HOME FEDERAL BANCORP, INC. OF LOUISIANA REPORTS RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2021

Rhea-AI Summary

Home Federal Bancorp, Inc. (Nasdaq: HFBL) announced a net income of $1.2 million for Q4 2021, down from $1.4 million in Q4 2020. Earnings per share were $0.36, compared to $0.44 the prior year. For the first half of 2021, net income totaled $2.5 million, a decrease from $2.7 million in 2020. Total deposits rose 1.1% to $512.2 million, but time deposits dropped 22.6% to $84.4 million. Gross loans increased 7.5% to $354.6 million. The provision for loan losses decreased significantly to $61,000 from $1.3 million, reflecting improved credit quality.

Positive

• Net income for Q4 2021 was $1.2 million, with a decrease in provision for loan losses to $61,000 from $1.3 million.
• Deposits increased by $5.6 million or 1.1%, totaling $512.2 million.
• Gross loans rose 7.5% to $354.6 million, indicating strong loan demand.

Negative

• Net income for Q4 2021 decreased by 14.3% compared to Q4 2020.
• Earnings per share dropped from $0.44 to $0.36 year-over-year.
• Total interest income fell by $694,000, or 12.9%, contributing to a reduction in net interest income.

Shreveport, LA, Jan. 27, 2022 (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 December 31, 2021 of $1.2 million compared to net income of $1.4 million reported for the three months ended December 31, 2020. The Company’s basic and diluted earnings per share were $0.36 and $0.34, respectively, for the three months ended December 31, 2021 compared to basic and diluted earnings per share of $0.44 and $0.42, respectively, for the three months ended December 31, 2020. The Company reported net income of $2.5 million for the six months ended December 31, 2021, compared to $2.7 million for the six months ended December 31, 2020. The Company’s basic and diluted earnings per share were $0.79 and $0.73, respectively, for the six months ended December 31, 2021 compared to $0.82 and $0.79, respectively, for the six months ended December 31, 2020.

The Company reported the following during the six months ended December 31, 2021:

• Total deposits increased $5.6 million or 1.1% to $512.2 million at December 31, 2021, compared to $506.6 million at June 30, 2021, however time deposits decreased $24.6 million, or 22.6%, to $84.4 million at December 31, 2021, compared to $109.0 million at June 30, 2021.
• Total mortgage loans originated for sale were $58.4 million for the three months ended December 31, 2021.
• In July 2021, we announced plans to enter the Minden, Louisiana market area. In September 2021, we opened a loan production office with a team of six seasoned local bankers, which converted to a full service branch in October 2021.
• Gross loans, excluding SBA PPP loans for the three months ended December 31, 2021 increased $24.8 million, or 7.5%, to $354.6 million at December 31, 2021, compared to $329.8 million at September 31, 2021. SBA PPP loans at December 31, 2021 and September 31, 2021 totaled $10.9 million and $13.7 million, respectively. The pipeline for our commercial loan originations remains strong.
• In December 2021, we opened our ninth full service branch office located in Shreveport, Louisiana.
• Loan income decreased $1.0 million for the six month period ended December 31, 2021 compared to the same period ended December 31, 2020 due in part to a reduction for the 2021 period compared to the same period in 2020 of $444,000 in SBA PPP loan income, and a reduction of $204,000 in held-for-sale loan income.

The Company has worked diligently to help support its customers through the SBA Paycheck Protection Program (“SBA PPP”), loan modifications and loan deferrals. On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic Aid Act”) became law. The Economic Aid Act extended the authority to make SBA PPP loans through May 31, 2021. As of December 31, 2021, Home Federal Bank has funded 597 SBA PPP loans totaling approximately $68.8 million to existing customers and key prospects located primarily in our trade area of NW Louisiana. Our commercial lenders and operational support staff have worked diligently to accomplish what seemed to be an insurmountable task in providing a lifeline to our small community businesses. We believe the customer interaction during this time provides a real opportunity to broaden and deepen our customer relationships while benefiting our community. We have had $57.9 million of SBA PPP loans that have been forgiven which represents 84.1% of the total amount of loans funded. The provision for loan losses for the six months ended December 31, 2021 was $61,000 compared to $1.3 million for the six months ended December 31, 2020. The decrease is mainly due to improved economic quality factors along with an improvement in our overall credit quality.

