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Home Financial Bancorp Announces Fourth Quarter and Year-End Results
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Negative)
Tags
Rhea-AI Summary
Home Financial Bancorp (OTCPink: HWEN) reported its fourth quarter and annual financial results for the period ending June 30, 2021. Key highlights include an 11% decrease in net interest income ($71,000) and a 17% drop in non-interest income ($29,000) for Q4. Net income fell 18% to $60,000, while full-year results showed a net loss of $652,000 compared to a profit of $340,000 the previous year. Total assets increased slightly to $74.2 million, and total deposits rose to $58.3 million. Shareholders’ equity was reported at $8.2 million, indicating challenges in profitability and expense management.
Positive
Net income from normal operations in Q4 2021 increased 18%, reaching $86,000 when excluding acquisition-related fees.
The percentage of loans delinquent for over 90 days decreased 36%, indicating improved loan quality.
Total deposits increased from $55.8 million to $58.3 million, showing liquidity growth.
Negative
Net interest income decreased 6% for FY 2021, totaling $2.5 million.
The company recorded a net loss of $652,000 for FY 2021, a significant decline from a net income of $340,000 in FY 2020.
Non-interest expenses surged 42% to $4.0 million, largely due to extraordinary expenses related to employee benefit plans.
Home Financial Bancorp (“Company”) (OTCPink: 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, 2021.
Fourth Quarter Highlights:
Net interest income decreased 11%, or $71,000;
Non-interest income decreased 17%, or $29,000;
Non-interest expense fell 11%, or $79,000;
Net income declined 18% to $60,000, from $73,000;
Excluding specific acquisition transaction professional fees, net income increased $13,000 or 18%, to $86,000.
Twelve Month Highlights:
Shareholders’ equity was $8.2 million, or 11.0% of total assets;
Net interest income declined 6%, or $158,000;
Non-interest expense increased 42%, or $1.2 million;
Net loss totaled $652,000, compared to $340,000 net income for fiscal year 2020;
Excluding effects of benefit plan withdrawal expenses and extraordinary professional fees, net income increased $39,000 or 12%, to $379,000.
For the quarter ended June 30, 2021, the Company reported net income of $60,000, or $.05 basic and diluted earnings per common share. For the same period last year, the Company reported net income of $73,000, or $.06 basic and diluted earnings per common share. Net income declined, compared to fourth quarter 2020 results, due to lower overall interest income and an increase in professional fees incurred by the Company related to the acquisition of the Bank subsidiary by Crane Credit Union, which was announced on August 19, 2020. Eliminating the impact of these professional fees associated with the acquisition transaction, net income from normal operations was $86,000, or $07 basic and diluted earnings per share.
Total interest income for the quarter decreased $130,000, or 16%. Total interest expense fell by a smaller $59,000, or 39%. Consequently, net interest income before provisions for loan losses decreased $71,000, or 11% for the three months ended June 30, 2021, compared to the same quarter in 2020.
No provisions for loan losses were recorded during fourth quarter 2021, compared to $15,000 for the same period a year earlier. No loan losses were recorded during the most recent quarter and were $13,000 a year ago. A regular analysis of the allowance for loan losses indicated the reserve was adequate on June 30, 2021. This analysis included reviewing changes in volume, composition, and quality of the loan portfolio, as well as actual loan loss experience.
Non-interest income decreased $29,000 or 17%, to $141,000 for the three months ended June 30, 2021. Non-interest income was $170,000 for the same period a year earlier. Gain on sale of investment securities decreased $37,000, or 74%, compared to the same period in 2020.
Non-interest expense decreased $79,000, or 11%, to $669,000. Contributing to the overall drop in non-interest expense for the current quarter, salaries and employee benefits declined $43,000 or 12% and legal and professional fees fell $37,000 or 35%, compared to the same quarter a year earlier.
For the twelve-month period ended June 30, 2021, the Company reported net loss of $652,000, or ($.56) basic and diluted earnings per common share. The Company reported earnings of $340,000 or $.29 basic and diluted earnings per common share for fiscal 2020. Operations for fiscal year 2021 resulted in a net loss due to extraordinary expenses incurred in connection with the announced sale of Our Community Bank to Crane Credit Union. During the quarter-ended December 31, 2020, the Bank made a one-time payment of $1.1 million to withdrawal from a defined employee benefit plan and transfer the plan to an insurance company to provide annuity contracts for individual plan participants. Excluding the impact of the pension plan withdrawal expense and professional fees related to the Bank sale transaction, net income was $379,000 or $.33 basic and diluted earnings per share for fiscal year 2021.
