-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FU/ENTUV4Be4rYCopc/hUYfVE+a73kEGG5veEO8FaoZK8bBKhxx7TUTWET77ZYhx vOksFnpZLngIYNF4qU/Gqg== 0001157523-04-000624.txt : 20040127 0001157523-04-000624.hdr.sgml : 20040127 20040127160012 ACCESSION NUMBER: 0001157523-04-000624 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040127 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040127 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOME FEDERAL BANCORP CENTRAL INDEX KEY: 0000867493 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 351807839 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-18847 FILM NUMBER: 04546434 BUSINESS ADDRESS: STREET 1: 501 WASHINGTON STREET CITY: COLUMBUS STATE: IN ZIP: 47201 BUSINESS PHONE: 8125221592 MAIL ADDRESS: STREET 1: 501 WASHINGTON STREET CITY: SEYMOUR STATE: IN ZIP: 47201 8-K 1 a4559059.txt HOME FEDERAL BANCORP 8-K 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 (Date of earliest event reported): January 27, 2004 HOME FEDERAL BANCORP (Exact name of registrant as specified in its charter) INDIANA (State or other jurisdiction of incorporation) 0-18847 35-1807839 (Commission File Number) (IRS Employer Identification No.) 501 Washington Street Columbus, Indiana 47201 (Address of principal executive offices)(Zip Code) Registrant's telephone number, including area code: (812) 522-1592 Item 7. Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release dated January 27, 2004. Item 12. Results of Operations and Financial Condition. Home Federal Bancorp, an Indiana corporation ("Registrant"), issued a press release which was publicly disseminated on January 27, 2004 announcing its results of operations for the quarter ended December 31, 2003. A copy of the press release is furnished herewith as Exhibit 99.1. Pursuant to General Instruction B.6 of Form 8-K, this exhibit is not "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, but is instead furnished as required by that instruction. 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. /s/Lawrence E. Welker --------------------- Lawrence E. Welker Executive Vice President, and Chief Financial Officer Dated: January 27, 2004 EX-99 3 a4559059ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Home Federal Bancorp Announces 2003 Results COLUMBUS, Ind.--(BUSINESS WIRE)--Jan. 27, 2004--Home Federal Bancorp (the "Company") (Nasdaq:HOMF), the holding company of HomeFederal Bank of Columbus, Indiana (the "Bank"), today announced that its fourth-quarter 2003 earnings were $1,787,000. On a per share basis the results were $0.42 basic and $0.40 diluted. Earnings in the fourth-quarter of 2002 were $2,706,000, or $0.63 basic and $0.60 diluted earnings per common share. For the full year 2003, earnings were $9,643,000, or $2.26 basic and $2.15 diluted earnings per common share, compared to $10,501,000, or $2.41 basic and $2.30 diluted earnings per common share in 2002. The decrease in net income year-to-date, compared to the prior year, is attributed to tightening net interest margins due to the low rate environment in 2003 and increased operating expenses. Operating expenses for the year were up compared to the comparable year ended December 31, 2002, due to increased loan activity in the first three quarters, increases throughout the year in retirement costs, health insurance costs, compliance expenses, technology expenses and costs associated with the opening of a new branch on the south side of Indianapolis. The decrease in income for the three months ended December 31, 2003 compared to the same period ended December 31, 2002, was due to tightened net interest margins as well as the abrupt slow down of loan refinancing in the fourth quarter. Operating expenses were unchanged for the quarter ended December 31, 2003 compared to the same period ended December 31, 2002. Net Interest Income Net interest income after provision for loan loss decreased by $386,000 to $5,375,000 for the fourth quarter compared to $5,761,000 for the same period one year ago. Net interest income after provision for loan losses for 2003 decreased by $2,074,000, from $24,144,000 in 2002 to $22,070,000 for the 12-month period ended December 31, 2003. The decreases in net interest income after provision for loan losses in both periods were due to tightening net interest