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8-K - HMN FINANCIAL, INC. 8-K - HMN FINANCIAL INC | a50617661.htm |
EX-3.1 - EXHIBIT 3.1 - HMN FINANCIAL INC | a50617661ex3_1.htm |
Exhibit 99
HMN Financial, Inc. Announces First Quarter Results
ROCHESTER, Minn.--(BUSINESS WIRE)--April 19, 2013--HMN Financial, Inc. (NASDAQ:HMNF):
First Quarter Highlights
- Net income of $0.7 million, a decrease of $2.1 million, compared to net income of $2.8 million in the first quarter of 2012
- Diluted earnings per common share of $0.06, a decrease of $0.52, compared to diluted earnings per common share of $0.58 in the first quarter of 2012
- Provision for loan losses of $0, an increase of $0.1 million, compared to a provision for loan losses of ($0.1 million) in first quarter of 2012
- Non-performing assets of $38.7 million, down $1.9 million from fourth quarter of 2012
- Total assets decreased $26 million in first quarter of 2013
EARNINGS SUMMARY (unaudited) |
Three Months Ended |
||||||||
March 31, |
|||||||||
(dollars in thousands, except per share amounts) | 2013 | 2012 | |||||||
Net income | $ | 741 | 2,804 | ||||||
Net income available to common stockholders | 265 | 2,343 | |||||||
Diluted earnings per common share | 0.06 | 0.58 | |||||||
Return on average assets | 0.48 | % | 1.57 | % | |||||
Return on average common equity | 4.90 | % | 19.32 | % | |||||
Book value per common share | $ | 8.07 | 7.81 | ||||||
HMN Financial, Inc. (HMN or the Company) (NASDAQ:HMNF), the $627 million holding company for Home Federal Savings Bank (the Bank), today reported net income of $0.7 million for the first quarter of 2013, a decrease of $2.1 million compared to net income of $2.8 million for the first quarter of 2012. Net income available to common shareholders was $0.3 million for the first quarter of 2013, a decrease of $2.0 million from the net income available to common shareholders of $2.3 million for the first quarter of 2012. Diluted earnings per common share for the first quarter of 2013 were $0.06, a decrease of $0.52 from the diluted earnings per common share of $0.58 for the first quarter of 2012. The decrease in net income between the periods was due primarily to a $1.3 million decrease in net interest income as a result of a decrease in interest earning assets, a $0.6 million decrease in the gain recognized on the sales of branch offices, and a $0.2 million decrease in the gains recognized on loan sales due to a decrease in the sale of commercial government guaranteed loans.
President’s Statement
“We are pleased to report earnings
for the first quarter of 2013 and the continued reduction in our
non-performing assets,” said Home Federal Savings Bank President and
Chief Executive Officer, Bradley Krehbiel. “We continue to focus our
efforts on improving credit quality and reducing non-performing assets
in the most cost effective manner while at the same time reducing
expenses to reflect the decreased size of our balance sheet. We believe
that, over time, our focus on these areas will be effective in
generating improved financial results.”
First Quarter Results
Net Interest Income
Net interest income was $4.9 million for
the first quarter of 2013, a decrease of $1.3 million, or 20.6%,
compared to $6.2 million for the first quarter of 2012. Interest income
was $6.3 million for the first quarter of 2013, a decrease of $2.0
million, or 23.6%, from $8.3 million for the first quarter of 2012.
Interest income decreased between the periods primarily because of a
$109 million decrease in the average interest-earning assets between the
periods. Average interest-earning assets decreased between the periods
primarily because of a decrease in the commercial loan portfolio, which
occurred because of limited loan demand and the Company’s focus on
improving credit quality, reducing loan concentrations, managing
interest rate risk and improving capital ratios. Interest income also
decreased because of lower average yields on loans and investment
securities. The average yield earned on interest-earning assets was
4.28% for the first quarter of 2013, a decrease of 42 basis points from
the 4.70% average yield for the first quarter of 2012.
