Home Federal Bancorp, Inc. of Louisiana - FORM 8-K - EX-99.1 - PRESS RELEASE - October 23, 2014

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EXHIBIT 99.1
 
IMMEDIATE RELEASE
 
HOME FEDERAL BANCORP, INC. OF LOUISIANA REPORTS
RESULTS OF OPERATIONS FOR THE
QUARTER ENDED SEPTEMBER 30, 2014
 
Shreveport, Louisiana – October 23, 2014 – 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, 2014 of $823,000, an increase of $110,000, or 15.4% compared to net income of $713,000 reported for the three months ended September 30, 2013. The Company’s basic and diluted earnings per share were $0.41 and $0.40, respectively for the quarter ended September 30, 2014, compared to basic and diluted earnings per share of $0.34 and $0.33, respectively, for the quarter ended September 30, 2013.
 
The increase in net income for the three months ended September 30, 2014, resulted primarily from an increase of $274,000, or 10.1%, in net interest income, a $26,000, or 39.4%, decrease in the provision for loan losses and a $25,000, or 4.1%, increase in non-interest income, partially offset by a $60,000, or 17.4%, increase in the provision for income tax expense and a $155,000, or 7.1%, increase in non-interest expense. The increase in net interest income for the three months ended September 30, 2014, was primarily due to a $224,000, or 6.7%, increase in total interest income, and a decrease of $50,000, or 7.9%, in aggregate interest expense on borrowings and deposits primarily due to an overall decrease in rates paid on interest-bearing liabilities.  The Company’s average interest rate spread was 3.63% for the three months ended September 30, 2014, compared to 3.65% for the three months ended September 30, 2013. The Company’s net interest margin was 3.83% for the three months ended September 30, 2014, compared to 3.91% for the quarter ended September 30, 2013. The decrease in the average interest rate spread on a comparative quarterly basis was primarily the result of a decrease of 25 basis points in average yield on interest-earning assets.  The decrease in net interest margin was primarily the result of a higher average volume of interest earning assets for the quarter ended September 30, 2014 compared to the prior year quarterly period.
 
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,
  
   
2014
    
2013
  
   
Average
Balance
    
Average
Yield/Rate
    
Average
Balance
    
Average
Yield/Rate
  
   
(Dollars in thousands)
  
Interest-earning assets:
                        
    Loans Receivable
   $ 252,870       5.23 %   $ 215,741       5.65 %
    Investment Securities
     53,820       1.82       55,312       2.00  
    Interest-earning deposits
     4,191       0.28        5,314       0.31  
        Total interest-earning assets
   $ 310,881       4.57 %   $ 276,367       4.82 %
                                 
Interest-bearing liabilities:
                                
    Savings accounts
   $ 12,788       0.20 %   $ 10,001       0.24 %
    NOW accounts
     26,227       0.69       25,535       1.06  
    Money market accounts
     45,002       0.36       44,026       0.41  
    Certificates of deposit
     125,386       1.41       113,641       1.61  
         Total interest-bearing deposits
     209,403       1.02       193,203       1.19  
    Other Bank Borrowings
     --       --       733       4.01  
    FHLB advances
     36,608       0.49       21,864       0.88  
                Total interest-bearing liabilities
   $ 246,011       0.94 %   $ 215,800       1.17 %
 
 
 
 
 
 
The $25,000 increase in non-interest income for the quarter ended September 30, 2014, compared to the prior year quarterly period was due to an increase of $26,000 in service charges on deposit accounts and $6,000 in other non-interest income, partially offset by a decrease of $4,000 in gain on sale of loans and a $3,000 decrease in income on Bank Owned Life Insurance.
 
The $155,000 increase in non-interest expense for the three months ended September 30, 2014, compared to the same period in 2013, is primarily attributable to increases of $116,000 in compensation and benefits expense, $34,000 in occupancy and equipment expense, $34,000 in loan collection expense, $11,000 in advertising expense, $4,000 in data processing expense and $6,000 in other non-interest expenses.  These increases were partially offset by decreases of $24,000 in legal fees, $20,000 in franchise and bank share taxes, $4,000 in audit and examination fees and $2,000 in deposit insurance premiums.
 
At September 30, 2014, the Company reported total assets of $340.5 million, an increase of $11.0 million, or 3.3%, compared to total assets of $329.5 million at June 30, 2014. The increase in assets was comprised primarily of increases in loans receivable, net of $8.7 million, or 3.7%, from $239.6 million at June 30, 2014, to $248.3 million at September 30, 2014, loans held-for-sale of $1.7 million, or 17.7%, from $9.4 million at June 30, 2014, to $11.0 million at September 30, 2014, other assets of $1.7 million, or 10.1%, from $16.8 million at June 30, 2014 to $18.5 million at September 30, 2014, and an increase in investment securities of $7.7 million, or 15.3%, from $50.2 million at June 30, 2014, to $57.9 million at September 30, 2014.  These increases were partially offset by a decrease in cash and cash equivalents of $8.8 million or 64.8%, from $13.6 million at June 30, 2014 to $4.8 million at September 30, 2014.  The increase in loans held-for-sale results primarily from an increase at September 30, 2014 in receivables from financial institutions purchasing the Company’s loans held-for-sale.
 
