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IF Bancorp, Inc. Announces Results for Fourth Quarter and Fiscal Year Ended June 30, 2018

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IF Bancorp, Inc. (NASDAQ:IROQ) (the "Company") the holding company for
Iroquois Federal Savings and Loan Association (the "Association"),
announced net income of $1.7 million, or $0.47 per basic and diluted
share for the fiscal year ended June 30, 2018, compared to $3.9 million,
or $1.06 per basic and diluted share for the fiscal year ended June 30,
2017. The Company also announced net income of $497,000, or $0.14 per
basic and diluted share for the three months ended June 30, 2018,
compared to $602,000, or $0.16 per basic and diluted share for the three
months ended June 30, 2017.

Net income for the year ended June 30, 2018, was negatively impacted by
a nonrecurring $1.3 million income tax expense due to a downward
adjustment to our net deferred tax assets ("DTA") related to the Tax
Cuts and Jobs Act (the "Tax Act"), which was enacted on December 22,
2017. The Tax Act provided for a reduction in the corporate income tax
rate from 35% to 21% effective January 1, 2018, which resulted in the
downward adjustment to our DTA. Excluding the $1.3 million impact of the
adjustment to the DTA, the Company's net income for the year ended June
30, 2018, would have been $3.1 million, or a decrease of $863,000 from
the year ended June 30, 2017. Management believes that presenting net
income on a non-GAAP basis excluding the impact of the adjustment to the
DTA in the 2018 period provides useful information for evaluating the
Company's operating results and any related trends that may be affecting
the Company's business. These disclosures should not be viewed as a
substitute for operating results determined in accordance with GAAP.

For the year ended June 30, 2018, net interest income was $17.5 million,
compared to $17.7 million for the year ended June 30, 2017. The
provision for loan losses decreased to $777,000 for the year ended June
30, 2018, from $1.7 million for the year ended June 30, 2017. Interest
income increased to $22.8 million for the year ended June 30, 2018, from
$21.3 million for the year ended June 30, 2017. Interest expense
increased to $5.3 million for the year ended June 30, 2018, from $3.6
million for the year ended June 30, 2017. Non-interest income decreased
to $4.1 million for the year ended June 30, 2018, from $4.7 million for
the year ended June 30, 2017. Non-interest expense increased $1.8
million to $16.4 million for the year ended June 30, 2018, from $14.5
million for the year ended June 30, 2017. The increase in non-interest
expense was primarily due to a $1.4 million increase in other
non-interest expense as a result of the accrual of real estate taxes and
closing costs on a large credit in bankruptcy. For the year ended June
30, 2018, income tax expense totaled $2.7 million compared to $2.3
million for the year ended June 30, 2017. Excluding the $1.3 million DTA
tax adjustment as a result of the Tax Act, income tax expense for the
year ended June 30, 2018 was approximately $1.4 million.

Total assets at June 30, 2018 were $638.9 million compared to $585.5
million at June 30, 2017. Cash and cash equivalents decreased to $4.7
million at June 30, 2018, from $7.8 million at June 30, 2017. Investment
securities increased to $126.0 million at June 30, 2018, from $111.6
million at June 30, 2017. Net loans receivable increased to $476.5
million at June 30, 2018, from $440.3 million at June 30, 2017. Deposits
increased to $480.4 million at June 30, 2018, from $439.1 million at
June 30, 2017. Total borrowings, including repurchase agreements,
increased to $69.8 million at June 30, 2018 from $55.7 million at June
30, 2017. Stockholders' equity decreased to $81.7 million at June 30,
2018 from $84.0 million at June 30, 2017.

The allowance for loan losses decreased $890,000 to $5.9 million at June
30, 2018, from $6.8 million at June 30, 2017. The decrease was the
result of net charge-offs of $1.7 million, partially offset by an
increase in outstanding loans and the corresponding provision expense,
and was necessary to bring the allowance for loan losses to a level that
reflects management's estimate of the probable loss in the Company's
loan portfolio at June 30, 2018.

As announced on August 15, 2018, IF Bancorp, Inc. will pay a cash
dividend of $0.125 per common share on or about October 19, 2018, to
stockholders of record as of the close of business on September 24,
2018. This dividend reflects a 25% increase over our last dividend paid
in April 2018.