Interest expense was $1.4 million for the first quarter of 2013, a decrease of $0.7 million, or 32.5%, compared to $2.1 million for the first quarter of 2012. Interest expense decreased primarily because of a $124 million decrease in the average interest-bearing liabilities between the periods. The decrease in average interest-bearing liabilities is primarily the result of a decrease in the outstanding brokered and retail certificates of deposits between the periods. The decrease in brokered and retail certificates of deposits between the periods was the result of using the proceeds from loan principal payments to fund maturing certificates. Interest expense also decreased because of the lower average interest rates paid on money market accounts and certificates of deposits. The decreased rates were the result of the low interest rate environment that continued to exist during the first quarter of 2013. The average interest rate paid on interest-bearing liabilities was 1.02% for the first quarter of 2013, a decrease of 20 basis points from the 1.22% average interest rate paid in the first quarter of 2012. Net interest margin (net interest income divided by average interest earning assets) for the first quarter of 2013 was 3.34%, a decrease of 19 basis points compared to 3.53% for the first quarter of 2012.
Provision for Loan Losses
The provision for loan losses was $0
for the first quarter of 2013, an increase of $0.1 million compared to
($0.1 million) for the first quarter of 2012. The provision for loan
losses remained low in the first quarter of 2013 primarily because the
decrease in the required reserves for certain risk rated commercial
loans was entirely offset by additional specific reserves on certain
development loans. These additional reserves were the result of a
decrease in the estimated value of the underlying collateral supporting
these loans. Total non-performing assets were $38.7 million at March 31,
2013, a decrease of $1.9 million, or 4.6%, from $40.6 million at
December 31, 2012. Non-performing loans decreased $1.2 million and
foreclosed and repossessed assets decreased $0.7 million during the
first quarter of 2013. The non-performing loan and foreclosed and
repossessed asset activity for the first quarter of 2013 was as follows:
(Dollars in thousands) |
|||||||||||||
Non-performing loans | Foreclosed and repossessed assets | ||||||||||||
January 1, 2013 | $ | 29,975 | January 1, 2013 | $ | 10,595 | ||||||||
Classified as non-performing | 861 | Transferred from non-performing loans | 0 | ||||||||||
Charge offs | (346 | ) | Other payments received | (68 | ) | ||||||||
Principal payments received | (1,355 | ) | Real estate sold | (628 | ) | ||||||||
Classified as accruing |
(373 |
) | Net gain on sale of assets | 136 | |||||||||
Transferred to real estate owned | 0 | Write downs |
(117 |
) | |||||||||
March 31, 2013 | $ | 28,762 | March 31, 2013 | $ | 9,918 | ||||||||
A reconciliation of the Company’s allowance for loan losses for the first quarters of 2013 and 2012 is summarized as follows:
(Dollars in thousands) | 2013 | 2012 | ||||||||
Balance at January 1, | $ | 21,608 | $ | 23,888 | ||||||
Provision | 0 | (128 | ) | |||||||
Charge offs: | ||||||||||
Consumer | (46 | ) | (265 | ) | ||||||
Commercial business | 0 | (8 | ) | |||||||
Commercial real estate | (337 | ) | (2,630 | ) | ||||||
Recoveries | 716 | 567 | ||||||||
Balance at March 31, | $ | 21,941 | $ | 21,424 | ||||||
General allowance | $ | 13,614 | $ | 13,913 | ||||||
Specific allowance | 8,327 | 7,511 | ||||||||
$ | 21,941 | $ | 21,424 | |||||||
The following table summarizes the amounts and categories of non-performing assets in the Bank’s portfolio and loan delinquency information as of the end of the two most recently completed quarters.
March 31, | December 31, | |||||||||
(Dollars in thousands) | 2013 | 2012 | ||||||||
Non-Performing Loans: | ||||||||||
One-to-four family real estate | $ | 2,127 | $ | 2,492 | ||||||
Commercial real estate | 24,590 | 25,543 | ||||||||
Consumer | 334 | 300 | ||||||||
Commercial business | 1,711 | 1,640 | ||||||||
Total | 28,762 | 29,975 | ||||||||
Foreclosed and Repossessed Assets: | ||||||||||
One-to-four family real estate | 1,114 | 1,595 | ||||||||
Commercial real estate | 8,804 | 9,000 | ||||||||
Total non-performing assets | $ | 38,680 | $ | 40,570 | ||||||
Total as a percentage of total assets | 6.17 | % | 6.21 | % | ||||||
Total non-performing loans | $ | 28,762 | $ | 29,975 | ||||||
Total as a percentage of total loans receivable, net | 6.62 | % | 6.60 | % | ||||||
Allowance for loan loss to non-performing loans | 76.29 | % | 72.09 | % | ||||||
Delinquency Data: | ||||||||||
Delinquencies (1) | ||||||||||
30+ days | $ | 3,613 | $ | 2,739 | ||||||
90+ days (2) | 4 | 7,423 | ||||||||
Delinquencies as a percentage of | ||||||||||
Loan and lease portfolio (1) | ||||||||||
30+ days | 0.76 | % | 0.57 | % | ||||||
90+ days | 0.00 | % | 1.55 | % | ||||||
(1) Excludes non-accrual loans.
