500 12th Ave. South * Nampa, ID 83651
Home Federal Bancorp, Inc.
Daniel L. Stevens, Chairman, President & CEO
Robert A. Schoelkoph, SVP, Treasurer & CFO
208-466-4634
www.myhomefed.com
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 19, 2007
Home Federal Bancorp, Inc.
(Exact name of registrant as specified in its charter)
| Federal (State or other jurisdiction of incorporation) |
000-50901 (Commission File Number) |
20-0945587 (I.R.S. Employer Identification No.) |
500 12th Avenue South
Nampa, Idaho 83651
(Address of principal executive offices and zip code)
(208) 466-4634
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
On July 19, 2007, Home Federal Bancorp, Inc. issued its earnings release for the third quarter of its
fiscal year ending September 30, 2007. A copy of the press release is attached hereto as Exhibit 99.1
and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
| (c) | Exhibits |
| 99.1 | Press release of Home Federal Bancorp, Inc. dated July 19, 2007 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| HOME FEDERAL BANCORP, INC. | |
| Date: July 19, 2007 | By: /s/ Robert A. Schoelkoph Robert A. Schoelkoph Senior Vice President and Chief Financial Officer |
Exhibit 99.1
500 12th Ave. South * Nampa, ID 83651 |
Contact: Home Federal Bancorp, Inc. Daniel L. Stevens, Chairman, President & CEO Robert A. Schoelkoph, SVP, Treasurer & CFO 208-466-4634 www.myhomefed.com |
PRESS RELEASE -- For Immediate Release
HOME FEDERAL BANCORP, INC. ANNOUNCES THIRD QUARTER EARNINGS
Nampa, ID (July 19, 2007) - Home Federal Bancorp, Inc. (the "Company") (Nasdaq GSM: HOME), the parent
company of Home Federal Bank (the "Bank"), today reported net income of $1.6 million, or $0.11 per diluted
share, for the quarter ended June 30, 2007, compared to $1.6 million, or $0.11 per diluted share, for the same
period a year ago. Net income for the nine months ended June 30, 2007 was $4.1 million, or $0.28 per diluted
share, compared to $4.6 million, or $0.31 per diluted share, for the same nine-month period a year ago.
"We are seeing very positive results from the implementation of our commercial banking division as we extend
our reputation for premier service to a new group of clients," said Daniel L. Stevens, the Company's Chairman
and CEO. "The Bank has assembled a seasoned group of business bankers from the local market, led by
experienced officers who are well known and highly regarded. I am very pleased with this new addition to the
business model."
Operating Results
Revenues for the quarter ended June 30, 2007, which consisted of net interest income before the provision for
loan losses plus noninterest income, decreased 6% to $8.3 million for the quarter, compared to $8.8 million for
the quarter ended June 30, 2006. Net interest income before the provision for loan losses decreased 8% to
$5.3 million for the quarter ended June 30, 2007 compared to $5.8 million for the same quarter of the prior
year as the cost of deposits increased more rapidly than the yield on loans and investments. In addition, the
current business strategy is to reduce the outstanding balances of the residential mortgage portfolio and
mortgage-backed securities to re-deploy the proceeds in support of the commercial banking initiative.
Revenues for the nine months ended June 30, 2007 decreased 4% to $24.8 million, compared to $25.8 million
for the same period of last year. Net interest income before the provision for loan losses decreased 7% to
$16.2 million, compared to $17.4 million for the same period of last year.
A provision for loan losses was not required in connection with the analysis of the loan portfolio for the current
quarter, compared to a provision for loan losses of $175,000 established for the same quarter of the prior year.
The decrease in the provision reflects a $12 million reduction in loans receivable for the current quarter as
compared to an increase of $18 million for the same period of last year. The provision for loan losses was $71,000
for the nine months ended June 30, 2007, compared to $320,000 for the nine months ended June 30, 2006. The
$249,000, or 78% decrease in the provision reflects the decrease in net loans receivable for the comparable
periods.
The Company's net interest margin decreased 23 basis points to 3.02% for the quarter ended June 30, 2007,
from 3.25% for the same quarter last year. The net interest margin for the nine months ended June 30, 2007
decreased 39 basis points to 3.02% from 3.41% for the same period a year earlier. The decline in the net
interest margin reflects competitive pricing pressures and the relatively flat yield curve that
Home Federal Bancorp, Inc.
July 19, 2007
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exists, as the cost of
shorter-term deposits and borrowed funds have increased more rapidly than the yield on longer-term assets.
