HF Financial Corp. Earns $0.29 per Share in First Fiscal Quarter
SIOUX FALLS, S.D., Oct. 29, 2012 /PRNewswire/ --HF Financial
Corp. (Nasdaq: HFFC) today reported its earnings increased 44%
to $2.1 million, or $0.29 per diluted share for the first fiscal
quarter ended September 30, 2012,
compared to $1.4 million, or
$0.21 per diluted share for the prior
year's first fiscal quarter. Loan loss recoveries, production and
gains on the sale of mortgage loans and a reduction in expenses
helped to drive results for the quarter.
HF Financial's capital ratios continue to increase with tangible
common equity to tangible assets at 8.23% at September 30, 2012 versus 7.78% the previous
quarter and 7.62% one year earlier. Capital ratios
continued to remain well above minimum regulatory
requirements. The tangible book value per share was
$13.40 at September 30, 2012.
"Our core operations continue to improve," said Stephen Bianchi, President and Chief Executive
Officer. "Noninterest expenses are nearly $1.0 million lower than one year ago reflecting
our continued efforts to contain expenses. Additionally, we
are beginning to see moderate improvement in lending opportunities.
Residential mortgage loan originations have increased considerably
over the past year with the majority of these loans sold into the
secondary market. Commercial real estate lending
opportunities have increased, while strong underwriting standards
remain in place. Agricultural loans still represent over
21.8% of the loan portfolio despite seasonal loan repayments at the
end of this year's farming cycle."
Fiscal First Quarter Financial Highlights (at or for the
period ended September 30, 2012,
compared to June 30, 2012, and
September 30, 2011.)
- Earnings for the fiscal first quarter were $0.29 per diluted share versus $0.26 per diluted share in the preceding quarter
and $0.21 per share in the first
fiscal quarter a year ago.
- The provision for loan loss was a net benefit of $300,000 for the first fiscal quarter versus a
benefit of $1.1 million the preceding
quarter and a provision of $522,000
one year earlier. Loan recoveries exceeded charge-offs during
the past two quarters, helping to support a sound allowance for
loan losses relative to total loans.
- The allowance for loan losses was 1.55% of gross loans at
September 30, 2012, the same level as
the previous quarter, and up from 1.35% a year ago.
- Nonperforming assets ("NPAs") improved further, decreasing to
$16.7 million, or 1.45% of total
assets from $17.8 million, or 1.49%,
of total assets at the end of the preceding quarter. Of the
$15.6 million of nonperforming loans
included in NPAs, $13.2 million of
these loans were current on their scheduled payments. This is the
fifth consecutive quarter in which nonperforming assets have
trended down.
- The net interest margin, expressed on a fully taxable
equivalent basis ("NIM, TE"), was 2.72% versus 2.99% for the
preceding quarter.
- Strong mortgage lending activity led to gain on sale of loans
of $1.0 million and securities gains
added $1.8 million for the quarter,
while nonrecurring charges to noninterest income included
$1.5 million related to the
termination of hedging activity on deposit balances.
Provision for impairment of mortgage servicing rights totaled
$263,000 for the quarter.
- Capital levels at September 30,
2012 continued to remain well above the regulatory
"well-capitalized" minimum levels of 10.00%, 6.00% and 5.00%,
respectively:
- Total risk-based capital to risk weighted assets was 16.32%
versus 15.87% at June 30, 2012.
- Tier 1 capital to risk-weighted assets was 15.07% versus 14.62%
at June 30, 2012.
- Tier 1 capital to total adjusted assets was 10.05% versus 9.66%
at June 30, 2012.
- The most recent dividend of $0.1125 per share represents the eighteenth
consecutive quarter at this level and provides a 3.60% current
yield at recent market prices.
- Tangible book value per share increased to $13.40 per share, compared to $12.96 per share at September 30, 2011.
Balance Sheet and Asset Quality Review
Total assets at September 30,
2012, declined slightly from the preceding quarter to
$1.15 billion from $1.19 billion due primarily to security sales,
which accompanied the reduction of funding from deposits and the
repayment of Federal Home Loan Bank advances. Meanwhile,
total loans increased to $695.6
million from $683.7 million
during the most recent quarter, with the largest gain in commercial
real estate loans. Commercial real estate lending activity
remains solid in local markets and accounted for 42.5% of the loan
portfolio. Agricultural loans are the next largest business
sector in the loan portfolio, accounting for 21.8% of the loan
portfolio, followed by consumer loans at 15.1%, commercial business
loans at 11.8% and residential loans at 8.8%.
"Mortgage originations driven by refinance and purchase activity
remain strong in our markets and we recorded a large level of gains
on the sale of mortgage loans, while we retained servicing and
added lower coupon mortgages to our servicing portfolio," added
Bianchi.
Total deposits were $861.6 million
at September 30, 2012, versus
$893.9 million at June 30, 2012. Deposit balances decreased in the
first quarter from the preceding quarter, due primarily to a
$45.0 million decline in seasonal
public fund deposits. Excluding public funds, deposits
increased $12.7 million from the
preceding quarter. FHLB advances are being repaid as they
mature and are not being rolled into new term advances.
Nonperforming assets decreased to $16.7
million at September 30, 2012,
from $17.8 million the preceding
quarter and $31.4 million a year
ago. Total NPAs were 1.45% of total assets at the end of the
quarter, compared to 2.64% one year earlier. "For the second
consecutive quarter, we recognized more net recoveries relative to
charge-offs. We remain diligent in recovering the value of
our assets while prudently keeping adequate reserves on our loan
portfolio," said Bianchi.
The allowance for loan and lease losses at September 30, 2012, totaled $10.8 million, representing 1.55% of total loans
outstanding. Relative to the previous quarter, reserves
increased $243,000 while the ratio of
reserves to total loans remained the same. Charge-offs in the
quarter totaled $403,000 while
recoveries totaled $946,000.