(2) Loans
delinquent for 90 days and over are generally non-accruing and are
included in the Company’s non-performing asset total unless they are
well secured and in the process of collection.
The following table summarizes the number and types of commercial real estate loans (the largest category of non-performing loans) that were non-performing as of the end of the two most recently completed quarters.
|
|
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|
Principal Amount |
Principal Amount | ||||||||||||
(Dollars in thousands) |
of Loans at |
of Loans at | ||||||||||||
# of | March 31, | # of | December 31, | |||||||||||
Property Type |
relationships | 2013 | relationships | 2012 | ||||||||||
Developments/land | 10 | $ | 23,854 | 9 | $ | 24,339 | ||||||||
Shopping centers/retail | 1 | 69 | 2 | 386 | ||||||||||
Restaurants/bar | 1 | 526 | 1 | 547 | ||||||||||
Office buildings | 0 | 0 | 2 | 128 | ||||||||||
Other buildings | 1 | 141 | 1 | 143 | ||||||||||
13 | $ | 24,590 | 15 | $ | 25,543 | |||||||||
The following table summarizes the number of lending relationships and industry of commercial business loans that were non-performing as of the end of the two most recently completed quarters.
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|
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Principal Amount |
Principal Amount | |||||||||||||
(Dollars in thousands) |
of Loans at |
of Loans at | ||||||||||||
# of | March 31, | # of | December 31, | |||||||||||
Industry Type |
relationships | 2013 | relationships | 2012 | ||||||||||
Construction/development | 7 | $ | 1,007 | 6 | $ | 1,074 | ||||||||
Retail | 2 | 406 | 2 | 239 | ||||||||||
Restaurant | 1 | 124 | 1 | 129 | ||||||||||
Other | 3 | 174 | 3 | 198 | ||||||||||
13 | $ | 1,711 | 12 | $ | 1,640 | |||||||||
Non-Interest Income and Expense
Non-interest income was $1.9
million for the first quarter of 2013, a decrease of $0.8 million, or
30.7%, from $2.7 million for the first quarter of 2012. Gain on sale of
branch office decreased $0.6 million as a gain was realized on the sale
of the Toledo, Iowa branch in the first quarter of 2012. Gain on sales
of loans decreased $0.2 million between the periods due to a $0.3
million decrease in the gains recognized on the sale of commercial
government guaranteed loans between the periods that was partially
offset by a $0.1 million increase in the gains recognized on the sale of
single family loans. The increase in the gains recognized on single
family loans was due to an increase in loan originations and sales as a
result of the low interest rate environment that continued to exist
during the first quarter of 2013. Fees and service charges decreased
$40,000 between the periods primarily because of a decrease in debit
card and overdraft charges. Other non-interest income decreased $25,000
between the periods primarily because of a decrease in rental income
realized on other real estate owned. Loan servicing fees increased
$16,000 between the periods because of an increase in the number of
single family loans that are being serviced for others.
Non-interest expense was $6.0 million for the first quarter of 2013, a decrease of $0.2 million, or 3.3%, from $6.2 million for the first quarter of 2012. Compensation expense decreased $0.2 million primarily because of a decrease in the number of employees between the periods. Other non-interest expense decreased $57,000 between the periods primarily because of decreased expenses related to non-performing assets. Deposit insurance expense increased $48,000 between the periods primarily because of an increase in FDIC insurance rates between the periods. The gain on real estate owned decreased $58,000 between the periods because fewer properties were sold. Occupancy expense decreased $32,000 primarily because of a decrease in rent and depreciation expense as a result of having fewer branch facilities.