margins and decreases in total assets. The current low interest rate environment continues to see loan and investment rates drop more rapidly than deposit and borrowing rates. The yield on the investment portfolio has dropped because much of it was comprised of mortgage backed securities that have pre paid ahead of schedule as well as U.S. Government agency securities that had call features exercised. The loan loss provision decreased in the quarter ended December 31, 2003 compared to the quarter ended December 31, 2002 by $439,000. This decrease was due to the low number of loan charge offs the Bank has experienced in recent years. Even with the lower loan loss provision for the year, the allowance for loan losses increased by $334,000. On the liability side of the balance sheet competition for retail deposits has caused deposit rates to decline more slowly than they otherwise might have given the overall rate environment, which has also kept interest margins from widening. Other Income Other income in 2003 was $15,088,000. This represented an increase of $2,028,000 or 15.5%, over the same 12-month period ended December 31, 2002. This increase was due to several factors including the increase in gain on sale of loans of $2,099,000 in the current 12-month period compared to the same period one year ago. The increase was due to increased refinancing activity and corresponding loan sales. Additional increases in service fees on deposit accounts and insurance, annuity and other fees were offset by decreases in income from joint ventures and real estate owned. For the three months ended December 31, 2003 compared to the three months ended December 31, 2002, other income decreased by $1,469,000. Gain on sale of loans was down $1,640,000 as the refinancing activity that had been so strong in the first three quarters declined rapidly in the fourth quarter. Offsetting this decrease in other income was a $291,000 increase in loan servicing income due to the recovery of part of the prior period impairment charges thus increasing the value of originated mortgage servicing rights. The originated mortgage servicing rights asset is reviewed for impairment each quarter. This asset is created when mortgage loans are sold and the lender retains the servicing rights. The servicing rights are recognized as income at the time the loan is sold and the servicing asset is also recorded. The asset is then amortized as an expense to mortgage servicing income over the life of the loan. The impairment charge is the recognition of the change in value of mortgage servicing rights that result with changes in interest rates. Mortgage servicing portfolios typically decline in value as interest rates drop and increase in value as rates rise. The reason for this decline in value is as rates drop, prepayment speeds increase causing the average life of the servicing portfolio to shorten. This reduces the amount of servicing income the Bank receives over time and thus reduces the value of the servicing portfolio. If rates rise the opposite occurs, prepayments slow, the average life of the mortgage servicing portfolio lengthens, increasing the amount of servicing income the Bank receives over time thus increasing the value of the servicing portfolio. For the quarter ended December 31, 2003 the Bank recovered impairment charges in the amount of $157,000 compared to the same period ending December 31, 2002 where the charge was $249,000. This resulted in a net gain of $406,000 over the prior year quarter. The amortization charge in the current period was $407,000 compared to $250,000 for the same period a year ago. Future impairment charges or recoveries will depend on future interest rate changes and the effect they have on pre-payment speeds, if rates continue to drop there will be more impairment charges, if rates rise the impairment charges may be recovered. Other Expenses Other operating expense for the three-month period ended December 31, 2003 increased only $69,000, over the three-month period ended December 31, 2002. For the 12-month period other expenses increased $1,943,000. As mentioned above the increases in expenses were due to costs associated with the significant loan refinancing activity in the first three quarters of the year, benefit expenses, expanded