Tangible common shareholders' equity increased to 8.23% of
tangible assets at September 30, 2012
compared to 7.78% at June 30,
2012. Tangible book value per common share was $13.40 at September
30, 2012.
Capital ratios continued to remain strong and the Bank remained
well-capitalized with Tier 1 capital to risk-weighted assets of
15.07% at September 30, 2012, while
its Tier 1 capital to adjusted total assets was 10.05%. These
regulatory ratios were much higher than the required minimum levels
of 6.00% and 5.00%, respectively.
Review of Operations
For the quarter ended September 30,
2012, HF Financial's earnings reflect net loan loss
recoveries and resulting provision benefit of $300,000, gains on the sale of loans of
$1.0 million and security gains of
$1.8 million, partially offsetting
the $1.5 million cost of terminating
its deposit hedging activities. "With the Federal Reserve
indicating they intend to hold rates steady into 2015, we decided
to terminate our deposit hedging activity. The termination
should help us improve our net interest margin by approximately
eight basis points through lower overall deposit costs," said
Brent Olthoff, Chief Financial
Officer and Treasurer.
Net interest income totaled $7.3
million for the first fiscal quarter 2013 compared to
$8.1 million for the previous fiscal
quarter, and $9.1 million in the year
ago quarter. The net interest margin on a fully taxable
equivalent basis was 2.72% for the first quarter compared to 2.99%
the previous quarter.
Fee income and gains on the sale of loans and securities
contributed to a stronger level of noninterest income.
Deposit fees totaled $2.1 million for
the quarter ended September 30, 2012
versus $1.5 million the previous
quarter and $1.6 million one year
earlier. Deposit fees for the first fiscal quarter included
approximately $600,000 of
nonrecurring vendor incentive related to debit cards. Gains
on the sale of loans totaled $1.0
million for the first fiscal quarter compared to
$780,000 the preceding quarter.
Security gains totaled $1.8 million
for the quarter ended September 30,
2012 compared to $616,000
during the preceding quarter. Nonrecurring charges to other
noninterest income included $1.5
million related to the termination of hedging activity on
deposit balances for the quarter ended September 30, 2012. Total noninterest
income was $4.1 million for the
quarter ended September 30, 2012
compared to $3.1 million the previous
quarter and $3.4 million one year
earlier.
Noninterest expenses decreased to $8.8
million in the first fiscal quarter from $9.6 million in the preceding quarter, reflecting
the streamlining of the branch footprint completed in the prior
fiscal year. In the fiscal first quarter a year ago, noninterest
expenses totaled $9.8 million. Total
compensation and employee benefit expenses totaled $4.9 million for the quarter ended September 30, 2012, which is similar to the
preceding quarter. One year earlier, the first quarter's
compensation and employee benefit expenses totaled $5.7 million. Professional fees for
the first fiscal quarter included approximately $165,000 of nonrecurring consulting expense
related to debit card incentive income. Occupancy and
equipment totaled $1.1 million for
the first quarter of fiscal 2013, which is $55,000 less than the same quarter of a year ago
due to the consolidation of 6 branches to other nearby branches
during the past 3 quarters. Generally, total noninterest expenses
reflect lower compensation, occupancy and professional fees
relative to the same time period one year ago.
These financial results are preliminary until the Form 10-Q is
filed in November 2012.
Quarterly Dividend Declared
The board of directors declared a regular quarterly cash
dividend of $0.1125 per common share
for the first fiscal quarter 2013. The dividend is payable
November 16, 2012 to stockholders of
record November 9, 2012.
Use of Non-GAAP Financial Measures
This press release contains financial measures that are not
calculated in accordance with U.S. generally accepted accounting
principles ("GAAP"). "Net Interest Margin, TE" is a non-GAAP
financial measure. Information regarding the usefulness of Net
Interest Margin, TE appears in the notes to the attached financial
statements. The Company believes that the presentation of
non-GAAP financial measures will permit investors to assess the
Company's core operating results on the same basis as management.
Non-GAAP financial measures should be considered supplemental to,
not a substitute for or superior to, financial measures calculated
in accordance with GAAP. As other companies may use different
calculations for these measures, this presentation may not be
comparable to other similarly titled measures reported by other
companies. Reconciliation of the non-GAAP measures to the most
comparable GAAP measures are set forth in the notes to the attached
financial statements.
About HF Financial Corp.
HF Financial Corp., based in Sioux
Falls, SD, is the parent company for financial services
companies, including Home Federal Bank, Mid America Capital
Services, Inc., dba Mid America Leasing Company, Hometown
Investment Services, Inc. and HF Financial Group, Inc. As the
largest publicly traded savings association headquartered in
South Dakota, HF Financial Corp.
operates with 28 offices in 19 communities, throughout Eastern South Dakota and one location in
Marshall, Minnesota. The
Company operates a branch in the Twin
Cities market as Infinia Bank, a Division of Home Federal
Bank of South Dakota. Internet banking is also available at
www.homefederal.com and www.infiniabank.com.
This news release and other reports issued by the Company,
including reports filed with the Securities and Exchange
Commission, contain "forward-looking statements" that deal with
future results, expectations, plans and performance. In
addition, the Company's management may make forward-looking
statements orally to the media, securities analysts, investors or
others. These forward-looking statements might include one or
more of the following:
- Projections of income, loss, revenues, earnings or losses per
share, dividends, capital expenditures, capital structure, adequacy
of loan loss reserves, tax benefit or other financial items.
- Descriptions of plans or objectives of management for future
operations, products or services, transactions, investments and use
of subordinated debentures payable to trusts.
- Forecasts of future economic performance.
- Use and descriptions of assumptions and estimates underlying or
relating to such matters.
Forward-looking statements can be identified by the fact they do
not relate strictly to historical or current facts. They
often include words such as "optimism," "look-forward," "bright,"
"pleased," "believe," "expect," "anticipate," "intend," "plan,"
"estimate" or words of similar meaning, or future or conditional
verbs such as "will," "would," "should," "could," or "may".
