UNITED
STATES
|
SECURITIES
AND EXCHANGE COMMISSION
|
Washington,
DC 20549
|
|
FORM
10-Q
|
(Mark
One)
|
[X] |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the quarterly period ended:
|
March
31, 2009
|
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:
|
000-51117
|
|
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
(Exact
name of registrant as specified in its charter)
|
|
Federal
|
|
86-1127166
|
(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)
|
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
|
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90 days. [ ]
Yes [X] No
|
|
Indicate by check mark whether
the registrant has submitted electronically and posted on its corporate
Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such
files). [
] Yes [ ]
No
|
|
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check
One):
|
|
Large
accelerated
filer [
] Accelerated
filer [
]
|
Non-accelerated
filer
[
] Smaller
reporting company
[X]
|
(Do
not check if a smaller reporting company)
|
|
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
|
[
]
Yes [X] No
|
Shares
of common stock, par value $.01 per share, outstanding as of May 14, 2009:
The registrant had 3,377,600 shares of common stock outstanding, of which
2,135,375 shares were held by Home Federal Mutual Holding Company of
Louisiana, the registrant’s mutual holding company, and 1,242,225 shares
were held by the public and directors, officers and employees of the
registrant, and the registrant’s employee benefit
plans.
|
INDEX
PART
I
|
--
|
FINANCIAL
INFORMATION
|
Page
|
|
Item
1:
|
Financial
Statements
|
|
|
|
Consolidated
Statements of Financial Condition
|
1
|
|
|
Consolidated
Statements of Income
|
2
|
|
|
Consolidated
Statements of Changes in Stockholders' Equity
|
3
|
|
|
Consolidated
Statements of Cash Flows
|
4
|
|
|
Notes
to Consolidated Financial Statements
|
6
|
|
Item
2:
|
Management's
Discussion and Analysis of Financial Condition and
Results
of Operations
|
12
|
|
Item
3:
|
Quantitative
and Qualitative Disclosures About Market Risk
|
18
|
|
|
|
Item
4:
|
Controls
and Procedures
|
18
|
|
|
|
Item
4T.
|
Controls
and Procedures
|
18
|
|
PART
II - OTHER INFORMATION
|
|
Item
1:
|
Legal
Proceedings
|
19
|
|
Item
1A:
|
Risk
Factors
|
19
|
|
Item
2:
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
19
|
|
Item
3:
|
Defaults
Upon Senior Securities
|
20
|
|
Item
4:
|
Submission
of Matters to a Vote of Security Holders
|
20
|
|
Item
5:
|
Other
Information
|
20
|
|
Item
6:
|
Exhibits
|
20
|
|
SIGNATURES
|
|
PART
I - FINANCIAL INFORMATION
Item 1 - Financial Statements
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
|
|
|
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION
|
|
|
|
|
|
March
31,
|
|
|
June
30,
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
ASSETS
|
(In
Thousands)
|
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents (Includes Interest-Bearing Deposits with Other Banks
of $2,915 and $4,957 for
March
31, 2009 and June 30, 2008, respectively)
|
|
$ |
4,306 |
|
|
$ |
7,363 |
|
Securities
Available-for-Sale
|
|
|
111,709 |
|
|
|
96,324 |
|
Securities
Held-to-Maturity
|
|
|
2,200 |
|
|
|
1,688 |
|
Loans
Held for Sale
|
|
|
1,067 |
|
|
|
852 |
|
Loans
Receivable, Net
|
|
|
28,558 |
|
|
|
28,263 |
|
Accrued
Interest Receivable
|
|
|
580 |
|
|
|
550 |
|
Premises
and Equipment, Net
|
|
|
977 |
|
|
|
880 |
|
Deferred
Tax Asset
|
|
|
- |
|
|
|
1,691 |
|
Foreclosed
Real Estate
|
|
|
- |
|
|
|
52 |
|
Other
Assets
|
|
|
59 |
|
|
|
52 |
|
Total Assets
|
|
$ |
149,456 |
|
|
$ |
137,715 |
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Deposits
|
|
$ |
79,826 |
|
|
$ |
78,359 |
|
Advances
from Borrowers for Taxes and Insurance
|
|
|
92 |
|
|
|
177 |
|
Advances
from Federal Home Loan Bank of Dallas
|
|
|
35,995 |
|
|
|
26,876 |
|
Stock
Purchase Deposit Escrow
|
|
|
- |
|
|
|
3,575 |
|
Other
Accrued Expenses and Liabilities
|
|
|
874 |
|
|
|
854 |
|
Deferred
Tax Liability
|
|
|
534 |
|
|
|
- |
|
Total Liabilities
|
|
|
117,321 |
|
|
|
109,841 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY
|
|
|
|
|
|
|
|
|
Preferred
Stock – No Par Value; 2,000,000 Shares
Authorized;
None Issued and Outstanding
|
|
|
- |
|
|
|
- |
|
Common
stock - 8,000,000 shares of $.01 par value
authorized;
3,558,958 shares issued; 3,377,600
shares
outstanding and 3,383,287 shares outstanding at
March
31, 2009 and June 30, 2008, respectively
|
|
|
14 |
|
|
|
14 |
|
Additional
paid-in capital
|
|
|
13,598 |
|
|
|
13,567 |
|
Treasury
Stock, at Cost – 181,358 Shares at March 31,
2009;
175,671 Shares at June 30, 2008
|
|
|
(1,858 |
) |
|
|
(1,809 |
) |
Unearned
ESOP Stock
|
|
|
(897 |
) |
|
|
(940 |
) |
Unearned
RRP Trust Stock
|
|
|
(269 |
) |
|
|
(395 |
) |
Retained
Earnings
|
|
|
20,368 |
|
|
|
20,071 |
|
Accumulated
Other Comprehensive Income (Loss)
|
|
|
1,179 |
|
|
|
(2,634 |
) |
|
|
|
|
|
|
|
|
|
Total Stockholders’
Equity
|
|
|
32,135 |
|
|
|
27,874 |
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’
EQUITY
|
|
$ |
149,456 |
|
|
$ |
137,715 |
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to consolidated financial statements. |
|
|
|
|
|
|
|
|
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(Unaudited)
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
|
|
|
|
March
31,
|
|
March
31,
|
|
|
|
|
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
(In
Thousands, Except Per Share Data)
|
INTEREST
