Home Federal Bancorp, Inc., Announces Fourth Quarter and Year End Results

Home Federal Bancorp, Inc., Announces Fourth Quarter and Year End Results

NAMPA, Idaho, Jan. 24, 2014 (GLOBE NEWSWIRE) -- Home Federal Bancorp, Inc.
("Company") (Nasdaq:HOME), the parent company of Home Federal Bank ("Bank"),
today announced results for the quarter and year ended December 31, 2013. For
the quarter ended December 31, 2013, the Company reported a net loss of $2.3
million, or $(0.17) per diluted share, compared to net income of $219,000, or
$0.02 per diluted share, for the same period a year ago. For the year ended
December 31, 2013, the Company reported net loss of $255,000, or $(0.02) per
diluted share, compared to net income of $1.8 million, or $0.12 per diluted
share, for the same period a year ago.

The Bank has entered into shared-loss agreements with the Federal Deposit
Insurance Corporation ("FDIC") in connection with two acquisitions. The loans
and foreclosed assets purchased in these acquisitions that are subject to the
shared-loss agreements are referred to as "covered loans" or "covered assets."
Loans and foreclosed and repossessed assets not subject to shared-loss
agreements with the FDIC are referred to as "noncovered loans" or "noncovered
assets."

The following items summarize key activities of the Company during the quarter
ended December 31, 2013:

  oOn October 23, 2013, the Company announced the signing of a definitive
    merger agreement ("Cascade Agreement") with Cascade Bancorp ("Cascade").
    Under the terms of the Cascade Agreement, Cascade will acquire the
    Company, subject to regulatory approval, approval by the stockholders of
    the Company and Cascade, and other customary conditions of closing.
    Previously, on September 24, 2013, the Company entered into a merger
    agreement ("Banner Agreement") with Banner Corporation ("Banner"). The
    Company terminated the Banner Agreement on October 23, 2013, and paid a
    termination fee of $3.0 million to Banner during the fourth quarter of
    2013. The Banner Agreement was terminated pursuant to its terms because
    the Company's Board of Directors determined the Cascade offer was a
    Superior Proposal, as defined in the Banner Agreement;
  oNet interest income increased $1.9 million compared to the linked quarter
    ended September 30, 2013, due primarily to an increase of accretable yield
    on purchased loans as a result of recoveries and payoffs of purchased
    loans;
  oA reverse provision for loan losses of ($1.2 million) was recorded on
    noncovered originated loans, while we recognized a net provision of
    $241,000 on covered loans, during the quarter ended December 31, 2013,
    resulting in a net reverse provision of ($933,000);
  oThe ($436,000) of noninterest income during the quarter ended December 31,
    2013, included impairment of the FDIC indemnification asset of $2.9
    million, which was a result of a reduction in estimated future losses on
    covered loans and recoveries of previously charged-off loans. The
    impairment of the FDIC indemnification asset was $1.2 million in the
    linked quarter and $2.8 million in the year-ago quarter;
  oThe Company did not realize gains on the sale of investments during the
    quarter, consistent with the linked quarter, but $754,000 less than the
    year-ago quarter;
  oNoninterest expense increased by $2.9 million during the quarter ended
    December 31, 2013, compared to the year-ago quarter, and by $4.0 million
    compared to the linked quarter. Noninterest expenses totaled $13.9 million
    during the fourth quarter of 2013, which included $3.4 million of
    merger-related expenses;
  oIncome tax provision was $576,000 as nearly all of the merger-related
    expenses incurred during the fourth quarter of 2013 were not deductible
    from taxable income;
  oTotal assets decreased $13.5 million during the quarter ended December 31,
    2013, compared to September 30, 2013, and decreased $46.2 million since
    December 31, 2012;
  oNet loans increased $5.6 million during the quarter ended December 31,
    2013;
  oAsset quality continued to improve as noncovered nonperforming assets
    declined $1.2 million to $5.2 million at December 31, 2013, compared to
    September 30, 2013. Total nonperforming assets decreased $4.3 million
    during the quarter to $11.2 million at December 31, 2013; and
  oThe Company declared and paid its regular quarterly dividend of $0.06 per
    share.

