Declares Regular Quarterly Dividend of
$0.1125 per Share
HF Financial Corp. (Nasdaq:HFFC) today
reported fiscal third quarter 2016 earnings of $2.1 million, or
$0.29 per diluted share compared to $0.10 per diluted share one
year earlier and $0.21 per diluted share in the second
quarter. Core earnings were $0.32 per diluted share compared
to $0.23 per diluted share one year earlier. Most recent core
earnings were adjusted for professional fees related to the pending
acquisition by Great Western Bancorp, Inc. announced on November
30, 2015.
Total assets were $1.14 billion at March 31, 2016, which was
slightly lower than the $1.17 billion for the previous quarter and
the same one year earlier. Tangible book value per share was
$14.93 per share versus $13.93 per share one year earlier.
The net interest margin increased as non-accrued interest was
collected on paid-off loans, as well as the collection of a
prepayment fee on a large commercial real estate loan.
Nonperforming assets as a percentage of total assets was 1.40% at
March 31, 2016, compared to 0.95% one quarter earlier.
On November 30, 2015, HFFC announced its entry into a definitive
merger agreement with Great Western Bancorp, Inc. (“Great
Western”). Under the terms of the merger agreement, 75% of
HFFC’s common stock will be converted into Great Western common
stock and the remaining 25% will be exchanged for cash. HFFC
stockholders will have the option to elect to receive either 0.6500
shares of Great Western common stock or $19.50 in cash for each
HFFC common share, subject to proration to ensure that, in the
aggregate, 75% of HFFC shares will be converted into stock. The
merger has been unanimously approved by the Board of Directors of
both Great Western and HFFC and is expected to close in the second
quarter of calendar 2016, subject to certain conditions, including
the approval by HFFC’s stockholders and customary regulatory
approvals. The special meeting of HFFC's stockholders to
consider approval of the merger agreement will be held on May 10,
2016, at 2:00 p.m., Central Time, at the Hilton Garden Inn, 201
East 8th Street, Sioux Falls, South Dakota 57103.
“Our core earnings remain strong as we progress toward our
merger with Great Western Bank. Our staff has worked
extremely hard over the past several years to improve our core
operations, and I am proud of their efforts,” said Stephen Bianchi,
President and Chief Executive Officer.
Fiscal 2016 Third Quarter Financial Highlights:
(at or for the periods ended March 31, 2016, compared to December
31, 2015, and /or March 31, 2015.)
- Earnings were $0.29 per diluted share for the third fiscal
quarter of 2016 versus $0.21 per diluted share the previous quarter
and $0.10 per diluted share one year earlier.
- Core earnings increased 41% to $0.32 per diluted share for the
third quarter of fiscal 2016 as compared to the third quarter of
the prior year. For the nine months ended March 31, 2016,
core earnings grew 19% to $0.88 per diluted share compared to $0.75
per diluted share for the comparable period one year earlier.
- The net interest margin expressed on a fully taxable equivalent
basis (“NIM, TE”), a non-GAAP measure, was 3.64% for the fiscal
third quarter 2016 compared to 3.51% the previous quarter and 3.33%
one year ago. Fees received from prepayment of a loan
amounted to $224,000 of income recognized and enhanced the net
interest margin percentage by 8 basis points.
- Total loans decreased to $892.2 million at March 31, 2016, from
$905.6 million at December 31, 2015, and were up from $871.6
million one year earlier.
- Nonperforming assets increased to $15.9 million, or 1.40% of
total assets at quarter end compared to $11.1 million or 0.95% of
total assets one quarter earlier. Nonperforming assets at March 31,
2016, include $8.9 million of non-accruing troubled debt
restructured loans that are compliant with their restructured
terms.
- Loan and lease losses allowance totaled 1.30% of total loans at
March 31, 2016, compared to 1.27% one quarter earlier. The Company
has no direct exposure to the oil & gas industry.
- Bank capital ratios as of March 31, 2016, continued to remain
well above the newly implemented regulatory “well-capitalized”
minimum levels and include the newly implemented common equity tier
1 capital to risk- weighted assets ratio:
- Total risk-based capital to risk-weighted assets was 13.90%
versus 13.68% at December 31, 2015.
- Tier 1 capital to risk-weighted assets was 12.72% versus 12.52%
at December 31, 2015.
- Tier 1 capital to total adjusted assets was 10.94% versus
10.69% at December 31, 2015.
- Common equity tier 1 capital to risk-weighted assets was 12.72%
versus 12.52% at December 31, 2015.
- The most recent dividend of $0.1125 per share represents a
2.42% current yield at recent market prices.
- Tangible book value was $14.93 per share at March 31, 2016,
compared to $13.93 per share a year ago. This increase in tangible
book value, combined with a total dividend of $0.45, results in an
intrinsic return of 10.41% for the past twelve month period.
For a reconciliation of core earnings and core diluted earnings
per share to accounting principles generally accepted in the United
States ("GAAP") for net income and GAAP diluted earnings per share,
please refer to the tables in the section titled "Reconciliation of
GAAP Earnings and Core Earnings."
Balance Sheet and Asset Quality Review
HF Financial’s total asset base was $1.14 billion at March 31,
2016, compared to $1.17 billion at the end of the previous quarter
and similar to one year earlier. Total loans decreased slightly to
$892.2 million at March 31, 2016 due largely to a reduction in
commercial construction loans and seasonal pay-down of agricultural
loans. Despite the decline in total loans, multi-family loans
increased to $126.1 million from $108.8 million, while commercial
real estate loans increased to $338.2 million from $334.6 million.
Agricultural loans decreased slightly over the quarter. At
March 31, 2016, commercial real estate totaled 52.0% of the total
loan portfolio, agricultural loans totaled 20.5%, commercial and
residential construction were 6.3%, commercial business loans were
7.4%, consumer and residential loans totaled 7.3% and 6.5%,
respectively.
Reflecting normal seasonality, total deposits decreased to
$910.6 million at March 31, 2016, from $941.7 million one quarter
earlier. Non-certificate accounts represented 74.1% of total
deposits, while certificates of deposit represented 25.9% of total
deposits at March 31, 2016. Non-interest bearing deposits
represent 15.4% of total deposits.
FHLB advances and other borrowings decreased during the third
fiscal quarter of 2016 to $65.4 million compared to $73.4 million
in the previous quarter, primarily consisting of shorter-term
borrowing. For the quarter ended March 31, 2016, the average cost
of the FHLB and other borrowings portfolio was 0.63% compared to
0.53% the previous quarter.