INCOME
|
|
|
|
|
|
|
|
|
Loans,
Including Fees
|
$ 502
|
|
$ 514
|
|
$ 1,540
|
|
$ 1,559
|
|
Investment
Securities
|
23
|
|
60
|
|
94
|
|
204
|
|
Mortgage-Backed
Securities
|
1,417
|
|
1,088
|
|
4,009
|
|
3,319
|
|
Other
Interest-Earning Assets
|
1
|
|
54
|
|
21
|
|
140
|
|
|
|
Total
Interest Income
|
1,943
|
|
1,716
|
|
5,664
|
|
5,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
Deposits
|
|
572
|
|
760
|
|
1,884
|
|
2,327
|
|
Federal
Home Loan Bank Borrowings
|
367
|
|
247
|
|
1,026
|
|
647
|
|
|
|
Total
Interest Expense
|
939
|
|
1,007
|
|
2,910
|
|
2,974
|
|
|
|
Net
Interest Income
|
1,004
|
|
709
|
|
2,754
|
|
2,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION
FOR LOAN LOSSES
|
--
|
|
--
|
|
--
|
|
--
|
|
|
|
Net
Interest Income after
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for Loan Losses
|
1,004
|
|
709
|
|
2,754
|
|
2,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-INTEREST
INCOME
|
|
|
|
|
|
|
|
|
Gain
on Sale of Loans
|
1
|
|
1
|
|
1
|
|
5
|
|
Gain
on Sale of Investments
|
113
|
|
55
|
|
146
|
|
149
|
|
Other
Income
|
7
|
|
7
|
|
27
|
|
29
|
|
|
|
|
|
Total
Non-Interest Income
|
121
|
|
63
|
|
174
|
|
183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
Compensation
and Benefits
|
432
|
|
390
|
|
1,238
|
|
1,180
|
|
Occupancy
and Equipment
|
51
|
|
43
|
|
141
|
|
128
|
|
Data
Processing
|
19
|
|
19
|
|
55
|
|
52
|
|
Audit
and Professional Fees
|
73
|
|
52
|
|
183
|
|
184
|
|
Franchise
and Bank Shares Tax
|
38
|
|
26
|
|
113
|
|
102
|
|
Merger
and Stock Issuance Costs
|
-
|
|
-
|
|
133
|
|
-
|
|
Other
Expense
|
99
|
|
72
|
|
276
|
|
218
|
|
|
|
|
|
Total
Non-Interest Expense
|
712
|
|
602
|
|
2,139
|
|
1,864
|
|
|
|
|
|
Income
Before Income Taxes
|
413
|
|
170
|
|
789
|
|
567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION
FOR INCOME TAX EXPENSE
|
140
|
|
58
|
|
268
|
|
192
|
|
|
|
|
|
Net
Income
|
$
273
|
|
$ 112
|
|
$
521
|
|
$ 375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
PER COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$ 0.08
|
|
$ 0.03
|
|
$ 0.16
|
|
$ 0.12
|
|
|
|
|
|
Diluted
|
$ 0.08
|
|
$ 0.03
|
|
$ 0.16
|
|
$ 0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DIVIDENDS
DECLARED
|
$ 0.06
|
|
$ 0.06
|
|
$ 0.18
|
|
$ 0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to consolidated financial statements. |
|
|
|
|
|
|
|
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
NINE
MONTHS ENDED MARCH 31, 2009 AND 2008
|
|
|
|
|
Additional
Paid-in
|
|
|
Unearned
|
|
|
Unearned
RRP
Trust
|
|
|
Retained
|
|
|
|
|
|
Accumulated
Other
Comprehensive
|
|
|
Total
Stockholders’
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
– JUNE 30, 2007
|
|
$ |
14 |
|
|
$ |
13,509 |
|
|
$ |
(997 |
) |
|
$ |
(551 |
) |
|
$ |
20,449 |
|
|
$ |
(1,771 |
) |
|
$ |
(2,841 |
) |
|
$ |
27,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
374 |
|
|
|
-- |
|
|
|
-- |
|
|
|
374 |
|
Other
Comprehensive Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes
in Unrealized Gain
on
Securities Available-
for-Sale,
Net of Tax
Effects
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
3,082 |
|
|
|
3,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RRP
Shares Earned
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
156 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
156 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Options Vested
|
|
|
-- |
|
|
|
47 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ESOP
Compensation Earned
|
|
|
-- |
|
|
|
(2 |
) |
|
|
43 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
Declared
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
(199 |
) |
|
|
-- |
|
|
|
-- |
|
|
|
(199 |
) |
Acquisition
of Treasury Stock
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
(38 |
) |
|
|
-- |
|
|
|
(38 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
– MARCH
31, 2008
|
|
$ |
14 |
|
|
$ |
13,554 |
|
|
$ |
(954 |
) |
|
$ |
(395 |
) |
|
$ |
20,624 |
|
|
$ |
(1,809 |
) |
|
$ |
241 |
|
|
$ |
31,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
– JUNE 30, 2008
|
|
$ |
14 |
|
|
$ |
13,567 |
|
|
$ |
(940 |
) |
|
$ |
(395 |
) |
|
$ |
20,071 |
|
|
$ |
(1,809 |
) |
|
$ |
(2,634 |
) |
|
$ |
27,874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
521 |
|
|
|
-- |
|
|
|
-- |
|
|
|
521 |
|
Other
Comprehensive Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes
in Unrealized Gain
on
Securities Available-
for-Sale,
Net of Tax Effects
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
3,813 |
|
|
|
3,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RRP
Shares Earned
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
126 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Options Vested
|
|
|
-- |
|
|
|
43 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ESOP
Compensation Earned
|
|
|
-- |
|
|
|
(12 |
) |
|
|
43 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
Declared
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
(224 |
) |
|
|
-- |
|
|
|
-- |
|
|
|
(224 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
of Treasury Stock
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
(49 |
) |
|
|
-- |
|
|
|
(49 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
– MARCH
31, 2009
|
|
$ |
14 |
|
|
$ |
13,598 |
|
|
$ |
(897 |
) |
|
$ |
(269 |
) |
|
$ |
20,368 |
|
|
$ |
(1,858 |
) |
|
$ |
1,179 |
|
|
$ |
32,135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated
financial statements. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
Nine
Months Ended
|
|
|
March
31,
|
|
|
2009 |
|
2008
|
|
|
|
(In
Thousands)
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net
Income
|
|
|
$ |
521 |
|
$ |
|
|
374 |
|
Adjustments
to Reconcile Net Income to Net
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Provided by Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
Net
Amortization and Accretion on Securities
|
|
|
|
(208 |
) |
|
|
|
(132 |
) |
Gain
on Sale of Investments
|
|
|
|
(146 |
) |
|
|
|
(149 |
) |
Amortization
of Deferred Loan Fees
|
|
|
|
(11 |
) |
|
|
|
(17 |
) |
Depreciation
of Premises and Equipment
|
|
|
|
43 |
|
|
|
|
41 |
|
ESOP
Expense
|
|
|
|
31 |
|
|
|
|
41 |
|
Stock
Option Expense
|
|
|
|
43 |
|
|
|
|
48 |
|
Recognition
and Retention Plan Expense
|
|
|
|
94 |
|
|
|
|
118 |
|
Deferred
Income Tax
|
|
|
|
(11 |
) |
|
|
|
(16 |
) |
Changes
in Assets and Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Loans
Held-for-Sale – Originations
|
|
|
|
(10,229 |
) |
|
|
|
(10,712 |
) |
Loans
Held-for-Sale – Principal Repayments
|
|
|
|
10,014 |
|
|
|
|
11,706 |
|
Accrued
Interest Receivable
|
|
|
|
(30 |
) |
|
|
|
(60 |
) |
Other
Operating Assets
|
|
|
|
(6 |
) |
|
|
|
(209 |
) |
Other
Operating Liabilities
|
|
|
|
325 |
|
|
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by Operating Activities
|
|
|
|
430 |
|
|
|
|
1,056 |
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Loan
Originations and Purchases, Net of Principal Collections
|
|
|
(285 |
) |
|
|
|
(3,550 |
) |
Deferred
Loan Fees Collected
|
|
|
10 |
|
|
|
|
38 |
|
Acquisition
of Premises and Equipment
|
|
|
(140 |
) |
|
|
|
(12 |
) |
Activity
in Available-for-Sale Securities:
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from Sales of Securities
|
|
|
6,697 |
|
|
|
|
15,507 |
|
Principal
Payments on Mortgage-backed Securities
|
|
|
8,319 |
|
|
|
|
8,970 |
|
Purchases
of Securities
|
|
|
(24,269 |
) |
|
|
|
(36,129 |
) |
Activity
in Held-to-Maturity Securities
|
|
|
|
|
|
|
|
|
|
|
Principal
Payments on Mortgage-Backed Securities
|
|
|
96 |
|
|
|
|
115 |
|
Purchases
of Securities
|
|
|
(608 |
) |
|
|
|
(407 |
) |
Proceeds
from Disposition of Foreclosed Real Estate
|
|
|
|
|
42 |
|
|
|
|
-
|
|
Net
Cash Used in Investing Activities
|
|
|
$ |
(10,138
|
) |
$ |
|
|
(15,468 |
) |
See accompanying notes to consolidated financial statements.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)
|
|
(Unaudited)
|
|
|
|
|
|
Nine
Months Ended
|
|
|
|
March
31,
|
|
|
|
2009
|
|
|
2008
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
(In
Thousands)
|
|
Net
Increase in Deposits
|
|
$ |
1,466 |
|
|
$ |
1,632 |
|
Proceeds
from Federal Home Loan Bank Advances
|
|
|
45,950 |
|
|
|
17,700 |
|
Repayments
of Advances from Federal Home Loan Bank
|
|
|
(36,831 |
) |
|
|
(2,936 |
) |
Net
Decrease in Mortgage-Escrow Funds
|
|
|
(86 |
) |
|
|
(74 |
) |
Dividends
Paid
|
|
|
(224 |
) |
|
|
(199 |
) |
Acquisition
of Treasury Stock
|
|
|
(49 |
) |
|
|
(38 |
) |
Stock
Purchase Deposits Received
|
|
|
4,556 |
|
|
|
-- |
|
Stock
Purchase Deposits Refunded
|
|
|
(8,131 |
) |
|
|
-- |
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by Financing Activities
|
|
|
6,651 |
|
|
|
16,085 |
|
|
|
|
|
|
|
|
|
|
NET
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
|
|
(3,057 |
) |
|
|
1,673 |
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
|
|
|
|
|
|
|
|
|
|
|
7,363 |
|
|
|
3,972 |
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
|
$ |
4,306 |
|
|
$ |
5,645 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTARY
CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
Interest
Paid on Deposits and Borrowed Funds
|
|
$ |
2,889 |
|
|
$ |
2,940 |
|
Income
Taxes Paid
|
|
|
-- |
|
|
|
185 |
|
Market
Value Adjustment for Gain on Securities
|
|
|
|
|
|
|
|
|
Available-for-Sale
|
|
|
5,778 |
|
|
|
4,670 |
|
NON-CASH
INVESTING ACTIVITY
|
|
|
|
|
|
|
|
|
Real
Estate Acquired through Foreclosure
|
|
$ |
-- |
|
|
$ |
33 |
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial
statements.
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 (the
“Bank”), formerly Home Federal Savings and Loan Association. The change in the
name of the Bank was effective April 8, 2009. 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 nine month period ended March 31, 2009 are not
necessarily indicative of the results which may be expected for the fiscal year
ending June 30, 2009.
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
On
January 18, 2005, the Bank completed its reorganization to the mutual holding
company form of organization and formed the Company to serve as the mid-tier
stock holding company for the Bank. In connection with the
reorganization, the Company sold 1,423,583 shares of its common stock in a
subscription and community offering at a price of $10.00 per
share. The Company also issued 2,135,375 shares of common stock in
the reorganization to Home Federal Mutual Holding Company of Louisiana, or 63.2%
of our outstanding common stock at March 31, 2009. Home Federal 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 Thrift Supervision. Services are provided to its customers by
three offices, all of which are located in the City of Shreveport,
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 March 31, 2009, the Bank had one wholly-owned
subsidiary, Metro Financial Services, Inc., which is currently
inactive.