The Company believes the repricing of existing loans and the emphasis on expanding the commercial and small
business banking programs, including both loan and deposit products, will help counter the trend in net interest
margin.
Noninterest income decreased 2% to $3.0 million for the quarter ended June 30, 2007, compared to $3.1
million for the same quarter a year ago. The decrease was primarily attributable to a $161,000 decrease
related to the value of the mortgage servicing rights and a $107,000 decrease in fees and service charges offset
by a $203,000 increase in gains on the sale of residential loans. For the nine months ended June 30, 2007,
noninterest income increased 3% to $8.6 million, compared to $8.3 million for the same period of the prior
year. Increases in gains on the sale of residential loans of $374,000 offset by a $176,000 decrease related to
the value of the mortgage servicing rights account for the majority of the increase. The Company currently sells
the majority of the one-to four-family residential mortgage loans that it originates. For the three and nine
months ended June 30, 2006, a larger percentage of the residential mortgage loans originated were held in the
loan portfolio. During the quarter ended June 30, 2006, the Company had a $201,000 write-up of the value of
the mortgage servicing rights.
Noninterest expense for the quarter ended June 30, 2007 decreased $337,000, or 5%, to $5.8 million, from $6.1
million for the comparable period a year earlier. Compensation and benefit expenses decreased $354,000, or 9%,
to $3.5 million for the quarter ended June 30, 2007 as compared to $3.9 million for the same quarter a year ago.
As of June 30, 2007, the Company employed 215 full-time equivalent employees, compared to 240 at June 30,
2006. The Company's efficiency ratio was 69.9% for the quarter ended June 30, 2007, relatively unchanged from
69.3% for the same quarter a year ago. The efficiency ratio indicates how much is spent on non-interest expenses
as a percentage of total revenue.
Noninterest expense for the nine months ended June 30, 2007 was unchanged at $18.1 million from the comparable
period ended June 30, 2006. Compensation and benefits were also unchanged at $11.4 million for the nine months
ended June 30, 2007 and 2006. Advertising costs increased $232,000, or 31% primarily as a result of marketing
costs related to a debit card rewards program and business banking campaign that were implemented during the
current fiscal year. The debit card rewards program is designed to reward customers for their debit card usage
which results in additional interchange income to the Company. The efficiency ratio was 73.1% for the nine months
ended June 30, 2007 compared to 70.1% for the same period of the prior year. The reduction in the Company's
net interest income was the primary factor related to the increase in the efficiency ratio.
Balance Sheet Growth
Total assets decreased $28.4 million, or 4%, to $728.3 million at June 30, 2007, compared to $756.7 million a
year earlier. Net loans (excluding loans held for sale) at June 30, 2007 decreased less than 1% to $491.8
million, compared to $494.0 million at June 30, 2006. One- to four-family residential loans represented 57%
of the Bank's loan portfolio at June 30, 2007, compared to 63% at June 30, 2006 as the Bank continues to sell
the majority of the residential mortgage loans that it originates. Commercial real estate loans accounted for
32% of the Bank's loan portfolio at June 30, 2007, compared to 27% at June 30, 2006. In the future, the
Bank plans to increase its emphasis on commercial and small business banking products. Mortgage-backed
securities decreased $36.2 million to $166.8 million at June 30, 2007, compared to $203.0 million at June 30,
2006. The decrease is primarily attributable to normal
Home Federal Bancorp, Inc.
July 19, 2007
Page 3 of 7
principal repayments during the period. During the
quarter ended June 30, 2007, the Company transferred its entire portfolio of held-to-maturity mortgage-backed securities to available for sale to meet the additional liquidity needs associated with increasing
commercial banking activities.
The Company's credit quality remains excellent, as non-performing assets were $520,000, or 0.07% of total assets,
at June 30, 2007, compared to $30,000, or 0.004% of total assets, at June 30, 2006. The allowance for loan
losses was $2.7 million, or 0.56% of gross loans, at June 30, 2007 compared to $3.2 million, or 0.64% of gross
loans, at June 30, 2006. Prior to March 31, 2007, the allowance for loan losses included the estimated loss from
unfunded loan commitments. The preferred accounting method is to separate the unfunded loan commitments from
the disbursed loan amounts and record the unfunded loan commitment portion as a liability. At March 31, 2007,
the reserve for unfunded loan commitments of $192,000 was reclassed to other liabilities on the Consolidated
Balance Sheet.
