-----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, BYCcT9tkCr8L7aO7yMwkr5bCroyaGAPSPOxPlqm3ylPvWPD/agXmdyh6ChpUP81C /UtH360ukt5JxXdVBhTNCA== 0000921183-97-000035.txt : 19971017 0000921183-97-000035.hdr.sgml : 19971017 ACCESSION NUMBER: 0000921183-97-000035 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971016 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HMN FINANCIAL INC CENTRAL INDEX KEY: 0000921183 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 411777397 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-24100 FILM NUMBER: 97697017 BUSINESS ADDRESS: STREET 1: 101 N BROADWAY CITY: SPRING VALLEY STATE: MN ZIP: 55975-1223 BUSINESS PHONE: 5073467345 8-K 1 8-K PR 10-17-97 SECURITIES AND EXCHANGE COMMISSION Washington, DC 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) October 17, 1997 HMN FINANCIAL, INC. (Exact name of Registrant as specified in its Charter) DELAWARE 0-24100 41-1777397 (State or other (Commission File No.) (IRS Employer jurisdiction of Identification incorporation) Number) 101 NORTH BROADWAY, SPRING VALLEY, MINNESOTA 55975 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (507) 346-7345 N/A _________________________________________________________________ (Former name or former address, if changed since last report) Item 5. Other Events On October 17, 1997 the Registrant issued the attached press release announcing its third quarter earnings. Item 7. Financial Statements and Exhibits (a) Exhibits 99. Press release, dated October 17, 1997. 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 thereunto duly authorized. HMN FINANCIAL, INC. Date: October 17, 1997 By: /s/ Roger. P. Weise Roger P. Weise, Chairman and Chief Executive Officer EX-99 2 NEWS RELEASE CONTACT: James B. Gardner, Executive Vice President HMN Financial, Inc. (507) 346-7345 FOR IMMEDIATE RELEASE HMN FINANCIAL, INC. ANNOUNCES QUARTERLY RESULTS - ------------------------------------------------
EARNINGS SUMMARY Three Months Ended Nine Months Ended September 30, September 30, 1997 1996 1997 1996 --------------------- ---------------------- Net income (loss) $1,524,111 (144,527) $4,330,812 2,975,248 Primary earnings (loss) per common share and common share equivalent 0.38 (0.03) 1.10 0.66 Before special SAIF assessment: Income 1,524,111 1,329,806 4,330,812 4,449,581 Primary earnings per share and common share equivalent 0.38 0.31 1.10 0.98 Return on average assets 1.06% (0.10)% 1.03% 0.72% Return on average assets before SAIF assessment 1.06% 0.95 % 1.03% 1.08% Return on average common equity 7.29% (0.67)% 7.10% 4.42% Return on average common equity before SAIF assessment 7.29% 6.13 % 7.10% 6.61% Book value per share $20.09 17.90 $20.09 17.90
SPRING VALLEY, MINNESOTA, October 17, 1997. . . HMN Financial, Inc. (HMN) (NASDAQ:HMNF), the $569 million holding company for Home Federal Savings Bank (the Bank), today reported net income of $1.5 million for the third quarter of 1997, up $1.67 million, from a loss of $145,000 for the third quarter of 1996. Primary earnings per share were $0.38 for the third quarter of 1997, up $0.41 per share from a loss of $0.03 per share for the third quarter of 1996. In September of 1996, Congress enacted the Savings Association Insurance Fund (SAIF) legislation which assessed a one time charge of $2.4 million to the Bank in order to recapitalize the SAIF. The total SAIF assessment was charged directly to earnings and reduced quarterly earnings by $1.5 million after tax, or $0.34 per share. If the SAIF legislation had not passed, net income for the third quarter of 1996 would have been $1.3 million, or $0.31 per share. Return on average assets for the third quarter of 1997 was 1.06% compared to -0.10% for the same quarter of 1996. Return on average equity was 7.29% for the third quarter of 1997 compared