EX-99.1 2 ex_586841.htm EXHIBIT 99.1 ex_586841.htm

Exhibit 99.1

 

 

 

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FOR RELEASE: Monday, October 30, 2023 at 4:30 PM (Eastern)

 

HOME FEDERAL BANCORP, INC. OF LOUISIANA REPORTS RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023

 

Shreveport, Louisiana – October 30, 2023 – 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, 2023, of $1.2 million compared to net income of $1.7 million reported for the three months ended September 30, 2022. The Company’s basic and diluted earnings per share were $0.40 and $0.39, respectively, for the three months ended September 30, 2023, compared to basic and diluted earnings per share of $0.55 and $0.52, respectively, for the three months ended September 30, 2022.

 

The Company reported the following highlights during the three months ended September 30, 2023:

 

  ● 

Total loans receivable, net for the three months ended September 30, 2023 increased $17.1 million, or 3.5%, to $506.6 million at September 30, 2023, compared to $489.5 million at June 30, 2023.
  ●

The Company’s average interest rate spread was 2.68% for the three months ended September 30, 2023, compared to 3.74% for the three months ended September 30, 2022.
  ●

The Company’s net interest margin was 3.37% for the three months ended September 30, 2023, compared to 3.90% for the three months ended September 30, 2022.
  ●

Basic earnings per share decreased $0.15, or 27.3%, from $0.55 for the three months ended September 30, 2022, compared to $0.40 for the three months ended September 30, 2023.
  ●

Diluted earnings per share decreased $0.13 or 25.0%, from $0.52 for the three months ended September 30, 2022, compared to $0.39 for the three months ended September 30, 2023.
  ●

Nonperforming assets totaled $1.8 million, or 0.28% of total assets at September 30, 2023 compared to $1.6 million, or 0.24% of total assets, at June 30, 2023.

 

 

The decrease in net income for the three months ended September 30, 2023, as compared to the prior year quarter resulted primarily from an increase of $435,000, or 11.6%, in non-interest expense, an increase of $301,000 in provision for income taxes, a decrease of $112,000, or 20.5%, in non-interest income, and a decrease of $21,000, or 0.4% in net interest income, partially offset by a decrease of $418,000, or 100.0% in the provision for credit losses. The decrease in net interest income for the three months ended September 30, 2023, was primarily due to a $2.3 million, or 486.1%, increase in total interest expense, partially offset by an increase of $2.3 million, or 39.7%, in total interest income. The Company’s average interest rate spread was 2.68% for the three months ended September 30, 2023, compared to 3.74% for the three months ended September 30, 2022. The Company’s net interest margin was 3.37% for the three months ended September 30, 2023, compared to 3.90% for the three months ended September 30, 2022.

 

ASU 2016-13, Financial Instruments – Credit Losses (Topic 326):Measurement of Credit Losses on Financial Instruments. On July 1, 2023, the Company adopted the CECL methodology for estimating credit losses. This resulted in a $189,000 increase to the allowance for credit losses and a one-time cumulative adjustment resulted in a $149,000, net of tax, decrease to stockholders’ equity. For purchased credit deteriorated loans, the Company applied the guidance under CECL using the prospective transition approach. As a result, the Company adjusted the amortized cost basis of the purchased credit deteriorated loans by $170,000 to reclassify the purchase discount to the allowance for credit losses on July 1, 2023. The ACL account increased $359,000 from these two transactions. No provision expense was recorded in the first quarter of 2024. As of September 30, 2023, the ACL was $5.1 million, and the ratio of ACL to gross loans was 1.00%. As of June 30, 2023, the ACL was $5.2 million, and the ratio of ACL to gross loans was 1.05%.

 
 

 

 

 

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,

  
   

2023

    

2022

  
   

Average

Balance

    

Average

Yield/Rate

    

Average

Balance

    

Average

Yield/Rate

  
   

(Dollars in thousands)

  

Interest-earning assets:

                                

Loans receivable

   $ 498,242       5.79 %   $ 396,768       5.03 %

Investment securities

     113,584       2.18       110,602       1.76  

Interest-earning deposits

     10,066       6.98       32,706       3.18  

Total interest-earning assets

   $ 621,892       5.15 %   $ 540,076       4.25 %
                                 

Interest-bearing liabilities:

                                

