UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: April 19, 2006
Home Federal Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Federal | 000-50901 | 20-0945587 |
(State or other jurisdiction | (Commission File | (I.R.S. Employer |
of incorporation) | Number) | Identification No.) |
500 12th Avenue South
Nampa, Idaho 83651
(Address of principal executive offices and zip code)
(208) 466-4634
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
<PAGE>
Item 2.02 Results of Operations and Financial Condition
On April 19, 2006, Home Federal Bancorp, Inc. issued its earnings release for the second quarter of its fiscal year ending September 30, 2006. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Press release of Home Federal Bancorp, Inc. dated April 19, 2006
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
HOME FEDERAL BANCORP, INC.
Date: April 19, 2006 By: /s/ Robert A. Schoelkoph
Robert A. Schoelkoph
Senior Vice President and
Chief Financial Officer
<PAGE>
Exhibit 99.1
<PAGE>
Contact:
Home Federal Bancorp, Inc.
Daniel L. Stevens, Chairman, President & CEO
Robert A. Schoelkoph, SVP, Treasurer & CFO
208-466-4634
www.myhomefed.com
PRESS RELEASE - For Immediate Release
HOME FEDERAL BANCORP, INC. ANNOUNCES SECOND QUARTER EARNINGS
Nampa, ID (April 19, 2006) - Home Federal Bancorp, Inc. (the "Company") (Nasdaq: HOME), the parent company of Home Federal Bank (the "Bank"), today reported net income of $1.2 million, or $0.09 per diluted share, for the quarter ended March 31, 2006, compared to $1.7 million, or $0.11 per diluted share, for the same period a year ago. Results for the quarter ended March 31, 2005 included a $386,000 pre-tax gain on the sale of a former branch. Excluding the gain on the sale of the branch, the Company had net income of $1.4 million, or $0.10 per share for the quarter ended March 31, 2005.
Net income for the six months ended March 31, 2006 was $3.0 million, or $0.21 per diluted share, compared to $1.7 million, or $0.12 per diluted share for the same six-month period a year ago. Results for the six months ended March 31, 2005 included the $386,000 pre-tax gain on the sale of a former branch and a $1.8 million pre-tax expense for establishing the Home Federal Foundation, Inc. (the "Foundation"). Excluding the gain on the sale of the branch and the expense for establishing the Foundation, the Company had net income of $2.6 million, or $0.18 per diluted share, for the six months ended March 31, 2005.
"We have continued to perform successfully despite a flattening yield curve," said Daniel L. Stevens, Chairman and CEO. "During the quarter ended March 31, 2006, we experienced a 14% increase in interest and dividend income, net loans increased 14% and deposits were up 16%, as compared to the same period a year ago."
The following table reconciles the Company's actual net income to pro forma net income for the three and six months ended March 31, 2006 and 2005 exclusive of the sale of the branch and the contribution to the Foundation, as adjusted for Federal and state taxes (in thousands, except per share data):
Three Months Ended |
Six Months Ended |
||||||
2006 |
2005 |
2006 |
2005 |
||||
Pro forma disclosure |
(unaudited) |
||||||
Net income, as reported |
$ 1,233 |
$ 1,674 |
$ 2,993 |
$ 1,748 |
|||
Sale of branch |
- |
(386) |
- |
(386) |
|||
Contribution to Foundation |
- |
- |
- |
1,825 |
|||
Federal and state income taxes |
- |
151 |
- |
(561) |
|||
Pro forma net income |
$ 1,233 |
$ 1,439 |
$ 2,993 |
$ 2,626 |
|||
Earnings per share |
|||||||
Diluted as reported |
$ 0.09 |
$ 0.11 |
$ 0.21 |
$ 0.12 |
|||
Pro forma diluted |
$ 0.09 |
$ 0.10 |
$ 0.21 |
$ 0.18 |
<PAGE>
Home Federal Bancorp, Inc.
April 19, 2006
Page 2 of 7
Second Quarter Highlights (at or for the periods ended March 31, 2006 compared to March 31, 2005):
Operating Results
Revenues for the quarter ended March 31, 2006, which consisted of net interest income before the provision for loan losses plus noninterest income, were unchanged at $8.1 million as compared to the quarter ended March 31, 2005. Results for the quarter ended March 31, 2005 included a $386,000 pre-tax gain on the sale of a former branch. Net interest income before the provision for loan losses increased 3% to $5.6 million for the quarter ended March 31, 2006, compared to $5.5 million for the same quarter of the prior year.