Forward-looking statements about the Company's expected
financial results and other plans are subject to certain risks,
uncertainties and assumptions. These include, but are not
limited to the following: possible legislative changes and adverse
economic, business and competitive conditions and developments
(such as shrinking interest margins and continued short-term
environments); deposit outflows, reduced demand for financial
services and loan products; changes in accounting policies or
guidelines, or in monetary and fiscal policies of the federal
government; changes in credit and other risks posed by the
Company's loan and lease portfolios; the ability or inability of
the Company to manage interest rate and other risks; unexpected or
continuing claims against the Company's self-insured health plan;
the ability or inability of the Company to successfully enter into
a definitive agreement for and close anticipated transactions;
technological, computer-related or operational difficulties;
adverse changes in securities markets; results of litigation; and
the other risks detailed from time to time in the Company's SEC
filings, including but not limited to, its annual report on Form
10-K for the fiscal year ending June 30,
2012, and its subsequent quarterly reports on Form 10-Q.
Forward-looking statements speak only as of the date they are
made. The Company does not undertake to update
forward-looking statements to reflect circumstances or events that
occur after the date the forward-looking statements are made.
Although the Company believes its expectations are reasonable, it
can give no assurance that such expectations will prove to be
correct. Based upon changing conditions, should any one or
more of these risks or uncertainties materialize, or should any
underlying assumptions prove incorrect, actual results may vary
materially from those described in any forward-looking
statements.
|
HF
Financial Corp.
|
|
Selected Consolidated Operating
Highlight
|
|
(Dollars in Thousands, except share
data)
|
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
|
2012
|
|
2012
|
|
2011
|
|
Interest,
dividend and loan fee income:
|
|
|
|
|
|
|
|
Loans and leases receivable
|
|
$
|
9,006
|
|
|
$
|
9,770
|
|
|
$
|
11,566
|
|
|
Investment securities and interest-earning
deposits
|
|
1,237
|
|
|
1,337
|
|
|
1,303
|
|
|
|
10,243
|
|
|
11,107
|
|
|
12,869
|
|
|
Interest
expense:
|
|
|
|
|
|
|
|
Deposits
|
|
1,406
|
|
|
1,536
|
|
|
2,157
|
|
|
Advances from Federal Home Loan Bank and other
borrowings
|
|
1,489
|
|
|
1,511
|
|
|
1,614
|
|
|
|
2,895
|
|
|
3,047
|
|
|
3,771
|
|
|
Net interest income
|
|
7,348
|
|
|
8,060
|
|
|
9,098
|
|
|
Provision
for losses on loans and leases
|
|
(300)
|
|
|
(1,136)
|
|
|
522
|
|
|
Net interest income after provision for losses on
loans and leases
|
|
7,648
|
|
|
9,196
|
|
|
8,576
|
|
|
Noninterest income:
|
|
|
|
|
|
|
|
Fees on deposits
|
|
2,096
|
|
|
1,487
|
|
|
1,629
|
|
|
Loan servicing income, net
|
|
(40)
|
|
|
(270)
|
|
|
471
|
|
|
Gain on sale of loans
|
|
1,022
|
|
|
780
|
|
|
376
|
|
|
Earnings on cash value of life insurance
|
|
205
|
|
|
171
|
|
|
171
|
|
|
Trust income
|
|
194
|
|
|
176
|
|
|
166
|
|
|
Commission and insurance income
|
|
194
|
|
|
273
|
|
|
152
|
|
|
Gain on sale of securities, net
|
|
1,822
|
|
|
616
|
|
|
301
|
|
|
Loss on disposal of closed-branch fixed
assets
|
|
—
|
|
|
(228)
|
|
|
—
|
|
|
Other
|
|
(1,367)
|
|
|
86
|
|
|
99
|
|
|
|
4,126
|
|
|
3,091
|
|
|
3,365
|
|
|
Noninterest expense:
|
|
|
|
|
|
|
|
Compensation and employee benefits
|
|
4,931
|
|
|
4,946
|
|
|
5,718
|
|
|
Occupancy and equipment
|
|
1,069
|
|
|
1,643
|
|
|
1,124
|
|
|
FDIC insurance
|
|
210
|
|
|
252
|
|
|
272
|
|
|
Check and data processing expense
|
|
817
|
|
|
759
|
|
|
715
|
|
|
Professional fees
|
|
643
|
|
|
734
|
|
|
836
|
|
|
Marketing and community investment
|
|
368
|
|
|
368
|
|
|
394
|
|
|
Foreclosed real estate and other properties,
net
|
|
103
|
|
|
(76)
|
|
|
43
|
|
|
Other
|
|
680
|
|
|
961
|
|
|
687
|
|
|
|
8,821
|
|
|
9,587
|
|
|
9,789
|
|
|
Income before income taxes
|
|
2,953
|
|
|
2,700
|
|
|
2,152
|
|
|
Income tax
expense
|
|
876
|
|
|
903
|
|
|
711
|
|
|
Net income
|
|
$
|
2,077
|
|
|
$
|
1,797
|
|
|
$
|
1,441
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share:
|
|
$
|
0.29
|
|
|
$
|
0.26
|
|
|
$
|
0.21
|
|
|
Diluted earnings per common share:
|
|
$
|
0.29
|
|
|
$
|
0.26
|
|
|
$
|
0.21
|
|
|
Basic weighted average shares:
|
|
7,051,169
|
|
|
7,041,870
|
|
|
6,974,066
|
|
|
Diluted weighted average shares:
|
|
7,052,994
|
|
|
7,042,460
|
|
|
6,974,066
|
|
|
Outstanding shares (end of period):
|
|
7,056,283
|
|
|
7,042,296
|
|
|
6,974,323
|
|
|
Number of
full-service offices
|
|
28
|
|
|
28
|
|
|
34
|
|
|
HF
Financial Corp.
