EX-99.1 2 pr.htm PRESS RELEASE
EXHIBIT 99.1
 

 
 
 
FOR RELEASE: Tuesday, October 31, 2017 at 4:30 PM (Eastern)

HOME FEDERAL BANCORP, INC. OF LOUISIANA REPORTS RESULTS OF OPERATIONS
FOR THE QUARTER ENDED SEPTEMBER 30, 2017

Shreveport, Louisiana – October 31, 2017 – Home Federal Bancorp, Inc. of Louisiana (the "Company") (Nasdaq: HFBL), the holding company of Home Federal Bank, reported net income for the three months ended September 30, 2017 of $1.008 million, an increase of $6,000, or 0.6%, compared to net income of $1.002 million reported for the three months ended September 30, 2016. The Company's basic and diluted earnings per share were $0.55 and $0.53, respectively, for both the three months ended September 30, 2017 and September 30, 2016.

The increase in net income for the three months ended September 30, 2017 resulted primarily from an increase of $285,000, or 8.2%, in net interest income partially offset by a $150,000 or 13.4%, decrease in non-interest income, a $56,000, or 2.0%, increase in non-interest expense, and a $73,000, or 14.7%, increase in the provision for income tax expense. The increase in net interest income for the three months ended September 30, 2017 was primarily due to a $498,000, or 12.2%, increase in total interest income, partially offset by an increase of $213,000, or 33.4%, in aggregate interest expense primarily due to an increase in the average volume of interest bearing loans receivable. The Company's average interest rate spread was 3.48% for the three months ended September 30, 2017 compared to 3.68% for the three months ended September 30, 2016. The Company's net interest margin was 3.69% for the three months ended September 30, 2017 compared to 3.83% for the three months ended September 30, 2016. The decrease in the average interest rate spread on a comparative quarterly basis was primarily the result of an increase of nineteen basis points in average rate on interest-bearing liabilities.  The decrease in net interest margin was primarily the result of a higher percentage increase in the average volume of interest-earning assets for the three months ended September 30, 2017 compared to the prior year quarterly period.

The $150,000 decrease in non-interest income for the three months ended September 30, 2017 compared to the prior year quarterly period was due to a decrease of $193,000 in gain on sale of loans, a decrease of $110,000 in gain on sale of real estate, and a decrease of $1,000 in income from bank owned life insurance, partially offset by an increase of $94,000 in gain on sale of securities, an increase of $53,000 in service charges on deposit accounts, and a $7,000 increase in other non-interest income.  The Company sells most of its long term fixed rate residential mortgage loan originations, primarily in order to manage interest rate risk.

The $56,000 increase in non-interest expense for the three months ended September 30, 2017 compared to the same period in 2016 was primarily attributable to increases of $65,000 in legal fees, $51,000 in other non-interest expense, $12,000 in data processing expense, and $3,000 in both occupancy and equipment expense and bank share tax expense.  The increases were partially offset by decreases of $32,000 in advertising expense, $19,000 in loan and collection expense, $17,000 in deposit insurance premiums, $8,000 in compensation and benefits expense, and $2,000 in audit and examination fees.


 
The following table sets forth the Company's average balances and average yields earned and rates paid on its interest-earning assets and interest-bearing liabilities for the periods indicated.

   
For the Three Months Ended September 30,
 
   
2017
   
2016
 
   
Average
Balance
   
Average
Yield/Rate
   
Average
Balance
   
Average
Yield/Rate
 
   
(Dollars in thousands)
 
Interest-earning assets:
                       
    Loans receivable
 
$
330,376
     
5.14
%
 
$
300,441
     
5.14
%
    Investment securities
   
60,539
     
1.78
     
54,275
     
1.44
 
    Interest-earning deposits
   
11,637
     
1.30
     
3,165
     
0.50
 
        Total interest-earning assets
 
$
402,552
     
4.53
%
 
$
357,881
     
4.54
%
                                 
Interest-bearing liabilities:
                               