Income tax expense was $25,000 for the first quarter of 2013, an increase of $25,000 from the first quarter of 2012 when no income tax expense was recorded. In the second quarter of 2010, the Company recorded a deferred tax asset valuation reserve against its entire deferred tax asset balance and the Company continued to maintain a valuation reserve against the entire deferred tax asset balance at March 31, 2013. Since the valuation reserve is established against the entire deferred tax asset balance, no regular income tax expense was recorded for the first quarter of 2013. The income tax expense that was recorded in the first quarter of 2013 relates to alternative minimum tax amounts that are due since only a portion of the outstanding net operating loss carry forwards can be used to offset current income under the current alternative minimum tax rules.
Net Income Available to Common Shareholders
The net income
available to common shareholders was $0.3 million for the first quarter
of 2013, a decrease of $2.0 million from the $2.3 million income
available to common shareholders in the first quarter of 2012. The net
income available to common shareholders decreased primarily because of
the change in the net income between the periods. The Company has
deferred the last nine quarterly dividend payments, beginning with the
February 15, 2011 dividend payment, on its Fixed Rate, Series A,
Cumulative Perpetual Preferred Stock that was originally issued to the
United States Treasury Department as part of the TARP Capital Purchase
Program (the “Preferred Stock”). The deferred dividend payments have
been accrued for payment in the future and are being reported for the
deferral period as a preferred dividend requirement that is deducted
from income for financial statement purposes to arrive at the net income
available to common shareholders.
Under the terms of the certificate of designations for the Preferred Stock, dividend payments may be deferred, but the dividend is cumulative and compounds quarterly during the deferral period. In addition, if the Company fails to pay dividends for six quarters, whether or not consecutive, the holders of the Preferred Stock have the right to appoint two representatives to the Company’s board of directors. On February 8, 2013, the Treasury sold the Preferred Stock to unaffiliated third party investors in a private transaction. The Company has been advised that the current holders of substantially all of the Preferred Stock have entered into agreements with the Federal Reserve Board pursuant to which they have each agreed not to take action, influence over the management or policies of the Company or the Bank, including exercise of any right to elect any representative to the Company’s board of directors. Further, while dividends on the Preferred Stock are in arrears, no dividend may be paid on the common stock of the Company. Under the terms of the Company’s and Bank’s Supervisory Agreements with their federal banking regulators, neither the Company nor the Bank may declare or pay any cash dividends, or purchase or redeem any capital stock, without prior notice to, and consent of these regulators.
Return on Assets and Equity
Return on average assets for the
first quarter of 2013 was 0.48%, compared to 1.57% for the first quarter
of 2012. Return on average equity was 4.90% for the first quarter of
2013, compared to 19.32% for the first quarter of 2012. Book value per
common share at March 31, 2013 was $8.07, compared to $7.81 at March 31,
2012.
General Information
HMN Financial, Inc. and Home Federal
Savings Bank are headquartered in Rochester, Minnesota. Home Federal
Savings Bank operates eight full service offices in Minnesota located in
Albert Lea, Austin, Eagan, La Crescent, Rochester (2), Spring Valley and
Winona; one full service office in Iowa located in Marshalltown; one
loan origination office in Sartell, Minnesota; and two Private Banking
offices in Rochester, Minnesota.