Nonperforming assets ("NPAs"), which included $8.9 million of
non-accruing troubled debt restructurings that are in compliance
with their restructured terms, totaled $15.9 million at March 31,
2016 compared to $13.1 million one year earlier. At March 31, 2016,
NPAs represented 1.40% of total assets and included only $99,000 in
foreclosed assets.
The allowance for loan and lease losses at March 31, 2016,
totaled $11.6 million and represented 1.30% of total loans and
leases. Total allowance relative to total nonperforming loans was
73.2% at March 31, 2016 compared to 84.4% one year earlier.
Tangible common stockholders' equity was 9.28% of tangible
assets at March 31, 2016 compared to 9.22% one year earlier.
Tangible book value per common share was $14.93 at March 31, 2016,
up from $13.93 one year earlier.
Capital ratios continued to remain well above regulatory
requirements with Tier 1 capital to risk-weighted assets of 12.72%
at March 31, 2016, while the ratio of Tier 1 capital to total
adjusted assets was 10.94%. These regulatory ratios were higher
than the required minimum levels of 6.00% and 4.00%,
respectively.
Review of Operations
For the third fiscal quarter ending March 31, 2016, HF
Financial's operations reflected improved earnings compared to one
year earlier and the preceding quarter. Net interest income
increased 8.5% to $9.6 million for the third fiscal quarter of
fiscal 2016 compared to $8.8 million one year earlier, and
$9.5 million in the preceding quarter. The NIM, TE was 3.64%
for the fiscal third quarter compared to 3.51% the preceding
quarter and 3.33% one year earlier.
Provision for loan losses reflect prudent reserves established
for the loan portfolio, economic conditions and historical
charge-off activity. Provisions totaled $162,000 for the third
fiscal quarter of 2016 compared to $192,000 for the second fiscal
quarter of 2016. Gross charge-offs were $61,000 for the third
quarter versus $187,000 in the prior quarter. Recoveries
totaled $32,000 in the third fiscal quarter of 2016 versus $198,000
the prior quarter.
Noninterest income totaled $2.5 million for the fiscal third
quarter of 2016 compared to $3.4 million in the previous quarter.
Mortgage activity produced $397,000 in servicing and gains on loan
sales revenue in the third fiscal quarter of 2016 versus $999,000
the previous quarter.The current quarter reflects a $407,000
temporary impairment in servicing income related to lower market
rates and less gains on the sale of loans. Fees on
deposits totaled $1.2 million for the third quarter of fiscal 2016
versus $1.4 million the previous quarter. The lower deposit
fees relate, in part, to the lower level of total deposits.
Total noninterest expense was $8.9 million compared to $10.5
million in the previous quarter. The current quarter reflects less
full time employees and better health care claims experience.
Compensation and employee benefits totaled $4.9 million versus $6.1
million in the previous quarter.
These financial results are preliminary until the Form 10-Q is
filed in May 2016.
Quarterly Dividend Declared
The board of directors declared a regular quarterly cash
dividend of $0.1125 per common share for the third fiscal quarter
2016. The dividend is payable May 12, 2016 to stockholders of
record May 6, 2016.
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” and "Core Earnings"
are non-GAAP financial measures. Information regarding the
usefulness of Net Interest Margin, TE and Core Earnings appear 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, these
presentations 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 Great Western Bancorp, Inc.
Great Western Bancorp, Inc. is the holding company for
Great Western Bank, a full-service regional bank focused on
relationship-based business and agribusiness banking. Great Western
Bank offers small and mid-sized businesses a focused suite of
financial products and a range of deposit and loan products to
retail customers through several channels, including the branch
network, online banking system, mobile banking applications and
customer care centers. The bank services its customers through 158
branches in seven states: South Dakota, Iowa, Nebraska,
Colorado, Arizona, Kansas and Missouri. To learn more about Great
Western Bank visit www.greatwesternbank.com.
About HF Financial Corporation
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 a publicly traded bank holding
company headquartered in South Dakota, HF Financial Corp. operates
with 23 offices in 17 communities, throughout Eastern South Dakota,
Minnesota, and North Dakota. The Company operates a branch in the
Twin Cities market as Infinia Bank, a Division of Home Federal Bank
of South Dakota. To learn more about Home Federal Bank, visit
www.homefederal.com.
No Offer or Solicitation
This communication is not a solicitation of a proxy from any
stockholder of HF Financial Corp. This communication is for
informational purposes only and is neither an offer to purchase,
nor a solicitation of an offer to sell, any securities in any
jurisdiction pursuant to the proposed transaction or otherwise, nor
shall there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of any applicable law. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of
1933.
Important Additional Information and Where to Find
It
In connection with the Agreement and Plan of Merger by and
between Great Western Bancorp, Inc. (“Great Western”) and HF
Financial Corp., Great Western filed with the Securities and
Exchange Commission (“SEC”) a Registration Statement on
Form S-4 that contained a proxy statement of HF Financial
Corp. and a prospectus of Great Western, as well as other relevant
documents concerning the proposed transaction. STOCKHOLDERS OF HF
FINANCIAL CORP. ARE URGED TO READ THE REGISTRATION STATEMENT AND
THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION
AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT GREAT WESTERN, HF
FINANCIALCORP. AND THE PROPOSED TRANSACTION. The Registration
Statement, including the proxy statement/prospectus, and other
relevant materials, and any other documents filed by Great Western
and HF Financial Corp. with the SEC, may be obtained free of charge
at the SEC’s website at www.sec.gov. Documents filed by Great
Western with the SEC, including the Registration Statement, may
also be obtained free of charge from Great Western’s website
(www.greatwesternbank.com) under the “Investor Relations” heading
and the “SEC Filings” sub-heading, or by directing a request to
Great Western’s Investor Relations contact, David Hinderaker at
David.Hinderaker@greatwesternbank.com. Documents filed by HF
Financial Corp. with the SEC may also be obtained free of charge
from HF Financial Corp. website (www.homefederal.com) under the
“Investor Relations” heading and the “SEC Filings” sub-heading, or
by directing a request to HF Financial Corp. Investor Relations
contact, Pamela F. Russo at prusso@homefederal.com.
Participants in the Solicitation
Great Western, HF Financial Corp., and certain of their
respective directors and executive officers may be deemed to be
participants in the solicitation of proxies from the stockholders
of HF Financial Corp., in connection with the proposed merger
transaction. Information about the directors and executive officers
of Great Western is available in Great Western’s definitive proxy
statement for its 2016 annual meeting of stockholders as previously
filed with the SEC on January 4, 2016, and other documents
subsequently filed by Great Western with the SEC. Information about
the directors and executive officers of HF Financial Corp., is
available in HF Financial Corp.’s, definitive proxy statement, for
its 2015 annual meeting of stockholders as previously filed with
the SEC on October 16, 2015 and on its definitive proxy
statement for its 2016 Special Meeting of Stockholders as
previously filed with the SEC on April 7, 2016. Other information
regarding the participants and a description of their direct and
indirect interests, by security holdings or otherwise, will be
contained in the Registration Statement and including the proxy
statement/prospectus, and other relevant documents regarding the
transaction filed with the SEC when they become available.