The decrease in net income for the three months ended December 31, 2021, as compared to the prior year quarter resulted primarily from a $472,000, or 31.3%, decrease in non-interest income, a decrease of $290,000, or 6.5%, in net interest income, an increase of $94,000, or 2.6%, in non-interest expense, partially offset by a decrease of $539,000, or 89.8%, in provision for loan losses, and a $90,000, or 23.1%, decrease in provision for income taxes. The decrease in the provision for loan losses for the three months ended December 31, 2021, was primarily due to improvement in economic and credit quality factors. The decrease in net interest income for the three months ended December 31, 2021 was primarily due to a $694,000, or 12.9%, decrease in total interest income, partially offset by a decrease of $404,000, or 44.6% in total interest expense. The Company’s average interest rate spread was 2.99% for the three months ended December 31, 2021 compared to 3.23% for the three months ended December 31, 2020. The Company’s net interest margin was 3.15% for the three months ended December 31, 2021 compared to 3.50% for the three months ended December 31, 2020.

The decrease in net income for the six months ended December 31, 2021 resulted primarily from a $1.2 million, or 36.1%, decrease in non-interest income, an increase of $206,000, or 2.9%, in non-interest expense, a decrease of $54,000, or 0.6% in net interest income, partially offset by a decrease of $1.2 million, or 95.3%, in provision for loan losses, and a decrease of $60,000, or 8.4%, in provision for income taxes. The decrease in the provision for loan losses for the six-month period was primarily due to improvement in economic and credit quality factors. The decrease in net interest income for the six-month period was primarily due to a $904,000, or 8.7%, decrease in total interest income, partially offset by an $850,000, or 44.7%, decrease in total interest expense. The Company’s average interest rate spread was 2.99% for the six months ended December 31, 2021 compared to 3.06% for the six months ended December 31, 2020. The Company’s net interest margin was 3.15% for the six months ended December 31, 2021 compared to 3.34% for the six months ended December 31, 2020.

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 December 31,
	2021						2020
	Average			Average			Average			Average
	Balance			Yield/Rate			Balance			Yield/Rate
				(Dollars in thousands)
Loans receivable	$	359,186		4.76	%		$	378,516		5.32	%
Investment securities		96,765		1.41				60,890		1.84
Interest-earning deposits		70,847		0.17				68,242		0.14
Total interest-earning assets	$	526,798		3.53	%		$	507,648		4.20	%
Interest-bearing liabilities:
Savings accounts	$	136,482		0.29	%		$	101,802		0.60	%
NOW accounts		47,633		0.12				43,605		0.22
Money market accounts		87,012		0.12				73,316		0.35
Certificates of deposit		92,477		1.43				147,322		1.71
Total interest-bearing deposits		363,604		0.52				366,045		0.95
Other bank borrowings		1,643		3.86				2,043		3.55
FHLB advances		857		4.63				933		4.49
Total interest-bearing liabilities	$	366,104		0.54	%		$	369,021		0.97	%

 

