hf financial corp - 2013 summary annual report

ENERGIZEDCOMMITTED

FOCUSED

2013 Summary Annual Report

SUCCESSFUL

DRIVEN

DEDICATED

MOTIVATED

DISCIPLINED

EFFECTIVEAMBITIOUS

PASSIONATEPOSITIVE

TIRELESS

CONFIDENTEFFICIENT

RESPONSIBLE

STRATEGIC

Stephen BianchiPresident and

Chief Executive OfficerHF Financial Corp.

TO OURSHARE-HOLDERS

HF Financial Corp. 2013 Summary Annual Report | 2

I’m pleased to report that fiscal 2013 was a solid, positive and successful year for HF Financial Corp., one that saw us realign, reposition, and reinvest to build momentum and provide returns.

To that end, our performance in fiscal 2013 reflected key progress on these three fronts:

• Realign Reduced redundancy, centralized

processes, served clients better

• Reposition Fostered a culture of evolution

focused on proactive banking

• Reinvest Identified people and technologies

to further the vision and drive value

Our efforts also resulted in improved earnings generated from a more efficient branch network, robust mortgage lending operations, and growth in commercial and agricultural lending.

Bottom line: Our earnings increased 13.6% to $5.9 million, or $0.83 per diluted share for fiscal 2013, compared to $5.2 million or $0.74 per diluted share a year ago.

By the NumbersI’d like to point out fiscal 2013 financial highlights that demonstrate our sound performance:

• Earnings per diluted share for fiscal 2013 increased 12.2% to $0.83 versus $0.74 in fiscal 2012.

• Loans and leases receivable, net of allowance, increased 1.8% in fiscal 2013 to $685.0 million from $673.1 million at June 30, 2012, reflecting new agricultural and commercial real estate relationships.

• Total assets at June 30, 2013, increased slightly to $1.22 billion from $1.19 billion one year earlier due primarily to larger loan and security balances.

• Total deposits increased to $898.8 million at June 30, 2013 versus $893.9 million at June 30, 2012.

• Noninterest-bearing deposits increased to 17.5% of the deposit portfolio from 16.4% one year earlier.

• Low cost interest-bearing checking accounts and money market accounts increased to 16.8% and 23.7%, respectively, from 15.5% and 23.5% at June 30, 2012.

• Total past due loans 30 days or greater were $2.6 million at June 30, 2013, compared to $9.1 million one year earlier.

• For fiscal 2013, noninterest expenses decreased 7.5% to $34.3 million from $37.1 million for fiscal 2012.

• Finally, the most recent dividend of $0.1125 per share represents the twenty-first consecutive quarter at this level and provides a 3.33% current yield at recent market prices.

September 20, 2013

Abbreviated Financial Highlights:(in thousands) 2013 2012 2011 2010 2009

Interest and Dividend Income $38,991 $47,211 $54,411 $57,354 $60,688

Interest Expense 10,607 13,563 17,077 20,681 25,359

Net Interest Income 28,384 33,648 37,334 36,673 35,329

Net Interest Income after Provision for Loan

and Lease Losses 28,113 31,878 28,718 33,723 33,650

Noninterest Income 15,123 12,895 8,874 11,014 12,602

Noninterest Expense 34,332 37,115 37,144 36,036 34,566

Income Before Taxes 8,904 7,658 448 8,701 11,686

Net Income 5,870 5,165 679 5,745 7,816

Earnings Per Common Share (diluted) $0.83 $0.74 $0.10 $1.00 $1.61

SUCCESSFUL

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HF Financial Corp. - Total Return (%)

HFFC (+700.49%)

SNL US Bank and Thrift (+509.66%)

HF Financial Corp. - Dividend Yield (%)

HFFC

SNL US Bank and Thrift

Pivotal YearIn many ways, fiscal 2013 was a pivotal year where our growth accelerated, requiring swift processes, motivated employees, and adoption of forward-thinking technologies. As the financial highlights in this summary annual report indicate, we were disciplined in our approach, we performed well and we delivered on what we set out to do. And that has given rise to what I see as an emerging cultural change.

3 | HF Financial Corp. 2013 Summary Annual Report

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21 Years of Consistent Cash Dividends

SNL U.S. Bank and Thrift : Includes all Major Exchange (NYSE, NYSE MKT, NASDAQ) Banks and Thrifts in SNL’s coverage universe.

