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Home Federal Bancorp, Inc. of Louisiana Reports Results of Operations for the Three and Nine Months Ended March 31, 2016

Shreveport, Louisiana, April 27, 2016 (GLOBE NEWSWIRE) --


Home Federal Bancorp, Inc. of Louisiana (the “Company”) (Nasdaq: HFBL), the holding company of Home Federal Bank, reported net income for the three months ended March 31, 2016 of $774,000, a decrease of $69,000, or 8.2% compared to net income of $843,000 reported for the three months ended March 31, 2015. The Company’s basic and diluted earnings per share were $0.42 and $0.40, respectively, for the three months ended March 31, 2016, compared to basic and diluted earnings per share of $0.43 and $0.42, respectively, for the three months ended March 31, 2015.

The Company reported net income of $2.4 million for the nine months ended March 31, 2016, a decrease of $105,000, or 4.2%, compared to $2.5 million for the nine months ended March 31, 2015. The Company’s basic and diluted earnings per share were $1.27 and $1.22, respectively, for the nine months ended March 31, 2016, compared to $1.26 and $1.22, respectively, for the nine months ended March 31, 2015.

The decrease in net income for the three months ended March 31, 2016, resulted primarily from a decrease of $171,000, or 18.1%, in non-interest income, and a $73,000, or 2.7%, increase in non-interest expense, partially offset by a $140,000, or 4.5%, increase in net interest income, and a $35,000, or 8.5%, decrease in income tax expense. The increase in net interest income for the three months ended March 31, 2016, was primarily due to an increase of $156,000, or 4.2%, in total interest income, partially offset by an increase of $16,000, or 2.5%, in aggregate interest expense primarily due to an increase in interest paid on deposits. The Company’s average interest rate spread was 3.57% for the three months ended March 31, 2016, compared to 3.55% for the three months ended March 31, 2015. The Company’s net interest margin was 3.75% for the three months ended March 31, 2016, compared to 3.73% for the three months ended March 31, 2015. The increase in the average interest rate spread and net interest margin on a comparative quarterly basis was primarily the result of a higher average volume of interest earning assets for the three months ended March 31, 2016 compared to the prior year quarterly period.

The decrease in net income for the nine months ended March 31, 2016, resulted primarily from an increase of $661,000, or 8.9%, in non-interest expense, partially offset by an increase of $321,000, or 3.5%, in net-interest income, an increase of $138,000, or 6.4%, in non-interest income, a decrease of $68,000, or 5.5%, in income tax expense, and a decrease of $29,000, or 13.8%, in the provision for loan losses. The increase in net interest income for the nine month period was primarily due to a $474,000, or 4.3%, increase in total interest income, partially offset by a $153,000, or 8.4%, increase in interest expense on borrowings and deposits due to an overall increase in interest bearing liabilities. The Company’s average interest rate spread was 3.47% for the nine months ended March 31, 2016, compared to 3.61% for the nine months ended March 31, 2015. The Company’s net interest margin was 3.66% for the nine months ended March 31, 2016, compared to 3.79% for the nine months ended March 31, 2015. The decrease in net interest margin and average interest rate spread is attributable primarily to a decrease of 13 basis points in average yield on interest earning assets.

The following tables set forth the Company’s average balances and average yields earned and rates paid on its interest-earning assets and interest-bearing liabilities for the periods indicated.

For the Three Months Ended March 31,
2016 2015
Average
Average Average
Average
Balance
Yield/Rate Balance
Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Loans receivable$ 288,028 5.06%$276,182 5.01%
Investment securities 43,007 1.85 51,340 1.93
Interest-earning deposits 12,288 0.62 2,443 0.18
Total interest-earning assets
$ 343,323 4.50%$329,965 4.49%
Interest-bearing liabilities:
Savings accounts$ 25,219 0.39%$ 14,593 0.21%
NOW accounts 35,779 0.79 30,659 0.77
Money market accounts 48,296 0.31 43,630 0.30
Certificates of deposit 139,644 1.26 136,148 1.35
Total interest-bearing deposits 248,938 0.92 225,030 1.00
Other bank borrowings 940 4.68 262 4.24
FHLB advances 26,574 0.92 41,424 0.64
Total interest-bearing liabilities
$ 276,452 0.93%$ 266,716 0.94%
For the Nine Months Ended March 31,
2016 2015
(Dollars in thousands)
Interest-earning assets:
Loans receivable$ 282,948 5.10%$265,809 5.12%
Investment securities 42,737 1.83 53,289 1.95
Interest-earning deposits 19,657 0.35 2,704 0.27
Total interest-earning assets$ 345,342 4.42%$321,802 4.55%
Interest-bearing liabilities:
Savings accounts$ 22,511 0.37%$ 13,581 0.20%
NOW accounts 35,175 0.85 29,142 0.73
Money market accounts 47,544 0.31 43,534 0.32
Certificates of deposit 143,563 1.28 130,321 1.39
Total interest-bearing deposits 248,793 0.95 216,578 1.01
Other bank borrowings 559 4.29 88 4.23
FHLB advances 27,751 0.89 41,666 0.57
Total interest-bearing liabilities
$ 277,103 0.95%$258,332 0.94%