Deposits decreased $20.8 million, or 5%, to $418.7 million at June 30, 2007 compared to $439.5 million at
June 30, 2006. Demand deposits and savings accounts decreased $14.2 million, or 7%, as customers migrated
towards higher rate deposit products the past year. Noninterest-bearing demand deposits decreased $14.4
million, or 30%, to $34.4 million at June 30, 2007, compared to $48.8 million at June 30, 2006. A significant
portion of the decrease in noninterest-bearing demand deposits was the result of a single commercial
relationship that reduced outstanding balances by approximately $7.1 million. Interest-bearing demand
deposits increased $1.1 million, or less than 1%, to $133.8 million at June 30, 2007, compared to $132.7
million at June 30, 2006. Certificates of deposit decreased $6.5 million, or 3%, to $227.1 million at June 30,
2007, compared to $233.6 million at June 30, 2006. The decrease in certificates of deposit was primarily the
result of the Bank choosing not to match rates offered by local competitors that in some instances exceeded the
Bank's alternative funding sources. Advances from the Federal Home Loan Bank ("FHLB") decreased $8.4
million, or 4%, to $189.3 million at June 30, 2007 compared to $197.7 million at June 30, 2006. The
Company utilizes advances from the FHLB as an alternative funding source to retail deposits in order to
manage funding costs, manage interest rate risk and to leverage the Balance Sheet.
Stockholders' equity increased $4.0 million, or 4%, to $110.0 million at June 30, 2007, compared to $106.0
million at June 30, 2006. The increase was primarily the result of $5.7 million in net income for the period,
$801,000 in earned employee stock ownership plan ("ESOP") shares, $1.0 million in equity compensation and
$854,000 proceeds from the exercise of stock options, offset by $1.3 million of cash dividends paid to
stockholders and $3.2 million increase in unrealized losses on securities. During the quarter ended June 30, 2007,
the Company transferred its entire portfolio of held-to-maturity mortgage-backed securities to available for sale
for additional liquidity purposes. As a result, stockholders' equity was decreased by the securities unrealized
holding loss of $1.9 million at the date of transfer. The Company's book value per share as of June 30, 2007 was
$7.22 per share based upon 15,232,243 outstanding shares of common stock.
About the Company
Home Federal Bancorp, Inc. is a federally chartered savings and loan holding company headquartered in Nampa,
Idaho. It is the subsidiary of Home Federal MHC, a federally chartered mutual holding company, and the parent
company of Home Federal Bank, a federally chartered savings bank that was originally organized as a building and
loan association in 1920. The Company serves the Treasure Valley region of southwestern Idaho that includes
Ada, Canyon, Elmore and Gem Counties, through 15 full-service banking offices and two mortgage loan centers.
The Company's common stock is traded on
Home Federal Bancorp, Inc.
July 19, 2007
Page 4 of 7
the NASDAQ Global Market under the symbol "HOME." The
Company's stock is also included in the America's Community Bankers NASDAQ Index. For more information,
visit the Company's web site at www.myhomefed.com.
Forward-Looking Statements:
Statements in this news release regarding future events, performance or results are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA") and are
made pursuant to the safe harbors of the PSLRA. Actual results could be materially different from those
expressed or implied by the forward-looking statements. Factors that could cause results to differ include but
are not limited to: general economic and banking business conditions, competitive conditions between banks
and non-bank financial service providers, interest rate fluctuations, regulatory and accounting changes, the
value of mortgage servicing rights, risks related to construction and development lending, increased emphasis
on commercial and small business banking and other risks. Additional factors that could cause actual results
to differ materially are disclosed in Home Federal Bancorp, Inc.'s recent filings with the Securities and
Exchange Commission, including but not limited to its Annual Report on Form 10-K for the year ended
September 30, 2006, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Forward-looking
statements are accurate only as of the date released, and we do not undertake any responsibility to update
or revise any forward-looking statements to reflect subsequent events or circumstances.
Home Federal Bancorp, Inc.