	For the Six Months Ended December 31,
		2021						2020
	Average			Average			Average			Average
	Balance			Yield/Rate			Balance			Yield/Rate
				(Dollars in thousands)
Loans receivable	$	351,063		4.92	%		$	379,377		5.08	%
Investment securities		91,518		1.49				59,021		2.02
Interest-earning deposits		86,289		0.15				64,447		0.13
Total interest-earning assets	$	528,870		3.55	%		$	502,845		4.09	%
Interest-bearing liabilities:
Savings accounts	$	134,811		0.31	%		$	98,211		0.63	%
NOW accounts		49,011		0.11				42,108		0.26
Money market accounts		87,002		0.12				73,248		0.38
Certificates of deposit		96,920		1.47				151,821		1.75
Total interest-bearing deposits		367,744		0.54				365,388		1.00
Other bank borrowings		1,643		3.14				1,898		3.24
FHLB advances		857		4.86				971		4.70
Total interest-bearing liabilities	$	370,244		0.56	%		$	368,257		1.02	%

The $472,000 decrease in non-interest income for the three months ended December 31, 2021, compared to the prior year quarterly period, was primarily due to a decrease of $497,000 in gain on sale of loans, and a $5,000 decrease in income from bank owned life insurance, partially offset by an increase of $29,000 in service charges on deposit accounts, and a $1,000 increase in other non-interest income. The $1.2 million decrease in non-interest income for the six months ended December 31, 2021 compared to the prior year six-month period was primarily due to a decrease of $1.2 million in gain on sale of loans, and a decrease of $12,000 in income from bank owned life insurance, partially offset by a $49,000 increase in service charges on deposit accounts. The decreases in gain on sale of loans for both the quarter and six-month periods were primarily due to a decrease in refinance activity causing a decrease in mortgage loan originations. The Company sells most of its long-term fixed rate residential mortgage loan originations primarily in order to manage interest rate risk.

The $94,000 increase in non-interest expense for the three months ended December 31, 2021, compared to the same period in 2020, is primarily attributable to increases of $168,000 in compensation and benefits expense, $55,000 in audit and examination fees, $53,000 in franchise and bank shares tax expense, $50,000 in occupancy and equipment expense, $23,000 in advertising expense, $13,000 in other non-interest expenses, and $1,000 in deposit insurance premiums expense. The increases were partially offset by decreases of $200,000 in real estate owned valuation adjustment expense, $29,000 in legal fees, $25,000 in data processing expense, and $15,000 in loan and collection expense. The $206,000 increase in non-interest expense for the six months ended December 31, 2021, compared to the same six month period in 2020, is primarily attributable to increases of $164,000 in compensation and benefits expense, $102,000 in occupancy and equipment expense, $73,000 in franchise and bank shares tax expense, $71,000 in advertising expense, $61,000 in audit and examination fees expense, $32,000 in other non-interest expenses, and $9,000 in deposit insurance premium expense, partially offset by decreases of $200,000 in real estate owned valuation adjustment expense, $59,000 in legal fees, $37,000 in loan and collection expense, and $10,000 in data processing expense.

At December 31, 2021, the Company reported total assets of $571.3 million, an increase of $5.6 million, or 1.0%, compared to total assets of $565.7 million at June 30, 2021. The increase in assets was comprised primarily of increases in loans receivable, net of $24.9 million, or 7.4%, from $336.4 million at June 30, 2021 to $361.3 million at December 31, 2021, investment securities of $14.3 million, or 16.9%, from $84.3 million at June 30, 2021 to $98.5 million at December 31, 2021, premises and equipment of $1.1 million, or 7.1%, from $14.9 million at June 30, 2021 to $16.0 million at December 31, 2021, and bank owned life insurance of $55,000, or 0.8%, from $7.2 million at June 30, 2021 to $7.3 million at December 31, 2021. These increases were partially offset by decreases in cash and cash equivalents of $30.0 million, or 28.7%, from $104.4 million at June 30, 2021 to $74.4 million at December 31, 2021, loans held-for-sale of $4.2 million, or 29.4%, from $14.4 million at June 30, 2021 to $10.2 million at December 31, 2021, other assets of $246,000, or 14.0%, from $1.8 million at June 30, 2021 to $1.5 million at December 31, 2021, deferred tax assets of $196,000, or 23.9%, from $819,000 at June 30, 2021 to $623,000 at December 31, 2021, accrued interest receivable of $33,000, or 2.8%, from $1.2 million at June 30, 2021 to $1.1 million at December 31, 2021, and real estate owned of $8,000, or 2.1% from $383,000 at June 30, 2021 to $375,000 at December 31, 2021. The decrease in cash and cash equivalents was primarily due to the funding of additional loan growth with excess liquidity. The increase in loans receivable, net, was primarily due to an increase of $24.1 million in commercial real estate loans. The increase in investment securities was primarily due to security purchases of $24.8 million offset by principal repayments on mortgage backed securities of $10.2 million. The decrease in loans held-for-sale primarily reflected a reduction in loans originated for sale during the six-month period.

