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Home Financial Bancorp Announces Fourth Quarter and Year-End Results

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Home Financial Bancorp ("Company") (OTC: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, 2018.

Fourth Quarter Highlights:

  • Non-interest expense increased 33%, or $234,000;
  • Net loss was $84,000, compared to year-earlier net income of $86,000;
  • Excluding $265,000 of non-recurring expenses and related tax benefit
    of $81,000, net income would have been $100,000.

Twelve Month Highlights:

  • Total loans grew 10%, or $4.6 million;
  • Non-interest income decreased 23%, or $129,000;
  • Non-interest expense increased 7%, or $188,000;
  • Net income decreased 53% to $159,000, from $336,000;
  • Excluding $265,000 of non-recurring expenses and related tax benefit
    of $31,000, net income would have been $346,000.

For the quarter ended June 30, 2018, the
Company reported net loss of $84,000, or ($.07) basic and diluted
earnings per common share. Excluding $265,000 of non-recurring costs and
related tax benefit, net income would have been $100,000 or $.09 basic
and diluted earnings per common share. For the same period last year,
the Company reported net income of $86,000, or $.07 basic and diluted
earnings per common share. The quarterly net loss resulted from
non-recurring conversion-related expenses which generated much higher
non-interest expense.

Total interest income for the quarter was down $3,000, or less than 1%.
Total interest expense increased $30,000, or 27%. Consequently, net
interest income before provisions for loan losses decreased $34,000, or
5% for the three months ended June 30, 2018, compared to the same
quarter in 2017.

Provision for loan losses was $12,000 during fourth quarter 2018,
compared to $20,000 for the same period a year earlier. Net loan losses
totaled $2,000 for the most recent quarter, and were $18,000 a year ago.
A regular analysis of the allowance for loan losses indicated the
reserve was adequate at June 30, 2018. This analysis included reviewing
changes in volume, composition and quality of the loan portfolio, as
well as actual loan loss experience.

Non-interest income was $118,000 for the 3 months ended June 30, 2018.
Non-interest income was $132,000 for the same period a year earlier.
Service charges on deposit accounts decreased $10,000 compared to the
same period in 2017.

Non-interest expense increased $234,000, or 33%, to $944,000. A number
of non-recurring expenses led to higher non-interest expense. One-time
data system conversion-related charges and associated expenses totaled
$182,000. In addition, during the quarter-ended June 30, 2018, the
Company recognized $83,000 of impairment and depreciation expense for
assets no longer in use. These non-recurring expense items are not
expected to adversely impact Company financial statements in future
periods.

For the twelve-month period ended June 30, 2018,
the Company reported net income of $159,000, or $.14 basic and diluted
earnings per common share. Excluding $265,000 of non-recurring expenses
and related tax benefit, net income would have been $346,000 or $.30
basic and diluted earnings per common share. The Company reported
earnings of $336,000 or $.29 basic and diluted earnings per common share
for fiscal 2017.

Net interest income before provisions for loan losses increased $6,000,
or less than 1% for fiscal year 2018. Total interest income increased
nearly $75,000, or 2%, but was substantially offset by a $69,000, or 16%
increase in interest expense for the year. Loan loss provisions
decreased to $52,000, compared to $80,000 for the prior year. Net loan
charge-offs totaled $36,000 for fiscal year 2018, compared to $66,000
for fiscal year 2017.

Non-interest income decreased $129,000 or 23%, to $438,000 for fiscal
2018. Service charges on deposit accounts decreased $74,000, or 29%,
compared to the prior year. Also contributing to this change, $39,000
from gain on investment sales and $17,000 from gain on sale of loans was
recognized in 2017. For 2018, no gains on investment sales were realized
and gains on sales of loans totaled $6,000.

Non-interest expense increased $188,000 or 7%, to $3.0 million. As
mentioned above, non-recurring expenses led to higher non-interest
expense. One-time data system conversion-related charges and associated
expenses totaled $182,000. In addition, during the quarter-ended June
30, 2018, the Company recognized $83,000 of impairment and depreciation
expense for assets no longer in use. These non-recurring expense items
are not expected to adversely impact Company financial statements in
future periods.

At June 30, 2018, total assets were $73.3
million, compared to $69.7 million at June 30, 2017. During the twelve
months ended June 30, 2018, loans outstanding increased $4.6 million, or
10%, to $52.3 million. Cash and cash equivalents and interest-bearing
time deposits increased $963,000, from $5.5 million at June 30, 2017 to
$6.5 million at June 30, 2018. Investment securities decreased $2.1
million, or 18% during the year.

Loans delinquent 90 days or more totaled $879,000, and equaled 1.7% of
total loans at June 30, 2018, compared to $694,000 and 1.5% of total
loans a year earlier. Other real estate owned ("OREO") and repossessed
property was $53,000 at June 30, 2018, compared to $102,000 at June 30,
2017.

Allowances for loan losses were $485,000 at June 30, 2018, and $468,000
at June 30, 2017. Loan loss allowances equaled 0.93% of total loans at
June 30, 2018, and 0.98% 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 a number of 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, 2018 adequate to cover probable
incurred losses inherent in the loan portfolio at that date.

At June 30, 2018, total deposits were $50.1 million, compared to $50.2
million twelve months earlier. Total borrowings increased to $14.0
million at June 30, 2018, compared to $10.0 million a year earlier.

Shareholders' equity was $8.7 million, or 11.9% of total assets at June
30, 2018, compared to $8.8 million, or 12.7% of total assets at June 30,
2017. Factors impacting shareholder equity during fiscal 2018 included
net income, four quarterly cash dividends totaling $.16 per share, and a
decrease from $11,000 accumulated other comprehensive income at June 30,
2017 to $91,000 accumulated other comprehensive loss at June 30, 2018.
At June 30, 2018, the Company's book value per share was $7.48 based on
1,166,002 shares outstanding compared to $7.59 per share at June 30,
2017. The last reported price per share on June 30, 2018 was $7.70.

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:

2018

 

2017

Net Interest Income $ 654 $ 687
Provision for Loan Losses 12 20
Non-interest Income 118 132
Non-interest Expense 944 710
Income Tax (100 ) 3
Net Income (84 ) 86
 
Basic and Diluted (Loss) Earnings Per Share:

($ .07

) $ .07
Average Shares Outstanding - Basic 1,165,594 1,165,458
Average Shares Outstanding - Diluted 1,165,594 1,165,614
 
FOR TWELVE MONTHS ENDED JUNE 30:

2018

2017

Net Interest Income

$2,685

$2,679

Provision for Loan Losses 52 80
Non-interest Income 438 567
Non-interest Expense 2,975 2,787
Income Tax (Benefit) (63 ) 43
Net Income 159 336
 
Basic and Diluted Earnings Per Share: $ .14 $ .29
Average Shares Outstanding - Basic 1,165,526 1,168,028
Average Shares Outstanding - Diluted 1,165,713 1,168,127
 
June 30, June 30,

2018

2017

Total Assets

$73,347

$69,704

Total Loans 52,348 47,713
Allowance for Loan Losses 485 468
Total Deposits 50,133 50,199
Borrowings 14,000 10,000
Shareholders' Equity 8,717 8,847
 
90-days Past Due Loans and OREO 932 796
90-days Past Due Loans 879 694
 
90-days Past Due Loans and OREO to Total Assets 1.27 % 1.14 %
90-days Past Due Loans to Total Loans 1.68 % 1.45 %
 
Book Value Per Share*

$7.48

$7.59

 

*Based on 1,166,002 Shares at June 30, 2018 and at June 30, 2017.

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