form10qhomefederal.htm
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:
|
December
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
No. |
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. [
X ] Yes [ ]
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 February 16,
2010: The registrant had 3,348,237 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 1,212,862 shares were held
by the public and directors, officers and employees of the registrant, and
the registrant’s employee benefit
plans.
|
|
|
|
Page
|
PART
I
|
FINANCIAL
INFORMATION
|
|
Item
1:
|
Financial
Statements
(Unaudited)
|
|
|
Consolidated
Statements of Financial Condition
|
1
|
|
|
|
|
Consolidated
Statements of Income
|
2
|
|
|
|
|
Consolidated
Statements of Comprehensive Income
|
3
|
|
|
|
|
Consolidated
Statements of Changes in Stockholders' Equity
|
4
|
|
|
|
|
Consolidated
Statements of Cash Flows
|
5
|
|
|
|
|
Notes
to Consolidated Financial Statements
|
7
|
|
|
|
Item
2:
|
Management’s
Discussion and Analysis of Financial Condition and
Results of
Operations
|
19
|
|
|
|
Item
3:
|
Quantitative
and Qualitative Disclosures About Market Risk
|
23
|
|
|
|
Item
4:
|
Controls
and Procedures
|
23
|
|
|
|
Item
4T:
|
Controls
and Procedures
|
23
|
|
|
|
PART
II
|
OTHER
INFORMATION
|
|
|
Item
1:
|
Legal
Proceedings
|
24
|
|
|
|
Item
1A:
|
Risk
Factors
|
24
|
|
|
|
Item
2:
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
24
|
|
|
|
Item
3:
|
Defaults
Upon Senior Securities
|
24
|
|
|
|
Item
4:
|
Submission
of Matters to a Vote of Security Holders
|
24
|
|
|
|
Item
5:
|
Other
Information
|
25
|
|
|
|
Item
6:
|
Exhibits
|
25
|
|
|
SIGNATURES
|
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
|
|
|
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION
|
|
|
|
|
|
December
31,
|
|
|
June
30,
|
|
|
ASSETS
|
|
(Unaudited) (Audited)
|
|
|
|
(In Thousands)
|
|
Cash
and Cash Equivalents (Includes Interest-Bearing
Deposits
with Other Banks of $12,052 and $8,508 for
December
31, 2009 and June 30, 2009, Respectively)
|
|
$ |
13,416 |
|
|
$ |
10,007 |
|
Securities
Available-for-Sale
|
|
|
80,861 |
|
|
|
92,647 |
|
Securities
Held-to-Maturity
|
|
|
2,177 |
|
|
|
2,184 |
|
Loans
Held-for-Sale
|
|
|
1,540 |
|
|
|
1,277 |
|
Loans
Receivable, Net
|
|
|
70,417 |
|
|
|
46,948 |
|
Accrued
Interest Receivable
|
|
|
562 |
|
|
|
543 |
|
Premises
and Equipment, Net
|
|
|
2,878 |
|
|
|
982 |
|
Other
Assets
|
|
|
391 |
|
|
|
178 |
|
|
|
|
|
|
|
|
|
|
Total
Assets |
|
$ |
172,242 |
|
|
$ |
154,766 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Deposits |
|
|
95,794 |
|
|
|
86,146 |
|
Advances
from Borrowers for Taxes and Insurance
|
|
|
65 |
|
|
|
137 |
|
Advances
from Federal Home Loan Bank of Dallas
|
|
|
42,542 |
|
|
|
35,997 |
|
Other
Accrued Expenses and Liabilities
|
|
|
1,039 |
|
|
|
1,082 |
|
Deferred
Tax Liability
|
|
|
456 |
|
|
|
94 |
|
Total Liabilities
|
|
|
139,896 |
|
|
|
123,456 |
|
|
|
|
|
|
|
|
|
|
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; 3,348,237
Shares
and
3,373,464 Shares Outstanding at December 31, 2009 and
June
30, 2009, respectively
|
|
|
14 |
|
|
|
14 |
|
Additional
paid-in capital
|
|
|
13,631 |
|
|
|
13,608 |
|
Treasury
Stock, at Cost – 210,721 Shares and 185,494 Shares at
December
31, 2009 and at June 30, 2009, respectively
|
|
|
(2,094 |
) |
|
|
(1,887 |
) |
Unearned
ESOP Stock
|
|
|
(854 |
) |
|
|
(883 |
) |
Unearned
RRP Trust Stock
|
|
|
(145 |
) |
|
|
(269 |
) |
Retained
Earnings
|
|
|
20,642 |
|
|
|
20,288 |
|
Accumulated
Other Comprehensive Income