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.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The
Company classifies its debt and equity investment securities into one of three
categories: held-to-maturity, available-for-sale, or
trading. Investments in nonmarketable equity securities and debt
securities, in which the Company has the positive intent and ability to hold to
maturity, are classified as held-to-maturity and carried at amortized
cost. Investments in debt securities that are not classified as
held-to-maturity and marketable equity securities that have readily determinable
fair values are classified as either trading or available-for-sale
securities. Securities that are acquired and held principally for the
purpose of selling in the near term are classified as trading
securities. Investments in securities not classified as trading or
held-to-maturity are classified as available-for-sale.
Trading
account and available-for-sale securities are carried at fair
value. Unrealized holding gains and losses on trading securities are
included in earnings while net unrealized holding gains and losses on
available-for-sale securities are excluded from earnings and reported in other
comprehensive income. Purchase premiums and discounts are recognized
in interest income using the interest method over the term of the
securities. Declines in the fair value of held-to-maturity and
available-for-sale securities below their cost that are deemed to be other than
temporary are reflected in earnings as realized losses. In estimating
other-than-temporary impairment losses, management considers (1) the length of
time and the extent to which the fair value has been less than cost, (2) the
financial condition and near-term prospects of the issuer, and (3) the intent
and ability of the Bank to retain its investment in the issuer for a period of
time sufficient to allow for any anticipated recovery in fair
value. Gains and losses on the sale of securities are recorded on the
trade date and are determined using the specific identification
method.
Loans
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
receivable are stated at 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 uncollectibility of a loan balance is
confirmed. Subsequent recoveries, if any, are credited to the
allowance.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Allowance
for Loan Losses (Continued)
The
allowance for loan losses is evaluated on a regular basis by management and is
based upon management’s periodic review of the collectibility 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.
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.
An
allowance is also established for uncollectible interest on loans classified as
substandard. Substandard loans are those, which are in excess of ninety days
delinquent. 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.
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.
Premises
and Equipment
Land is
carried at cost. Buildings and equipment are carried at cost less
accumulated depreciation computed on the straight-line method over the estimated
useful lives of the assets.
Income
Taxes
Deferred
income tax assets and liabilities are determined using the liability (or balance
sheet) method. Under this method, the net deferred tax asset or
liability is determined based on the tax effects of the temporary differences
between the book and tax bases of the various assets and liabilities and gives
current recognition to changes in tax rates and laws.
Accounting
principles generally accepted in the United States of America require that
recognized revenue, expenses, gains and losses be included in net
income. Although certain changes in assets and liabilities, such as
unrealized gains and losses on available-for-sale securities, are reported as a
separate component of the equity section of the Consolidated Statements of
Financial Condition, such items, along with net income, are components of
comprehensive income.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
2. EARNINGS
PER SHARE
Basic
earnings per common share is computed based on the weighted average number of
shares outstanding. Diluted earnings per share is computed based on
the weighted average number of shares outstanding and common share equivalents
that would arise from the exercise of dilutive securities. Earnings per share
for the three and nine month periods ended March 31, 2009 and 2008 were
calculated as follows:
|
Three
Months Ended
March
31, 2009
|
Three
Months Ended
March
31, 2008
|
|
|
|
|
|
|
(In
Thousands, Except Per Share Data)
|
|
|
|
|
|
Net
Income
|
$ 273
|
$ 273
|
$ 112
|
$ 112
|
Weighted
average shares outstanding
|
3,260
|
3,260
|
3,247
|
3,247
|
Effect
of unvested common stock awards
|
--
|
--
|
--
|
--
|
Adjusted
weighted average shares used in
earnings
per share computation
|
3,260
|
3,260
|
3,247
|
3,247
|
Earnings
per share
|
$0.08
|
$0.08
|
$0.03
|
$0.03
|
|
Nine
Months Ended
March
31, 2009
|
Nine
Months Ended
March
31, 2008
|
|
|
|
|
|
|
(In
Thousands, Except Per Share Data)
|
|
|
|
|
|
Net
Income
|
$ 520
|
$ 520
|
$ 374
|
$ 374
|
Weighted
average shares outstanding
|
3,257
|
3,257
|
3,243
|
3,243
|
Effect
of unvested common stock awards
|
--
|
--
|
--
|
--
|
Adjusted
weighted average shares used in
earnings per share computation
|
3,257
|
3,257
|
3,243
|
3,243
|
Earnings
per share
|
$0.16
|
$0.16
|
$0.12
|
$0.12
|
For the
three months ended March 31, 2009 and 2008, there were weighted-average
outstanding options to purchase 169,290 and 170,819 shares, respectively, and
for the nine months ended March 31, 2009 and 2008, there were weighted-average
outstanding options to purchase 169,676 and 170,844 shares, respectively, at
$9.85 per share. For the three and nine months ended March 31, 2009, the options
were not included in the computation of diluted earnings per share because the
options' exercise price was greater than the average market value price of the
common shares during the periods.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
3. RECOGNITION
AND RETENTION PLAN
On August
10, 2005, the shareholders of the Company approved the establishment of the Home
Federal Bancorp, Inc. of Louisiana 2005 Recognition and Retention Plan and Trust
Agreement (the “Recognition Plan”) for the benefit of directors, officers, and
employees as an incentive to retain personnel of experience and ability in key
positions. The aggregate number of shares of the Company’s common
stock subject to award under the Recognition Plan totals 69,756
shares. During fiscal 2006, the Company purchased 69,756 shares at an
aggregate cost of $688,439. As the shares were acquired for the
Recognition Plan, the purchase price of these shares was recorded as a contra
equity account. As the shares are distributed, the contra equity
account is reduced. During the nine months ended March 31, 2009,
12,781 shares vested and were released from the Recognition Plan Trust and
27,504 shares remained in the Recognition Plan Trust at March 31,
2009.