Revenues for the six months ended March 31, 2006 increased 10% to $16.9 million, compared to $15.3 million for the same period of last year. Net interest income before the provision for loan losses increased 11% to $11.6 million, compared to $10.5 million for the same period of last year. On December 6, 2004, the Bank completed its mutual holding company reorganization, at which time the Bank converted to stock form and the Company was organized. In connection with the reorganization, the Company received $53.6 million in net proceeds from a minority stock offering. The majority of the proceeds were invested in mortgage-backed securities. Revenues from mortgage-backed securities increased $1.4 million to $4.8 million for the six months ended March 31, 2006, compared to $3.4 million for the same period of the prior year.
For the quarter ended March 31, 2006, net interest income after provision for loan losses increased 5% to $5.5 million, compared to $5.3 million for the same quarter a year ago. For the quarter ended March 31, 2006, a provision for loan losses of $90,000 was established by management in connection with its analysis of the loan portfolio, compared to a provision for loan losses of $236,000 established for the same quarter of the prior year. The decrease in the provision reflects the Company's current credit quality and decrease in classified assets, nonperforming loans and net charge-offs. Net interest income after provision for loan losses for the six months ended March 31, 2006 increased 13% to $11.5 million, compared to $10.2 million for the same period of the prior year.
The Company's net interest margin decreased 34 basis points to 3.33% for the quarter ended March 31, 2006, from 3.67% for the same quarter last year. The net interest margin for the six months ended March 31, 2006 decreased 9 basis points to 3.50% from 3.59% for the same period a year earlier. The cost of deposits was 2.04% for the six months ended March 31, 2006 compared to 1.65% for the same period of the prior year. During the current fiscal year, the Company revised its estimate of accrued interest on an escalator certificate of deposit product. The revision resulted in a one-time $310,000 reduction in interest expense for the six months ended March 31, 2006. Excluding the revision, the net interest margin and cost of deposits for the six months ended March 31, 2006 were 3.37% and 2.21%, respectively. The decline in net interest margin reflects the relatively flat yield curve that currently exists, as the cost of shorter-term deposits and borrowed funds increased more rapidly than the yield on
<PAGE>
Home Federal Bancorp, Inc.
April 19, 2006
Page 3 of 7
longer-term assets. Although the Company believes the repricing of existing and new loans over time will help counter the trend in net interest margin, pressure will likely continue in the near term as a result of the flat yield curve environment.
Noninterest income decreased 6% to $2.5 million for the quarter ended March 31, 2006, compared to $2.6 million for the same quarter a year ago. The decrease in noninterest income is primarily attributable to a $386,000 gain on the sale of a former branch in the prior quarter a year ago. The prior year gain is partially offset by an 8% increase in service charges and fees and a 171% increase in gains on loan sales in the quarter ended March 31, 2006. For the six months ended March 31, 2006, noninterest income increased 9% to $5.3 million, compared to $4.9 million for the same period of the prior year. Increases in service charges and gains on loans sales of $590,000 and $366,000 account for the increase, offset by the $386,000 gain on the sale of the former branch.
Noninterest expense for the quarter ended March 31, 2006 increased 17% to $6.1 million, from $5.2 million for the comparable period a year earlier. Compensation and benefits increased $674,000 to $3.8 million for the quarter ended March 31, 2006 as compared to $3.1 million for the same quarter a year ago. The majority of the increase is attributable to the establishment of the equity compensation plans during the prior fiscal year, annual merit increases, and an increase in employee commissions. The equity compensation plans include the Company's employee stock option plan, 2005 Recognition and Retention Plan ("RRP") and 2005 Stock Option and Incentive Plan. The efficiency ratio was 74.5% for the quarter ended March 31, 2006 compared to 63.8% for the same quarter a year ago. Excluding the non-recurring gain on sale of a former branch, the efficiency ratio was 67.0% for the same period of the prior year. The efficiency ratio indicates how much is spent on non-interest expenses as a percentage of total revenue.
Noninterest expense for the six months ended March 31, 2006 decreased 3% to $11.9 million, compared to $12.2 million for the six months ended March 31, 2005. The decrease was primarily a result of the $1.8 million contribution to the Foundation during the quarter ended December 31, 2004. Compensation and benefits increased $1.4 million to $7.6 million for the six months ended March 31, 2006 as compared to $6.1 million for the same period a year ago. The majority of the increase is attributable to the establishment of the equity compensation plans during the prior fiscal year, annual merit increases, and increases in employee commissions and incentive plans. The efficiency ratio was 70.6% for the six months ended March 31, 2006 compared to 79.9% for the same period of the prior year. Excluding the non-recurring contribution to the Foundation and the gain on sale of the former branch, the efficiency ratio was 69.7% for the six months ended March 31, 2005.
