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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)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 

For the quarterly period ended:
September 30, 2020
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)
 
Securities registered pursuant to Section 12(b) of the Act:
 

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock (par value $.01 per share)
HFBL
Nasdaq Stock Market, LLC

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.
☒ Yes        ☐ No
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).
 ☒  Yes       ☐ No
 
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer
 
Accelerated filer
 
Non-accelerated filer
 
Smaller reporting company
 
     
Emerging growth company
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes        ☒  No
 
Shares of common stock, par value $.01 per share, outstanding as of November 11, 2020: The registrant had 1,683,465 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
29
     
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)

   
September 30, 2020
   
June 30, 2020
 
   
(In Thousands)
 
ASSETS
           
 Cash and Cash Equivalents (Includes Interest-Bearing Deposits with Other Banks of $69,505 and $50,417
   September 30, 2020 and June 30, 2020, Respectively)
 
$
75,628
   
$
54,871
 
Securities Available-for-Sale
   
38,375
     
42,060
 
Securities Held-to-Maturity (Fair Value of $19,261 and $21,879, Respectively)
   
18,351
     
20,858
 
Loans Held-for-Sale
   
27,842
     
14,798
 
 Loans Receivable, Net of Allowance for Loan Losses of $4,553 and $4,081, Respectively
   
354,793
     
359,927
 
Accrued Interest Receivable
   
1,622
     
1,860
 
Premises and Equipment, Net
   
13,918
     
13,235
 
Bank Owned Life Insurance
   
7,120
     
7,087
 
Deferred Tax Asset
   
945
     
757
 
Foreclosed Assets
   
950
     
950
 
Other Assets
   
2,081
     
1,817
 
                 
Total Assets
 
$
541,625
   
$
518,220
 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
                 
LIABILITIES
               
Deposits:
               
    Non-interest bearing
 
$
120,987
   
$
103,422
 
    Interest-bearing
   
362,718
     
357,388
 
Total Deposits
   
483,705
     
460,810
 
Advances from Borrowers for Taxes and Insurance
   
926
     
522
 
Short-term Federal Home Loan Bank Advances
   
125
     
193
 
Long-term Federal Home Loan Bank Advances
   
858
     
867
 
Other Borrowings
   
1,500
     
2,300
 
Other Accrued Expenses and Liabilities
   
3,459
     
2,993
 
 
Total Liabilities
   
490,573
     
467,685
 
                 
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; 1,716,842 and 1,724,512 Shares Issued and Outstanding at
   September 30, 2020 and June 30, 2020, Respectively
   
22
     
22
 
Additional Paid-in Capital
   
36,643
     
36,531
 
Unearned ESOP Stock
   
(841
)
   
(870
)
Retained Earnings
   
14,515
     
13,937
 
Accumulated Other Comprehensive Income
   
713
     
915
 
                 
Total Stockholders’ Equity
   
51,052
     
50,535
 
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
541,625
   
$
518,220
 




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
September 30,
 
   
2020
   
2019
 
   
(In Thousands, Except per Share Data)
 