to -0.67% for the same quarter of 1996. Book value per share was $20.09 at September 30, 1997, up 12.2% from $17.90 for September 30, 1996. more . . . Net income for the nine months ended September 30, 1997 was $4.33 million, an increase of $1.36 million, or 45.6%, from $2.97 million for the nine months ended September 30, 1996. Primary earnings per share were $1.10 for the nine months ended September 30, 1997, an increase of $0.44 per share, or 66.7%, from $0.66 per share for the nine months ended September 30, 1996. The SAIF assessment reduced earnings for the nine months ended September 30, 1996 by $1.5 million after tax, or $0.32 per share. If the SAIF legislation had not passed, net income for the nine months ended September 30, 1996 would have been $4.4 million, or $0.98 per share. Return on average assets for the nine month period ended September 30, 1997 was 1.03% compared to 0.72% for the same period of 1996. Return on average equity was 7.10% for the nine month period ended September 30, 1997 compared to 4.42% for the same period of 1996. Net interest income for the third quarter of 1997 was $3.85 million, an increase of $27,000, or 0.7%, compared to $3.82 million for the third quarter of 1996. Interest income increased by $186,000 due to increasing yields on interest-earning assets and $114,000 due to an increase in interest-earning assets. Interest expense increased by $233,000 due to an increase in interest-bearing liabilities and $40,000 due to an increase in the interest rates paid on interest-bearing liabilities. Net interest income for the nine months ended September 30, 1997 was $11.6 million, a decrease of $136,000, or 1.2%, from $11.73 million for the same nine month period ended in 1996. Interest income for the nine month period ended September 30, 1997 increased by $384,000 due to an increase in interest-earning assets and $246,000 due to increasing yields on interest-earning assets. The increase in interest income was totally offset by an increase in interest expense of $766,000, primarily due to additional borrowing from the Federal Home Loan Bank of Des Moines. Non-interest income for the third quarter of 1997 was $879,000, an increase of $467,000, or 113%, from $412,000 for the same quarter in 1996. The increase in quarterly income was primarily due to a $295,000 increase in gains recognized on the sale of securities and a $107,000 increase in gain on the sale of loans. Interest rates, in general, decreased during the third quarter of 1997, creating a favorable environment for HMN to sell securities and loans. During 1997, HMN increased its mortgage banking activities and is selling more loans in the secondary market than it did in 1996. Non-interest income for the nine months ended September 30, 1997 was $2.0 million, an increase of $384,000, or 24%, from $1.6 million for the same nine month period in 1996. The increase in non-interest income was primarily due to a $317,000 gain on the sale of loans and a $64,000 increase in fee income. Both of the increases were due to HMN's mortgage banking activities and increased loan sales in the secondary market. Other income for the nine month period ended September 30, 1997, increased by $92,000, but was offset by a decrease of $90,000 in gains recognized on the sale of securities. Non-interest expense for the third quarter of 1997 was $2.2 million, a decrease of $2.2 million, or 49.3%, from $4.4 million for the same quarter in 1996. In September of 1996, a one time assessment of $2.4 million was made by Congress to recapitalize the SAIF. As a result of the SAIF being fully funded, the FDIC insurance premium expense decreased by $155,000 for the third quarter of 1997 from the same quarter in 1996. Compensation and benefits expense increased by $256,000 due to new employees, plus