Results of Operations

Net interest income. During the quarter ended December 31, 2013, net interest
income increased $1.9 million and $573,000 compared to the linked quarter and
the quarter ended December 31, 2012, respectively. Net interest margin
increased to 4.98% during the quarter ended December 31, 2013, from 4.21% in
the linked quarter and 4.55% during the quarter ended December 31, 2012.
Similarly, the Company's yield on earning assets increased to 5.26% in the
quarter ended December 31, 2013, from 4.51% in the linked quarter, and 4.89%
during the quarter ended December 31, 2012. These increases during the quarter
ended December 31, 2013, were primarily due to an increase in accretable
income on loans purchased in the LibertyBank acquisition as the balance of
purchased loan pools continued to decline significantly, thereby reducing
expected losses, and increases in cash flows recovered from previously charged
down loans. However, as the balance of purchased loan pools declines, the
future impact of accretable yield on interest income and net interest margin
will lessen significantly.

The cost of funds for the quarter ended December 31, 2013, was 0.40% compared
to 0.42% in the quarter ended September 30, 2013, and 0.47% for the quarter
ended December 31, 2012. The cost of deposits, which includes
noninterest-bearing deposits, was 0.32% during the quarter ended December 31,
2013, compared to 0.34% during the quarter ended September 30, 2013 and 0.39%
for the year-ago quarter.

Provision for loan losses. A net reverse provision for loan losses of
($933,000) was recorded during the quarter ended December 31, 2013, compared
to a net reverse provision of ($970,000) for the quarter ended September 30,
2013, and a reverse provision of ($653,000) for the year-ago quarter. The net
reverse provision for loan losses in the quarter ended December 31, 2013, was
related to improving credit quality (including significantly lower
nonperforming and classified loans), stabilizing and improving economic
factors and recoveries on previously charged-off loans. The net reverse
provision included a provision of $241,000 related to the covered loans
purchased in the Community First Bank acquisition, driven primarily by net
charge-offs of $294,000 in that portfolio. The estimated amount recoverable
from or due to the FDIC under the loss sharing agreements as a result of the
provision for loan losses on covered loans is reported as "FDIC
indemnification provision" in noninterest income.

Noninterest income. Impairment of the FDIC indemnification asset recognizes
the decreased amount the Company expects to collect from the FDIC under the
terms of its loss sharing agreements due to lower expected losses on covered
loans, which reduces noninterest income. The following table presents
noninterest income excluding the impact of FDIC indemnification items on all
covered loans:

                         Three Months Ended         Years Ended
(in thousands)            December 31, September 30, December 31, December 31,
                          2013         2013          2013         2012
                                                              
Total noninterest income, $ (436)      $ 755         $ 1,049      $ (655)
as reported
Less: FDIC
indemnification recovery
(impairment) related to   231          (648)         (464)        (1,807)
current period provision
for loan losses
Impairment of FDIC        (2,930)      (1,164)       (8,410)      (10,856)
indemnification asset
Total noninterest income,
excluding FDIC            $ 2,263      $ 2,567       $ 9,923      $ 12,008
indemnification items

Noninterest income, excluding FDIC indemnification items, declined $304,000
during the quarter ended December 31, 2013, compared to the linked quarter as
the Company realized a gain on life insurance proceeds of $161,000 during the
linked quarter and service charges and fees declined $128,000 during the
quarter ended December 31, 2013. Pre-tax gains on sales of investments were
$0, $0 and $753,000 during the quarters ended December 31, 2013, September 30,
2013 and December 31, 2012, respectively.

Noninterest expense. Noninterest expense for the quarter ended December 31,
2013, increased by $2.9 million compared to the quarter ended December 31,
2012, and by $4.0 million compared to the linked quarter. As previously
mentioned, in the quarter ended December 31, 2013, the Company recognized a
$3.0 million fee in relation to the termination of the Banner Agreement and
$445,000 of other merger-related expenses during the quarter. Compensation
expense increased during the quarter ended December 31, 2013, compared to the
linked quarter by $719,000, primarily due to annual incentive and commission
plan accruals. The provision for real estate owned was $150,000 during the
current quarter compared to $1,000 during the linked quarter. Professional
services increased during the quarter ended December 31, 2013,compared to the
linked and year-ago quarters, due to merger-related expenses.

