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

Shreveport, Louisiana, Oct. 30, 2023 (GLOBE NEWSWIRE) -- 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.

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 Companys loans, investment and mortgage-backed securities portfolios; geographic concentration of the Companys business; fluctuations in real estate values; the adequacy of loan loss reserves; the risk that goodwill and intangibles recorded in the Companys financial statements will become impaired; changes in accounting principles, policies or guidelines and other economic, competitive, governmental and technological factors affecting the Companys operations, markets, products, services and fees.

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 


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 


  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.        

  


James R. Barlow
Chairman of the Board, President and Chief Executive Officer
(318) 222-1145

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