Recognition
Plan shares are earned by recipients at a rate of 20% of the aggregate number of
shares covered by the Recognition Plan award over five
years. Generally, if the employment of an employee or service as a
non-employee director is terminated prior to the fifth anniversary of the date
of grant of Recognition Plan share award, the recipient shall forfeit the right
to any shares subject to the award that have not been earned. In the
case of death or disability of the recipient or a change in control of the
Company, the Recognition Plan awards will be vested and shall be distributed as
soon as practicable thereafter. As of March 31, 2009, 2,290 awards
had been forfeited and vesting was accelerated on 2,270 shares as a result of
the death of two of the participants.
The
present cost associated with the Recognition Plan is based on a share price of
$9.85, which represents the market price of the Company’s stock on August 18,
2005, the date on which the Recognition Plan shares were granted. The
cost is being recognized over five years.
4. STOCK
OPTION PLAN
On August
10, 2005, the shareholders of the Company approved the establishment of the Home
Federal Bancorp, Inc. of Louisiana 2005 Stock Option Plan (the “Option Plan”)
for the benefit of directors, officers, and other key employees. The
aggregate number of shares of common stock reserved for the issuance under the
Option Plan totaled 174,389. Both incentive stock options and
non-qualified stock options may be granted under the Option Plan.
On August
18, 2005, the Company granted 174,389 options to directors and key
employees. Under the Option Plan, the exercise price of each option
cannot be less than the fair market value of the underlying common stock as of
the date of the option grant, which was $9.85, and the maximum term is ten
years. Incentive stock options and non-qualified stock options
granted under the Option Plan become vested and exercisable at a rate of 20% per
year over five years, commencing one year from the date of the grant, with an
additional 20% vesting on each successive anniversary of the date the option was
granted. No vesting shall occur after an employee’s employment or
service as a director is terminated. As of March 31, 2009, 5,099
stock options had been forfeited and are available for future
grant. In the event of the death or disability of an employee or
director or change in control of the Company, the unvested options shall become
vested and exercisable. The Company accounts for the Option Plan
under the guidance of SFAS No. 123(R).
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
5. RECENT
ACCOUNTING PRONOUNCEMENTS
In
December 2007, the FASB issued SFAS 141(R). Business
Combinations. SFAS 141 (R) will impact how entities apply the
acquisition method to business combinations. Significant changes to
how the Company accounts for business combinations under this Statement include
1) the acquisition date will be the date the acquirer obtains control, 2) all
identifiable assets acquired, liabilities assumed, and noncontrolling interests
in the acquiree will be stated at fair value on the acquisition date, 3) assets
or liabilities arising from noncontractual contingencies will be measured at the
acquisition date fair value only if it is more likely than not that they meet
the definition of an asset or liability on the acquisition date, 4) adjustments
subsequently made to the provisional amounts recorded on the acquisition date
will be made retroactively during a measured period not to exceed one year, 5)
acquisition-related restructuring costs that do not meet the criteria in SFAS
146, Accounting for Cost Associated with Exit or Disposal Activities, will be
expensed as incurred, transaction costs will be expensed as incurred, 7)
reversals of deferred income tax valuation allowances and income tax
contingencies will be recognized in earnings subsequent to the measurement
period, and 8) the allowance for loan loses of an acquiree will not be permitted
to the recognized by the acquirer. Additionally, SFAS 141(R) will
require additional disclosures regarding subsequent changes to
acquisition-related contingencies, contingent consideration, noncontrolling
interests, acquisition-related transaction costs, fair values and cash flows not
expected to be collected for acquired loans, and goodwill
valuation.
The
Company will be required to apply SFAS 141(R) prospectively to all business
combinations completed on or after July 1, 2009. Early adoption is
not permitted. For business combinations with an acquisition date
before the effective date, the provisions of SFAS 141(R) will apply to the
subsequent accounting for deferred income tax valuation allowances and income
tax contingencies and will require any changes in those amounts to be recorded
in earnings.
In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements (an amendment of ARB No.
51). This Statement was issued to improve the relevance,
comparability, and transparency of the financial information that a reporting
entity provides in its consolidated financial statements. This
Statement is effective for fiscal years, and interim periods with those fiscal
years, beginning on or after December 31, 2008.
In March
2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities (an amendment of FASB Statement No.
133). This Statement requires enhanced disclosures about an entity's
derivative and hedging activities and thereby improves the transparency of
financial reporting. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008, with early application encouraged. This Statement
encourages, but does not require, comparative disclosures for earlier periods at
initial adoption.
In May
2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles. This Statement identifies the source of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States (the GAAP hierarchy). This Statement is effective 60
days following the SEC's approval of the PCAOB amendments to AU Section 411,
The Meaning of Present Fairly
in Conformity with Generally Accepted Accounting Principles.
In April
2009, the FASB issued FSP FAS 115-2 and FSP FAS 124-2 which amend
other-than-temporary impairment guidance in U.S. GAAP for debt securities to
make the guidance more operational and to improve the presentation and
disclosure of other-than-temporary impairments on debt and equity securities in
the financial statements. These FSP’s are effective for annual
reporting periods ending after June 15, 2009.
In April
2009, the FASB issued FSP FAS 157-4 which provides additional guidance for
estimating fair value in accordance with SFAS No. 157 when the volume and level
of activity for the asset or liability have significantly
decreased. This FSP emphasizes that even if there has been a
significant decrease in the volume and level of activity for the asset or
liability and regardless of the valuation technique used, the objective of a
fair value measurement remains the same. The FSP is effective for
annual reporting periods ending after June 15, 2009, and shall be applied
prospectively.
The above
pronouncements are not expected to have a significant impact on the consolidated
financial statements of the Company.
|
ITEM
2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
|
General
The
Company’s results of operations are primarily dependent on the results of the
Bank. The Bank’s results of operations depend, to a large extent, on
net interest income, which is the difference between the income earned on its
loan and investment portfolios and the cost of funds, consisting of the interest
paid on deposits and borrowings. Results of operations are also
affected by provisions for loan losses and loan sale
activities. Non-interest expense principally consists of compensation
and employee benefits, office occupancy and equipment expense, data processing
and other expense. Our results of operations are also significantly
affected by general economic and competitive conditions, particularly changes in
interest rates, government policies and actions of regulatory
authorities. Future changes in applicable law, regulations or
government policies may materially impact our financial condition and results of
operations.