|
|
|
1,152 |
|
|
|
439 |
|
|
|
|
|
|
|
|
|
|
Total Stockholders’
Equity
|
|
|
32,346 |
|
|
|
31,310 |
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$ |
172,242 |
|
|
$ |
154,766 |
|
See
accompaning notes to consolidated financial statements.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
|
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(Unaudited)
|
|
|
|
|
|
Three
Months Ended
December
31,
|
|
Six
Months Ended
December
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
Thousands, Except Per Share Data)
|
|
INTEREST
INCOME
|
|
|
|
Loans, Including
Fees
|
|
$ |
1,189 |
|
|
$ |
510 |
|
|
$ |
2,228 |
|
|
$ |
1,038 |
|
Investment
Securities
|
|
|
17 |
|
|
|
31 |
|
|
|
36 |
|
|
|
71 |
|
Mortgage-Backed
Securities
|
|
|
1,027 |
|
|
|
1,326 |
|
|
|
2,157 |
|
|
|
2,592 |
|
Other Interest-Earning
Assets
|
|
|
2 |
|
|
|
4 |
|
|
|
4 |
|
|
|
20 |
|
Total Interest
Income
|
|
|
2,235 |
|
|
|
1,871 |
|
|
|
4,425 |
|
|
|
3,721 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
556 |
|
|
|
638 |
|
|
|
1,134 |
|
|
|
1,312 |
|
Federal Home Loan Bank
Borrowings
|
|
312
|
|
|
|
353 |
|
|
|
643 |
|
|
|
659 |
|
Total Interest
Expense
|
|
|
868 |
|
|
|
991 |
|
|
|
1,777 |
|
|
|
1,971 |
|
Net Interest
Income
|
|
|
1,367 |
|
|
|
880 |
|
|
|
2,648 |
|
|
|
1,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION
FOR LOAN LOSSES
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
Net Interest Income
after
Provision for Loan
Losses
|
|
|
1,367 |
|
|
|
880 |
|
|
|
2,648 |
|
|
|
1,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-INTEREST
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on Sale of
Loans
|
|
|
85 |
|
|
|
-- |
|
|
|
129 |
|
|
|
-- |
|
Gain on Sale of
Investments
|
|
|
186 |
|
|
|
-- |
|
|
|
186 |
|
|
|
33 |
|
Other Income
|
|
|
14 |
|
|
|
10 |
|
|
|
24 |
|
|
|
20 |
|
Total Non-Interest
Income
|
|
|
285 |
|
|
|
10 |
|
|
|
339 |
|
|
|
53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger and Stock Issuance
Costs
|
|
|
-- |
|
|
|
1 |
|
|
|
-- |
|
|
|
133 |
|
Compensation
and Benefits
|
|
|
817 |
|
|
|
409 |
|
|
|
1,429 |
|
|
|
806 |
|
Occupancy and
Equipment
|
|
|
87 |
|
|
|
44 |
|
|
|
180 |
|
|
|
90 |
|
Data Processing
|
|
|
22 |
|
|
|
16 |
|
|
|
46 |
|
|
|
36 |
|
Audit and Professional
Fees
|
|
|
117 |
|
|
|
75 |
|
|
|
177 |
|
|
|
110 |
|
Franchise and Bank Shares
Tax
|
|
|
37 |
|
|
|
37 |
|
|
|
75 |
|
|
|
75 |
|
Other Expense
|
|
|
195 |
|
|
|
97 |
|
|
|
321 |
|
|
|
177 |
|
Total Non-Interest
Expense
|
|
|
1,275 |
|
|
|
679 |
|
|
|
2,228 |
|
|
|
1,427 |
|
Income Before Income
Taxes
|
|
|
377 |
|
|
|
211 |
|
|
|
759 |
|
|
|
376 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION
FOR INCOME TAX EXPENSE
|
|
|
128 |
|
|
|
72 |
|
|
|
258 |
|
|
|
128 |
|
Net Income
|
|
$ |
249 |
|
|
$ |
139 |
|
|
$ |
501 |
|
|
$ |
248 |
|
EARNINGS PER COMMON
SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ |
0 .08 |
|
|
$ |
0.04 |
|
|
$ |
0 .15 |
|
|
$ |
0.08 |
|
Diluted
|
|
$ |
0 .08 |
|
|
$ |
0.04 |
|
|
$ |
0 .15 |
|
|
$ |
0.08 |
|
DIVIDENDS
DECLARED
|
|
$ |
0 .06 |
|
|
$ |
0.06 |
|
|
$ |
0 .12 |
|
|
$ |
0.12 |
|
See accompaning notes to
consolidated financial statements.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
For
the Six Months Ended December 31, 2009 and 2008
|
|
(Unaudited)
|
|
|
|
For
the Six Months Ended
December
31,
|
|
|
|
|
|
|
|
|
|
|
(In
Thousands)
|
|
|
|
|
|
|
|
|
Net
Income
|
|
$ |
501 |
|
|
$ |
248 |
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income, Net of Tax
|
|
|
|
|
|
|
|
|
Unrealized Holding Gains Arising
