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EX-32.0 - EXHIBIT 32.0 - Home Federal Bancorp, Inc. of Louisianaexh320.htm
EX-31.2 - EXHIBIT 31.2 - Home Federal Bancorp, Inc. of Louisianaexh312.htm
EX-31.1 - EXHIBIT 31.1 - Home Federal Bancorp, Inc. of Louisianaexh311.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC  20549
 
FORM 10-Q
(Mark One)
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the quarterly period ended:
December 31, 2016
or
 
[   ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from
 
to
 
 
Commission file number:
001-35019
 
HOME FEDERAL BANCORP, INC. OF LOUISIANA
(Exact name of registrant as specified in its charter)
 
Louisiana
 
02-0815311
(State or other jurisdiction of incorporation or organization)
 
(IRS Employer Identification No.)
 
624 Market Street, Shreveport, Louisiana
 
71101
(Address of principal executive offices)
 
(Zip Code)
 
(318) 222-1145
(Registrant's telephone number, including area code)
 
N/A
(Former name, former address and former fiscal year, if changed since last report)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   [X] Yes    [  ]  No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).       [X] Yes   [  ] No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check One):
 
Large accelerated filer                               [   ]                                                        Accelerated filer                                      [   ]
Non-accelerated filer                                [   ]                                                        Smaller reporting company                     [X]
(Do not check if a smaller reporting company)
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[   ] Yes     [X] No
 
Shares of common stock, par value $.01 per share, outstanding as of February 8, 2017: The registrant had 1,953,599 shares of common stock outstanding.
 
 
 

INDEX
 
   
            Page
PART I
FINANCIAL INFORMATION
 
     
Item 1:
Financial Statements (Unaudited)
 
     
 
Consolidated Statements of Financial Condition
  1
     
 
Consolidated Statements of Income
  2
     
 
Consolidated Statements of Comprehensive Income
  3
     
 
Consolidated Statements of Changes in Stockholders' Equity
  4
     
 
Consolidated Statements of Cash Flows
  5
     
 
Notes to Consolidated Financial Statements
  7
     
Item 2:
Management's Discussion and Analysis of Financial Condition and  Results of Operations
28
     
Item 3:
Quantitative and Qualitative Disclosures About Market Risk
36
     
Item 4:
Controls and Procedures
36
     
PART II
OTHER INFORMATION
 
     
Item 1:
Legal Proceedings
36
     
Item 1A:
Risk Factors
36
     
Item 2:
Unregistered Sales of Equity Securities and Use of Proceeds
37
     
Item 3:
Defaults Upon Senior Securities
37
     
Item 4:
Mine Safety Disclosures
37
     
Item 5:
Other Information
37
     
Item 6:
Exhibits
37
     
     
SIGNATURES
   

HOME FEDERAL BANCORP, INC. OF LOUISIANA
 
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
 
   
December 31, 2016
   
June 30, 2016
 
       (In Thousands)   
ASSETS
           
Cash and Cash Equivalents (Includes Interest-Bearing Deposits with Other Banks of $2,389 and $2,529 for December 31, 2016
  and June 30, 2016, Respectively)
 
$
13,646
   
$
4,756
 
Securities Available-for-Sale
   
42,039
     
50,173
 
Securities Held-to-Maturity (Fair Value of $23,962 and $2,349, Respectively
   
24,542
     
2,349
 
Loans Receivable, Net of Allowance for Loan Losses of $3,439 and $2,845, Respectively
   
297,115
     
290,827
 
Loans Held-for-Sale
   
10,931
     
11,919
 
Accrued Interest Receivable
   
1,014
     
1,024
 
Premises and Equipment, Net
   
12,047
     
12,366
 
Bank Owned Life Insurance
   
6,597
     
6,523
 
Deferred Tax Asset
   
1,557
     
984
 
Other Assets
   
820
     
780
 
                 
Total Assets
 
$
410,308
   
$
381,701
 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
LIABILITIES
               
Deposits
 
$
310,654
   
$
287,822
 
Advances from Borrowers for Taxes and Insurance
   
355
     
716
 
Advances from Federal Home Loan Bank of Dallas
   
53,037
     
47,665
 
Other Bank Borrowings
   
700
     
400
 
Other Accrued Expenses and Liabilities
   
1,424
     
1,706
 
 
Total Liabilities
   
366,170
     
338,309
 
                 
STOCKHOLDERS' EQUITY
               
Preferred Stock – $.01 Par Value; 10,000,000 Shares Authorized; None Issued and Outstanding
   
--
     
--
 
Common Stock – $.01 Par Value; 40,000,000 Shares Authorized; 1,955,039 and 1,967,955 Shares Issued and Outstanding at
   December 31, 2016 and June 30, 2016, Respectively
   
23
     
23
 
Additional Paid-in Capital
   
34,265
     
33,863
 
Unearned ESOP Stock
   
(1,273
)
   
(1,331
)
Unearned RRP Trust Stock
   
(241
)
   
(265
)
Retained Earnings
   
11,905
     
11,018
 
Accumulated Other Comprehensive Income
   
(541
)
   
84
 
                 
Total Stockholders' Equity
   
44,138
     
43,392
 
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
$
410,308
   
$
381,701
 
                 
 
See accompanying notes to unaudited consolidated financial statements.
1

HOME FEDERAL BANCORP, INC. OF LOUISIANA
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

   
For the Three Months Ended
December 31,
   
For the Six Months Ended
December 31,
 
   
2016
   
2015
   
2016
   
2015
 
   
(In Thousands, Except per Share Data)
 
