Home Financial Bancorp Announces Third Quarter Results

SPENCER, Ind.--(BUSINESS WIRE)-- Home Financial Bancorp (“Company”) (OTCQB Symbol “HWEN”), an Indiana corporation which is the holding company for Our Community Bank, (“Bank”) based in Spencer, Indiana, announces results for the third quarter and nine months ended March 31, 2016.

Third Quarter Highlights:

• Provision for Loan Losses declined 25% or $10,000;
• Non-interest income decreased 46% or $87,000;
• Net income fell 49%, from $172,000 to $87,000.

Nine Month Highlights:

• Provision for Loan Losses declined $90,000 or 56%;
• Non-performing loans decreased 34%, or $293,000;
• Non-interest income decreased 26%, or $117,000;
• Net income decreased 41%, from $261,000 to $154,000.

For the quarter ended March 31, 2016, the Company reported net income of $87,000 or $.07 basic and diluted earnings per share. For the same period last year, the Company reported net income of $172,000 or $.15 per share. Net income was lower, compared to third quarter 2015 results, due to lower net interest income and lower non-interest income. Non-interest income in the prior year included $100,000 of tax free income from key-man life insurance proceeds associated with the death of Executive Vice President and Chief Financial Officer, Gary (Mike) Monnett in January, 2015.

Due to declining interest income on loans, total interest income was lower by $31,000 or 4%, while interest expense fell $19,000 or 15% during the quarter ended March 31, 2016 compared to the quarter ended March 31, 2015. As a result, net interest income decreased $12,000, or 2%, for the three months ended March 31, 2016, compared to the same period in 2015.

Loan loss provisions for third quarter 2016 totaled $30,000. Loan loss provisions were $40,000 for the same period a year earlier. A regular assessment of loan loss allowance adequacy indicated that these provisions were necessary to maintain an appropriate allowance level. Net loan charge-offs totaled $71,000 for the three months ended March 31, 2016, compared to $3,000 for third quarter 2015. Changes in volume, composition and quality of the loan portfolio, as well as actual loan loss experience, will influence the need for future loss provisions.

Third quarter 2016 non-interest income totaled $101,000 compared to $188,000 a year earlier. Accounting for the change, third quarter 2015 included $100,000 from nonrecurring life insurance proceeds. Non-interest expense for the quarter ended March 31, 2016 totaled $677,000, compared to $679,000 for the same period a year earlier.

For the nine-month period ended March 31, 2016, the Company reported net income of $154,000 or $.13 earnings per share. Net income was $261,000 or $.22 earnings per share for the year-earlier period. Net income was lower due to a decrease in non-interest income and decline in interest income from loans.

Total interest income decreased $159,000, or 6%. Interest expense fell $76,000 or 19%. Consequently, net interest income before provisions for loan losses dropped $83,000 or 4%, compared to the same period in 2015.

For the nine-month period ended March 31, 2016, loan loss provisions were $70,000, which represents a $90,000 or 56% decline from $160,000 for the nine-month period ended March 31, 2015. Loan loss provisions reflect management’s assessment of various risk factors including, but not limited to, the level and trend of loan delinquencies and losses. Net loan charge-offs totaled $105,000 during the first three quarters of fiscal 2016, compared to $135,000 for the year-earlier period.

Total non-interest income decreased $117,000, or 26%. Nonrecurring income from life insurance proceeds reported in 2015 accounts for most of the change in non-interest income. Total non-interest expense increased $34,000, or 2%, compared to the same nine-months during the prior year. Salaries and employee benefits decreased $57,000, or 6%. Net occupancy expense decreased $15,000, or 13%. Offsetting these decreases, legal and professional fees increased $36,000 or 25%. Also, repossessed property expense rose $35,000 or 35%, compared to the same period a year earlier.

At March 31, 2016, total assets were $67.7 million. Total assets were $64.9 million at June 30, 2015, the end of the prior fiscal year. Cash and interest-bearing deposits totaled $8.3 million at March 31, 2016. Investment securities available for sale increased $2.8 million, or 32%, to $11.5 million from June 30, 2015 to March 31, 2016. Total loans decreased 2% to $44.6 million, from $45.7 million at June 30, 2015.

Loans delinquent 90 days or more decreased 34% and totaled $569,000, or 1.3% of total loans at March 31, 2016. At June 30, 2015, non-performing loans were $862,000, or 1.9% of total loans. Total non-performing assets were $752,000, or 1.1% of total assets at March 31, 2016, compared to $1.2 million, or 1.8% of total assets at June 30, 2015. Non-performing assets included $183,000 in Other Real Estate Owned (“OREO”) and other repossessed properties at March 31, 2016, compared to $283,000 nine months earlier.

The balance of the loan loss allowance decreased 7% to $491,000, or 1.1% of total loans at March 31, 2016, compared to $526,000, or 1.2% of total loans at June 30, 2015. Management considered the level of loan loss allowances at March 31, 2016 to be adequate to cover estimated losses inherent in the loan portfolio at that date.

Deposits increased to $49.8 million as of March 31, 2016, from $44.6 million nine months earlier. Total borrowings declined $2.0 million, or 19%, to $8.5 million.

Shareholders’ equity was $8.8 million, or 13.1% of total assets at March 31, 2016, compared to $8.7 million or 13.4% of total assets at June 30, 2015. Factors impacting shareholder equity during the first three quarters of fiscal 2016 included net income, three quarterly cash dividends totaling $.105 per share, the repurchase of 980 shares of its common stock, a shift from a $44,000 net unrealized loss to a $45,000 net unrealized gain on securities available for sale, and a $17,000 increase in equity components associated with a stock-based employee benefit plan. At March 31, 2016, the Company’s book value per share was $7.42 based on 1,190,603 shares outstanding. The last reported price per share on March 31, 2016 was $5.81.

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
Consolidated Financial Highlights
(Unaudited)
(Dollars in thousands, except per share and book value amounts)
FOR THREE MONTHS ENDED MARCH 31:		2016				2015
Net Interest Income		$688				$700
Provision for Loan Losses		30				40
Non-interest Income		101				188
Non-interest Expense		677				679
Income Tax		(5	)			(3	)
Net Income		87				172
Basic and Diluted Earnings Per Share:		$ .07				$.15
Average Shares Outstanding - Basic		1,190,737				1,184,614
Average Shares Outstanding - Diluted		1,190,827				1,184,919
FOR NINE MONTHS ENDED MARCH 31:		2016				2015
Net Interest Income		$2,034				$2,117
Provision for Loan Losses		70				160
Non-interest Income		329				446
Non-interest Expense		2,223				2,188
Income Tax		(84	)			(46	)
Net Income		154				261
Basic and Diluted Earnings Per Share:		$ .13				$ .22
Average Shares Outstanding - Basic		1,189,641				1,186,725
Average Shares Outstanding - Diluted		1,190,087				1,187,978
		March 31,				June 30,
		2016				2015
Total Assets		$67,661				$64,910
Total Loans		44,597				45,716
Allowance for Loan Losses		491				526
Total Deposits		49,836				44,606
Borrowings		8,500				10,500
Shareholders’ Equity		8,833				8,704
Non-Performing Assets		752				1,155
Non-Performing Loans		569				862
Non-Performing Assets to Total Assets		1.11	%			1.79	%
Non-Performing Loans to Total Loans		1.28				1.89
Book Value Per Share*		$7.42				$7.30

*Based on 1,190,603 shares at March 31, 2016 and 1,191,583 shares at June 30, 2015.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160510006066/en/

Home Financial Bancorp
Kurt D. Rosenberger, 812-829-2095

Source: Home Financial Bancorp

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