Attached files
| file | filename |
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| 8-K - FORM 8-K - HOPFED BANCORP INC | d8k.htm |
 Howe Barnes Hoefer
& Arnett Investor Conference
Chicago, IL
John E. Peck,
President & Chief Executive Officer
Billy C. Duvall,
Senior Vice President & Chief Financial Officer
August 17, 2010
Exhibit 99.1 |
 2
Certain statements contained herein are forward-looking statements, within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934 and are subject to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995, that
involve risks and uncertainties. Actual results may differ materially from the
results in these forward- looking statements. Factors that might cause
such a difference include, among other matters, changes in interest rates,
economic conditions, governmental regulation and legislation, credit quality and
competition affecting the Company’s business; the risk of natural disasters
and future catastrophic events including terrorist related incidents; and
other factors discussed in the Company’s Annual Report on Form
10-K for the year ended December 31, 2009 and in subsequent reports
filed on Form
10-Q and Form 8-K.
We can give no assurance that any of the events anticipated by the
forward-looking statements will occur or, if any of them does, what
impact they will have on our results of operations and financial
condition. We disclaim any intent or obligation to publicly update or
revise any forward-looking statements, regardless of whether new
information becomes available, future developments occur or otherwise,
except as required by law. Cautionary and Forward Looking Statements
|
 Company Profile
Headquarters:
Hopkinsville, Kentucky
18 branches: 11 in Kentucky; 7
in Tennessee
Total Assets:
$1.1 billion
Common
Stockholders’
Equity:
$95.4 million
Total Loans:
$636.4 million
Total Deposits:
$844.3 million
3
Source: SNL Financial LC and Company reports
Financials as of June 30, 2010 |
 4
Recent Follow-on Common Stock Offering
Summary
Rationale
Pricing date: June 16, 2010
Gross proceeds: $32.3 million (including
overallotment)
Price per share: $9.00
Shares issued: 3,583,334
Shares issued / total shares: 49.9%
Price/ pro forma tang. book value: 69.0%
Price performance since offering: 4.1%
Further strengthens our balance sheet
and regulatory capital ratios
Supports ongoing and future growth
Eventual redemption of our TARP
preferred capital
Current Pricing Multiples
Stock Price (as of 8/11/10):
$9.37
TBV ($13.66):
68.6%
Earnings (Howe Barnes Estimates)
2010 ($1.24):
7.6x
2011 ($1.25):
7.5x
Source: SNL Financial LC and Company reports |
 5
Balance Sheet Strength
Consolidated Capital Ratios
Asset Quality YTD as of June 30, 2010
Tier 1 Capital Ratio
(1)
:
10.61%
RBC Ratio
(1)
:
18.03%
TCE / TA:
8.58%
NPLs
/ Loans:
1.83%
NPAs
/ total assets:
Including TDRs:
2.22%
Excluding TDRs:
1.28%
NCOs / avg. loans:
0.54%
LLR / total loans:
1.35%
(1) Includes $18.4 million in TARP preferred equity
|
 6
Market Areas –
Clarksville/Hopkinsville
Source: SNL Financial LC and company reports
8 Offices in 4 counties
Clarksville, TN is ninth fastest
growing city in United States
Entire market area home to Ft.