INTEREST INCOME
                       
Loans, Including Fees
 
$
3,794
   
$
3,541
   
$
7,688
   
$
7,177
 
Investment Securities
   
8
     
1
     
13
     
3
 
Mortgage-Backed Securities
   
252
     
189
     
444
     
384
 
Other Interest-Earning Assets
   
8
     
21
     
12
     
33
 
Total Interest Income
   
4,062
     
3,752
     
8,157
     
7,597
 
                                 
INTEREST EXPENSE
                               
Deposits
   
563
     
599
     
1,103
     
1,204
 
Federal Home Loan Bank Borrowings
   
89
     
63
     
184
     
125
 
Other Bank Borrowings
   
5
     
7
     
8
     
7
 
Total Interest Expense
   
657
     
669
     
1,295
     
1,336
 
Net Interest Income
   
3,405
     
3,083
     
6,862
     
6,261
 
                                 
PROVISION FOR LOAN LOSSES
   
300
     
26
     
600
     
91
 
Net Interest Income after Provision for Loan Losses
   
3,105
     
3,057
     
6,262
     
6,170
 
                                 
NON-INTEREST INCOME
                               
Gain on Sale of Loans
   
587
     
428
     
1,385
     
1,154
 
     Gain on Sale of Real Estate
   
-
     
-
     
110
     
-
 
Income on Bank Owned Life Insurance
   
37
     
40
     
74
     
80
 
     Service Charges on Deposit Accounts
   
184
     
139
     
347
     
272
 
Other Income
   
13
     
13
     
23
     
26
 
Total Non-Interest Income
   
821
     
620
     
1,939
     
1,532
 
                                 
NON-INTEREST EXPENSE
                               
Compensation and Benefits
   
1,737
     
1,601
     
3,459
     
3,310
 
Occupancy and Equipment
   
311
     
276
     
618
     
514
 
Data Processing
   
159
     
147
     
314
     
277
 
Audit and Examination Fees
   
81
     
83
     
133
     
133
 
Franchise and Bank Shares Tax
   
106
     
91
     
201
     
181
 
Advertising
   
94
     
65
     
166
     
126
 
Legal Fees
   
147
     
151
     
228
     
218
 
Loan and Collection
   
49
     
34
     
148
     
117
 
Deposit Insurance Premium
   
20
     
60
     
65
     
120
 
Other Expense
   
142
     
158
     
289
     
303
 
Total Non-Interest Expense
   
2,846
     
2,666
     
5,621
     
5,299
 
Income Before Income Taxes
   
1,080
     
1,011
     
2,580
     
2,403
 
                                 
PROVISION FOR INCOME TAX EXPENSE
   
317
     
330
     
815
     
781
 
Net Income
 
$
763
   
$
681
   
$
1,765
   
$
1,622
 
EARNINGS PER SHARE:
                               
Basic
 
$
0.42
   
$
0.36
   
$
0.97
   
$
0.85
 
Diluted
 
$
0.40
   
$
0.35
   
$
0.94
   
$
0.83
 
DIVIDENDS DECLARED
 
$
0.09
   
$
0.08
   
$
0.18
   
$
0.16
 
 
 
See accompanying notes to unaudited consolidated financial statements.
2

HOME FEDERAL BANCORP, INC. OF LOUISIANA

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

   
For the Three Months Ended
December 31,
   
For the Six Months Ended
December 31,
 
   
2016
   
2015
   
2016
   
2015
 
   
(In Thousands)
   
(In Thousands)
 
                         
Net Income
 
$
763
   
$
681
   
$
1,765
   
$
1,622
 
                                 
Other Comprehensive Loss, Net of Tax
                               
   Unrealized Holding Loss on Securities Available-for-Sale,
     Net of Tax of $220 and $322 in 2016, respectively, and $104 and $131 in 2015, respectively
   
(427
)
   
(202
)
   
(625
)
   
(252
)
                                 
        Total Comprehensive Income
 
$
336
   
$
479
   
$
1,140
   
$
1,370
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

See accompanying notes to unaudited consolidated financial statements.
3

HOME FEDERAL BANCORP, INC. OF LOUISIANA

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
SIX MONTHS ENDED DECEMBER 31, 2016 AND 2015
(Unaudited)
 
   
 
 
Common
Stock
   
 
Additional
Paid-in
Capital
   
 
Unearned
ESOP
Stock
   
Unearned
RRP
Trust
Stock
   
 
 
Retained
Earnings
   
Accumulated
Other
Comprehensive
Income (Loss)
   
 
Total
Stockholders'
Equity
 
                                           
BALANCE – June 30, 2015
 
$
25
   
$
33,375
   
$
(1,445
)
 
$
(333
)
 
$
11,664
   
$
100
   
$
43,386
 
                                                         
Net Income
   
--
     
--
     
--
     
--
     
1,622
     
--
     
1,622
 
                                                         
Other Comprehensive Loss,  Net of
  Applicable Deferred Income Taxes
   
--
     
--
     
--
     
--
     
--
     
(252
)
   
(252
)
                                                         
RRP Shares Earned
   
--
     
27
     
--
     
(127
)
   
--
     
--
     
(100
)
                                                         
Stock Options Vested
   
--
     
97
     
--
     
--
     
--
     
--
     
97
 
                                                         
Common Stock Issuance for Stock
  Option Exercises
   
--
     
88
     
--
     
--
     
--
     
--
     
88
 
                                                         
ESOP Compensation Earned
   
--
     
71
     
57
     
--
     
--
     
--
     
128
 
                                                         
Company Stock Purchased
   
(1
)
   
