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, 2018.
First Quarter Highlights:
- Non-performing assets decreased to $713,000, or 1% of total assets;
- Net interest income fell $17,000 or 3%;
- Non-interest expense increased $65,000 or 10%;
- Net income decreased $68,000 or 77%, to $20,000.
For the quarter ended September 30, 2018, the Company reported net income of $20,000 or $.02 basic and diluted earnings per share. Net income totaled $88,000 or $.08 basic and diluted earnings per share for the quarter ended September 30, 2017. A decrease in net interest income, plus higher non-interest expense resulted in lower net income compared to the same period a year earlier.
Net interest income decreased 3% to $650,000 for the three months ended September 30, 2018. Total interest income rose $41,000 or 5%, while interest expense increased $58,000, or 53%. Net interest margin for the quarter was 3.8%, compared to 4.1% a year earlier.
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Loan loss provisions were $20,000 for the quarter-ended September 30, 2018, and $15,000 for the same period a year earlier. 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 $2,000 or 2%, compared to the year-earlier period. Service charge income on deposit accounts increased $14,000 or 34%. This change reflects a rebound from fiscal first quarter 2018, when courtesy fee waivers and other actions related to the banks July, 2017 core data conversion led to a period of reduced service charge income on deposit accounts. The current period service charge income increase was offset by net loss on sale of repossessed property of $12,000 during fiscal first quarter 2019.
Non-interest expense increased $65,000 or 10%. Computer processing fees more than doubled, to $81,000 compared to the same period last year. Due to use of negotiated data system conversion expense credits, computer processing fees were reported at $25,000 for the quarter ended September 30, 2017. Also contributing to the overall increase in non-interest expense, legal and professional fees increased $25,000 or 31% compared to a year earlier. Most of this increase was related to auditing and consulting services performed during the first fiscal quarter of 2019.
At September 30, 2018, total assets were $73.8 million, an increase of $643,000 from $73.2 million at June 30, 2018. During fiscal first quarter 2019, cash and interest-bearing deposits increased $1.6 million, and investment securities decreased $381,000. Total loans decreased $540,000 or 1%, to $51.8 million, from $52.3 million at June 30, 2018.
Loans delinquent 90 days or more decreased 19% to $712,000 or 1.4% of total loans at September 30, 2018. Three months earlier, non-performing loans were $879,000 or 1.7% of total loans. Non-performing assets, which includes non-performing loans, decreased 24% to $713,000, or 1.0% of total assets, at September 30, 2018. Non-performing assets totaled $932,000, or 1.3% of assets, at June 30, 2018. Non-performing assets included $1,000 in Other Real Estate Owned (OREO) and other repossessed properties at September 30, 2018, compared to $53,000 three months earlier.
The allowance for loan losses was $510,000 at September 30, 2018, compared to $485,000 at June 30, 2018. Loan loss allowances were 0.98% of total loans at September 30, 2018, and 0.93% at June 30, 2018. Net loan recoveries during the quarter ended September 30, 2018 totaled $5,000, compared to net charge offs of $1,000 for the first quarter of fiscal 2018. Periodic provisions to loan loss allowances reflect managements view of risk in the Banks entire portfolio due to a number of 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, 2018 to be adequate to cover probable incurred losses inherent in the loan portfolio at that date.
Total deposits increased $3.0 million or 6% since June 30, 2018 and were $53.1 million as of September 30, 2018. Total borrowings decreased $2.5 million or 18%, to $11.5 million for quarter-ended September 30, 2018.
Shareholders equity was $8.7 million or 11.7% of total assets at September 30, 2018. Factors affecting shareholders equity during the quarter included net income, quarterly cash dividends of $.04 per share, and a $37,000 net decrease in the market value of securities available for sale. Based on 1,166,002 shares outstanding, the Companys book value per share was $7.42 at September 30, 2018.
Home Financial Bancorp and Our Community Bank, an FDIC-insured, state stock commercial bank, operate from headquarters in Spencer, Indiana, and a branch office in Cloverdale, Indiana. Additional information concerning Home Financial Bancorp and its subsidiaries is available at www.hfbancorp.com or www.ocbconnect.com.
|HOME FINANCIAL BANCORP|
|Consolidated Financial Highlights|
(Dollars in thousands, except per share and book value amounts)
FOR THREE MONTHS ENDED SEPTEMBER 30:
|Net Interest Income||$||650||$||667|
|Provision for Loan Losses||20||15|
|Basic Earnings Per Share:||$||.02||$||.08|
|Diluted Earnings Per Share:||.02||.08|
|Average Shares Outstanding – Basic||1,166,002||1,165,458|
|Average Shares Outstanding – Diluted||1,166,002||1,165,623|
|Allowance for Loan Losses||510||485|
|Non-Performing Assets to Total Assets||0.97||%||1.27||%|
|Non-Performing Loans to Total Loans||1.37||%||1.68||%|
|Book Value Per Share*||$||7.42||$||7.48|
*Based on 1,166,002 shares at September 30, 2018 and June 30, 2018.
Home Financial Bancorp
Kurt D. Rosenberger, 812-829-2095