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: January 31, 2006
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 January 31, 2006, Home Federal Bancorp, Inc. issued its earnings release
for the first quarter of its fiscal year ending September 30, 2006. 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 January 31,
2006
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: January 31, 2006 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
[Home Federal Bancorp, Inc. Logo] 208-466-4634
500 12th Ave. South * www.myhomefed.com
Nampa, ID 83651
PRESS RELEASE For Immediate Release
------------------------------------------------------------------------------
HOME FEDERAL BANCORP, INC. ANNOUNCES FIRST QUARTER EARNINGS
Nampa, ID (January 31, 2006) - Home Federal Bancorp, Inc. (the "Company")
(Nasdaq: HOME), the parent company of Home Federal Bank (the "Bank"), today
announced earnings for the first quarter of its fiscal year ending September
30, 2006. For the quarter ended December 31, 2005, the Company reported net
income of $1.8 million, or $0.12 per diluted share, compared to $74,000, or
less than $.01 per diluted share, for the same period a year ago. The results
for the quarter ended December 31, 2004 include a $1.8 million pre-tax expense
for establishing the Home Federal Foundation, Inc. (the "Foundation").
Excluding the expense for establishing the Foundation, the Company had net
income of $1.2 million, or $0.08 per diluted share, for the quarter ended
December 31, 2004.
"We have continued to successfully meet our goals and strategic business plan
since our conversion to a publicly-traded company," said Daniel L. Stevens,
Chairman and CEO. "We are also pleased to report the conversion of the
Company's core processing system and redesign of our website this quarter.
The new system and website will enable the Company to efficiently handle
transactions as well as product and service expansion for our growing
business."
The following table reconciles the Company's actual net income to pro forma
net income for the quarter ended December 31, 2004, exclusive of the
contribution to the Foundation, as adjusted for Federal and state taxes (in
thousands, except per share data):
Three Months Ended
December 31,
---------------------
2005 2004
------- -------
(unaudited)
Pro forma disclosure
Net income, as reported $1,760 $ 74
Contribution to Foundation - 1,825
Federal and state income tax
expense - (712)
------- -------
Pro forma net income $1,760 $1,187
======= =======
Earnings per share
Diluted as reported $0.12 $0.00
Pro forma diluted $0.12 $0.08
First Quarter Highlights (at or for the periods ended December 31, 2005
compared to December 31, 2004):
* Pro forma net income increased 48% to $1.8 million
* Net interest income increased 20% to $6.0 million
* Noninterest income increased 27% to $2.8 million
Home Federal Bancorp, Inc.
January 31, 2006
Page 2 of 7
* Total assets increased 13% to $695.7 million
* Net loans increased 9% to $439.2 million
* Deposits increased 14% to $410.2 million
* Non-performing assets decreased 74% to $180,000 or 0.03% of total
assets
Operating Results:
Revenues for the quarter ended December 31, 2005, which consisted of net
interest income before the provision for loan losses plus noninterest income,
increased 22% to $8.8 million for the quarter, compared to $7.2 million for
the quarter ended December 31, 2004. Net interest income before the provision
for loan losses increased 20% to $6.0 million for the quarter ended December
31, 2005, compared to $5.0 million for the same quarter of the prior year. On
December 6, 2004, the Bank completed its mutual holding company
reorganization, at which time the Bank converted to stock form and the Company
was organized. In connection with the reorganization, the Company received
$53.6 million in net proceeds from a minority stock offering. The majority of
the proceeds were invested in mortgage-backed securities. Revenues from
mortgage-backed securities increased $1.0 million to $2.4 million for the
quarter ended December 31, 2005, compared to $1.4 million for the quarter
ended December 31, 2004.
For the quarter ended December 31, 2005, net interest income after provision
for loan losses increased 20% to $5.9 million, compared to $4.9 million for
the same quarter a year ago. For the quarter ended December 31, 2005, a
provision for loan losses of $55,000 was established by management in
connection with its analysis of the loan portfolio compared to a provision for
loan losses of $59,000 established for the same quarter of the prior year.