--
     
--
     
--
     
(1,802
)
   
--
     
(1,803
)
                                                         
Dividends Declared
   
--
     
--
     
--
     
--
     
(337
)
   
--
     
(337
)
                                                         
BALANCE – December 31, 2015
 
$
24
   
$
33,658
   
$
(1,388
)
 
$
(460
)
 
$
11,147
   
$
(152
)
 
$
42,829
 
                                                         
BALANCE – June 30, 2016
 
$
23
   
$
33,863
   
$
(1,331
)
 
$
(265
)
 
$
11,018
   
$
84
   
$
43,392
 
                                                         
Net Income
   
--
     
--
     
--
     
--
     
1,765
     
--
     
1,765
 
                                                         
Other Comprehensive Loss Net of
  Applicable Deferred Income Taxes
   
--
     
--
     
--
     
--
     
--
     
(625
)
   
(625
)
                                                         
RRP Shares Earned
   
--
             
--
     
24
     
--
     
--
     
24
 
                                                         
Stock Options Vested
   
--
     
146
     
--
     
--
     
--
     
--
     
146
 
                                                         
Common Stock Issuance for Share
  Awards Earned
   
--
     
138
     
--
     
--
     
--
     
--
     
138
 
                                                         
Common Stock Issuance for Stock
  Option Exercises
   
--
     
39
     
--
     
--
     
--
     
--
     
39
 
                                                         
ESOP Compensation Earned
   
--
     
79
     
58
     
--
     
--
     
--
     
137
 
                                                         
Company Stock Purchased
   
--
     
--
     
--
     
--
     
(525
)
   
--
     
(525
)
                                                         
Dividends Declared
   
--
     
--
     
--
     
--
     
(353
)
   
--
     
(353
)
                                                         
BALANCE – December 31, 2016
 
$
23
   
$
34,265
   
$
(1,273
)
 
$
(241
)
 
$
11,905
   
$
(541
)
 
$
44,138
 

 
 
 
 
 
 
 
 
See accompanying notes to unaudited consolidated financial statements.
4

HOME FEDERAL BANCORP, INC. OF LOUISIANA
 
   
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
   
        
Six Months Ended
 
        
December 31,
 
   
2016
   
2015
 
        
(In Thousands)
 
CASH FLOWS FROM OPERATING ACTIVITIES
           
Net Income
 
$
1,765
   
$
1,622
 
Adjustments to Reconcile Net Income to Net
               
Cash Provided by Operating Activities
               
Net Amortization and Accretion on Securities
   
18
     
9
 
Gain on Sale of Real Estate
   
(110
)
   
--
 
Gain on Sale of Loans
   
(1,385
)
   
(1,154
)
Amortization of Deferred Loan Fees
   
(31
)
   
(38
)
Depreciation of Premises and Equipment
   
247
     
196
 
ESOP Expense
   
137
     
128
 
Stock Option Expense
   
146
     
97
 
Recognition and Retention Plan Expense
   
116
     
117
 
Share Awards Expense
   
69
     
23
 
Deferred Income Tax
   
(252
)
   
(61
)
Provision for Loan Losses
   
600
     
91
 
Increase in Cash Surrender Value on Bank Owned Life Insurance
   
(74
)
   
(80
)
Bad Debt Recovery
   
8
     
44
 
Changes in Assets and Liabilities:
               
Loans Held-for-Sale – Originations and Purchases
   
(58,028
)
   
(46,759
)
Loans Held-for-Sale – Sale and Principal Repayments
   
60,402
     
55,242
 
Accrued Interest Receivable
   
10
     
(33
)
Other Operating Assets
   
(40
)
   
208
 
Other Operating Liabilities
   
(305
)
   
(324
)
                 
Net Cash Provided by Operating Activities
   
3,293
     
9,328
 
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
Loan Originations and Purchases, Net of Principal Collections
   
(6,950
)
   
(88
)
Deferred Loan Fees Collected
   
86
     
3
 
Acquisition of Premises and Equipment
   
(241
)
   
(1,871
)
Proceeds from Sale of Real Estate
   
423
     
--
 
Activity in Available-for-Sale Securities:
               
Principal Payments on Mortgage-Backed Securities
   
7,178
     
5,578
 
Activity in Held-to-Maturity Securities:
               
Principal Payments on Mortgage-Backed Securities
   
591
     
--
 
Redemption Proceeds
   
--
     
509
 
Purchases of Securities
   
(22,793
)
   
(3
)
                 
Net Cash (Used In) Provided by Investing Activities
   
(21,706
)
   
4,128
 
                 

 
 
 
 
 
 
See accompanying notes to unaudited consolidated financial statements.
 
5

HOME FEDERAL BANCORP, INC. OF LOUISIANA
 
   
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
 
(Unaudited)
 
   
   
Six Months Ended
 
   
December 31,
 
   
2016
   
2015
 
   
(In Thousands)
 
CASH FLOWS FROM FINANCING ACTIVITIES
     
Net Increase in Deposits
 
$
22,832
   
$
2,662
 
Proceeds from Federal Home Loan Bank Advances
   
512,100
     
44,000
 
Repayments of Advances from Federal Home Loan Bank
   
(506,727
)
   
(56,122
)
Net Increase in Advances from Borrowers for Taxes and Insurance
   
(363
)
   
(278
)
Dividends Paid
   
(353
)
   
(337
)
Company Stock Purchased
   
(525
)
   