Forward-Looking Statements
This document contains forward-looking statements. You can
generally identify forward-looking statements by the use of
forward-looking terminology such as “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “explore,” “evaluate,”
“intend,” “may,” “might,” “plan,” “potential,” “predict,”
“project,” “seek,” “should,” or “will,” or the negative thereof or
other variations thereon or comparable terminology. These
forward-looking statements are only predictions and involve known
and unknown risks and uncertainties, many of which are beyond GWB’s
and HF Financial Corp’s control.
Statements in this document regarding Great Western, HF
Financial Corp., and the proposed merger that are forward-looking,
including projections as to the anticipated benefits of the
proposed transaction, the impact of the proposed transaction on
anticipated financial results, the synergies from the proposed
transaction, and the closing date for the proposed transaction, are
based on management’s estimates, assumptions and projections, and
are subject to significant uncertainties and other factors, many of
which are beyond the control of Great Western and HF Financial
Corp. In particular, projected financial information for the
combined company is based on management’s estimates, assumptions
and projections and has not been prepared in conformance with the
applicable accounting requirements of Regulation S-X relating to
pro forma financial information, and the required pro forma
adjustments have not been applied and are not reflected therein.
None of this information should be considered in isolation from, or
as a substitute for, the historical financial statements of Great
Western or HF Financial Corp. Important risk factors could cause
actual future results and other future events to differ materially
from those currently estimated by management, including, but not
limited to: the timing to consummate the proposed transaction; the
risk that a condition to closing of the proposed transaction may
not be satisfied and the transaction may not close; the risk that a
regulatory approval that may be required for the proposed
transaction is not obtained, is rescinded or becomes subject to
conditions that are not anticipated; the combined company’s ability
to achieve the synergies and value creation contemplated by the
proposed transaction; management’s ability to promptly and
effectively integrate the businesses of the two companies; the
diversion of management time on transaction-related issues; change
in national and regional economic conditions; the effects of
governmental regulation of the financial services industry;
industry consolidation; technological developments and major world
news events.
For more discussion of important risk factors that may
materially affect Great Western and HF Financial Corp., please see
the risk factors contained in Great Western’s Annual Report on
Form 10-K for its fiscal year ended September 30, 2015
and HF Financial Corp's Annual Report on Form 10-K for its
fiscal year ended June 30, 2015 and Quarterly Report on Form
10-Q for the fiscal quarter ended December 31, 2015, all of which
are on file with the SEC and available through the SEC’s website at
www.sec.gov.
No assurances can be given that any of the events anticipated by
the forward-looking statements will transpire or occur, or if any
of them do occur, what impact they will have on the results of
operations, financial condition or cash flows of Great Western, HF
Financial Corp. or the combined company. None of Great Western nor
HF Financial Corp. assumes any duty to update or revise
forward-looking statements, whether as a result of new information,
future events or otherwise, as of any future date.
HF Financial Corp. |
Selected Consolidated Operating
Highlights |
(Dollars in Thousands, except share
data) |
(Unaudited) |
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
March 31, |
|
|
|
2016 |
|
2015 |
|
2015 |
|
2016 |
|
2015 |
Interest, dividend and
loan fee income: |
|
|
|
|
|
|
|
|
|
|
|
Loans and leases receivable |
|
|
$ |
10,131 |
|
|
$ |
9,978 |
|
|
$ |
9,197 |
|
|
$ |
30,194 |
|
|
$ |
28,549 |
|
Investment securities and
interest-earning deposits |
|
|
807 |
|
|
807 |
|
|
863 |
|
|
2,360 |
|
|
3,128 |
|
|
|
|
10,938 |
|
|
10,785 |
|
|
10,060 |
|
|
32,554 |
|
|
31,677 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
947 |
|
|
928 |
|
|
846 |
|
|
2,720 |
|
|
2,661 |
|
Advances from Federal Home Loan
Bank and other borrowings |
|
|
389 |
|
|
371 |
|
|
365 |
|
|
1,139 |
|
|
2,517 |
|
|
|
|
1,336 |
|
|
1,299 |
|
|
1,211 |
|
|
3,859 |
|
|
5,178 |
|
Net interest income |
|
|
9,602 |
|
|
9,486 |
|
|
8,849 |
|
|
28,695 |
|
|
26,499 |
|
Provision for losses on
loans and leases |
|
|
162 |
|
|
192 |
|
|
282 |
|
|
532 |
|
|
1,201 |
|