The $171,000 decrease in non-interest income for the three months ended March 31, 2016, compared to the prior year quarterly period was due to a decrease of $191,000 in gain on sale of loans, a decrease of $1,000 in income on Bank Owned Life Insurance, and a decrease of $1,000 in other non-interest income, partially offset by a $22,000 increase in service charges on deposit accounts. The $138,000 increase in non-interest income for the nine months ended March 31, 2016, compared to the prior year period was primarily due to increases of $81,000 in service charges on deposit accounts, and $76,000 in gain on sale of loans partially offset by a $10,000 decrease in gain on sale of securities, a $6,000 decrease in other non-interest income, and a $3,000 decrease in income on Bank Owned Life Insurance. The Company sells most of its fixed rate mortgage loan originations other than those loans selected for portfolio.

The $73,000 increase in non-interest expense for the three months ended March 31, 2016, compared to the same period in 2015, is primarily attributable to increases of $80,000 in compensation and benefits expense, $52,000 in legal fees, $11,000 in franchise and bank share taxes, $7,000 in data processing expense, $7,000 in advertising expense, and $1,000 in other non-interest expenses. These increases were partially offset by a decrease of $70,000 in loan and collection expense, $10,000 in audit and examination fees, and $5,000 in occupancy and equipment expense. The $661,000 increase in non-interest expense for the nine months ended March 31, 2016, compared to the same period in 2015, is primarily attributable to increases of $443,000 in compensation and benefits expense, $73,000 in franchise and bank share taxes, $67,000 in legal fees, $46,000 in deposit insurance premiums, $40,000 in data processing expense, $31,000 in other non-interest expenses, $22,000 in audit and examination fees, and $11,000 in occupancy and equipment expense. These increases were partially offset by a decrease of $70,000 in loan and collection expense, and $2,000 in advertising expense. The increases in compensation and benefits expense for both the three and nine month periods ended March 31, 2016, were primarily due to increases in the compensation paid to mortgage lenders along with increases in support staff for the mortgage lenders.

At March 31, 2016, the Company reported total assets of $362.6 million, a decrease of $7.2 million, or 2.0%, compared to total assets of $369.8 million at June 30, 2015. The decrease in assets was comprised primarily of decreases in investment securities of $2.9 million, or 6.2%, from $46.9 million at June 30, 2015, to $44.0 million at March 31, 2016, a decrease in loans held-for-sale of $6.9 million, or 48.7%, from $14.2 million at June 30, 2015, to $7.3 million at March 31, 2016, and a decrease in cash and cash equivalents of $13.6 million, or 64.3%, from $21.2 million at June 30, 2015 to $7.5 million at March 31, 2016. These decreases were partially offset by increases in loans receivable, net of $13.9 million, or 5.2%, from $268.4 million at June 30, 2015 to $282.4 million at March 31, 2016, and other assets of $2.3 million, or 11.8%, from $19.1 million at June 30, 2015 to $21.4 million at March 31, 2016. The decrease in loans held-for-sale results primarily from a decrease at March 31, 2016 in receivables from financial institutions purchasing the Company’s loans held-for-sale.

The following table shows total loans originated and sold during the periods indicated.