The following table shows total loans originated and sold during the periods indicated.
 
   
Quarter Ended
September 30,
        
   
2014
    
2013
    
% Change
  
   
(In thousands)
        
Loan originations:
                  
   One- to four-family residential
   $ 26,896     $ 26,481       1.6 %
   Commercial — real estate secured:
                        
        Owner occupied
     18,065       10,306       75.3  
        Non-owner occupied
     1,524       1,522       0.1  
   Multi-family residential
     2,440       151       1,515.9  
   Commercial business
     10,145       6,841       48.3  
   Land
     1,884       2,422       (22.2 )
   Construction
     8,673       5,569       55.7  
   Home equity loans and lines of credit and other consumer
     2,314       1,343       72.3  
        Total loan originations
   $ 71,941     $ 54,635       31.7  
Loans sold
   $ (21,402 )   $ (17,866 )     19.8 %
 
Included in the $8.7 million and $5.6 million of construction loan originations for the three months ended September 30, 2014 and 2013, respectively, are approximately $3.2 million and $4.3 million, respectively, of one- to four-family residential construction loans and $5.5 million and $1.3 million, respectively, of commercial and multi-family construction loans, all of which are primarily located in the Company’s market area.
 
Total liabilities increased $11.1 million, or 3.9%, from $286.8 million at June 30, 2014, to $297.8 million at September 30, 2014, primarily due to an increase in advances from the Federal Home Loan Bank of Dallas of 30.7 million, or 238.0%, to 43.6 million at September 30, 2014, compared to 12.9 million at June 30, 2014, partially offset by a decrease in total deposits of $20.3 million, or 7.4%, to $252.0 million at September 30, 2014, compared to $272.3 million at June 30, 2014.  The decrease in deposits was primarily due to a $27.0 million, or 37.4% decrease in money market deposits from $72.2 million at June 30, 2014 to $45.2 million at September 30, 2014, and a decrease in non-interest bearing demand deposits of $3.0 million, or 6.9%, from $43.4 million at June 30, 2014 to $40.4 million at September 30, 2014, partially offset by increases in certificates of deposit of $6.5 million, or 5.4%, from $120.4 million at June 30, 2014 to $126.9 million at September 30, 2014 and NOW accounts of $2.3 million, or 9.6%, from $24.0 million at June 30, 2014 to $26.3 million at September 30, 2014. The decrease in money market deposits was primarily due to a transitory deposit in the fourth quarter of fiscal 2014 which had a balance of approximately $30.6 million at June 30, 2014. The deposit was short-term in nature and was fully withdrawn as of September 30, 2014. At both September 30, 2014 and June 30, 2014, the Company had $12.7 million in brokered deposits. The Company utilizes brokered certificates of deposit as a component of its strategy for lowering Home Federal Bank’s overall cost of funds. 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 increase in advances from the Federal Home Loan Bank of Dallas was a result of the non-recurring deposit described above being used to pay down advances at June 30, 2014.
 
 
2
 
At September 30, 2014, the Company had $108,000 of non-performing assets compared to $178,000 of non-performing assets at June 30, 2014, consisting of two single-family residential loans and one non-performing line of credit at September 30, 2014, compared to one single family residential loan and one non-performing line of credit at June 30, 2014. At September 30, 2014, the Company had one single family residential loan classified as substandard, compared to none at June 30, 2014. The Company had one commercial loan secured by real estate classified as doubtful at September 30, 2014, in the amount of $64,000, one single-family residential loan classified as doubtful in the amount of $151,000 at June 30, 2014 and one line of credit classified as doubtful in the amount of $27,000 at both September 30, 2014 and June 30, 2014.
 
Shareholders’ equity decreased $121,000, or 0.3%, to $42.7 million at September 30, 2014 from $42.8 million at June 30, 2014.  The primary reasons for the decrease in shareholders’ equity from June 30, 2014, were the acquisition of treasury stock in the amount of $756,000, a decrease in the Company’s accumulated other comprehensive income of $159,000, and dividends paid of $156,000.  These decreases were partially offset by net income of $823,000, the vesting of restricted stock awards, stock options and the release of employee stock ownership shares totaling $110,000, and proceeds from the issuance of common stock from the exercise of stock options of $17,000.
 