Balance Sheet Growth
Total assets increased 16% to $747.3 million at March 31, 2006 compared to $643.4 million a year earlier. Net loans (excluding loans held for sale) at March 31, 2006 increased 14% to $476.2 million, compared to $419.1 million at March 31, 2005. Single family loans represented 64% of the Bank's loan portfolio at March 31, 2006, compared to 62% at March 31, 2005. Commercial real estate loans accounted for 27% of the Bank's loan portfolio at March 31, 2006, compared to 28% at March 31, 2005.
Credit quality remains exceptional, as non-performing assets were $10,000, or 0.001% of total assets, at March 31, 2006, compared to $803,000, or 0.125% of total assets, at March 31, 2005. The allowance
<PAGE>
Home Federal Bancorp, Inc.
April 19, 2006
Page 4 of 7
for loan losses was $3.0 million, or 0.62% of gross loans, including loans held for sale, at March 31, 2006 compared to $2.8 million, or 0.67% of gross loans, at March 31, 2005.
Deposits increased 16% to $431.6 million at March 31, 2006 compared to $373.1 million at March 31, 2005. Noninterest-bearing demand deposits increased $14.7 million, or 43%, to $49.1 million at March 31, 2006, compared to $34.4 million at March 31, 2005. Interest-bearing demand deposits were unchanged at $132.3 million at March 31, 2006 and 2005. Certificates of deposit increased $44.0 million to $224.6 million at March 31, 2006, compared to $180.6 million at March 31, 2005. The majority of the increase in certificates of deposits was in 12 to 23 month terms. Advances from the Federal Home Loan Bank ("FHLB") increased 27% to $196.5 million at March 31, 2006 compared to $154.7 million at March 31, 2005. The Company utilizes advances from the FHLB as an alternative funding source to retail deposits in order to manage funding costs, reduce interest rate risk and to leverage the Balance Sheet.
Stockholders' equity increased $2.5 million to $104.4 million at March 31, 2006, compared to $101.9 million at March 31, 2005. The increase was primarily the result of $6.5 million in net income for the period, $678,000 in earned ESOP shares and $412,000 equity compensation, offset by $1.2 million of cash dividends paid to stockholders and $3.9 million for the repurchase of 298,092 shares of common stock for the RRP plan. The Company's book value per share as of March 31, 2006 was $6.89 per share based upon 15,154,114 outstanding shares of common stock.
About the Company
Home Federal Bancorp, Inc. is a savings and loan holding company headquartered in Nampa, Idaho. It is the subsidiary of Home Federal MHC, a federally chartered mutual holding company, and the parent company of Home Federal Bank, a federal savings bank that was originally organized as a building and loan association in 1920. The Company serves the Treasure Valley region of southwestern Idaho, that includes Ada, Canyon, Elmore and Gem Counties, through 14 full-service banking offices and two mortgage loan centers. The Company's common stock is traded on the NASDAQ National Market System under the symbol "HOME." The Company's stock is also included in the America's Community Bankers NASDAQ Index. For more information, visit the Company's web site at www.myhomefed.com.
Forward-Looking Statements:
Statements in this report regarding future events, performance or results are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA") and are made pursuant to the safe harbors of the PSLRA. Actual results could be materially different from those expressed or implied by the forward-looking statements. Factors that could cause results to differ include but are not limited to: general economic and banking business conditions, competitive conditions between banks and non-bank financial service providers, interest rate fluctuations, regulatory and accounting changes, the value of mortgage servicing rights, risks related to construction and development, commercial real estate and consumer lending and other risks. Additional factors that could cause actual results to differ materially are disclosed in Home Federal Bancorp, Inc.'s recent filings with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Forward-looking statements are accurate only as of the date released, and we do not undertake any responsibility to update or revise any forward-looking statements to reflect subsequent events or circumstances.
<PAGE>
Home Federal Bancorp, Inc.
