UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 000-50901
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Home Federal Bank's 401(K) Plan
B: Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
Home Federal Bancorp, Inc.
500 12th Avenue South
Nampa, Idaho 83651
Financial Statements and Exhibits
---------------------------------
(a) Financial Statements
The Home Federal Savings and Loan Association of Nampa 401(k) Savings Plan
became effective as of October 1, 2004. Filed as a part of this report on
Form 11-K are the audited financial statements of the Plan as of and for
the years ended December 31, 2005 and 2004.
(b) Exhibit 23
Consent of Independent Registered Public Accounting Firm
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
HOME FEDERAL BANK'S 401(K) PLAN
Date: June 29, 2006 By: /s/ Daniel L. Stevens
---------------------
Daniel L. Stevens
Administrator
HOME FEDERAL BANK's
401(K) PLAN
INDEPENDENT AUDITOR'S REPORT
and
FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004
TABLE OF CONTENTS
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REPORT OF INDEPENDENT REGISTERED PUBLIC COMPANY ACCOUNTING FIRM 1
FINANCIAL STATEMENTS
Statement of net assets available for benefits 2
Statement of changes in net assets available for benefits 3
Notes to financial statements 4-9
SUPPLEMENTAL INFORMATION
Schedule H, Line 4i - Schedule of assets (held at end of year) 10
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Audit Committee
Home Federal Bank's 401(K) Plan
Nampa, Idaho
We have audited the accompanying statements of net assets available for Plan
benefits of Home Federal Bank's 401(K) Plan as of December 31, 2005 and 2004,
and the related statements of changes in net assets available for Plan
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for Plan benefits of the Home
Federal Bank's 401(K) Plan as of December 31, 2005 and 2004, and the changes
in net assets available for Plan benefits for the years then ended, in
conformity with accounting principles generally accepted in the United States
of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes at year end is presented for purposes of
additional analysis, and is not a required part of the basic financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.
/s/Moss Adams LLP
Spokane, Washington
June 27, 2006
HOME FEDERAL BANK'S 401(K) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
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December 31
-----------------------
2005 2004
-----------------------
INVESTMENTS
Pooled separate accounts $2,711,603 $2,231,516
Common stock 1,573,140 1,663,766
---------- ----------
Total investments 4,284,743 3,895,282
---------- ----------
Contributions receivable - 21,516
---------- ----------
Participant loans 57,205 26,796
---------- ----------
Cash 63,619 20,442
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $4,405,567 $3,964,036
========== ==========
See accompanying notes 2
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HOME FEDERAL BANK'S 401(K) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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Year Ended December 31
-----------------------
2005 2004
-----------------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Interest and dividends $ 4,054 $ 4,807
Net appreciation of fair value of investments 111,907 544,552
---------- ----------
115,961 549,359
---------- ----------
Contributions:
Participants 447,212 381,099
Employer matching 155,585 154,009
Rollovers 74,810 314,809
---------- ----------
677,607 849,917
---------- ----------
Total additions 793,568 1,399,276
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 349,771 173,109
Administrative expenses 2,266 687
---------- ----------
Total deductions 352,037 173,796
---------- ----------
NET INCREASE 441,531 1,225,480
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 3,964,036 2,738,556
---------- ----------
End of year $4,405,567 $3,964,036
========== ==========
See accompanying notes. 3
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HOME FEDERAL BANK'S 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
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Note 1 - Summary of Accounting Policies
Basis of accounting:
The accompanying financial statements have been prepared under the accrual
method of accounting.
Valuation of investments:
Investments are stated at fair value. Quoted market prices are used to value
shares of common stock. Units of pooled separate accounts are valued at
accumulation unit values (consisting of the account's performance at year end
plus applicable dividend income less administrative expenses). Participant
loans are valued at their outstanding balances, which approximate fair value.
Net appreciation or depreciation in the fair value of investments presented in
the statement of changes in net assets available for Plan benefits consists of
both realized and unrealized gains and losses on those investments.