DISCIPLINED

2013 Total Loans and Leases

Commercial Real Estate 43.3%Agricultural 25.5%Consumer 13.0%Commercial 11.1%Residential 7.1%

Residential

Commercial

Consumer Direct and Indirect

Ag

Commercial

25.5%

2012 Total Loans & Leases

13.0%

11.1%

7.1%

43.3%

Equipment

Construction

Multi-Family

One-to-Four

Consumer Direct and Indirect

Ag

Commercial

Out-of-market CDs

In-market CDs

Savings accounts

Money market accounts

Interest bearing checking

Noninterest bearing checking

$115.6

Bank-Like Deposit Franchise (in millions)

$239.5

$22.6

$156.9

$151.4

$212.8

hospitality hotels

hospitality

health care

RE non-owner occ

RE owner-occ

RE multi-fam

RE other

Finance

Retail wT

Manu

Const land division

Construction NSF

Contr other

ag dairy

ag swine

ag beef

ag cash grain

Ag other

other

PAOS

4.4%


14.9%

8.5%

6.8%

4.1%0.3%

1.3%

4.2%3.3%5.3%

8.1%

3.3%0.9% 4.3% 5.4%

7.6%

13.0%

1.3%

0.2%2.8%

Public Administration & Other ServicesOtherAgriculture - OtherAgriculture - Cash GrainAgriculture - BeefAgriculture - SwineAgriculture - DairyConstr. - OtherConstr. - New Single FamilyConstr. - Land SubdivisionManufacturingRetail Wholesale TradeFinance & Ins.RE - OtherRE - Multi-Fam.RE - Owner OccupiedRE - Non-Owner OccupiedHealth Care & Social AssistHospitality - OtherHospitality - Hotels

5.4%

7.6%13.0%8.5%2.8%0.2%4.4%4.2%1.3%1.3%3.3%5.3%0.3%4.1%6.8%

14.9%8.1%3.3%0.9%4.3%

Commercial and Agricultural Portfolio - $556 million

Well Diversified Lending


Noninterest-bearing checking $156.9Interest-bearing checking $151.4Money market accounts $212.8Savings accounts $115.6In-market CDs $239.5Out-of-market CDs $22.6

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$1,194 $1,193

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$894

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$68.7

$94.4$97.3

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Stockholders’ Equity(in millions)

$94.4 $96.8

Stockholders’ Equity (in millions)


DELIVERY

Better at What We Do BestGiven our long history in South Dakota, many of our customers know us as “their bank” that provided their first and subsequent home loans. Looking back, our financial institution was originally chartered as Home Savings Association nearly 85 years ago. Since that time, while expanding into a full range of financial services offerings, we still have served our communities with a strong concentration on home lending.

With record mortgage banking revenue in fiscal 2013, our home-loan operation has never been stronger. Mortgage banking revenue (including gains on sales of loans and loan servicing income) increased to $1.6M during the fourth quarter alone. This success can be attributed to the momentum generated in fiscal 2012, with a renewed focus of an augmented lending team, centralized processing systems and more effective lending center operations at our branches and in-store facilities.


Left to right: Kevin Sanchez, Senior VP/Human Resources; and Wendy Wills, Senior VP/Corporate Strategy.

MOMENTUM

HOME LOANS


A Brand Ally for Wealth ManagementIn fiscal 2013, one of the many major system and operational changes implemented included the transition to Raymond James Financial Services, Inc., offered through Hometown Investment Services, Inc., a wholly-owned subsidiary of Home Federal Bank. The brand equity of the Raymond James organization combined with its robust analytical tools has allowed our advisors to provide a wider range of financial planning services and products. Moreover, the transition to Raymond James helped our organization attract and hire new financial advisors to be part of our growing team.

The Trust Department posted a record year in fiscal 2013, with 17.7% of all assets under management being new within the past year. We continue to attract new relationships by offering Dynasty Trusts. Because of our South Dakota roots and favorable trust laws, we are able to engage customers throughout the Midwest and beyond. Combined with our momentum in Hometown Investment Services, Inc., we are well positioned to grow our business and guide customers toward achievement of investment goals and protect assets for future generations.

Left to right: Brent Olthoff, Senior VP/Chief Financial Officer and Treasurer; Jon Gadberry, Senior VP/Wealth Management; and Pamela Russo, Corporate Secretary.