Savings accounts

   $ 78,572       0.38 %   $ 128,749       0.26 %

NOW accounts

     55,900       0.48       58,658       0.11  

Money market accounts

     108,891       2.26       94,694       0.15  

Certificates of deposit

     194,785       3.73       84,715       1.24  

Total interest-bearing deposits

     438,148       2.47       366,816       0.43  

Other bank borrowings

     8,654       8.39       4,915       5.33  

FHLB advances

     1,138       5.23       826       4.80  

Total interest-bearing liabilities

   $ 447,940       2.47 %   $ 372,557       0.51 %

 

The $112,000 decrease in non-interest income for the three months ended September 30, 2023, compared to the prior year quarterly period, was primarily due to a decrease of $137,000 in gain on sale of loans, and a $34,000 increase in loss on sale of real estate and fixed assets, partially offset by a $56,000 increase in service charges on deposit accounts, and an increase of $3,000 in other non-interest income. The decrease in gain on sale of loans for the quarter ended September 30, 2023, was primarily due to a decrease in refinance activity causing a decrease in mortgage loan originations. In addition, in recent periods the Company has increased its originations of adjustable rate mortgages for portfolio rather than for sale in the secondary market.

 

The $435,000 increase in non-interest expense for the three months ended September 30, 2023, compared to the same period in 2022, is primarily attributable to increases of $94,000 in amortization of core deposit intangible expense, $74,000 in compensation and benefits expense, $69,000 in advertising expense, $64,000 in data processing expense, $48,000 in occupancy and equipment expense, $44,000 in deposit insurance premium expense, $37,000 in franchise and bank shares tax expense, $34,000 in professional fees, $27,000 in audit and examination fees, and $8,000 in loan and collection expense. The increases were partially offset by a decrease of $64,000 in other non-interest expense.

 

At September 30, 2023, the Company reported total assets of $662.6 million, an increase of $1.7 million, or 0.3%, compared to total assets of $660.9 million at June 30, 2023. The increase in assets was comprised primarily of increases in loans receivable, net of $17.1 million, or 3.5%, from $489.5 million at June 30, 2023 to $506.6 million at September 30, 2023, loans-held-for-sale of $585,000, from $4,000 at June 30, 2023 to $589,000 at September 30, 2023, premises and equipment of $417,000, or 2.5%, from $16.6 million at June 30, 2023 to $17.0 million at September 30, 2023, real estate owned of $193,000, or 52.4% from $368,000 at June 30, 2023 to $561,000 at September 30, 2023, deferred tax asset of $147,000, or 11.2%, from $1.3 million at June 30, 2023 to $1.5 million at September 30, 2023, accrued interest receivable of $117,000, or 6.5%, from $1.8 million at June 30, 2023 to $1.9 million at September 30, 2023, and bank owned life insurance of $25,000, or 0.4%, from $6.70 million at June 30, 2023 to $6.73 million at September 30, 2023. These increases were partially offset by decreases in cash and cash equivalents of $15.9 million, or 64.2%, from $24.8 million at June 30, 2023 to $8.9 million at September 30, 2023, investment securities of $759,000, or 0.7%, from $114.0 million at June 30, 2023 to $113.2 million at September 30, 2023, other assets of $163,000, or 11.4%, from $1.4 million at June 30, 2023 to $1.3 million at September 30, 2023, and core deposit intangible of $94,000, or 6.1%, from $1.5 million at June 30, 2023 to $1.4 million at September 30, 2023. The decrease in cash and cash equivalents was primarily due to the funding of additional loan growth.

 

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The decrease in held to maturity securities was due to $1.6 million in principal payments. The increase in loans held-for-sale primarily reflected an increase in loans originated for sale during the three months ended September 30, 2023.

 