The Company's net interest margin increased 15 basis points to 3.66% for the
quarter ended December 31, 2005, from 3.51% for the same quarter last year.
The cost of deposits was 1.80% for the first quarter of fiscal 2006 compared
to 1.56% for the first quarter of the prior year. During the current quarter,
the Company revised its estimate of accrued interest on an escalator
certificate of deposit product. The revision resulted in a $310,000 reduction
in interest expense for the quarter ended December 31, 2005. Excluding the
revision, the net interest margin and cost of deposits for the first quarter
were 3.47% and 2.15%, respectively. The decline in net interest margin to
3.47% reflects the relatively flat yield curve that currently exists, as the
cost of shorter-term deposits and borrowed funds increased more rapidly than
the yield on longer-term assets. Although the Company believes the repricing
of existing and new loans over time will help counter the trend in net
interest margin, pressure will likely continue in the near term as a result of
the flat yield curve environment.
Noninterest income increased 27% to $2.8 million for the quarter ended
December 31, 2005, compared to $2.2 million for the same quarter a year ago.
The increase in noninterest income is primarily attributable to a $427,000
increase in service charges as a result of enhancements to the retail checking
program related to the core processing conversion in the current quarter.
Noninterest expense for the quarter ended December 31, 2005 decreased 17% to
$5.9 million, from $7.1 million for the comparable period a year earlier. The
$1.2 million decrease was primarily a result of the $1.8 million contribution
to the Foundation during the quarter ended December 31, 2004. Compensation
and benefits increased $753,000 to $3.8 million for the quarter ended December
31, 2005 as compared to $3.1 million for the same quarter a year ago. The
majority of the increase is attributable
Home Federal Bancorp, Inc.
January 31, 2006
Page 3 of 7
to the establishment of the equity compensation plans during the prior fiscal
year, annual merit increases, and an increase in employee commissions and
incentive plans. The equity compensation plans include the Company's employee
stock option plan ("ESOP"), 2005 Recognition and Retention Plan ("RRP") and
2005 Stock Option and Incentive Plan. The efficiency ratio improved to 66.95%
for the quarter ended December 31, 2005 compared to 97.93% for the same
quarter a year ago. Excluding the non-recurring contribution to the
Foundation, the efficiency ratio was 72.61% for the quarter ended December 31,
2004. The efficiency ratio indicates how much is spent on non-interest
expenses as a percentage of total revenue.
Balance Sheet Growth:
Total assets increased 13% to $695.7 million at December 31, 2005 compared to
$618.3 million a year earlier. Total assets at December 31, 2005 increased
$6.1 million, or less than 1%, from $689.6 million at September 30, 2005.
Net loans at December 31, 2005 increased 9% to $439.2 million, compared to
$401.8 million at December 31, 2004. Single family lending represented 62% of
the Bank's loan portfolio at December 31, 2005, compared to 63% at December
31, 2004. Commercial real estate loans accounted for 28% of the Bank's loan
portfolio at December 31, 2005, compared to 27% at December 31, 2004.
Credit quality remains high, as non-performing assets were $180,000, or 0.03%
of total assets, at December 31, 2005, compared to $685,000, or 0.11% of total
assets, at December 31, 2004. The allowance for loan losses was $2.9 million,
or 0.66% of gross loans, including loans held for sale, at December 31, 2005
compared to $2.7 million, or 0.66% of gross loans, at December 31, 2004.
Despite a surge in bankruptcy filings prior to the October 17, 2005 effective
date of the new bankruptcy laws, the Company does not anticipate material
increases in the provision for loan losses as a result of charge-offs related
to these additional filings.