Campbell Army Base with 22,000
active personnel –
largest
employer in TN and KY
“Green Energy Corridor”
–
future
home of Hemlock Semiconductor
Diverse agricultural production –
corn, wheat, soybeans, cattle and
tobacco
Strong retail and service industries
Home to Austin Peay
State
University with 10,000+ students
Recognized for growth potential,
talented labor pool and affordable
living
Market
# of
Deposits in
Market
Rank
Institution (State)
branches
Market ($MM)
Share (%)
1
F&M Financial Corporation (TN)
9
415
$
13.74%
2
Planters Financial Group Inc. (TN)
8
336
11.12%
3
Regions Financial Corp. (AL)
7
310
10.24%
4
HopFed Bancorp Inc. (KY)
7
309
10.23%
5
BB&T Corp. (NC)
6
293
9.70%
6
U.S. Bancorp (MN)
12
243
8.05%
7
Legends Financial Holdings Inc (TN)
6
225
7.44%
8
First Advantage Bancorp (TN)
5
208
6.90%
9
Bank of America Corp. (NC)
4
191
6.32%
10
Green Bankshares Inc (TN)
5
131
4.33%
11
Todd Bancshares Inc. (KY)
4
113
3.73%
12
Cumberland Bancorp Inc. (TN)
5
106
3.50%
13
Cadiz Bancorp Inc. (KY)
4
73
2.40%
14
Jackson Financial Corporation (KY)
2
69
2.29%
15
J. R. Montgomery Bancorp. (OK)
1
0
0.02%
Grand Total
85
3,021
$
100.00%
Clarksville/Hopkinsville MSA Market Share
(1)
(1) Source: SNL Financial LC; Branch deposit data as of June 30, 2009
|
 7
Market Areas –
Middle Tennessee
Source: SNL Financial LC and company reports
3 Offices in Cheatham County
and 1 in Houston County
Cheatham County is in
Nashville MSA and currently
serves as a Nashville bedroom
community
Light manufacturing
Management values good
deposit mix, long term growth
prospects and proximity to
Nashville
Market
# of
Deposits in
Market
Rank
Institution (State)
branches
Market ($MM)
Share (%)
1
Regions Financial Corp. (AL)
67
6,120
$
18.78%
2
Bank of America Corp. (NC)
38
4,924
13.71%
3
SunTrust Banks Inc. (GA)
57
4,220
12.91%
4
Pinnacle Financial Partners (TN)
30
3,638
9.53%
5
Fifth Third Bancorp (OH)
30
1,742
5.08%
6
First Horizon National Corp. (TN)
49
1,659
5.20%
7
Tennessee Commerce Bancorp Inc (TN)
1
1,205
3.05%
8
Wilson Bank Holding Company (TN)
21
1,176
3.59%
9
U.S. Bancorp (MN)
51
1,023
2.84%
10
Green Bankshares Inc (TN)
21
717
2.24%
11
First South Bancorp Inc. (TN)
10
601
1.53%
12
Synovus Financial Corp. (GA)
10
541
2.25%
13
BB&T Corp. (NC)
3
459
1.44%
14
Wells Fargo & Co. (CA)
11
428
1.11%
15
First Farmers Bancshares Inc. (TN)
10
378
1.20%
16
Avenue Financial Holdings Inc. (TN)
6
350
0.61%
17
Renasant Corp. (MS)
7
347
1.16%
18
Reliant Bank (TN)
3
323
0.84%
19
Southeastern Bancorp Inc. (TN)
9
293
0.97%
20
Citizens Bncp Investment Inc. (TN)
10
272
0.84%
47
HopFed Bancorp Inc. (KY)
3
59
0.17%
Grand Total
564
34,682
$
Nashville MSA Market Share
(1)
(1) Source: SNL Financial LC; Branch deposit data as of June 30, 2009
|
 8
Market Areas –
Western Kentucky
6 Offices in 3 counties
Significant agricultural base
with prominent wheat, corn
and soybean production
Light manufacturing
Tourism focused on
Kentucky Lake and Land
Between the Lakes
Home to Murray State with
10,000+ students
Market
# of
Deposits in
Market
Rank
Institution (State)
branches
Market ($MM)
Share (%)
1
Community Financial Services (KY)
6
323
$
21.90%
2
HopFed Bancorp Inc. (KY)
6
320
21.71%
3
BB&T Corp. (NC)
4
226
15.34%
4
Regions Financial Corp. (AL)
5
208
14.10%
5
BancKentucky Inc. (KY)
2
174
11.81%
6
U.S. Bancorp (MN)
3
103
6.98%
7
Citizens Bncp of Hickman Inc. (KY)
2
72
4.88%
8
Reelfoot Bancshares Inc. (TN)
1
31
2.11%
9
Exchange Bancshares Inc. (KY)
2
12
0.81%
10
Jackson Financial Corporation (KY)
1
4
0.28%
11
Woodforest Financial Group (TX)
1
1
0.04%
12
Cadiz Bancorp Inc. (KY)
1
0
0.03%
Grand Total
34
1,474
$
100.00%
Market Share –
Fulton, Marshall and Calloway
Counties
(1)
(1) Source: SNL Financial LC; Branch deposit data as of June 30, 2009
|
 9
Experienced Management
Our management team has over 150 years of combined industry
experience and strong ties to the Western Kentucky and Middle
Tennessee markets
Years with
Industry
Name
Position
HFBC
Experience
Previous experience
John Peck
President & CEO
10
29
President and CEO of United Commonwealth Bank
President of Firstar Bank-Calloway County
Mike Woolfolk
Chief Operating Officer
10
38
President of Firstar Bank-Marshall County
Senior Vice President of Operations of Citizens Bank
Billy Duvall
Chief Financial Officer
9
20
Auditor with Rayburn, Betts & Bates, P.C.