Safe Harbor Statement
This press release may contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are often identified by
such forward-looking terminology as “expect,” “intend,” “look,”
“believe,” “anticipate,” “estimate,” “project,” “seek,” “may,” “will,”
“would,” “could,” “should,” “trend,” “target,” and “goal” or similar
statements or variations of such terms and include, but are not limited
to, those relating to increasing our core deposit relationships,
reducing non-performing assets, reducing expense and generating improved
financial results; the adequacy and amount of available liquidity and
capital resources to the Bank; the Company’s liquidity and capital
requirements; our expectations for core capital and our strategies and
potential strategies for improvement thereof; changes in the size of the
Bank’s loan portfolio; the recovery of the valuation allowance on
deferred tax assets; the amount and mix of the Bank’s non-performing
assets and the appropriateness of the allowance therefor; future losses
on non-performing assets; the amount of interest-earning assets; the
amount and mix of brokered and other deposits (including the Company’s
ability to renew brokered deposits); the availability of alternate
funding sources; the payment of dividends; the future outlook for the
Company; the amount of deposits that will be withdrawn from checking and
money market accounts and how the withdrawn deposits will be replaced;
the projected changes in net interest income based on rate shocks; the
range that interest rates may fluctuate over the next twelve months; the
net market risk of interest rate shocks; the future outlook for the
issuer trust preferred securities held by the Bank; and the Bank’s
compliance with regulatory standards generally (including the Bank’s
status as “well-capitalized”), and supervisory agreements, individual
minimum capital requirements or other supervisory directives or
requirements to which the Company or the Bank are or may become
expressly subject, specifically, and possible responses of the OCC and
FRB and the Bank and the Company to any failure to comply with any such
regulatory standard, agreement or requirement. A number of factors could
cause actual results to differ materially from the Company’s assumptions
and expectations. These include but are not limited to the adequacy and
marketability of real estate and other collateral securing loans to
borrowers; federal and state regulation and enforcement, including
restrictions set forth in the supervisory agreements between each of the
Company and Bank and the OCC and FRB; possible legislative and
regulatory changes, including changes in the degree and manner of
regulatory supervision, the ability of the Company and the Bank to
establish and adhere to plans and policies relating to, among other
things, capital, business, non-performing assets, loan modifications,
documentation of loan loss allowance and concentrations of credit that
are satisfactory to the OCC and FRB, as applicable, in accordance with
the terms of the Company and Bank supervisory agreements and to
otherwise manage the operations of the Company and the Bank to ensure
compliance with other requirements set forth in the supervisory
agreements; the ability of the Company and the Bank to obtain required
consents from the OCC and FRB, as applicable, under the supervisory
agreements or other directives; the ability of the Bank to comply with
its individual minimum capital requirement and other applicable
regulatory capital requirements; enforcement activity of the OCC and FRB
in the event of our non-compliance with any applicable regulatory
standard, agreement or requirement; adverse economic, business and
competitive developments such as shrinking interest margins, reduced
collateral values, deposit outflows, changes in credit or other risks
posed by the Company’s loan and investment portfolios, changes in costs
associated with alternate funding sources, including changes in
collateral advance rates and policies of the Federal Home Loan Bank,
technological, computer-related or operational difficulties, results of
litigation, and reduced demand for financial services and loan products;
changes in accounting policies and guidelines, or monetary and fiscal
policies of the federal government or tax laws; international economic
developments; the Company’s access to and adverse changes in securities
markets; the market for credit related assets; or other significant