Net interest income before provisions for loan losses decreased $158,000, or 6% for fiscal year 2021. Total interest income fell $408,000 or 12%. Total interest expense decreased $250,000 or 36%. Loan loss provisions were $35,000, compared to $60,000 for the prior year. Net loan charge-offs were $14,000 for fiscal year 2021, compared to $42,000 for fiscal year 2020.
Non-interest income increased $22,000 or 4%, to $602,000 for fiscal 2021. Most of the increase came from ATM service fees and gain on sale of ownership units in the Title Center of Indiana. Partially offsetting the overall increase, service charges on deposit accounts decreased $33,000, or 15%, compared to the prior year.
Total non-interest expense increased $1.2 million or 42%, to $4.0 million. This increase was the result of a withdrawal payment of $1.1 million to transfer a defined benefit plan obligation from the bank to individual annuity contracts provided by a selected insurance company. Contributing to the overall rise in non-interest expense, legal and professional fees increased to $542,000, compared to $332,000 for fiscal year 2020.
On June 30, 2021, total assets were $74.2 million, compared to $74.0 million on June 30, 2020. During the twelve months ended June 30, 2021, loans outstanding decreased $7.3 million, or 14%, to $45.0 million. Cash and cash equivalents and interest-bearing time deposits increased from $11.5 million on June 30, 2020, to $15.9 million on June 30, 2021. Investment securities totaled $8.7 million; a $2.8 million or 46% increase during the year.
Loans delinquent 90 days or more decreased 36% to $252,000, and equaled 0.6% of total loans on June 30, 2021. A year earlier, loans delinquent 90 days or more totaled $396,000 and 0.8% of total loans. The Company held no other real estate owned (“OREO”) and repossessed property on June 30, 2021, compared to $14,000 on June 30, 2020.
Allowances for loan losses were $543,000 on June 30, 2021, and $522,000 on June 30, 2020. Loan loss allowances equaled 1.21% of total loans on June 30, 2021, and 1.00% 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 several dynamic factors, including current economic conditions, quantity of outstanding loans, and loan delinquency trends. Management considered the level of allowances for loan losses on June 30, 2021, adequate to cover probable incurred losses inherent in the loan portfolio at that date.
On June 30, 2021, total deposits were $58.3 million, compared to $55.8 million twelve months earlier. Total borrowings decreased 12% to $7.5 million on June 30, 2021, compared to $8.5 million a year earlier.
Shareholders’ equity was $8.2 million, or 11.0% of total assets on June 30, 2021, compared to $9.1 million, or 12.3% of total assets on June 30, 2020. Factors impacting shareholder equity during fiscal 2021 included net loss, four quarterly cash dividends totaling $.16 per share, and change from a $43,000 gain to a $10,000 accumulated other comprehensive loss. On June 30, 2021, the Company’s book value per share was $7.07 based on 1,155,594 shares outstanding. On June 30, 2020, book value was $7.84 per share based on 1,155,594 shares outstanding. The last reported price per share on June 30, 2021, was $11.00.
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:
2021
2020
Net Interest Income
$598
$669
Provision for Loan Losses
0
15
Non-interest Income
141
170
Non-interest Expense
669
748
Income Tax (Benefit)
10
3
Net Income
60
73
Basic and Diluted (Loss) Earnings Per Share:
$.05
$.06
Average Shares Outstanding - Basic
1,155,594
1,155,594
Average Shares Outstanding - Diluted
1,155,594
1,155,594
FOR TWELVE MONTHS ENDED JUNE 30:
2021
2020
Net Interest Income
$2,513
$2,671
Provision for Loan Losses
35
60
Non-interest Income
602
580
Non-interest Expense
4,033
2,840
Income Tax (Benefit)
(301
)
11
Net Income
(652
)
340
Basic and Diluted Earnings Per Share:
($.56
)
$.29
Average Shares Outstanding - Basic
1,155,594
1,155,594
Average Shares Outstanding - Diluted
1,155,594
1,155,594
June 30,
June 30,
2021
2020
Total Assets
$74,160
$73,945
Total Loans
45,044
52,354
Allowance for Loan Losses
543
522
Total Deposits
58,347
55,815
Borrowings
7,500
8,500
Shareholders’ Equity
8,171
9,061
90-days Past Due Loans and OREO
252
410
90-days Past Due Loans
252
396
90-days Past Due Loans and OREO to Total Assets
0.34
%
0.56
%
90-days Past Due Loans to Total Loans
0.56
%
0.76
%
Book Value Per Share*
$7.07
$7.84
*Based on 1,155,594 Shares on June 30, 2021, and on June 30, 2020.
