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: November 2, 2007
Home Federal Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Federal 000-50901 20-0945587
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) 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 November 2, 2007, Home Federal Bancorp, Inc. issued its earnings release
for the fourth quarter and fiscal year ended 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 November 2,
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: November 2, 2007 By: /s/ Robert A. Schoelkoph
------------------------
Robert A. Schoelkoph
Senior Vice President and
Chief Financial Officer
Exhibit 99.1
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 FOURTH QUARTER AND ANNUAL EARNINGS
Nampa, ID (November 2, 2007) - Home Federal Bancorp, Inc. (the "Company")
(Nasdaq GSM: HOME), the parent company of Home Federal Bank (the "Bank"),
today reported net income of $1.2 million, or $0.08 per diluted share, for the
quarter ended September 30, 2007, compared to $1.7 million, or $0.11 per
diluted share, for the same period a year ago. Net income for the fiscal year
ended September 30, 2007 was $5.3 million, or $0.36 per diluted share,
compared to $6.2 million, or $0.43 per diluted share, for the fiscal year
ended September 30, 2006.
"We continue to experience increasing positive results from the implementation
of our Bank's new commercial banking division and we are pleased with our
employee's ability to leverage our market reputation for excellent service
through our new commercial banking initiative," said Daniel L. Stevens, the
Company's Chairman, President and CEO. "The Bank's management team has
developed, and is successfully implementing, effective strategic and tactical
plan elements which currently benefit our customers and shareholders and which
will become the foundation for the future of the Company. One of the current
business strategies is to redeploy the proceeds from amortization and payoffs
in the residential mortgage and mortgage-backed securities portfolios to
assets acquired through the commercial banking initiative."
Operating Results
Revenues for the quarter ended September 30, 2007, which consisted of net
interest income before the provision for loan losses plus noninterest income,
decreased 7.9% to $7.7 million for the quarter, compared to $8.4 million for
the quarter ended September 30, 2006. Net interest income before the
provision for loan losses decreased 8.2% to $5.1 million for the quarter ended
September 30, 2007 compared to $5.6 million for the same quarter of the prior
year as the cost of deposits increased more rapidly than the yield on loans
and investments.
Revenues for the fiscal year ended September 30, 2007 decreased 4.7% to $32.5
million, compared to $34.1 million for the same period of last year. Net
interest income before the provision for loan losses decreased 7.4% to $21.3
million, compared to $23.0 million for the same period of last year.
A provision of $338,000 was taken for the quarter ended September 30, 2007
compared to a recapture of provision of $182,000 for the same quarter of the
prior year. The provision for loan losses was $409,000 for the fiscal year
ended September 30, 2007, compared to $138,000 for the fiscal year ended
September 30, 2006. The increases in the provision for both time periods
reflect an increase in activity within non-performing assets.
The Company's net interest margin decreased eight basis points to 3.04% for
the quarter ended September 30, 2007, from 3.12% for the same quarter last
year. The net interest margin for the fiscal year ended September 30, 2007
decreased 30 basis points to 3.03% from 3.33% for the prior year. The
Home Federal Bancorp, Inc.
November 2, 2007
Page 2 of 7
decline in the net interest margin reflects competitive pricing pressures and
the relatively flat yield curve that 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 7.3% to $2.6 million for the quarter ended
September 30, 2007, compared to $2.8 million for the same quarter a year ago.
The decrease was primarily attributable to a $90,000 decrease related to the
value of the mortgage servicing rights and a $102,000 decrease in fees and
service charges. For the fiscal year ended September 30, 2007, noninterest
income increased .7% to $11.2 million, compared to $11.1 million for the same
period of the prior year.
Noninterest expense for the quarter ended September 30, 2007 decreased
$472,000, or 8.0%, to $5.4 million, from $5.9 million for the comparable
period a year earlier. Compensation and benefit expenses decreased $767,000,
or 21%, to $2.9 million for the quarter ended September 30, 2007 as compared
to $3.7 million for the same quarter a year ago. This reduction was due to a
combination of reduced number of employees and decreased incentive
compensation in the fiscal year just ended. Advertising expenses increased
$218,000 or 76.5% to $503,000 for the quarter ended September 30, 2007 as
compared to $285,000 for the same quarter a year ago. The increase is
primarily attributable to a debit card rewards program and a business banking
campaign that were recently initiated. 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 Company's efficiency ratio
was 70.3% for the quarter ended September 30, 2007, relatively unchanged from
70.4% 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 fiscal year ended September 30, 2007 decreased
$400,000, or 1.7% to $23.5 million, from $23.9 million for the fiscal year
ended September 30, 2006. Compensation and benefits decreased and advertising
expenses increased from the prior year, 5.5% or $832,000 and 43.9% or $450,000
respectively. The efficiency ratio was 72.5% for the fiscal year ended
September 30, 2007 compared to 70.2% 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 $51.3 million, or 6.7%, to $710.0 million at September
30, 2007, compared to $761.3 million a year earlier. Net loans (excluding
loans held for sale) at September 30, 2007 decreased 4.6% to $480.1 million,
compared to $503.1 million at September 30, 2006. One- to four-family
residential loans represented 52.0% of the Bank's loan portfolio at September
30, 2007, compared to 59.5% at September 30, 2006 as the Bank continues to
sell the majority of the residential mortgage loans that it originates.