Payment of benefits:
Benefits are recorded when paid.
Income tax status:
The Plan obtained its latest determination letter on November 27, 2001, in
which the Internal Revenue Service stated that the Plan, as then designed, was
in compliance with the applicable requirements of the Internal Revenue Code.
The Plan has been amended since receiving the determination letter. However,
the Plan administrator and the Plan's tax counsel believe that the Plan is
currently designed and operating in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, no provision for income
taxes has been included in the Plan's financial statements.
Use of estimates:
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of additions
to and deductions from net assets available for Plan benefits during the
reporting period. Actual results could differ from those estimates.
Note 2 - Plan Description
General:
The following description of the Home Federal Bank's 401(K) Plan (the Plan) is
provided for general information purposes only. Participants should refer to
the Plan agreement for more complete information.
4
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HOME FEDERAL BANK'S 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
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Note 2 - Plan Description (Continued)
General (continued):
The Plan is a defined contribution plan qualifying as a salary reduction plan
as defined in Section 401(k) of the Internal Revenue Code. The Plan covers
substantially all employees of Home Federal Bank (the Bank). The Plan is
subject to federal laws, such as the Employee Retirement Income Security Act
(ERISA), the Internal Revenue Code, and other applicable federal and state
laws. The provisions of the Plan are subject to revisions due to changes in
laws or due to pronouncements by the Internal Revenue Service (IRS) or
Department of Labor (DOL).
Amendments:
Beginning in 2004, an eligible participant will automatically defer 3% of
included compensation for each payroll period, unless the eligible participant
makes a contrary salary reduction agreement election on or after plan entry
date. This automatic deferral election only applies to those employees who
become eligible participants on or after July 1, 2004.
Name change:
During 2005 the Plan changed it's name from Home Federal Savings & Loan
Association of Nampa 401(k) Savings Plan to Home Federal Bank's 401(K) Plan.
Eligibility:
Eligible employees may participate in the Plan once the service requirements
described below are met.
The service requirement for matching contributions is one year of service. A
year of service will have been completed if, at the end of twelve consecutive
months of employment, at least 1000 hours of service have been performed. If
1000 hours of service have not been completed by the end of twelve consecutive
months of employment, a year of service will have been completed at the end of
any following plan year during which 1000 hours of service are performed.
For purpose of salary deferrals, there is no service requirement for
eligibility to participate. Thus, for all employees other than excluded
employees, participation with respect to those contributions can begin upon
hire.
Contributions:
Participants in this Plan may elect to reduce their compensation by a specific
percentage or dollar amount up to 100% of pretax annual compensation, and have
that amount contributed to the Plan on a pre-tax basis as a salary deferral,
subject to IRS limitations. Participants who have attained age 50 before the
end of the plan year are eligible to make catch-up contributions.
Participants may also elect to contribute amounts representing distributions
from other qualified defined benefit or defined contribution plans.
Participants direct the investment of their contributions into various
investment options offered by the Plan. The Plan currently offers a variety
of pooled separate accounts and Home Federal Bancorp common stock.
5
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HOME FEDERAL BANK'S 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
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Note 2 - Plan Description (Continued)
Matching contributions are made as a percentage of the amount of salary
deferred by employees. Additional discretionary contributions can also be
made to the Plan. Both types of contributions are made at the discretion of
the Board of Directors. The Bank elected to make matching contributions equal
to 50% of the first 10% of base compensation that a participant contributed to
the Plan during 2005 and 2004. The Bank's contributions equaled $155,585 and
$146,737 during the years ended December 31, 2005 and 2004, respectively. No
additional employer discretionary contributions were made during 2005 and
2004.
Vesting:
Participants are immediately vested in their voluntary contributions, any
rollover contributions, as well as any income or loss thereon.
The vested percentage in a participant's account attributable to employer
matching and discretionary contributions is determined under the following
schedule and is based on years of service. A participant will always be 100%
vested if employed on or after normal retirement age, death, or disability.
