Exhibit 99.1
 

 
 
 
FOR RELEASE: Thursday, October 25, 2018 at 4:30 PM (Eastern)

HOME FEDERAL BANCORP, INC. OF LOUISIANA REPORTS RESULTS OF OPERATIONS FOR
THE THREE MONTHS ENDED SEPTEMBER 30, 2018

Shreveport, Louisiana – October 25, 2018 – 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 September 30, 2018 of $1.2 million compared to net income of $1.0 million reported for the three months ended September 30, 2017. The Company's basic and diluted earnings per share were $0.68 and $0.63, respectively, for the three months ended September 30, 2018 compared to basic and diluted earnings per share of $0.55 and $0.53, respectively, for the three months ended September 30, 2017.

The increase in net income for the three months ended September 30, 2018 resulted primarily from a decrease of $257,000, or 45.0%, in provision for income taxes, a $146,000, or 3.9%, increase in net interest income, a decrease of $55,000, or 1.9%, in non-interest expense, along with a decrease of $50,000, or 16.7%, in provision for loan losses, partially offset by a decrease of $298,000, or 30.8%, in non-interest income.  The decrease in the provision for income taxes was primarily due to the Tax Cuts and Jobs Act (the "Tax Act") signed into law on December 22, 2017 which reduced the Company's effective tax rate for the three months ended September 30, 2018 over the prior year quarterly period.  The increase in net interest income for the three months ended September 30, 2018 was primarily due to a $293,000, or 6.4%, increase in total interest income, primarily due to an increase in the average rate of loans receivable, partially offset by an increase of $147,000, or 17.3%, in interest expense.  The Company's average interest rate spread was 3.60% for the three months ended September 30, 2018 compared to 3.48% for the three months ended September 30, 2017. The Company's net interest margin was 3.86% for the three months ended September 30, 2018 compared to 3.69% for the three months ended September 30, 2017. The increase in net interest margin on a comparative quarterly basis was primarily the result of an increase of 33 basis points in average yield on average balances of loans receivable for the three months ended September 30, 2018 compared to the prior year.

The following table sets 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 September 30,
 
   
2018
   
2017
 
   
Average
Balance
   
Average
Yield/Rate
   
Average
Balance
   
Average
Yield/Rate
 
   
(Dollars in thousands)
 
Interest-earning assets:
                       
    Loans receivable          
 
$
325,720
     
5.47
%
 
$
330,376
     
5.14
%
    Investment securities          
   
57,652
     
2.15
     
60,539
     
1.78
 
    Interest-earning deposits          
   
16,221
     
1.96
     
11,637
     
1.30
 
        Total interest-earning assets          
 
$
399,593
     
4.85
%
 
$
402,552
     
4.53
%
                                 
Interest-bearing liabilities:
                               
    Savings accounts          
 
$
36,099
     
0.54
%
 
$
35,758
     
0.52
%
    NOW accounts          
   
33,079
     
0.50
     
36,277
     
0.48
 
    Money market accounts          
   
70,296
     
0.85
     
41,466
     
0.35
 
    Certificates of deposit          
   
166,889
     
1.63
     
164,502
     
1.40
 
         Total interest-bearing deposits
   
306,363
     
1.20
     
278,003
     
1.01
 
    Other bank borrowings          
   
98
     
4.05
     
--
     
--
 
    FHLB advances          
   
10,614
     
2.54
     
42,890
     
1.33
 
                Total interest-bearing liabilities
 
$
317,075
     
1.25
%
 
$
320,893
     
1.05
%
 
 
 

                The $298,000 decrease in non-interest income for the three months ended September 30, 2018, compared to the prior year quarterly period, was primarily due to a decrease of $213,000 in gain on sale of loans, $94,000 in gain on sale of securities, and $4,000 on other income, partially offset by an increase of $11,000 in service charges on deposit accounts, and $3,000 in gain on sale of fixed assets. The Company sells most of its long term fixed rate residential mortgage loan originations primarily in order to manage interest rate risk. The decrease in gain on sale of loans reflects a reduced emphasis on the Company's mortgage banking operations in recent periods and fewer loans originated for sale.

The $55,000 decrease in non-interest expense for the three months ended September 30, 2018, compared to the same period in 2017, is primarily attributable to decreases of $98,000 in compensation and benefits expense, $26,000 in other expenses, $18,000 in loan and collection expense, $17,000 in data processing expense, and $7,000 in legal fees.  The decreases were partially offset by increases of $75,000 related to a write down on a parcel of  real estate owned that was purchased for a future branch site, $18,000 in advertising expenses, $10,000 in occupancy and equipment expense, $4,000 in audit and examination fees, $2,000 in franchise and bank shares tax expense, and $2,000 in deposit insurance premium expense.