Noninterest expenses increased $815,000, or 1.9%, during the twelve months
ended December 31, 2013, compared to the twelve months ended December 31,
2012.Noninterest expense for the year included $3.7 million of merger-related
expenses.

Balance Sheet

Total assets decreased $46.2 million to $1.0 billion at December 31, 2013,
compared to December 31, 2012, primarily due to a decrease in investments and
cash of $38.4 million, which was used to fund a $32.4 million decline in
deposits during the year. Balances of certificates of deposit declined $40.8
million during the year as core deposits increased to $650.0 million at
December 31, 2013, compared to $641.6 million at December 31, 2012.

Cash and investments. Cash and amounts due from depository institutions at
December 31, 2013, decreased by $8.5 million from December 31, 2012, to $107.0
million. Investments decreased $29.9 million from December 31, 2012, to $390.6
million at December 31, 2013. The reduction in investments resulted from
regularly scheduled principal repayments and maturities and a decline in the
fair value of investments due to continued rising market interest rates during
the quarter ended December 31, 2013. During the quarter ended December 31,
2013, cash increased $4.7 million and investments declined $23.4 million.

Loans. Net loans increased by $5.6 million during the quarter ended December
31, 2013 compared to September 30, 2013, but declined $2.4 million compared to
December 31, 2012.During the quarter ended December 31, 2013, construction
loans increased by $6.9 million, commercial business loans increased by $6.0
million and multifamily residential loans increased by $3.3 million. Partially
offsetting these increases were declines in commercial real estate and
one-to-four family residential loans of $8.2 million and $3.3 million,
respectively.All other loans, net, increased $930,000.

Asset Quality. The allowance for loan losses was $9.0 million at December 31,
2013, compared to $10.6 million and $12.5 million at September 30, 2013 and
December 31, 2012, respectively. The allowance for loan losses allocated to
the noncovered loan portfolio was $6.7 million, or 1.89% of noncovered loans
at December 31, 2013, while the allowance for loan losses allocated to covered
loans totaled $2.3 million, or 3.96% of covered loans, at December 31, 2013.
The FDIC indemnification receivable declined $1.2 million during the quarter
ended December 31, 2013, to $4.9 million, primarily due to the continued
reduction in estimated losses on covered loans in the LibertyBank portfolio
(which resulted in the impairment noted above in noninterest income) that was
somewhat offset by an increase in estimated losses in the Community First Bank
loan portfolio during the quarter ended December 31, 2013.

Loans delinquent 30 to 89 days and still accruing interest totaled $1.3
million at December 31, 2013, compared to $492,000 at September 30, 2013 and
$809,000 at December 31, 2012. Nonperforming assets, which include nonaccrual
loans and REO, totaled $11.2 million at December 31, 2013, compared to $15.5
million at September 30, 2013 and $24.8 million at December 31, 2012. Total
nonperforming loans declined $2.6 million, while REO declined $1.8 million
during the quarter ended December 31, 2013.

The following table summarizes nonperforming loans and REO at December 31,
2013 and September 30, 2013, and the quarterly change (in thousands):

             December 31, 2013         September 30, 2013        Quarter Change
(in           Covered Noncovered        Covered Noncovered        Covered Noncovered
thousands)    Assets  Assets     Total  Assets  Assets     Total  Assets  Assets
                                                                  
Real estate   $ 219   $ 656      $ 875  $ 223   $ 781      $      $ (4)   $ (125)
construction                                               1,004
Commercial
and           1,941   875        2,816  3,369   894        4,263  (1,428) (19)
multifamily
real estate
One-to-four
family        232     2,000      2,232  243     2,790      3,033  (11)    (790)
residential
Other         1       544        545    34      702        736    (33)    (158)
                                                                  