uncertainties. Additional factors that may cause actual results to
differ from the Company’s assumptions and expectations include those set
forth in the Company’s most recent filings on Forms 10-K and 10-Q with
the Securities and Exchange Commission. All forward-looking statements
are qualified by, and should be considered in conjunction with, such
cautionary statements. For additional discussion of the risks and
uncertainties applicable to the Company, see the “Risk Factors” sections
of the Company’s Annual Report on Form 10-K for the year ended December
31, 2012 and Part II, Item 1A of its Quarterly Reports on Form 10-Q. We
undertake no duty to update any of the forward-looking statements after
the date of this press release.
HMN FINANCIAL, INC. AND SUBSIDIARIES | |||||||||
Consolidated Balance Sheets | |||||||||
March 31, | December 31, | ||||||||
(Dollars in thousands) | 2013 | 2012 | |||||||
(unaudited) | |||||||||
Assets | |||||||||
Cash and cash equivalents | $ | 72,995 | 83,660 | ||||||
Securities available for sale: | |||||||||
Mortgage-backed and related securities | |||||||||
(amortized cost $8,090 and $9,825) | 8,586 | 10,421 | |||||||
Other marketable securities | |||||||||
(amortized cost $82,773 and $75,759) | 82,438 | 75,470 | |||||||
91,024 | 85,891 | ||||||||
Loans held for sale | 2,210 | 2,584 | |||||||
Loans receivable, net | 434,634 | 454,045 | |||||||
Accrued interest receivable | 1,971 | 2,018 | |||||||
Real estate, net | 9,918 | 10,595 | |||||||
Federal Home Loan Bank stock, at cost | 4,063 | 4,063 | |||||||
Mortgage servicing rights, net | 1,783 | 1,732 | |||||||
Premises and equipment, net | 7,019 | 7,173 | |||||||
Prepaid expenses and other assets | 1,469 | 1,566 | |||||||
Total assets | $ | 627,086 | 653,327 | ||||||
Liabilities and Stockholders’ Equity | |||||||||
Deposits | $ | 487,645 | 514,951 | ||||||
Federal Home Loan Bank advances | 70,000 | 70,000 | |||||||
Accrued interest payable | 173 | 247 | |||||||
Customer escrows | 1,365 | 830 | |||||||
Accrued expenses and other liabilities | 6,850 | 6,465 | |||||||
Total liabilities | 566,033 | 592,493 | |||||||
Commitments and contingencies | |||||||||
Stockholders’ equity: | |||||||||
Serial preferred stock ($.01 par value): | |||||||||
Authorized 500,000 shares; issued shares 26,000 | 25,481 | 25,336 | |||||||
Common stock ($.01 par value): | |||||||||
Authorized 11,000,000; issued shares 9,128,662 | 91 | 91 | |||||||
Additional paid-in capital | 51,691 | 51,795 | |||||||
Retained earnings, subject to certain restrictions | 47,386 | 47,004 | |||||||
Accumulated other comprehensive loss, net of tax | (195 | ) | (49 | ) | |||||
Unearned employee stock ownership plan shares | (2,949 | ) | (2,997 | ) | |||||
Treasury stock, at cost 4,722,418 and 4,705,073 shares | (60,452 | ) | (60,346 | ) | |||||
Total stockholders’ equity | 61,053 | 60,834 | |||||||
Total liabilities and stockholders’ equity | $ | 627,086 | 653,327 | ||||||
HMN FINANCIAL, INC. AND SUBSIDIARIES | |||||||||
Consolidated Statements of Comprehensive Income | |||||||||
(unaudited) | |||||||||
|
Three Months Ended |
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|
March 31, |
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(Dollars in thousands) |
|
2013 |
2012 |
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Interest income: | |||||||||
Loans receivable | $ | 6,028 | 7,796 | ||||||
Securities available for sale: | |||||||||
Mortgage-backed and related | 94 | 193 | |||||||
Other marketable | 139 | 249 | |||||||
Cash equivalents | 33 | 27 | |||||||
Other | 29 | 10 | |||||||
Total interest income | 6,323 | 8,275 | |||||||
Interest expense: | |||||||||
Deposits | 557 | 1,217 | |||||||
Federal Home Loan Bank advances | 835 | 845 | |||||||
Total interest expense | 1,392 | 2,062 | |||||||
Net interest income | 4,931 | 6,213 | |||||||
Provision for loan losses | 0 | (128 | ) | ||||||
Net interest income after provision for loan losses | 4,931 | 6,341 | |||||||
Non-interest income: | |||||||||
Fees and service charges | 789 | 829 | |||||||
Loan servicing fees | 248 | 232 | |||||||
Gain on sales of loans | 678 | 909 | |||||||
Gain on sale of branch office | 0 | 552 | |||||||
Other | 159 | 184 | |||||||
Total non-interest income | 1,874 | 2,706 | |||||||
Non-interest expense: | |||||||||
Compensation and benefits | 3,199 | 3,413 | |||||||
Gain on real estate owned | (19 | ) | (77 | ) | |||||
Occupancy | 850 | 882 | |||||||
Deposit insurance | 318 | 270 | |||||||
Data processing | 330 | 337 | |||||||
