results, due to an increase in non-interest expense.

Total interest income increased slightly to $829,000, while interest expense decreased $5,000 or 3%, to $173,000 during the quarter ended March 31, 2020, compared to the quarter ended March 31, 2019. As a result, net interest income increased $6,000, or 1%, for the three months ended March 31, 2020.

Loan loss provisions for third quarter 2020 totaled $15,000. Loan loss provisions were $9,000 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. 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 2020 non-interest income totaled $124,000 compared to $130,000 a year earlier. Service charges on deposit accounts decreased $4,000 or 7%. Non-interest expense for the quarter ended March 31, 2020 rose $51,000, or 8% to $723,000, compared to $672,000 for the same period a year earlier. This change primarily resulted from salaries and employee benefits $40,000, or 12% increase, and legal and professional fees $29,000, or 62% increase, for the quarter ended March 31, 2020.

For the nine-month period ended March 31, 2020, the Company reported net income of $267,000 or $.23 earnings per share. Net income was $201,000 or $.17 earnings per share for the year-earlier period. Net income improved due to increases in net interest income and non-interest income.

Total interest income increased $66,000, or 3%. Interest expense decreased $2,000 or less than 1%. Consequently, net interest income before provisions for loan losses increased $68,000 or 4%, compared to the same period in 2019.

For the nine-month period ended March 31, 2020, loan loss provisions were $45,000, compared to $39,000 recorded for the nine-month period ended March 31, 2019. 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.

Total non-interest income increased $47,000, or 13%. Accounting for part of this change, service charges on deposit accounts increased $10,000, or 6%, and sale of repossessed property produced a $1,000 gain, compared to a $12,000 loss on sale of repossessed real estate for the year-earlier period. Total non-interest expense increased $21,000, or 1%, compared to the same nine-month period during the prior year.

As of March 31, 2020, total assets were $73.7 million and $72.0 million at June 30, 2019; the end of the prior fiscal year. Cash and interest-bearing deposits totaled $9.4 million at March 31, 2020. Investment securities available for sale decreased $1.8 million, or 20%, to $7.2 million at March 31, 2020. Total loans decreased to $52.8 million, from $53.2 million at June 30, 2019.

Non-performing loans decreased 52% and totaled $187,000, or 0.4% of total loans at March 31, 2020. At June 30, 2019, non-performing loans were $386,000, or 0.7% of total loans. Total non-performing assets were $217,000, or 0.3% of total assets at March 31, 2020, compared to $495,000, or 0.7% of total assets at June 30, 2019. Non-performing assets included $30,000 in Other Real Estate Owned (“OREO”) and other repossessed properties at March 31, 2020, compared to $109,000 nine months earlier.

The balance of the loan loss allowance increased 3% to $520,000 or 0.99% of total loans at March 31, 2020, compared to $504,000, or 0.95% of total loans at June 30, 2019. Management considered the level of loan loss allowances at March 31, 2020 to be adequate to cover estimated losses inherent in the loan portfolio at that date.

Total deposits increased 2% to $54.2 million as of March 31, 2020, from $53.1 million nine months earlier. Total borrowings increased $500,000, or 5%, to $10.0 million.

Shareholders’ equity was $8.9 million, or 12.0% of total assets at March 31, 2020, and $8.9 million or 12.4% of total assets at June 30, 2019. Factors impacting shareholder equity during the first three quarters of fiscal 2020 included net income, three quarterly cash dividends totaling $.12 per share, and a change in unrealized gain on available for sale securities of $39,000 at June 30, 2019, to an unrealized loss of $122,000 at March 31, 2020. At March 31, 2020, the Company’s book value per share was $7.67 based on 1,155,594 shares outstanding. The last reported price per share as of March 31, 2020 was $6.00.

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:	2020		2019
Net Interest Income	$656		$650
Provision for Loan Losses	15		9
Non-interest Income	124		130
Non-interest Expense	723		672
Income Tax	(10	)	(6	)
Net Income	52		105
Basic and Diluted Earnings Per Share:	$.04		$.09
Average Shares Outstanding - Basic	1,155,594		1,155,594
Average Shares Outstanding - Diluted	1,155,594		1,155,594
FOR NINE MONTHS ENDED MARCH 31:	2020		2019
Net Interest Income	$2,002		$1,934
Provision for Loan Losses	45		39
Non-interest Income	410		363
Non-interest Expense	2,093		2,071
Income Tax	7		(14	)
Net Income	267		201
Basic and Diluted Earnings Per Share:	$.23		$.17
Average Shares Outstanding - Basic	1,155,594		1,161,514
Average Shares Outstanding - Diluted	1,155,594		1,161,514
	March 31, 2020		June 30, 2019
Total Assets	$73,738		$72,011
Total Loans	52,765		53,232
Allowance for Loan Losses	520		504
Total Deposits	54,169		53,081
Borrowings	10,000		9,500
Shareholders’ Equity	8,869		8,900
Non-Performing Assets	217		495
Non-Performing Loans	187		386
Non-Performing Assets to Total Assets	0.29	%	0.69	%
Non-Performing Loans to Total Loans	0.35		0.73
Book Value Per Share*	$7.67		$7.70
*Based on 1,155,594 shares at March 31, 2020 and at June 30, 2019.