Vesting Schedule
Profit Sharing Contributions
Years of Service Percentage
--------------------------- --------------------
Less than 2 years 0%
2 20%
3 40%
4 60%
5 80%
6 100%
Participant's accounts:
Each participant's account is credited with the participant's contribution and
the allocation of the Bank's contributions and net plan earnings, and charged
with a $5.00 annual fee for Morningstar investment services. Earnings
allocations are based on participant investment balances. The benefit, to
which a participant is entitled, is the benefit that can be provided from the
participant's vested balance.
Forfeitures:
If a participant is not vested or is partially vested in their account balance
when they leave, the non-vested portion of their account balance will be
forfeited on the earlier of:
a) the distribution of their entire vested account balance, or
b) five consecutive one-year breaks in service
Forfeitures of matching and discretionary contributions are reallocated as
discretionary matching contributions. If a participant is employed on or
after their normal retirement age, death, or disability, they will be 100%
vested.
6
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HOME FEDERAL BANK'S 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
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Note 2 - Plan Description (Continued)
Forfeited balances of terminated participants' accounts are considered a
reduction of discretionary employer contributions. Forfeitures available for
the reduction of discretionary employer contributions were $7,432 and $6,950
for the years ended December 31, 2005 and 2004, respectively.
Participant Loans:
Participants may borrow from their account a minimum of $1,000 up to a maximum
equal to the lesser of $50,000 or 50 percent of their vested account balance.
The loans are secured by the balance in the participant's account and bear
interest at rates that range from 6.75% to 10.50%. Principal and interest is
paid ratably through monthly payroll deductions.
Payment of benefits:
On termination of employment due to retirement, death, or disability, a
participant or his/her heirs may elect to receive an amount equal to the value
of the participant's vested interest in his or her account in lump-sum
amounts, installments, or annuity payments. For termination of service due to
other reasons, a participant may receive the value of the vested interest in
his or her account as a lump-sum distribution. Distributions requested but
not yet remitted were $0 and $124,741 for the years ended December 31, 2005
and 2004, respectively.
Plan termination:
Although it has not expressed any intent to do so, the Bank has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants would become 100% vested in their accounts and any
unallocated forfeitures would be remitted to the Bank.
Administrative expenses:
Certain administrative expenses of the Plan are paid directly by the Bank.
7
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HOME FEDERAL BANK'S 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
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Note 3 - Investments
The following tables present the fair values of investments at December 31,
2005 and 2004. Investments that represent 5% or more of the Plan's net assets
are separately identified.
2005
----------
Pooled Separate Accounts:
American Balanced $ 605,424
Fidelity VIP II Contrafund 294,275
Lord Abbett Mid-Cap 222,788
Other pooled separate accounts 1,589,116
----------
Total pooled separate accounts $2,711,603
----------
Common Stock:
Home Federal Bancorp 1,573,140
----------
Total $4,284,743
==========
2004
----------
Pooled Separate Accounts:
ING VP Money Market $ 274,560
American Balanced 542,134
Fidelity VIP II Contrafund 205,498
Other pooled separate accounts 1,209,324
----------
Total pooled separate accounts 2,231,516
----------
Common Stock:
Home Federal Bancorp 1,663,766
----------
Total $3,895,282
==========
8
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HOME FEDERAL BANK'S 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
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During 2005 and 2004, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated in
value as follows:
2005 2004
--------- ---------
Pooled separate accounts $ 150,440 $ 206,395
Common stock (38,533) 338,157
--------- ---------
NET APPRECIATION OF FAIR VALUE OF
INVESTMENTS $ 111,907 $ 544,552
========= =========
Note 4 - Parties in Interest
Certain Plan investments are shares in the Bancorp common stock. These
transactions represent investments in the Bancorp and, therefore, qualify as
parties in interest.
Certain Plan investments are shares of pooled separate accounts managed by
ING. ING is the Trustee as defined by the Plan and, therefore, these
transactions qualify as party in interest transactions.
The Plan also has participant loans, which qualify as party-in-interest
transactions.