TRANSITION

TRUST & INVESTMENTS

A Good Bank for BusinessNew opportunities emerged in fiscal 2013 through our emphasis on business and agribusiness financial services. Compounded with South Dakota’s emergence as a marquee state for business ventures, commercial loan assets increased, and now make up 54.7% of our total loan portfolio. Commercial real estate loans (41.5%) indicate we’re funding our footprint’s expansion of business. Commercial lending (11.1%) demonstrates our dedication to helping strengthen existing and larger businesses’ relationships, particularly among manufacturers, wholesalers and service industries. Finally, commercial construction (1.8%) shows how we help build and expand the very communities we live and work in.

The overall increase within our business and commercial loan portfolio also reflects our investment in the positive economic climate within our footprint, especially the growth surrounding Sioux Falls, S.D. As the state’s business-friendly policies attract established companies and inspire new ones, Home Federal’s renewed effort in our business and commercial lines will continue to pursue these economic opportunities. True to our mission and vision, we’re a community-driven bank, capable of undertaking major investments and helping our region and its people prosper.


Left to right: Michael Westberg, Senior VP/Chief Credit Officer; Terry Cleberg, VP/Business Banking; Randy Snyders, VP/Business Banking; and Stephen Bianchi, President and Chief Executive Officer.

DEDICATION

SMALL BUSINESS


The Business of AgAmidst the burgeoning business and commercial banking opportunities and growth in our loan portfolio, agriculture remains an integral part of South Dakota’s overall culture, economy and our business. In other words, strategically deepening our commitment to agribusiness and farmers helps ensure our success in other areas. In fiscal 2013, Home Federal added bench strength by hiring additional ag bankers and investing in new financial tools and technologies. Our agriculture loans increased 14.6%, and account for 25.5% of the total loan portfolio. This allows us to expand our reach into the agricultural and agribusiness loan arena, while leveraging our business and commercial base.

Left to right: Michael Westberg, Senior VP/Chief Credit Officer; and Brent Olthoff, Senior VP/Chief Financial Officer and Treasurer.

COMMITMENT

AGRIBUSINESS

Left to right: Brent Olthoff, Senior VP/Chief Financial Officer and Treasurer; Jon Gadberry, Senior VP/Wealth Management; Kevin Sanchez, Senior VP/Human Resources; Stephen Bianchi, President and Chief Executive Officer; Wendy Wills, Senior VP/Corporate Strategy; Pamela Russo, Corporate Secretary; and Michael Westberg, Senior VP/Chief Credit Officer.


Changing For and With CustomersHome Federal streamlined our branch system in fiscal 2013 by closing a branch, increasing services and product offerings, and shifting its debit card offering from Visa® to MasterCard®. While every change carries the potential for customer concern, we continue to maintain high levels of customer loyalty and satisfaction.

As we look ahead to what we envision as the branch of the future, we continue to research and test innovative uses of technologies and customer service methodologies to be more efficient, provide additional convenience, and layer on product offerings our customers desire. We see opportunities to establish a new definition of convenience – one that aligns our services with our customers’ lifestyles.

A Region of RichesFrom our HF Financial Corp. headquarters in South Dakota, we know there is so much more to our area than seas of fertile farm fields. Yes, farming and agribusiness are central to our state’s economy. But our values of fairness, compassion and hard work meld with the business acumen of our bank’s major markets, such as Sioux Falls, Yankton, Mitchell, Watertown, Pierre and Aberdeen, and now, the Twin Cities of Minnesota.

It’s a refreshing and thriving economic climate in which we operate. Others agree. According to Forbes, South Dakota was rated #1 for business costs and #12 overall in its 2012 “Best States for Business Survey.” The Small Businesses and Entrepreneurship Council listed South Dakota as the #1 state for public policy climate for small businesses and entrepreneurs in 2012 as well.

An ambitious, yet community-focused business culture nests within a state that offers no state corporate income tax, no state personal income tax, no personal property tax, no inheritance tax, and no inventory tax. That led CNBC to rank South Dakota America’s top state for business, in part due to its low cost. [Source: http://www.cnbc.com/id/100874421]

South Dakota has been a strong, agriculturally rich region for generations and is emerging as an attractive frontier for large and small businesses alike in a multitude of business sectors.

In addition, our strategic expansion into the Twin Cities of Minnesota through Infinia Bank, a division of Home Federal Bank of South Dakota, has allowed us to bring our blend of community-focused banking to businesses, business owners and individuals who are located in the country’s 16th-largest metropolitan area.