Total liabilities increased $4.9 million, or 0.9%, from $513.0 million at June 30, 2021 to $517.9 million at December 31, 2021 primarily due to increases in total deposits of $5.6 million, or 1.1%, to $512.2 million at December 31, 2021 compared to $506.6 million at June 30, 2021, and $100,000, or 4.2%, in other borrowings from $2.4 million at June 30, 2021 to $2.5 million at December 31, 2021, partially offset by a decrease of $570,000, or 21.0%, in other liabilities from $2.7 million at June 30, 2021 to $2.1 million at December 31, 2021, a decrease of $220,000 or 51.6%, in advances from borrowers for taxes and insurance, and a decrease of $17,000, or 2.0%, in advances from the Federal Home Loan Bank from $867,000 at June 30, 2021 to $850,000 at December 31, 2021. The increase in deposits was primarily due to an $11.0 million, or 8.4%, increase in non-interest bearing deposits from $131.0 million at June 30, 2021 to $142.0 million at December 31, 2021, a $9.8 million, or 7.6%, increase in savings deposits from $129.1 million at June 30, 2021 to $138.9 million at December 31, 2021, an increase in NOW accounts of $7.0 million, or 14.3%, from $49.3 million at June 30, 2021 to $56.3 million at December 31, 2021, and a $2.4 million, or 2.7%, increase in money market deposits from $88.2 million at June 30, 2021 to $90.6 million at December 31, 2021, partially offset by a decrease of $24.6 million, or 22.6%, in certificates of deposit from $109.0 million at June 30, 2021 to $84.4 million at December 31, 2021. The Company had $6.0 million in brokered deposits at December 31, 2021 compared to $10.7 million at June 30, 2021. The decrease in advances from the Federal Home Loan Bank was primarily due to principal paydowns on amortizing advances.  

At December 31, 2021, the Company had $1.6 million of non-performing assets (defined as non-accruing loans, accruing loans 90 days or more past due, and other real estate owned) compared to $1.4 million on non-performing assets at June 30, 2021, consisting of six commercial real estate loans to one borrower, three single-family residential loans, and one commercial real estate property at December 31, 2021, compared to six commercial real estate loans to one borrower, three single-family residential loans, and one commercial real estate property and one single family residence in other real estate owned at June 30, 2021. At December 31, 2021, the Company had one single family residential loan and eight commercial real estate loans classified as substandard compared to two single family residential loans and eight commercial real estate loans classified as substandard at June 30, 2021. There were no loans classified as doubtful at December 31, 2021 or June 30, 2021.

Shareholders’ equity increased $683,000, or 1.3%, to $53.4 million at December 31, 2021 from $52.7 million at June 30, 2021. The primary reasons for the changes in shareholders’ equity from June 30, 2021 were net income of $2.5 million, proceeds from the issuance of common stock from the exercise of stock options of $1.2 million, and the vesting of restricted stock awards, stock options, and the release of employee stock ownership plan shares totaling $381,000, partially offset by the repurchase of Company stock of $2.6 million, dividends paid totaling $671,000, and a decrease in the Company’s accumulated other comprehensive income of $213,000.

