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CST: 10/12/2019 01:18:14   

HOME FEDERAL BANCORP, INC. OF LOUISIANA REPORTS RESULTS OF OPERATIONS FOR THE THREE MONTHS AND YEAR ENDED JUNE 30, 2019

132 Days ago

Shreveport, Louisiana, July 30, 2019 (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 June 30, 2019 of $1.2 million, which was substantially consistent with net income  for the three months ended June 30, 2018. The Company’s basic and diluted earnings per share were $0.66 and $0.62, respectively, for the three months ended June 30, 2019 compared to basic and diluted earnings per share of $0.66 and $0.61, respectively, for the three months ended June 30, 2018. The Company reported net income of $4.7 million for the year ended June 30, 2019 compared to $3.6 million for the year ended June 30, 2018. The Company’s basic and diluted earnings per share were $2.68 and $2.50, respectively, for the year ended June 30, 2019 compared to $1.98 and $1.87, respectively, for the year ended June 30, 2018. The increase in net income for the year ended June 30, 2019 as compared to the prior year reflected in part the effect of the one-time non-cash charge in the quarter ended December 31, 2017, related to the re-measurement of the Company's deferred tax assets arising from the lower U.S. corporate tax rate provided for by the Tax Cuts and Jobs Act (the “Tax Act”) enacted in December 2017 combined with a reduction in the Company’s effective tax rate for the year ended June 30, 2019. The non-recurring deferred tax adjustment was $642,000 for the year ended June 30, 2018 representing $0.35 diluted earnings per share.

The Company reported the following key achievements during fiscal 2019:

  • Total deposits increased $27.9 million or 7.7% to $388.2 million at year end.
  • Total assets increased $20.8 million or 4.9% to $442.5 million at year end.
  • Total equity increased $3.3 million or 7.0% to $50.3 million at year end.
  • Opened new Pierremont Banking Center in Shreveport in March 2019.

The $16,000 decrease in net income for the three months ended June 30, 2019 resulted primarily from a decrease of $138,000, or 3.6%, in net interest income, and a $67,000, or 2.4%, increase in non-interest expense, partially offset by a decrease of $113,000, or 27.4%, in provision for income taxes, a decrease of $50,000, or 25.0%, in provision for loan losses and a $26,000, or 3.4%, increase in non-interest income.  The decrease in net interest income for the three months ended June 30, 2019 was due to a $365,000, or 39.4%, increase in total interest expense, partially offset by an increase of $227,000, or 4.8%, in total interest income, primarily due to an increase in the average volume of deposits. The Company’s average interest rate spread was 3.24% for the three months ended June 30, 2019 compared to 3.63% for the three months ended June 30, 2018. The Company’s net interest margin was 3.56% for the three months ended June 30, 2019 compared to 3.86% for the three months ended June 30, 2018. The decrease in net interest margin on a comparative quarterly basis was primarily the result of an increase of 44 basis points in average cost on average balances of interest-bearing deposits combined with a $27.1 million increase in average balance of interest-bearing deposits for the three months ended June 30, 2019 compared to the prior year.

The increase in net income for the year ended June 30, 2019 resulted primarily from a decrease of $969,000, or 43.0%, in the provision for income taxes, a $450,000, or 42.9%, decrease in the provision for loan losses, and an increase of $386,000, or 2.6%, in net interest income partially offset by a decrease of $604,000, or 20.2%, in non-interest income and a $26,000, or 0.2%, increase in non-interest expense. The decrease in the provision for income taxes for the year ended June 30, 2019 over the prior year was primarily due to the $642,000 re-measurement charge of the Company’s net deferred tax asset in the quarter ended December 31, 2017, as a result of the Tax Act signed into law on December 22, 2017, combined with a reduction in the Company’s effective tax rate for the year ended June 30, 2019, also as a result of the Tax Act. The increase in net interest income for the year was due to a $1.4 million, or 7.7%, increase in total interest income, partially offset by a $1.0 million, or 29.7%, increase in interest expense on borrowings and deposits. The Company’s average interest rate spread was 3.50% for the year ended June 30, 2019 compared to 3.58% for the year ended June 30, 2018. The Company’s net interest margin was 3.78% for the year ended June 30, 2019 compared to 3.80% for the year ended June 30, 2018.  The decrease in the average interest rate spread and net interest margin was attributable primarily to an increase of 30 basis points in average rate on interest bearing liabilities for the year ended June 30, 2019 compared to the prior year.