Total
nonperforming 2,393   4,075      6,468  3,869   5,167      9,036  (1,476) (1,092)
loans
                                                                  
Real estate
owned and
other         3,597   1,159      4,756  5,205   1,308      6,513  (1,608) (149)
repossessed
assets
                                                                  
Total                            $                         $      $
nonperforming $ 5,990 $ 5,234    11,224 $ 9,074 $ 6,475    15,549 (3,084) $ (1,241)
assets

Deposits. Total deposits decreased $13.3 million during the quarter ended
December 31, 2013, to $818.5 million and decreased $32.4 million compared to
December 31, 2012. During the quarter ended December 31, 2013, end of period
balances in core deposits (defined as checking, savings and money market
accounts) decreased by $3.4 million to $650.0 million, while certificates of
deposit declined by $9.9 million to $168.4 million. Certificates of deposit
declined by $40.8 million during the year ended December 31, 2013. Average
core deposits were $12.1 million higher during the fourth quarter of 2013
compared to the linked quarter. Core deposits comprised 79.4% of the deposit
portfolio at December 31, 2013, compared to 75.4% at December 31, 2012.

Equity. Stockholders' equity decreased $10.8 million during 2013 to $169.0
million at December 31, 2013. Dividends paid during 2013 totaled $3.3 million.
Additionally, the Company experienced a decrease of $13.3 million in
accumulated other comprehensive income, which includes the unrealized loss on
investments available-for-sale, net of taxes, and was $5.1 million at December
31, 2013.A year earlier, we had an unrealized gain, net of taxes, of $8.2
million. The decline in the fair value of investments was due to the
significant increase in market interest rates during fiscal year 2013.

Use of Non-GAAP Financial Measures

This document contains non-GAAP financial measures as management believes it
to be helpful in understanding the Company's results of operations and
financial position. "Total noninterest income, excluding FDIC indemnification
items" is used by management to assess core noninterest income as the impact
of accounting for the FDIC indemnification asset is highly volatile. A
reconciliation to the comparable GAAP financial measure "Total noninterest
income" has been provided above. "Tangible book value per share" is another
non-GAAP financial measure that is included in the table below to facilitate
the comparison of the Company with its peers. Tangible book value is equal to
"Total shareholders' equity" less "Core deposit intangible." Tangible book
value is then divided by the number of outstanding shares at the end of each
period to calculate tangible book value per share.

About the Company

Home Federal Bancorp, Inc., is headquartered in Nampa, Idaho, and is the
parent company of Home Federal Bank, a community bank originally organized in
1920. The Company primarily serves southwestern Idaho and Central and Western
Oregon through 24 full-service branches and three commercial loan production
offices. The Company's common stock is traded on the NASDAQ Global Select
Market under the symbol "HOME" and is included in the Russell 2000 Index. For
more information, visit the Company's web site at www.myhomefed.com/ir.

Participants in the Solicitation

Cascade, Company and their respective directors and executive officers may be
soliciting proxies from Cascade and Company shareholders in favor of the
proposed merger and related matters.Information regarding the persons who
may, under the rules of the SEC, be deemed participants in the solicitation of
Cascade and Company shareholders in connection with the proposed merger and a
description of their direct and indirect interests, by security holdings or
otherwise will be set forth in the joint proxy statement/prospectus.
Additional information about Cascade's directors and executive officers and
Company's directors and executive officers can also be found in the
Registration Statement on Form S-4, which Cascade filed with the SEC on
December 16, 2013, as amended thereafter. Investors and Company stockholders
should read the joint proxy statement/prospectus carefully before making any
voting or investment decisions.You may obtain copies of all documents filed
with the SEC, free of charge, at the SEC's website (www.sec.gov).You may also
obtain these documents, free of charge, from: (i) Cascade's website
(www.botc.com) under the heading "About Us" and then under the heading
"Investor Relations" and then under the heading "Investor Information" and
then under the tab "SEC Filings;" (ii) Cascade upon written request to Cascade
Bancorp, Attn: Investor Relations, 1100 North West Wall Street, P.O. Box 369,
Bend, Oregon 97701; (iii) Company's website (www.myhomefed.com/ir) under the
under the heading "SEC Filings, Ownership and Forms;" or (iv) Company upon
written request to Company Bancorp, Inc., Attn: Eric Nadeau, 500 12th Avenue
South, Nampa, Idaho 83651.