|
|
Consolidated Statements of Financial
Condition
|
|
(Dollars in Thousands, except share
data)
|
|
|
|
|
|
September 30, 2012
|
|
June 30,
2012
|
|
(Unaudited)
|
|
(Audited)
|
|
ASSETS
|
|
|
|
|
Cash and
cash equivalents
|
$
|
57,519
|
|
|
$
|
50,334
|
|
|
Securities
available for sale
|
315,094
|
|
|
373,246
|
|
|
Correspondent bank stock
|
7,354
|
|
|
7,843
|
|
|
Loans held
for sale
|
17,936
|
|
|
16,207
|
|
|
|
|
|
|
Loans and
leases receivable
|
695,563
|
|
|
683,704
|
|
|
Allowance
for loan and lease losses
|
(10,809)
|
|
|
(10,566)
|
|
|
Loans and leases receivable, net
|
684,754
|
|
|
673,138
|
|
|
|
|
|
|
Accrued
interest receivable
|
5,733
|
|
|
5,431
|
|
|
Office
properties and equipment, net of accumulated
depreciation
|
14,699
|
|
|
14,760
|
|
|
Foreclosed
real estate and other properties
|
1,055
|
|
|
1,627
|
|
|
Cash value
of life insurance
|
19,451
|
|
|
19,276
|
|
|
Servicing
rights, net
|
11,574
|
|
|
11,932
|
|
|
Goodwill,
net
|
4,366
|
|
|
4,366
|
|
|
Other
assets
|
13,891
|
|
|
14,431
|
|
|
Total assets
|
$
|
1,153,426
|
|
|
$
|
1,192,591
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
Liabilities
|
|
|
|
|
Deposits
|
$
|
861,558
|
|
|
$
|
893,859
|
|
|
Advances from Federal Home Loan Bank and other
borrowings
|
131,411
|
|
|
142,394
|
|
|
Subordinated debentures payable to trusts
|
27,837
|
|
|
27,837
|
|
|
Advances by borrowers for taxes and
insurance
|
18,624
|
|
|
12,708
|
|
|
Accrued expenses and other liabilities
|
15,044
|
|
|
18,977
|
|
|
Total liabilities
|
1,054,474
|
|
|
1,095,775
|
|
|
Stockholders' equity
|
|
|
|
|
Preferred stock, $.01 par value, 500,000 shares
authorized, none outstanding
|
—
|
|
|
—
|
|
|
Series A Junior Participating Preferred Stock, $1.00
stated value, 50,000 shares authorized, none outstanding
|
—
|
|
|
—
|
|
|
Common stock, $.01 par value, 10,000,000 shares
authorized, 9,139,738 and 9,125,751 shares issued at September 30,
2012 and June 30, 2012, respectively
|
91
|
|
|
91
|
|
|
Additional paid-in capital
|
45,843
|
|
|
45,673
|
|
|
Retained earnings, substantially
restricted
|
84,854
|
|
|
83,571
|
|
|
Accumulated other comprehensive (loss), net of
related deferred tax effect
|
(939)
|
|
|
(1,622)
|
|
|
Less cost of treasury stock, 2,083,455 and 2,083,455
shares at September 30, 2012 and June 30, 2012,
respectively
|
(30,897)
|
|
|
(30,897)
|
|
|
Total stockholders' equity
|
98,952
|
|
|
96,816
|
|
|
Total liabilities and stockholders' equity
|
$
|
1,153,426
|
|
|
$
|
1,192,591
|
|
|
HF
Financial Corp.
|
|
Selected Consolidated Financial Condition
Data
|
|
(Dollars in Thousands)
|
|
(Unaudited)
|
|
|
|
|
Allowance for Loan and Lease Loss Activity
|
|
Three
Months Ended
|
|
9/30/2012
|
|
6/30/2012
|
|
9/30/2012
|
|
Balance,
beginning
|
|
$
|
10,566
|
|
|
$
|
10,540
|
|
|
$
|
14,315
|
|
|
Provision charged to income
|
|
(300)
|
|
|
(1,136)
|
|
|
522
|
|
|
Charge-offs
|
|
(403)
|
|
|
(1,040)
|
|
|
(3,888)
|
|
|
Recoveries
|
|
946
|
|
|
2,202
|
|
|
82
|
|
|
Balance,
ending
|
|
$
|
10,809
|
|
|
$
|
10,566
|
|
|
$
|
11,031
|
|
|
|
|
|
|
|
|
|
Asset Quality
|
|
9/30/2012
|
|
6/30/2012
|
|
9/30/2011
|
|
Nonaccruing loans and leases
|
|
$
|
14,914
|
|
|
$
|
16,075
|
|
|
$
|
26,225
|
|
|
Accruing
loans and leases delinquent more than 90 days
|
|
717
|
|
|
107
|
|
|
3,833
|
|
|
Foreclosed
assets
|
|
1,055
|
|
|
1,627
|
|
|
1,326
|
|
|
Total
nonperforming assets
|
|
$
|
16,686
|
|
|
$
|
17,809
|
|
|
$
|
31,384
|
|
|
|
|
|
|
|
|
|
General
allowance for loan and lease losses
|
|
$
|
8,667
|
|
|
$
|
8,447
|
|
|
$
|
7,355
|
|
|
Specific
impaired loan valuation allowance
|
|
2,142
|
|
|
2,119
|
|
|
3,676
|
|
|
Total
allowance for loans and lease losses
|
|
$
|
10,809
|
|
|
$
|
10,566
|
|
|
$
|
11,031
|
|
|
|
|
|
|
|
|
|
Ratio of
nonperforming assets to total assets at end of period
(1)
|
|
1.45
|
%
|
|
1.49
|
%
|
|
2.64
|
%
|
|
Ratio of
nonperforming loans and leases to total loans and leases at end of
period (2)
|
|
2.25
|
%
|
|
2.37
|
%
|
|
3.68
|
%
|
|
Ratio of
net charge-offs to average loans and leases for the year-to-date
period (3)
|
|
(0.31)
|
%
|
|
0.71
|
%
|
|
1.82
|
%
|
|
Ratio of
allowance for loan and lease losses to total loans and leases at
end of period
|
|
1.55
|
%
|
|
1.55
|
%
|
|
1.35
|
%
|
|
Ratio of
allowance for loan and lease losses to nonperforming loans and
leases at end of period (2)
|
|
69.15
|
%
|
|
65.29
|
%
|
|
36.70
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1) Nonperforming assets include
nonaccruing loans and leases, accruing loans and leases delinquent
more than 90 days and foreclosed assets.