Nine Months Ended
March 31,
2016 2015
% Change
(In thousands)
Loan originations:
One- to four-family residential$ 82,508 $73,118 12.8%
Commercial — real estate secured:
Owner occupied 35,616 49,167 (27.6)%
Non-owner occupied. 6,388 3,271 95.3%
Multi-family residential 580 2,851 (79.7)%
Commercial business 25,176 39,003 (35.5)%
Land
7,777 4,763 63.3%
Construction
15,571 20,403 (23.7)%
Home equity loans and lines of credit and other consumer
7,154 6,355 12.6%
Total loan originations$180,770 $198,931 (9.1)%
Loans sold$(75,997)$(63,425) 19.8%

Included in the $15.6 million and $20.4 million of construction loan originations for the nine months ended March 31, 2016 and 2015, respectively, are approximately $14.7 million and $12.3 million, respectively, of one- to four-family residential construction loans and $878,000 and $8.1 million, respectively, of commercial and multi-family construction loans, all of which are primarily located in the Company’s market area.

Total liabilities decreased $6.7 million, or 2.1%, from $326.4 million at June 30, 2015, to $319.7 million at March 31, 2016, primarily due to a decrease in advances from the Federal Home Loan Bank of Dallas of $11.2 million, or 29.1%, to $27.2 million at March 31, 2016, compared to $38.4 million at June 30, 2015, partially offset by an increase in total deposits of $4.4 million, or 1.5%, to $290.7 million at March 31, 2016, compared to $286.2 million at June 30, 2015. The increase in deposits was primarily due to an $8.0 million, or 43.5%, increase in savings deposits from $18.4 million at June 30, 2015 to $26.4 million at March 31, 2016, a $4.9 million, or 15.7%, increase in NOW accounts from $31.2 million at June 30, 2015 to $36.1 million at March 31, 2016, and a $1.7 million, or 3.7%, increase in money market deposits from $45.6 million at June 30, 2015 to $47.3 million at March 31, 2016, partially offset by a $9.3 million, or 6.4%, decrease in certificates of deposit from $146.0 million at June 30, 2015 to $136.7 million at March 31, 2016, and a decrease of $934,000, or 2.1%, in non-interest bearing demand deposits from $45.0 million at June 30, 2015 to $44.1 million at March 31, 2016. At March 31, 2016 the Company had $9.9 million in brokered deposits compared to $12.7 million at June 30, 2015. The brokered certificates of deposit which have maturity dates greater than twelve months are callable by Home Federal Bank after twelve months pursuant to early redemption provisions. The $2.8 million, or 22.0%, decrease in brokered deposits at March 31, 2016 compared to June 30, 2015 was primarily a result of Home Federal Bank replacing the brokered deposits with core deposits as part of our current strategy to reduce our reliance on brokered certificates of deposit.

At March 31, 2016, the Company had $218,000 of non-performing assets compared to $80,000 of non-performing assets at June 30, 2015, consisting of three single-family residential loans, at March 31, 2016, compared to two single family residential loans at June 30, 2015. At March 31, 2016, the Company had two single family residential loans and one commercial real estate loan classified as substandard, compared to one single family residential loan and one line of credit at June 30, 2015. There were no loans classified as doubtful at March 31, 2016 or June 30, 2015.

Shareholders’ equity decreased $508,000, or 1.2%, to $42.9 million at March 31, 2016 from $43.4 million at June 30, 2015. The primary reasons for the decrease in shareholders’ equity from June 30, 2015, were the acquisition of Company stock of $2.7 million, dividends paid of $500,000 and a decrease in the Company’s accumulated other comprehensive income of $225,000. These decreases in shareholders’ equity were partially offset by net income of $2.4 million, the vesting of restricted stock awards, stock options and the release of employee stock ownership plan shares totaling $453,000 and proceeds from the issuance of common stock from the exercise of stock options of $91,000.

The Company repurchased 119,557 shares of its common stock during the nine months ended March 31, 2016 at an average price per share of $22.73. On December 9, 2015, the Company announced that its Board of Directors approved a sixth stock repurchase program for the repurchase of up to 102,000 shares. As of March 31, 2016, there were a total of 60,868 shares remaining for repurchase under the program.

Home Federal Bancorp, Inc. of Louisiana is the holding company for Home Federal Bank which conducts business from its five full-service banking offices and home office in northwest Louisiana.

Statements contained in this news release which are not historical facts may be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” We undertake no obligation to update any forward-looking statements.