Building From WithinOur region is strong and Home Federal’s roots run deep. We’ve grown alongside the people and communities in our area for nearly 85 years. Given our expanding footprint, we know and value the regional culture. We know our communities. And we know we have the asset quality, capacity and capability to continue that growth. Now is an exciting time to be a strong and robust community-driven bank, located in a region primed for further expansion.

Confidence in Community BankingWe’re confident in our people, our strategies and our roots in community banking. More than that, I can hear, see and feel firsthand that our organization is energized, committed and focused to deliver exceptional customer service and shareholder value.

Thank you for your investment and for the trust you place in HF Financial Corp.

Sincerely,

Stephen M. BianchiPresident and Chief Executive OfficerHF Financial Corp.


AMBITIOUS


Consolidated Statements of Financial Condition

June 30, 2013, 2012 and 2011 (Dollars in Thousands, Except Share Data)

2013 2012 2011

Assets

Cash and cash equivalents $21,352 $50,334 $55,617

Securities available for sale (Note 2) 424,481 373,246 234,860

Correspondent bank stock (Note 8) 8,936 7,843 8,065

Loans held for sale (Note 3) 9,169 16,207 11,991

Loans and leases receivable, net (Note 3) 685,028 673,138 811,178

Accrued interest receivable 5,301 5,431 7,607

Office properties and equipment, net of accumulated depreciation (Note 5) 13,853 14,760 14,969

Foreclosed real estate and other properties 564 1,627 712

Cash value of life insurance 19,965 19,276 15,704

Servicing rights, net (Note 4) 10,987 11,932 12,952

Goodwill and intangible assets, net (Note 6) 4,938 4,366 4,366

Other assets (Note 11) 12,938 14,431 15,492

Total assets $1,217,512 $1,192,591 $1,193,513

Liabilities & Stockholders’ Equity

Liabilities

Deposits (Note 7) $898,761 $893,859 $893,157

Advances from Federal Home Loan Bank and other borrowings (Note 8) 167,163 142,394 147,395

Subordinated debentures payable to trusts (Note 9) 24,837 27,837 27,837

Advances by borrowers for taxes and insurance 12,595 12,708 11,587

Accrued expenses and other liabilities (Note 15) 16,885 18,977 19,091

Total liabilities 1,120,241 1,095,775 1,099,067

Stockholders’ Equity (Notes 12, 13 and 14)

Preferred stock, $.01 par value, 500,000 shares authorized,

none outstanding - - - - - - - - - - - -

Series A Junior Participating Preferred Stock, $1.00 stated value,

50,000 shares authorized, none outstanding - - - - - - - - - - - -

Common stock, $.01 par value, 10,000,000 shares authorized,

9,138,475 and 9,125,751 shares issued at

June 30, 2013, and June 30, 2012, respectively 91 91 91

Additional paid-in capital 46,096 45,673 45,116

Retained earnings, substantially restricted 86,266 83,571 81,554

Accumulated other comprehensive (loss),

net of related deferred tax effect (Note 18) (4,285) (1,622) (1,418)

Less cost of treasury stock, 2,083,455

shares at June 30, 2013 and 2012 (30,897) (30,897) (30,897)

Total stockholders’ equity 97,271 96,816 94,446

Total liabilities and stockholders’ equity $1,217,512 $1,192,591 $1,193,513

(See notes to Consolidated Financial Statements in our Form 10-K)


Consolidated Statements of Income

Years Ended June 30, 2013, 2012 and 2011(Dollars in Thousands, Except Share Data)

2013 2012 2011Interest, Dividend & Loan Fee IncomeLoans and leases receivable $33,923 $42,283 $48,557Investment securities and interest-bearing deposits 5,068 4,928 5,854 38,911 47,211 54,411

Interest ExpenseDeposits 4,762 7,228 9,572Advances from Federal Home Loan Bank and other borrowings 5,845 6,335 7,505 10,607 13,563 17,077Net interest income 28,384 33,648 37,334Provision for losses on loans and leases 271 1,770 8,616Net interest income after provision for losses on loans and leases 28,113 31,878 28,718

