HMN Financial, Inc. (HMNF) has reported a 31.45 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $1.22 million, or $0.25 a share in the quarter, compared with $1.77 million, or $0.38 a share for the same period last year.
Revenue during the quarter went down marginally by 2.71 percent to $8.40 million from $8.64 million in the previous year period. Net interest income for the quarter rose 1.66 percent over the prior year period to $6.25 million. Non-interest income for the quarter rose 7.18 percent over the last year period to $1.88 million.
HMN Financial, Inc. has made negative provision of $0.27 million for loan losses during the quarter, compared with a negative provision of $0.73 million in the same period last year.
Net interest margin contracted 18 basis points to 3.91 percent in the quarter from 4.09 percent in the last year period. Efficiency ratio for the quarter deteriorated to 78.03 percent from 71.98 percent in the previous year period. A rise in efficiency ratio suggests a fall in profitability.
"We continue to be encouraged by the growth in our loan portfolio as well as the increase in the gains realized on the sale of single family loans,” said Home Federal Savings Bank president and chief executive officer, Bradley Krehbiel. “We intend to continue to focus our efforts on improving the Bank’s core operating results by prudently growing the asset size of the Bank while maintaining the credit quality of our loan portfolio."
Assets outpace liabilities growth
Total assets stood at $680.98 million as on Mar. 31, 2017, up 6.71 percent compared with $638.16 million on Mar. 31, 2016. On the other hand, total liabilities stood at $603.58 million as on Mar. 31, 2017, up 6.55 percent from $566.47 million on Mar. 31, 2016. Net loans stood at $565.04 million as on Mar. 31, 2017. Deposits stood at $591.38 million as on Mar. 31, 2017, up 7.23 percent compared with $551.51 million on Mar. 31, 2016.
Investments stood at $78.55 million as on Mar. 31, 2017, down 25.78 percent or $27.28 million from year-ago. Shareholders equity stood at $77.40 million as on Mar. 31, 2017, up 7.97 percent or $5.71 million from year-ago.
Return on average assets moved down 39 basis points to 0.73 percent in the quarter from 1.12 percent in the last year period. At the same time, return on average equity decreased 377 basis points to 6.35 percent in the quarter from 10.12 percent in the last year period.
Nonperforming assets moved down 26.57 percent or $1.48 million to $4.09 million on Mar. 31, 2017 from $5.57 million on Mar. 31, 2016. Meanwhile, nonperforming assets to total assets was 0.60 percent in the quarter, down from 0.87 percent in the last year period.
Capital ratios improve
Hmn Financial recorded an improvement in capital ratios during the quarter. Tier-1 leverage ratio stood at 11.74 percent for the quarter, up from 11.62 percent for the previous year quarter. Equity to assets ratio was 11.37 percent for the quarter, up from 11.23 percent for the previous year quarter. Average equity to average assets ratio was 11.49 percent for the quarter, up from 11.11 percent for the previous year quarter. Book value per share was $17.22 for the quarter, up 7.76 percent or $1.24 compared to $15.98 for the same period last year.
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