normal merit and salary more . . . increases. Non-interest expense for the nine months ended September 30, 1997 was $6.5 million, a decrease of $1.9 million, or 22.6%, from $8.4 million for the nine months ended September 30, 1996. The majority of the $1.9 million decrease in non-interest expense was due to the one time SAIF assessment of $2.4 million not repeating itself in 1997. As a result of the SAIF assessment the FDIC insurance premium expense decreased by $461,000. The decrease in non-interest expense was partially offset by a $726,000 increase in compensation and benefits, an increase in occupancy of $124,000 and an increase in other expense of $80,000. Compensation and benefits expense increased as a result of adding new employees and normal merit and salary increases. Occupancy increased for the nine month period ended September 30, 1997 compared to the same period in 1996 because of continued remodeling and updating of offices for new technological advances. As previously reported through a press release dated July 1, 1997, HMN Financial, Inc. and Marshalltown Financial Corporation (MFC)(NASDAQ:MFCX), the thrift holding company for Marshalltown Savings Bank, FSB, have entered into a definitive agreement to merge. Under the agreement, HMN Financial will acquire in a cash transaction valued at $25.9 million, or $17.51 per share, all outstanding shares of Marshalltown Financial's common stock. The agreement is subject to regulatory approvals, as well as approval of Marshalltown Financial's shareholders, a process that is expected to be completed by the end of the year. At June 30, 1997, MFC had total assets of $127.5 million, deposits of $106.4 million and shareholders' equity of $20.1 million. Marshalltown Savings Bank, FSB operates full service retail banking facilities in Marshalltown and Toledo, Iowa. HMN Financial, Inc. and Home Federal Savings Bank are headquartered in Spring Valley, MN. The Bank operates seven offices in southern Minnesota and a mortgage banking office in Eden Prairie, Minnesota. (Three pages of selected consolidated financial information are included with this release.) ***END*** HMN FINANCIAL, INC. AND SUBSIDIARIES Consolidated Balance Sheets (unaudited)
September 30, December 31, ASSETS 1997 1996 ------------ ------------- Cash and cash equivalents. . . . . . . . . . . $ 9,635,956 10,583,717 Securities available for sale: Mortgage-backed and related securities (amortized cost $111,030,951 and $134,474,167) . . . . . . . . . . . . . . 111,117,282 133,355,278 Other marketable securities (amortized cost $71,405,849 and $42,360,499). . . . . . . . . . . . . . . 72,815,033 42,474,810 ----------- ----------- 183,932,315 175,830,088 ----------- ----------- Securities held to maturity: Mortgage-backed and related securities (fair value $ 0 and $1,904,993). . . . . . . . 0 1,805,744 Other marketable securities (fair value $ 0 and $1,000,550). . . . . . . . 0 999,812 ----------- ----------- 0 2,805,556 ----------- ----------- Loans held for sale. . . . . . . . . . . . . . . 2,089,733 739,316 Loans receivable, net. . . . . . . . . . . . . . 352,925,376 349,022,236 Federal Home Loan Bank stock, at cost. . . . . . 6,236,700 5,434,000 Real estate, net . . . . . . . . . . . . . . . . 89,334 20,610 Premises and equipment, net. . . . . . . . . . . 4,230,723 3,581,497 Accrued interest receivable. . . . . . . . . . . 3,180,525 3,415,152 Prepaid expenses and other assets. . . . . . . . 6,526,233 3,299,427 ----------- ----------- Total assets . . . . . . . . . . . . . . $ 568,846,895 554,731,599 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits . . . . . . . . . . . . . . . . . . . $ 366,682,349 362,476,944 Federal Home Loan Bank advances. . . . . . . . . 112,007,163 106,078,589 Accrued interest payable . . . . . . . . . . . . 