The following tables set 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 June 30,
   2019    2018
  Average   Average   Average   Average
  Balance   Yield/Rate   Balance   Yield/Rate
  (Dollars in thousands)
Interest-earning assets:              
  Loans receivable $  329,800   5.43 %   $  322,884   5.42 %
  Investment securities   67,886   2.38       59,967   2.11  
  Interest-earning deposits    16,297    2.34        12,710    1.80  
  Total interest-earning assets $  413,983   4.81 %   $  395,561   4.80 %
               
Interest-bearing liabilities:              
  Savings accounts $  35,647   0.61 %   $  35,738   0.53 %
  NOW accounts   30,705   0.57       35,692   0.47  
  Money market accounts   76,322   1.21       68,996   0.78  
  Certificates of deposit    186,344    2.03        161,457    1.52  
  Total interest-bearing deposits   329,018   1.55       301,883   1.11  
  Other bank borrowings   234    5.13       --     --  
  FHLB advances     1,280     5.02         16,439    2.27  
  Total interest-bearing liabilities $  330,532   1.57 %   $  318,322   1.17 %
               
  For the Year Ended June 30,
   2019
   2018
  Average   Average   Average   Average
  Balance   Yield/Rate   Balance   Yield/Rate
  (Dollars in thousands)
Interest-earning assets:              
  Loans receivable $  326,994   5.52 %   $  323,692   5.28 %
  Investment securities   63,029   2.32       59,948   1.96  
  Interest-earning deposits     14,613     2.24          9,289    1.52  
  Total interest-earning assets $  404,636   4.90 %   $  392,929   4.69 %
               
Interest-bearing liabilities:              
  Savings accounts $  35,449   0.55 %   $  36,323   0.53 %
  NOW accounts   30,617   0.54       34,892   0.47  
  Money market accounts   72,266   1.05       51,571   0.57  
  Certificates of deposit    178,823    1.82        165,141    1.45  
  Total interest-bearing deposits   317,155   1.38       287,927   1.06  
  Other bank borrowings   172     5.23       89     4.49  
  FHLB advances     4,697    3.04         27,242    1.63  
  Total interest-bearing liabilities $  322,024   1.41 %   $  315,258   1.11 %

The $26,000 increase in non-interest income for the three months ended June 30, 2019 compared to the prior year quarterly period was primarily due to increases of $40,000 in service charges on deposit accounts, $37,000 in gain on sale of loans, and $1,000 on income from bank owned life insurance partially offset by a decrease of $52,000 in other income. The $604,000 decrease in non-interest income for the year ended June 30, 2019, compared to the prior year, was primarily due to an increase of $344,000 in loss on sale of real estate, combined with decreases of $213,000 in gain on sale of loans,  $94,000 in gain on sale of securities, and $45,000 in other income partially offset by a $92,000 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 for the year ended June 30, 2019 over the prior year reflects a reduced emphasis on the Company’s mortgage banking operations in recent periods and fewer loans originated for sale.

The $67,000 increase in non-interest expense for the three months ended June 30, 2019, compared to the same period in 2018, is primarily attributable to increases of $63,000 in advertising expense, $59,000 in occupancy and equipment expense, $17,000 in loan and collection expense, $14,000 in other non-interest expense, $8,000 in compensation and benefits expense, and $1,000 in franchise and bank shares tax expense. The increases were partially offset by decreases of $50,000 in legal fees, $36,000 in data processing, $8,000 in audit and examination fees, and $1,000 in deposit insurance premiums. The $26,000 increase in non-interest expense for the year ended June 30, 2019, compared to the year ended  June 30, 2018, is primarily attributable to increases of $177,000 in advertising expense, $63,000 in other non-interest expense, $21,000 in loan and collection expense, and $14,000 in occupancy and equipment expense partially offset by decreases of $129,000 in data processing expense, $57,000 in compensation and benefits expense, $37,000 in deposit insurance premiums, $13,000 in audit and examination fees, and $13,000 in legal fees.

At June 30, 2019, the Company reported total assets of $442.5 million, an increase of $20.8 million, or 4.9%, compared to total assets of $421.7 million at June 30, 2018. The increase in assets was comprised primarily of increases in investment securities of $8.8 million, or 15.1%, from $58.2 million at June 30, 2018 to $67.0 million at June 30, 2019, loans receivable net of $6.6 million, or 2.1%, from $317.5 million at June 30, 2018 to $324.1 million at June 30, 2019, cash and cash equivalents of $2.2 million, or 14.1%, from $15.9 million at June 30, 2018 to $18.1 million at June 30, 2019,  loans held-for-sale of $1.8 million, or 27.3%, from $6.8 million at June 30, 2018 to $8.6 million at June 30, 2019, premises and equipment, net of $1.4 million, or 10.7%, from $12.2 million at June 30, 2018 to $13.6 million at June 30, 2019, real estate owned of $189,000, or 16.1%, from $1.2 million at June 30, 2018 to $1.4 million at June 30, 2019.  These increases were partially offset by decreases in deferred tax assets of $253,000, or 23.0%, from $1.1 million at June 30, 2018 to $849,000 at June 30, 2019.  The increase in investment securities was primarily due to the purchase of $18.5 million of mortgage-backed securities offset by $11.0 million of principal repayments on mortgage-backed securities. The increase in real estate owned was due to the acquisition of two one-to-four family residences totaling $886,000 offset by the sale of two one-to-four family residences totaling $697,000.