Noninterest IncomeFees on deposits 6,500 6,015 6,154Loan servicing income, net 476 603 1,576Gain on sale of loans 4,613 2,664 2,845Earnings on cash value of life insurance 814 683 667Trust income 794 736 666 Commission and insurance income 860 765 754 Gain (loss) on sale of securities, net 2,110 1,490 (3,602)Loss on disposal of closed-branch fixed assets (22) (473) - - - -Total other-than-temporary impairment losses - - - - - - - - (399)Portion of loss recognized in other comprehensive income - - - - - - - - (150)Net impairment losses recognized in earnings - - - - - - - - (549)Other (1,022) 412 363 15,123 12,895 8,874

Noninterest ExpenseCompensation and employee benefits 20,044 20,478 21,823Occupancy and equipment 4,196 4,912 4,602FDIC insurance 798 1,048 1,473Checks and data processing expense 2,990 2,928 2,855Professional fees 2,086 3,198 2,356Marketing and community investment 1,090 1,455 1,270Foreclosed real estate and other properties, net 344 146 208Other 2,784 2,950 2,557 34,332 37,115 37,144Income before income taxes 8,904 7,658 448Income tax expense (benefit) (Note 11) 3,034 2,493 (231) Net income $5,870 $5,165 $679

Basic earnings per common share (Note 14) $0.83 $0.74 $0.10Diluted earnings per common share (Note 14) 0.83 0.74 0.10Dividend declared per common share 0.45 0.45 0.45



Selected Consolidated Financial and Other Data

Years Ended June 30, 2013, 2012 and 2011(Dollars in Thousands, Except Share Data)

2013 2012 2011 Selected Operations DataInterest, dividend and loan fee income $38,991 $47,211 $54,411

Interest expense 10,607 13,563 17,077

Net interest income 28,384 33,648 37,334

Provision for losses on loans and leases 271 1,770 8,616

Net interest income after

provision for losses on loans and leases 28,113 31,878 28,718

Noninterest income 15,123 12,895 8,874

Noninterest expense (34,332) (37,115) (37,144)

Income before income taxes 8,904 7,658 448

Income tax expense (benefit) 3,034 2,493 (231)

Net income $5,870 $5,165 $679

Average BalancesAssets $1,179,067 $1,196,098 $1,224,538

Interest-earning assets 1,099,100 1,109,832 1,141,357

Interest-bearing liabilities 919,241 943,789 990,848

Loans and leases receivable 696,075 772,344 867,346

Deposits 747,296 768,914 780,339

Stockholders’ equity 98,490 95,409 94,561

Stockholders’ equity to assets 8.35% 7.98% 7.72%

Per Common Share DataBasic earnings per common share $0.83 $0.74 $0.10

Diluted earnings per common share 0.83 0.74 0.10

Dividends declared per common share 0.45 0.45 0.45

Market Value:High $14.55 $12.99 $11.24

Low 11.00 7.76 9.25

Close 13.01 12.14 10.94

Shares outstanding, end of period 7,055,020 7,042,296 6,974,272

Significant RatiosInterest rate spread (average) 2.40% 2.81% 3.05%

Net interest margin, TE (average) (1) 2.63 3.07 3.31

Return on average assets (2) 0.50 0.43 0.06

Return on average equity (3) 5.96 5.41 0.72

Operating efficiency ratio (4) 77.52 77.17 78.34

Total efficiency ratio (5) 78.91 79.74 80.38

Equity to total assets (end of period) 7.99 8.12 7.93

Dividend payout ratio (6) 54.22 60.80 450.00

(1) Net interest income divided by average interest-earning assets, expressed on a fully taxable equivalent basis. See non-GAAP reconciliation.(2) Ratio of income to average total assets.(3) Ratio of income to average stockholders’ equity.(4) Total noninterest expense divided by the sum of net interest income plus total noninterest income excluding net interest expense on trust preferred

securities and loss on disposal of closed-branch fixed assets. See non-GAAP reconciliation.(5) Total noninterest expense divided by the sum of net interest income plus noninterest income.(6) Dividends declared per common share divided by net income per share.



HF Financial Corp.

General CounselBriggs and Morgan, PA2200 IDS Center80 South 8th StreetMinneapolis, MN 55402-2112

Independent AuditorsEide Bailly, LLP200 East 10th Street | Suite 500Sioux Falls, SD 57117

Robert L. HansonChief Executive Officer Harold’s Photo Experts

David J. HorazdovskyPresident and Chief Executive OfficerThe Evangelical Lutheran Good Samaritan Society

John W. PalmerCo-FounderPL Capital, LLC

Thomas L. Van WyheArea Manager Trane Company

Michael M. VekichChairman of the Board,Chief Executive Officer Vekich Chartered

Board Of Directors

Stephen M. BianchiPresident andChief Executive Officer

Corporate Officers

Pamela F. RussoCorporate Secretary

Brent R. OlthoffSenior VP/Chief Financial Officer and Treasurer

Charles T. DayChief Operating OfficerFace It Together, Inc.

