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Liquid assets sartell mn1/15/2024 ![]() Our improved asset quality allowed us to record a reverse provision for loan losses during the year of $0.5 million. Our past due ratio as of year -end remained very low at 0.30%, while our reserve for problem loans remained a healthy 1.57% of total loans. Non-performing asset levels remained flat during the year- further evidence of our improved asset quality and more normalized operations. Fortunately, the aforementioned loan growth along with a nominal increase in our cost of funds enabled us to report higher net interest income compared with the prior year. The continuing low interest rate environment caused a 0.23% decline in our yield on average earning assets. These assets include our own recession-era legacy assets as well as purchased assets that are collected in excess of our book value. It is important to note that as our asset quality has improved, the opportunities to recognize yield enhancements as problem assets are collected have diminished as well. ![]() The decline relating to our core operating results was centered in lower commercial loan sale gains- a result of increased competition from conventional lenders- and a decline in gain on sale of non-performing assets. The decline in income between the periods is partially because of the $1.1 million increase in income tax expense as a result of tax reform legislation that was enacted in the fourth quarter of 2017. Net income for 2017 was $4.4 million, a decline of $ 2.0 million from 2016. While it might appear to some that we hold more capital than is necessary, I firmly believe that our disciplined approach to capital planning will position our Company to capitalize on growth opportunities as they arise- in good times or in bad-, prudently fund organic growth and weather adverse economic conditions when they arise. In spite of our growth, our capital level remains strong. At a rate of 6.5%, this obligation represented our single most expensive source of funds and was an excellent opportunity to deploy excess balance sheet liquidity and capital of the Company. We have also experienced success in attracting new clients with special affiliation accounts like our Jubilee Program, for clients 55 and older and obtaining larger deposit relationships by providing insurance coverage for deposits over FDIC limits using the insured cash sweep (ICS) and Certificate of Deposit Account Registry Service (CDARS) programs offered through a third party vendor.ĭuring the year, we prepaid the remaining $7 million balance of the $ 10 million term loan secured in 2014 to repurchase the remaining HMN Preferred shares issued in connection with the Troubled Asset Relief Program (TARP). This growth can be attributed to management’s efforts to solicit more local deposits and the improving financial condition of our commercial clients. Retail accounts over the same period grew by $6.9 million. We believe organic loan growth offers us the best opportunity to develop long-term multi-product relationships with our clients.ĭeposits also exhibited growth during the year with commercial accounts leading the way increasing by $35.9 million. While we regularly participate with other community banks, the outstanding balances of participations purchased declined $8.5 million during the year to $20.1 million. ![]() It is important to note that this loan growth reflects loans made and serviced directly by Home Federal, and not loans purchased from third party originators. By design, our investment portfolio remained level throughout the year as management worked to deploy excess liquidity. This growth was comprised primarily of increases in our highest yielding assets- mortgage and commercial real estate loans. Our focus during the year to improve core balance sheet and earnings growth is reflected throughout this report.īy year-end 2017, total assets had grown by $41 million. I am pleased to present you with our 2017 Annual Report. Home Federal Savings Bank regulatory capital ratios: Stockholders ’ equity to total assets at year endįederal Home Loan Bank advances and other borrowings ![]() Net interest income after provision for loan lossesĮarnings per common share and common share equivalents :Īverage stockholders ’ equity to average assets ![]() (Dollars in thousands, except per share data) ![]()
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