    Savings accounts
 
$
35,758
     
0.52
%
 
$
29,437
     
0.43
%
    NOW accounts
   
36,277
     
0.48
     
38,964
     
0.51
 
    Money market accounts
   
41,466
     
0.35
     
47,710
     
0.32
 
    Certificates of deposit
   
164,502
     
1.40
     
132,820
     
1.25
 
         Total interest-bearing deposits
   
278,003
     
1.01
     
248,931
     
0.86
 
    Other bank borrowings
   
--
     
--
     
400
     
2.98
 
    FHLB advances
   
42,890
     
1.33
     
45,898
     
0.82
 
                Total interest-bearing liabilities
 
$
320,893
     
1.05
%
 
$
295,229
     
0.86
%

At September 30, 2017, the Company reported total assets of $418.0 million, a decrease of $8.6 million, or 2.0%, compared to total assets of $426.6 million at June 30, 2017. The decrease in assets was comprised primarily of decreases in investment securities of $6.9 million, or 10.6%, from $65.3 million at June 30, 2017 to $58.4 million at September 30, 2017, loans held-for-sale of $5.6 million, or 41.4%, from $13.6 million at June 30, 2017 to $8.0 million at September 30, 2017, cash and cash equivalents of $4.4 million, or 36.6%, from $11.9 million at June 30, 2017 to $7.5 million at September 30, 2017, premises and equipment of $101,000, or 0.8%, from $12.2 million at June 30, 2017 to $12.1 million at September 30, 2017, and other assets of $77,000, or 0.8%, from $10.3 million at June 30, 2017 to $10.2 million at September 30, 2017.  These decreases were partially offset by an increase in loans receivable, net of $8.4 million, or 2.7%, from $312.8 million at June 30, 2017 to $321.2 million at September 30, 2017, and real estate owned of $143,000, or 26.5%, from $540,000 at June 30, 2017 to $683,000 at September 30, 2017.  The decrease in investment securities was primarily due to the sale of $3.5 million of mortgage-backed securities along with $3.3 million of principal repayments on mortgage-backed securities during the quarter ended September 30, 2017.  We realized a profit of $94,000 from the sale of the securities.  The decrease in loans held-for-sale resulted primarily from a decrease in loans originated for sale during the quarter ended September 30, 2017.  Real estate owned increased by $143,000 during the quarter ended September 30, 2017 due to the foreclosure on a one-to-four family mortgage loan.

Total liabilities decreased $8.7 million, or 2.3%, from $380.4 million at June 30, 2017 to $371.7 million at September 30, 2017, primarily due to a decrease in advances from the Federal Home Loan Bank of $14.1 million, or 28.8%, to $34.8 million at September 30, 2017 compared to $48.9 million at June 30, 2017, partially offset by an increase of $4.5 million in total deposits, or 1.4%, to $333.5 million at September 30, 2017 compared to $329.0 million at June 30, 2017, and an increase in other liabilities of $933,000, or 38.7%, to $3.3 million at September 30, 2017 compared to $2.4 million at June 30, 2017.  The increase in deposits was primarily due to a $3.8 million, or 7.0%, increase in non-interest bearing demand deposits from $54.4 million at June 30, 2017 to $58.2 million at September 30, 2017, a $3.0 million, or 1.8%, increase in certificates of deposit from $162.6 million at June 30, 2017 to $165.6 million at September 30, 2017, and a $2.1 million, or 5.9%, increase in savings deposits from $35.0 million at June 30, 2017 to $37.1 million at September 30, 2017, partially offset by a decrease of $3.5 million, or 10.1%, in NOW accounts from $34.5 million at June 30, 2017 to $31.0 million at September 30, 2017 and a decrease of $900,000, or 2.1%, in money market deposits from $42.4 million at June 30, 2017 to $41.5 million at September 30, 2017.  At September 30, 2017, the Company had $10.7 million in brokered deposits compared to $11.5 million at June 30, 2017.  The decrease in brokered deposits is due to brokered deposits that had matured during the quarter. The brokered certificates of deposit which have maturity dates greater than twelve months are callable by Home Federal Bank after twelve months pursuant to early redemption provisions.  The $933,000 increase in other liabilities was primarily due to increases in accrued income taxes and loan escrow balances.
 