Deposits increased 14% to $410.2 million at December 31, 2005 compared to
$358.8 million at December 31, 2004. Noninterest-bearing demand deposits
increased $15.0 million to $47.4 million at December 31, 2005, compared to
$32.4 million at December 31, 2004. Interest-bearing demand deposits
decreased $3.2 million to $129.6 million at December 31, 2005, compared to
$132.8 million at December 31, 2004. Certificates of deposit increased $39.4
million to $208.1 million at December 31, 2005, compared to $168.7 million at
December 31, 2004. The majority of the increase in certificates of deposits
was in 12 to 23 month terms. Advances from the Federal Home Loan Bank
("FHLB") increased 16% to $171.8 million at December 31, 2005 compared to
$148.3 million at December 31, 2004. The Company utilizes advances from the
FHLB as an alternative funding source to retail deposits in order to manage
funding costs, reduce interest rate risk and to leverage the Balance Sheet.
Stockholders' equity increased $3.0 million to $103.2 million at December 31,
2005, compared to $100.2 million at December 31, 2004. The increase was
primarily the result of $7.0 million in net income for the period and $707,000
in earned ESOP shares, offset by $1.1 million of cash dividends paid to
stockholders and $3.9 million for the repurchase of 298,092 shares of common
stock for the RRP plan. The Company's book value per share as of December 31,
2005 was $6.81 per share based upon 15,152,114 outstanding shares of common
stock.
Home Federal Bancorp, Inc.
January 31, 2006
Page 4 of 7
About the Company:
Home Federal Bancorp, Inc. is a 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 federal savings bank that was originally organized as a building and loan
association in 1920. The Company serves the Treasure Valley region of
southwestern Idaho, which includes Ada, Canyon, Elmore and Gem Counties,
through 14 full-service banking offices and two mortgage loan centers. For
more information, visit the Company's web site at www.myhomefed.com
Forward Looking Statements:
Statements in this report 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, commercial real estate and consumer lending 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, 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.
January 31, 2006
Page 5 of 7
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS December 31, September 30, December 31,
(In thousands, except share data) (Unaudited) 2005 2005 2004
------------- ------------- -------------
ASSETS
Cash and amounts due from depository
institutions $ 11,051 $ 19,033 $ 10,795
Mortgage-backed securities available
for sale, at fair value 13,957 14,830 18,922
Mortgage-backed securities held to
maturity, at cost 187,498 180,974 150,400
Federal Home Loan Bank stock, at cost 9,591 9,591 7,797
Loan receivable, net of allowance for
loan losses of $2,924, $2,882 and $2,675 439,241 430,944 401,752
Loans held for sale 3,567 5,549 1,586
Accrued interest receivable 2,683 2,458 2,180
Property and equipment, net 13,375 11,995 10,668
Mortgage servicing rights, net 2,576 2,671 3,056
Bank owned life insurance 10,181 10,099 10,126
Real estate and other property owned 175 534 49
Other assets 1,823 899 990
--------- --------- ---------
TOTAL ASSETS $695,718 $689,577 $618,321
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposit accounts
Noninterest-bearing demand deposits $ 47,437 $ 46,311 $ 32,384
Interest-bearing demand deposits 129,581 127,330 132,805
Savings deposits 25,128 25,219 24,975
Certificates of deposit 208,078 197,465 168,659
--------- --------- ---------
Total deposit accounts 410,224 396,325 358,823
Advances by borrowers for taxes and
insurance 926 3,898 1,829
Interest payable 1,275 1,670 1,475
Deferred compensation 3,234 3,049 2,666
Federal Home Loan Bank advances 171,788 175,932 148,324
Deferred income tax liability 1,175 1,205 2,185
Other liabilities 3,939 6,131 2,836
--------- --------- ---------
Total liabilities 592,561 588,210 518,138
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:
Dec. 31, 2005 - 15,208,750 issued,
15,152,114 outstanding 152 149 152
Sept. 30, 2005 - 15,208,750 issued, 14,910,658
outstanding
Dec. 31, 2004 - 15,208,750 issued, 15,208,750
outstanding
Additional paid-in capital 56,373 56,115 59,898
Retained earnings 51,291 49,818 45,173
Unearned shares issued to employee stock
ownership plan (4,449) (4,550) (4,934)
Accumulated other comprehensive loss (210) (165) (106)
--------- --------- ---------
Total stockholders' equity 103,157 101,367 100,183
--------- --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $695,718 $689,577 $618,321
========= ========= =========
Home Federal Bancorp, Inc.
