Home Financial Bancorp Announces First Quarter Results

SPENCER, Ind.--(BUSINESS WIRE)--Home Financial Bancorp (“Company”) (OTC Symbol “HWEN”), an Indiana corporation which is the holding company for Our Community Bank, (“Bank”) based in Spencer, Indiana, announces unaudited results for the first quarter ended September 30, 2020.

First Quarter Highlights:

• Non-performing loans decreased 45% to $224,000, or 0.3% of total assets;
• Non-interest expense increased $148,000 or 21%;
• Net income decreased from $97,000 to net loss of $27,000.

For the quarter ended September 30, 2020, the Company reported net loss of $27,000 or ($.02) basic and diluted earnings per share. Net income totaled $97,000 or $.08 basic and diluted earnings per share for the quarter ended September 30, 2019. Non-interest expenses were higher due to professional costs incurred by the company related to the acquisition of its Bank subsidiary by Crane Credit Union (CCU), which was announced on August 19, 2020. Eliminating the impact of these professional fees associated with the acquisition transaction, net income from normal operations for the quarter was $68,000, or $0.06 basic and diluted earnings per share.

Net interest income decreased $23,000 or 3%, to $644,000 for the three months ended September 30, 2020. Total interest income fell $79,000 or 9%, while interest expense decreased $56,000, or 30%.

Loan loss provisions were $15,000 for the quarters-ended September 30, 2020 and 2019. A regular assessment of loan loss allowance adequacy indicated that these provisions were required 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 loan loss provisions.

Non-interest income increased $9,000 or 7%, compared to the year-earlier period. Service charges on deposit accounts decreased $13,000 or 21%. However, gain on sale of real estate and other miscellaneous income resulted in a net increase in non-interest income compared to fiscal first quarter 2020.

Non-interest expense increased $148,000 or 21%. Legal and professional fees increased to $218,000, compared to $76,000 for the same quarter a year earlier. Of this increase, $132,000 was for legal and consulting services specifically tied to a definitive purchase and assumption agreement signed by and between CCU and the Bank on August 18, 2020. In addition, salaries and employee benefits increased $11,000 or 3%. Decreases in computer processing fees and advertising expense partially offset the overall increase in non-interest expenses compared to a year earlier.

At September 30, 2020, total assets were $74.0 million; unchanged from the level reported at June 30, 2020. During fiscal first quarter 2021, cash and interest-bearing deposits decreased $1.6 million, and investment securities increased $1.9 million. Total loans decreased $162,000 or less than 1%, to $52.2 million, from $52.4 million at June 30, 2020.

Loans delinquent 90 days or more decreased 47% to $209,000 or 0.4% of total loans at September 30, 2020. Three months earlier, non-performing loans were $396,000 or 0.8% of total loans. Non-performing assets, which includes non-performing loans, decreased 45% to $224,000, or 0.3% of total assets, at September 30, 2020. Non-performing assets totaled $410,000, or 0.6% of assets, at June 30, 2020. Non-performing assets included $15,000 in Other Real Estate Owned (“OREO”) and other repossessed properties at both September 30, 2020 and June 30, 2020.

The allowance for loan losses was $535,000 at September 30, 2020, compared to $522,000 three months earlier. Loan loss allowances were 1.03% of total loans at September 30, 2020, and 1.00% at June 30, 2020. Periodic provisions to loan loss allowances reflect management’s view of risk in the Bank’s entire portfolio due to several dynamic factors, which include, but are not limited to, current economic conditions and loan delinquency trends. Management considered the level of loan loss allowances at September 30, 2020 to be adequate to cover probable incurred losses inherent in the loan portfolio at that date.

Total deposits were $56.5 million as of September 30, 2020 and $55.8 million as of June 30, 2020. Total borrowings decreased $500,000 or 6%, to $8.0 million for quarter-ended September 30, 2020.

Shareholders’ equity was $9.0 million or 12.1% of total assets at September 30, 2020. Factors affecting shareholders’ equity during the quarter included net income, quarterly cash dividends of $.04 per share, and a less than 1% net decrease in the market value of securities available for sale. Based on 1,155,594 shares outstanding, the Company’s book value per share was $7.78 at September 30, 2020.

Home Financial Bancorp and Our Community Bank, an FDIC-insured, state 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 SEPTEMBER 30:	2020		2019
Net Interest Income	$644		$667
Provision for Loan Losses	15		15
Non-interest Income	154		145
Non-interest Expense	843		695
Income Tax	(33	)	5
Net Income	(27	)	97
Basic Earnings Per Share:	$(.02	)	$.08
Diluted Earnings Per Share:	(.02	)	.08
Average Shares Outstanding - Basic	1,155,594		1,155,594
Average Shares Outstanding - Diluted	1,155,594		1,155,594
	September 30,		June 30,
	2020		2020
Total Assets	$74,019		$73,945
Total Loans	52,192		52,354
Allowance for Loan Losses	535		522
Total Deposits	56,480		55,815
Borrowings	8,000		8,500
Shareholders’ Equity	8,987		9,061
Non-Performing Assets	224		410
Non-Performing Loans	209		396
Non-Performing Assets to Total Assets	0.30	%	0.56	%
Non-Performing Loans to Total Loans	0.40	%	0.76	%
Book Value Per Share*	$7.78		$7.84

*Based on 1,155,594 shares at September 30, 2020 and June 30, 2020.