Total liabilities increased $17.5 million, or 4.7% from $374.6 million at June 30, 2018 to $392.1 million at June 30, 2019 primarily due to an increase in total deposits of $27.9 million, or 7.7%, to $388.2 million at June 30, 2019 compared to $360.3 million at June 30, 2018, and other borrowings of $150,000, or 50.0%, to $450,000 at June 30, 2019 compared to $300,000 at June 30, 2018, partially offset by a decrease of $10.3 million, or 88.4%, in advances from the Federal Home Loan Bank  to $1.4 million at June 30, 2019 compared to $11.6 million at June 30, 2018, and a $274,000, or 11.3%, decrease in other liabilities to $2.1 million at June 30, 2019 compared to $2.4 million at June 30, 2018.  The increase in deposits was primarily due to a $22.0 million, or 13.6%, increase in certificates of deposits from $161.3 million at June 30, 2018 to $183.3 million at June 30, 2019, a $4.7 million, or 6.8%, increase in money market deposits from $70.2 million at June 30, 2018 to $74.9 million at June 30, 2019, a $3.3 million, or 9.2%, increase in savings deposits from $36.2 million at June 30, 2018 to $39.5 million at June 30, 2019, and a $1.4 million, or 2.3%, increase in non-interest bearing demand deposits from $58.0 million at June 30, 2018 to $59.4 million at June 30, 2019, partially offset by a decrease of $3.5 million, or 10.2%, in interest bearing demand deposits from $34.5 million at June 30, 2018 to $31.0 million at June 30, 2019. At June 30, 2019, the Company had $11.2 million in brokered deposits compared to $8.7 million at June 30, 2018. The increase in brokered deposits is due to additional purchases during the year ended June 30, 2019. 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 decrease in advances from the Federal Home Loan Bank was primarily due to growth in total deposits which replaced advances as a source of funds. 

At June 30, 2019, the Company had $5.1 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 $3.0 million of non-performing assets at June 30, 2018, consisting of two commercial business loans, five single-family residential loans, two line of credit loans, one lot loan, one land loan, one residential lot in other real estate owned, and two single family residential loans in other real estate owned at June 30, 2019, compared to one commercial business loan, nine single-family residential loans, three line of credit loans, one residential lot in other real estate owned and two single family residential loans in other real estate owned at June 30, 2018. At June 30, 2019, the Company had four single family residential loans, one line of credit loan, two commercial business loans, two commercial land and lot development loans 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 eight single family residential loans, two line of credit loans, one commercial business loan 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 at June 30, 2018. There were no loans classified as doubtful at June 30, 2019 or June 30, 2018.

Shareholders’ equity increased $3.3 million, or 7.0%, to $50.3 million at June 30, 2019 from $47.0 million at June 30, 2018.  The primary reasons for the changes in shareholders’ equity from June 30, 2018 were net income of $4.7 million, the increase in the Company’s accumulated other comprehensive income of $1.1 million, the vesting of restricted stock awards, stock options, and the release of employee stock ownership plan shares totaling $670,000, and proceeds from the issuance of common stock from the exercise of stock options of $325,000. These increases in shareholders’ equity were partially offset by the acquisition of Company stock of $2.4 million, and dividends paid totaling $1.1 million.

The Company repurchased 76,217 shares of its common stock under its stock repurchase program during the year ended June 30, 2019 at an average price per share of $32.11. On December 12, 2018, the Company announced that its Board of Directors approved an eighth stock repurchase program for the repurchase of up to 95,000 shares. As of June 30, 2019, there were 55,398 shares remaining for repurchase under the eighth stock repurchase program.