During the Period
|
|
|
1,067 |
|
|
|
5,898 |
|
Reclassification Adjustment for
Gains Included in Net Income
|
|
|
(354 |
) |
|
|
(160 |
) |
|
|
|
|
|
|
|
|
|
Total Other Comprehensive
Income
|
|
|
713 |
|
|
|
5,738 |
|
|
|
|
|
|
|
|
|
|
Total Comprehensive
Income
|
|
$ |
1,214 |
|
|
$ |
5,986 |
|
See
accompaning notes to consolidated financial statements.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
SIX
MONTHS ENDED DECEMBER 31, 2009 AND 2008
(Unaudited)
|
|
|
|
|
Additional
Paid-in
|
|
|
Unearned
|
|
|
Unearned
RRP
Trust
|
|
|
Retained
|
|
|
|
|
|
Accumulated
Other
Comprehensive
|
|
|
Total
Stockholders’
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
Thousands)
|
|
|
|
|
|
|
|
|
|
|
BALANCE
– June 30, 2008
|
|
$ |
14 |
|
|
$ |
13,567 |
|
|
$ |
(940 |
) |
|
$ |
(395 |
) |
|
$ |
20,071 |
|
|
$ |
(1,809 |
) |
|
$ |
(2,634 |
) |
|
$ |
27,874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
248 |
|
|
|
-- |
|
|
|
-- |
|
|
|
248 |
|
Other
Comprehensive Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes
in Unrealized Gain
on
Securities Available-for-
Sale,
Net of Tax Effects
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
5,738 |
|
|
|
5,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RRP
Shares Earned
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
126 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Options Vested
|
|
|
-- |
|
|
|
29 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ESOP
Compensation Earned
|
|
|
-- |
|
|
|
(7 |
) |
|
|
29 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
Declared
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
(149 |
) |
|
|
-- |
|
|
|
-- |
|
|
|
(149 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
of Treasury Stock
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
(49 |
) |
|
|
-- |
|
|
|
(49 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
– December 31, 2008
|
|
$ |
14 |
|
|
$ |
13,589 |
|
|
$ |
(911 |
) |
|
$ |
(269 |
) |
|
$ |
20,170 |
|
|
$ |
(1,858 |
) |
|
$ |
3,104 |
|
|
$ |
33,839 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
– June 30, 2009
|
|
$ |
14 |
|
|
$ |
13,608 |
|
|
$ |
(883 |
) |
|
$ |
(269 |
) |
|
$ |
20,288 |
|
|
$ |
(1,887 |
) |
|
$ |
439 |
|
|
$ |
31,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
501 |
|
|
|
-- |
|
|
|
-- |
|
|
|
501 |
|
Other
Comprehensive Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes
in Unrealized Gain
on
Securities Available-for-
Sale,
Net of Tax Effects
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
713 |
|
|
|
713 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RRP
Shares Earned
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
124 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
124 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Options Vested
|
|
|
-- |
|
|
|
28 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ESOP
Compensation Earned
|
|
|
-- |
|
|
|
(5 |
) |
|
|
29 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
Declared
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
(147 |
) |
|
|
-- |
|
|
|
-- |
|
|
|
(147 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
of Treasury Stock
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
(207 |
) |
|
|
-- |
|
|
|
(207 |
) |
BALANCE
– December 31, 2009
|
|
$ |
14 |
|
|
$ |
13,631 |
|
|
$ |
(854 |
) |
|
$ |
(145 |
) |
|
$ |
20,642 |
|
|
$ |
(2,094 |
) |
|
$ |
1,152 |
|
|
$ |
32,346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompaning notes to consolidated financial statements.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