Examiner with National Credit Union Administration
Michael Stalls
SVP & Chief Credit Officer
7
36
Senior Lending Officer at Regions Bank (Southern TN)
Boyd Clark
SVP & Corporate Secretary
38
38
Held a variety of positions all at Heritage Bank |
 10
Business Strategy
Focus on relationship banking
We operate our franchise in a manner that provides local decision making in our
retail offices We have a local market president and a local market
advisory board within our larger markets Focus on our existing market
footprint Our markets are ideal for a community bank as they provide both
stability and growth Ft. Campbell military base, located within our
markets, is a major source of stability Considerable population growth is
projected for both the Clarksville and Nashville MSAs Take advantage of our
unique position as a middle market player Our primary competitors are
either large regional banks or smaller community banks We are small
enough to present ourselves to our customers as a locally-based community bank,
yet large enough to attract businesses that require a larger capital base
to service their needs Continue to reposition our balance sheet
In the last ten years we have transformed our Bank from a traditional mutual
savings bank into a highly diversified financial institution
We believe that the continued diversification of our loan portfolio and
improved
deposit mix will result in improved operating results
We distinguish our self from our competition by offering comprehensive banking
services to businesses and individuals in our markets with personalized
service |
 11
Franchise Transformation -
Lending
Over the last 10 years, we have transformed our franchise from a
traditional mutual to a vibrant community bank
dollars in thousands
Dec. 31, 2000
Dec. 31, 2005
June 30, 2010
Branches:
5
9
18
Employees:
33
126
245
Loans:
1-4 Family
93,147
$
71.1%
211,564
$
52.7%
231,445
$
36.4%
Mulit-family
2,841
2.2%
6,613
1.7%
48,352
7.6%
CRE
21,695
16.5%
102,676
25.6%
196,054
30.8%
C&D
5,729
4.4%
16,592
4.1%
90,211
14.2%
C&I
946
0.7%
36,945
9.2%
50,926
8.0%
Consumer
6,691
5.1%
26,924
6.7%
19,440
3.0%
Total
131,049
$
100.0%
401,314
$
100.0%
636,428
$
100.0% |
 12
Franchise Transformation -
Funding
Over the last 10 years, we have transformed our franchise from a
traditional mutual to a vibrant community bank
dollars in thousands
Dec. 31, 2000
Dec. 31, 2005
June 30, 2010
Deposits
Transaction Accounts
Non-Interest Bearing
3,828
$
2.3%
36,918
$
7.6%
69,788
$
8.3%
Interest Bearing
9,527
5.7%
96,949
20.1%
138,956
16.4%
Total
13,355
8.0%
133,867
27.7%
208,744
24.7%
MMDA & Savings
34,371
20.8%
97,477
20.2%
62,425
7.4%
Time Deposits
Retail < $100K
103,446
62.5%
174,741
36.2%
377,639
44.7%
Retail > $100K
14,432
8.7%
76,643
15.9%
111,161
13.2%
Brokered
---
---
---
---
84,376
10.0%
Total
117,878
71.2%
251,384
52.1%
573,176
67.9%
Total
165,604
$
100.0%
482,728
$
100.0%
844,345
$
100.0% |
 13
Asset Quality
Non-performing Assets Detail
Much of our past success is
attributable to our
commitment to conservative
lending practices
During the recent economic
downturn, we have remained
profitable, while continuing to