 
2

At September 30, 2017, the Company had $3.3 million of non-performing assets (defined as non-accruing loans, accruing loans 90 days or more past due, and other real estate owned) compared to $3.6 million of non-performing assets at June 30, 2017, consisting of nine commercial business loans to one borrower, five single-family residential loans, two line of credit loans, one residential lot in other real estate owned, and one single-family loan in other real estate owned at September 30, 2017 compared to four single-family residential loans, two line of credit loans, fifteen commercial business loans, and one residential lot in other real estate owned at June 30, 2017.  At September 30, 2017, the Company had six single family residential loans, one line of credit loan, nine commercial business loans to one borrower, and five loans to one borrower consisting of two commercial real estate loans, two non-real estate loans, and one single family residential loan classified as substandard compared to four single family residential loans, one line of credit loan, one commercial real estate loan, and fifteen commercial business loans to two borrowers classified as substandard at June 30, 2017. There were no loans classified as doubtful at September 30, 2017 or June 30, 2017.  During the quarter ended December 31, 2016, we became aware that one of two related borrowers of fifteen commercial business loans in the aggregate amount of $2.8 million that were classified as substandard filed for Chapter 11 (reorganization) bankruptcy protection during that period. We charged off nine of the fifteen loans in the amount of $797,000 against the allowance for loan losses during the quarter ended September 30, 2017. We received principal payments in March 2017 for $272,000, May 2017 for $10,000, August 2017 for $15,000, and September for $15,000 reducing our exposure to $1.7 million and expect to continue to receive future monthly adequate protection payments.    These loans continue to be classified as substandard and are on non-accrual at September 30, 2017.  We are continuing to monitor these credits and presently believe that our allowance for loan losses at September 30, 2017 is adequate.  No additional losses are currently anticipated with respect to these loans.

Shareholders' equity increased $117,000, or 0.3%, to $46.4 million at September 30, 2017 from $46.2 million at June 30, 2017.  The primary reasons for the increase in shareholders' equity from June 30, 2017 were net income of $1.0 million, the vesting of restricted stock awards, stock options and the release of employee stock ownership plan shares totaling $135,000, and proceeds from the issuance of common stock from the exercise of stock options of $13,000.  These increases in shareholders' equity were partially offset by dividends paid totaling $234,000, acquisition of Company stock of $719,000, and a decrease in the Company's accumulated other comprehensive income of $86,000.

The Company repurchased 26,283 shares of its common stock under its stock repurchase program during the three months ended September 30, 2017 at an average price per share of $27.24. On October 12, 2016, the Company announced that its Board of Directors approved a seventh stock repurchase program for the repurchase of up to 97,000 shares.  As of September 30, 2017, there were an aggregate total of 77,548 shares remaining for repurchase under the seventh stock repurchase program.

Home Federal Bancorp, Inc. of Louisiana is the holding company for Home Federal Bank which conducts business from its six full-service banking offices and home office in northwest Louisiana.

Statements contained in this news release which are not historical facts may be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts.  They often include words like "believe," "expect," "anticipate," "estimate" and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may."  We undertake no obligation to update any forward-looking statements.
 
 
3

Home Federal Bancorp, Inc. of Louisiana
 
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
(In thousands)
 
   
   
September 30, 2017
   
June 30, 2017
 
   
(Unaudited)
 
ASSETS
     
             
Cash and cash equivalents
 
$
7,547
   
$
11,905
 
Securities available for sale at fair value
   
30,805
     
36,935
 
Securities held to maturity (fair value September 30, 2017: $27,373; June 30, 2017: $27,988)
   
27,560
     
28,357
 
Loans held-for-sale
   
7,988
     
13,631
 
Loans receivable, net of allowance for loan losses (September 30, 2017: $3,231; June 30, 2017: $3,729)
   