The Company repurchased 40,057 shares of its common stock under its stock repurchase program during the quarter ended September 30, 2014 at an average price per share of $18.88.  On January 8, 2014, the Company announced that its Board of Directors approved a fourth stock repurchase program for the repurchase of up to 115,000 shares.  As of September 30, 2014, there were a total of 65,715 shares remaining for repurchase under the program.
 
Home Federal Bancorp, Inc. of Louisiana is the holding company for Home Federal Bank which conducts business from its four full-service banking offices and one agency 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.
 
 
 
 
 
 
 
 
3
 
 
Home Federal Bancorp, Inc. of Louisiana
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands)
 
     September 30,      June 30,  
    2014     2014  
ASSETS   (Unaudited)  
             
Cash and cash equivalents
   $ 4,794     $ 13,633  
Securities available for sale at fair value
     55,494       48,434  
Securities held to maturity (fair value September 30, 2014: $2,399 June 30, 2014: $1,765)
     2,399       1,765  
Loans held-for-sale
     11,035       9,375  
Loans receivable, net of allowance for loan losses (September 30, 2014: $2,285;
     June 30, 2014: $2,396)
     248,309       239,563  
Other assets
     18,454       16,759  
                 
Total assets
   $ 340,485     $ 329,529  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
                 
Deposits
   $ 252,011     $ 272,295  
Advances from the Federal Home Loan Bank of Dallas
     43,589       12,897  
Other liabilities
      2,227       1,558  
                 
Total liabilities
     297,827       286,750  
                 
Shareholders’ equity
     42,658       42,779  
                 
Total liabilities and shareholders’ equity
   $ 340,485     $ 329,529  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4
 
 
 
Home Federal Bancorp, Inc. of Louisiana
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
 
    Three Months Ended
September 30,
  
     2014      2013  
    (Unaudited)  
Interest income            
     Loans, including fees
   $ 3,307     $ 3,050  
     Investment securities
     1       1  
     Mortgage-backed securities
     244       276  
     Other interest-earning assets
     3       4  
          Total interest income
     3,555       3,331  
Interest expense
            
     Deposits
     535       575  
     Federal Home Loan Bank borrowings
     45       48  
     Other bank borrowings
     --       7  
          Total interest expense
     580       630  
               Net interest income
     2,975       2,701  
Provision for loan losses
     40       66  
               Net interest income after provision for loan losses
     2,935       2,635  
             
Non-interest income
            
     Gain on sale of loans
     472       476  
     Income on Bank Owned Life Insurance
     41       44  
     Service charges on deposit accounts
     101       75  
     Other income
     15       9  
                    Total non-interest income
     629       604  
             
Non-interest expense
            
     Compensation and benefits
     1,500       1,384  
     Occupancy and equipment
     229       195  
     Data processing
     119       115  
     Audit and examination fees
     53       57  
     Franchise and bank shares tax
     73       93  
     Advertising
     75       64  
     Legal fees
     69       93  
     Loan and collection
     66       32  
     Deposit insurance premium
     31       33  
     Other expenses
     122       116  
             
                    Total non-interest expense
     2,337       2,182  
                 
     Income before income taxes
     1,227       1,057  
Provision for income tax expense
     404       344  
             
     NET INCOME
   $ 823     $ 713  
         
     EARNINGS PER SHARE
          
          Basic
   $ 0.41     $ 0.34  
          Diluted
   $ 0.40     $ 0.33  
 
 
 
5
 
 
 
   
Three Months Ended
  
   
September 30,
  
   
2014
    
2013
  
   
(Unaudited)
  
Selected Operating Ratios(1):
            
     Average interest rate spread
     3.63 %     3.65 %
     Net interest margin
     3.83 %     3.91 %
     Return on average assets
     0.99 %     1.00 %
     Return on average equity
     7.10 %     6.45 %
                 
Asset Quality Ratios(2):
                
     Non-performing assets as a percent of total assets
     0.03 %     0.18 %
     Allowance for loan losses as a percent of non-performing loans
     2,115.74 %     437.57 %
     Allowance for loan losses as a percent of total loans receivable
     0.91 %     1.10 %
                 
Per Share Data:
                
     Shares outstanding at period end
     2,203,442       2,347,334  
     Weighted average shares outstanding:
                
          Basic
     2,005,487       2,112,679  
          Diluted
     2,057,803       2,116,030  
     Tangible book value at period end
   $ 19.36     $ 17.96  
____________
(1)      Ratios for the three month periods are annualized.
(2)      Asset quality ratios are end of period ratios.
 
 
 
CONTACT:
James R. Barlow
President and Chief Operating Officer
(318) 222-1145
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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Home Federal Bancorp, Inc. of Louisiana Reports