Note 5 - Reconciliation of the Financial Statements to Form 5500
The 2005 and 2004 Forms 5500 has certain items of assets, income, and expenses
that differ from the amounts shown on the accompanying statements of net
assets available for benefits and changes in net assets available for
benefits. These differences relate to classification only and have no effect
upon net assets available for benefits for either period.
Note 6 - Subsequent Event
Several provisions of the Plan were amended effective January 1, 2006. These
amendments changed the eligibility requirements for the matching and profit
sharing contributions, the allocation formula for the profit sharing
contribution, the definition of compensation, compliance testing requirements,
salary deferral automatic enrollment percentages, and the process for changing
salary deferral amounts.
Note 7 - Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are
exposed to various risks such as interest rate, market, and credit risks. Due
to the level of risk associated with certain investment securities, it is at
least reasonably possible that changes in the values of investment securities
will occur in the near term and that such changes could materially affect
participants account balances and the amounts reported in the statement of net
assets available for benefits.
9
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HOME FEDERAL BANK'S 401(K) PLAN
SCHEDULE H, LINE 4i-SCHEDULE OF ASSETS (HELD AT END OF YEAR)
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Plan's Sponsor EIN: 2-0127850
Plan Number: 002
(c)
Description, Including
Maturity Date December 31, 2005
(b) Rate of Interest, Par, -----------------
Identity of Issue, Borrower, Maturity Value, Number of (d) Current
(a) Lessor, or Similar Party Shares Cost Value
---- ------------------------- ------------------------- ------ ---------
* ING Fixed Pooled separate accounts ** $ 41,131
* ING VP Money Market Pooled separate accounts ** 189,213
Templeton Global Bond Pooled separate accounts ** 21,747
* ING VP Intermediate Bond Pooled separate accounts ** 71,054
* ING GNMA Income Fund Pooled separate accounts ** 53,876
Solution 2035 Portfolio I Pooled separate accounts ** 37
American Balanced Pooled separate accounts ** 605,424
* ING VP Index Plus Large Cap Pooled separate accounts ** 187,336
Oppenheimer Main Street Pooled separate accounts ** 61,438
Pioneer Fund Pooled separate accounts ** 123,370
Washington Mutual Investors Pooled separate accounts ** 59,229
Fidelity VIP II Contrafund Pooled separate accounts ** 294,275
MFS Capital Opportunities Pooled separate accounts ** 88,804
Fidelity Advisor Mid Cap Pooled separate accounts ** 198,384
Franklin Small-MidCap Growth Pooled separate accounts ** 82,738
* ING Am Cent Sm Cap Pooled separate accounts ** 28,874
* ING Baron Small Cap Pooled separate accounts ** 84,360
* ING VP Index Plus Mid-Cap Pooled separate accounts ** 55,507
* ING VP Index Plus Small-Cap Pooled separate accounts ** 99,955
Lord Abbett Mid-Cap Pooled separate accounts ** 222,788
* ING Oppenheimer Glob Port Pooled separate accounts ** 76,209
* ING VP Int'l Value Pooled separate accounts ** 65,854
----------
2,711,603
----------
Common stock:
* Home Federal Bancorp 129,271 shares 1,573,140
----------
* Participant loans 6.75% - 10.50% 57,205
----------
$4,341,948
==========
* - A party in interest, as defined by ERISA.
** - The cost of participant-directed investments is not required to be
disclosed.
10
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EXHIBIT INDEX
Exhibit No.
-----------
23 Consent of Independent Registered Public Accounting Firm
Exhibit 23
Consent of Independent Registered Public Accounting Firm
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (registration statement number 333-121085) filed on
December 8, 2004 of Home Federal Bancorp, Inc. of our report dated June 29,
2006, relating to the financial statements of Home Federal Bank's 401(k) Plan,
which appear in this Annual Report (Form 11-K) as of and for the year ended
December 31, 2005.
/s/ Moss Adams LLP
Spokane, Washington
June 29, 2006