Home Federal Bank

Curtis J. BernardOwner and Founder Bernard Properties

Mark R. BuchePresident KLAS, LLC

Michael M. VekichChairman of the Board,Chief Executive Officer Vekich Chartered

Bank Board Of DirectorsStephen M. BianchiPresident andChief Executive Officer

Executive Officers

Pamela F. RussoCorporate Secretary

Brent R. OlthoffSenior VP/Chief Financial Officer and Treasurer

James W. AbbottPresident University of South Dakota


Robbie L. ArendSteven L. BlockTerry J. ClebergCynthia A. DawsonRita M. EdwardsScott E. ErkonenRandall D. FinkAaron D. HansenBruce E. HansonTim R. HouskaMichael R. Hueg

Jeffrey L. JarrattKurt E. JohnsonPaul S. JordahlGerry L. KrechThomas P. KueterKristi R. MetzgerMary F. MurrayMichael R. PierceRick J. RysavyJeffrey E. ScheelJohn J. Schramm

Sandra J. SiegTamara A. SimonRandy P. SnydersJason L. StoebnerBecky N. StriteckyMark S. SwensonKirk L. WaughRandy T. Zdenek

Robert L. HansonChief Executive Officer Harold’s Photo Experts

David J. HorazdovskyPresident and Chief Executive OfficerThe Evangelical Lutheran Good Samaritan Society

John W. PalmerCo-FounderPL Capital, LLC

Thomas L. Van WyheArea Manager Trane Company

Charles T. DayChief Operating OfficerFace It Together, Inc.

Jon M. GadberrySenior VP/Wealth Management

Senior Officers

Michael WestbergSenior VP/Chief Credit Officer

Kevin G. SanchezSenior VP/Human Resources

Wendy A. WillsSenior VP/Corporate Strategy

Stephen M. BianchiPresident andChief Executive Officer

Vice Presidents


Shareholder Information

Annual MeetingPlease see our proxy statement for details regarding our 2013 Annual Meeting of Shareholders.

Annual Report on Form 10-KThis Annual Report is intended to provide a concise overview of HF Financial Corp. and its business operations in 2013. It does not include, and is not intended as a substitute for, the information set forth in our Annual Report on Form 10-K for the fiscal year ended June 30, 2013 filed with the Securities and Exchange Commission (the “SEC”). A copy of HF Financial Corp.’s Annual Report on Form 10-K as filed with the SEC may be obtained without charge upon written request to Shareholder Relations, Attn: Corporate Secretary, HF Financial Corp., P.O. Box 5000, Sioux Falls, SD 57117-5000. HF Financial Corp. will furnish to any shareholder any exhibit to the Form 10-K upon the advance payment of HF Financial Corp.’s reasonable expenses in furnishing such exhibits. A copy of the Form 10-K and Summary Annual Report is also available via the Internet at the following website: www.homefederal.com, Investor Relations.

DividendsFor fiscal year 2013, HF Financial Corp. paid dividends totaling $0.45 per share. The Board of Directors intends to continue the payment of quarterly cash dividends, dependent on the results of operations and financial condition of HF Financial Corp., tax considerations, industry standards, economic conditions, general business practices and other factors the Board of Directors deems relevant. HF Financial Corp.’s ability to pay dividends is dependent on the dividend payments it receives from its subsidiary, Home Federal Bank, which are subject to federal and state regulations; the terms of the agreements on subordinated debentures payable to trusts, should HF Financial Corp. elect to defer interest payments; and the terms of HF Financial Corp.’s line of credit with United Bankers’ Bank.

Forward-looking StatementsThis Annual Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, those described under Part I, Item 1—“Business,” Part I, Item 1A—“Risk Factors,” Part II, Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 7A—“Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended June 30, 2013. Forward-looking statements speak only as of the date they are made. Forward-looking statements are based upon management’s then-current beliefs and assumptions, but management does not give any assurance that such beliefs and assumptions will prove to be correct. We undertake no obligation to publicly update or revise any forward-looking statements included or incorporated by reference in this Summary Annual Report or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise, except to the extent required by federal securities laws. Based upon changing conditions, should any one or more of the above risks or uncertainties materialize, or should any of our underlying beliefs or assumptions prove incorrect, actual results may vary materially from those described in any forward-looking statement.