July 19, 2007
Page 5 of 7
| HOME FEDERAL BANCORP, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEET (In thousands, except share date) (Unaudited) |
June 30, 2007 |
September 30, 2006 |
June 30, 2006 | ||
| ASSETS | |||||
| Cash and amounts due from depository institutions | $ 23,086 | $ 18,385 | $ 14,358 | ||
| Mortgage-backed securities available for sale, at fair value | 166,755 | 12,182 | 12,678 | ||
| Mortgage-backed securities held to maturity, at cost | - | 183,279 | 190,273 | ||
| FHLB stock, at cost | 9,591 | 9,591 | 9,591 | ||
| Loan receivable, net of allowance for loan losses of $2,748, $2,974 and $3,160 |
491,768 |
503,065 |
494,016 | ||
| Loans held for sale | 4,363 | 4,119 | 5,065 | ||
| Accrued interest receivable | 2,880 | 3,025 | 2,984 | ||
| Property and equipment, net | 12,271 | 12,849 | 13,118 | ||
| Mortgage servicing rights, net | 2,269 | 2,492 | 2,624 | ||
| Bank owned life insurance | 11,065 | 10,763 | 10,665 | ||
| Real estate and other property owned | 153 | - | - | ||
| Deferred income tax asset | 1,757 | - | - | ||
| Other assets | 2,357 |
1,542 |
1,306 | ||
| TOTAL ASSETS | $728,315 | $761,292 | $756,678 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| LIABILITIES | |||||
| Deposit accounts: | |||||
| Noninterest-bearing demand deposits | $ 34,368 | $ 44,626 | $ 48,798 | ||
| Interest-bearing demand deposits | 133,770 | 128,276 | 132,652 | ||
| Savings deposits | 23,465 | 23,655 | 24,398 | ||
| Certificates of deposit | 227,095 |
233,724 |
233,622 | ||
| Total deposit accounts | 418,698 | 430,281 | 439,470 | ||
| Advances by borrowers for taxes and insurance | 921 | 2,133 | 1,096 | ||
| Interest payable | 773 | 971 | 978 | ||
| Deferred compensation | 4,418 | 3,875 | 3,634 | ||
| FHLB advances | 189,264 | 210,759 | 197,722 | ||
| Deferred income tax liability | - | 800 | 782 | ||
| Other liabilities | 4,243 |
4,604 |
6,989 | ||
| Total liabilities | 618,317 | 653,423 | 650,671 | ||
| STOCKHOLDERS' EQUITY | |||||
| Serial preferred stock, $.01 par value; 5,000,000 authorized, | |||||
| issued and outstanding, none | - | - | - | ||
| Common stock, $.01 par value; 50,000,000 authorized, | |||||
| issued and outstanding: | |||||
| June 30, 2007 - 15,278,803 issued, 15,232,243 outstanding | 152 | 152 | 152 | ||
| Sept. 30, 2006 - 15,208,750 issued, 15,169,114 outstanding | |||||
| June 30, 2006 - 15,208,750 issued, 15,154,114 outstanding | |||||
| Additional paid-in capital | 59,209 | 57,222 | 56,923 | ||
| Retained earnings | 57,922 | 54,805 | 53,462 | ||
| Unearned shares issued to ESOP | (3,808) | (4,134) | (4,240) | ||
| Accumulated other comprehensive loss | (3,477) |
(176) |
(290) | ||
| Total stockholders' equity | 109,998 |
107,869 |
106,007 | ||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $728,315 | $761,292 | $756,678 |
Home Federal Bancorp, Inc.
July 19, 2007
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| HOME FEDERAL BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF INCOME (In thousands, except share data) (Unaudited) |
Three Months Ended June 30, |
Nine Months Ended June 30, |
| 2007 |
2006 |
2007 |
2006 | ||||
| Interest and dividend income: | |||||||
| Loan interest | $ 8,334 | $ 7,896 | $25,331 | $21,959 | |||
| Investment interest | 179 | 43 | 223 | 114 | |||
| Mortgage-backed security interest | 2,123 | 2,448 | 6,673 | 7,220 | |||
| FHLB dividends | 14 |
- |
33 |
- | |||
| Total interest and dividend income | 10,650 |
10,387 |
32,260 |
29,293 | |||
| Interest expense: | |||||||
| Deposits | 3,131 | 2,493 | 9,146 | 6,187 | |||
| FHLB advances | 2,207 |
2,100 |
6,942 |
5,696 | |||
| Total interest expense | 5,338 |
4,593 |
16,088 |
11,883 | |||
| Net interest income | 5,312 | 5,794 | 16,172 | 17,410 | |||
| Provision for loan losses | - |
175 |
71 |
320 | |||
| Net interest income after provision for loan losses | 5,312 |