Critical
Accounting Policies
Allowance for Loan Losses.
The Company has identified the calculation of the allowance for loan losses as a
critical accounting policy, due to the higher degree of judgment and complexity
than its other significant accounting policies. Provisions for loan
losses are based upon management’s periodic valuation and assessment of the
overall loan portfolio and the underlying collateral, trends in non-performing
loans, current economic conditions and other relevant factors in order to
maintain the allowance for loan losses at a level believed by management to
represent all known and inherent losses in the portfolio that are both probable
and reasonably estimable. Although management uses the best
information available, the level of the allowance for loan losses remains an
estimate which is subject to significant judgment and short-term
change.
Income Taxes. Deferred income
tax assets and liabilities are determined using the liability (or balance sheet)
method. Under this method, the net deferred tax asset or liability is
determined based on the tax effects of the temporary differences between the
book and tax bases of the various assets and liabilities and gives current
recognition to changes in tax rates and laws. The realization of our
deferred tax assets principally depends upon our achieving projected future
taxable income. We may change our judgments regarding future
profitability due to future market conditions and other factors. We
may adjust our deferred tax asset balances if our judgments change.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Discussion of Financial Condition Changes from June 30,
2008 to March 31, 2009
At March
31, 2009, total assets amounted to $149.5 million compared to $137.7 million at
June 30, 2008, an increase of approximately $11.7 million, or
8.5%. The increase in assets was primarily due to an increase in
investment securities of $15.9 million, or 16.2%, from $98.0 million at June 30,
2008 to $113.9 million at March 31, 2009. The increase in assets was
partially offset by a decrease in cash and cash equivalents of $3.1 million, or
41.5%, and a decrease in the Company’s deferred tax asset of $1.7
million. Cash and cash equivalents at June 30, 2008 included $3.6
million of cash subscription orders which were returned following the
termination of the offering in connection with our proposed second step
conversion in August 2008.
The
increase in investment securities was primarily due to the acquisition of
securities funded by advances from the Federal Home Loan Bank, combined with an
increase in the overall fair market value of the securities
portfolio.
The
Company’s total liabilities amounted to $117.3 million at March 31, 2009 an
increase of approximately $7.5 million, or 6.8%, compared to total liabilities
of $109.8 million at June 30, 2008. This
increase was primary due to increases in advances from the Federal Home Loan
Bank of Dallas of $9.1 million, or 33.9%, from $26.9 million at June 30, 2008,
to $36.0 million at March 31, 2009, deposits of $1.5 million, or 1.9%, from
$78.4 million at June 30, 2008 to $79.8 million at March 31, 2009 and an
increase in deferred tax liability of $534,000. These increases were
partially offset by a $3.6 million decrease in the stock purchase deposit
escrow, which funds were returned to subscribers following termination of the
offering.
Stockholders’
equity increased $4.3 million, or 15.3%, to $32.1 million at March 31, 2009
compared to $27.9 million at June 30, 2008. This increase was
primarily the result of the change in the Company’s accumulated other
comprehensive income associated with securities available-for-sale of $3.8
million, the recognition of net income of $521,000 for the nine months ended
March 31, 2009, and the distribution of shares associated with the Company’s
Recognition and Retention Plan of $126,000. These increases were
offset by dividends of $224,000 paid during the nine months ended March 31,
2009, and the acquisition of treasury shares of $49,000.
The Bank
is required to meet minimum capital standards promulgated by the Office of
Thrift Supervision (“OTS”). At March 31, 2009 Home Federal Bank’s
regulatory capital was well in excess of the minimum capital
requirements.
Comparison of Operating
Results for the Three and Nine Month Periods Ended March 31, 2009 and
2008
General
Net
income amounted to $273,000 for the three months ended March 31, 2009 compared
to $112,000 for the
same period in 2008, an increase of $161,000, or 143.8%. The increase
was primarily due to an increase in net interest income of $295,000, or 41.6%,
and an increase of $58,000, or 105.5%, in gain on sale of investments, partially
offset by an increase of $110,000 in non-interest expense and $82,000 in income
tax expense, in comparison to the three months ended March 31,
2008.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
For the
nine months ended March 31, 2009, net income amounted to $521,000, compared to
$375,000 for the
same period in 2008, an increase of $146,000, or 38.9%. The increase
was primarily due to an increase
in net interest income of $506,000, or 22.5%, offset by a $9,000, or 4.9%,
decrease in non-interest income and the increase in non-interest expense and
income taxes of $275,000 and $76,000, respectively. The increase in non-interest
expense was primarily attributable to $133,000 in expenditures for merger and
stock issuance expense related to the proposed second step conversion and
acquisition of a local financial institution which was terminated in August
2008. The increase in net interest income was primarily attributable to an
increase of $690,000 in interest income generated from mortgage-backed
securities.
Net Interest
Income
Net
interest income for the three months ended March 31, 2009 was $1.0 million, an
increase of $295,000, or 41.6%, in comparison to $709,000 for the three months
ended March 31, 2008. This increase was primarily due to an increase
of $227,000 in total interest income and a decrease of $68,000 in the Company’s
cost of funds, consisting of deposits and Federal Home Loan Bank borrowings. The
increase in total interest income was primarily due to an increase in interest
income generated from mortgage-backed securities of $329,000, partially offset
by decreases in interest income on loans, investment securities and other
interest-earning assets of $12,000, $37,000 and $53,000,
respectively.
Net
interest income for the nine months ended March 31, 2009, was $2.8 million, an
increase of $506,000, or 22.5%, in comparison to $2.3 million for the nine
months ended March 31, 2008. This increase was primarily due to an
increase of $442,000 in total interest income, and a decrease of $64,000 in
total interest expense. The increase in total interest income was primarily due
to an increase in interest income generated from mortgage-backed securities of
$690,000, partially offset by decreases in interest income generated from loans,
investment securities and other interest-earning assets of $19,000, $110,000 and
$119,000, respectively.