Total liabilities increased $1.8 million, or 0.3%, from $610.4 million at June 30, 2023 to $612.1 million at September 30, 2023. The increase in liabilities was comprised primarily of increases in advances from FHLB of $4.6 million from none at June 30, 2022, other accrued expenses and liabilities of $1.6 million, or 39.7%, to $5.5 million at September 30, 2023 compared to $3.9 million at June 30, 2023, other borrowings of $300,000, or 3.5%, to $8.9 million at September 30, 2023 compared to $8.6 million at June 30, 2023, and advances from borrowers for taxes and insurance of $161,000, or 29.1%, to $715,000 at September 30, 2023 compared to $554,000 at June 30, 2023. The increases were partially offset by a decrease in total deposits of $4.9 million, or 0.8%, to $592.5 million at September 30, 2023 compared to $597.4 million at September 30, 2023. The decrease in deposits was primarily due to a decrease of $9.6 million, or 8.4%, in money market deposits from $114.2 million at June 30, 2023 to $104.6 million at September 30, 2023, a decrease of $6.1 million, or 7.5%, in savings deposits from $81.9 million at June 30, 2023 to $75.7 million at September 30, 2023, a decrease of $1.7 million, or 2.6%, in NOW accounts from $65.3 million at June 30, 2023 to $63.6 million at September 30, 2023, partially offset by an increase of $12.1 million, or 6.37%, in certificates of deposit from $190.4 million at June 30, 2023 to $202.5 million at September 30, 2023 and an increase of $504,000, or 0.4%, in non-interest deposits from $145.6 million at June 30, 2023 to $146.1 million at September 30, 2023. The Company had $3.0 million in brokered deposits at both September 30, 2023 and June 30, 2023.

 

At September 30, 2023, the Company had $1.8 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 $1.6 million on non-performing assets at June 30, 2023, consisting of five single-family residential loans, six commercial non-real estate loans, three consumer loans, two home equity line-of-credit loans, and three single-family residence loans in real estate owned at September 30, 2023, compared to seven single-family residential loans, three commercial non-real estate loans, one consumer loan and two single-family residences in other real estate owned at June 30, 2023. At September 30, 2023 the Company had seven single family residential loans, seven commercial non-real-estate loans, three home-equity line-of-credit loans, two commercial real estate loans, and one auto loan compared to ten single family residential loans, three commercial non-real-estate loans, two commercial real estate loans, and three home equity line-of-credit loans classified as substandard at June 30, 2023. There were no loans classified as doubtful at September 30, 2023 or June 30, 2023.

 

Shareholders’ equity decreased $69,000, or 0.1%, to $50.47 million at September 30, 2023 from $50.54 million at June 30, 2023. The primary reasons for the changes in shareholders’ equity from June 30, 2023 were a decrease in the Company’s accumulated other comprehensive income of $812,000, dividends paid totaling $392,000, and CECL implementation totaling $189,000, partially offset by net income of $1.2 million, and the vesting of restricted stock awards, stock options, and the release of employee stock ownership plan shares totaling $105,000,

 

Home Federal Bancorp, Inc. of Louisiana is the holding company for Home Federal Bank which conducts business from its ten 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.

 

In addition to factors previously disclosed in the reports filed by the Company with the Securities and Exchange Commission and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the strength of the United States economy in general and the strength of the local economies in which the Company conducts its operations; general economic conditions; legislative and regulatory changes; monetary and fiscal policies of the federal government; changes in tax policies, rates and regulations of federal, state and local tax authorities including the effects of the Tax Reform Act; changes in interest rates, deposit flows, the cost of funds, demand for loan products and the demand for financial services, competition, changes in the quality or composition of the Company’s loans, investment and mortgage-backed securities portfolios; geographic concentration of the Company’s business; fluctuations in real estate values; the adequacy of loan loss reserves; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; changes in accounting principles, policies or guidelines and other economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services and fees.

 

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Home Federal Bancorp, Inc. of Louisiana

  

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands)

  
                 
                 
   

September 30, 2023

    

June 30, 2023

  
   

(Unaudited)

    

(Audited)

  

ASSETS

                
                 

Cash and Cash Equivalents (Includes Interest-Bearing Deposits with Other Banks of $1,557 and $22,215 September 30, 2023 and June 30, 2023, Respectively)

   $ 8,878     $ 24,765  

Securities Available-for-Sale (amortized cost September 30, 2023: $36,178; June 30, 2023: $42,910, Respectively)

     40,409       39,551  

Securities Held-to-Maturity (fair value September 30, 2023: $57,557; June 30, 2023: $61,222, Respectively)

     72,806       74,423  

Loans Held-for-Sale

     589       4  

Loans Receivable, Net of Allowance for Credit Losses (September 30, 2023:

$5,102; June 30, 2023: $5,173, Respectively)

     506,599       489,493  

Accrued Interest Receivable

     1,907       1,790  

Premises and Equipment, Net

     16,978       16,561  

Bank Owned Life Insurance

     6,725       6,700  

Goodwill

     2,990       2,990  

Core Deposit Intangible

     1,439       1,533  

Deferred Tax Asset

     1,460       1,313  

Real Estate Owned

     561       368  

Other Assets

     1,261       1,424  
                 

Total Assets

   $ 662,602     $ 660,915  
                 

LIABILITIES AND SHAREHOLDERS’ EQUITY

                
                 

