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HOME FEDERAL BANCORP, INC. OF LOUISIANA REPORTS RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022

Home Federal Bancorp, Inc. of Louisiana
Home Federal Bancorp, Inc. of Louisiana

Shreveport, Louisiana, Oct. 27, 2022 (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, 2022 of $1.7 million compared to net income of $1.4 million reported for the three months ended September 30, 2021. The Company’s basic and diluted earnings per share were $0.55 and $0.52, respectively, for the three months ended September 30, 2022 compared to basic and diluted earnings per share of $0.42 and $0.38, respectively, for the three months ended September 30, 2021.

The Company reported the following key achievements during the three months ended September 30, 2022:

  • Total loans receivable, net of allowance for loan losses for the three months ended September 30, 2022 increased $18.5 million, or 4.8%, to $406.4 million at September 30, 2022, compared to $387.9 million at June 30, 2022.

  • The Company’s average interest rate spread was 3.74% for the three months ended September 30, 2022 compared to 2.98% for the three months ended September 30, 2021.

  • The Company’s net interest margin was 3.90% for the three months ended September 30, 2022 compared to 3.16% for the three months ended September 30, 2021.

  • Basic earnings per share increased $0.13, or 31.0%, from $0.42 for the three months ended September 30, 2021 compared to $0.55 for the three months ended September 30, 2022.

  • Diluted earnings per share increased $0.14 or 36.8%, from $0.38 for the three months ended September 30,2021 compared to $0.52 for the three months ended September 30, 2022.

The increase in net income for the three months ended September 30, 2022, as compared to the prior year quarter resulted primarily from an increase of $1.1 million, or 25.6%, in net interest income, and a decrease of $343,000, or 97.4%, in provision for income taxes, partially offset by a decrease of $470,000, or 46.3%, in non-interest income, an increase of $418,000, or 100.0%, in provision for loan losses, and an increase of $218,000, or 6.2%, in non-interest expense. The increase in net interest income for the three months ended September 30, 2022 was primarily due to a $1.0 million, or 21.1%, increase in total interest income, and a $74,000, or 13.5%, decrease in total interest expense. The increase in total interest income was primarily due to an increase of 68 basis points in the average rate on total interest-earning assets. The Company’s average interest rate spread was 3.74% for the three months ended September 30, 2022 compared to 2.98% for the three months ended September 30, 2021. The Company’s net interest margin was 3.90% for the three months ended September 30, 2022 compared to 3.16% for the three months ended September 30, 2021. The decrease in provision for income taxes was due to an adjustment in taxes due for fiscal year ended June 30, 2022 related to stock option exercises.

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,

 

 

2022

 

 

 

2021

 

 

Average

 

Average

 

Average

 

Average

 

Balance

 

Yield/Rate

 

Balance

 

Yield/Rate

 

(Dollars in thousands)

Interest-earning assets:

 

 

 

 

 

 

 

Loans receivable

$

396,768

 

5.03

%

 

$

342,942

 

5.09

%

Investment securities

 

110,602

 

1.76

 

 

 

86,350

 

1.57

 

Interest-earning deposits

 

32,706

 

3.18

 

 

 

101,732

 

0.14

 

   Total interest-earning assets

$

540,076

 

4.25

%

 

$

531,024

 

3.57

%

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

Savings accounts

$

128,749

 

0.26

%

 

$

133,140

 

0.32

%

NOW accounts

 

58,658

 

0.11

 

 

 

48,389

 

0.11

 

Money market accounts

 

94,694

 

0.15

 

 

 

86,991

 

0.12

 

Certificates of deposit

 

84,715

 

1.24

 

 

 

101,364

 

1.50

 

 Total interest-bearing deposits

 

366,816

 

0.43

 

 

 

369,884

 

0.57

 

Other bank borrowings

 

4,915

 

5.33

 

 

 

1,376

 

3.17

 

FHLB advances

 

826

 

4.80

 

 

 

861

 

4.61

 

   Total interest-bearing liabilities

$

372,557

 

0.51

%

 

$

372,121

 

0.59

%

The $470,000 decrease in non-interest income for the three months ended September 30, 2022, compared to the prior year quarterly period, was primarily due to a decrease of $534,000 in gain on sale of loans, a $2,000 decrease in income from bank owned life insurance, and a $1,000 decrease in other income, partially offset by a $67,000 increase in service charges on deposit accounts. The Company sells most of its long-term fixed rate residential mortgage loan originations primarily in order to manage interest rate risk. The decrease in gain on sale of loans was due to a reduction in loans originated for sale reflecting a decrease in mortgage refinancing activity.