(1,796
)
Proceeds from Stock Options Exercised
   
39
     
83
 
Proceeds from other Bank Borrowings
   
300
     
1,500
 
Recognition and Retention Plan Share Distributions
   
--
     
27
 
                 
Net Cash Provided (Used In) Financing Activities
   
27,303
     
(10,261
)
                 
NET INCREASE IN CASH AND CASH EQUIVALENTS
   
8,890
     
3,195
 
                 
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
   
4,756
     
21,166
 
                 
CASH AND CASH EQUIVALENTS - END OF PERIOD
 
$
13,646
   
$
24,361
 
                 
SUPPLEMENTARY CASH FLOW INFORMATION
               
Interest Paid on Deposits and Borrowed Funds
 
$
1,288
   
$
1,343
 
Income Taxes Paid
   
1,083
     
865
 
Market Value Adjustment for Loss on Securities Available-for-Sale
   
(947
)
   
(383
)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes to unaudited consolidated financial statements.
 
6

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 
1. Summary of Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Home Federal Bancorp, Inc. of Louisiana (the "Company") and its subsidiary, Home Federal Bank ("Home Federal Bank" or the "Bank").  These consolidated financial statements were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial statements have been included. The results of operations for the six month period ended December 31, 2016 are not necessarily indicative of the results which may be expected for the fiscal year ending June 30, 2017.

The Company follows accounting standards set by the Financial Accounting Standards Board (the "FASB"). The FASB sets generally accepted accounting principles ("GAAP") that we follow to ensure we consistently report our financial condition, results of operations, and cash flows.  References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification (the "Codification" or the "ASC").

In accordance with the subsequent events topic of the ASC, the Company evaluates events and transactions that occur after the balance sheet date for potential recognition in the consolidated financial statements.  The effect of all subsequent events that provide additional evidence of conditions that existed at the balance sheet date are recognized in the financial statements as of December 31, 2016.  In preparing these consolidated financial statements, the Company evaluated the events and transactions that occurred through the date these consolidated financial statements were issued.

Use of Estimates

In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Statements of Financial Condition and reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Material estimates that are particularly susceptible to significant change in the near term relate to the allowance for loan losses.

Nature of Operations

Home Federal Bancorp, Inc. of Louisiana, a Louisiana corporation, is the fully public stock holding company for Home Federal Bank located in Shreveport, Louisiana.  The Bank is a federally chartered, stock savings and loan association and is subject to federal regulation by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.  The Company is a savings and loan holding company regulated by the Board of Governors of the Federal Reserve System. Services are provided to the Bank's customers by six full-service banking offices and home office, located in Caddo and Bossier Parishes, Louisiana.  The area served by the Bank is primarily the Shreveport-Bossier City metropolitan area; however, loan and deposit customers are found dispersed in a wider geographical area covering much of northwest Louisiana. As of December 31, 2016, the Bank had one wholly-owned subsidiary, Metro Financial Services, Inc., which previously engaged in the sale of annuity contracts and does not currently engage in a meaningful amount of business.

Cash and Cash Equivalents

For purposes of the Consolidated Statements of Cash Flows, cash and cash equivalents include cash on hand, balances due from banks, and federal funds sold, all of which mature within ninety days of origination.
 
 
 

 
7

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 
 
1. Summary of Accounting Policies (continued)

Securities

The Company classifies its debt and equity investment securities into one of three categories:  held-to-maturity, available-for-sale, or trading.  Investments in nonmarketable equity securities and debt securities, in which the Company has the positive intent and ability to hold to maturity, are classified as held-to-maturity and carried at amortized cost.  Investments in debt securities that are not classified as held-to-maturity and marketable equity securities that have readily determinable fair values are classified as either trading or available-for-sale securities.  Securities that are acquired and held principally for the purpose of selling in the near term are classified as trading securities.  Investments in securities not classified as trading or held-to-maturity are classified as available-for-sale.

Trading account and available-for-sale securities are carried at fair value.  Unrealized holding gains and losses on trading securities are included in earnings, while net unrealized holding gains and losses on available-for-sale securities are excluded from earnings and reported in other comprehensive income.  Purchase premiums and discounts are recognized in interest income using the interest method over the term of the securities.  Declines in the fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses.  In estimating other-than-temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Bank to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.  Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

Loans Held-for-Sale

Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate.  Net unrealized losses, if any, are recognized through a valuation allowance by charges to income.

Loans

Loans receivable are stated as unpaid principal balances less allowances for loan losses and unamortized deferred loan fees.  Net nonrefundable fees (loan origination fees, commitment fees, discount points) and costs associated with lending activities are being deferred and subsequently amortized into income as an adjustment of yield on the related interest earning assets using the interest method.  Interest income on contractual loans receivable is recognized on the accrual method.  Unearned discount on property improvement and automobile loans is deferred and amortized on the interest method over the life of the loan.

Allowance for Loan Losses

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings.  Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management's periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower's ability to repay, estimated value of the underlying collateral, and prevailing economic conditions.  The evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.
 
 
 
 
 
 
 
8

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 
1. Summary of Accounting Policies (continued)

Allowance for Loan Losses (continued)

A loan is considered impaired when, based on current information or events, it is probable that the Bank will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement.  When a loan is impaired, the measurement of such impairment is based upon the present value of expected future cash flows or the fair value of the collateral of the loan.  If the present value of expected future cash flows or fair value of the collateral is less than the recorded investment in the loan, the Bank will recognize the impairment by creating a valuation allowance with a corresponding charge against earnings.