Commercial loans accounted for 38.8% of the Bank's loan portfolio at September
30, 2007, compared to 33.3% at September 30, 2006. In the future, the Bank
plans to increase its emphasis on commercial and small business banking
products. Mortgage-backed securities decreased $33.3 million to $162.3
million at September 30, 2007, compared to $195.5 million at September 30,
2006. The decrease is primarily attributable to normal 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.
Home Federal Bancorp, Inc.
November 2, 2007
Page 3 of 7
Non-performing assets were $2.1 million, or 0.30% of total assets, at
September 30, 2007, compared to $388,000, or 0.05% of total assets, at
September 30, 2006. The increase in non-performing assets isn't concentrated
in once specific area, but rather was experienced throughout all major loan
types. Although the Company experienced an increase in non-performing assets,
overall credit quality remains excellent. The allowance for loan losses was
$3.0 million, or 0.62% of gross loans, at September 30, 2007 compared to $3.0
million, or 0.59% of gross loans, at September 30, 2006.
Deposits decreased $25.7 million, or 6.0%, to $404.6 million at September 30,
2007 compared to $430.3 million at September 30, 2006. Demand deposits and
savings accounts decreased $7.1 million, or 3.6%, to $189.4 million, compared
to $196.6 million at September 30, 2006. Certificates of deposit decreased
$18.5 million, or 7.9%, to $215.2 million at September 30, 2007, compared to
$233.7 million at September 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
$30.0 million, or 14.3%, to $180.7 million at September 30, 2007 compared to
$210.8 million at September 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 $4.8 million, or 4.4%, to $112.6 million at
September 30, 2007, compared to $107.9 million at September 30, 2006. The
increase was primarily the result of $5.3 million in net income and the
allocation of earned employee stock ownership plan shares, equity compensation
and the exercise of stock options totaling $2.2 million, offset by $1.3
million in cash dividends paid to stockholders and a $2.0 million increase in
unrealized loses on securities available for sale. 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.
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 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,
Home Federal Bancorp, Inc.
November 2, 2007
Page 4 of 7
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.
November 2, 2007
Page 5 of 7
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) (Unaudited) September 30, September 30,
2007 2006
------------- -------------
ASSETS
Cash and amounts due from depository institutions $ 20,588 $ 18,385
Mortgage-backed securities available for sale,
at fair value 162,258 12,182
Mortgage-backed securities held to maturity, at
cost - 183,279
FHLB stock, at cost 9,591 9,591
Loan receivable, net of allowance for loan losses
of $2,988 and $2,974 480,118 503,065
Loans held for sale 4,904 4,119
Accrued interest receivable 2,804 3,025
Property and equipment, net 12,364 12,849
Mortgage servicing rights, net 2,047 2,492
Bank owned life insurance 11,168 10,763
Real estate and other property owned 549 -
Deferred income tax asset 1,245 -
Other assets 2,318 1,542
-------- --------
TOTAL ASSETS $709,954 $761,292
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposit accounts
Noninterest-bearing demand deposits $ 38,643 $ 44,626
Interest-bearing demand deposits 127,659 128,276
Savings deposits 23,116 23,655
Certificates of deposit 215,191 233,724
-------- --------
Total deposit accounts 404,609 430,281
Advances by borrowers for taxes and insurance 1,605 2,133
Interest payable 731 971
Deferred compensation 4,515 3,875
FHLB advances 180,730 210,759
Deferred income tax liability - 800
Other liabilities 5,127 4,604
-------- --------
Total liabilities 597,317 653,423
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:
Sept. 30, 2007 - 15,278,803 issued, 15,232,243
outstanding 152 152
Sept. 30, 2006 - 15,208,750 issued, 15,169,114
outstanding
Additional paid-in capital 59,613 57,222
Retained earnings 58,795 54,805
Unearned shares issued to ESOP (3,698) (4,134)
Accumulated other comprehensive loss (2,225) (176)
-------- --------
Total stockholders' equity 112,637 107,869
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $709,954 $761,292
======== ========
Home Federal Bancorp, Inc.