fund our allowance for loan
losses at appropriate levels
Source: SNL Financial LC and company reports
Non-performing Assets to Total Assets
(1)
(1) KY Banks & Thrifts include all banks and thrifts headquartered in
Kentucky that are listed on a major stock exchange. ($ in thousands)
2005
2006
2007
2008
2009
Q2'10
Non-performing loans
$ 996
$ 863
$ 593
$ 7,321
$ 11,209
$ 11,655
ORE
228
342
347
875
1,883
2,491
Non-performing assets
$ 1,224
$ 1,205
$ 940
$ 8,196
$ 13,092
$ 14,146
Total loans
$ 401,314
$ 499,438
$ 581,094
$ 634,210
$ 650,945
$ 636,428
Allowance for loan loss
4,004
4,470
4,842
6,133
8,851
8,571
Total assets
639,589
770,888
808,352
967,560
1,029,876
1,106,431
NPAs
/ Total loans
0.25%
0.17%
0.10%
1.16%
1.72%
1.83%
NPAs
/ Total assets
0.19%
0.16%
0.12%
0.84%
1.28%
1.28%
ALL / Total loans
1.00%
0.90%
0.30%
0.97%
1.36%
1.35%
ALL / NPAs
402.01%
519.96%
816.53%
83.01%
78.96%
73.54%
2.11%
1.28%
0.19%
0.16%
0.12%
0.84%
1.28%
1.29%
0.89%
0.94%
1.94%
0.59%
0.45%
1.93%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
2005
2006
2007
2008
2009
Q1'10
Q2'10
HopFed
Bancorp, Inc.
KY Banks & Thrifts Median |
 14
Loan Portfolio
Total Loan Portfolio
(1)
Over the last 10 years we have transformed
our loan portfolio to near optimum
concentrations and our continued loan
diversification will lead to improved
operating results
Total Loans:
$636.5 million
Weighted Average
Yield:
6.17%
(1)
As of June 30, 2010
1-4 Family
36.4%
Mulit-family
7.6%
Commercial
Real Estate
30.8%
C&D 14.2%
C&I 8.0%
Consumer,
3.0%
Outstanding
% of Total
% of Risk
Balance
Loans
Based Capital
Consumer
19,440
$
3.0%
15.8%
RE -
1 -
4 family
231,445
36.4%
188.5%
Multi-family
48,352
7.6%
39.4%
CRE (investor)
31,432
4.9%
25.6%
CRE (owner occupied)
164,622
25.9%
134.1%
Construction
28,584
4.5%
23.3%
Land & land development
61,627
9.7%
50.2%
C&I
50,926
8.0%
41.5%
Total
$ 636,428
100.0%
518.4%
Loan Portfolio Concentration
(1)
122,803
Consolidated Risk Based Capital
$
Source: SNL Financial LC and company reports
|
 15
Deposit Portfolio
Total
Deposit
Breakout
(1)
Total Deposit Growth ($M)
2010 Deposit Cost Summary
1
st
Qtr. Overall Cost of Deposits: 2.27%
2
nd
Qtr. Overall Cost of Deposits: 2.14%
Marketing campaign focused on increasing
our market share of checking accounts
that began in 2008 has netted 4,000 new
noninterest bearing checking accounts in
each of the last two years
Our base of core deposits has been a
driver of our net interest margin and
profitability throughout our recent history
Brokered deposits represent 10.0% of
total deposits and we have agreed not to
increase our brokered deposits without
prior OTS approval
Source: SNL Financial LC and company reports
(1) As of June 30, 2010
Interest
Bearing
16%
MMDA &
Savings
7%
Retail < $100K
46%
Retail > $100K
13%
Brokered
10%
Non-Interest
Bearing
8% |
 16
Financial Metrics
Source: Company reports
At or for the six months
ended June 30,
At or for the year ended December 31,
2010
2009
2009
2008
2007
2006
2005
(unaudited)
($ in thousands, except per share data)
Statement
of
Income:
Net interest income
$ 15,218
$ 12,957
$ 26,829
$ 23,057
$ 20,142
$ 17,380
$ 14,192
Provision for loan losses
1,469