The $218,000 increase in non-interest expense for the three months ended September 30, 2022, compared to the same period in 2021, is primarily attributable to increases of $93,000 in other non-operating expense, $72,000 in compensation and benefits expense, $72,000 in occupancy and equipment expense, $26,000 in legal fees, $9,000 in deposit insurance expense, and $3,000 in audit and examination fees. The increases were partially offset by decreases of $26,000 in data processing expense, $20,000 in loan and collection expense, and $11,000 in franchise and bank shares tax expense. The decrease in other non-operating expense was primarily due to communication expense, correspondent bank fees, and fraud expense related to deposit checking accounts.

At September 30, 2022, the Company reported total assets of $581.6 million, a decrease of $8.9 million, or 1.5%, compared to total assets of $590.5 million at June 30, 2022. The decrease in assets was comprised primarily of decreases in cash and cash equivalents of $26.5 million, or 41.4%, from $64.1 million at June 30, 2022 to $37.5 million at September 30, 2022, loans held for sale of $2.0 million, or 50.0%, from $4.0 million at June 30, 2022 to $2.0 million at September 30, 2022, premises and equipment of $112,000, or 0.7%, from $16.2 million at June 30, 2022 to $16.1 million at September 30, 2022, and other assets of $103,000, or 7.4%, from $1.4 million at June 30, 2022 to $1.3 million at September 30, 2022. These decreases were partially offset by increases in loans receivable, net of $18.5 million, or 4.8%, from $387.9 million at June 30, 2022 to $406.4 million at September 30, 2022, investment securities of $789,000, or 0.7%, from $108.0 million at June 30, 2022 to $108.8 million at September 30, 2022, deferred tax asset of $323,000, or 28.3%, from $1.1 million at June 30, 2022 to $1.5 million at September 30, 2022, accrued interest receivable of $126,000, or 11.2%, from $1.1 million at June 30, 2022 to $1.3 million at September 30, 2022, and real estate owned of $93,000, or 100.0%, from none at June 30, 2022 to $93,000 at September 30, 2022, and bank owned life insurance of $26,000, or 0.4%, from $6.60 million at June 30, 2022 to $6.62 million at September 30, 2022. The decrease in cash and cash equivalents was primarily due to the funding of additional loan growth and purchases of securities with excess liquidity. The increase in loans receivable, net, was primarily due to an increase of $13.9 million in commercial real estate loans. The increase in investment securities was primarily due to security purchases of $5.4 million offset by principal repayments on mortgage backed securities of $3.4 million and a $1.1 million increase in market value losses on available-for-sale securities. The decrease in loans held-for-sale primarily reflected a reduction in loans originated for sale during the three months ended September 30, 2022 due mainly to a decrease in mortgage refinance activity likely attributable to the increase in interest rates.

Total liabilities decreased $3.7 million, or 0.7%, from $538.1 million at June 30, 2022 to $534.5 million at September 30, 2022 primarily due to decreases in total deposits of $8.2 million, or 1.5%, to $523.8 million at September 30, 2022 compared to $532.0 million at June 30, 2022, and advances from the Federal Home Loan Bank of $9,000, or 1.1%, to $823,000 at September 30, 2022 compared to $832,000 at June 30, 2022, partially offset by increases in other borrowings of $4.0 million, or 170.2%, to $6.4 million at September 30, 2022 compared to $2.4 million at June 30, 2022, other accrued expenses and liabilities of $431,000, or 16.5%, to $3.0 million at September 30, 2022 compared to $2.6 million at June 30, 2022, and advances from borrowers for taxes and insurance of $136,000, or 38.4%, to $490,000 at September 30, 2022 compared to $354,000 at June 30, 2022. The decrease in deposits was primarily due to a $13.1 million, or 9.8%, decrease in savings deposits from $133.0 million at June 30, 2022 to $119.9 million at September 30, 2022, a $6.4 million, or 4.0%, decrease in non-interest bearing deposits from $161.1 million at June 30, 2022 to $154.7 million at September 30, 2022, a $2.2 million, or 2.2%, decrease in money market deposits from $98.6 million at June 30, 2022 to $96.5 million at September 30, 2022, partially offset by an increase of $7.8 million, or 9.8%, in certificates of deposit from $80.3 million at June 30, 2022 to $88.1 million at September 30, 2022, and an increase of $5.6 million, or 9.4% in NOW accounts from $59.0 million at June 30, 2022 compared to $64.5 million at September 30, 2022. The Company had $3.0 million in brokered deposits at September 30, 2022 compared to $6.0 million at June 30, 2022. The decrease in advances from the Federal Home Loan Bank was primarily due to principal paydowns on amortizing advances. The entire balance in advances from the Federal Home Loan Bank are now short-term due to our only advance with a balloon maturity in January 2023.

