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)) |
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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 |
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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 |
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Exhibit 99.1
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 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.
Home Federal Bancorp, Inc. 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.
Home Federal Bancorp, Inc. 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. 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.
Home Federal Bancorp, Inc.
Home Federal Bancorp, Inc.
Home Federal Bancorp, Inc. (1) Amounts are annualized.
"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
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July 19, 2007
Page 2 of 7
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
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July 19, 2007
Page 3 of 7
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
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July 19, 2007
Page 4 of 7
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.
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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,
2006ASSETS
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
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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
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July 19, 2007
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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, 2006FINANCIAL 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
(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.
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