Stock Listing

Our common stock is listed on the Nasdaq Global Market under the symbol “HFFC.” As of September 9, 2013, 7,055,020 shares of our common stock were issued and outstanding, held of record by approximately 416 stockholders. On September 9, 2013, the last reported sale price of our common stock was $12.91 per share. The table below sets forth the high and low sale prices per share of our common stock on the Nasdaq Global Market and the dividends paid per share of our common stock for the indicated periods.

High Low DividendsFiscal 2013 1st Quarter (Jul-Sep) $13.25 $11.00 $0.11252nd Quarter (Oct-Dec) 13.15 11.85 0.11253rd Quarter (Jan-Mar) 14.00 12.76 0.11254th Quarter (Apr-Jun) 14.55 12.56 0.1125

Fiscal 2012 1st Quarter (Jul-Sep) $10.94 $7.76 $0.11252nd Quarter (Oct-Dec) 10.85 8.21 0.11253rd Quarter (Jan-Mar) 12.25 10.38 0.11254th Quarter (Apr-Jun) 12.99 11.85 0.1125

Fiscal 2011 1st Quarter (Jul-Sep) $10.97 $9.25 $0.11252nd Quarter (Oct-Dec) 11.15 10.00 0.11253rd Quarter (Jan-Mar) 11.20 10.57 0.11254th Quarter (Apr-Jun) 11.24 10.55 0.1125

Corporate HeadquartersHF Financial Corp.225 South Main AvenueSioux Falls, SD 57104

Mailing AddressHF Financial Corp.P.O. Box 5000Sioux Falls, SD 57117-5000

Registrar and Transfer AgentComputershareP.O. Box 43078Providence, RI 02940-30781-800-984-9012www.computershare.com/investor

Shareholder Relations DepartmentHF Financial Corp.225 South Main AvenueSioux Falls, SD 571041-605-333-7556

The reconciliation of the Net Interest Income (GAAP) to Net Interest Margin, TE (non-GAAP) is as follows:

Years Ended June 30 (Dollars in Thousands)

2013 2012 2011Net interest income $28,384 $33,648 $37,334

Taxable equivalent adjustment 488 378 500

Adjusted net interest income 28,872 34,026 37,834

Average interest-earning assets 1,099,100 1,109,832 1,141,357

Net interest margin, TE 2.63% 3.07% 3.31%

The reconciliation of the Efficiency Ratio (GAAP) to Operating Efficiency Ratio (non-GAAP) is as follows:

Years Ended June 30 (Dollars in Thousands)

2013 2012 2011Noninterest expense (line a) $34,332 $37,115 $37,144

Total revenue (net interest income and other noninterest income) 43,507 46,543 46,208

Net Interest expense on Trust Preferred Debt Securities

included in net interest income 761 1,076 1,207

Loss on disposal of closed-branch fixed assets 22 473 - - - -

Total revenue, excluding net interest income effect of Trust Preferred Debt

Securities and gain on sale of land and branches, net (line b) $44,290 $48,092 $47,415

Operating efficiency ratio (line a/line b) 77.52% 77.17% 78.34%

Efficiency ratio 78.91% 79.74% 80.38%


Fargo

Minneapolis St. Paul

Des Moines

Omaha

North Dakota

South DakotaMinnesota

Iowa

Nebraska

City Name - Branch

- Market Center for

Rural Communities

City Name - Major Regional City

Home Federal has 27 branch o�ces in 18 communities

Aberdeen

Marshall

Mitchell

Pierre

Watertown

Colman

Canton

Yankton

Crooks

Brandon

Freeman LennoxParker

Hartford

Dell Rapids

Bloomington

Sioux Falls

Brookings


The mission of Home Federal Bank is to help make our customers’ financial dreams come true.

From personal banking, wealth management, home loans, and business and ag banking, the trusted

advisors at Home Federal help bring focused and prudent financial solutions to customers.

Community-driven banking: it’s something our employees know, feel and deliver every day.

NASDAQ: HFFC

003SSN03BD

hf financial corp - 2013 summary annual report

Documents

net income

noninterest income

diluted share

dividend income

common share

successful year

improved earnings

net of allowance