An allowance is also established for uncollectible interest on loans classified as substandard.  The allowance is established by a charge to interest income equal to all interest previously accrued and income is subsequently recognized only to the extent that cash payments are received.  When, in management's judgment, the borrower's ability to make periodic interest and principal payments is back to normal, the loan is returned to accrual status.

It should be understood that estimates of future loan losses involve an exercise of judgment.  While it is possible that in particular periods the Company may sustain losses which are substantial relative to the allowance for loan losses, it is the judgment of management that the allowance for loan losses reflected in the accompanying statements of condition is adequate to absorb possible losses in the existing loan portfolio.

Off-Balance Sheet Credit Related Financial Instruments

In the ordinary course of business, the Bank has entered into commitments to extend credit.  Such financial instruments are recorded when they are funded.

Foreclosed Assets

Assets acquired through, or in lieu of, loan foreclosure are held-for-sale and are transferred to other real estate owned at the lower of cost or current fair value minus estimated cost to sell as of the date of foreclosure.  Cost is defined as the lower of the fair value of the property or the recorded investment in the loan.  Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell.

Premises and Equipment

Land is carried at cost.  Buildings and equipment are carried at cost less accumulated depreciation computed on the straight-line method over the estimated useful lives of the assets.

Income Taxes

The Company and its wholly-owned subsidiary file a consolidated Federal income tax return on a fiscal year basis.  Each entity pays its pro-rata share of income taxes in accordance with a written tax-sharing agreement.

The Company accounts for income taxes on the asset and liability method.  Deferred tax assets and liabilities are recorded based on the difference between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, computed using enacted tax rates.  A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years.  Although realization is not assured, management believes it is more likely than not that all of the deferred tax assets will be realized.  Current taxes are measured by applying the provisions of enacted tax laws to taxable income to determine the amount of taxes receivable or payable.

 
 

 

9

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Summary of Accounting Policies (continued)

Income Taxes (continued)

While the Bank is exempt from Louisiana income tax, it is subject to the Louisiana Ad Valorem Tax, commonly referred to as the Louisiana Shares Tax, which is based on stockholders' equity and net income.

Comprehensive Income

Accounting principles generally accepted in the United States of America require that recognized revenue, expenses, gains and losses be included in net income.  Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the Consolidated Statements of Financial Condition, such items, along with net income, are components of comprehensive income.

Stockholders' Equity

On January 1, 2015, the Louisiana Business Corporation Act (the Act) became effective.  Under the provisions of the Act, there is no concept of "Treasury Shares".  Rather, shares purchased by the Company constitute authorized but unissued shares.  Under Accounting Standards Codification (ASC) 505-30, Treasury Stock, accounting for treasury stock shall conform to state law.  Accordingly, the Company's Consolidated Statements of Financial Condition as of June 30, 2016 and December 31, 2016 reflect this change.  The cost of shares purchased by the Company has been allocated to Common Stock and Retained Earnings balances.

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606).  The amendments in ASU 2014-09 supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance.  The general principle of ASU 2014-09 requires an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration of which the entity expects to be entitled in exchange for those goods or services.  The guidance sets forth a five step approach to be utilized for revenue recognition.  In August 2015, the FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 making it effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.  In April 2016, the FASB issued ASU 2016-10 which does not change the core principle of the guidance in Topic 606.  The amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas.  In May 2016, the FASB issued ASU 2016-12 which does not change the core principle of the guidance in Topic 606.  The amendments in this Update affect only certain narrow aspects of Topic 606.  Management is currently assessing the impact to the Company's consolidated financial statements.

In August 2014, the FASB issued ASU 2014-13, Consolidation (Topic 810).  The amendments of ASU 2014-13 allow for a reporting entity that consolidates a collateralized financing entity within the scope of the guidance to elect to measure the financial assets and the financial liabilities of that collateralized financing entity using the measurement alternative.  Under the measurement alternative, the reporting entity should measure both the financial assets and the financial liabilities of that collateralized financing entity in its consolidated financial statements using the more observable of the fair value of the financial assets and the fair value of the financial liabilities.   The amendments are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015.   The adoption of this guidance did not have a material effect on the Company's financial statements.

In August 2014, the FASB issued ASU 2014-14, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40).  The amendments in this Update require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure, if the following conditions are met:  (1) the loan has a government guarantee that is not separable from the loan before foreclosure, (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guaranty, and the creditor has the ability to recover under that claim, and (3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed.  Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor.  The amendments in this Update are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014.  This Update did not have a significant impact on the Company's consolidated financial statements.

 
10

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 
1. Summary of Accounting Policies (continued)

Recent Accounting Pronouncements (continued)
 
In January 2015, the FASB issued ASU 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20).  The amendments of ASU 2015-01 eliminate from Generally Accepted Accounting Principles the concept of extraordinary items.  The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015.  The adoption of this guidance did not have a material effect on the Company's consolidated financial statements.