Home Federal Bancorp, Inc. of Louisiana
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands)
March 31,
June 30,
2016
2015
ASSETS
(Unaudited)
Cash and cash equivalents$ 7,547 $ 21,166
Securities available for sale at fair value 42,486 44,885
Securities held to maturity (fair value March 31, 2016: $1,509 June 30, 2015:
$2,010)
1,509 2,010
Loans held-for-sale 7,284 14,203
Loans receivable, net of allowance for loan losses (March 31, 2016: $2,749;
June 30, 2015: $2,515)
282,365 268,427
Other assets 21,408 19,142
Total assets$ 362,599 $ 369,833
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits$290,653 $286,238
Advances from the Federal Home Loan Bank of Dallas 27,227 38,411
Other liabilities 1,841 1,798
Total liabilities 319,721 326,447
Shareholders’ equity 42,878 43,386
Total liabilities and shareholders’ equity$ 362,599 $ 369,833




Home Federal Bancorp, Inc. of Louisiana
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended
Nine Months Ended
March 31,
March 31,
2016
2015
2016
2015
(Unaudited)
Interest income
Loans, including fees$ 3,644 $ 3,457 $ 10,821 $ 10,201
Investment securities 4 2 7 5
Mortgage-backed securities 195 246 579 773
Other interest-earning assets 19 1 52 6
Total interest income 3,862 3,706 11,459 10,985
Interest expense
Deposits 573 560 1,777 1,647
Federal Home Loan Bank borrowings 61 66 186 178
Other bank borrowings 11 3 18 3
Total interest expense 645 629 1,981 1,828
Net interest income 3,217 3,077 9,478 9,157
Provision for loan losses 90 90 181 210
Net interest income after provision for loan losses
3,127 2,987 9,297 8,947
Non-interest income
Gain on sale of loans 590 781 1,744 1,668
Gain on sale of securities
-
-
-
10
Income on Bank Owned Life Insurance 39 40 120 123
Service charges on deposit accounts 138 116 410 329
Other income 8 9 34 40
Total non-interest income 775 946 2,308 2,170
Non-interest expense
Compensation and benefits 1,749 1,669 5,059 4,616
Occupancy and equipment 275 280 789 778
Data Processing 140 133 417 377
Audit and Examination Fees 56 66 189 167
Franchise and Bank Shares Tax 83 72 266 193
Advertising 55 48 181 183
Legal fees 133 81 351 284
Loan and collection 74 144 191 261
Deposit insurance premium 45 45 165 119
Other expenses 140 139 443 412
Total non-interest expense 2,750 2,677 8,051 7,390
Income before income taxes 1,152 1,256 3,554 3,727
Provision for income tax expense 378 413 1,158 1,226
NET INCOME$ 774 $ 843 $ 2,396 $ 2,501
EARNINGS PER SHARE
Basic$ 0.42 $ 0.43 $ 1.27 $ 1.26
Diluted$ 0.40 $ 0.42 $ 1.22 $ 1.22


Three Months EndedNine Months Ended
March 31,
March 31,
2016 2015 2016 2015
(Unaudited)
Selected Operating Ratios(1):
Average interest rate spread 3.57% 3.55% 3.47% 3.61%
Net interest margin 3.75% 3.73% 3.66% 3.79%
Return on average assets 0.84% 0.95% 0.87% 0.97%
Return on average equity 6.95% 7.57% 7.04% 7.39%
Asset Quality Ratios(2):
Non-performing assets as a percent of total assets 0.06% 0.04% 0.06% 0.04%
Allowance for loan losses as a percent of non-
performing loans
1,259.87% 1,704.86% 1,259.87% 1,704.86%
Allowance for loan losses as a percent of total
loans receivable
0.96% 0.92% 0.96% 0.92%
Per Share Data:
Shares outstanding at period end 1,996,880 2,131,343 1,996,880 2,131,343
Weighted average shares outstanding:
Basic 1,851,010 1,970,066 1,892,078 1,990,960
Diluted 1,914,310 2,024,055 1,957,598 2,045,333
Tangible book value at period end$ 21.47 $ 20.25 $ 21.47 $ 20.25

____________
(1) Ratios for the three and nine month periods are annualized.
(2) Asset quality ratios are end of period ratios.

CONTACT: James R. Barlow President and Chief Executive Officer (318) 222-1145

Source:Home Federal Bancorp, Inc. of Louisiana