INTEREST INCOME
           
Loans, Including Fees
 
$
4,647
   
$
4,653
 
Investment Securities
   
2
     
16
 
Mortgage-Backed Securities
   
317
     
390
 
Other Interest-Earning Assets
   
18
     
109
 
Total Interest Income
   
4,984
     
5,168
 
                 
INTEREST EXPENSE
               
Deposits
   
971
     
1,335
 
      Other Borrowings
   
14
     
4
 
Federal Home Loan Bank Borrowings
   
12
     
15
 
Total Interest Expense
   
997
     
1,354
 
Net Interest Income
   
3,987
     
3,814
 
                 
PROVISION FOR LOAN LOSSES
   
700
     
175
 
Net Interest Income after Provision for Loan Losses
   
3,287
     
3,639
 
                 
NON-INTEREST INCOME
               
     Gain on Sale of Real Estate
   
--
     
80
 
Gain on Sale of Loans
   
1,411
     
567
 
Income on Bank Owned Life Insurance
   
34
     
35
 
     Service Charges on Deposit Accounts
   
248
     
272
 
Other Income
   
13
     
10
 
Total Non-Interest Income
   
1,706
     
964
 
                 
NON-INTEREST EXPENSE
               
Compensation and Benefits
   
2,214
     
1,806
 
Occupancy and Equipment
   
376
     
372
 
Data Processing
   
194
     
160
 
Audit and Examination Fees
   
66
     
56
 
Franchise and Bank Shares Tax
   
108
     
115
 
Advertising
   
26
     
147
 
Legal Fees
   
131
     
110
 
Loan and Collection
   
94
     
119
 
Deposit Insurance Premium
   
30
     
--
 
Other Expense
   
184
     
192
 
Total Non-Interest Expense
   
3,423
     
3,077
 
Income Before Income Taxes
   
1,570
     
1,526
 
                 
PROVISION FOR INCOME TAX EXPENSE
   
323
     
279
 
Net Income
 
$
1,247
   
$
1,247
 
EARNINGS PER COMMON SHARE:
               
Basic
 
$
0.76
   
$
0.73
 
Diluted
 
$
0.74
   
$
0.68
 
DIVIDENDS DECLARED
 
$
0.165
   
$
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
September 30,
 
   
2020
   
2019
 
   
(In Thousands)
 
Net Income
 
$
1,247
   
$
1,247
 
                 
Other Comprehensive (Loss) Income, Net of Tax
               
     Investment securities available-for-sale:
               
         Net unrealized (Losses)/Gains
   
(256
)
   
83
 
         Income Tax Effect
   
54
     
(17
)
         Reclassification adjustments for net (gains) losses realized in net income
   
--
     
--
 
        Income tax effect
   
--
     
--
 
Other Comprehensive (Loss) Income
   
(202
)
   
66
 
        Total Comprehensive Income
 
$
1,045
   
$
1,313
 






















See accompanying notes to unaudited consolidated financial statements.
3

HOME FEDERAL BANCORP, INC. OF LOUISIANA

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019
(Unaudited)

   
Common Stock
   
Additional
Paid-in
Capital
   
Unearned
ESOP
Stock
   
Unearned RRP
Trust
Stock
   
Retained
Earnings
   
Accumulated
Other
Comprehensive
Income (Loss)

 
Total
Stockholders’
Equity
 
                     
(In Thousands)
     
     
BALANCE – June 30, 2019
 
$
23
   
$
35,914
   
$
(985
)
 
$
--
   
$
15,370
   
$
20
   
$
50,342
 
                                                         
Net Income
   
--
     
--
     
--
     
--
     
1,247
     
--
     
1,247
 
                                                         
Changes in Unrealized Gain on Securities Available-for-
    Sale, Net of Tax Effects
   
--
     
--
     
--
     
--
     
--
     
66
     
66
 
                                                         
RRP Shares Earned
   
--
     
24
     
--
     
--
     
--
     
--
     
24
 
                                                         
Stock Options Vested
   
--
     
35
     
--
     
--
     
--
     
--
     
35
 
                                                         
Common Stock Issuance for Stock Option Exercises
   
--
     
4
     
--
     
--
     
--
     
--
     
4
 
                                                         
ESOP Compensation Earned
   
--
     
66
     
29
     
--
     
--
     
--
     
95
 
                                                         
Company Stock Purchased
   
--
     
--
     
--
     
--
     
(1,783
)
   
--
     
(1,783
)
                                                         
Dividends Declared
   
--
     
--
     
--
     
--
     
(293
)
   
--
     
(293
)
                                                         
BALANCE – September 30, 2019
 
$
23
   
$
36,043
   
$
(956
)
 
$
--
   
$
14,541
   
$
86
   
$
49,737
 
                                                         
BALANCE – June 30, 2020
 
$
22
   
$
36,531
   
$
(870
)
 
$
--
   
$
13,937
   
$
915
   
$
50,535
 
                                                         
Net Income
   
--
     
--
     
--
     
--
     
1,247
     
--
     
1,247
 
                                                         
Changes in Unrealized Gain on Securities Available-
  for-Sale, Net of Tax Effects
   
--
     
--
     
--
     
--
     
--
     
(202
)
   
(202
)
                                                         
RRP Shares Earned
   
--
     
--
     
--
     
--
     
--
     
--
     
--
 
                                                         
Stock Options Vested
   
--
     
34
     
--
     
--
     
--
     
--
     
34
 
                                                         
Common Stock Issuance for Stock Option Exercises
   
--
     
38
     
--
     
--
     
--
     
--
     
38
 
                                                         
ESOP Compensation Earned
   
--
     
40
     
29
     
--
     
--
     
--
     
69
 
                                                         
Company Stock Purchased
   
--
     
--
     
--
     
--
     
(387
)
   
