HF FINANCIAL CORP. 
By
Revenue inclusive of net interest income and non-interest income totaled
For the quarter, non-interest income was
"We continue to deepen the relationships with existing customers and that
drives the increase in our revenues," said
The company previously announced participation in the US Treasury Capital
Purchase Program ("CPP"). This transaction closed on
"HF Financial Corp. did not seek out the CPP stimulus funding," Hage said. "We have always done our part for economic development in our markets. However, we chose to participate in the CPP program because our government asked us to and because our participation will strengthen our capacity to serve the economic needs of our markets during the recovery from these challenging economic times."
The ratio of non-performing loans and leases to total loans and leases at
the end of the second quarter of fiscal year 2009 was 0.50 percent, compared
to 0.39 percent at the end of the second quarter in the prior year period.
Net loan and lease recoveries of
"The bank has not experienced the non performing loan or charge off levels
experienced by others in the banking industry," said
Non-interest expense grew
Second Quarter Year-to-Date Results
For the six months ended
Net interest income for the first six months of the fiscal year totaled
Non-interest income for the six months ended
Non-interest expense during the first six months of fiscal 2008 increased
Average earning assets increased 13.1 percent, yielding 5.88 percent for
the six months ended
Balance Sheet Performance
Loans and leases receivable at
Total non-performing assets increased
The company has trust preferred securities in its investment portfolio that are currently impaired under applicable accounting rules. The reduction in fair value compared to the historical cost is recorded as an after tax reduction to capital on the balance sheet. Currently, the company expects to receive interest and principal payments on these trust preferred securities as contracted. If based on the judgment of management it becomes probable that these securities will not receive all of the contractual payments, the reduction in after tax fair value will be reversed in the equity section and recorded as a charge in the income statement, which will then decrease capital by the same amount.
Deposits at
Quarterly Dividend Declared
The company announced it will pay a quarterly cash dividend of
The company also announced a quarterly cash dividend on its Fixed Rate
Cumulative Perpetual Preferred Stock (Series A) issued to the U.S. Treasury
Department under its voluntary Capital Purchase Program. The dividend amount
is equal to
Second Quarter Fiscal 2009 Conference Call and Webcast
The company will host its quarterly conference calls and webcasts to
discuss its quarterly financial and operational results. The conference call
and webcast is scheduled for
When: Tuesday, January 27, 2009
Conference call: 9:00 am CT / 10:00 am ET
Dial-in Number: 1-877-407-8031
Call ID: HF Financial Second Quarter Fiscal 2009 Earnings Conference Call
Webcast: To listen to a live Webcast of the presentations, go to the
Investor Relations page of the HF Financial website site,
http://www.homefederal.com, and then the Webcast icon. The Webcast replay
will be available from
Replay: If you do not have Internet access and want to listen to an audio
replay, call 1-877-660-6853 using Account #: 286, Conference ID #: 309735. The
audio replay will be available beginning at
About HF Financial
HF Financial Corp., based in
Forward-Looking Statements
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, 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 rate 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 company's use of trust preferred securities; 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; or other significant uncertainties.
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 Highlights
(Dollars in Thousands, except share data)
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
2008 2007 2008 2007
Interest, dividend and loan
fee income:
Loans and leases
receivable $12,646 $13,879 $25,664 $27,999
Investment securities and
interest-earning
deposits 2,920 2,206 5,733 4,071
15,566 16,085 31,397 32,070
Interest expense:
Deposits 4,132 6,913 8,709 14,411
Advances from Federal
Home Loan Bank
and other borrowings 2,427 2,176 4,992 3,995
6,559 9,089 13,701 18,406
Net interest
income 9,007 6,996 17,696 13,664
Provision for losses on loans
and leases - 295 387 620
Net interest
income after
provision
for
losses
on
loans
and
leases 9,007 6,701 17,309 13,044
Noninterest income:
Fees on deposits 1,518 1,355 3,069 2,768
Loan servicing income 534 542 1,091 1,047
Gain on sale of loans,
net 285 439 536 698
Trust income 153 249 375 498
Gain on sale of
securities, net 45 - 125 -
Other 394 381 782 770
2,929 2,966 5,978 5,781
Noninterest expense:
Compensation and employee
benefits 5,828 4,788 10,949 9,231
Occupancy and equipment 1,012 981 1,989 1,918
Foreclosed real estate
and other properties,
net 96 37 213 80
Other 2,240 1,902 4,428 3,623
9,176 7,708 17,579 14,852
Income before
income taxes 2,760 1,959 5,708 3,973
Income tax expense 914 708 1,887 1,375
Net income $1,846 $1,251 $3,821 $2,598
Basic earnings per share: $0.46 $0.32 $0.96 $0.65
Diluted earnings per
share: $0.46 $0.31 $0.95 $0.64
Basic weighted average
shares: 4,007,870 3,955,388 3,989,962 3,984,376
Diluted weighted average
shares: 4,023,791 4,009,060 4,019,280 4,043,022
Outstanding shares (end
of period): 4,021,367 3,966,345 4,021,367 3,966,345
HF Financial Corp.