Net interest income after provision
for losses on loans and leases |
|
|
9,440 |
|
|
9,294 |
|
|
8,567 |
|
|
28,163 |
|
|
25,298 |
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
|
|
Fees on deposits |
|
|
1,210 |
|
|
1,366 |
|
|
1,375 |
|
|
4,037 |
|
|
4,524 |
|
Loan servicing income, net |
|
|
(100 |
) |
|
329 |
|
|
319 |
|
|
564 |
|
|
1,034 |
|
Gain on sale of loans |
|
|
497 |
|
|
670 |
|
|
457 |
|
|
1,940 |
|
|
1,476 |
|
Earnings on cash value of life
insurance |
|
|
210 |
|
|
212 |
|
|
204 |
|
|
632 |
|
|
619 |
|
Trust income |
|
|
231 |
|
|
235 |
|
|
234 |
|
|
680 |
|
|
682 |
|
Commission and insurance
income |
|
|
358 |
|
|
432 |
|
|
438 |
|
|
1,281 |
|
|
1,224 |
|
Gain (loss) on sale of securities,
net |
|
|
— |
|
|
15 |
|
|
(1,076 |
) |
|
20 |
|
|
(1,117 |
) |
Gain on sale of bank branch |
|
|
— |
|
|
— |
|
|
— |
|
|
2,847 |
|
|
— |
|
Loss on disposal of closed-branch
fixed assets |
|
|
— |
|
|
— |
|
|
(298 |
) |
|
— |
|
|
(461 |
) |
Other |
|
|
96 |
|
|
93 |
|
|
402 |
|
|
298 |
|
|
540 |
|
|
|
|
2,502 |
|
|
3,352 |
|
|
2,055 |
|
|
12,299 |
|
|
8,521 |
|
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee
benefits |
|
|
4,914 |
|
|
6,119 |
|
|
5,675 |
|
|
17,092 |
|
|
16,434 |
|
Occupancy and equipment |
|
|
1,087 |
|
|
1,083 |
|
|
1,330 |
|
|
3,216 |
|
|
3,381 |
|
FDIC insurance |
|
|
147 |
|
|
148 |
|
|
221 |
|
|
485 |
|
|
627 |
|
Check and data processing
expense |
|
|
938 |
|
|
865 |
|
|
815 |
|
|
2,668 |
|
|
2,463 |
|
Professional fees |
|
|
644 |
|
|
909 |
|
|
447 |
|
|
2,228 |
|
|
1,512 |
|
Marketing and community
investment |
|
|
222 |
|
|
345 |
|
|
444 |
|
|
841 |
|
|
1,192 |
|
Loss on early extinguishment of
debt |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,065 |
|
Other |
|
|
918 |
|
|
1,006 |
|
|
848 |
|
|
2,747 |
|
|
2,276 |
|
|
|
|
8,870 |
|
|
10,475 |
|
|
9,780 |
|
|
29,277 |
|
|
31,950 |
|
Income before income taxes |
|
|
3,072 |
|
|
2,171 |
|
|
842 |
|
|
11,185 |
|
|
1,869 |
|
Income tax expense |
|
|
1,003 |
|
|
693 |
|
|
123 |
|
|
3,786 |
|
|
206 |
|
Net income |
|
|
$ |
2,069 |
|
|
$ |
1,478 |
|
|
$ |
719 |
|
|
$ |
7,399 |
|
|
$ |
1,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common
share: |
|
|
$ |
0.29 |
|
|
$ |
0.21 |
|
|
$ |
0.10 |
|
|
$ |
1.05 |
|
|
$ |
0.24 |
|
Diluted earnings per common
share: |
|
|
$ |
0.29 |
|
|
$ |
0.21 |
|
|
$ |
0.10 |
|
|
$ |
1.05 |
|
|
$ |
0.24 |
|
Basic weighted average shares: |
|
|
7,057,191 |
|
|
7,055,058 |
|
|
7,054,197 |
|
|
7,056,236 |
|
|
7,054,662 |
|
Diluted weighted average
shares: |
|
|
7,068,564 |
|
|
7,069,954 |
|
|
7,061,035 |
|
|
7,068,546 |
|
|
7,059,805 |
|
Outstanding shares (end of
period): |
|
|
7,066,348 |
|
|
7,056,492 |
|
|
7,054,451 |
|
|
7,066,348 |
|
|
7,054,451 |
|
Number of full-service
offices |
|
|
23 |
|
|
23 |
|
|
23 |
|
|
|
|
|
HF Financial Corp. |
Consolidated Statements of Financial
Condition |
(Dollars in Thousands, except share
data) |
|
|
|
March 31, 2016 |
|
June 30, 2015 |
|
|
(Unaudited) |
|
(Audited) |
ASSETS |
|
|
|
|
Cash and cash
equivalents |
|
$ |
19,320 |
|
|
$ |
21,476 |
|
Investment securities
available for sale |
|
148,353 |
|
|
158,806 |
|
Investment securities
held to maturity |
|
19,918 |
|
|
20,156 |
|
Correspondent bank
stock |
|
4,062 |
|
|
4,177 |
|
Loans held for
sale |
|
2,586 |
|
|
9,038 |
|
|
|
|
|
|
Loans and leases
receivable |
|
892,227 |
|
|
914,419 |
|
Allowance for loan and
lease losses |
|
(11,592 |
) |
|
(11,230 |
) |
Loans and leases receivable,
net |
|
880,635 |
|
|
903,189 |
|
|
|
|
|
|
Accrued interest
receivable |
|
5,192 |
|
|
5,414 |
|
Office properties and
equipment, net of accumulated depreciation |
|
16,114 |
|
|
15,493 |
|
Foreclosed real estate
and other properties |
|
99 |
|
|
157 |
|
Cash value of life
insurance |
|
21,830 |
|
|
21,320 |
|
Servicing rights,
net |
|
9,723 |
|
|
10,584 |
|
Goodwill and intangible
assets, net |
|
4,915 |
|
|
4,737 |
|
Other assets |
|
9,130 |
|
|
10,648 |
|
Total assets |
|
$ |
1,141,877 |
|
|
$ |
1,185,195 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
Liabilities |
|
|
|
|
Deposits |
|
$ |
910,552 |
|
|
$ |
963,229 |
|
Advances from Federal Home Loan
Bank and other borrowings |
|
65,367 |
|
|
65,558 |
|
Subordinated debentures payable to
trusts, net of unamortized debtissuance costs |
|
24,662 |
|
|
24,655 |
|
Advances by borrowers for taxes and
insurance |
|
17,564 |
|
|
14,197 |
|
Accrued expenses and other
liabilities |
|
13,339 |
|
|
13,579 |
|
Total liabilities |
|
1,031,484 |
|
|
1,081,218 |
|
Stockholders'
equity |
|
|
|
|
Preferred stock, $.01 par value,
500,000 shares authorized, noneoutstanding |
|
— |
|
|
— |
|
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,9,149,803 and 9,137,906 shares issued
at March 31, 2016 and June30, 2015, respectively |
|
91 |
|
|
91 |
|
Additional paid-in capital |
|
46,590 |
|
|
46,320 |
|