|
|
|
|
Six
Months Ended
|
|
|
|
December
31,
|
|
|
|
2009
|
|
|
2008
|
|
|
|
(In
Thousands)
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net
Income
|
|
$ |
501 |
|
|
$ |
248 |
|
Adjustments
to Reconcile Net Income to Net Cash
|
|
|
|
|
|
|
|
|
(Used
in) Provided by Operating Activities
|
|
|
|
|
|
|
|
|
Net
Amortization and Accretion on Securities
|
|
|
(168 |
) |
|
|
(127 |
) |
Gain
on Sale of Securities
|
|
|
(186 |
) |
|
|
(33 |
) |
Amortization
of Deferred Loan Fees
|
|
|
(103 |
) |
|
|
(4 |
) |
Depreciation
of Premises and Equipment
|
|
|
48 |
|
|
|
26 |
|
ESOP
Expense
|
|
|
23 |
|
|
|
22 |
|
Stock
Option Expense
|
|
|
29 |
|
|
|
29 |
|
Recognition
and Retention Plan Expense
|
|
|
63 |
|
|
|
63 |
|
Deferred
Income Tax Benefit
|
|
|
(5 |
) |
|
|
(7 |
) |
Gain
on Sale of Loans
|
|
|
(129 |
) |
|
|
-- |
|
Changes
in Assets and Liabilities:
|
|
|
|
|
|
|
|
|
Loans
Held-for-Sale – Originations and Purchases
|
|
|
(21,364 |
) |
|
|
(6,963 |
) |
Loans
Held-for-Sale – Sale and Principal Repayments
|
|
|
21,230 |
|
|
|
7,030 |
|
Accrued
Interest Receivable
|
|
|
(20 |
) |
|
|
(51 |
) |
Other
Operating Assets
|
|
|
(226 |
) |
|
|
27 |
|
Other
Operating Liabilities
|
|
|
18 |
|
|
|
90 |
|
|
|
|
|
|
|
|
|
|
Net
Cash (Used in) Provided by Operating Activities
|
|
|
(289 |
) |
|
|
350 |
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Loan
Originations and Purchases, Net of Principal Collections
|
|
|
(23,474 |
) |
|
|
70 |
|
Deferred
Loan Fees Collected
|
|
|
121 |
|
|
|
6 |
|
Acquisition
of Premises and Equipment
|
|
|
(1,945 |
) |
|
|
(6 |
) |
Activity
in Available-for-Sale Securities:
|
|
|
|
|
|
|
|
|
Proceeds
from Sales of Securities
|
|
|
4,663 |
|
|
|
2,035 |
|
Principal
Payments on Mortgage-backed Securities
|
|
|
8,558 |
|
|
|
4,626 |
|
Purchases
of Securities
|
|
|
-- |
|
|
|
(21,648 |
) |
Activity
in Held-to-Maturity Securities:
|
|
|
|
|
|
|
|
|
Principal
Payments on Mortgage-Backed Securities
|
|
|
39 |
|
|
|
64 |
|
Purchases
of Securities
|
|
|
(31 |
) |
|
|
(561 |
) |
Proceeds
from Disposition of Foreclosed Real Estate
|
|
|
-- |
|
|
|
42 |
|
Net
Cash Used in Investing Activities
|
|
$ |
(12,069 |
) |
|
$ |
(15,372 |
) |
See
accompaning notes to consolidated financial statements.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)
|
|
(Unaudited)
|
|
|
|
|
|
Six
Months Ended
|
|
|
|
December
31,
|
|
|
|
2009
|
|
|
2008
|
|
|
|
(In
Thousands)
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
Net
Increase in Deposits
|
|
|
9,648 |
|
|
|
332 |
|
Proceeds
from Federal Home Loan Bank Advances
|
|
|
15,500 |
|
|
|
25,200 |
|
Repayments
of Advances from Federal Home Loan Bank
|
|
|
(8,955 |
) |
|
|
(11,249 |
) |
Net
Decrease in Mortgage-Escrow Funds
|
|
|
(72 |
) |
|
|
(117 |
) |
Dividends
Paid
|
|
|
(147 |
) |
|
|
(149 |
) |
Acquisition
of Treasury Stock
|
|
|
(207 |
) |
|
|
(49 |
) |
Stock
Purchase Deposit Received
|
|
|
-- |
|
|
|
(8,131 |
) |
Stock
Purchase Deposit Refunded
|
|
|
-- |
|
|
|
4,556 |
|
Net
Cash Provided by Financing Activities
|
|
|
15,767 |
|
|
|
10,393 |
|
|
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
3,409 |
|
|
|
(4,629 |
) |
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS – BEGINNING
|
|
|
|
|
|
|
|
|
OF
PERIOD
|
|
|
10,007 |
|
|
|
7,363 |
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
|
$ |
13,416 |
|
|
$ |
2,734 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTARY
CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
Interest
Paid on Deposits and Borrowed Funds