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

Home Federal Bancorp, Inc. of Louisiana
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands)
 
  June 30,
   2019    2018
  (Unaudited)
       
ASSETS      
       
Cash and cash equivalents $   18,108   $   15,867
Securities available for sale at fair value   41,655     29,324
Securities held to maturity (fair value June 30, 2019: $25,532;
  June 30, 2018: $27,818)
  25,349     28,888
Loans held-for-sale   8,608     6,762
Loans receivable, net of allowance for loan losses (June 30, 2019: $3,452;
  June 30, 2018: $3,425)
  324,134     317,493
Premises and equipment, net   13,554     12,243
Deferred tax asset   849     1,102
Real estate owned   1,366     1,177
Other assets     8,830      8,794
       
  Total assets $   442,453   $  421,650 
       
LIABILITIES AND SHAREHOLDERS’ EQUITY      
       
Deposits $  388,164   $  360,260
Advances from the Federal Home Loan Bank of Dallas   1,355     11,637
Other Borrowings   450     300
Other liabilities     2,142      2,416
       
  Total liabilities   392,111     374,613
       
Shareholders’ equity     50,342      47,037
       
  Total liabilities and shareholders’ equity $   442,453   $    421,650


Home Federal Bancorp, Inc. of Louisiana
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
 
  Three Months Ended   Year Ended
  June 30,   June 30,
   2019    2018    2019      2018 
Interest income              
  Loans, including fees $ 4,465   $ 4,363   $  18,058     $  17,106  
  Investment securities   16     12     62       47  
  Mortgage-backed securities   386     303     1,398       1,129  
  Other interest-earning assets    95      57        328          141  
  Total interest income   4,962      4,735     19,846       18,423  
Interest expense              
  Deposits   1,272     833     4,380       3,046  
  Federal Home Loan Bank borrowings   16     93     143       445  
  Other bank borrowings        3        --       9          4  
  Total interest expense   1,291      926      4,532        3,495  
  Net interest income   3,671     3,809     15,314       14,928  
               
Provision for loan losses      150      200        600        1,050  
  Net interest income after provision for loan losses    3,521      3,609     14,714       13,878  
               
Non-interest income              
  Gain on sale of loans   484     447     1,555       1,767  
  (Loss) on sale of real estate   --     --     (345 )     (1 )
  Gain on sale of securities   --     --     --       94  
  Income on bank owned life insurance   35     34     140       140  
  Service charges on deposit accounts   263     223     975       883  
  Other income    12      64        60        105  
               
  Total non-interest income    794      768      2,385         2,988  
               
Non-interest expense              
  Compensation and benefits   1,648     1,640     6,443       6,500  
  Occupancy and equipment   388     329     1,359       1,345  
  Data processing   128     164     533       662  
  Audit and examination fees   53     61     242       254  
  Franchise and bank shares tax   97     96     392       392  
  Advertising   131     68     362       185  
  Legal fees   111     161     544       557  
  Loan and collection   81     64     290       269  
  Deposit insurance premium   29     30     88       125  
  Other expenses    189      175      820          757  
               
  Total non-interest expense    2,855      2,788     11,073       11,046  
               
  Income before income taxes   1,460     1,589     6,026       5,820  
Provision for income tax expense     299      412      1,283        2,252  
               
  NET INCOME $ 1,161   $  1,177   $   4,743     $   3,568  
               
  EARNINGS PER SHARE              
               
  Basic $     0.66   $     0.66   $     2.68     $     1.98  
  Diluted $    0.62   $     0.61   $     2.50     $     1.87  


  Three Months Ended   Year Ended
  June 30,   June 30,
   2019     2018     2019     2018 
               
Selected Operating Ratios(1):              
  Average interest rate spread   3.24 %     3.63 %     3.50 %     3.58 %
  Net interest margin   3.56 %     3.86 %     3.78 %     3.80 %
  Return on average assets   1.05 %     1.12 %     1.10 %     0.85 %
  Return on average equity   9.37 %     10.03 %     9.82 %     7.61 %
               
Asset Quality Ratios(2):              
  Non-performing assets as a percent of total assets   1.15 %     0.72 %     1.15 %     0.72 %
  Allowance for loan losses as a percent of non-performing loans   92.3 %     112.17 %     92.3 %     112.17 %
  Allowance for loan losses as a percent of total loans receivable   1.05 %     1.07 %     1.05 %     1.07 %
               
Per Share Data:              
  Shares outstanding at period end   1,845,482       1,894,081       1,845,482       1,894,081  
  Weighted average shares outstanding:              
  Basic   1,748,218       1,791,595       1,767,736       1,734,948  
  Diluted   1,874,634       1,919,185       1,894,011       1,846,540  
  Tangible book value at period end $   27.28     $      24.83     $   27.28     $    24.83  
                 
(1)  Ratios for the three month periods are annualized.              
(2)  Asset quality ratios are end of period ratios.              


 

 

James R. Barlow
President and Chief Executive Officer
(318) 222-1145

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