--
     
(387
)
                                                         
Dividends Declared
   
--
     
--
     
--
     
--
     
(282
)
   
--
     
(282
)
                                                         
BALANCE – September 30, 2020
 
$
22
   
$
36,643
   
$
(841
)
 
$
--
   
$
14,515
   
$
713
   
$
51,052
 



See accompanying notes to unaudited consolidated financial statements.
4

HOME FEDERAL BANCORP, INC. OF LOUISIANA

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

   
Three Months Ended
 
   
September 30,
 
   
2020
   
2019
 
   
(In Thousands)
 
CASH FLOWS FROM OPERATING ACTIVITIES
           
Net Income
 
$
1,247
   
$
1,247
 
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities
               
Bad Debt Recovery
   
52
     
2
 
Federal Home Loan Bank stock certificate
   
(2
)
   
16
 
Net Amortization and Accretion on Securities
   
44
     
32
 
Gain on Sale of Loans
   
(1,411
)
   
(567
)
Gain on Sale of Real Estate
   
--
     
(80
)
Amortization of Deferred Loan Fees
   
(216
)
   
(38
)
Depreciation of Premises and Equipment
   
168
     
161
 
ESOP Expense
   
69
     
95
 
Stock Option Expense
   
34
     
35
 
Recognition and Retention Plan Expense
   
--
     
2
 
Deferred Income Tax
   
(188
)
   
(17
)
Provision for Loan Losses
   
700
     
175
 
Increase in Cash Surrender Value on Bank Owned Life Insurance
   
(34
)
   
(35
)
Share Awards Expense
   
37
     
4
 
Changes in Assets and Liabilities:
               
Loans Held-for-Sale – Originations and Purchases
   
(60,258
)
   
(24,441
)
Loans Held-for-Sale – Sale and Principal Repayments
   
48,625
     
21,573
 
Accrued Interest Receivable
   
238
     
70
 
Other Operating Assets
   
(264
)
   
(212
)
Other Operating Liabilities
   
429
     
489
 
                 
Net Cash Used in Operating Activities
   
(10,730
)
   
(1,489
)
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
Loan Originations and Purchases, Net of Principal Collections
   
4,586
     
1,027
 
Deferred Loan Fees Collected
   
67
     
2
 
Acquisition of Premises and Equipment
   
(851
)
   
(357
)
Proceeds Sale of Land
   
--
     
796
 
Activity in Available-for-Sale Securities:
               
Principal Payments on Mortgage-Backed Securities
   
8,488
     
3,216
 
Purchases of Securities
   
(5,090
)
   
(4,975
)
Activity in Held-to-Maturity Securities:
               
Principal Payments on Mortgage-Backed Securities
   
2,496
     
1,330
 
                 
Net Cash Provided by Investing Activities
   
9,696
     
1,039
 




See accompanying notes to unaudited consolidated financial statements.
5

HOME FEDERAL BANCORP, INC. OF LOUISIANA
 
   
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
 
(Unaudited)
 
   
   
Three Months Ended
 
   
September 30,
 
   
2020
   
2019
 
   
(In Thousands)
 
CASH FLOWS FROM FINANCING ACTIVITIES
     
Net Increase in Deposits
 
$
22,895
   
$
16,851
 
Repayments of Advances from Federal Home Loan Bank
   
(77
)
   
(73
)
Proceeds from Other Borrowings
   
700
     
1,000
 
Repayments of Other Borrowings
   
(1,500
)
   
(450
)
Net Increase in Advances from Borrowers for Taxes and Insurance
   
404
     
226
 
Dividends Paid
   
(282
)
   
(293
)
Company Stock Purchased
   
(387
)
   
(1,783
)
Proceeds from Stock Options Exercised
   
38
     
4
 
                 
Net Cash Provided by Financing Activities
   
21,791
     
15,482
 
                 
NET INCREASE IN CASH AND CASH EQUIVALENTS
   
20,757
     
15,032
 
                 
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
 
$
54,871
   
$
18,108
 
                 
CASH AND CASH EQUIVALENTS - END OF PERIOD
 
$
75,628
   
$
33,140
 
                 
SUPPLEMENTAL CASH FLOW INFORMATION
               
Interest Paid on Deposits and Borrowed Funds
 
$
1,008
   
$
1,361
 
Income Taxes Paid
   
275
     
150
 
Market Value Adjustment for Unrealized Gain (Loss) on Debt Securities Available-for-Sale
   
(256
)
   
83
 
                 
                 
                 
                 




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 three month period ended September 30, 2020 are not necessarily indicative of the results which may be expected for the fiscal year ending June 30, 2021.