At September 30, 2018, the Company reported total assets of $428.3 million, an increase of $6.7 million, or 1.6%, compared to total assets of $421.6 million at June 30, 2018. The increase in assets was comprised primarily of increases in loans receivable of $9.1 million, or 2.9%, from $317.5 million at June 30, 2018 to $326.6 million at September 30, 2018, investment securities of $809,000, or 1.4%, from $58.2 million at June 30, 2018 to $59.0 million at September 30, 2018, real estate owned of $649,000, or 55.1%, from $1.2 million at June 30, 2018 to $1.8 million at September 30, 2018, premises and equipment of $509,000, or 4.2%, from $12.2 million at June 30, 2018 to $12.7 million at September 30, 2018, and accrued interest receivable of $47,000, or 4.1%, from $1.1 million at June 30, 2018 to $1.2 million at September 30, 2018.  These increases were partially offset by decreases in cash and cash equivalents of $2.5 million, or 15.9%, from $15.9 million at June 30, 2018 to $13.3 million at September 30, 2018, loans held-for-sale of $1.9 million, or 27.6%, from $6.8 million at June 30, 2018 to $4.9 million at September 30, 2018, and other assets of $116,000, or 1.5%, from $7.6 million at June 30, 2018 to $7.5 million at September 30, 2018.  The increase in investment securities was primarily due to the purchase of $3.7 million of mortgage-backed securities offset by $2.8 million of principal repayments on mortgage-backed securities.  The decrease in loans held-for-sale resulted primarily from a decrease in loans originated for sale during the three months ended September 30, 2018.  The increase in real estate owned was due to the acquisition of ten one-to-four family residences during the quarter ended September 30, 2018.

Total liabilities increased $5.8 million, or 1.5%, from $374.6 million at June 30, 2018 to $380.4 million at September 30, 2018 primarily due to an increase in total deposits of $10.5 million, or 2.9%, to $370.8 million at September 30, 2018 compared to $360.3 million at June 30, 2018, and an increase in other liabilities of $640,000, or 26.5%, from $2.4 million at June 30, 2018 to $3.1 million at September 30, 2018, partially offset by a decrease of $5.1 million, or 43.6%, in advances from the Federal Home Loan Bank from $11.6 million at June 30, 2018 to $6.6 million at September 30, 2018, and a decrease in other borrowings of $300,000 from $300,000 at June 30, 2018 to a zero balance at September 30, 2018.  The increase in deposits was primarily due to an $11.8 million, or 7.3%, increase in certificates of deposit from $161.3 million at June 30, 2018 to $173.1 million at September 30, 2018, a $2.6 million, or 4.4%, increase in non-interest bearing deposits from $58.0 million at June 30, 2018 to $60.6 million at September 30, 2018, and a $243,000, or 0.7%, increase in savings deposits from $36.2 million at June 30, 2018 to $36.5 million at September 30, 2018,  partially offset by a decrease of $3.2 million, or 9.1%, in NOW accounts from $34.6 million at June 30, 2018 to $31.4 million at September 30, 2018, and a decrease in money market deposits of $946,000, or 1.3%, from $70.2 million at June 30, 2018 to $69.2 million at September 30, 2018. The Company had $8.7 million in brokered deposits at June 30, 2018 and September 30, 2018. 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 decrease in advances from the Federal Home Loan Bank was primarily due to growth in total deposits which replaced advances as a source of funds.
 
 
 

 
2

At September 30, 2018, the Company had $2.7 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 $3.0 million of non-performing assets at June 30, 2018, consisting of one commercial business loan, five single-family residential loans, three line of credit loans, one residential lot in other real estate owned, and twelve single family residential loans in other real estate owned at September 30, 2018 compared to nine single-family residential loans, three line of credit loans, one commercial business loan, and one residential lot in other real estate owned, and two single-family residential loans in other real estate owned at June 30, 2018. At September 30, 2018, the Company had five single family residential loans, one line of credit loan, one commercial business loan, and five loans to one borrower consisting of two commercial real estate loans, two non-real estate loans, and one single family residential loan classified as substandard compared to eight single family residential loans, two line of credit loans, one commercial business loan, and five loans to one borrower consisting of two commercial real estate loans, two non-real estate loans, and one single family residential loan classified as substandard at June 30, 2018. There were no loans classified as doubtful at September 30, 2018 or June 30, 2018.

Shareholders' equity increased $922,000, or 2.0%, to $48.0 million at September 30, 2018 from $47.0 million at June 30, 2018.  The primary reasons for the changes in shareholders' equity from June 30, 2018 were net income of $1.2 million, the vesting of restricted stock awards, stock options, and the release of employee stock ownership plan shares totaling $152,000, and proceeds from the issuance of common stock from the exercise of stock options of $90,000. These increases in shareholders' equity were partially offset by acquisition of Company stock of $198,000, dividends paid totaling $265,000, and a decrease in the Company's accumulated other comprehensive income of $75,000.

The Company repurchased 5,812 shares of its common stock under its stock repurchase program during the quarter ended September 30, 2018 at an average price per share of $34.15. On October 12, 2016, the Company announced that its Board of Directors approved a seventh stock repurchase program for the repurchase of up to 97,000 shares. As of September 30, 2018, there were 29,377 shares remaining for repurchase under the seventh stock repurchase program.

