Home Federal Bancorp has reported net income of $559,000, or 4 cents per diluted share, for the second quarter, compared to a net loss of $78,000, or 1 cent per share, a year earlier. Reduced operating expenses, improved loan quality and a gain on securities sales boosted performance in the recent period, the Nampa-based bank said July 27.
Net interest income before the provision for loan losses increased $913,000 to $10.3 million due to a higher yield on purchased loans and a declining cost of funds, the bank said. Nonperforming loans and the provision for loan losses declined, but so did total loans on the books.
“Commercial loan growth is coming back a little bit, certainly not at a level to get back to where we were pre-recession,” President and CEO Len Williams said in an interview. Loan losses are down as Home Federal worked through owned and foreclosed real estate in recent quarters, he said. The bank also consolidated some branches.
Home Federal reduced its provision for loan losses because the bank is more optimistic about loan performance and because its loan portfolio is smaller, he said.
Assets were $1.07 billion, down from $1.27 billion a year earlier.