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 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 September 30, 2020.  In preparing these financial statements, the Company evaluated the events and transactions that occurred through the date these 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 seven 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 September 30, 2020, 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.


7

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Summary of Accounting Policies (continued)

Securities

Securities are being accounted for in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 320’s, Investments which requires the classification of securities into one of three categories: Trading, Available-for-Sale, or Held-to-Maturity.  Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates this classification periodically.

Investments in non-marketable 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 cost, adjusted for amortization of the related premiums, and accretion of discounts, using the interest method.  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 debt securities are excluded from earnings and reported in other comprehensive income.  

The Company held no trading securities as of September 30, 2020 and June 30, 2020.

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 Company 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 fair value of the collateral of the loan.  If the 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.  A loan is considered a troubled debt restructuring (“TDR”) if the Company, for economic or legal reasons related to a debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.  Concessions granted under a TDR typically involve a temporary or permanent reduction in payments or interest rate or an extension of a loan’s stated maturity date at less than a current market rate of interest.  Loans identified as TDRs are designated as impaired.

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 known and inherent losses in the existing loan portfolio both probable and reasonable to estimate.

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. Estimated useful lives are as follows:

Buildings and Improvements 10 - 40 Years
Furniture and Equipment              3 - 10 Years

Bank-Owned Life Insurance

The Company has purchased life insurance contracts on the lives of certain key employees.  The Bank is the beneficiary of these policies.  These contracts are reported at their cash surrender value, and changes in the cash surrender value are included in non-interest income.

9

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Summary of Accounting Policies (continued)

Allowance for Loan Losses (continued)

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 basis 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.

The Company follows the provisions of the Income Taxes Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740.  ASC 740 prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on various related matters such as derecognition, interest, penalties, and disclosures required.  The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

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.

Earnings per Share

Earnings per share are computed based upon the weighted average number of common shares outstanding during the period.

Non-Direct Response Advertising

The Company expenses all advertising costs, except for direct-response advertising, as incurred.  Non-direct response advertising costs were $26,000 and $147,000 for the three months ended September 30, 2020 and 2019, respectively.

In the event the Company incurs expense for material direct-response advertising, it will be amortized over the estimated benefit period.  Direct-response advertising consists of advertising whose primary purpose is to elicit sales to customers who could be shown to have responded specifically to the advertising and results in probable future benefits.  For the three months ended September 30, 2020 and 2019, the Company did not incur any amount of direct-response advertising.

Stock-Based Compensation

GAAP requires all share-based payments to employees, including grants of employee stock options and recognition and retention share awards, to be recognized as expense in the statement of operations based on their fair values.  The amount of compensation is measured at the fair value of the options or recognition and retention share awards when granted, and this cost is expensed over the required service period, which is normally the vesting period of the options or recognition and retention awards.

10

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Summary of Accounting Policies (continued)

Reclassification

Certain financial statement balances included in the prior year consolidated financial statements have been reclassified to conform to the current period presentation.

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 debt securities, are reported as a separate component of the equity section of the consolidated balance sheets along with net income, they are components of comprehensive income (loss).

Recent Accounting Pronouncements

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.  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.  In February 2018, the FASB issued ASU 2018-03, Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10):  Recognition and Measurement of Financial Assets and Financial Liabilities.  The amendments in this Update include items brought to the FASB Board’s attention regarding ASU 2016-01.

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 did not 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 did not have a material effect on the Company’s consolidated financial statements.

11


HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

Recent Accounting Pronouncements (Continued)

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. 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, 2022, including interim periods with those fiscal years.  The extent of the impact upon adoption is not known and will depend on the characteristics of the Company’s loan portfolio and economic conditions on that date as well as forecasted conditions thereafter.

In December 2019, the FASB issued ASU No. 2019-12, "Simplifying the Accounting for Income Taxes (Topic 740)." The amendments in this ASU simplified the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improved the consistent application of and simplified GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendments in the ASU are effective for fiscal years and interim periods beginning after December 15, 2020. The Company does not expect the adoption of this ASU to impact the consolidated financial statements.