compliance and technology needs and the new branch in Indianapolis. Credit Quality Non-performing assets to total assets decreased from 0.70% at December 31, 2002 to 0.66% at December 31, 2003. Non-performing loans to total gross loans decreased from 0.71% to 0.60%, respectively, for the same periods. Non-performing assets decreased $592,000 from $6,218,000 at the end of 2002 to $5,626,000 at the end of 2003. Balance Sheet The return on average assets for the current year was 1.10%, while the return on average equity was 11.95%. In 2002 the return on average assets was 1.22% and the return on equity was 13.59%. The Company's assets totaled $853,328,000 as of December 31, 2003, a decrease of $33,177,000 from December 31, 2002. As of December 31, 2003, shareholders' equity was $84,022,000. Based on the December 31, 2003, book value of $19.48 per common share, Home Federal Bancorp stock was trading at 145% of book value. The stock price at December 31, 2003, was $28.18. In February 2003, the Board of Directors announced it had approved the sixth repurchase, from time to time, on the open market of up to 5% of the Company's outstanding shares of common stock, or 211,699 such shares. Home Federal has to date repurchased 140,400 shares under this plan. Home Federal Bancorp is a bank holding company registered with the Federal Reserve, which has been authorized by the Federal Reserve to engage in activities permissible for a financial holding company. HomeFederal Bank, its principal subsidiary, is an FDIC insured state chartered commercial bank. HomeFederal Bank was founded in 1908 and offers a wide range of consumer and commercial financial services through eighteen branch offices in southeastern Indiana. Forward-Looking Statement This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include expressions such as "expects," "intends," "believes," and "should," which are necessarily statements of belief as to the expected outcomes of future events. Actual results could materially differ from those presented. Home Federal Bancorp undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release. The company's ability to predict future results involves a number of risks and uncertainties, some of which have been set forth in the company's most recent annual report on Form 10-K, which disclosures are incorporated by reference herein. HOME FEDERAL BANCORP CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) December December (unaudited) 31, 31, 2003 2002 -------- -------- ASSETS: Cash $ 22,734 $ 27,404 Interest-bearing deposits 11,444 26,261 -------- -------- Total cash and cash equivalents 34,178 53,665 -------- -------- Securities available for sale at fair value (amortized cost $123,243 and $113,000) 123,638 114,467 Securities held to maturity (fair value $1,883 and $3,147) 1,828 3,026 Loans held for sale (fair value $6,357 and $31,055) 6,272 30,560 Loans receivable, net of allowance for loan losses of $7,506 and $7,172 630,672 628,883 Investments in joint ventures 5,501 6,710 Federal Home Loan Bank stock 9,965 9,965 Accrued interest receivable, net 3,733 4,289 Premises and equipment, net 13,987 12,973 Real estate owned 1,739 1,472 Prepaid expenses and other assets 9,061 8,259 Cash surrender value of life insurance 11,359 10,841 Goodwill 1,395 1,395 -------- -------- TOTAL ASSETS $853,328 $886,505 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY: Deposits $588,915 $609,358 Advances from Federal Home Loan Bank 154,296 171,635 Senior debt 14,242 14,242 Other borrowings 624 1,867 Advance payments by borrowers for taxes and insurance 76 229 Accrued expenses and other liabilities 11,153 11,380 -------- -------- Total liabilities 769,306 808,711 -------- -------- Shareholders' equity: No par preferred stock; Authorized: 2,000,000 shares Issued and outstanding: None No par common stock; Authorized: 15,000,000 shares Issued and outstanding: 12,616 9,184 4,312,805 shares at December 31, 2003 4,228,859 shares at December 31, 2002 Retained earnings, restricted 71,436 68,156 Accumulated other comprehensive income, net of taxes (30) 454 -------- -------- Total shareholders' equity 84,022 77,794 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $853,328 $886,505 ======== ======== HOME FEDERAL BANCORP CONSOLIDATED STATEMENTS OF INCOME (in thousands