Home Financial Bancorp Announces Fourth Quarter and Year-End Results

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, 2020.

Fourth Quarter Highlights:

  • Net interest income decreased 6%, or $45,000;
  • Non-interest income increased 21%, or $30,000;
  • Non-interest expense rose 5%, or $35,000;
  • Net income declined 35% to $73,000, from $113,000.

Twelve Month Highlights:

  • Shareholders’ equity was $9.1 million, or 12.3% of total assets;
  • Non-interest income increased 15%, or $77,000;
  • Non-interest expense rose 2%, or $65,000;
  • Net income increased 8% to $340,000, from $314,000;

For the quarter ended June 30, 2020, the Company reported net income of $73,000, or $.06 basic and diluted earnings per common share. For the same period last year, the Company reported net income of $113,000, or $.10 basic and diluted earnings per common share. The decrease in earnings resulted from lower interest income on loans, investments, and interest-earning deposits.

Total interest income for the quarter decreased $71,000, or 8%. Total interest expense fell by a smaller $26,000, or 14%. Consequently, net interest income before provisions for loan losses decreased $45,000, or 6% for the three months ended June 30, 2020, compared to the same quarter in 2019.

Provision for loan losses was $15,000 during fourth quarter 2020, compared to $17,000 for the same period a year earlier. Net loan losses totaled $13,000 for the most recent quarter, and were $20,000 a year ago. A regular analysis of the allowance for loan losses indicated the reserve was adequate at June 30, 2020. This analysis included reviewing changes in volume, composition and quality of the loan portfolio, as well as actual loan loss experience.

Non-interest income increased $30,000 or 21%, to $170,000 for the three months ended June 30, 2020. Non-interest income was $140,000 for the same period a year earlier. Service charges on deposit accounts decreased $29,000, or 45% compared to the same period in 2019.

Non-interest expense increased $35,000, or 5%, to $748,000. Contributing to the overall increase in non-interest expense for the current quarter, legal and professional fees rose $32,000 or 43%, and salaries and employee benefits edged up $24,000 or 7% compared to the same quarter a year earlier.

For the twelve-month period ended June 30, 2020, the Company reported net income of $340,000, or $.29 basic and diluted earnings per common share. The Company reported earnings of $314,000 or $.27 basic and diluted earnings per common share for fiscal 2019. Net income for the year improved due to gain on sale of investment securities and increased interest from loans compared to fiscal 2019.

Net interest income before provisions for loan losses increased $23,000, or 1% for fiscal year 2020. Interest from loans increased $65,000 or 2%, but was more than offset by a $69,000 decrease in interest income from investments and interest-earning deposits. Consequently, total interest income declined $5,000 or less than 1%. Total interest expense decreased $28,000 or 4%. Loan loss provisions were $60,000, compared to $66,000 for the prior year. Net loan charge-offs totaled $42,000 for fiscal year 2020, compared to $47,000 for fiscal year 2019.

Non-interest income increased $77,000 or 15%, to $580,000 for fiscal 2020. Most of the increased came from gain on sale of securities, which increased $55,000. Partially offsetting the overall increase, service charges on deposit accounts decreased $19,000, or 8%, compared to the prior year. Non-interest expense increased $65,000 or 2%, to $2.8 million. Contributing to the overall rise in non-interest expense for 2020 compared to 2019, salaries and employee benefits increased $126,000, or 10%, plus legal and professional fees increased $35,000 or 12%.

At June 30, 2020, total assets were $74.0 million, compared to $72.0 million at June 30, 2019. During the twelve months ended June 30, 2020, loans outstanding decreased $878,000, or 2%, to $52.4 million. Cash and cash equivalents and interest-bearing time deposits jumped from $5.3 million at June 30, 2019 to $11.5 million at June 30, 2020. Investment securities totaled $6.0 million, a $3.0 million or 33% decrease during the year.

Loans delinquent 90 days or more increased 3% to $396,000, and equaled 0.8% of total loans at June 30, 2020. A year earlier, loans delinquent 90 days or more totaled $386,000 and 0.7% of total loans. Other real estate owned (“OREO”) and repossessed property was $14,000 at June 30, 2020, compared to $109,000 at June 30, 2019.

Allowances for loan losses were $522,000 at June 30, 2020, and $504,000 at June 30, 2019. Loan loss allowances equaled 1.00% of total loans at June 30, 2020, and 0.95% 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 several 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, 2020 adequate to cover probable incurred losses inherent in the loan portfolio at that date.

At June 30, 2020, total deposits were $55.8 million, compared to $53.1 million twelve months earlier. Total borrowings decreased 11% to $8.5 million at June 30, 2020, compared to $9.5 million a year earlier.

Shareholders’ equity was $9.1 million, or 12.3% of total assets at June 30, 2020, compared to $8.9 million, or 12.4% of total assets at June 30, 2019. Factors impacting shareholder equity during fiscal 2020 included net income, four quarterly cash dividends totaling $.16 per share, and a $6,000 or 15% increase in accumulated other comprehensive gain. At June 30, 2020, the Company’s book value per share was $7.84 based on 1,155,594 shares outstanding. At June 30, 2019, book value was $7.70 per share based on 1,155,594 shares outstanding. The last reported price per share on June 30, 2020 was $6.35.

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:

2020

2019

Net Interest Income

$669

$714

Provision for Loan Losses

15

17

Non-interest Income

170

140

Non-interest Expense

748

713

Income Tax (Benefit)

3

11

Net Income

73

113

Basic and Diluted (Loss) Earnings Per Share:

$.06

$.10

Average Shares Outstanding - Basic

1,155,594

1,155,594

Average Shares Outstanding - Diluted

1,155,594

1,155,594

FOR TWELVE MONTHS ENDED JUNE 30:

2020

2019

Net Interest Income

$2,671

$2,648

Provision for Loan Losses

60

66

Non-interest Income

580

503

Non-interest Expense

2,840

2,775

Income Tax (Benefit)

11

(4

)

Net Income

340

314

Basic and Diluted Earnings Per Share:

$.29

$.27

Average Shares Outstanding - Basic

1,155,594

1,160,034

Average Shares Outstanding - Diluted

1,155,594

1,160,034

June 30,

June 30,

2020

2019

Total Assets

$73,945

$72,004

Total Loans

52,354

53,232

Allowance for Loan Losses

522

504

Total Deposits

55,815

53,081

Borrowings

8,500

9,500

Shareholders’ Equity

9,061

8,900

90-days Past Due Loans and OREO

410

495

90-days Past Due Loans

396

386

90-days Past Due Loans and OREO to Total Assets

0.56

%

0.69

%

90-days Past Due Loans to Total Loans

0.76

%

0.73

%

Book Value Per Share*

$7.84

$7.70

*Based on 1,155,594 Shares at June 30, 2020 and at June 30, 2019.

Contacts:

Kurt D. Rosenberger
Phone: (812) 829-2095

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