1,147,269 1,542,773 Advance payments by borrowers for taxes and insurance. . . . . . . . . . . . . . . . . 758,067 518,911 Accrued expenses and other liabilities . . . . . 3,632,564 2,014,938 ----------- ----------- Total liabilities. . . . . . . . . . . . . 484,227,412 472,632,155 ----------- ----------- Commitments and contingencies Stockholders' equity: Serial preferred stock: authorized 500,000 shares; issued and outstanding none. . . . . . 0 0 Common stock ($.01 par value): authorized shares 7,000,000; issued shares 6,085,775. . . 60,858 60,858 Additional paid-in capital. . . . . . . . . . . 59,702,833 59,428,768 Retained earnings, subject to certain restrictions . . . . . . . . . . . . . . . . . 58,976,197 54,645,387 Net unrealized gain (loss) on securities available for sale . . . . . . . . . . . . . . 967,170 (598,045) Unearned employee stock ownership plan shares. . . . . . . . . . . . . . . . . . (4,650,340) (4,938,520) Unearned compensation restricted stock awards . (658,817) (793,289) Treasury stock, shares at cost 1,873,939 and 1,651,615. . . . . . . . . . . . . . . . . (29,778,418) (25,705,715) ----------- ----------- Total stockholders' equity . . . . . . . . 84,619,483 82,099,444 ----------- ----------- Total liabilities and stockholders' equity $ 568,846,895 554,731,599 =========== ===========
HMN FINANCIAL, INC. AND SUBSIDIARIES Consolidated Statements of Income (unaudited)
Three Months Ended Nine Months Ended September 30, September 30, 1997 1996 1997 1996 ----------------------- ----------------------- Interest Income: Loans receivable. . . . . . $ 6,939,224 6,461,279 20,730,094 19,009,335 Securities available for sale: Mortgage-backed and related . . . . . . . . . 2,092,964 2,429,330 6,458,996 7,730,690 Other marketable. . . . . . 1,119,452 669,964 2,621,762 1,655,705 Securities held to maturity: Mortgage-backed and related . . . . . . . . . 0 196,050 33,400 719,827 Other marketable. . . . . . 0 14,250 10,032 90,103 Cash equivalents. . . . . . . 55,643 149,819 225,237 315,623 Other . . . . . . . . . . . . 107,187 93,823 304,159 232,453 ---------- ---------- ---------- ---------- Total interest income. . . 10,314,470 10,014,515 30,383,680 29,753,736 ---------- ---------- ---------- ---------- Interest expense: Deposits. . . . . . . . . . . 4,749,737 4,741,907 13,993,332 14,281,156 Federal Home Loan Bank advances. . . . . . . . . . 1,714,642 1,449,492 4,792,552 3,739,015 ---------- ---------- ---------- ---------- Total interest expense . . 6,464,379 6,191,399 18,785,884 18,020,171 ---------- ---------- ---------- ---------- Net interest income . . 3,850,091 3,823,116 11,597,796 11,733,565 Provision for loan losses. . . 75,000 75,000 225,000 225,000 ---------- ---------- ---------- ---------- Net interest income after provision for loan losses . . . 3,775,091 3,748,116 11,372,796 11,508,565 ---------- ---------- ---------- ---------- Non-interest income: Fees and service charges. . . 121,489 94,817 318,346 254,188 Securities gains, net . . . . 487,547 192,761 872,159 961,798 Gain on sales of loans. . . . 117,302 9,896 334,367 16,980 Other . . . . . . . . . . . . 152,230 114,957 457,786 365,879 ---------- ---------- ---------- ---------- Total non-interest income. 878,568 412,431 1,982,658 1,598,845 ---------- ---------- ---------- ---------- Non-interest expense: Compensation and benefits . . 1,431,853 1,175,725 4,106,699 3,380,843 Occupancy . . . . . . . . . . 245,202 203,071 718,801 595,216 Federal deposit insurance premiums . . . . . . . . . . 57,478 212,020 175,379 636,676 SAIF assessment . . . . . . . 0 2,351,563 0 2,351,563 Advertising . . . . . . . . . 62,763 77,696 214,557 229,735 Data processing . . . . . . . 129,100 118,949 372,432 368,145 Provision for real estate losses. . . . . . . . . . . 0 0 3,000 0 Other . . . . . . . . . . . . 