The Company repurchased 132,505 shares of its common stock during the six months ended December 31, 2021 at an average price per share of $19.46. On November 18, 2020, the Company announced that its Board of Directors approved a tenth stock repurchase program for the repurchase of up to 170,000 shares (split adjusted). As of December 31, 2021, there were 1,495 shares remaining for repurchase under the tenth stock repurchase program.

Home Federal Bancorp, Inc. of Louisiana is the holding company for Home Federal Bank which conducts business from its nine 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.

In addition to factors previously disclosed in the reports filed by the Company with the Securities and Exchange Commission and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the strength of the United States economy in general and the strength of the local economies in which the Company conducts its operations; general economic conditions; the scope and duration of the COVID-19 pandemic; the effects of the COVID-19 pandemic, including on the Company’s credit quality and operations as well as its impact on general economic conditions; legislative and regulatory changes including actions taken by governmental authorities in response to the COVID-19 pandemic; monetary and fiscal policies of the federal government; changes in tax policies, rates and regulations of federal, state and local tax authorities including the effects of the Tax Reform Act; changes in interest rates, deposit flows, the cost of funds, demand for loan products and the demand for financial services, in each case as may be affected by the COVID-19 pandemic, competition, changes in the quality or composition of the Company’s loans, investment and mortgage-backed securities portfolios; geographic concentration of the Company’s business; fluctuations in real estate values; the adequacy of loan loss reserves; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; changes in accounting principles, policies or guidelines and other economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services and fees.

 

Home Federal Bancorp, Inc. of Louisiana
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands)
	December 31, 2021							June 30, 2021
	(Unaudited)
ASSETS
Cash and Cash Equivalents (Includes Interest-Bearing Deposits with Other Banks of
$62,561 and $91,713 December 31, 2021 and June 30, 2021, Respectively)	$	74,402				$	104,405
Securities Available-for-Sale		24,244					29,550
Securities Held-to-Maturity (fair value December 31, 2021: $73,023; June 30, 2021: $54,608, Respectively)		74,277					54,706
Loans Held-for-Sale		10,180					14,427
Loans Receivable, Net of Allowance for Loan Losses (December 31, 2021: $4,184; June 30, 2021: $4,121, Respectively)		361,295					336,394
Accrued Interest Receivable		1,130					1,163
Premises and Equipment, Net		15,981					14,915
Bank Owned Life Insurance		7,269					7,214
Deferred Tax Asset		623					819
Real Estate Owned		375					383
Other Assets		1,509					1,755
Total Assets	$	571,285				$	565,731
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Deposits:
Non-interest bearing	$	142,001				$	131,014
Interest-bearing		370,173					375,582
Total Deposits		512,174					506,596
Advances from Borrowers for Taxes and Insurance		206					426
Short-term Federal Home Loan Bank Advances		36					35
Long-term Federal Home Loan Bank Advances		814					832
Other Borrowings		2,500					2,400
Other Accrued Expenses and Liabilities		2,147					2,717
Total Liabilities		517,877					513,006
SHAREHOLDERS’ EQUITY
Preferred Stock - $0.01 Par Value; 10,000,000 Shares
Authorized; None Issued and Outstanding		--					--
Common Stock - $0.01 Par Value; 40,000,000 Shares
Authorized: 3,398,407 and 3,350,966 Shares Issued and
Outstanding (split adjusted) at December 30, 2021
and June 30, 2021, Respectively		36					34
Additional Paid-in Capital		39,269					37,583
Unearned ESOP Stock		(696	)				(754		)
Retained Earnings		14,737					15,587
Accumulated Other Comprehensive Income		62					275
Total Shareholders’ Equity		53,408					52,725
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	571,285				$	565,731