|
|
|
(2) Nonperforming loans and leases include
both nonaccruing and accruing loans and leases delinquent more than
90 days.
|
|
|
(3) Percentages for the three months ended
September 30, 2012 and September 30, 2011 have been
annualized.
|
|
|
Troubled Debt Restructuring Summary
|
|
9/30/2012
|
|
6/30/2012
|
|
9/30/2011
|
|
Nonaccruing troubled debt
restructurings-non-compliant (1)(2)
|
|
$
|
95
|
|
|
$
|
117
|
|
|
$
|
4,778
|
|
|
Nonaccruing troubled debt restructurings-compliant
(1)(2)
|
|
11,134
|
|
|
11,213
|
|
|
12,128
|
|
|
Accruing
troubled debt restructurings (3)
|
|
1,195
|
|
|
1,213
|
|
|
3,734
|
|
|
Total
troubled debt restucturings
|
|
$
|
12,424
|
|
|
$
|
12,543
|
|
|
$
|
20,640
|
|
|
(1) Non-compliant and compliant refer to
the terms of the restructuring agreement.
|
|
(2) balances are included in nonaccruing
loans as part of nonperforming loans.
|
|
(3) None of the loans included are 90 days
past due and are not included in the nonperforming
loans.
|
|
|
|
HF
Financial Corp.
|
|
Selected Capital Composition
Highlights
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
9/30/2012
|
|
6/30/2012
|
|
9/30/2011
|
|
|
Common
stockholder's equity before OCI (1) to consolidated
assets
|
|
8.69
|
%
|
|
8.29
|
%
|
|
8.15
|
%
|
|
OCI components to consolidated assets:
|
|
|
|
|
|
|
|
Net changes in unrealized gain on securities
available for sale
|
|
0.21
|
|
|
0.22
|
|
|
0.16
|
|
|
Net unrealized losses on defined benefit
plan
|
|
(0.12)
|
|
|
(0.11)
|
|
|
(0.05)
|
|
|
Net unrealized losses on derivatives and hedging
activities
|
|
(0.17)
|
|
|
(0.25)
|
|
|
(0.27)
|
|
|
Goodwill to consolidated assets
|
|
(0.38)
|
|
|
(0.37)
|
|
|
(0.37)
|
|
|
Tangible
common equity to tangible assets
|
|
8.23
|
%
|
|
7.78
|
%
|
|
7.62
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible
book value per common share (2)
|
$
|
13.40
|
|
$
|
13.13
|
|
$
|
12.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier I
capital (to adjusted total assets) (3)
|
|
10.05
|
%
|
|
9.66
|
%
|
|
9.63
|
%
|
|
Tier I
capital (to risk weighted assets) (3)
|
|
15.07
|
|
|
14.62
|
|
|
12.57
|
|
Total
risk-based capital (to risk-weighted assets)
(3)
|
|
16.32
|
|
|
15.87
|
|
|
13.79
|
|
|
|
|
|
|
|
|
|
|
(1) Accumulated other comprehensive income
(loss).
|
|
(2) Common equity reduced by goodwill and
divided by number of shares of outstanding common stock.
|
|
(3) Capital ratios for Home Federal
Bank.
|
|
HF
Financial Corp.
|
|
Selected Consolidated Financial Condition
Data
|
|
(Dollars in Thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Loan
and Lease Portfolio composition
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
|
June 30, 2012
|
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Residential:
|
|
|
|
|
|
|
|
|
One-to four-family
|
$
|
56,947
|
|
|
8.2
|
%
|
|
52,626
|
|
|
7.7
|
%
|
|
Construction
|
3,944
|
|
|
0.6
|
|
|
2,808
|
|
|
0.4
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
Commercial business (1)
|
79,491
|
|
|
11.4
|
|
|
79,069
|
|
|
11.6
|
|
|
Equipment finance leases
|
2,841
|
|
|
0.4
|
|
|
3,297
|
|
|
0.5
|
|
|
Commercial real estate:
|
|
|
|
|
|
|
|
|
Commercial real estate
|
235,315
|
|
|
33.8
|
|
|
225,341
|
|
|
33.0
|
|
|
Multi-family real estate
|
47,233
|
|
|
6.8
|
|
|
47,121
|
|
|
6.9
|
|
|
Construction
|
13,389
|
|
|
1.9
|
|
|
12,172
|
|
|
1.8
|
|
|
Agricultural:
|
|
|
|
|
|
|
|
|
Agricultural real estate
|
64,183
|
|
|
9.2
|
|
|
70,796
|
|
|
10.4
|
|
|
Agricultural business
|
87,435
|
|
|
12.6
|
|
|
84,314
|
|
|
12.3
|
|
|
Consumer:
|
|
|
|
|
|
|
|
|
Consumer direct
|
21,521
|
|
|
3.1
|
|
|
21,345
|
|
|
3.1
|
|
|
Consumer home equity
|
79,994
|
|
|
11.5
|
|
|
81,545
|
|
|
11.9
|
|
|
Consumer overdraft & reserve
|
3,133
|
|
|
0.5
|
|
|
3,038
|
|
|
0.4
|
|
|
Consumer indirect
|
137
|
|
|
—
|
|
|
232
|
|
|
—
|
|
|
Total (2)
|
$
|
695,563
|
|
|
100.0
|
%
|
|
$
|
683,704
|
|
|
100.0
|
%
|
|
(1)
Includes $2,142 and $2,262 tax exempt leases at September 30, 2012
and June 30, 2012, respectively.