Retained earnings, substantially
restricted |
|
95,163 |
|
|
90,145 |
|
Accumulated other comprehensive
(loss), net of related deferredtax effect |
|
(554 |
) |
|
(1,682 |
) |
Less cost of treasury stock,
2,083,455 shares at March 31, 2016 andJune 30, 2015 |
|
(30,897 |
) |
|
(30,897 |
) |
Total stockholders' equity |
|
110,393 |
|
|
103,977 |
|
Total liabilities and stockholders'
equity |
|
$ |
1,141,877 |
|
|
$ |
1,185,195 |
|
HF Financial Corp. |
Selected Consolidated Financial Condition
Data |
(Dollars in Thousands) |
(Unaudited) |
|
|
|
|
|
Allowance for Loan and LeaseLoss Activity |
|
Three Months Ended |
|
Nine Months Ended |
March 31, |
|
December 31, |
|
March 31, |
|
March 31, |
|
2016 |
|
2015 |
|
2015 |
|
2016 |
|
2015 |
Balance, beginning |
|
$ |
11,459 |
|
|
$ |
11,256 |
|
|
$ |
10,933 |
|
|
$ |
11,230 |
|
|
$ |
10,502 |
|
Provision charged to income |
|
162 |
|
|
192 |
|
|
282 |
|
|
532 |
|
|
1,201 |
|
Charge-offs |
|
(61 |
) |
|
(187 |
) |
|
(268 |
) |
|
(441 |
) |
|
(842 |
) |
Recoveries |
|
32 |
|
|
198 |
|
|
65 |
|
|
271 |
|
|
151 |
|
Balance, ending |
|
$ |
11,592 |
|
|
$ |
11,459 |
|
|
$ |
11,012 |
|
|
$ |
11,592 |
|
|
$ |
11,012 |
|
Asset Quality |
|
March 31,2016 |
|
December 31,2015 |
|
March 31,2015 |
Nonaccruing loans and
leases |
|
$ |
15,820 |
|
|
$ |
10,888 |
|
|
$ |
13,043 |
|
Accruing loans and
leases delinquent more than 90 days |
|
15 |
|
|
— |
|
|
— |
|
Foreclosed assets |
|
99 |
|
|
229 |
|
|
27 |
|
Total nonperforming
assets (1) |
|
$ |
15,934 |
|
|
$ |
11,117 |
|
|
$ |
13,070 |
|
|
|
|
|
|
|
|
General allowance for
loan and lease losses |
|
$ |
10,874 |
|
|
$ |
11,215 |
|
|
$ |
10,491 |
|
Specific impaired loan
valuation allowance |
|
718 |
|
|
244 |
|
|
521 |
|
Total allowance for
loans and lease losses |
|
$ |
11,592 |
|
|
$ |
11,459 |
|
|
$ |
11,012 |
|
|
|
|
|
|
|
|
Ratio of nonperforming
assets to total assets at end of period (1) |
|
1.40 |
% |
|
0.95 |
% |
|
1.15 |
% |
Ratio of nonperforming
loans and leases to total loans andleases at end of period (2) |
|
1.77 |
% |
|
1.20 |
% |
|
1.50 |
% |
Ratio of net
charge-offs to average loans and leases for theyear-to-date period
(3) |
|
0.02 |
% |
|
0.03 |
% |
|
0.11 |
% |
Ratio of allowance for
loan and lease losses to total loans andleases at end of
period |
|
1.30 |
% |
|
1.27 |
% |
|
1.26 |
% |
Ratio of allowance for
loan and lease losses to nonperformingloans and leases at end of
period (2) |
|
73.2 |
% |
|
105.2 |
% |
|
84.4 |
% |
_____________________________________________(1)
Nonperforming assets include nonaccruing loans and leases, accruing
loans and leases delinquent more than 90 days and foreclosed
assets. Includes nonaccruing troubled debt restructured loans
compliant with their restructured terms of $8.9 million, $9.6
million, and $8.7 million, for the respective quarters.(2)
Nonperforming loans and leases include both nonaccruing and
accruing loans and leases delinquent more than 90 days.(3)
Percentages for the six months ended December 31, 2015 and the nine
months ended March 31, 2016 and March 31, 2015 have been
annualized.
Troubled Debt Restructuring Summary |
|
March 31,2016 |
|
December 31,2015 |
|
March 31,2015 |
Nonaccruing troubled
debt restructurings-non-compliant (1)(2) |
|
$ |
107 |
|
|
$ |
108 |
|
|
$ |
52 |
|
Nonaccruing troubled
debt restructurings-compliant (1)(2)(3) |
|
8,937 |
|
|
9,560 |
|
|
8,664 |
|
Accruing troubled debt
restructurings (4) |
|
795 |
|
|
2,035 |
|
|
2,788 |
|
Total troubled debt
restructurings |
|
$ |
9,839 |
|
|
$ |
11,703 |
|
|
$ |
11,504 |
|
______________________________________________(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) Interest received but applied
to the principal balance was $125, $166, and $189, for the
respective quarters.(4) 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) |
|
|
|
March 31,2016 |
|
December 31,2015 |
|
June 30, 2015 |
Common stockholder's
equity before OCI (1) to consolidated assets |
|
9.76 |
% |
|
9.38 |
% |
|
8.95 |
% |
OCI components to consolidated
assets: |
|
|
|
|
|
|
Net changes in unrealized gains and
losses: |
|
|
|
|
|
|
Investment securities available for
sale |
|
0.06 |
|
|
(0.05 |
) |
|
(0.02 |
) |
Defined benefit plan |
|
(0.10 |
) |
|
(0.09 |
) |
|
(0.09 |
) |
Derivatives and hedging
activities |
|
(0.01 |
) |
|
(0.02 |
) |
|
(0.03 |
) |
Goodwill and intangible assets, net
to consolidated assets |
|
(0.43 |
) |
|
(0.42 |
) |
|
(0.40 |
) |
Tangible common equity
to tangible assets |
|
9.28 |
% |
|
8.80 |
% |
|
8.41 |
% |
|
|
|
|
|
|
|
Tangible book value per
common share (2) |
|
$ |
14.93 |
|
|
$ |
14.55 |
|
|
$ |
14.07 |
|
______________________________________________(1)
Accumulated other comprehensive income (loss).(2) Common
equity reduced by goodwill and intangible assets, net and divided
by number of shares of outstanding common stock.