Selected Consolidated Financial Condition Data
(Dollars in Thousands, except share data)
(Unaudited)
12/31/2008 6/30/2008 12/31/2007
Balance Sheet Data
Total assets $1,173,152 $1,103,494 $1,020,649
Cash and cash equivalents 25,882 21,170 24,042
Securities available for sale 254,389 225,004 164,352
Loans and leases receivable, net 803,156 777,777 754,458
Loans held for sale 14,027 8,796 5,536
In-Market Deposits 750,300 756,982 752,815
Out-of-Market Deposits 22,617 27,255 19,081
Advances from Federal Home Loan
Bank and other borrowings 252,769 198,454 130,457
Subordinated debentures payable
to trusts 27,837 27,837 27,837
Stockholders' equity 91,660 64,203 64,439
Stockholders' equity before OCI
(1) to consolidated assets 8.21 % 6.11 % 6.39 %
OCI components to consolidated
assets:
Net changes in unrealized
gain (loss) on securities
available
for sale (0.23) (0.19) (0.02)
Net unrealized losses on
defined benefit plan (0.07) (0.08) (0.01)
Net unrealized losses on
derivatives and hedging
activities (0.06) (0.01) (0.02)
Goodwill to consolidated
assets (0.42) (0.45) (0.48)
Tangible capital to consolidated
assets 7.42 % 5.39 % 5.86 %
Book value per common share (2) $16.58 $16.25 $16.25
Tier I (core) capital (3) 8.00 % 7.78 % 8.39 %
Risk-based capital (3) 11.40 % 10.83 % 11.16 %
Number of full-service offices 33 33 33
(1) Accumulated other comprehensive income (loss)
(2) Common equity 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, Except per Share Data)
(Unaudited)
Loan and Lease Portfolio Composition
December 31, 2008 June 30, 2008
Amount Percent Amount Percent
(Dollars in Thousands)
One-to four-family (1) $92,972 11.46% $99,989 12.76%
Commercial business and real
estate (2) (3) 307,458 37.90% 303,415 38.72%
Multi-family real estate 45,912 5.66% 45,093 5.75%
Equipment finance leases 18,985 2.34% 19,288 2.46%
Consumer direct (4) 112,688 13.89% 105,719 13.49%
Consumer indirect (5) 31,421 3.87% 44,294 5.65%
Agricultural 191,556 23.61% 160,267 20.45%
Construction and development 10,297 1.27% 5,645 0.72%
Total Loans and Leases
Receivable (6) $811,289 100.00% $783,710 100.00%
(1) Excludes $10,710 and $7,958 loans held for sale at December 31, 2008
and June 30, 2008, respectively.
(2) Includes $2,912 and $3,012 tax exempt leases at December 31, 2008 and
June 30, 2008, respectively.
(3) Excludes $0 and $223 commercial loans held for sale at December 31,
2008 and June 30, 2008, respectively.
(4) Excludes $3,318 and $614 student loans held for sale at December 31,
2008 and June 30, 2008, respectively.
(5) The Company announced Consumer Indirect originations ceased during
the first quarter of Fiscal 2008.
(6) Includes deferred loan fees and discounts and undisbursed portion of
loans in process.