|
|
(2)
Exclusive of undisbursed portion of loans in process and net of
deferred loan fees and discounts.
|
|
|
|
|
|
|
|
|
|
Deposit
Composition
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
|
June
30, 2012
|
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Noninterest bearing checking accounts
|
$
|
125,198
|
|
|
14.5
|
%
|
|
146,963
|
|
|
16.4
|
%
|
|
Interest
bearing checking accounts
|
140,583
|
|
|
16.3
|
|
|
138,075
|
|
|
15.5
|
|
|
Money
market accounts
|
214,152
|
|
|
24.9
|
|
|
210,298
|
|
|
23.5
|
|
|
Savings
accounts
|
104,741
|
|
|
12.2
|
|
|
121,092
|
|
|
13.6
|
|
|
In-market
certificates of deposit
|
264,683
|
|
|
30.7
|
|
|
265,009
|
|
|
29.6
|
|
|
Out-of-market certificates of deposit
|
12,201
|
|
|
1.4
|
|
|
12,422
|
|
|
1.4
|
|
|
Total deposits
|
$
|
861,558
|
|
|
100.0
|
%
|
|
$
|
893,859
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HF
Financial Corp.
|
|
Selected Consolidated Financial Condition
Data
|
|
(Dollars in Thousands)
|
|
(Unaudited)
|
|
|
|
|
Average
Balance, Interest Yields and Rates
|
Three
Months Ended
|
|
|
September 30, 2012
|
|
|
June 30, 2012
|
|
|
Average
Outstanding
Balance
|
|
Yield/
Rate
|
|
Average
Outstanding
Balance
|
|
Yield/
Rate
|
|
Interest-earning assets:
|
|
|
|
|
|
|
|
|
Loans and leases
receivable(1)(3)
|
$
|
703,470
|
|
|
5.08
|
%
|
|
$
|
711,252
|
|
|
5.52
|
%
|
|
Investment securities(2)(3)
|
379,698
|
|
|
1.29
|
|
|
386,228
|
|
|
1.39
|
|
|
Total
interest-earning assets
|
1,083,168
|
|
|
3.75
|
%
|
|
1,097,480
|
|
|
4.07
|
%
|
|
Noninterest-earning assets
|
83,133
|
|
|
|
|
87,482
|
|
|
|
|
Total
assets
|
$
|
1,166,301
|
|
|
|
|
$
|
1,184,962
|
|
|
|
|
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
Checking and money market
|
$
|
336,643
|
|
|
0.47
|
%
|
|
$
|
346,690
|
|
|
0.54
|
%
|
|
Savings
|
112,365
|
|
|
0.26
|
|
|
128,062
|
|
|
0.30
|
|
|
Certificates of deposit
|
278,278
|
|
|
1.33
|
|
|
282,069
|
|
|
1.39
|
|
|
Total interest-bearing deposits
|
727,286
|
|
|
0.77
|
|
|
756,821
|
|
|
0.82
|
|
|
FHLB
advances and other borrowings
|
147,241
|
|
|
2.86
|
|
|
144,380
|
|
|
3.02
|
|
|
Subordinated debentures payable to trusts
|
27,837
|
|
|
6.10
|
|
|
27,837
|
|
|
6.16
|
|
|
Total
interest-bearing liabilities
|
902,364
|
|
|
1.27
|
|
|
929,038
|
|
|
1.32
|
|
|
Noninterest-bearing deposits
|
131,901
|
|
|
|
|
124,607
|
|
|
|
|
Other liabilities
|
34,163
|
|
|
|
|
34,491
|
|
|
|
|
Total
liabilities
|
1,068,428
|
|
|
|
|
1,088,136
|
|
|
|
|
Equity
|
97,873
|
|
|
|
|
96,826
|
|
|
|
|
Total
liabilities and equity
|
$
|
1,166,301
|
|
|
|
|
$
|
1,184,962
|
|
|
|
|
Net
interest spread(4)
|
|
|
2.48
|
%
|
|
|
|
2.75
|
%
|
|
Net
interest margin(4)(5)
|
|
|
2.69
|
%
|
|
|
|
2.95
|
%
|
|
Net
interest margin, TE(6)
|
|
|
2.72
|
%
|
|
|
|
2.99
|
%
|
|
Return on
average assets(7)
|
|
|
0.71
|
%
|
|
|
|
0.61
|
%
|
|
Return on
average equity(8)
|
|
|
8.42
|
%
|
|
|
|
7.46
|
%
|
|
(1) Includes loan fees and interest on
accruing loans and leases past due 90 days or more.
|
|
(2) Includes federal funds sold and
interest earning reserve balances at the Federal Reserve
Bank.
|
|
(3) Yields do not reflect the tax-exempt
nature of loans, equipment leases and municipal
securities.
|
|
(4) Percentages for the three months ended
September 30, 2012 and June 30, 2012 have been
annualized.
|
|
(5) Net interest income divided by average
interest-earning assets.
|
|
(6) Net interest margin expressed on a
fully taxable equivalent basis ("Net Interest Margin, TE") is a
non-GAAP financial measure. See the following Non-GAAP Disclosure
Reconciliation of Net Interest Income (GAAP) to Net Interest
Margin, TE (Non-GAAP). The tax-equivalent adjustment to net
interest income recognizes the income tax savings when comparing
taxable and tax-exempt assets and adjusting for federal and state
exemption of interest income and certain other permanent income tax
differences. We believe that it is a standard practice in the
banking industry to present net interest margin expressed on a
fully taxable equivalent basis, and accordingly believe the
presentation of this non-GAAP financial measure may be useful for
peer comparison purposes. As a non-GAAP financial measure, Net
Interest Margin, TE should be considered supplemental to and not a
substitute for or superior to, financial measures calculated in
accordance with GAAP. As other companies may use different
calculations for Net Interest Margin, TE, this presentation may not
be comparable to similarly titled measures reported by other
companies.