LIABILITIES

                
                 

Deposits:

                

Non-interest bearing

   $ 146,057     $ 145,553  

Interest-bearing

     446,448       451,808  

Total Deposits

     592,505       597,361  

Advances from Borrowers for Taxes and Insurance

     715       554  

Short-term Federal Home Loan Bank Advances

     4,600       --  

Other Borrowings

     8,850       8,550  

Other Accrued Expenses and Liabilities

     5,459       3,908  
                 

Total Liabilities

     612,129       610,373  
                 

SHAREHOLDERS’ EQUITY

                
                 

Preferred Stock - $0.01 Par Value; 10,000,000 Shares

                

Authorized; None Issued and Outstanding

     --       --  

Common Stock - $0.01 Par Value; 40,000,000 Shares

                

Authorized: 3,133,351 and 3,133,351 Shares Issued and

                

Outstanding at September 30, 2023 and June 30, 2023, Respectively

     31       31  

Additional Paid-in Capital

     41,057       40,981  

Unearned ESOP Stock

     (495 )     (523 )

Retained Earnings

     13,346       12,707  

Accumulated Other Comprehensive Loss

     (3,466 )     (2,654 )
                 

Total Shareholders’ Equity

     50,473       50,542  
                 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 662,602     $ 660,915  

 

 

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Home Federal Bancorp, Inc. of Louisiana

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

  
   

Three Months Ended

  
   

September 30,

  
   

2023

    

2022

  
   

(Unaudited)

    

(Unaudited)

  

Interest income

                

Loans, including fees

   $ 7,274     $ 5,028  

Investment securities

     150       2  

Mortgage-backed securities

     473       489  

Other interest-earning assets

     177       262  

Total interest income

     8,074       5,781  

Interest expense

                

Deposits

     2,592       400  

Federal Home Loan Bank borrowings

     15       10  

Other bank borrowings

     183       66  

Total interest expense

     2,790       476  

Net interest income

     5,284       5,305  
                 

Provision for credit losses

     --       418  

Net interest income after provision for credit losses

     5,284       4,887  
                 

Non-interest income

                

Gain on sale of loans

     38       175  

Loss on sale of real estate and fixed assets

     (34 )     --  

Income on Bank-Owned Life Insurance

     26       26  

Service charges on deposit accounts

     391       335  

Other income

     13       10  
                 

Total non-interest income

     434       546  
                 

Non-interest expense

                

Compensation and benefits

     2,356       2,282  

Occupancy and equipment

     549       501  

Data processing

     245       181  

Audit and examination fees

     102       75  

Franchise and bank shares tax

     156       119  

Advertising

     143       74  

Professional fees

     160       126  

Loan and collection

     60       52  

Amortization Core Deposit Intangible

     94       --  

Deposit insurance premium

     91       47  

Other expenses

     232       296  
                 

Total non-interest expense

     4,188       3,753  
                 

Income before income taxes

     1,530       1,680  

Provision for income tax expense

     310       9  
                 

NET INCOME

   $ 1,220     $ 1,671  
                 

EARNINGS PER SHARE

                
                 

Basic

   $ 0.40     $ 0.55  

Diluted

   $ 0.39     $ 0.52  

 

 

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Three Months Ended

  
   

September 30,

  
   

2023

    

2022

  
                 

Selected Operating Ratios(1):

                

Average interest rate spread

     2.68 %     3.74 %

Net interest margin

     3.37 %     3.90 %

Return on average assets

     0.73 %     1.13 %

Return on average equity

     9.46 %     13.99 %
                 

Asset Quality Ratios(2):

                

Non-performing assets as a percent of total assets

     0.28 %     0.38 %

Allowance for credit losses as a percent of non-performing loans

     403.96 %     229.97 %

Allowance for credit losses as a percent of total loans receivable

     1.00 %     1.18 %
                 

Per Share Data:

                

Shares outstanding at period end

     3,133,351       3,108,145  

Weighted average shares outstanding:

                

Basic

     3,028,597       3,065,552  

Diluted

     3,107,834       3,227,418  
 ____________________________________________                

(1) Ratios for the three month periods are annualized.

                

(2) Asset quality ratios are end of period ratios.

                

 

 

 

 

CONTACT:

James R. Barlow

Chairman of the Board, President and Chief Executive Officer

(318) 222-1145

 

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