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Home Financial Bancorp Announces First Quarter Results

^{Published on 2010-11-10 06:30:55 - Market Wire}
 

SPENCER, Ind.--([ BUSINESS WIRE ])--Home Financial Bancorp (aCompanya) (OTCBB:HWEN), an Indiana corporation which is the holding company for Owen Community Bank, s.b., (aBanka) based in Spencer, Indiana, announces unaudited results for the first quarter ended September 30, 2010.

First Quarter Highlights:

• Interest expense fell $90,000 or 22%;
• Fee income from deposit accounts decreased $41,000 or 29%;
• Net income improved 58%, from $73,000 to $115,000;
• Shareholdersa™ equity increased to $8.1 million or 11% of total assets.

For the quarter ended September 30, 2010, the Company reported net income of $115,000 or $.09 basic and diluted earnings per share. Net income totaled $73,000 or $.06 basic and diluted earnings per share for the quarter ended September 30, 2009. Net income increased due to lower interest expense.

Net interest income increased 14% to $791,000 for the three months ended September 30, 2010, compared to $696,000 for the same period in 2009. Interest income showed a modest increase while interest expense fell $90,000, or 22%. As a result, net interest margin for the quarter expanded to 4.66%, from 4.18% a year earlier.

Loan loss provisions were $90,000 for the quarter ended September 30, 2010 and $80,000 for the year-earlier period. A regular assessment of loan loss allowance adequacy indicated that these provisions were required to maintain an appropriate allowance level. Changes in volume, composition and quality of the loan portfolio, as well as actual loan loss experience, will influence the need for future loan loss provisions.

Non-interest income totaled $190,000, compared to $188,000 for the year-earlier period. Service charge income on deposit accounts declined $41,000 or 29%. The drop in service charge revenue was offset by gain on sale of investment securities and increases in other assorted non-interest income categories.

Non-interest expense increased $30,000 or 4% compared to the quarter ended September 30, 2009. Legal and professional fees were up $18,000 or 39%, and repossessed property expense increased $14,000 to $45,000. Lowering the overall increase in non-interest expense, salaries and employee benefits fell $11,000 or 4%.

At September 30, 2010, total assets were $72.3 million. Assets were $72.2 million at June 30, 2010. During fiscal first quarter 2011, cash and interest-bearing deposits decreased 11% to $5.1 million. Outstanding loans increased 3% to $59.5 million as of September 30, 2010.

Loans delinquent 90 days or more totaled $2.4 million or 4.1% of total loans at September 30, 2010. Three months earlier, non-performing loans were also at $2.4 million or 4.1% of total loans. Non-performing assets were $3.0 million or 4.2% of total assets at September 30, 2010 and were $3.3 million or 4.5% of total assets at June 30, 2010. Non-performing assets included $582,000 in Real Estate Owned (aREOa) and other repossessed properties at September 30, 2010, compared to $896,000 three months earlier.

The allowance for loan losses increased 12% to $760,000, compared to $677,000 at June 30, 2010. Loan loss allowances were 1.28% of total loans at September 30, 2010 compared to 1.17% of total loans at June 30, 2010. Net loans charged off during the quarter ended September 30, 2010 totaled $7,000 compared to $87,000 for the first quarter of fiscal 2010. Periodic provisions to loan loss allowances reflect managementa™s view of risk in the Banka™s entire portfolio due to a number of dynamic factors, which include, but are not limited to, current economic conditions and loan delinquency trends. Management considered the level of loan loss allowances at September 30, 2010 to be adequate to cover probable incurred losses inherent in the loan portfolio at that date.

Total deposits were $49.2 million as of September 30, 2010, compared to $47.2 million three months earlier. Total borrowings fell 12% to $14.5 million. Borrowings were $16.5 million at June 30, 2010.

Shareholdersa™ equity was $8.1 million or 11.2% of total assets at September 30, 2010. Factors affecting shareholdersa™ equity during the quarter included net income, quarterly cash dividends of $.03 per share, an $18,000 net increase in the market value of securities available for sale, and a $9,000 decrease in costs associated with a stock-based employee benefit plan. Based on 1,350,605 shares outstanding, the Companya™s book value per share was $6.00 at September 30, 2010.

Home Financial Bancorp and Owen Community Bank, s.b., an FDIC-insured, federal stock savings 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.owencom.com ].

*Based on 1,350,605 shares at September 30, 2010 and 1,350,605 shares at June 30, 2010.