12

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

Recent Accounting Pronouncements (Continued)

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. On July 1, 2019, the Company adopted ASU No. 2016-02 “Leases” (Topic 842) and all subsequent ASUs that modified Topic 842. For the Company, Topic 842 primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee. Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branches with terms extending through 2058. Substantially all of the Company’s leases are classified as operating leases, and therefore, were previously not recognized on the Company’s consolidated statements of condition. With the adoption of Topic 842, operating lease agreements are required to be recognized on the consolidated statements of condition as right-of-use (“ROU”) assets and corresponding lease liabilities.

(In Thousands)
  September 30, 2020
June 30, 2020
Lease Right-of-Use Assets
Classification
   
   Operating lease right-of-use assets
   Other Assets
$   869
$   877
Total Lease Right-of-Use Assets
  $   869
$   877
       
Lease Liabilities
     
   Operating lease liabilities
Other Accrued Expenses and Liabilities
$   879
$   887
Total Lease Liabilities
  $   879
$   887
       
The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For operating leases existing prior to July 1, 2019, the rate for the remaining lease term as of July 1, 2019, was the Company’s only finance lease, the Company utilized its incremental borrowing rate at lease inception.

  September 30, 2020
June 30, 2020
Weighted-average remaining lease term
   
   Operating leases
 38.1 years
                                                  38.4 years
     
Weighted-average discount rate
   
   Operating leases
 3.00%
    3.00%


13

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:

   
September 30, 2020
 
         
Gross
   
Gross
       
   
Amortized
   
Unrealized
   
Unrealized
   
Fair
 

 
Cost
   
Gains
   
Losses
   
Value
 
   
(In Thousands)
 
Securities Available-for-Sale  
 
                         
Debt Securities
                       
  FHLMC Mortgage-Backed Certificates
 
$
4,197
   
$
115
   
$
--
   
$
4,312
 
  FNMA Mortgage-Backed Certificates
   
24,623
     
818
     
--
     
25,441
 
  GNMA Mortgage-Backed Certificates
   
8,653
     
9
     
40
     
8,622
 
Debt Securities
                               
          Total Debt Securities
   
37,473
     
942
     
40
     
38,375
 
                                 
          Total Securities Available-for-Sale
 
$
37,473
   
$
942
   
$
40
   
$
38,375
 
                                 
Securities Held-to-Maturity
                               
                                 
Debt Securities
                               
  GNMA Mortgage-Backed Certificates
 
$
949
   
$
15
   
$
--
   
$
964
 
  FNMA Mortgage-Backed Certificates
   
14,199
     
888
     
--
     
15,087
 
                                 
          Total Debt Securities
   
15,148
     
903
     
--
     
16,051
 
                                 
Municipals
   
241
     
7
     
--
     
248
 
                                 
Equity Securities (Non-Marketable)
                               
 27,118 Shares – Federal Home Loan Bank
   
2,712
     
--
     
--
     
2,712
 
  630 Shares – First National Bankers Bankshares, Inc.
   
250
     
--
     
--
     
250
 
                                 
          Total Equity Securities
   
2,962
     
--
     
--
     
2,962
 
                                 
          Total Securities Held-to-Maturity
 
$
18,351
   
$
910
   
$
--
   
$
19,261
 


14

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Securities (continued)

   
June 30, 2020
 
         
Gross
   
Gross
       
   
Amortized
   
Unrealized
   
Unrealized
   
Fair
 

 
Cost
   
Gains
   
Losses
   
Value
 
   
(In Thousands)
 
Securities Available-for-Sale                        

                       
Debt Securities
                       
  FHLMC Mortgage-Backed Certificates
 
$
5,018
   
$
141
   
$
--
   
$
5,159
 
  FNMA Mortgage-Backed Certificates
   
30,820
     
1,032
     
--
     
31,852
 
  GNMA Mortgage-Backed Certificates
   
5,064
     
23
     
38
     
5,049
 
                                 
          Total Debt Securities
   
40,902
     
1,196
     
38
     
42,060
 
                                 
          Total Securities Available-for-Sale
 
$
40,902
   
$
1,196
   
$
38
   
$
42,060
 
                                 
Securities Held-to-Maturity
                               
                                 
Debt Securities
                               
  GNMA Mortgage-Backed Securities
 
$
1,109
   
$
20
   
$
--
   
$
1,129
 
  FNMA Mortgage-Backed Securities
   
16,546
     
997
     
--
     
17,543
 
                                 
          Total Debt Securities
   
17,655
     
1,017
     
--
     
18,672
 
                                 
Municipals
   
243
     
4
     
--
     
247
 
                                 
Equity Securities (Non-Marketable)
                               