The
Company’s average interest rate spread was 2.00% and 1.83%, respectively, for
the three and nine months ended March 31, 2009, compared to 1.53% and 1.62%,
respectively, for the three and nine months ended March 31, 2008. The
Company’s net interest margin was 2.68% and 2.55%, respectively, for the three
and nine months ended March 31, 2009, compared to 2.22% and 2.44%, respectively,
for the three and nine months ended March 31, 2008. The increase in
net interest income and net interest margin is attributable primarily to the
decrease in interest expense on interest-bearing liabilities and average cost
associated with deposits and advances from the Federal Home Loan Bank, and a
substantial increase in interest income from mortgage-backed
securities. Net interest income increased primarily due to the
increase in volume of average interest earning assets and is reflected in the
increase of the average interest rate spread.
Provision for Losses on
Loans
Based on
an analysis of historical experience, the volume and type of lending conducted
by Home Federal Bank, the status of past due principal and interest payments,
general economic conditions, particularly as such conditions relate to Home
Federal’s market area and other factors related to the collectibility of Home
Federal Bank’s loan portfolio, no provisions for loan losses were made during
the three and nine months ended March 31, 2009 and 2008. The Bank’s
allowance for loan losses was $225,629, or 0.76% of total loans, at March 31,
2009 compared to $235,000, or 0.81% of total loans, at March 31,
2008. At March 31, 2009, Home Federal Bank had no non-performing
loans or other non-performing assets. Home Federal Bank had
non-performing loans of $19,000 and other non-performing assets of $33,000 at
March 31, 2008. There can be no assurance that the loan loss
allowance will be sufficient to cover losses on non-performing assets in the
future.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Non-interest
Income
Total
non-interest income amounted to $121,000 for the three months ended March 31,
2009, compared to $63,000 for the same period in 2008, an increase of $58,000,
or 92.1%. The increase was due to an increase of $58,000 in gain on
sale of investments.
Total
non-interest income amounted to $174,000 for the nine months ended March 31,
2009, compared to $183,000 for the same period in 2008, a decrease of $9,000, or
4.9%. The decrease was primarily due to decreases in gain on sale of
loans and gain on sale of securities.
Non-interest
Expense
Total
non-interest expense increased $110,000, or 18.3%, for the three months ended
March 31, 2009 compared to the same period in 2008. The increase in
non-interest expense was primarily due to an increase in compensation and
benefits expense of $42,000, or 10.8%, over the same period in 2008 and an
increase in audit and professional fees of $21,000, or 40.4%. Other
non-interest expense increased $27,000 over the same period in
2008.
The
increase in compensation and benefits expense was primarily the result of new
personnel hired during the three months ended March 31, 2009. These
new personnel included a new president for Home Federal Bank, as well as
additional lending officers. The increase in audit and professional
fees was a due to increases in the Company’s legal costs during the three months
ended March 31, 2009. The increase in other non-interest expense is a
result of increases in various general and administrative expense categories,
such as printing and office supplies expense, advertising, and automobile
expense.
Total
non-interest expense increased $275,000, or 14.8%, for the nine months ended
March 31, 2009, compared to the same period in 2008. The increase was
primarily due to the recognition of $133,000 in merger and stock issuance costs
related to the terminated offering and acquisition described below, an increase
of $58,000, or 4.9%, in compensation and benefits expense, an increase of
$13,000, or 10.2%, in occupancy and equipment expense, and an increase in other
operating expense of $58,000.
The
increase in compensation and benefits expense was a result of new personnel
hires and normal compensation increases, including stock option and recognition
and retention plan expenses for the three and nine months ended March 31, 2009.
Compensation expense recognized by the Company for its Stock Option Plan and
Recognition and Retention Plan amounted to $14,000 and $31,000, respectively,
for the three months ended March 31, 2009, and $43,000 and $94,000,
respectively, for the nine months ended March 31, 2009.
The
increase in occupancy and equipment expense was primarily due to an increase in
office lease expense of approximately $3,000 for the nine months ended March 31,
2009, compared to the same period in 2008, and an increase in office furniture
and equipment expense of approximately $7,000 for the nine months ended March
31, 2009, compared to the same period in 2008. The increase in lease
expense was due primarily to additional lease space the Bank acquired in order
to house the new lending personnel hired in the third quarter ended March 31,
2009.
On August
11, 2008, the board of directors of Home Federal Bancorp, Inc. of Louisiana
terminated the stock offering in connection with the conversion of Home Federal
Mutual Holding Company of Louisiana and the acquisition of a local financial
institution that was contingent on the completion of the offering. The
recognition of merger and stock issuance expense for the nine months ended March
31, 2009 was a result of this action.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Effective
January 1, 2006, the Company, through its subsidiary Home Federal Bank, became
subject to the Louisiana bank shares tax. This tax is assessed on the
Bank’s equity and earnings. For the three and nine months ended March
31, 2009, the Company recognized franchise and bank shares tax expense of
$38,000 and $113,000, respectively.
Income
Taxes
Income taxes amounted to
$140,000 and $58,000 for the three months ended March 31, 2009 and 2008,
respectively, resulting in an effective tax rate of 34.0% for each period.
Income taxes amounted to $268,000 and $192,000 for the nine months ended
March 31, 2009 and 2008, respectively, resulting in effective tax rates of 34.0%
and 33.9%, respectively.
Liquidity and Capital
Resources
Home
Federal Bank maintains levels of liquid assets deemed adequate by
management. The Bank adjusts its liquidity levels to fund deposit
outflows, repay its borrowings and to fund loan commitments. Home
Federal Bank also adjusts liquidity as appropriate to meet asset and liability
management objectives.
Home
Federal Bank’s primary sources of funds are deposits, amortization and
prepayment of loans and mortgage-backed securities, maturities of investment
securities and other short-term investments, loan sales and earnings and funds
provided from operations. While scheduled principal repayments on
loans and mortgage-backed securities are a relatively predictable source of
funds, deposit flows and loan prepayments are greatly influenced by general
interest rates, economic conditions and competition. The Bank sets
the interest rates on its deposits to maintain a desired level of total
deposits. In addition, Home Federal Bank invests excess funds in
short-term interest-earning accounts and other assets, which provide liquidity
to meet lending requirements. Home Federal Bank’s deposit accounts
with the Federal Home Loan Bank of Dallas amounted to $998,000 at March 31,
2009.