At September 30, 2022, the Company had $2.2 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 $2.2 million on non-performing assets at June 30, 2022, consisting of six single-family residential loans and one single family residence in other real estate owned at September 30, 2022, compared to six single-family residential loans and one line of credit loan at June 30, 2022. At both September 30, 2022 and June 30, 2022, the Company had five single family residential loans and two commercial real estate loans classified as substandard. There were no loans classified as doubtful at September 30, 2022 or June 30, 2022.

Shareholders’ equity decreased $5.2 million, or 10.0%, to $47.1 million at September 30, 2022 from $52.3 million at June 30, 2022. The primary reasons for the changes in shareholders’ equity from June 30, 2022 were the repurchase of Company stock of $5.9 million, a decrease in the Company’s accumulated other comprehensive income of $877,000, and dividends paid totaling $407,000, partially offset by net income of $1.7 million, proceeds from the issuance of common stock from the exercise of stock options of $147,000, and the vesting of restricted stock awards, stock options, and the release of employee stock ownership plan shares totaling $137,000.

The Company repurchased 289,900 shares of its common stock during the three months ended September 30, 2022 at an average price per share of $20.00. On February 16, 2022, the Company announced that its Board of Directors approved an eleventh stock repurchase program for the repurchase of up to 170,000 shares. The eleventh stock repurchase program was completed on August 2, 2022.

Home Federal Bancorp, Inc. of Louisiana is the holding company for Home Federal Bank which conducts business from its nine 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; the scope and duration of the COVID-19 pandemic; the effects of the COVID-19 pandemic, including on the Company’s credit quality and operations as well as its impact on general economic conditions; legislative and regulatory changes including actions taken by governmental authorities in response to the COVID-19 pandemic; 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, in each case as may be affected by the COVID-19 pandemic, 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.

 

Home Federal Bancorp, Inc. of Louisiana

 

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 

(In thousands)


 

September 30,
2022

 

June 30,
2022

 

(Unaudited)

 

(Audited)

ASSETS

 

 

 

 

 

 

 

Cash and Cash Equivalents (Includes Interest-Bearing

 

 

 

Deposits with Other Banks of $26,710 and $42,531

 

 

 

September 30, 2022 and June 30, 2022, Respectively)

$

37,531

 

 

$

64,078

 

Securities Available-for-Sale

 

30,765

 

 

 

28,099

 

Securities Held-to-Maturity (fair value September 30, 2022: $63,989;

 

 

 

June 30, 2022: $69,513, Respectively)

 

78,073

 

 

 

79,950

 

Loans Held-for-Sale

 

1,988

 

 

 

3,978

 

Loans Receivable, Net of Allowance for Loan Losses (September 30, 2022:

 

 

 

$4,844; June 30, 2022: $4,451, Respectively)

 

406,373

 

 

 

387,873

 

Accrued Interest Receivable

 

1,250

 

 

 

1,124

 

Premises and Equipment, Net

 

16,137

 

 

 

16,249

 

Bank Owned Life Insurance

 

6,623

 

 

 

6,597

 

Deferred Tax Asset

 

1,466

 

 

 

1,143

 

Real Estate Owned

 

93

 

 

 

--

 

Other Assets

 

1,286

 

 

 

1,389

 

 

 

 

 

Total Assets

$

581,585

 

 

$

590,480

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Deposits:

 

 

 

Non-interest bearing

$

154,740

 

 

$

161,142

 

Interest-bearing

 

369,020

 

 

 

370,849

 

      Total Deposits

 

523,760

 

 

 

531,991

 

Advances from Borrowers for Taxes and Insurance

 

490

 

 

 