Forward-Looking Statements:

Statements in this news release regarding future events, performance or
results are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 ("PSLRA") and are made pursuant to
the safe harbors of the PSLRA. These forward-looking statements relate to,
among other things, expectations of the business environment in which the
Company operates, projections of future performance, perceived opportunities
in the market, potential future credit experience, the Company's ability to
achieve projected cost savings, the ability to consummate the merger with
Cascade, and statements regarding the Company's mission and vision. These
forward-looking statements speak only as of the date they are made and are
based upon management's current expectations and projections and therefore,
involve risks and uncertainties. Such projections are based upon many
estimates and are inherently subject to significant economic and competitive
uncertainties and contingencies, many of which are beyond the control of
management of the Company. The inclusion of such projections herein should not
be regarded as a representation by the Company that the projections will prove
to be correct. Actual results could be materially different from those
expressed or implied by the forward-looking statements and you should not rely
on such statements. Factors that could cause results to differ include but are
not limited to: general economic and banking business conditions; competitive
conditions between banks and non-bank financial service providers; interest
rate fluctuations; the credit risk of lending activities, including changes in
the level and trend of loan delinquencies and write-offs; results of
examinations by our banking regulators;regulatory and accounting changes,
including as a result of Basel III; risks related to construction and
development lending; our ability to successfully integrate any assets,
liabilities, customers, systems, and management personnel we have acquired or
may in the future acquire into our operations and our ability to realize
related revenue synergies and cost savings within expected time frames; and
other risks. Additional factors that could cause actual results to differ
materially are disclosed in Home Federal Bancorp, Inc.'s recent filings with
the Securities and Exchange Commission, including but not limited to its
Annual Report on Form 10-K for the year ended December 31, 2012, Quarterly
Reports on Forms 10-Q and Current Reports on Form 8-K. Forward-looking
statements are accurate only as of the date released, and the Company's
management does not undertake any responsibility to update or revise any
forward-looking statements to reflect subsequent events or circumstances.

CONSOLIDATED BALANCE SHEETS            December 31, September 30, December 31,
(In thousands, except share data)      2013         2013          2012
(Unaudited)
                                                               
ASSETS                                                          
Cash and cash equivalents              $ 107,000    $ 102,269     $ 115,529
Investments available-for-sale, at     390,648      414,026       420,505
fair value
FHLB stock, at cost                    16,771       16,929        17,401
Loans receivable, net of allowance for
loan losses of $9,046, $10,583 and     407,451      401,842       409,846
$12,528, respectively
Accrued interest receivable            2,764        2,852         2,776
Property and equipment, net            25,943       26,592        29,057
Bank owned life insurance              15,751       15,635        15,938
Real estate owned and other            4,756        6,513         10,386
repossessed assets
FDIC indemnification receivable, net   4,914        6,129         10,846
Core deposit intangible                2,062        2,168         2,523
Deferred tax assets, net               17,175       15,853        9,022
Other assets                           7,139        5,022         4,791
TOTAL ASSETS                           $ 1,002,374  $ 1,015,830   $ 1,048,620
                                                               
LIABILITIES AND STOCKHOLDERS' EQUITY                            
LIABILITIES                                                     
Deposit accounts:                                               
Noninterest-bearing demand            $ 160,602    $ 161,335     $ 142,207
Interest-bearing demand               245,271      247,099       248,836
Money market                          158,364      158,231       167,202
Savings                               85,775       86,792        83,401
Certificates                          168,439      178,319       209,242
Total deposit accounts                 818,451      831,776       850,888
                                                               