Other | 1,361 | 1,418 | |||||||
Total non-interest expense | 6,039 | 6,243 | |||||||
Income before income tax expense | 766 | 2,804 | |||||||
Income tax expense | 25 | 0 | |||||||
Net income | 741 | 2,804 | |||||||
Preferred stock dividends and discount | (476 | ) | (461 | ) | |||||
Net income available to common shareholders | $ | 265 | 2,343 | ||||||
Other comprehensive loss, net of tax: | |||||||||
Unrealized holding losses arising during the period | $ | (146 | ) | (180 | ) | ||||
Other comprehensive loss, net of tax | (146 | ) | (180 | ) | |||||
Comprehensive income attributable to common shareholders | $ | 119 | 2,163 | ||||||
Basic earnings per common share |
|
$ |
0.07 | 0.60 | |||||
Diluted earnings per common share |
|
$ |
0.06 | 0.58 | |||||
HMN FINANCIAL, INC. AND SUBSIDIARIES |
||||||||||||||
Selected Consolidated Financial Information |
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(unaudited) | ||||||||||||||
Three Months Ended |
||||||||||||||
SELECTED FINANCIAL DATA: |
March 31, |
|||||||||||||
(Dollars in thousands, except per share data) |
2013 |
2012 |
||||||||||||
I. OPERATING DATA: | ||||||||||||||
Interest income | $ | 6,323 | 8,275 | |||||||||||
Interest expense | 1,392 | 2,062 | ||||||||||||
Net interest income | 4,931 | 6,213 | ||||||||||||
II. AVERAGE BALANCES: | ||||||||||||||
Assets (1) | 624,855 | 716,807 | ||||||||||||
Loans receivable, net | 441,721 | 546,112 | ||||||||||||
Securities available for sale (1) | 90,862 | 105,257 | ||||||||||||
Interest-earning assets (1) | 598,912 | 708,275 | ||||||||||||
Interest-bearing liabilities | 556,200 | 680,435 | ||||||||||||
Equity (1) | 61,363 | 58,357 | ||||||||||||
III. PERFORMANCE RATIOS: (1) | ||||||||||||||
Return on average assets (annualized) | 0.48 | % | 1.57 | % | ||||||||||
Interest rate spread information: | ||||||||||||||
Average during period |
|
3.27 | 3.48 | |||||||||||
End of period | 3.23 | 3.47 | ||||||||||||
Net interest margin | 3.34 | 3.53 | ||||||||||||
Ratio of operating expense to average | ||||||||||||||
total assets (annualized) |
3.92 | 3.50 | ||||||||||||
Return on average equity (annualized) | 4.90 | 19.32 | ||||||||||||
Efficiency | 88.75 | 70.00 | ||||||||||||
March 31, | December 31, | March 31, | ||||||||||||
2013 | 2012 | 2012 | ||||||||||||
IV. ASSET QUALITY: | ||||||||||||||
Total non-performing assets | $ | 38,680 | 40,570 | 46,608 | ||||||||||
Non-performing assets to total assets | 6.17 | % | 6.21 | % | 6.60 | % | ||||||||
Non-performing loans to total loans receivable, net | 6.62 | 6.60 | 6.14 | |||||||||||
Allowance for loan losses | $ | 21,941 | 21,608 | 21,424 | ||||||||||
Allowance for loan losses to total assets | 3.50 | % | 3.31 | % | 3.03 | % | ||||||||
Allowance for loan losses to total loans receivable, net | 5.05 | 4.76 | 3.98 | |||||||||||
Allowance for loan losses to non-performing loans | 76.29 | 72.09 | 64.90 | |||||||||||
V. BOOK VALUE PER COMMON SHARE: | ||||||||||||||
Book value per common share | $ | 8.07 | 8.02 | 7.81 | ||||||||||
Three Months |
Three Months |
|||||||||||||
Ended |
Year Ended |
Ended |
||||||||||||
Mar 31, 2013 |
Dec 31, 2012 |
Mar 31, 2012 |
||||||||||||
VI. CAPITAL RATIOS: | ||||||||||||||
Stockholders’ equity to total assets, at end of period | 9.74 | % | 9.31 | % | 8.42 |
% |
|
|||||||
Average stockholders’ equity to average assets (1) | 9.82 | 8.81 | 8.14 | |||||||||||
Ratio of average interest-earning assets to | 107.68 | 105.73 | 104.09 | |||||||||||
average interest-bearing liabilities (1) | ||||||||||||||
Tier 1 or core capital (2) | 10.24 | 9.68 | 8.50 |
|
||||||||||
Risk-based capital |
16.38 |
15.52 | 12.55 | |||||||||||
March 31, | December 31, | March 31, | ||||||||||||
2013 | 2012 | 2012 | ||||||||||||
VII. EMPLOYEE DATA: | ||||||||||||||
Number of full time equivalent employees | 188 | 194 | 197 | |||||||||||
(1) Average balances were calculated based upon amortized cost without
the market value impact of ASC 320.
(2) OCC has established an
individual minimum capital requirement (IMCR) for the Bank. An IMCR
requires a bank to establish and maintain levels of capital greater than
those generally required for a bank to be classified as
“well-capitalized.” Effective December 31, 2011, the Bank was required
to establish, and subsequently maintain, core capital at least equal to
8.5% of adjusted total assets. The Bank’s core capital ratio was in
excess of this requirement at March 31, 2013.
CONTACT:
HMN Financial, Inc.
Bradley Krehbiel, 507-252-7169
President/CEO