Home Federal Bancorp, Inc. of Louisiana
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
	Three Months Ended					Six Months Ended
	December 31,					December 31,
	2021			2020		2021			2020
Interest income
Loans, including fees	$	4,311	$	5,074		$	8,708		$	9,721
Investment securities		--		1			--			4
Mortgage-backed securities		345		281			686			597
Other interest-earning assets		30		24			66			42
Total interest income		4,686		5,380			9,460			10,364
Interest expense
Deposits		475		877			1,004			1,848
Federal Home Loan Bank borrowings		10		11			21			23
Other bank borrowings		16		17			26			30
Total interest expense		501		905			1,051			1,901
Net interest income		4,185		4,475			8,409			8,463
Provision for loan losses		61		600			61			1,300
Net interest income after provision for loan losses		4,124		3,875			8,348			7,163
Non-interest income
Gain on sale of loans		710		1,207			1,420			2,618
Income on Bank-Owned Life Insurance		28		33			55			67
Service charges on deposit accounts		282		253			549			500
Other income		16		15			28			28
Total non-interest income		1,036		1,508			2,052			3,213
Non-interest expense
Compensation and benefits		2,306		2,138			4,516			4,352
Occupancy and equipment		443		393			871			769
Data processing		176		201			385			395
Audit and examination fees		118		63			190			129
Franchise and bank shares tax		142		89			271			198
Advertising		70		47			144			73
Legal fees		105		134			205			264
Loan and collection		68		83			140			177
Real estate owned valuation adjustment		--		200			--			200
Deposit insurance premium		39		38			77			68
Other expenses		217		204			420			388
Total non-interest expense		3,684		3,590			7,219			7,013
Income before income taxes		1,476		1,793			3,181			3,363
Provision for income tax expense		300		390			653			713
NET INCOME	$	1,176	$	1,403		$	2,528		$	2,650
EARNINGS PER SHARE
Basic	$	0.36	$	0.44		$	0.79		$	0.82
Diluted	$	0.34	$	0.42		$	0.73		$	0.79

		Three Months Ended								Six Months Ended
		December 31,								December 31,
		2021				2020				2021				2020
Selected Operating Ratios(1):
Average interest rate spread			2.99	%			3.23	%			2.99	%			3.06	%
Net interest margin			3.15	%			3.50	%			3.15	%			3.34	%
Return on average assets			0.82	%			1.03	%			0.88	%			0.99	%
Return on average equity			8.71	%			10.82	%			9.48	%			10.40	%
Asset Quality Ratios(2):
Non-performing assets as a percent of total assets			0.27	%			0.91	%			0.27	%			0.91	%
Allowance for loan losses as a percent of non-performing loans			349.78	%			96.60	%			349.78	%			96.60	%
Allowance for loan losses as a percent of total loans receivable			1.14	%			1.11	%			1.14	%			1.11	%
Per Share Data:
Shares outstanding at period end			3,398,407				3,379,054				3,398,407				3,379,054
Weighted average shares outstanding:
Basic			3,228,274				3,233,602				3,215,954				3,247,770
Diluted			3,474,245				3,368,202				3,475,761				3,361,308
Book value at period end		$	15.72			$	15.23			$	15.72			$	15.23
(1)        Ratios for the three and six month periods are annualized.
(2)        Asset quality ratios are end of period ratios.

FAQ

What were Home Federal Bancorp's earnings for Q4 2021?

Home Federal Bancorp reported a net income of $1.2 million for Q4 2021.

How did the earnings per share change for HFBL in Q4 2021?

The basic and diluted earnings per share for HFBL were $0.36 and $0.34, down from $0.44 and $0.42 in Q4 2020.

Did Home Federal Bancorp's total deposits increase in Q4 2021?

Yes, total deposits increased by $5.6 million, or 1.1%, totaling $512.2 million.

What impact did the provision for loan losses have on HFBL's financials?

The provision for loan losses decreased to $61,000, significantly down from $1.3 million, reflecting improved credit quality.

What was the trend in gross loans for HFBL in Q4 2021?

Gross loans increased by 7.5% to $354.6 million in Q4 2021.