1,936
4,199
2,417
976
1,023
1,250
Non-interest income
4,765
5,100
10,225
8,344
7,231
5,765
4,532
Non-interest expense
12,973
12,743
30,483
22,417
20,553
16,514
11,600
Income before income taxes
5,541
3,378
2,372
6,567
5,844
5,608
5,874
Provision for income taxes
1,610
1,001
397
1,952
1,728
1,700
1,744
Net income
3,931
2,377
1,975
4,615
4,116
3,908
4,130
Preferred stock dividends
511
511
1,031
56
-
-
-
Net income available to common stockholders
$ 3,420
$ 1,866
$
944 $ 4,559
$ 4,116
$ 3,908
$ 4,130
Balance
Sheet:
Assets
$ 1,106,431
$ 1,001,794
$ 1,029,876
$ 967,560
$ 808,352
$ 770,888
$ 639,589
Loans receivable, net
627,857
637,111
642,355
628,356
576,252
494,968
397,310
Deposits
844,345
743,547
794,144
713,005
598,753
569,433
482,728
Subordinated debentures
10,310
10,310
10,310
10,310
10,310
10,310
10,310
Total stockholders' equity
113,806
79,809
79,949
78,284
55,803
52,270
49,842
Performance
Ratios:
Return on average assets
0.74%
0.48%
0.09%
0.55%
0.53%
0.56%
0.69%
Return on average equity
9.24
5.93
1.18
8.08
7.84
7.65
8.33
Net interest margin
3.28
2.91
2.97
3.06
2.89
2.71
2.61
Efficiency ratio
62.58
69.33
80.73
70.41
73.66
70.66
61.95
Capital
Ratios:
Tangible common equity to tangible assets
8.58%
5.58%
5.87%
5.52%
6.01%
5.73%
7.06%
Tier 1 capital to risk weighted assets (Company)
10.6%
12.6%
12.7%
12.7%
10.1%
11.0%
14.7%
Total capital to risk weighted assets (Company)
18.0%
13.8%
13.8%
13.7%
11.0%
11.8%
15.7%
Tier 1 capital to risk weighted assets (Bank)
8.9%
7.8%
12.2%
11.7%
9.6%
10.4%
14.0%
Total capital to risk weighted assets (Bank)
15.0%
13.0%
13.3%
12.6%
10.5%
11.3%
15.0%
Per
Share
Data:
Basic earnings per share
$
0.91
$
0.52
$
0.26
$
1.28
$
1.15
$
1.08
$
1.13 Diluted earnings per share
0.91
0.52
0.26
1.27
1.14
1.07
1.13
Book value per share
13.74
17.22
17.12
16.70
15.54
14.41
13.66
Tangible book value per share
13.60
15.44
16.80
14.81
13.40
12.03
12.27
Dividends per share
0.12
0.12
0.48
0.48
0.48
0.48
0.48
Weighted
average
shares
outstanding
-
basic
3,757,614
3,568,257
3,569,969
3,572,127
3,588,163
3,634,138
3,644,178
Weighted
average
shares
outstanding
-
diluted
3,757,614
3,568,257
3,569,969
3,597,483
3,607,870
3,659,666
3,669,918
Common shares outstanding
6,971,616
3,594,620
3,594,620
3,585,049
3,592,033
3,627,906
3,649,078 |
 17
0.69%
0.56%
0.53%
0.55%
0.74%
0.09%
0.00%
0.25%
0.50%
0.75%
1.00%
1.25%
1.50%
2005
2006
2007
2008
2009
YTD
61.95%
70.66%
73.30%
69.84%
66.88%
62.58%
40.00%
50.00%
60.00%
70.00%
80.00%
2005
2006
2007
2008
2009
YTD
2.61%
2.71%
2.89%
3.06%
2.97%
3.28%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
2005
2006
2007
2008
2009
YTD
9.24%
8.33%
7.65%
7.84%
8.08%
1.18%
0.00%
2.50%
5.00%
7.50%
10.00%
12.50%
15.00%
2005
2006
2007
2008
2009
YTD
Historical Performance
Return on Average Equity
Net Interest Margin
Efficiency Ratio
(1)
Return on Average Assets
HopFed
Bancorp, Inc.
KY Banks & Thrifts
(2)
Source: SNL Financial LC and company reports
(1) Excludes goodwill impairment and foreclosed property expense.
(2) KY Banks & Thrifts include all banks and thrifts
headquartered in Kentucky that are listed on a major stock exchange. |
 18
Why Invest in HopFed
Bancorp, Inc.