January 31, 2006
Page 6 of 7
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME Three Months Ended
(In thousands, except share data) (Unaudited) December 31,
------------------------
2005 2004
----------- -----------
Interest and dividend income:
Loan interest $6,934 $6,069
Investment interest 11 243
Mortgage-backed security interest 2,386 1,363
Federal Home Loan Bank dividends - -
Total interest and dividend income 9,331 7,675
----------- -----------
Interest expense:
Deposits 1,597 1,425
Federal Home Loan Bank advances 1,752 1,261
----------- -----------
Total interest expense 3,349 2,686
----------- -----------
Net interest income 5,982 4,989
Provision for loan losses 55 59
----------- -----------
Net interest income after provision
for loan losses 5,927 4,930
----------- -----------
Noninterest income:
Service charges and fees 2,386 1,959
Gain on sale of loans 311 68
Increase in cash surrender value of bank
owned life insurance 82 75
Loan servicing fees 160 172
Mortgage servicing rights, net (96) (96)
Other (42) 39
----------- -----------
Total noninterest income 2,801 2,217
----------- -----------
Noninterest expense:
Compensation and benefits 3,806 3,053
Occupancy and equipment 728 719
Data processing 341 443
Advertising 214 340
Postage and supplies 231 210
Professional services 187 219
Insurance and taxes 103 66
Charitable contribution to Foundation - 1,825
Other 270 182
----------- -----------
Total noninterest expense 5,880 7,057
----------- -----------
Income before income taxes 2,848 90
Income tax expense 1,088 16
----------- -----------
NET INCOME $1,760 $ 74
=========== ===========
Earnings per common share:
Basic $0.12 $0.00
Diluted $0.12 $0.00
Weighted average number of shares outstanding:
Basic 14,466,288 14,710,589
Diluted 14,469,663 14,710,589
Home Federal Bancorp, Inc.
January 31, 2006
Page 7 of 7
At Or At Or
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY For The For The
ADDITIONAL FINANCIAL INFORMATION Three Months Year Ended
(Dollars in thousands, except share data) Ended Dec. 31, Sep. 30,
(Unaudited) 2005 2005
------------- -----------
FINANCIAL CONDITION DATA
Average interest-earning assets $653,178 $606,690
Average interest-bearing liabilities 528,590 501,124
Net average earning assets 124,588 105,566
Average interest-earning assets to average
interest-bearing liabilities 123.57% 121.07%
Stockholders' equity to assets 14.83% 14.70%
ASSET QUALITY
Allowance for loan losses $2,924 $2,882
Non-performing loans 5 478
Non-performing assets 180 1,012
Allowance for loan losses to non-performing
loans 58,480.00% 602.93%
Allowance for loan losses to gross loans
and loans held for sale 0.66% 0.66%
Non-performing loans to gross loans
and loans held for sale 0.00% 0.11%
Non-performing assets to total assets 0.03% 0.15%
At Or For The Three Months
Ended Dec. 31,
------------------------------
2005 2004
----------- ----------
SELECTED PERFORMANCE RATIOS
Return on average assets (1) 1.02% 0.05%
Return on average equity (1) 6.82% 0.48%
Net interest margin (1) 3.66% 3.51%
Efficiency ratio 66.95% 97.93%
Efficiency ratio, excluding
non-recurring items (2) 66.95% 72.61%
PER SHARE DATA
Basic earnings per share $0.12 $0.00
Diluted earnings per share 0.12 0.00
Book value per share 6.81 6.59
Cash dividends declared per share 0.05 0.00
Average number of shares
outstanding:
Basic (3) 14,466,288 14,710,589
Diluted (3) 14,469,663 14,710,589
(1) Amounts are annualized.
(2) Noninterest expense divided by net interest income plus noninterest
income. The pro forma efficiency ratio for the three months ended
December 31, 2004 excludes the effect of the $1.8 million contribution to
the Foundation.
(3) Amounts calculated exclude ESOP shares not committed to be released and
unvested restricted shares granted under the RRP.