321,175
     
312,772
 
Premises and equipment, net
   
12,118
     
12,219
 
Real estate owned
   
683
     
540
 
Other assets
   
10,170
     
10,247
 
                 
Total assets
 
$
418,046
   
$
426,606
 
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
Deposits
 
$
333,502
   
$
329,045
 
Advances from the Federal Home Loan Bank of Dallas
   
34,840
     
48,907
 
Other liabilities
   
3,341
     
2,408
 
                 
Total liabilities
   
371,683
     
380,360
 
                 
Shareholders' equity
   
46,363
     
46,246
 
                 
Total liabilities and shareholders' equity
 
$
418,046
   
$
426,606
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4

Home Federal Bancorp, Inc. of Louisiana
 
CONSOLIDATED STATEMENTS OF INCOME
 
(In thousands, except per share data)
 
       
   
Three Months Ended
 
   
September 30,
 
   
2017
   
2016
 
Interest income
           
     Loans, including fees
 
$
4,284
   
$
3,894
 
     Investment securities
   
11
     
5
 
     Mortgage-backed securities
   
260
     
192
 
     Other interest-earning assets
   
38
     
4
 
          Total interest income
   
4,593
     
4,095
 
Interest expense
               
     Deposits
   
707
     
540
 
     Federal Home Loan Bank borrowings
   
144
     
95
 
     Other bank borrowings
   
--
     
3
 
          Total interest expense
   
851
     
638
 
               Net interest income
   
3,742
     
3,457
 
Provision for loan losses
   
300
     
300
 
               Net interest income after provision for loan losses
   
3,442
     
3,157
 
                 
Non-interest income
               
     Gain on sale of loans
   
605
     
798
 
     Gain on sale of real estate
   
--
     
110
 
     Gain on sale of securities
   
94
     
--
 
     Income on Bank Owned Life Insurance
   
36
     
37
 
     Service charges on deposit accounts
   
216
     
163
 
     Other income
   
17
     
10
 
                 
                    Total non-interest income
   
968
     
1,118
 
                 
Non-interest expense
               
     Compensation and benefits
   
1,714
     
1,722
 
     Occupancy and equipment
   
310
     
307
 
     Data processing
   
167
     
155
 
     Audit and examination fees
   
50
     
52
 
     Franchise and bank shares tax
   
98
     
95
 
     Advertising
   
40
     
72
 
     Legal fees
   
146
     
81
 
     Loan and collection
   
80
     
99
 
     Deposit insurance premium
   
28
     
45
 
     Other expenses
   
198
     
147
 
                 
                    Total non-interest expense
   
2,831
     
2,775
 
                 
     Income before income taxes
   
1,579
     
1,500
 
Provision for income tax expense
   
571
     
498
 
                 
     NET INCOME
 
$
1,008
   
$
1,002
 
                 
     EARNINGS PER SHARE
               
          Basic
 
$
0.55
   
$
0.55
 
          Diluted
 
$
0.53
   
$
0.53
 
 
 
5

   
Three Months Ended
 
   
September
 
   
2017
   
2016
 
             
Selected Operating Ratios(1):
           
     Average interest rate spread
   
3.48
%
   
3.68
%
     Net interest margin
   
3.69
%
   
3.83
%
     Return on average assets
   
0.94
%
   
1.03
%
     Return on average equity
   
8.57
%
   
9.02
%
                 
Asset Quality Ratios(2):
               
     Non-performing assets as a percent of total assets
   
0.78
%
   
0.29
%
     Allowance for loan losses as a percent of non-performing loans
   
99.07
%
   
278.95
%
     Allowance for loan losses as a percent of total loans receivable
   
1.00
%
   
1.08
%
                 
Per Share Data:
               
     Shares outstanding at period end
   
1,927,053
     
1,959,419
 
     Weighted average shares outstanding:
               
          Basic
   
1,816,295
     
1,812,578
 
          Diluted
   
1,914,932
     
1,877,509
 
     Tangible book value at period end
 
$
24.06
   
$
22.44
 
 ______________________________                
(1) Ratios for the three month periods are annualized.
               
(2) Asset quality ratios are end of period ratios.
               
 
 
 
    
CONTACT:
 
 
James R. Barlow
President and Chief Executive Officer
(318) 222-1145
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6