A
significant portion of Home Federal Bank’s liquidity consists of securities
classified as available-for-sale and cash and cash equivalents. Home
Federal Bank’s primary sources of cash are net income, principal repayments on
loans and mortgage-backed securities and increases in deposit
accounts. If Home Federal Bank requires funds beyond its ability to
generate them internally, borrowing agreements exist with the Federal Home Loan
Bank of Dallas which provide an additional source of funds. At March
31, 2009, Home Federal Bank had $36 million in advances from the Federal Home
Loan Bank of Dallas.
At March
31, 2009, Home Federal Bank had outstanding loan commitments of $5.7 million to
originate loans. At March 31, 2009, certificates of deposit scheduled
to mature in less than one year, totaled $40.8 million. Based on
prior experience, management believes that a significant portion of such
deposits will remain with the Company, although there can be no assurance that
this will be the case. In addition, the cost of such deposits could be
significantly higher upon renewal, in a rising interest rate
environment.
Home
Federal Bank intends to utilize its high levels of liquidity to fund its lending
activities. If additional funds are required to fund lending
activities, Home Federal Bank intends to sell its securities classified as
available-for-sale as needed.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Home
Federal Bank is required to maintain regulatory capital sufficient to meet
tangible, core and risk-based capital ratios of at least 1.5%, 3.0% and 8.0%,
respectively. At March 31, 2009, Home Federal Bank exceeded each of
its capital requirements with ratios of 19.73%, 19.73% and 70.72%,
respectively.
In
connection with the Bank’s reorganization to the mutual holding company form of
organization, Home Federal Bancorp, Inc. of Louisiana, the parent holding
company of the Bank, sold 1,423,583 shares of its common stock in a subscription
and community offering, which was completed on January 18, 2005 at a price of
$10.00 per share. The shares issued include 113,887 shares acquired
by the Bank’s Employee Stock Ownership Plan. Net proceeds from the
offering were approximately $13.6 million. The Company has invested
approximately 50% of the net proceeds from the reorganization in the
Bank.
Off-Balance Sheet
Arrangements
At March
31, 2009, the Bank did not have any off-balance sheet arrangements, as defined
by Securities and Exchange Commission rules.
Impact of Inflation and
Changing Prices
The
financial statements and related financial data presented herein have been
prepared in accordance with instructions to Form 10-Q, which require the
measurement of financial position and operating results in terms of historical
dollars, without considering changes in relative purchasing power over time due
to inflation.
Unlike
most industrial companies, virtually all of the Bank’s assets and liabilities
are monetary in nature. As a result, interest rates generally have a
more significant impact on a financial institution’s performance than does the
effect of inflation.
Forward-Looking
Statements
This Form
10-Q contains certain forward-looking statements and information relating to the
Company that are based on the beliefs of management as well as assumptions made
by and information currently available to management. In addition, in
those and other portions of this document, the words “anticipate,” “believe,”
“estimate,” “except,” “intend,” “should” and similar expressions, or the
negative thereof, as they relate to the Company or the Company’s management, are
intended to identify forward-looking statements. Such statements
reflect the current views of the Company with respect to future looking events
and are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties
materialize or should underlying assumptions prove incorrect, actual results may
vary from those described herein as anticipated, believed, estimated, expected
or intended. The Company does not intend to update these
forward-looking statements.
ITEM
3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM
4 - CONTROLS AND PROCEDURES
See Item 4T below.
ITEM
4T - CONTROLS AND PROCEDURES
Evaluation of Disclosures Controls
and Procedures. Under the supervision and with the
participation of our management, including our Chief Executive Officer and our
principal financial officer, we evaluated the effectiveness of the design and
operation of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end
of the period covered by this report. Based upon that evaluation, the Chief
Executive Officer and the principal financial officer have concluded that, as of
the end of the period covered by this report, our disclosure controls and
procedures are effective to ensure that information required to be disclosed in
the reports that the Company files or submits under the Securities Exchange Act
of 1934, is recorded, processed, summarized and reported within the applicable
time periods specified by the Securities and Exchange Commission’s rules and
forms.
Changes in Internal Control over
Financial Reporting. There has been no change in the Company’s
internal control over financial reporting during the Company’s most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.
PART
II
ITEM
1. LEGAL PROCEEDINGS
The
Company is not involved in any pending legal proceedings other than routine
legal proceedings occurring in the ordinary course of business, which involve
amounts in the aggregate believed by management to be immaterial to the
financial condition of the Company.
ITEM
1A. RISK FACTORS
Not applicable.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) Not
applicable.
(b) Not
applicable.
(c)
Purchases of Equity Securities
The
following table represents the repurchasing activity of the stock repurchase
program during the third quarter of fiscal 2009:
|
|
Total
Number of Shares Purchased
|
|
|
Average
Price Paid per Share
|
|
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
|
|
Maximum
Number of Shares that May Yet Be Purchased Under the Plans or
Programs
|
|
January
1, 2009 – January 31, 2009
|
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
|
119,313 |
|
February
1, 2009 – February 28, 2009
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
119,313 |
|
March
1, 2009 – March 31, 2009
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
119,313 |
|
Total
|
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
|
119,313 |
|
Notes
to this table:
(a)
|
On
August 26, 2008, the Company issued a press release announcing that the
Board of Directors authorized a stock repurchase program (the "program")
on August 13, 2008.
|
(b)
|
The
Company was authorized to repurchase 10% or 125,000 of the outstanding
shares other than shares held by Home Federal Mutual Holding
Company.
|
(c)
|
The
program does not have an expiration
date.
|
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
Not
applicable.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM
5. OTHER INFORMATION
Not
applicable.
ITEM
6. EXHIBITS
The following Exhibits are filed as
part of this report:
|
|
31.1
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
31.2
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
32.0
|
Section
1350 Certifications
|
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
HOME FEDERAL BANCORP, INC. OF
LOUISIANA
Date: May 15,
2009 By: /s/Daniel R. Herndon
Daniel R. Herndon
President and Chief Executive Officer
Date: May 15,
2009 By: /s/Clyde D. Patterson
Clyde D. Patterson
Executive Vice President
(principal financial officer)