In April 2015, the FASB issued ASU-2015-03, Interest – Imputation of Interest (Subtopic 325-30).  The amendments in ASU 2015-03 are intended to simplify the presentation of debt issuance costs.  These amendments required that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of the debt liability, consistent with debt discounts.  The recognition and measurement guidance of debt issuance costs are not affected by the amendments in this ASU.  The amendments are effective for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016.  Early adoption is permitted for financial statements that have not been previously issued.  In August 2015, the FASB issued ASU 2015-05, which modifies ASU 2015-03 to include line of credit arrangements.  The adoption of this guidance did not have a material effect on the Company's consolidated financial statements.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805).  This ASU eliminates the requirement to retrospectively account for changes to provisional amounts initially recorded in a business combination.  ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustments are determined, including the effect of the change in provisional amount as if the accounting had been completed at the acquisition date.  The provisions of this ASU are effective for fiscal years beginning after December 15, 2015, and should be applied prospectively to adjustments to provisional amounts that occur after the effective date.  The adoption of this guidance did not have a material effect on the Company's consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes, which simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities to be classified as non-current on the balance sheet.  This update is effective for fiscal years beginning after December 15, 2017.  The guidance may be adopted prospectively or retrospectively and early adoption is permitted.  The adoption of this guidance is not expected to have a material effect on the Company's consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments.  The amendments in this Update supersede the guidance to classify equity securities with readily determinable fair values into different categories and require equity securities to be measured at fair value with changes in the fair value recognized through net income.  The amendments allow equity investments that do not have readily determinable fair values to be remeasured at fair value either upon the occurrence of an observable price change or upon identification of impairment.  The amendments in this Update also simplify the impairment assessment of equity investments without readily determinable fair values by requiring assessment for impairment qualitatively at each reporting period.
 
 
 
 
 
 
 

11

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 
1. Summary of Accounting Policies (continued)

Recent Accounting Pronouncements (continued)

In addition, the amendments in this Update exempt all entities that are not public business entities from disclosing fair value information for financial instruments measured at amortized cost.  In addition, for public business entities, the amendments supersede the requirement to disclose the methods and significant assumptions used in calculating the fair value of financial instruments required to be disclosed for financial instruments measured at amortized cost on the balance sheet.  The amendments in this Update require public business entities that are required to disclose fair value of financial instruments measured at amortized cost on the balance sheet to measure that fair value using the exit price notion consistent with Topic 820, Fair Value Measurement.

The provisions within this Update require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option.  This amendment excludes from net income gains or losses that the entity may not realize because those financial liabilities are not usually transferred or settled at their fair values before maturity.  The amendments in this Update require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or in the accompanying notes to the financial statements.

For public business entities, the amendments in ASU 2016-01 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases.  From the lessee's perspective, the new standard establishes a right-of-use (ROU) model that requires a lessee to record ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months.  Leases will be classified as either finance or operating, with classification affecting pattern of expense recognition in the income statement for a lessee.  The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements, with certain practical expedients available.  The adoption of this guidance is not expected to have a material effect on the Company's consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718).  This Update is being issued as part of the Simplification Initiative.  The areas of simplification in this Update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  Some areas only apply to nonpublic entities.  For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods.  The adoption of this guidance is not expected to have a material effect on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326). The amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.  For public business entities that are SEC filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.  The adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350).  The amendments in this Update eliminate Step 2 from the goodwill impairment test.  For public business entities that are SEC filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2020.  The adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements.

 
 
 
 
 
 
 
 
12

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 
2. Securities

The amortized cost and fair value of securities with gross unrealized gains and losses follows:

   
December 31, 2016
 
         
Gross
   
Gross
       
   
Amortized
   
Unrealized
   
Unrealized
   
Fair
 
   
Cost
   
Gains
   
Losses
   
Value
 
   
(In Thousands)
 
Securities Available-for-Sale
                       
                         
Debt Securities
                       
  FHLMC Mortgage-Backed Certificates
 
$
9,902
   
$
6
   
$
441
   
$
9,467
 
  FNMA Mortgage-Backed Certificates
   
22,689
     
299
     
467
     
22,521
 
  GNMA Mortgage-Backed Certificates
   
10,268
     
3
     
220
     
10,051
 
                                 
          Total Debt Securities
   
42,859
     
308
     
1,128
     
42,039
 
                                 
    Total Securities Available-for-Sale
 
$
42,859
   
$
308
   
$
1,128
   
$
42,039
 
                                 
Securities Held-to-Maturity
                               
                                 
Debt Securities
                               
  FNMA Mortgage-Backed Certificates
 
$
21,822
   
$
--
   
$
580
   
$
21,242
 
Equity Securities (Non-Marketable)
                               
  24,702 shares – Federal Home Loan Bank
   
2,470
     
--
     
--
     
2,470
 
  630 Shares – First National Bankers Bankshares, Inc.
   
250
     
--
     
--
     
250
 
          Total Equity Securities
   
2,720
     
--
     
--
     
2,720
 
                                 
    Total Securities Held-to-Maturity
 
$
24,542
   
$
--
   
$
580
   
$
23,962
 

   
June 30, 2016
 
         
Gross
   
Gross
       
   
Amortized
   
Unrealized
   
Unrealized
   
Fair
 
   
Cost
   
Gains
   
Losses
   
Value
 
   
(In Thousands)
 
Securities Available-for-Sale
     
                         
Debt Securities
                       
  FHLMC Mortgage-Backed Certificates
 
$
10,928
   
$
12
   
$
147
   
$
10,793
 
  FNMA Mortgage-Backed Certificates
   
26,610
     
613
     
--
     
27,223
 
  GNMA Mortgage-Backed Certificates
   
12,507
     
4
     
354
     
12,157
 
                                 
          Total Debt Securities
   
50,045
     
629
     
501
     
50,173
 
                                 
          Total Securities Available-for-Sale
 
$
50,045
   
$
629
   
$
501
   
$
50,173
 
                                 
Securities Held-to-Maturity
                               
                                 
Equity Securities (Non-Marketable)
                               
  20,989 shares – Federal Home Loan Bank
 
$
2,099
   
$
--
   
$
--
   
$
2,099
 
  630 Shares – First National Bankers Bankshares, Inc.
   
250
     
--
     
--
     
250
 
                                 
          Total Equity Securities
   
2,349
     
--
     
--
     
2,349
 
                                 
          Total Securities Held-to-Maturity
 
$
2,349
   
$
--
   
$
--
   
$
2,349
 
 
 