  27,094 Shares – Federal Home Loan Bank
   
2,710
     
--
     
--
     
2,710
 
  630 Shares – First National Bankers Bankshares, Inc.
   
250
     
--
     
--
     
250
 
                                 
          Total Equity Securities
   
2,960
     
--
     
--
     
2,960
 
                                 
          Total Securities Held-to-Maturity
 
$
20,858
   
$
1,021
   
$
--
   
$
21,879
 

The amortized cost and fair value of securities by contractual maturity at September 30, 2020 follows:

     Available-for-Sale         Held-to-Maturity     
   
Amortized
   
Fair
   
Amortized
   
Fair
 
   
Cost
   
Value
   
Cost
   
Value
 
    (In Thousands)
 
Debt Securities
                       
    Within One Year or Less
 
$
  11
   
$
12
   
$
--
   
$
--
 
    One through Five Years
   
10,002
     
10,248
     
--
     
--
 
    After Five through Ten Years
   
22,383
     
23,038
     
--
     
--
 
    Over Ten Years
   
5,077
     
5,077
     
15,148
     
16,051
 
     
37,473
     
38,375
     
15,148
     
16,051
 
                                 
Municipals
   
--
     
--
     
241
     
248
 
                                 
Other Equity Securities
   
--
     
--
     
2,962
     
2,962
 
                                 
   Total
 
$
37,473
   
$
38,375
   
$
18,351
   
$
19,261
 
                                 

15

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Securities (continued)

Securities available-for-sale totaling $5.1 million were purchased during the three months ending September 30, 2020.

The following tables show information pertaining to gross unrealized losses on securities available-for-sale at September 30, 2020 and June 30, 2020 aggregated by investment category and length of time that individual securities have been in a continuous loss position.

   
September 30, 2020
 
   
Less Than Twelve Months
   
Over Twelve Months
 
   
Gross
         
Gross
       
   
Unrealized
   
Fair
   
Unrealized
   
Fair
 
   
Losses
   
Value
   
Losses
   
Value
 
   
(In Thousands)
 
Securities Available-for-Sale
                       
                         
Mortgage-Backed Securities
 
$
--
   
$
--
   
$
40
   
$
2,227
 
                                 
   Total Securities Available-for-Sale
 
$
--
   
$
--
   
$
40
   
$
2,227
 

   
June 30, 2020
 
   
Less Than Twelve Months
   
Over Twelve Months
 
   
Gross
         
Gross
       
   
Unrealized
   
Fair
   
Unrealized
   
Fair
 
   
Losses
   
Value
   
Losses
   
Value
 
   
(In Thousands)
 
Securities Available-for-Sale
                       
                         
Mortgage-Backed Securities
 
$
--
   
$
--
   
$
38
   
$
2,816
 
                                 
   Total Securities Available-for-Sale
 
$
--
   
$
--
   
$
38
   
$
2,816
 

The unrealized losses on the Company’s investment in mortgage-backed securities at September 30, 2020 and June 30, 2020 were caused by interest rate changes.  The contractual cash flows of these investments are guaranteed by agencies of the U.S. Government.  Accordingly, it is expected that these securities would not be settled at a price less than the amortized cost of the Company’s investment.  Because the decline in market value is attributable to changes in interest rates and not credit quality and because the Company has the ability and intent to hold these investments until a recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2020.

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.

At September 30, 2020, securities with a carrying value of $1.6 million were pledged to secure public deposits, and securities and mortgage loans with a carrying value of $181.6 million were pledged to secure FHLB advances.


16

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Loans Receivable

Loans receivable are summarized as follows:

   
 
September 30, 2020
   
June 30, 2020
 
     
(In Thousands)
 
              Loans Secured by Mortgages on Real Estate
           
            One-to-Four Family Residential
 
$
103,667
   
$
108,146
 
            Commercial
   
89,171
     
87,088
 
            Multi-Family Residential
   
46,482
     
47,432
 
             Land
   
17,829
     
18,068
 
            Construction
   
9,518
     
8,159
 
            Equity and Second Mortgage
   
1,464
     
1,410
 
            Equity Lines of Credit
   
11,532
     
12,252
 
                 
Total Mortgage Loans
   
279,663
     
282,555
 
                 
             Commercial Loans
   
80,070
     
81,909
 
             Consumer Loans
               
            Loans on Savings Accounts
   
342
     
364
 
            Other Consumer Loans
   
558
     
615
 
                 
Total Consumer Other Loans
   
900
     
979
 
Total Loans
   
360,633
     
365,443
 
                 
             Less: Allowance for Loan Losses
   
(4,553
)
   
