Home Federal Bancorp, Inc. of Louisiana - FORM 10-Q - February 9, 2017

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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
      
--