5,619 |
16,101 |
17,090 | |||
| Noninterest income: | |||||||
| Service charges and fees | 2,285 | 2,392 | 6,921 | 6,893 | |||
| Gain on sale of loans | 491 | 288 | 1,168 | 794 | |||
| Increase in cash surrender value of bank owned life insurance | 102 | 95 | 301 | 285 | |||
| Loan servicing fees | 134 | 151 | 420 | 470 | |||
| Mortgage servicing rights, net | (48) | 113 | (223) | (47) | |||
| Other | 18 |
14 |
39 |
(52) | |||
| Total noninterest income | 2,982 |
3,053 |
8,626 |
8,343 | |||
| Noninterest expense: | |||||||
| Compensation and benefits | 3,498 | 3,852 | 11,363 | 11,428 | |||
| Occupancy and equipment | 716 | 651 | 2,145 | 2,073 | |||
| Data processing | 548 | 503 | 1,549 | 1,364 | |||
| Advertising | 376 | 269 | 972 | 740 | |||
| Postage and supplies | 167 | 196 | 487 | 616 | |||
| Professional services | 209 | 278 | 620 | 641 | |||
| Insurance and taxes | 114 | 106 | 323 | 320 | |||
| Other | 166 |
276 |
675 |
880 | |||
| Total noninterest expense | 5,794 |
6,131 |
18,134 |
18,062 | |||
| Income before income taxes | 2,500 | 2,541 | 6,593 | 7,371 | |||
| Income tax expense | 934 |
980 |
2,517 |
2,817 | |||
| NET INCOME | $1,566 | $1,561 | $ 4,076 | $ 4,554 | |||
| Earnings per common share: | |||||||
| Basic | $0.11 | $0.11 | $0.28 | $0.31 | |||
| Diluted | $0.11 | $0.11 | $0.28 | $0.31 | |||
Weighted average number of shares outstanding: |
|||||||
| Basic | 14,625,927 | 14,491,205 | 14,594,936 | 14,478,701 | |||
| Diluted | 14,714,933 | 14,563,609 | 14,716,165 | 14,503,587 | |||
| Dividends declared per share: | $0.055 | $0.055 | $0.165 | $0.160 |
Home Federal Bancorp, Inc.
July 19, 2007
Page 7 of 7
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY ADDITIONAL FINANCIAL INFORMATION (Dollars in thousands, except share data) (Unaudited) |
At Or For The Nine Months Ended June 30, 2007 |
At Or For The Year Ended Sept. 30, 2006 | |
| FINANCIAL CONDITION DATA | |||
| Average interest-earning assets | $713,455 | $689,688 | |
| Average interest-bearing liabilities | 592,398 | 563,834 | |
| Net average earning assets | 121,057 | 125,854 | |
| Average interest-earning assets to average interest-bearing liabilities |
120.44% |
122.32% | |
| Stockholders' equity to assets | 15.10 | 14.17 | |
| ASSET QUALITY | |||
| Allowance for loan losses | $2,748 | $2,974 | |
| Non-performing loans | 367 | 388 | |
| Non-performing assets | 520 | 388 | |
| Allowance for loan losses to non-performing loans | 748.77% | 766.49% | |
| Allowance for loan losses to gross loans | 0.56 | 0.59 | |
| Non-performing loans to gross loans | 0.07 | 0.08 | |
| Non-performing assets to total assets | 0.07 | 0.05 |
| At Or For The Three Months Ended June 30, |
At Or For The Nine Months Ended June 30, |
||||||
| 2007 |
2006 |
2007 |
2006 | ||||
| SELECTED PERFORMANCE RATIOS | |||||||
| Return on average assets (1) | 0.85% | 0.83% | 0.72% | 0.85% | |||
| Return on average equity (1) | 5.63 | 5.89 | 4.92 | 5.81 | |||
| Net interest margin (1) | 3.02 | 3.25 | 3.02 | 3.41 | |||
| Efficiency ratio (2) | 69.86 | 69.30 | 73.13 | 70.14 | |||
| PER SHARE DATA | |||||||
| Basic earnings per share | $ 0.11 | $ 0.11 | $ 0.28 | $ 0.31 | |||
| Diluted earnings per share | 0.11 | 0.11 | 0.28 | 0.31 | |||
| Book value per share | 7.22 | 7.00 | 7.22 | 7.00 | |||
| Cash dividends declared per share | 0.055 | 0.055 | 0.165 | 0.160 | |||
| Average number of shares outstanding: | |||||||
| Basic (3) | 14,625,927 | 14,491,205 | 14,594,936 | 14,478,701 | |||
| Diluted (3) | 14,714,933 | 14,563,609 | 14,716,165 | 14,503,587 | |||
(1) Amounts are annualized.
(2) Noninterest expense divided by net interest income plus noninterest income.
(3) Amounts calculated exclude ESOP shares not committed to be released and unvested restricted
shares granted under the 2005 Recognition and Retention Plan.