Home Federal
Bank Capital Ratios: |
March 31,2016 |
|
December 31,2015 |
|
June 30, 2015 |
Tier I capital (to
adjusted total assets) |
10.94 |
% |
|
10.69 |
% |
|
10.39 |
% |
Tier I capital (to
risk-weighted assets) |
12.72 |
|
|
12.52 |
|
|
12.16 |
|
Common equity tier I
capital (to risk-weighted assets) |
12.72 |
|
|
12.52 |
|
|
12.16 |
|
Total risk-based
capital (to risk-weighted assets) |
13.90 |
|
|
13.68 |
|
|
13.29 |
|
|
|
|
|
|
|
HF Financial
Corp. Capital Ratios: |
|
|
|
|
|
Tier I capital (to
adjusted total assets) |
11.37 |
% |
|
11.05 |
% |
|
10.73 |
% |
Tier I capital (to
risk-weighted assets) |
13.23 |
|
|
12.95 |
|
|
12.58 |
|
Common equity tier I
capital (to risk-weighted assets) |
10.80 |
|
|
10.54 |
|
|
10.17 |
|
Total risk-based
capital (to risk-weighted assets) |
14.41 |
|
|
14.10 |
|
|
13.70 |
|
HF Financial Corp. |
Selected Consolidated Financial Condition
Data |
(Dollars in Thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
Loan and Lease
Portfolio Composition |
|
|
|
|
|
|
|
|
March 31, 2016 |
|
June 30, 2015 |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
Residential: |
|
|
|
|
|
|
|
One-to four-family |
$ |
57,873 |
|
|
6.5 |
% |
|
$ |
55,572 |
|
|
6.1 |
% |
Construction |
7,485 |
|
|
0.8 |
|
|
6,308 |
|
|
0.7 |
|
Commercial: |
|
|
|
|
|
|
|
Commercial business (1) |
65,910 |
|
|
7.4 |
|
|
78,493 |
|
|
8.6 |
|
Equipment finance leases |
88 |
|
|
— |
|
|
158 |
|
|
— |
|
Commercial real
estate: |
|
|
|
|
|
|
|
Commercial real estate |
338,151 |
|
|
37.9 |
|
|
325,453 |
|
|
35.6 |
|
Multi-family real estate |
126,090 |
|
|
14.1 |
|
|
111,354 |
|
|
12.2 |
|
Construction |
49,293 |
|
|
5.5 |
|
|
48,224 |
|
|
5.3 |
|
Agricultural: |
|
|
|
|
|
|
|
Agricultural real estate |
81,642 |
|
|
9.2 |
|
|
96,952 |
|
|
10.6 |
|
Agricultural business |
100,855 |
|
|
11.3 |
|
|
123,988 |
|
|
13.5 |
|
Consumer: |
|
|
|
|
|
|
|
Consumer direct |
13,735 |
|
|
1.5 |
|
|
14,837 |
|
|
1.6 |
|
Consumer home equity |
48,871 |
|
|
5.5 |
|
|
50,377 |
|
|
5.5 |
|
Consumer overdraft &
reserve |
2,234 |
|
|
0.3 |
|
|
2,703 |
|
|
0.3 |
|
Total (2) |
$ |
892,227 |
|
|
100.0 |
% |
|
$ |
914,419 |
|
|
100.0 |
% |
_________________________________________________(1) Includes
$1,238 and $1,377 tax exempt leases at March 31, 2016 and
June 30, 2015, respectively.(2) Exclusive of undisbursed
portion of loans in process and net of deferred loan fees and
discounts.
Deposit
Composition |
|
|
|
|
|
|
|
|
|
|
March 31, 2016 |
|
June 30, 2015 |
|
|
Amount |
|
Percent |
|
Amount |
|
Percent |
Noninterest-bearing
checking accounts |
|
$ |
140,007 |
|
|
15.4 |
% |
|
$ |
171,064 |
|
|
17.8 |
% |
Interest-bearing
checking accounts |
|
229,396 |
|
|
25.2 |
|
|
185,075 |
|
|
19.2 |
|
Money market
accounts |
|
199,935 |
|
|
22.0 |
|
|
198,000 |
|
|
20.5 |
|
Savings accounts |
|
105,097 |
|
|
11.5 |
|
|
93,053 |
|
|
9.7 |
|
In-market certificates
of deposit |
|
194,265 |
|
|
21.3 |
|
|
242,036 |
|
|
25.1 |
|
Out-of-market
certificates of deposit |
|
41,852 |
|
|
4.6 |
|
|
74,001 |
|
|
7.7 |
|
Total deposits |
|
$ |
910,552 |
|
|
100.0 |
% |
|
$ |
963,229 |
|
|
100.0 |
% |
HF Financial Corp. |
Selected Consolidated Financial Condition
Data |
(Dollars in Thousands) |
(Unaudited) |
|
|
Average
Balance, Interest Yields and Rates |
Three Months Ended |
|
March 31, 2016 |
|
December 31, 2015 |
|
AverageOutstandingBalance |
|
Yield/Rate |
|
AverageOutstandingBalance |
|
Yield/Rate |
Interest-earning
assets: |
|
|
|
|
|
|
|
Loans and leases
receivable(1)(3) |
$ |
903,698 |
|
|
|
|
4.51 |
% |
|
$ |
916,495 |
|
|
|
|
4.33 |
% |
Investment securities(2)(3) |
175,187 |
|
|
|
|
1.85 |
|
|
178,635 |
|
|
|
|
1.80 |
|
Total interest-earning
assets |
1,078,885 |
|
|
|
|
4.08 |
% |
|
1,095,130 |
|
|
|
|
3.92 |
% |
Noninterest-earning assets |
74,301 |
|
|
|
|
77,470 |
|
|
|
Total assets |
$ |
1,153,186 |
|
|
|
|
$ |
1,172,600 |
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
Checking and money market |
$ |
415,108 |
|
|
|
|
0.29 |
% |
|
$ |
395,012 |
|
|
|
|
0.26 |
% |
Savings |
115,298 |
|
|
|
|
0.21 |
|
|
109,930 |
|
|
|
|
0.16 |
|
Certificates of deposit |
249,763 |
|
|
|
|
0.95 |
|
|
281,826 |
|
|
|
|
0.88 |
|
Total interest-bearing
deposits |
780,169 |
|
|
|
|
0.49 |
|
|
786,768 |
|
|
|
|
0.47 |
|
FHLB advances and other
borrowings |
70,406 |
|
|
|
|
0.63 |
|
|
74,214 |
|
|
|
|
0.53 |
|
Subordinated debentures payable to
trusts |
24,661 |
|
|
|
|
4.55 |
|
|
24,658 |
|
|
|
|
4.39 |
|
Total interest-bearing
liabilities |
875,236 |
|
|
|
|
0.61 |
% |
|
885,640 |
|
|
|
|
0.58 |
% |
Noninterest-bearing deposits |
136,876 |
|
|
|
|
150,422 |
|
|
|
Other liabilities |
32,125 |
|
|
|
|
28,921 |
|
|
|
Total liabilities |
1,044,237 |
|
|
|
|
1,064,983 |
|
|
|
Equity |
108,949 |
|
|
|
|
107,617 |
|
|
|
Total liabilities and
equity |
$ |
1,153,186 |
|
|
|
|
$ |
1,172,600 |
|
|
|
Net interest
spread(4) |
|
|
|
|
3.47 |
% |
|
|
|
|
|
3.34 |
% |
Net interest
margin(4)(5) |
|
|
|
|
3.58 |
% |
|
|
|
|
|
3.45 |
% |
Net interest margin,
TE(6) |
|
|
|
|
3.64 |
% |
|
|
|
|
|
3.51 |
% |
Return on average
assets(7) |
|
|
|
|
0.72 |
% |
|
|
|
|
|
0.50 |
% |
Return on average
equity(8) |
|
|
|
|
7.64 |
% |
|
|
|
|
|
5.46 |
% |
_____________________________________(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 March 31, 2016 and
December 31, 2015 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 |
Nine Months Ended |
|
March 31, 2016 |
|
March 31, 2015 |
|
AverageOutstandingBalance |
|
Yield/Rate |
|
AverageOutstandingBalance |
|
Yield/Rate |
Interest-earning
assets: |
|
|
|
|
|
|
|
Loans and leases
receivable(1)(3) |
$ |
911,184 |
|
|
|
|
4.41 |
% |
|
$ |
842,062 |
|
|
|
|
4.52 |
% |
Investment securities(2)(3) |
179,070 |
|
|
|
|
1.75 |
|
|
316,305 |
|
|
|
