FOR RELEASE: Thursday, October 22, 2015 at 4:30 PM (Eastern)

HOME FEDERAL BANCORP, INC. OF LOUISIANA REPORTS RESULTS OF OPERATIONS

FOR THE QUARTER ENDED SEPTEMBER 30, 2015

Shreveport, Louisiana – October 22, 2015 – 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, 2015 of $941,000, an increase of $118,000, or 14.3% compared to net income of $823,000 reported for the three months ended September 30, 2014. The Company's basic and diluted earnings per share were $0.49 and $0.47, respectively, for the three months ended September 30, 2015, compared to basic and diluted earnings per share of $0.41 and $0.40, respectively, for the quarter ended September 30, 2014.

The increase in net income for the three months ended September 30, 2015, resulted primarily from an increase of $203,000, or 6.8%, in net interest income, and a $283,000, or 45.0%, increase in non-interest income, partially offset by a $296,000, or 12.7%, increase in non-interest expense, a $47,000, or 11.6%, increase in the provision for income tax expense and a $25,000, or 62.5% increase in the provision for loan losses. The increase in net interest income for the three months ended September 30, 2015, was primarily due to a $290,000, or 8.2%, increase in total interest income, partially offset by an increase of $87,000, or 15.0%, in aggregate interest expense primarily due to an increase in the average balance of deposits.  The Company's average interest rate spread was 3.45% for the three months ended September 30, 2015, compared to 3.63% for the three months ended September 30, 2014. The Company's net interest margin was 3.65% for the three months ended September 30, 2015, compared to 3.83% for the three months ended September 30, 2014. The decrease in the average interest rate spread on a comparative quarterly basis was primarily the result of a decrease of 16 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 three months ended September 30, 2015 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.

 

 

 

The $283,000 increase in non-interest income for the three months ended September 30, 2015, compared to the prior year quarterly period was due to an increase of $253,000 in gain on sale of loans, and an increase of $33,000 in service charges on deposit accounts, partially offset by a decrease of $2,000 in other non-interest income and a decrease of $1,000 in income on Bank Owned Life Insurance.  The Company sells most of its long term fixed rate residential mortgage loan originations primarily in order to manage interest rate risk.

The $296,000 increase in non-interest expense for the three months ended September 30, 2015, compared to the same period in 2014, is primarily attributable to increases of $208,000 in compensation and benefits expense, $29,000 in deposit insurance premiums, $23,000 in other non-interest expense, $18,000 in franchise and bank share tax expense, $17,000 in loan and collection expense, $11,000 in data processing expense, and $10,000 in occupancy and equipment expense.  These increases were partially offset by decreases of $14,000 in advertising expense, $3,000 in audit and examination fees, and $3,000 in legal fees.

At September 30, 2015, the Company reported total assets of $366.1 million, a decrease of $3.7 million, or 1.0%, compared to total assets of $369.8 million at June 30, 2015. The decrease in assets was comprised primarily of decreases in investment securities of $3.8 million, or 8.2%, from $46.9 million at June 30, 2015, to $43.1 million at September 30, 2015 and a decrease in loans held-for-sale of $3.3 million, or 22.9%, from $14.2 million at June 30, 2015, to $11.0 million at September 30, 2015.  These decreases were partially offset by increases in cash and cash equivalents of $1.6 million, or 7.6%, from $21.2 million at June 30, 2015 to $22.8 million at September 30, 2015, other assets of $1.2 million, or 6.5%, from $19.1 million at June 30, 2015 to $20.4 million at September 30, 2015, and an increase in loans receivable-net of $555,000, or 0.2%, from $268.4 million at June 30, 2015 to $269.0 million at September 30, 2015.  The decrease in loans held-for-sale results primarily from a decrease at September 30, 2015 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.

Included in the $5.9 million and $8.7 million of construction loan originations for the three months ended September 30, 2015 and 2014, respectively, are approximately $5.8 million and $3.2 million, respectively, of one- to four-family residential construction loans and $135,000 and $5.5 million, respectively, of commercial and multi-family construction loans, all of which are primarily located in the Company's market area.

 

 

Total liabilities decreased $4.3 million, or 1.3%, from $326.4 million at June 30, 2015, to $322.1 million at September 30, 2015, primarily due to a decrease in advances from the Federal Home Loan Bank of Dallas of $12.1 million, or 31.4%, to $26.4 million at September 30, 2015, compared to $38.4 million at June 30, 2015, partially offset by an increase in total deposits of $7.0 million, or 2.5%, to $293.3 million at September 30, 2015, compared to $286.2 million at June 30, 2015.  The increase in deposits was primarily due to a $3.3 million, or 10.6%, increase in NOW accounts from $31.2 million at June 30, 2015 to $34.5 million at September 30, 2015, a $2.5 million, or 13.6%, increase in savings deposits from $18.4 million at June 30, 2015 to $20.9 million at September 30, 2015, a $1.6 million, or 3.5%, increase in money market deposits from $45.6 million at June 30, 2015 to $47.2 million at September 30, 2015, and a $417,000, or 0.3%, increase in certificates of deposit from $146.0 million at June 30, 2015 to $146.4 million at September 30, 2015, partially offset by a decrease of $772,000, or 1.7%, in non-interest bearing demand deposits from $45.0 million at June 30, 2015 to $44.3 million at September 30, 2015.  At both September 30, 2015 and June 30, 2015, 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.

At September 30, 2015, the Company had $289,000 of non-performing assets compared to $80,000 of non-performing assets at June 30, 2015, consisting of four single-family residential loans, at September 30, 2015, compared to two single family residential loans at June 30, 2015. At September 30, 2015, the Company had two single family residential loans and one commercial real estate loan classified as substandard, compared to one single family residential loan and one line of credit at June 30, 2015. There were no loans classified as doubtful at September 30, 2015 or June 30, 2015.

Shareholders' equity increased $633,000, or 1.5%, to $44.0 million at September 30, 2015 from $43.4 million at June 30, 2015.  The primary reasons for the increase in shareholders' equity from June 30, 2015, were net income of $941,000, the vesting of restricted stock awards, stock options and the release of employee stock ownership plan shares totaling $161,000 and proceeds from the issuance of common stock from the exercise of stock options of $50,000.  These increases in shareholders' equity were partially offset by dividends paid totaling $169,000, acquisition of Company stock of $300,000 and a decrease in the Company's accumulated other comprehensive income of $50,000.

The Company repurchased 13,425 shares of its common stock under its stock repurchase program during the quarter ended September 30, 2015 at an average price per share of $21.89.  On February 11, 2015, the Company announced that its Board of Directors approved a fifth stock repurchase program for the repurchase of up to 108,000 shares.  As of September 30, 2015, there were a total of 49,480 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 five full-service banking offices and one agency 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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