|
|
$ |
1,817 |
|
|
$ |
1,969 |
|
Income
Taxes Paid
|
|
|
177 |
|
|
|
-- |
|
Market
Value Adjustment for Gain on Securities
|
|
|
|
|
|
|
|
|
Available-for-Sale
|
|
|
1,081 |
|
|
|
8,694 |
|
|
|
|
|
|
|
|
|
|
See accompaning 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”). 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 six month period ended December
31, 2009, is not necessarily indicative of the results which may be expected for
the fiscal year ending June 30, 2010.
The
Company follows accounting standards set by the Financial Accounting Standards
Board (the “FASB”). The FASB sets generally accepted accounting principles
(“GAAP”) that we follow to ensure we consistently report our financial
condition, results of operations and cash flows. References to GAAP
issued by the FASB in these footnotes are to the FASB Accounting Standards
Codification (the “Codification” or the “ASC”). The FASB established
the Codification as the source of authoritative accounting principles effective
for interim and annual periods ending on or after September 15,
2009. Prior FASB standards are no longer being referenced by the
FASB, and the Company adopted the Codification as of September 30,
2009. The adoption did not have an impact on our financial position
or results of operations.
In
accordance with the subsequent events topic of the ASC, the Company evaluates
events and transactions that occur after the balance sheet date for potential
recognition in the financial statements. The effects of all
subsequent events that provide additional evidence of conditions that existed at
the balance sheet date are recognized in the financial statements as of December
31, 2009. In preparing these financial statements, the Company
evaluated the events and transactions that occurred from December 31, 2009
through February 16, 2010, the date these financial statements were
issued.
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, Home Federal Bank, formerly named Home Federal Savings and
Loan Association, completed its reorganization to the mutual holding company
form of organization and formed Home Federal Bancorp, Inc. of Louisiana (the
“Company”) to serve as the 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 63.8%
of our outstanding common stock at December 31, 2009. The Bank is a
federally chartered, stock savings and loan association and is subject to
federal regulation by the Federal Deposit Insurance Corporation and the Office
of Thrift Supervision. Services are provided to its customers by
three banking offices and one agency office, 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.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Summary
of Accounting Policies (continued)
Nature
of Operations (continued)
In
December 2009, Home Federal Bank acquired land in North Bossier which is
expected to include a full service branch office and leasable Class A office
space. The Bank expects to open a temporary office in North Bossier by the
second half of calendar year 2010, followed by construction of the permanent
facility. The Bank currently owns land in South Bossier and expects to begin
construction of a branch office on that site immediately following development
of the North Bossier site.
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.
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.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Summary
of Accounting Policies (continued)
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.