History of strong financial performance
We have remained profitable during the recent economic downturn and believe that
we are positioned to take advantage of future growth opportunities
Strong Asset Quality
Our asset quality metrics have remained superior to our peers
Experienced Management Team
We have
an
experienced
and
energetic
management
team
with
strong
relationships in
our market areas
Disciplined approach to internal and external growth
We are
confident
in
our
ability
to
successfully
integrate
future
branch
or
whole
bank
acquisitions as well as grow through de novo branches
Attractive Entry Point
Opportunity to invest in a high quality franchise with a proven track record and
at a significant discount to tangible book value and peer trading
multiples We believe there will be exceptional opportunities for responsible
strategic growth in our market areas |
 19
Public Company Comparables
Source: SNL Financial LC and company reports
Publicly traded banks headquartered in Kentucky and listed on a major stock
exchange
YTD as of June 30, 2010
Pricing data as of August 11, 2010
Total
TCE /
Price/
Assets
Tg. Assets
Price/
LTM
NIM
LLRs/
NPAs/
Ticker
Company Name
City, State
($MM)
(%)
TBV (%)
EPS (x)
ROAA (%)
ROAE (%)
(%)
Loans (%)
Assets (%)
CTBI
Community Trust Bancorp Inc.
Pikeville, KY
3,209
8.43
148.5
14.0
0.97
9.37
4.06
1.48
2.83
RBCAA
Republic Bancorp Inc.
Louisville, KY
3,140
11.36
121.2
6.9
2.80
30.15
5.73
1.21
2.20
FFKT
Farmers Capital Bank Corp.
Frankfort, KY
2,093
5.76
34.4
NM
0.44
6.34
3.00
2.09
5.98
SYBT
S.Y. Bancorp Inc.
Louisville, KY
1,859
8.68
203.3
18.6
1.17
13.24
3.88
1.55
0.82
PBIB
Porter Bancorp Inc.
Louisville, KY
1,761
7.80
79.4
16.6
0.27
2.78
3.45
2.01
6.66
BKYF
Bank of Kentucky Finl Corp.
Crestview Hills, KY
1,520
5.71
122.9
16.7
0.57
6.29
3.72
1.46
1.78
FFKY
First Financial Service Corp.
Elizabethtown, KY
1,239
5.29
44.0
NM
0.11
1.60
3.15
2.19
4.19
CZFC
Citizens First Corp.
Bowling Green, KY
347
5.23
82.3
NM
0.66
6.11
4.03
1.67
0.53
Average
1,896
7.28
104.5
14.6
0.87
9.49
3.88
1.71
3.12
Median
1,810
6.78
101.7
16.6
0.62
6.32
3.80
1.61
2.52
HFBC
HopFed Bancorp Inc.
Hopkinsville, KY
1,106
8.58
68.6
14.2
0.74
9.24
3.28
1.35
2.22
Valuation Data:
Operating Data:
|
 20
Appendix: Company History
1879:
The Bank was founded under the name Hopkinsville Building and Loan Association
1940:
The Bank converted to a savings association and began insuring deposits
1983:
The Bank became a federal mutual savings bank
1997:
HopFed
Bancorp, Inc. was incorporated under the laws of Delaware
1998:
The Bank converted from a federal mutual savings bank to a federal stock
savings bank and the Company became listed on the NASDAQ
2000:
John E. Peck named President and Chief Executive Officer
2002:
Bank changed name from Hopkinsville Federal Savings Bank to Heritage
Bank 2002:
Acquired two branch offices in Fulton, Kentucky from Old National Bancorp
2006:
Acquired four branch offices in Middle Tennessee from AmSouth Bancorp
2006:
Opened first of three branch offices in Clarksville, Tennessee
2008:
Issued $18.4 million of Series A Preferred Stock under
CPP to the Treasury
June 2010:
Completed sale of 3,583,334 shares of common stock
We are a Kentucky-based unitary savings and loan holding company.
Our wholly-owned savings bank subsidiary is Heritage Bank.
|
 John E. Peck
Billy C. Duvall
President & Chief Executive Officer
SVP & Chief Financial Officer
(270) 887-8401
(270) 887-8404
john.peck@bankwithheritage.com
billy.duvall@bankwithheritage.com |