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

 
 
 
3

Home Federal Bancorp, Inc. of Louisiana
 
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
(In thousands)
 
   
   
September 30, 2018
   
June 30, 2018
 
   
(Unaudited)
 
ASSETS
     
             
Cash and cash equivalents
 
$
13,340
   
$
15,867
 
Securities available-for-sale at fair value
   
31,329
     
29,324
 
Securities held-to-maturity (fair value September 30, 2018: $26,409;
     June 30, 2018: $27,818)
   
27,692
     
28,888
 
Loans held-for-sale
   
4,899
     
6,762
 
Loans receivable, net of allowance for loan losses (September 30, 2018: $3,497;
     June 30, 2018: $3,425)
   
326,621
     
317,493
 
Accrued Interest Receivable
   
1,193
     
1,146
 
Premises and equipment, net
   
12,752
     
12,243
 
Deferred tax asset
   
1,144
     
1,102
 
Real estate owned
   
1,826
     
1,177
 
Other assets
   
7,532
     
7,648
 
                 
Total assets
 
$
428,328
   
$
421,650
 
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
Deposits
 
$
370,745
   
$
360,260
 
Advances from the Federal Home Loan Bank of Dallas
   
6,568
     
11,637
 
Other Borrowings
   
--
     
300
 
Other liabilities
   
3,056
     
2,416
 
                 
Total liabilities
   
380,369
     
374,613
 
                 
Shareholders' equity
   
47,959
     
47,037
 
                 
Total liabilities and shareholders' equity
 
$
428,328
   
$
421,650
 
 
 
 
4

Home Federal Bancorp, Inc. of Louisiana
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
 
   
   
Three Months Ended
 
   
September 30,
 
   
2018
   
2017
 
     (Unaudited)     
Interest income
           
     Loans, including fees
 
$
4,494
   
$
4,284
 
     Investment securities
   
14
     
11
 
     Mortgage-backed securities
   
298
     
260
 
     Other interest-earning assets
   
80
     
38
 
          Total interest income
   
4,886
     
4,593
 
Interest expense
               
     Deposits
   
929
     
707
 
     Federal Home Loan Bank borrowings
   
68
     
144
 
     Other bank borrowings
   
1
     
--
 
          Total interest expense
   
998
     
851
 
               Net interest income
   
3,888
     
3,742
 
                 
Provision for loan losses
   
250
     
300
 
               Net interest income after provision for loan losses
   
3,638
     
3,442
 
                 
Non-interest income
               
     Gain on sale of loans
   
392
     
605
 
     Gain on sale of fixed assets
   
3
     
--
 
     Gain on sale of securities
   
--
     
94
 
     Income on Bank-Owned Life Insurance
   
35
     
36
 
     Service charges on deposit accounts
   
227
     
216
 
     Other income
   
13
     
17
 
                 
                    Total non-interest income
   
670
     
968
 
                 
Non-interest expense
               
     Compensation and benefits
   
1,616
     
1,714
 
     Occupancy and equipment
   
320
     
310
 
     Data processing
   
150
     
167
 
     Audit and examination fees
   
54
     
50
 
     Franchise and bank shares tax
   
100
     
98
 
     Advertising
   
58
     
40
 
     Legal fees
   
139
     
146
 
     Loan and collection
   
62
     
80
 
     Deposit insurance premium
   
30
     
28
 
     Real estate owned valuation adjustment
   
75
     
--
 
     Other expenses
   
172
     
198
 
                 
                    Total non-interest expense
   
2,776
     
2,831
 
                 
     Income before income taxes
   
1,532
     
1,579
 
Provision for income tax expense
   
314
     
571
 
                 
     NET INCOME
 
$
1,218
   
$
1,008
 
                 
     EARNINGS PER SHARE
               
                 
          Basic
 
$
0.68
   
$
0.55
 
          Diluted
 
$
0.63
   
$
0.53
 
 
 
5

   
Three Months Ended
 
   
September 30,
 
   
2018
   
2017
 
     (Unaudited)   
Selected Operating Ratios(1):
           
     Average interest rate spread
   
3.60
%
   
3.48
%
     Net interest margin
   
3.86
%
   
3.69
%
     Return on average assets
   
1.14
%
   
0.94
%
     Return on average equity
   
10.33
%
   
8.57
%
                 
Asset Quality Ratios(2):
               
     Non-performing assets as a percent of total assets
   
0.64
%
   
0.78
%
     Allowance for loan losses as a percent of non-performing loans
   
127.29
%
   
99.07
%
     Allowance for loan losses as a percent of total loans receivable
   
1.05
%
   
1.00
%
                 
Per Share Data:
               
     Shares outstanding at period end
   
1,894,105
     
1,927,053
 
     Weighted average shares outstanding:
               
          Basic
   
1,795,630
     
1,816,295
 
          Diluted
   
1,932,225
     
1,914,932
 
     Tangible book value at period end
 
$
25.32
   
$
24.06
 
________________________                
(1)          Ratios for the three 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
 
   



 
 
 
 
 
 
 
 
 
 
6

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