April 19, 2006
Page 5 of 7
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY |
March 31, |
September 30, |
March 31, |
||
ASSETS |
|||||
Cash and amounts due from depository institutions |
$ 19,326 |
$ 19,033 |
$ 11,875 |
||
Mortgage-backed securities available for sale, at fair value |
13,600 |
14,830 |
19,120 |
||
Mortgage-backed securities held to maturity, at cost |
193,402 |
180,974 |
155,030 |
||
Federal Home Loan Bank stock, at cost |
9,591 |
9,591 |
8,112 |
||
Loan receivable, net of allowance for
loan losses of |
476,227 |
430,944 |
419,146 |
||
Loans held for sale |
5,139 |
5,549 |
1,566 |
||
Accrued interest receivable |
2,777 |
2,458 |
2,261 |
||
Property and equipment, net |
13,296 |
11,995 |
10,992 |
||
Mortgage servicing rights, net |
2,511 |
2,671 |
2,998 |
||
Bank owned life insurance |
10,289 |
10,099 |
10,214 |
||
Real estate and other property owned |
- |
534 |
567 |
||
Other assets |
1,138 |
899 |
1,549 |
||
TOTAL ASSETS |
$ 747,296 |
$ 689,577 |
$ 643,430 |
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
||||
LIABILITIES |
|||||
Deposit accounts |
|||||
Noninterest-bearing demand deposits |
$ 49,068 |
$ 46,311 |
$ 34,351 |
||
Interest-bearing demand deposits |
132,342 |
127,330 |
132,288 |
||
Savings deposits |
25,583 |
25,219 |
25,917 |
||
Certificates of deposit |
224,642 |
197,465 |
180,594 |
||
Total deposit accounts |
431,635 |
396,325 |
373,150 |
||
Advances by borrowers for taxes and insurance |
1,951 |
3,898 |
3,710 |
||
Interest payable |
1,170 |
1,670 |
1,607 |
||
Deferred compensation |
3,452 |
3,049 |
2,796 |
||
Federal Home Loan Bank advances |
196,542 |
175,932 |
154,717 |
||
Deferred income tax liability |
913 |
1,205 |
1,317 |
||
Other liabilities |
7,245 |
6,131 |
4,191 |
||
Total liabilities |
642,908 |
588,210 |
541,488 |
||
STOCKHOLDERS' EQUITY |
|||||
Serial preferred stock, $.01 par value;
5,000,000 |
- |
- |
- |
||
Common stock, $.01 par value; 50,000,000 authorized, |
|||||
issued and outstanding: |
|||||
Mar. 31, 2006 - 15,208,750 issued,
15,154,114 |
152 |
149 |
152 |
||
Sept. 30, 2005 - 15,208,750 issued,
14,910,658 |
|||||
Mar. 31, 2005 - 15,208,750 issued,
15,208,750 |
|||||
Additional paid-in capital |
56,632 |
56,115 |
59,884 |
||
Retained earnings |
52,216 |
49,818 |
46,847 |
||
Unearned shares issued to employee stock
ownership |
(4,344) |
(4,550) |
(4,784) |
||
Accumulated other comprehensive loss |
(268) |
(165) |
(157) |
||
Total stockholders' equity |
104,388 |
101,367 |
101,942 |
||
TOTAL LIABILITIES AND STOCKHOLDERS' |
|
|
|
||
<PAGE>
Home Federal Bancorp, Inc.
April 19, 2006
Page 6 of 7
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY |
Three Months Ended |
Six Months Ended |
|||||
2006 |
|
2005 |
2006 |
2005 |
|||
Interest and dividend income: |
|||||||
Loan interest |
$ 7,129 |
$ 6,315 |
$ 14,063 |
$ 12,384 |
|||
Investment interest |
60 |
17 |
71 |
260 |
|||
Mortgage-backed security interest |
2,386 |
2,045 |
4,772 |
3,408 |
|||
Federal Home Loan Bank dividends |
- |
30 |
- |
30 |
|||
Total interest and dividend income |
9,575 |
8,407 |
18,906 |
16,082 |
|||
Interest expense: |
|||||||
Deposits |
2,097 |
1,465 |
3,694 |
2,890 |
|||
Federal Home Loan Bank advances |
1,844 |
1,448 |
3,596 |
2,709 |
|||
Total interest expense |
3,941 |
2,913 |
7,290 |
5,599 |
|||
Net interest income |
5,634 |
5,494 |
11,616 |
10,483 |
|||
Provision for loan losses |
90 |
236 |
145 |
295 |
|||
Net interest income after provision for loan losses |
5,544 |
5,258 |
11,471 |
10,188 |
|||
Noninterest income: |
|
||||||
Service charges and fees |
2,115 |
1,952 |
4,501 |
3,911 |
|||
Gain on sale of loans |
195 |
72 |
506 |
140 |
|||
Increase in cash surrender value of bank
owned life |
108 |