November 2, 2007
Page 6 of 7
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data) Three Months Ended Year Ended
(Unaudited) September 30, September 30,
2007 2006 2007 2006
------- ------- ------- -------
Interest and dividend income:
Loan interest $ 8,222 $ 8,216 $33,553 $30,175
Investment interest 122 26 345 140
Mortgage-backed security interest 2,019 2,378 8,692 9,598
FHLB dividends 15 - 48 -
------- ------- ------- -------
Total interest and dividend
income 10,378 10,620 42,638 39,913
------- ------- ------- -------
Interest expense:
Deposits 3,133 2,727 12,279 8,914
FHLB advances 2,115 2,307 9,057 8,003
------- ------- ------- -------
Total interest expense 5,248 5,034 21,336 16,917
------- ------- ------- -------
Net interest income 5,130 5,586 21,302 22,996
Provision for loan losses 338 (182) 409 138
------- ------- ------- -------
Net interest income after
provision for loan losses 4,792 5,768 20,893 22,858
------- ------- ------- -------
Noninterest income:
Service charges and fees 2,297 2,399 9,218 9,292
Gain on sale of loans 251 262 1,419 1,056
Increase in cash surrender value
of bank owned life insurance 104 98 405 383
Loan servicing fees 129 150 549 620
Mortgage servicing rights, net (222) (132) (445) (179)
Other 5 (11) 44 (63)
------- ------- ------- -------
Total noninterest income 2,564 2,766 11,190 11,109
------- ------- ------- -------
Noninterest expense:
Compensation and benefits 2,886 3,653 14,249 15,081
Occupancy and equipment 726 686 2,871 2,759
Data processing 548 438 2,097 1,802
Advertising 503 285 1,475 1,025
Postage and supplies 163 195 650 811
Professional services 236 276 856 917
Insurance and taxes 106 111 429 431
Other 243 239 918 1,119
------- ------- ------- -------
Total noninterest expense 5,411 5,883 23,545 23,945
------- ------- ------- -------
Income before income taxes 1,945 2,651 8,538 10,022
Income tax expense 750 993 3,267 3,810
------- ------- ------- -------
NET INCOME $ 1,195 $ 1,658 $ 5,271 $ 6,212
======= ======= ======= =======
Earnings per common share:
Basic $ 0.08 $ 0.11 $ 0.36 $ 0.43
Diluted $ 0.08 $ 0.11 $ 0.36 $ 0.43
Weighted average number of shares
outstanding:
Basic 14,670,519 14,503,619 14,614,509 14,484,982
Diluted 14,734,001 14,589,904 14,759,876 14,519,778
Dividends declared per share: $0.055 $0.055 $0.220 $0.215
Home Federal Bancorp, Inc.
November 2, 2007
Page 7 of 7
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
ADDITIONAL FINANCIAL INFORMATION At Or For The At Or For The
(Dollars in thousands, except share data) Year Ended Year Ended
(Unaudited) Sept. 30, 2007 Sept. 30, 2006
-------------- --------------
FINANCIAL CONDITION DATA
Average interest-earning assets $703,675 $689,688
Average interest-bearing liabilities 582,936 563,834
Net average earning assets 120,739 125,854
Average interest-earning assets to average
interest-bearing liabilities 120.71% 122.32%
Stockholders' equity to assets 15.87 14.17
ASSET QUALITY
Allowance for loan losses $ 2,988 $ 2,974
Non-performing loans 1,531 388
Non-performing assets 2,080 388
Allowance for loan losses to non-performing
loans 195.17% 766.49%
Allowance for loan losses to gross loans 0.62 0.59
Non-performing loans to gross loans 0.32 0.08
Non-performing assets to total assets 0.30 0.05
At Or For The At Or For The
Three Months Ended Year Ended
Sept. 30, Sept. 30,
----------------- ----------------
2007 2006 2007 2006
------ ------ ------ ------
SELECTED PERFORMANCE RATIOS
Return on average assets (1) 0.67% 0.88% 0.71% 0.85%
Return on average equity (1) 4.27 6.16 4.75 5.90
Net interest margin (1) 3.04 3.12 3.03 3.33
Efficiency ratio (2) 70.33 70.44 72.46 70.21
PER SHARE DATA
Basic earnings per share $0.08 $0.11 $0.36 $0.43
Diluted earnings per share 0.08 0.11 0.36 0.43
Book value per share 7.39 7.11 7.39 7.11
Cash dividends declared per share 0.055 0.055 0.22 0.215
Average number of shares
outstanding:
Basic (3) 14,670,519 14,503,619 14,614,509 14,484,982
Diluted (3) 14,734,001 14,589,904 14,759,876 14,519,778
(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.