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 second quarter and six months ended December 31, 2018. The following comparisons are made to the same time period in the prior fiscal year.
Second Quarter Highlights:
- Net interest income decreased $38,000 or 6%;
- Non-interest income increased $22,000 or 21%;
- Income tax expense decreased $23,000;
- Net income increased $18,000 or 31%, to $76,000.
Six Month Highlights:
- Non-performing assets fell $145,000 or 16%;
- Net interest income decreased $56,000 or 4%;
- Non-interest expense increased $67,000 or 5%;
- Net income declined $51,000 to $96,000.
For the quarter ended December 31, 2018, the Company reported net income of $76,000, or $.07 basic and diluted earnings per share. Net income was $58,000 or $.05 basic and diluted earnings per share for the quarter ended December 31, 2017. Second quarter 2019 net income was impacted by higher interest costs on deposits compared to the same quarter last year.
Net interest income decreased $38,000 or 6%, and totaled $635,000. Total interest income improved $32,000 or 4%, but was more than offset by $70,000 or 58% increase in interest expense. Net interest margin for the quarter was 3.68%, compared to 4.12% for the same period a year earlier.
Loan loss provisions were $15,000 for the quarter-ended December 31, 2018, compared to $10,000 for the year-earlier period. 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, influences the need for future loan loss provisions.
Total non-interest income increased $22,000 or 22%, to $127,000 for the quarter. This change primarily resulted from $15,000 increase from service charges on deposit accounts compared to second quarter 2018. Total non-interest expense for second quarter 2019 decreased $16,000 or 2%.
Income tax expense was less than $1,000, compared to $24,000 for the same quarter a year earlier. This change was partially due to federal tax legislation enacted during fiscal 2018. As a result of the Tax Cuts and Jobs Act Bill of 2017, the Company’s net deferred tax asset (“net DTA”) was revalued as of December 31, 2017. The value of the net DTA was reduced by $34,000 with the amount of this reduction recognized as additional income tax expense in the second quarter of fiscal 2018.
For the six-month period ended December 31, 2018, the Company reported net income of $96,000, or $.08 basic and diluted earnings per share. Net income was $147,000, or $.13 basic and diluted earnings per share for the six months ended December 31, 2017. Higher interest expense and elevated non-interest expense contributed to reduced net income compared to the same period a year earlier.
Net interest income decreased $56,000, or 4%, to $1.3 million for the six-month period ending December 31, 2018. Total interest income increased $73,000 or 5%. Total interest expense increased $129,000 or 56%.
Loan loss provisions were $30,000 for six-months ended December 31, 2018, compared to $25,000 for the same period ending December 31, 2017. 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.
Non-interest income increased $38,000, or 18%, to $246,000 for the first half of fiscal 2019, compared to $208,000 for the year-earlier period. This change was largely due to an increase in service charge income from deposit accounts.
Non-interest expense increased $67,000 or 5%. Contributing to the increase in non-interest expense, computer processing fees increased $28,000 or 23%, legal and professional fees increased $27,000 or 18%, and net occupancy expenses increased $20,000 or 25%. Partially offsetting these increases, salaries and employee benefits decreased $25,000 or 4%.
At December 31, 2018, total assets were $72.9 million, compared to $73.3 million at June 30, 2018. Cash and cash equivalents decreased $350,000 or 5% to $6.1 million. Investments available for sale declined 4% to $9.6 million. Total loans increased $439,000 or 1%, to $52.8 million.
Loans delinquent 90 days or more decreased 11% and were $787,000 or 1.5% of total loans at December 31, 2018, compared to $879,000 or 1.7% of total loans at June 30, 2018. Non-performing assets decreased 16% to $787,000 or 1.1% of total assets at December 31, 2018. This compares to non-performing assets of $932,000 or 1.3% of total assets at June 30, 2018. Non-performing assets included no Other Real Estate Owned (“OREO”) and repossessed properties at December 31, 2018, compared to $53,000 six months earlier.
Loan loss allowances were $515,000 or 0.98% of total loans at December 31, 2018, compared to $485,000 or 0.93% of total loans at June 30, 2018. Management considered the level of loan loss allowances at December 31, 2018 to be adequate to cover estimated losses inherent in the loan portfolio at that date.
Total deposits increased $4.0 million or 8%, to $54.2 million as of December 31, 2018. Total borrowings decreased $4.5 million or 32%, to $9.5 million at December 31, 2018, from $14.0 million at June 30, 2018.
Shareholders’ equity was $8.7 million or 11.9% of total assets at December 31, 2018. Factors impacting shareholder equity during the first half of fiscal 2019 included net income, two quarterly cash dividends totaling $.08 per share, and a $4,000 decline in accumulated other comprehensive loss related to securities available for sale. At December 31, 2018, the Company’s book value per share was $7.54 based on 1,155,594 shares outstanding.
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 DECEMBER 31: | 2018 | 2017 | |||||||
Net Interest Income | $ | 635 | $ | 673 | |||||
Provision for Loan Losses | 15 | 10 | |||||||
Non-interest Income | 127 | 105 | |||||||
Non-interest Expense | 670 | 686 | |||||||
Income Tax | 1 | 24 | |||||||
Net Income | 76 | 58 | |||||||
Basic Earnings Per Share: | $ | .07 | $ | .05 | |||||
Diluted Earnings Per Share: | $ | .07 | $ | .05 | |||||
Average Shares Outstanding - Basic | 1,162,947 | 1,165,458 | |||||||
Average Shares Outstanding - Diluted | 1,162,947 | 1,165,618 | |||||||
FOR SIX MONTHS ENDED DECEMBER 31: | 2018 | 2017 | |||||||
Net Interest Income | $ | 1,284 | $ | 1,340 | |||||
Provision for Loan Losses | 30 | 25 | |||||||
Non-interest Income | 246 | 208 | |||||||
Non-interest Expense | 1,412 | 1,345 | |||||||
Income Tax | (8 | ) | 31 | ||||||
Net Income | 96 | 147 | |||||||
Basic Earnings Per Share: | $ | .08 | $ | .13 | |||||
Diluted Earnings Per Share: | $ | .08 | $ | .13 | |||||
Average Shares Outstanding - Basic | 1,164,475 | 1,165,458 | |||||||
Average Shares Outstanding - Diluted | 1,164,475 | 1,165,621 | |||||||
| December 31, | June 30, | |||||||
2018 | 2018 | ||||||||
Total Assets | $ | 72,913 | $ | 73,347 | |||||
Total Loans | 52,786 | 52,348 | |||||||
Allowance for Loan Losses | 515 | 485 | |||||||
Total Deposits | 54,177 | 50,133 | |||||||
Borrowings | 9,500 | 14,000 | |||||||
Shareholders’ Equity | 8,709 | 8,717 | |||||||
Non-Performing Assets | 787 | 932 | |||||||
Non-Performing Loans | 787 | 879 | |||||||
Non-Performing Assets to Total Assets | 1.08 | % | 1.27 | % | |||||
Non-Performing Loans to Total Loans | 1.49 | 1.68 | |||||||
Book Value Per Share* | $ | 7.54 | $ | 7.48 |
*Based on 1,155,594 shares at December 31, 2018 and 1,166,002 shares at June 30, 2018.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190205005652/en/
Kurt D. Rosenberger
Phone: (812) 829-2095