Advances by borrowers for taxes and    383          1,334         490
insurance
Accrued interest payable               122          127           167
Deferred compensation                  6,504        6,422         6,149
Repurchase agreements                  --           511           4,775
Other liabilities                      7,916        5,490         6,366
Total liabilities                      833,376      845,660       868,835
                                                               
STOCKHOLDERS' EQUITY                                            
Serial preferred stock, $.01 par
value; 10,000,000 authorized; issued   --           --            --
and outstanding: none
Common stock, $.01 par value;          148          145           145
90,000,000 authorized; issued
and outstanding:                                                
Dec. 31, 2013 - 17,852,778 issued;                              
14,832,757 outstanding
Sep. 30, 2013 - 17,542,217 issued;                              
14,522,196 outstanding
Dec. 31, 2012 - 17,512,197 issued;                              
14,453,399 outstanding
Additional paid-in capital             137,252      133,354       131,934
Retained earnings                      42,752       45,942        46,337
Unearned shares issued to employee     (6,065)      (6,254)       (6,823)
stock ownership plan
Accumulated other comprehensive income (5,089)      (3,017)       8,192
(loss)
Total stockholders' equity             168,998      170,170       179,785
TOTAL LIABILITIES AND STOCKHOLDERS'    $ 1,002,374  $ 1,015,830   $ 1,048,620
EQUITY

                                                        
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY                                 
CONSOLIDATED STATEMENTS OF OPERATIONS                                     
(In thousands, except share and per share data) (Unaudited)               
                                                        
                          Three Months Ended   Year Ended
                           December 31,          December 31,
                          2013       2012       2013       2012
Interest income:                                         
Loans                      $ 9,681    $ 9,658    $ 34,432   $ 40,058
Investments                2,558      2,199      10,399     8,861
Other interest income      65         51         232        230
Total interest income      12,304     11,908     45,063     49,149
                                                        
Interest expense:                                        
Deposits                   667        827        2,920      3,811
Repurchase agreements      --         17         19         71
Total interest expense     667        844        2,939      3,882
Net interest income        11,637     11,064     42,124     45,267
                                                        
Provision for loan losses  (933)      (653)      (2,486)    (1,765)
Net interest income after  12,570     11,717     44,610     47,032
provision for loan losses
                                                        
Noninterest income:                                      
Service charges and fees   1,992      2,162      8,226      8,653
Gain on sales of           --         754        485        1,971
securities
FDIC indemnification       231        (627)      (464)      (1,807)
(provision) recovery
Impairment of FDIC         (2,930)    (2,814)    (8,410)    (10,856)
indemnification asset, net
Other                      271        192        1,212      1,384
Total noninterest income   (436)      (333)      1,049      (655)
                                                        
Noninterest expense:                                     
Compensation and benefits 6,541      6,025      24,032     24,054
Occupancy and equipment    1,290      1,633      5,386      6,176
Data processing            848        1,078      3,571      3,945
Advertising                123        180        550        776
Postage and supplies       187        224        803        987
Professional services      849        404        2,670      2,351
Insurance and taxes        411        573        1,642      2,158
Amortization of            107        131        461        564
intangibles
Provision for REO          151        282        795        736
Merger termination fee     2,954      --         2,954      --
Other                      441        432        1,465      1,767
Total noninterest expense  13,902     10,962     44,329     43,514
Income (loss) before       (1,768)    422        1,330      2,863
income taxes
                                                        
Income tax provision       576        203        1,585      1,061
Net income (loss)          $ (2,344)  $ 219      $ (255)    $ 1,802
                                                        
Earnings (loss) per common                               
share:
Basic                      $ (0.17)   $ 0.02     $ (0.02)   $ 0.12
Diluted                    (0.17)     0.02       (0.02)     0.12
                                                        
Weighted average number of                               
shares outstanding:
Basic                      14,005,216 13,660,245 13,822,263 14,292,815
Diluted                    14,005,216 13,689,742 13,822,263 14,297,987
                                                        
Dividends declared per     $ 0.06     $ 0.18     $ 0.24     $ 0.35
share:

                                                                
HOME FEDERAL BANCORP, INC. AND SUBSIDIARY                                           
ADDITIONAL FINANCIAL INFORMATION                                                    
(Dollars in thousands, except share and per share data) (Unaudited)                 
                                                                
                        At or For the Three Months Ended
                         December   September  June 30,   March 31,  December
                        31,        30,        2013       2013       31,
                         2013       2013                             2012
SELECTED PERFORMANCE                                             
RATIOS
Return on average assets (0.92) %   0.42 %     0.22 %     0.18 %     0.08 %
^(1)
Return on average equity (5.46)     2.48       1.29       1.03       0.48
^(1)
Net interest margin ^(1) 4.98       4.21       4.47       4.16       4.55
                                                                
PER SHARE DATA                                                   
Diluted earnings per     $ (0.17)   $ 0.08     $ 0.04     $ 0.03     $ 0.02
share
Tangible book value per  11.25      11.57      11.60      12.16      12.26
outstanding share
Cash dividends declared  0.06       0.06       0.06       0.06       0.18
per share
Average number of
diluted                  13,946,256 13,836,734 13,763,806 13,714,084 13,689,742
sharesoutstanding ^(2)
for earnings per share
                                                                
ASSET QUALITY-                                                   
NONCOVERED ^(3)
Allowance for loan       $ 6,750    $ 7,795    $ 8,025    $ 8,412    $ 8,611
losses
Nonperforming loans      4,075      5,167      5,433      9,115      9,597
Nonperforming assets     5,234      6,475      8,806      13,377     13,872
Provision for loan       (1,175)    (281)      (364)      (225)      --
losses
Allowance for loan       1.89 %     2.27 %     2.48 %     2.58 %     2.59 %
losses to gross loans
Nonperforming loans to   1.14       1.51       1.68       2.79       2.87
gross loans
Nonperforming assets to  0.56       0.69       0.87       1.22       1.46
total assets
                                                                
TOTAL COVERED ASSETS     $ 63,925   $ 75,745   $ 82,929   $ 88,425   $ 95,556
^(4)
                                                                
FINANCIAL CONDITION DATA                                         
Average interest-earning $ 935,063  $ 928,765  $ 954,852  $ 966,269  $ 973,113
assets
Average interest-bearing 668,966    668,556    686,598    706,561    717,519
liabilities
Net average earning      266,097    260,209    268,254    259,708    255,594
assets
Average interest-earning
assets to                139.78 %   138.92 %   139.07 %   136.76 %   135.62 %
averageinterest-bearing
liabilities
Stockholders' equity to  16.86      16.75      16.90      17.00      17.14
total assets
                                                                
STATEMENT OF OPERATIONS                                          
DATA
Interest income          $ 12,304   $ 10,474   $ 11,418   $ 10,867   $ 11,908
Interest expense         667        707        753        812        844
Net interest income      11,637     9,767      10,665     10,055     11,064
                                                                
Provision for loan       (933)      (970)      (356)      (227)      (653)
losses ^(5)
Noninterest income       (436)      755        232        498        (333)
Noninterest expense      13,902     9,933      10,397     10,097     10,962
Income (loss) before     (1,768)    1,559      856        683        422
taxes
Income (loss) tax        576        506        281        222        203
provision
Net income (loss)       $ (2,344)  $ 1,053    $ 575      $ 461      $ 219
                                                                
(1) Amounts are annualized.                                                        
(2) Amounts calculated exclude ESOP shares not committed to be released and       
unvested restricted shares.
(3) Excludes loans and REO covered by a loss sharing agreement with the FDIC.      
(4) Loans and REO covered by loss share agreements with the FDIC.                  
(5) Provision for loan losses does not consider impact of indemnification for
losses on covered loans under the loss sharing agreements with the FDIC, which
is reported in noninterest income as "FDIC indemnification recovery."

CONTACT: Home Federal Bancorp, Inc.
         Len E. Williams, President & CEO
         Eric S. Nadeau, EVP, Treasurer & CFO
         208-466-4634
         www.myhomefed.com/ir
 
Press spacebar to pause and continue. Press esc to stop.