354

 

Short-term Federal Home Loan Bank Advances

 

823

 

 

 

832

 

Other Borrowings

 

6,350

 

 

 

2,350

 

Other Accrued Expenses and Liabilities

 

3,037

 

 

 

2,606

 

 

 

 

 

Total Liabilities

 

534,460

 

 

 

538,133

 

 

 

 

 

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: 3,108,145 and 3,387,839 Shares Issued and

 

 

 

    Outstanding at September 30, 2022 and June 30, 2022, Respectively

 

34

 

 

 

34

 

Additional Paid-in Capital

 

40,400

 

 

 

40,145

 

Unearned ESOP Stock

 

(610

)

 

 

(639

)

Retained Earnings

 

9,878

 

 

 

14,506

 

Accumulated Other Comprehensive Loss

 

(2,577

)

 

 

(1,699

)

 

 

 

 

Total Shareholders’ Equity

 

47,125

 

 

 

52,347

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

581,585

 

 

$

590,480

 

 

 

 

 

 

 

 

 

Home Federal Bancorp, Inc. of Louisiana
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)

 

Three Months Ended

 

September 30,

 

2022

 

2021

 

 

 

 

Interest-income

 

 

 

Loans, including fees

$

5,028

 

$

4,397

Investment securities

 

2

 

 

--

Mortgage-backed securities

 

489

 

 

341

Other interest-earning assets

 

262

 

 

   36

    Total interest income

 

5,781

 

 

4,774

Interest expense

 

 

 

Deposits

 

400

 

 

529

Federal Home Loan Bank borrowings

 

10

 

 

10

Other bank borrowings

 

66

 

 

11

    Total interest expense

 

476

 

 

550

          Net interest income

 

5,305

 

 

4,224

 

 

 

 

Provision for loan losses

 

  418

 

 

    --

Net interest income after provision for loan losses

 

4,887

 

 

4,224

 

 

 

 

Non-interest income

 

 

 

Gain on sale of loans

 

175

 

 

709

Income on bank owned life insurance

 

26

 

 

28

Service charges on deposit accounts

 

335

 

 

268

Other income

 

 10

 

 

 11

 

 

 

 

          Total non-interest income

 

546

 

 

1,016

 

 

 

 

Non-interest expense

 

 

 

Compensation and benefits

 

2,282

 

 

2,210

Occupancy and equipment

 

501

 

 

429

Data processing

 

181

 

 

207

Audit and examination fees

 

75

 

 

72

Franchise and bank shares tax

 

119

 

 

130

Advertising

 

74

 

 

74

Legal fees

 

126

 

 

100

Loan and collection

 

52

 

 

72

Deposit insurance premium

 

47

 

 

38

Other expenses

 

296

 

 

203

 

 

 

 

          Total non-interest expense

 

3,753

 

 

3,535

 

 

 

 

Income before income taxes

 

1,680

 

 

1,705

Provision for income tax expense

 

9

 

 

352

 

 

 

 

NET INCOME

$

1,671

 

$

1,353

 

 

 

 

EARNINGS PER SHARE

 

 

 

 

 

 

 

    Basic

$

  0.55

 

$

  0.42

    Diluted

$

0.52

 

$

0.38


 

Three Months Ended

 

September 30,

 

 

2022

 

 

 

2021

 

 

 

 

 

Selected Operating Ratios(1):

 

 

 

Average interest rate spread

 

3.74

%

 

 

2.98

%

Net interest margin

 

3.90

%

 

 

3.16

%

Return on average assets

 

1.13

%

 

 

0.95

%

Return on average equity

 

13.99

%

 

 

10.29

%

 

 

 

 

Asset Quality Ratios(2):

 

 

 

Non-performing assets as a percent of total assets

 

0.38

%

 

 

0.24

%

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

 

229.97

%

 

 

422.81

%

Allowance for loan losses as a percent of total loans receivable

 

1.18

%

 

 

1.20

%

 

 

 

 

Per Share Data:

 

 

 

Shares outstanding at period end

 

3,108,145

 

 

 

3,359,856

 

Weighted average shares outstanding:

 

 

 

    Basic

 

3,065,552

 

 

 

3,203,530

 

    Diluted

 

3,227,418

 

 

 

3,514,082

 

Book value at period end

$

15.16

 

 

$

15.98

 

 

 

 

 

 

(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