|
1.32 |
|
Total interest-earning
assets |
1,090,254 |
|
|
|
|
3.97 |
% |
|
1,158,367 |
|
|
|
|
3.64 |
% |
Noninterest-earning assets |
75,612 |
|
|
|
|
76,064 |
|
|
|
Total assets |
$ |
1,165,866 |
|
|
|
|
$ |
1,234,431 |
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
Checking and money market |
$ |
394,784 |
|
|
|
|
0.26 |
% |
|
$ |
395,476 |
|
|
|
|
0.24 |
% |
Savings |
107,045 |
|
|
|
|
0.20 |
|
|
118,616 |
|
|
|
|
0.20 |
|
Certificates of deposit |
277,135 |
|
|
|
|
0.86 |
|
|
280,474 |
|
|
|
|
0.85 |
|
Total interest-bearing
deposits |
778,964 |
|
|
|
|
0.46 |
|
|
794,566 |
|
|
|
|
0.45 |
|
FHLB advances and other
borrowings |
75,542 |
|
|
|
|
0.52 |
|
|
131,175 |
|
|
|
|
1.66 |
|
Subordinated debentures payable to
trusts |
24,658 |
|
|
|
|
4.56 |
|
|
24,837 |
|
|
|
|
4.75 |
|
Total interest-bearing
liabilities |
879,164 |
|
|
|
|
0.58 |
% |
|
950,578 |
|
|
|
|
0.73 |
% |
Noninterest-bearing deposits |
147,821 |
|
|
|
|
148,988 |
|
|
|
Other liabilities |
31,340 |
|
|
|
|
32,262 |
|
|
|
Total liabilities |
1,058,325 |
|
|
|
|
1,131,828 |
|
|
|
Equity |
107,541 |
|
|
|
|
102,603 |
|
|
|
Total liabilities and
equity |
$ |
1,165,866 |
|
|
|
|
$ |
1,234,431 |
|
|
|
Net interest
spread(4) |
|
|
|
|
3.39 |
% |
|
|
|
|
|
2.91 |
% |
Net interest
margin(4)(5) |
|
|
|
|
3.50 |
% |
|
|
|
|
|
3.05 |
% |
Net interest margin,
TE(6) |
|
|
|
|
3.56 |
% |
|
|
|
|
|
3.11 |
% |
Return on average
assets(7) |
|
|
|
|
0.84 |
% |
|
|
|
|
|
0.18 |
% |
Return on average
equity(8) |
|
|
|
|
9.16 |
% |
|
|
|
|
|
2.16 |
% |
_____________________________________(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 nine months ended March 31, 2016 and
March 31, 2015 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) |
|
March 31,
2016 |
|
Accruing and Nonaccruing Loans |
|
Nonperforming Loans |
|
|
30 -
59DaysPastDue |
|
60 -
89DaysPastDue |
|
GreaterThan89
Days |
|
TotalPastDue |
|
Current |
|
RecordedInvestment
>90 Days andAccruing
(1) |
|
NonaccrualBalance |
|
Total |
Residential: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to four-family |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
15 |
|
|
$ |
15 |
|
|
$ |
57,858 |
|
|
$ |
15 |
|
|
$ |
107 |
|
|
$ |
122 |
|
Construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
7,485 |
|
|
— |
|
|
— |
|
|
— |
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business |
|
— |
|
|
— |
|
|
3 |
|
|
3 |
|
|
65,907 |
|
|
— |
|
|
1,277 |
|
|
1,277 |
|
Equipment finance leases |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
88 |
|
|
— |
|
|
— |
|
|
— |
|
Commercial real
estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
— |
|
|
— |
|
|
247 |
|
|
247 |
|
|
337,904 |
|
|
— |
|
|
481 |
|
|
481 |
|
Multi-family real estate |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
126,090 |
|
|
— |
|
|
5,207 |
|
|
5,207 |
|
Construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
49,293 |
|
|
— |
|
|
— |
|
|
— |
|
Agricultural: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural real estate |
|
454 |
|
|
— |
|
|
— |
|
|
454 |
|
|
81,188 |
|
|
— |
|
|
3,153 |
|
|
3,153 |
|
Agricultural business |
|
190 |
|
|
400 |
|
|
334 |
|
|
924 |
|
|
99,931 |
|
|
— |
|
|
5,461 |
|
|
5,461 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer direct |
|
24 |
|
|
— |
|
|
2 |
|
|
26 |
|
|
13,709 |
|
|
— |
|
|
26 |
|
|
26 |
|
Consumer home equity |
|
15 |
|
|
60 |
|
|
79 |
|
|
154 |
|
|
48,717 |
|
|
— |
|
|
108 |
|
|
108 |
|
Consumer OD & reserve |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2,234 |
|
|
— |
|
|
— |
|
|
— |
|
Total |
|
$ |
683 |
|
|
$ |
460 |
|
|
$ |
680 |
|
|
$ |
1,823 |
|
|
$ |
890,404 |
|
|
$ |
15 |
|
|
$ |
15,820 |
|
|
$ |
15,835 |
|
December 31,
2015 |
|
Accruing and Nonaccruing Loans |
|
Nonperforming Loans |
|
|
30 -
59DaysPastDue |
|
60 -
89DaysPastDue |
|
GreaterThan89
Days |
|
TotalPastDue |
|
Current |
|
RecordedInvestment
>90 Days andAccruing
(1) |
|
NonaccrualBalance |
|
Total |
Residential: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to four-family |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
59,911 |
|
|
$ |
— |
|
|
$ |
108 |
|
|
$ |
108 |
|
Construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
7,336 |
|
|
— |
|
|
— |
|
|
— |
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business |
|
— |
|
|
476 |
|
|
3 |
|
|
479 |
|
|
69,068 |
|
|
— |
|
|
1,495 |
|
|
1,495 |
|
Equipment finance leases |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
101 |
|
|
— |
|
|
— |
|
|
— |
|
Commercial real
estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
— |
|
|
— |
|
|
247 |
|
|
247 |
|
|
334,353 |
|
|
— |
|
|
522 |
|
|
522 |
|
Multi-family real estate |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
108,816 |
|
|
— |
|
|
— |
|
|
— |
|
Construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
71,629 |
|
|
— |
|
|
— |
|
|
— |
|
Agricultural: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural real estate |
|
— |
|
|
— |
|
|
767 |
|
|
767 |
|
|
84,684 |
|
|
— |
|
|
3,900 |
|
|
3,900 |
|
Agricultural business |
|
— |
|
|
— |
|
|
772 |
|
|
772 |
|
|
99,662 |
|
|
— |
|
|
4,626 |
|
|
4,626 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer direct |
|
37 |
|
|
40 |
|
|
156 |
|
|
233 |
|
|
14,244 |
|
|
— |
|
|
30 |
|
|
30 |
|
Consumer home equity |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
50,734 |
|
|
— |
|
|
207 |
|
|
207 |
|
Consumer OD & reserve |
|
4 |
|
|
— |
|
|
— |
|
|
4 |
|
|
2,530 |
|
|
— |
|
|
— |
|
|
— |
|
Total |
|
$ |
41 |
|
|
$ |
516 |
|
|
$ |
1,945 |
|
|
$ |
2,502 |
|
|
$ |
903,068 |
|
|
$ |
— |
|
|
$ |
10,888 |
|
|
$ |
10,888 |
|
____________________________________(1)
Loans accruing and delinquent greater than 90 days have government
guarantees or acceptable loan-to-value ratios.