|
|
(7) Ratio of net income to average total
assets.
|
|
(8) Ratio of net income to average
equity.
|
|
HF
Financial Corp.
|
|
Selected Consolidated Financial Condition
Data
|
|
(Dollars in Thousands)
|
|
(Unaudited)
|
|
|
|
|
Average
Balance, Interest Yields and Rates
|
Three
Months Ended
|
|
|
September 30, 2012
|
|
|
September 30, 2011
|
|
|
Average
Outstanding
Balance
|
|
Yield/
Rate
|
|
Average
Outstanding
Balance
|
|
Yield/
Rate
|
|
Interest-earning assets:
|
|
|
|
|
|
|
|
|
Loans and leases
receivable(1)(3)
|
$
|
703,470
|
|
|
5.08
|
%
|
|
$
|
832,298
|
|
|
5.53
|
%
|
|
Investment securities(2)(3)
|
379,698
|
|
|
1.29
|
|
|
297,724
|
|
|
1.74
|
|
|
Total
interest-earning assets
|
1,083,168
|
|
|
3.75
|
%
|
|
1,130,022
|
|
|
4.53
|
%
|
|
Noninterest-earning assets
|
83,133
|
|
|
|
|
69,100
|
|
|
|
|
Total
assets
|
$
|
1,166,301
|
|
|
|
|
$
|
1,199,122
|
|
|
|
|
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
Checking and money market
|
$
|
336,643
|
|
|
0.47
|
%
|
|
$
|
311,203
|
|
|
0.68
|
%
|
|
Savings
|
112,365
|
|
|
0.26
|
|
|
113,693
|
|
|
0.28
|
|
|
Certificates of deposit
|
278,278
|
|
|
1.33
|
|
|
350,521
|
|
|
1.75
|
|
|
Total interest-bearing deposits
|
727,286
|
|
|
0.77
|
|
|
775,417
|
|
|
1.11
|
|
|
FHLB
advances and other borrowings
|
147,241
|
|
|
2.86
|
|
|
148,936
|
|
|
3.10
|
|
|
Subordinated debentures payable to trusts
|
27,837
|
|
|
6.10
|
|
|
27,837
|
|
|
6.50
|
|
|
Total
interest-bearing liabilities
|
902,364
|
|
|
1.27
|
|
|
952,190
|
|
|
1.58
|
|
|
Noninterest-bearing deposits
|
131,901
|
|
|
|
|
119,758
|
|
|
|
|
Other liabilities
|
34,163
|
|
|
|
|
32,834
|
|
|
|
|
Total
liabilities
|
1,068,428
|
|
|
|
|
1,104,782
|
|
|
|
|
Equity
|
97,873
|
|
|
|
|
94,340
|
|
|
|
|
Total
liabilities and equity
|
$
|
1,166,301
|
|
|
|
|
$
|
1,199,122
|
|
|
|
|
Net
interest spread(4)
|
|
|
2.48
|
%
|
|
|
|
2.95
|
%
|
|
Net
interest margin(4)(5)
|
|
|
2.69
|
%
|
|
|
|
3.20
|
%
|
|
Net
interest margin, TE(6)
|
|
|
2.72
|
%
|
|
|
|
3.24
|
%
|
|
Return on
average assets(7)
|
|
|
0.71
|
%
|
|
|
|
0.48
|
%
|
|
Return on
average equity(8)
|
|
|
8.42
|
%
|
|
|
|
6.08
|
%
|
|
(1) Includes loan fees and interest on
accruing loans and leases past due 90 days or more.
|
|
(2) Includes federal funds sold and
interest earning reserve balances at the Federal Reserve
Bank.
|
|
(3) Yields do not reflect the tax-exempt
nature of loans, equipment leases and municipal
securities.
|
|
(4) Percentages for the three months ended
September 30, 2012 and September 30, 2011 have been
annualized.
|
|
(5) Net interest income divided by average
interest-earning assets.
|
|
(6) Net interest margin expressed on a
fully taxable equivalent basis ("Net Interest Margin, TE") is a
non-GAAP financial measure. See the following Non-GAAP Disclosure
Reconciliation of Net Interest Income (GAAP) to Net Interest
Margin, TE (Non-GAAP). The tax-equivalent adjustment to net
interest income recognizes the income tax savings when comparing
taxable and tax-exempt assets and adjusting for federal and state
exemption of interest income and certain other permanent income tax
differences. We believe that it is a standard practice in the
banking industry to present net interest margin expressed on a
fully taxable equivalent basis, and accordingly believe the
presentation of this non-GAAP financial measure may be useful for
peer comparison purposes. As a non-GAAP financial measure, Net
Interest Margin, TE should be considered supplemental to and not a
substitute for or superior to, financial measures calculated in
accordance with GAAP. As other companies may use different
calculations for Net Interest Margin, TE, this presentation may not
be comparable to similarly titled measures reported by other
companies.
|
|
(7) Ratio of net income to average total
assets.
|
|
(8) Ratio of net income to average
equity.
|
|
HF
Financial Corp.