except per share data) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, --------------------- --------------------- Interest income: 2003 2002 2003 2002 ---------- ---------- ---------- ---------- Loans receivable $ 9,815 $ 11,578 $ 41,313 $ 46,830 Securities available for sale and held to maturity 974 1,290 3,932 5,733 Other interest income 53 95 357 437 ---------- ---------- ---------- ---------- Total interest income 10,842 12,963 45,602 53,000 ---------- ---------- ---------- ---------- Interest expense: Deposits 2,793 3,663 12,204 15,513 Advances from Federal Home Loan Bank 2,148 2,560 9,221 10,590 Other borrowings 204 218 839 830 ---------- ---------- ---------- ---------- Total interest expense 5,145 6,441 22,264 26,933 ---------- ---------- ---------- ---------- Net interest income 5,697 6,522 23,338 26,067 Provision for loan losses 322 761 1,268 1,923 ---------- ---------- ---------- ---------- Net interest income after provision for loan losses 5,375 5,761 22,070 24,144 ---------- ---------- ---------- ---------- Other income: Gain on sale of loans 714 2,354 7,492 5,393 Gain (loss) on sale of securities (87) - (83) 6 Income (loss) from joint ventures 148 31 668 916 Insurance, annuity income, other fees 397 375 1,677 1,501 Service fees on deposit accounts 719 680 2,715 2,399 Net gain (loss) on real estate owned and repossessed assets 18 102 197 362 Loan servicing income, net of impairments 271 (20) 575 514 Miscellaneous 376 503 1,847 1,969 ---------- ---------- ---------- ---------- Total other income 2,556 4,025 15,088 13,060 ---------- ---------- ---------- ---------- Other expenses: Compensation and employee benefits 3,009 2,998 12,520 11,483 Occupancy and equipment 753 753 3,027 2,861 Service bureau expense 245 203 957 873 Federal insurance premium 22 25 95 100 Marketing 170 136 655 508 Miscellaneous 1,438 1,453 5,241 4,727 ---------- ---------- ---------- ---------- Total other expenses 5,637 5,568 22,495 20,552 ---------- ---------- ---------- ---------- Income before income taxes 2,294 4,218 14,663 16,652 Income tax provision 507 1,512 5,020 6,151 ---------- ---------- ---------- ---------- Net Income $ 1,787 $ 2,706 $ 9,643 $ 10,501 ========== ========== ========== ========== Basic earnings per common share $ 0.42 $ 0.63 $ 2.26 $ 2.41 Diluted earnings per common share $ 0.40 $ 0.60 $ 2.15 $ 2.30 Basic weighted average number of shares 4,305,359 4,275,078 4,267,257 4,357,261 Dilutive weighted average number of shares 4,519,262 4,487,691 4,483,345 4,565,652 Dividends per share $ 0.188 $ 0.163 $ 0.700 $ 0.613 Three Months Supplemental Data: Ended Year to Date (unaudited) December 31, December 31, -------------- ------------ 2003 2002 2003 2002 ---- ---- ---- ---- Weighted average interest rate earned on total interest-earning assets 5.47% 6.38% 5.66% 6.60% Weighted average cost of total interest-bearing liabilities 2.66% 3.23% 2.85% 3.44% Interest rate spread during period 2.81% 3.15% 2.81% 3.16% Net yield on interest-earning assets (net interest income divided by average interest-earning assets on annualized basis) 2.88% 3.21% 2.90% 3.24% Total interest income divided by average total assets (on annualized basis) 5.03% 5.87% 5.20% 6.14% Total interest expense divided by average total assets (on annualized basis) 2.37% 2.90% 2.54% 3.12% Net interest income divided by average total assets (on annualized basis) 2.64% 2.96% 2.66% 3.02% Return on assets (net income divided by average total assets on annualized basis) 0.83% 1.23% 1.10% 1.22% Return on equity (net income divided by average total equity on annualized basis) 8.62% 13.85% 11.95%13.59% December 31, -------------- 2003 2002 ------ ------- Book value per share outstanding $19.48 $18.40 Nonperforming Assets: Loans: Non-accrual $2,499 $3,264 Past due 90 days or more 1,130 1,166 Restructured 258 316 -------------- Total nonperforming loans 3,887 4,746 Real estate owned, net 1,729 1,416 Other repossessed assets, net 10 56 -------------- Total Nonperforming Assets $5,626 $6,218 Nonperforming assets divided by total assets 0.66% 0.70% Nonperforming loans divided by total loans 0.60% 0.71% Balance in Allowance for Loan Losses $7,506 $7,172 CONTACT: Home Federal Bancorp John K. Keach, Jr., 812-373-7816 Lawrence E. Welker, 812-523-7308 -----END PRIVACY-ENHANCED MESSAGE-----