HF Financial Corp. |
Non-GAAP Disclosure
Reconciliations |
(Dollars in Thousands, except share
data) |
(Unaudited) |
|
Reconciliation of Net Interest Margin to Net Interest
Margin-Tax Equivalent Yield |
|
|
Three Months Ended |
|
Nine Months Ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
March 31, |
|
2016 |
|
2015 |
|
2015 |
|
2016 |
|
2015 |
Net interest
income |
$ |
9,602 |
|
|
$ |
9,486 |
|
|
$ |
8,849 |
|
|
$ |
28,695 |
|
|
$ |
26,499 |
|
Taxable
equivalent adjustment |
162 |
|
|
172 |
|
|
183 |
|
|
504 |
|
|
561 |
|
Adjusted net
interest income |
9,764 |
|
|
9,658 |
|
|
9,032 |
|
|
29,199 |
|
|
27,060 |
|
Average
interest-earning assets |
1,078,885 |
|
|
1,095,130 |
|
|
1,100,841 |
|
|
1,090,254 |
|
|
1,158,367 |
|
Net interest
margin, TE |
3.64 |
% |
|
3.51 |
% |
|
3.33 |
% |
|
3.56 |
% |
|
3.11 |
% |
Reconciliation of GAAP Earnings and Core
Earnings
Although core earnings are not a measure of performance
calculated in accordance with GAAP, the Company believes that its
core earnings are an important indication of performance through
ongoing operations. The Company believes that core earnings are
useful to management and investors in evaluating its ongoing
operating performance, and in comparing its performance with other
companies in the banking industry. Core earnings should not be
considered in isolation or as a substitute for GAAP earnings.
During the periods presented, the Company calculated core earnings
by adding back or subtracting, net of tax, net gain or loss on the
sale of securities, charges incurred from prepayment of borrowings,
gain on sale of bank branch, merger related costs, and costs
incurred for branch closures.
|
Three Months Ended |
|
Nine Months Ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
March 31, |
|
2016 |
|
2015 |
|
2015 |
|
2016 |
|
2015 |
GAAP earnings
before income taxes |
$ |
3,072 |
|
|
$ |
2,171 |
|
|
$ |
842 |
|
|
$ |
11,185 |
|
|
$ |
1,869 |
|
Net (gain) loss
on sale of securities |
— |
|
|
(15 |
) |
|
1,076 |
|
|
(20 |
) |
|
1,117 |
|
Charges
incurred from prepayment of borrowings (1) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,065 |
|
Gain on sale of
bank branch |
— |
|
|
— |
|
|
— |
|
|
(2,847 |
) |
|
— |
|
Net (gain) on
sale of property |
— |
|
|
— |
|
|
(313 |
) |
|
— |
|
|
(249 |
) |
Merger related
costs (2) |
350 |
|
|
712 |
|
|
— |
|
|
1,062 |
|
|
— |
|
Costs incurred
for branch closures (3) |
— |
|
|
— |
|
|
695 |
|
|
— |
|
|
896 |
|
Core earnings
before income taxes |
3,422 |
|
|
2,868 |
|
|
2,300 |
|
|
9,380 |
|
|
7,698 |
|
Provision for
income tax on core earnings |
1,136 |
|
|
958 |
|
|
677 |
|
|
3,100 |
|
|
2,421 |
|
Core
earnings |
$ |
2,286 |
|
|
$ |
1,910 |
|
|
$ |
1,623 |
|
|
$ |
6,280 |
|
|
$ |
5,277 |
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted
earnings per share |
$ |
0.29 |
|
|
$ |
0.21 |
|
|
$ |
0.10 |
|
|
$ |
1.05 |
|
|
$ |
0.24 |
|
Net (gain) loss
on sale of securities, net of tax |
— |
|
|
— |
|
|
0.10 |
|
|
— |
|
|
0.10 |
|
Charges
incurred from prepayment of borrowings, net of tax |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.36 |
|
Gain on sale of
bank branch, net of tax |
— |
|
|
— |
|
|
— |
|
|
(0.25 |
) |
|
— |
|
Net (gain) on
sale of property, net of tax |
— |
|
|
— |
|
|
(0.03 |
) |
|
— |
|
|
(0.02 |
) |
Merger related
costs, net of tax |
0.03 |
|
|
0.06 |
|
|
— |
|
|
0.08 |
|
|
— |
|
Costs incurred
for branch closures, net of tax |
— |
|
|
— |
|
|
0.06 |
|
|
— |
|
|
0.07 |
|
Core diluted
earnings per share |
$ |
0.32 |
|
|
$ |
0.27 |
|
|
$ |
0.23 |
|
|
$ |
0.88 |
|
|
$ |
0.75 |
|
(1) Charges incurred from prepayment of borrowings is included
as Other noninterest expense on the income statement.(2) Costs
incurred are included as professional fees, compensation and
employee benefits and other noninterest expense on the income
statement.(3) Branch closure costs include loss on disposal of
closed branch fixed assets in noninterest income and other
costsassociated with the closure and are included in the respective
categories within noninterest expenses.
HF FINANCIAL CORP.
Media Contact:
Stephen Bianchi, 605-333-7556
sbianchi@homefederal.com
Investor Relations Contact:
Pamela F Russo, 605-333-7558
prusso@homefederal.com
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