IF Bancorp, Inc. is the savings and loan holding company for Iroquois
Federal Savings and Loan Association (the "Association"). The
Association, originally chartered in 1883 and headquartered in Watseka,
Illinois, conducts its operations from seven full-service banking
offices located in Watseka, Danville, Clifton, Hoopeston, Savoy,
Bourbonnais, and Champaign, Illinois and a loan production and wealth
management office in Osage Beach, Missouri. The Champaign office,
located at 2411 Village Green Place, Champaign, Illinois, was opened on
August 6, 2018. The principal activity of the Association's wholly-owned
subsidiary, L.C.I. Service Corporation, is the sale of property and
casualty insurance.

This press release may contain statements relating to the future results
of the Company (including certain projections and business trends) that
are considered "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995 (the "PSLRA"). Such
forward-looking statements may be identified by the use of such words as
"believe," "expect," "anticipate," "should," "planned," "estimated,"
"intend" and "potential." For these statements, the Company claims the
protection of the safe harbor for forward-looking statements contained
in the PSLRA.

The Company cautions you that a number of important factors could cause
actual results to differ materially from those currently anticipated in
any forward-looking statement. Such factors include, but are not limited
to: prevailing economic and geopolitical conditions; changes in interest
rates, loan demand, real estate values and competition; changes in
accounting principles, policies, and guidelines; changes in any
applicable law, rule, regulation or practice with respect to tax or
legal issues; and other economic, competitive, governmental, regulatory
and technological factors affecting the Company's operations, pricing,
products and services and other factors that may be described in the
Company's annual report on Form 10-K and quarterly reports on Form 10-Q
as filed with the Securities and Exchange Commission. The
forward-looking statements are made as of the date of this release, and,
except as may be required by applicable law or regulation, the Company
assumes no obligation to update the forward-looking statements or to
update the reasons why actual results could differ from those projected
in the forward-looking statements.

 
Selected Income Statement Data
 

(Dollars in thousands, except per share data)

       

Quarter Ended

Quarter Ended

Year Ended

Year Ended

June 30, 2018

 

June 30, 2017

  June 30, 2018  

June 30, 2017

(unaudited)

(unaudited)

(unaudited)
Interest income $ 5,981 $ 5,327 $ 22,794 $ 21,338
Interest expense 1,639 935 5,289 3,617
Net interest income 4,342 4,392 17,505 17,721
Provision for loan losses 309 1,496 777 1,721

Net interest income after provision for loan losses

4,033 2,896 16,728 16,000
Non-interest income 1,033 1,750 4,115 4,728
Non-interest expense 4,341 3,712 16,380 14,535
Income before taxes 725 934 4,463 6,193
Income tax expense 228 332 2,725 2,274
 
Net income $ 497 $ 602 $ 1,738 $ 3,919
 
Earnings per share (1):
Basic $ 0.14 $ 0.16 $ 0.47 $ 1.06
Diluted $ 0.14 $ 0.16 $ 0.47 $ 1.06
 
Weighted average shares outstanding (1):
Basic 3,622,993 3,668,572 3,658,868 3,682,513

Diluted

3,671,798

3,703,809

3,698,584

3,712,074

   

Performance Ratios

 
Year Ended Year Ended
June 30, 2018 June 30, 2017
(unaudited)
Return on average assets 0.28 % 0.67 %
Return on average equity 2.09 % 4.69 %
Net interest margin on average interest earning assets 2.93 % 3.14 %
 
   
Selected Balance Sheet Data
 

(Dollars in thousands, except per share data)

Year Ended Year Ended
June 30, 2018 June 30, 2017
(unaudited)
Assets $ 638,923 $ 585,474
Cash and cash equivalents 4,754 7,766
Investment securities 125,996 111,611
Net loans receivable 476,480 440,322
Deposits 480,421 439,146
Total borrowings, including repurchase agreements 69,781 55,683
Total stockholders' equity 81,675 83,969
Book value per share (2) 21.10 21.31
Average stockholders' equity to average total assets 13.48 % 14.27 %
 
 
Asset Quality
 

(Dollars in thousands)

   
Year Ended Year Ended
June 30, 2018 June 30, 2017
(unaudited)
Non-performing assets (3) $ 7,048 $ 9,968
Allowance for loan losses 5,945 6,835
Non-performing assets to total assets 1.10 % 1.70 %
Allowance for losses to total loans 1.23 % 1.53 %
 
(1)   Shares outstanding do not include ESOP shares not committed for
release.
(2) Total stockholders' equity divided by shares outstanding of
3,871,408 and 3,940,408 at June 30, 2018 and 2017, respectively.
(3) Non-performing assets include non-accrual loans, loans past due 90
days or more and accruing, and foreclosed assets held for sale.

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