 
13

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 
2. Securities (continued)

The amortized cost and fair value of securities by contractual maturity at December 31, 2016 follows:

   
Available-for-Sale
   
Held-to-Maturity
 
   
Amortized
   
Fair
   
Amortized
   
Fair
 
   
Cost
   
Value
   
Cost
   
Value
 
   
(In Thousands)
 
                         
Debt Securities
                       
    Within One Year or Less
 
$
13
   
$
13
   
$
--
   
$
--
 
    One through Five Years
   
72
     
74
     
--
     
--
 
    After Five through Ten Years
   
82
     
85
     
--
     
--
 
    Over Ten Years
   
42,692
     
41,867
     
21,822
     
21,242
 
     
42,859
     
42,039
     
21,822
     
21,242
 
                                 
Other Equity Securities
   
--
     
--
     
2,720
     
2,720
 
                                 
   Total
 
$
42,859
   
$
42,039
   
$
24,542
   
$
23,962
 

There were no sales of available-for-sale securities during the six months ended December 31, 2016.

The following tables show information pertaining to gross unrealized losses on securities available-for-sale for the six months ended December 31, 2016 and at June 30, 2016 aggregated by investment category and length of time that individual securities have been in a continuous loss position.

   
December 31, 2016
 
   
Less Than Twelve Months
   
Over Twelve Months
 
   
Gross
         
Gross
       
   
Unrealized
   
Fair
   
Unrealized
   
Fair
 
   
Losses
   
Value
   
Losses
   
Value
 
   
(In Thousands)
 
Securities Available-for-Sale
                       
                         
Debt Securities
                       
    Mortgage-Backed Securities
 
$
582
   
$
14,216
   
$
546
   
$
23,010
 
Marketable Equity Securities
   
--
     
--
     
--
     
--
 
                                 
        Total Securities Available-for-Sale
 
$
582
   
$
14,216
   
$
546
   
$
23,010
 
                                 

   
June 30, 2016
 
   
Less Than Twelve Months
   
Over Twelve Months
 
   
Gross
         
Gross
       
   
Unrealized
   
Fair
   
Unrealized
   
Fair
 
   
Losses
   
Value
   
Losses
   
Value
 
   
(In Thousands)
 
Securities Available-for-Sale
                       
                         
Debt Securities
                       
    Mortgage-Backed Securities
 
$
147
   
$
17,852
   
$
354
   
$
12,066
 
Marketable Equity Securities
   
--
     
--
     
--
     
--
 
                                 
        Total Securities Available-for-Sale
 
$
147
   
$
17,852
   
$
354
   
$
12,066
 

The Company's investment in equity securities consists primarily of FHLB stock and shares of First National Bankers Bankshares, Inc. ("FNBB").  Management monitors its investment portfolio to determine whether any investment securities which have unrealized losses should be considered other than temporarily impaired.
 
 
 
 
14

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 
 
2. Securities (continued)

At December 31, 2016, securities with a carrying value of $1.0 million were pledged to secure public deposits, and securities and mortgage loans with a carrying value of $196.6 million were pledged to secure FHLB advances.

3. Loans Receivable

Loans receivable are summarized as follows:

   
 
December 31, 2016
   
June 30, 2016
 
     
(In Thousands)
 
Loans Secured by Mortgages on Real Estate
           
One- to Four-Family Residential
 
$
119,868
   
$
118,035
 
Commercial
   
73,226
     
69,197
 
Multi-Family Residential
   
15,548
     
20,661
 
 Land
   
23,991
     
24,308
 
Construction
   
13,745
     
14,442
 
Equity and Second Mortgage
   
1,492
     
1,526
 
Equity Lines of Credit
   
18,547
     
17,290
 
Total Mortgage Loans
   
266,417
     
265,459
 
                 
Commercial Loans
   
33,964
     
27,886
 
Consumer Loans
               
Loans on Savings Accounts
   
319
     
404
 
Automobile and Other Consumer Loans
   
71
     
86
 
Total Consumer and Other Loans
   
390
     
490
 
Total Loans
   
300,771
     
293,835
 
                 
Less:   Allowance for Loan Losses
   
(3,439
)
   
(2,845
)
     Unamortized Loan Fees
   
(217
)
   
(163
)
Net Loans Receivable
 
$
297,115
   
$
290,827
 

Following is a summary of changes in the allowance for loan losses:

   
Six Months Ended December 31,
 
 
 
2016
   
2015
 
   
(In Thousands)
 
             
Balance - Beginning of Period
 
$
2,845
   
$
2,515
 
Provision for Loan Losses
   
600
     
91
 
Loan Charge-Offs
   
(14
)
   
--
 
Recoveries
   
8
     
44
 
Balance - End of Period
 
$
3,439
   
$
2,650
 

Credit Quality Indicators

The Company segregates loans into risk categories based on the pertinent information about the ability of borrowers to service their debt such as:  current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.  The Company analyzes loans individually by classifying the loans according to credit risk.  Loans classified as substandard or identified as special mention are reviewed quarterly by management to evaluate the level of deterioration, improvement, and impairment, if any, as well as assign the appropriate risk category.
 
