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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED JUNE 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________________ TO ____________________
COMMISSION FILE NUMBER 0-19972
HF FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
Delaware 46-0418532
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(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
225 South Main Avenue, Sioux Falls, South Dakota 57102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (605) 333-7556
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Securities Registered Pursuant to Section 12(b) of the Act:
None
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Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
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(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such requirements for
the past 90 days.
YES X NO .
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
As of September 18, 1997, there were 3,142,810 issued and outstanding shares of
the Registrant's Common Stock.
The aggregate market value of the voting stock held by non-affiliates of the
registrant, computed by reference to the average of the bid and asked price of
such stock as of September 18, 1997, was $74.9 million (The exclusion from such
amount of the market value of the shares owned by any person shall not be deemed
an admission by the registrant that such person is an affiliate of the
Registrant.)
DOCUMENTS INCORPORATED BY REFERENCE
Part III of Form 10-K - Portions of the Proxy Statement for 1997 Annual Meeting
of Stockholders.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk Management
The Company's net income is dependent on its net interest income. Net
Interest income is susceptible to interest rate risk to the degree that
Interest-bearing liabilities mature or reprice on a different basis than
interest-earning assets. When Interest-bearing liabilities mature or reprice
more quickly than Interest-earning assets in a given period, a significant
Increase in market rates of interest could adversely affect net Interest Income.
Similarly, when interest-earning assets mature or reprice more quickly than
interest-bearing liabilities, falling Interest rates could result in a decrease
in net income.
In an attempt to manage its exposure to change in interest rates,
management monitors the Company's Interest rate risk. Since 1992, management's
asset-liability committee has met quarterly to review the Company's interest
rate risk position and profitability, and to recommend adjustments for
consideration by the Board of Directors. Management also reviews the Bank's
securities portfolio, formulates investment strategies, and oversees the timing
and implementation of transactions to assure attainment of the Board's
objectives in the most effective manner. Notwithstanding the Company's interest
rate risk management activities, the potential for changing interest rates is an
uncertainty that can have an adverse effect on net income. See "Asset/Liability
Management" for further analysis.
In adjusting the Company's asset/liability position, the Board and
management attempt to manage the Company's interest rate risk while enhancing
net interest margins. At times, depending on the level of general interest
rates, the relationship between long and short-term interest rates, market
conditions and competitive factors, the Board and management may determine to
increase the Company's Interest rate risk position somewhat in order to increase
its net Interest margin. The Company's results of operations and net portfolio
values remain vulnerable to increases in Interest rates and to fluctuations in
the difference between long-and short-term Interest rates.
One approach used to quantify interest rate risk is the net portfolio value
("NPV") analysis. In essence, this analysis calculates the difference between
the present value of liabilities and the present value of expected cash flows
from assets and off-balance sheet contracts. The OTS model is based on the
balance sheet of the Bank. Various asset and liability categories were adjusted
to reflect the consolidated NPV of the Company. These adjustments were not
material to the outcome of the simulation analysis of NPV.
The following table sets forth, at June 30, 1997, an analysis of the
Company's interest rate risk as measured by the estimated changes in NPV
resulting from instantaneous and sustained parallel shifts in the yield curve (+
or -400 basis points, measured in 100 basis point increments).
<TABLE>
<CAPTION>
Estimated Increase
(Decrease) in NPV
Change in Estimated
Interest Rates NPV Amount Per
Basis Points Amount Cent
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(Dollars in thousands)
<S> <C> <C> <C>
+400 $ 34,588 $ (17,525) (34)%
+300 39,763 (12,350) (24)
+200 44,595 (7,518) (14)
+100 48,924 (3,189) (6)
--- 52,113
-100 53,586 1,473 3
-200 53,814 1,701 3
-300 54,253 2,140 4
-400 56,569 4,456 9
</TABLE>
Certain assumptions utilized by the OTS in assessing the interest rate risk
of thrift institutions were employed in preparing data for the Bank included in
the preceding table. These assumptions relate to interest rates, loan prepayment
rates, deposit decay rates, and the market values of certain assets under the
various interest rate scenarios. It was also assumed that delinquency rates will
not change as a result of changes in interest rates although there can be no
assurance that this will be the case. Even if interest rates change in the
designated
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amounts, there can be no assurance that the Bank's assets and liabilities would
perform as set forth above. In addition, a change in U. S. Treasury rates in the
designated amounts accompanied by a change in the shape of the Treasury yield
curve would cause significantly different changes to the NPV than indicated
above.
The Company does not currently engage in trading activities or use
derivative instruments to control interest rate risk. Even though such
activities may be permitted with the approval of the Board of Directors, the
Company does not intend to engage in such activities in the immediate future.
Interest rate risk is the most significant market risk affecting the
Company. Other types of market risk, such as foreign currency exchange rate risk
and commodity price risk, do not arise in the normal course of the Company's
business activities.
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SIGNATURES
Pursuant to the requirements of Section 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
HF FINANCIAL CORP.
By /s/ Curtis L. Hage
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Curtis L. Hage, Chairman, President and
Chief Executive Officer
(Duly Authorized Representative)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and on
the dates indicated.
/s/ Curtis L. Hage /s/ Donald F. Bertsch
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Curtis L. Hage, Chairman, President Donald F. Bertsch, Senior Vice President
and Chief Executive Officer and Chief Financial Officer (PRINCIPAL
(PRINCIPAL EXECUTIVE AND OPERATING FINANCIAL AND ACCOUNTING OFFICER)
OFFICER)
Date: April 9, 1998 Date: April 9, 1998
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