87 |
190 |
162 |
|||
Loan servicing fees |
159 |
168 |
319 |
340 |
|||
Mortgage servicing rights, net |
(64) |
(58) |
(160) |
(154) |
|||
Other |
(24) |
420 |
(66) |
459 |
|||
Total noninterest income |
2,489 |
2,641 |
5,290 |
4,858 |
|||
Noninterest expense: |
|||||||
Compensation and benefits |
3,770 |
3,096 |
7,576 |
6,149 |
|||
Occupancy and equipment |
694 |
682 |
1,422 |
1,401 |
|||
Data processing |
520 |
376 |
861 |
819 |
|||
Advertising |
257 |
310 |
471 |
650 |
|||
Postage and supplies |
189 |
188 |
420 |
398 |
|||
Professional services |
176 |
203 |
363 |
422 |
|||
Insurance and taxes |
111 |
84 |
214 |
150 |
|||
Charitable contribution to Foundation |
- |
- |
- |
1,825 |
|||
Other |
334 |
254 |
604 |
436 |
|||
Total noninterest expense |
6,051 |
5,193 |
11,931 |
12,250 |
|||
Income before income taxes |
1,982 |
2,706 |
4,830 |
2,796 |
|||
Income tax expense |
749 |
1,032 |
1,837 |
1,048 |
|||
NET INCOME |
$ 1,233 |
$ 1,674 |
$ 2,993 |
$ 1,748 |
|||
Earnings per common share: |
|||||||
Basic |
$ 0.09 |
$ 0.11 |
$ 0.21 |
$ 0.12 |
|||
Diluted |
$ 0.09 |
$ 0.11 |
$ 0.21 |
$ 0.12 |
|||
Weighted average number of shares outstanding: |
|||||||
Basic |
14,478,746 |
14,720,524 |
14,472,449 |
14,718,364 |
|||
Diluted |
14,497,350 |
14,720,524 |
14,483,991 |
14,718,364 |
|||
<PAGE>
Home Federal Bancorp, Inc.
April 19, 2006
Page 7 of 7
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY |
At Or For The |
|
At Or For The |
FINANCIAL CONDITION DATA |
|||
Average interest-earning assets |
$ 664,390 |
$ 606,690 |
|
Average interest-bearing liabilities |
539,513 |
501,124 |
|
Net average earning assets |
124,877 |
105,566 |
|
Average interest-earning assets to
average |
123.15% |
121.07% |
|
Stockholders' equity to assets |
13.97% |
14.70% |
|
ASSET QUALITY |
|||
Allowance for loan losses |
$ 2,984 |
$ 2,882 |
|
Non-performing loans |
10 |
478 |
|
Non-performing assets |
10 |
1,012 |
|
Allowance for loan losses to non-performing loans |
29,840.00% |
602.93% |
|
Allowance for loan losses to gross
loans |
0.62% |
0.66% |
|
Non-performing loans to gross loans |
0.00% |
0.11% |
|
Non-performing assets to total assets |
0.00% |
0.15% |
At Or For The Three Months Ended March 31, |
At Or For The Six Months Ended March 31, |
||||||
2006 |
2005 |
2006 |
2005 |
||||
SELECTED PERFORMANCE RATIOS |
|||||||
Return on average assets (1) |
0.69% |
1.05% |
0.85% |
0.56% |
|||
Return on average equity (1) |
4.72% |
6.56% |
5.77% |
4.28% |
|||
Net interest margin (1) |
3.33% |
3.67% |
3.50% |
3.59% |
|||
Efficiency ratio |
74.49% |
63.83% |
70.57% |
79.85% |
|||
Efficiency ratio, excluding non-recurring items (2) |
74.49% |
67.01% |
70.57% |
69.71% |
|||
PER SHARE DATA |
|||||||
Basic earnings per share |
$ 0.09 |
$ 0.11 |
$ 0.21 |
$ 0.12 |
|||
Diluted earnings per share |
0.09 |
0.11 |
0.21 |
0.12 |
|||
Book value per share |
6.89 |
6.70 |
6.89 |
6.70 |
|||
Cash dividends declared per share |
0.055 |
- |
0.105 |
- |
|||
Average number of shares outstanding: |
|||||||
Basic (3) |
14,478,746 |
14,720,524 |
14,472,449 |
14,718,364 |
|||
Diluted (3) |
14,497,350 |
14,720,524 |
14,483,991 |
14,718,364 |
(1) Amounts are annualized.
(2) Noninterest expense divided by net interest
income plus noninterest income. The pro forma efficiency ratio for the
three
months ended March 31, 2005 excludes the effect of the $386,000 gain on sale of
a former branch. The pro
forma efficiency ratio for the six months ended March
31, 2005 excludes the effect of the $386,000 gain on sale of a
former branch and
the $1.8 million contribution to the Foundation.
(3) Amounts calculated exclude ESOP shares not
committed to be released and unvested restricted shares granted under
the RRP.
<PAGE>