The
allowance for loan losses is evaluated on a regular basis by management and is
based upon management’s periodic review of the collectability of the loans in
light of historical experience, the nature and volume of the loan portfolio,
adverse situations that may affect the borrower’s ability to repay, estimated
value of the underlying collateral and prevailing economic
conditions. The evaluation is inherently subjective as it requires
estimates that are susceptible to significant revision as more information
becomes available.
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 present value of expected future cash flows or the
fair value of the collateral of the loan. If the present value of
expected future cash flows or 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. Loans are classified as substandard and placed on non-accrual
status when they 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.
It should
be understood that estimates of future loan losses involve an exercise of
judgment. While it is possible that in particular periods, the
Company may sustain losses, which are substantial relative to the allowance for
loan losses, it is the judgment of management that the allowance for loan losses
reflected in the accompanying statements of condition is adequate to absorb
possible losses in the existing loan portfolio.
Off-Balance
Sheet Credit Related Financial Instruments
|
|
In the
ordinary course of business, the Bank has entered into commitments to extend
credit. Such financial instruments are recorded when they are
funded.
Foreclosed
Assets
Assets
acquired through, or in lieu of, loan foreclosure are held-for-sale and are
transferred to other real estate owned at the lower of cost or current fair
value minus estimated cost to sell as of the date of
foreclosure. Cost is defined as the lower of the fair value of the
property or the recorded investment in the loan. Subsequent to
foreclosure, valuations are periodically performed by management and the assets
are carried at the lower of carrying amount or fair value less cost to
sell.
Premises
and Equipment
Land is
carried at cost. Buildings and equipment are carried at cost less
accumulated depreciation computed on the straight-line method over the estimated
useful lives of the assets.
Income
Taxes
The
Company and its wholly-owned subsidiary file a consolidated Federal income tax
return on a fiscal year basis. Each entity will pay its pro-rata
share of income taxes in accordance with a written tax-sharing
agreement.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Summary
of Accounting Policies (continued)
Income
Taxes (continued)
The
Company accounts for income taxes on the asset and liability
method. Deferred tax assets and liabilities are recorded based on the
difference between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes, computed using enacted tax
rates. A valuation allowance, if needed, reduces deferred tax assets
to the expected amount most likely to be realized. Realization of deferred tax
assets is dependent upon the generation of a sufficient level of future taxable
income and recoverable taxes paid in prior years. Although
realization is not assured, management believes it is more likely than not that
all of the deferred tax assets will be realized. Current taxes are
measured by applying the provisions of enacted tax laws to taxable income to
determine the amount of taxes receivable or payable.
While the
Bank is exempt from Louisiana income tax, it is subject to the Louisiana Ad
Valorem Tax, commonly referred to as the Louisiana Shares Tax, which is based on
stockholders’ equity and net income.
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.
The
amortized cost and fair value of securities, with gross unrealized gains and
losses, follows:
|
|
December
31, 2009
|
|
|
|
|
|
|
Gross
|
|
|
Gross
|
|
|
|
|
|
|
Amortized
|
|
|
Unrealized
|
|
|
Unrealized
|
|
|
Fair
|
|
|
|
Cost
|
|
|
Gains
|
|
|
Losses
|
|
|
Value
|
|
Securities
Available-for-Sale:
|
|
(In
Thousands)
|
|
Debt
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLMC
Mortgage-Backed Certificates
|
|
$ |
10,791 |
|
|
$ |
401 |
|
|
$ |
2 |
|
|
$ |
11,190 |
|
FNMA
Mortgage-Backed Certificates
|
|
|
65,779 |
|
|
|
1,979 |
|
|
|
2 |
|
|
|
67,756 |
|
GNMA
Mortgage-Backed Certificates
|
|
|
130 |
|
|
|
1 |
|
|
|
1 |
|
|
|
130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Debt Securities
|
|
|
76,700 |
|
|
|
2,381 |
|
|
|
5 |
|
|
|
79,076 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
244,550
Shares, AMF ARM Fund
|
|
|
2,415 |
|
|
|
-- |
|
|
|
630 |
|
|
|
1,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Securities Available-for-Sale
|
|
$ |
79,115 |
|
|
$ |
2,381 |
|
|
$ |
635 |
|
|
$ |
80,861 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
Held-to-Maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GNMA
Mortgage-Backed Certificates
|
|
$ |
228 |
|
|
$ |
11 |
|
|
|
-- |
|
|
$ |
239 |
|
FNMA
Mortgage-Backed Certificates
|
|
|
82 |
|
|
|
2 |
|
|
|
-- |
|
|
|
84 |
|
FHLMC
Mortgage-Backed Certificates
|
|
|
29 |
|
|
|
-- |
|
|
|
-- |
|
|
|
29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Debt Securities
|
|
|
339 |
|
|
|
13 |
|
|
|
-- |
|
|
|
352 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Securities (Non-Marketable)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,378
Shares - Federal Home Loan Bank
|
|
|
1,838 |
|
|
|
-- |
|
|
|
-- |
|
|
|
1,838 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Securities Held-to-Maturity
|
|
$ |
2,177 |
|
|
$ |
13 |
|
|
|
-- |
|
|
$ |
2,190 |
|
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note
2.