(4,081
)
Unamortized Loan Fees
   
(1,287
)
   
(1,435
)
                 
Net Loans Receivable
 
$
354,793
   
$
359,927
 

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

   
Three Months Ended September 30,
 
 
 
2020
   
2019
 
   
(In Thousands)
 
Balance - Beginning of Period
 
$
4,081
   
$
3,452
 
Provision for Loan Losses
   
700
     
175
 
Loan Charge-Offs
   
(280
)
   
(45
)
Recoveries
   
52
     
2
 
Balance - End of Period
 
$
4,553
   
$
3,584
 

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.

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:


17

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Loans Receivable (continued)

Credit Quality Indicators (continued)

Pass - Loans classified as pass are well protected by the current net worth or paying capacity of the obligor or by the fair value, less cost to acquire and sell the underlying collateral in a timely manner.

Pass Watch - Loans are considered marginal, meaning some weakness has been identified which could cause future impairment of repayment. However, these relationships are currently protected from any apparent loss by collateral.

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 September 30, 2020 and June 30, 2020:

September 30, 2020
 
Pass and
Pass Watch
   
Special
Mention
    Substandard      Doubtful     Total  
   
(In Thousands)
 
Real Estate Loans:
                             
One-to-Four Family Residential
 
$
102,528
   
$
472
   
$
667
   
$
--
   
$
103,667
 
Commercial
   
85,616
     
--
     
3,555
     
--
     
89,171
 
Multi-Family Residential
   
46,482
     
--
     
--
     
--
     
46,482
 
Land
   
14,848
     
--
     
2,981
     
--
     
17,829
 
Construction
   
9,518
     
--
     
--
     
--
     
9,518
 
Equity and Second Mortgage
   
1,464
     
--
     
--
     
--
     
1,464
 
Equity Lines of Credit
   
11,515
     
17
     
--
     
--
     
11,532
 
Commercial Loans
   
80,070
     
--
     
--
     
--
     
80,070
 
Consumer Loans
   
900
     
--
     
--
     
--
     
900
 
                                         
     Totals
 
$
352,941
   
$
489
   
$
7,203
   
$
--
   
$
360,633
 
                                         


18

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Loans Receivable (continued)

Credit Quality Indicators (continued)

June 30, 2020
   
Pass and
Pass Watch
   
Special
Mention
   
Substandard
   
Doubtful
   
Total
 
    (In Thousands)    
 
Real Estate Loans:
                             
One-to-Four Family Residential
 
$
106,886
   
$
475
   
$
785
   
$
--
   
$
108,146
 
Commercial
   
83,376
     
1,915
     
1,797
     
--
     
87,088
 
Multi-Family Residential
   
47,432
     
--
     
--
     
--
     
47,432
 
Land
   
15,087
     
--
     
2,981
     
--
     
18,068
 
Construction
   
8,159
     
--
     
--
     
--
     
8,159
 
Equity and Second Mortgage
   
1,410
     
--
     
--
     
--
     
1,410
 
Equity Lines of Credit
   
12,235
     
17
     
--
     
--
     
12,252
 
Commercial Loans
   
81,452
     
--
     
457
     
--
     
81,909
 
Consumer Loans
   
979
     
--
     
--
     
--
     
979
 
                                         
     Total
 
$
357,016
   
$
2,407
   
$
6,020
   
$
--
   
$
365,443
 

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 September 30, 2020 and June 30, 2020:

                                         Recorded  
                                        Investment
 
                                         >90 Days
 
     30-59 Days
    60-89 Days
    90 Days or
    Total            Total Loans
     and  
September 30, 2020
  Past Due
     Past Due
     More      Past Due
    Current     Receivable
    Accruing  
    (In Thousands)
 
Real Estate Loans:
                                         
One-to-Four Family Residential
 
$
800
   
$
240
   
$
--
   
$
1,040
   
$
102,627
   
$
103,667
   
$
--
 
Commercial
   
--
     
--
     
1,641
     
1,641
     
87,530
     
89,171
     
--
 
Multi-Family Residential
   
--
     
--