302,449 255,808 879,374 799,710 ---------- ---------- ---------- ---------- Total non-interest expense 2,228,845 4,394,832 6,470,242 8,361,888 ---------- ---------- ---------- ---------- Income (loss) before income tax expense. . . . 2,424,814 (234,285) 6,885,212 4,745,522 Income tax (benefit) expense . 900,703 (89,758) 2,554,400 1,770,274 ---------- ---------- ---------- ---------- Net income (loss). . . . $ 1,524,111 (144,527) 4,330,812 2,975,248 ========== ========== ========== ========== Primary earnings (loss) per common share and common share equivalents. . . . . .$ 0.38 (0.03) 1.10 0.66 ==== ==== ==== ==== Fully diluted earnings (loss) per common share and common share equivalents. . .$ 0.38 (0.03) 1.09 0.66 ==== ==== ==== ====
HMN FINANCIAL, INC. AND SUBSIDIARIES Selected Consolidated Financial Information (unaudited)
Three Months Ended Nine Months Ended Selected Financial Data: Sept 30, Sept 30, Sept 30, Sept 30, (dollars in thousands, 1997 1996 1997 1996 except per share data) --------------------- --------------------- I. OPERATING DATA: Interest income. . . . . .$ 10,314 10,014 30,384 29,754 Interest expense . . . . . 6,464 6,191 18,786 18,020 Net interest income. . . . 3,850 3,823 11,598 11,734 II. AVERAGE BALANCES: Assets . . . . . . . . 569,479 557,091 560,335 548,254 Loans receivable, net. . . 344,669 331,331 344,645 321,134 Mortgage-backed and related securities . . . . . 121,235 153,760 125,883 164,679 Interest earnings assets . . . . . . . 554,314 548,702 546,719 539,483 Interest bearing liabilities 480,707 464,467 473,080 452,299 Equity . . . . . . 82,910 86,262 81,540 89,872 III.PERFORMANCE RATIOS: Return on average assets (annualized) . . . . . . . 1.06% (0.10) % 1.03% 0.72 % Interest rate spread information: Average during period. . 2.05 1.96 2.12 2.05 End of period. . . . . . 2.26 2.09 2.26 2.09 Net interest margin. . . . 2.76 2.77 2.84 2.91 Ratio of operating expense to average total assets (annualized) . . . . . . 1.55 3.14 1.54 2.04 Return on average equity (annualized) . . . . . . 7.29 (0.67) 7.10 4.42 Efficiency . . . . . . . . 47.14 103.76 47.64 62.72 Sept 30, Dec 31, Sept 30, 1997 1996 1996 -------------------------------- IV.ASSET QUALITY: Total non-performing assets. .$ 549 361 426 Non-performing assets to total assets. . . . . . . . . 0.10% 0.07 % 0.08% Non-performing loans to total loans receivable, net . . . . 0.13 0.10 0.12 Allowance for loan losses. . .$ 2,554 2,341 2,266 Allowance for loan losses to total assets. . . . . . . . . 0.45% 0.42 % 0.40% Allowance for loan losses to total loans receivable, net . 0.72 0.67 0.66 Allowance for loan losses to non-performing loans. . . . . 561.52 691.84 531.84 V. BOOK VALUE PER SHARE: Book value per share excluding net unrealized gain (loss) on securities available for sale . . . . . . . . . . $19.86 18.65 18.30 Book value per share . . . . . 20.09 18.52 17.90 Nine Nine Months Year Months Ended Ended Ended Sept 30, Dec 31, Sept 30, 1997 1996 1996 -------------------------------- VI. CAPITAL RATIOS Stockholders' equity to total assets, at end of period. . . 14.88% 14.80 % 14.80% Average stockholders' equity to average assets . . 14.55 16.12 16.39 Ratio of average interest-earning assets to average interest- bearing liabilities . . . 115.57 118.87 119.28 VII. EMPLOYEE DATA: Sept 30, Dec 31, Sept 30, 1997 1996 1996 ------------------------------- Number of employees. . . . . . 123 110 102
[FN] Average balances were calculated based upon amortized cost without the market value impact of SFAS 115. Average equity and average equity/average asset ratio decreased due in part to a repurchase of 243,088 shares of common stock in the fourth quarter of 1996 and an additional repurchase of 224,334 shares of common stock in 1997. -----END PRIVACY-ENHANCED MESSAGE-----