|
|
|
|
Age
Analysis of Past Due Loans and Leases Receivables
|
|
|
|
(Dollars in Thousands)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
September 30, 2012
|
Accruing and Nonaccruing Loans
|
|
Nonperforming Loans
|
|
30 - 59
Days
Past
Due
|
|
60 - 89
Days
Past
Due
|
|
Greater
Than
89
Days
|
|
Total
Past Due
|
|
Current
|
|
Recorded
Investment >
90 Days
and
Accruing (1)
|
|
Nonaccrual
Balance
|
|
Total
|
|
Residential:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to four-family
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
231
|
|
|
$
|
56,716
|
|
|
$
|
164
|
|
|
$
|
31
|
|
|
$
|
195
|
|
|
Construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,944
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business
|
35
|
|
|
8
|
|
|
1,262
|
|
|
1,305
|
|
|
78,186
|
|
|
553
|
|
|
1,383
|
|
|
1,936
|
|
|
Equipment finance leases
|
41
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
2,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Commercial
real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
115
|
|
|
—
|
|
|
246
|
|
|
361
|
|
|
234,954
|
|
|
—
|
|
|
1,065
|
|
|
1,065
|
|
|
Multi-family real estate
|
—
|
|
|
—
|
|
|
32
|
|
|
32
|
|
|
47,201
|
|
|
—
|
|
|
32
|
|
|
32
|
|
|
Construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,389
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Agricultural:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural real estate
|
94
|
|
|
—
|
|
|
45
|
|
|
139
|
|
|
64,044
|
|
|
—
|
|
|
10,745
|
|
|
10,745
|
|
|
Agricultural business
|
16
|
|
|
—
|
|
|
31
|
|
|
47
|
|
|
87,388
|
|
|
—
|
|
|
1,102
|
|
|
1,102
|
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer direct
|
46
|
|
|
14
|
|
|
—
|
|
|
60
|
|
|
21,461
|
|
|
—
|
|
|
13
|
|
|
13
|
|
|
Consumer home equity
|
475
|
|
|
24
|
|
|
375
|
|
|
874
|
|
|
79,120
|
|
|
—
|
|
|
539
|
|
|
539
|
|
|
Consumer OD & reserve
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
3,127
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Consumer indirect
|
2
|
|
|
—
|
|
|
4
|
|
|
6
|
|
|
131
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
Total
|
$
|
866
|
|
|
$
|
46
|
|
|
$
|
2,190
|
|
|
$
|
3,102
|
|
|
$
|
692,461
|
|
|
$
|
717
|
|
|
$
|
14,914
|
|
|
$
|
15,631
|
|
|
|
|
|
|
June
30, 2012
|
Accruing and Nonaccruing Loans
|
|
Nonperforming Loans
|
|
30 - 59
Days
Past
Due
|
|
60 - 89
Days
Past
Due
|
|
Greater
Than
89
Days
|
|
Total
Past Due
|
|
Current
|
|
Recorded
Investment >
90 Days
and
Accruing (1)
|
|
Nonaccrual
Balance
|
|
Total
|
|
Residential:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to four-family
|
$
|
293
|
|
|
$
|
57
|
|
|
$
|
138
|
|
|
$
|
488
|
|
|
$
|
52,138
|
|
|
$
|
107
|
|
|
$
|
31
|
|
|
$
|
138
|
|
|
Construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,808
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business
|
576
|
|
|
2,214
|
|
|
817
|
|
|
3,607
|
|
|
75,462
|
|
|
—
|
|
|
1,813
|
|
|
1,813
|
|
|
Equipment finance leases
|
—
|
|
|
60
|
|
|
17
|
|
|
77
|
|
|
3,220
|
|
|
—
|
|
|
17
|
|
|
17
|
|
|
Commercial
real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
1,077
|
|
|
117
|
|
|
426
|
|
|
1,620
|
|
|
223,721
|
|
|
—
|
|
|
1,254
|
|
|
1,254
|
|
|
Multi-family real estate
|
—
|
|
|
—
|
|
|
32
|
|
|
32
|
|
|
47,089
|
|
|
—
|
|
|
32
|
|
|
32
|
|
|
Construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,172
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Agricultural:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural real estate
|
906
|
|
|
—
|
|
|
500
|
|
|
1,406
|
|
|
69,390
|
|
|
—
|
|
|
11,185
|
|
|
11,185
|
|
|
Agricultural business
|
981
|
|
|
—
|
|
|
79
|
|
|
1,060
|
|
|
83,254
|
|
|
—
|
|
|
1,169
|
|
|
1,169
|
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer direct
|
40
|
|
|
—
|
|
|
3
|
|
|
43
|
|
|
21,302
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
Consumer home equity
|
185
|
|
|
155
|
|
|
412
|
|
|
752
|
|
|
80,793
|
|
|
—
|
|
|
569
|
|
|
569
|
|
|
Consumer OD & reserve
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
3,036
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Consumer indirect
|
10
|
|
|
—
|
|
|
2
|
|
|
12
|
|
|
220
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
Total
|
$
|
4,070
|
|
|
$
|
2,603
|
|
|
$
|
2,426
|
|
|
$
|
9,099
|
|
|
$
|
674,605
|
|
|
$
|
107
|
|
|
$
|
16,075
|
|
|
$
|
16,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Loans accruing and delinquent greater
than 90 days have government guarantees or acceptable loan-to-value
ratios.
|
|
HF
Financial Corp.
|
|
Non-GAAP Disclosure Reconciliation
|
|
Net
Interest Margin to Net Interest Margin-Tax Equivalent
Yield
|
|
(Dollars in Thousands)
|
|
(Unaudited)
|
|
|
|
Three
Months Ended
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
2012
|
|
2012
|
|
2011
|
|
Net
interest income
|
$
|
7,348
|
|
|
$
|
8,060
|
|
|
$
|
9,098
|
|
|
Taxable
equivalent adjustment
|
85
|
|
|
93
|
|
|
105
|
|
|
Adjusted
net interest income
|
7,433
|
|
|
8,153
|
|
|
9,203
|
|
|
Average
interest-earning assets
|
1,083,168
|
|
|
1,097,480
|
|
|
1,130,022
|
|
|
Net
interest margin, TE
|
2.72
|
%
|
|
2.99
|
%
|
|
3.24
|
%
|
SOURCE HF Financial Corp.