Deposit Composition
December 31, 2008 June 30, 2008
Amount Percent Amount Percent
(Dollars in Thousands)
Noninterest bearing checking
accounts $88,762 11.48% $90,598 11.55%
Interest bearing checking accounts 87,486 11.32% 90,125 11.49%
Money market accounts 155,123 20.07% 171,689 21.89%
Savings accounts 73,518 9.51% 78,575 10.02%
In-market certificates of deposit 345,411 44.69% 325,995 41.57%
Out-of-market certificates of
deposit 22,617 2.93% 27,255 3.48%
Total Deposits $772,917 100.00% $784,237 100.00%
HF Financial Corp.
Selected Consolidated Financial Condition Data
(Dollars in Thousands)
(Unaudited)
Allowance for Loan and Lease Loss Activity
Three Months Ended Six Months Ended
12/31/2008 12/31/2007 12/31/2008 12/31/2007
Balance, beginning $6,183 $5,493 $5,933 $5,872
Provision charged to income - 295 387 620
Charge-offs (321) (434) (513) (1,215)
Recoveries 2,271 70 2,326 147
Balance, ending $8,133 $5,424 $8,133 $5,424
12/31/2008 6/30/2008 12/31/2007
Asset Quality
Nonaccruing loans and leases $1,939 $2,324 $1,840
Accruing loans and leases
delinquent more than 90 days 2,165 781 1,128
Foreclosed assets 370 643 458
Total nonperforming assets $4,474 $3,748 $3,426
FAS Statement No. 5 Allowance for
loan and lease losses $7,876 $5,803 $5,294
FAS Statement No. 114 Impaired
loan valuation allowance 257 130 130
Total allowance for loans and
lease losses $8,133 $5,933 $5,424
Ratio of nonperforming assets to
total assets at end of period (1) 0.38% 0.34% 0.34%
Ratio of nonperforming loans and
leases to total loans and
leases at end of period (2) 0.50% 0.39% 0.39%
Ratio of allowance for loan and
lease losses to total loans and
leases at end of period 0.99% 0.75% 0.71%
Ratio of allowance for loan and
lease losses to nonperforming
loans and leases at end of
period (2) 198.17% 191.08% 182.75%
(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.
HF Financial Corp.
Selected Consolidated Financial Condition Data
(Dollars in Thousands)
(Unaudited)
Average Balances, Interest Yields and Rates
Six Months Ended
12/31/2008 12/31/2007
Yield/ Yield/
Average Rate Average Rate
Interest-earning assets:
Loans and leases receivable
(1) (3) $812,657 6.26% $775,583 7.18%
Investment securities (2) (3) 246,529 4.61% 160,609 5.04%
Total interest-earning assets 1,059,186 5.88% 936,192 6.81%
Noninterest-earning assets 66,864 70,686
Total assets $1,126,050 $1,006,878
Interest-bearing liabilities:
Deposits:
Checking and money market $241,027 1.17% $275,962 3.36%
Savings 67,284 1.14% 51,096 2.66%
Certificates of deposit 376,546 3.64% 367,672 4.91%
Total interest-bearing
deposits 684,857 2.52% 694,730 4.13%
FHLB advances and other borrowings 233,055 3.45% 114,057 4.88%
Subordinated debentures payable to
trusts (4) 27,837 6.67% 27,837 8.57%
Total interest-bearing liabilities 945,749 2.87% 836,624 4.38%
Noninterest-bearing deposits 75,263 79,743
Other liabilities 32,706 27,349
Total liabilities 1,053,718 943,716
Equity 72,332 63,162
Total liabilities and equity $1,126,050 $1,006,878
Net interest spread (5) 3.01% 2.43%
Net interest margin (5) (6) 3.31% 2.90%
Net interest margin, TE (7) 3.37% 2.96%
Return on average assets (8) 0.67% 0.51%
Return on average equity (9) 10.48% 8.18%
(1) Includes loan fees and interest on accruing loans and leases past due
90 days or more.
(2) Includes federal funds sold and Federal Home Loan Bank stock.
(3) Yields do not reflect the tax exempt nature of loans, equipment
leases and municipal securities.
(4) Includes $125 expense in July 2007 for unamortized debt issuance
costs.
(5) Percentages for the six months ended December 31, 2008 and December
31,2007 have been annualized.
(6) Net interest margin is net interest income divided by average
interest-earning assets.
(7) Net interest margin expressed on a fully taxable equivalent basis.
(8) Ratio of net income to average total assets.
(9) Ratio of net income to average equity.
SOURCE HF Financial Corp.