 
15

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 
3. Loans Receivable (continued)

Credit Quality Indicators (continued)

Loans excluded from the scope of the quarterly review process above are generally identified as pass credits until:  (a) they become past due; (b) management becomes aware of deterioration in the credit worthiness of the borrower; or (c) the customer contacts the Company for a modification.  In these circumstances, the loan is specifically evaluated for potential classification and the need to allocate reserves or charge-off.  The Company uses the following definitions for risk ratings:

Special Mention - Loans identified as special mention have a potential weakness that deserves management's close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.

Substandard - Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loss - This classification includes those loans which are considered uncollectible and of such little value that their continuance as loans is not warranted.  Even though partial recovery may be possible in the future, it is not practical or desirable to defer writing off these basically worthless loans.  Accordingly, these loans are charged-off before period end.

The following tables present the grading of loans, segregated by class of loans, as of December 31, 2016 and June 30, 2016:

          Special                    
December 31, 2016    Pass      Mention      Substandard      Doubtful      Total  
                 (In Thousands)              
Real Estate Loans:
                             
  One- to Four-Family Residential
 
$
118,707
   
$
477
   
$
684
   
$
--
   
$
119,868
 
  Commercial
   
70,646
     
2,319
     
261
     
--
     
73,226
 
  Multi-Family Residential
   
15,548
     
--
     
--
     
--
     
15,548
 
  Land
   
23,312
     
123
     
556
     
--
     
23,991
 
  Construction
   
13,447
     
298
     
--
     
--
     
13,745
 
  Equity and Second Mortgage
   
1,492
     
--
     
--
     
--
     
1,492
 
  Equity Lines of Credit
   
18,547
     
--
     
--
     
--
     
18,547
 
Commercial Loans
   
31,179
     
--
     
2,785
     
--
     
33,964
 
Consumer Loans
   
390
     
--
     
--
     
--
     
390
 
     Total
 
$
293,268
   
$
3,217
   
$
4,286
   
$
--
   
$
300,771
 
                                         

 
 
 
 
 
 
 
16

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 
 
3. Loans Receivable (continued)
 
Credit Quality Indicators (continued)
                   
                     
June 30, 2016
 
Pass
   
Special
Mention
   
Substandard
   
Doubtful
   
Total
 
   
(In Thousands)
 
Real Estate Loans:
                             
  One- to Four-Family Residential
 
$
117,881
   
$
40
   
$
114
   
$
--
   
$
118,035
 
  Commercial
   
68,899
     
30
     
268
     
--
     
69,197
 
  Multi-Family Residential
   
20,661
     
--
     
--
     
--
     
20,661
 
  Land
   
23,753
     
555
     
--
     
--
     
24,308
 
  Construction
   
14,442
     
--
     
--
     
--
     
14,442
 
  Equity and Second Mortgage
   
1,526
     
--
     
--
     
--
     
1,526
 
  Equity Lines of Credit
   
17,290
     
--
     
--
     
--
     
17,290
 
Commercial Loans
   
25,896
     
--
     
1,990
     
--
     
27,886
 
Consumer Loans
   
490
     
--
     
--
     
--
     
490
 
                                         
     Total
 
$
290,838
   
$
625
   
$
2,372
   
$
--
   
$
293,835
 

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when contractually due.  Loans that experience insignificant payment delays or payment shortfalls are generally not classified as impaired.  On a case-by-case basis, management determines the significance of payment delays and payment shortfalls, taking into consideration all of the circumstances related to the loan, including:  the length of the payment delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

The following tables present an aging analysis of past due loans, segregated by class of loans, as of December 31, 2016 and June 30, 2016:

                                         Recorded  
                                         Investment  
           60-89      Greater                        > 90 Days  
     30-59      Days Past      Than 90      Total            Total Loans      and  
December 31, 2016    Past Due      Due      Days      Past Due      Current      Receivable      Accruing  
                       (In Thousands)                    
Real Estate Loans:
                                         
  One- to Four-Family
     Residential
 
$
869
   
$
387
   
$
819
   
$
2,075
   
$
117,793
   
$
119,868
   
$
235
 
  Commercial
   
--
     
--
     
--
     
--
     
73,226
     
73,226
     
--
 
  Multi-Family Residential
   
--
     
--
     
--
     
--
     
15,548
     
15,548
     
--
 
  Land
   
--
     
--
     
556
     
556
     
23,435
     
23,991
     
--
 
  Construction
   
--
     
--
     
--
     
--
     
13,745
     
13,745
     
--
 
  Equity and Second Mortgage
   
--
     
--
     
--
     
--
     
1,492
     
1,492
     
--
 
  Equity Lines of Credit
   
4
     
--
     
--
     
4
     
18,543
     
18,547
     
--
 
Commercial Loans
   
--
     
--
     
2,785
     
2,785
     
31,179
     
33,964
     
--
 
Consumer Loans
   
--
     
--
     
--
     
--
     
390
     
390
     
--
 
     Total
 
$
873
   
$
387
   
$
4,160
   
$
5,420
   
$
295,351
   
$
300,771
   
$
235
 

 
 
 
 
 
 
 
17

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 
3. Loans Receivable (continued)

Credit Quality Indicators (continued)

 June 30, 2016
 
30-59 Days
Past Due
   
60-89
Days Past Due
   
Greater
Than 90 Days
   
Total
Past Due
   
Current
   
Total Loans
Receivable
   
Recorded
Investment
> 90 Days and
Accruing
 
   
(In Thousands)
 
Real Estate Loans:
                                         
One- to Four-Family
    Residential
 
$
2,646
   
$
1,674
   
$
114
   
$
4,434
   
$
113,601
   
$
118,035
   
$
101
 
  Commercial
   
--
     
--
     
--
     
--
     
69,197
     
69,197
     
--