|
Securities
(continued)
|
|
|
June
30, 2009
|
|
|
|
|
|
|
Gross
|
|
|
Gross
|
|
|
|
|
|
|
Amortized
|
|
|
Unrealized
|
|
|
Unrealized
|
|
|
Fair
|
|
|
|
Cost
|
|
|
Gains
|
|
|
Losses
|
|
|
Value
|
|
Securities
Available-for-Sale:
|
|
(In
Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLMC
Mortgage-Backed Certificates
|
|
$ |
14,237 |
|
|
$ |
333 |
|
|
$ |
10 |
|
|
$ |
14,560 |
|
FNMA
Mortgage-Backed Certificates
|
|
|
75,194 |
|
|
|
1,197 |
|
|
|
166 |
|
|
|
76,225 |
|
GNMA
Mortgage-Backed Certificates
|
|
|
136 |
|
|
|
1 |
|
|
|
2 |
|
|
|
135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Debt Securities
|
|
|
89,567 |
|
|
|
1,531 |
|
|
|
178 |
|
|
|
90,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
244,550
Shares, AMF ARM Fund
|
|
|
2,415 |
|
|
|
-- |
|
|
|
688 |
|
|
|
1,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Securities Available-for-Sale
|
|
$ |
91,982 |
|
|
$ |
1,531 |
|
|
$ |
866 |
|
|
$ |
92,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
Held-to-Maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GNMA
Mortgage-Backed Certificates
|
|
$ |
260 |
|
|
$ |
10 |
|
|
|
-- |
|
|
$ |
270 |
|
FNMA
Mortgage-Backed Certificates
|
|
|
88 |
|
|
|
1 |
|
|
|
-- |
|
|
|
89 |
|
FHLMC
Mortgage-Backed Certificates
|
|
|
30 |
|
|
|
-- |
|
|
|
-- |
|
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Debt Securities
|
|
|
378 |
|
|
|
11 |
|
|
|
-- |
|
|
|
389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Securities (Non-Marketable)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,064
Shares - Federal Home Loan Bank
|
|
|
1,806 |
|
|
|
-- |
|
|
|
-- |
|
|
|
1,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Securities Held-to-Maturity
|
|
$ |
2,184 |
|
|
$ |
11 |
|
|
$ |
-- |
|
|
$ |
2,195 |
|
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note
2.
|
Securities
(continued)
|
The
amortized cost and fair value of debt securities by contractual maturity at
December 31, 2009, follows:
|
|
Available-for-Sale
|
|
Held-to-Maturity
|
|
|
Amortized
|
|
Fair
|
|
Amortized
|
|
Fair
|
|
|
Cost
|
|
Value
|
|
Cost
|
|
Value
|
|
|
|
|
(In
Thousands)
|
|
|
Within
One Year or Less
|
$ |
--
|
|
$
|
-- |
|
$ |
--
|
|
$ |
--
|
One
through Five Years
|
|
--
|
|
|
-- |
|
|
26
|
|
|
26
|
After
Five through Ten Years
|
|
687
|
|
|
695 |
|
|
128
|
|
|
131
|
Over
Ten Years
|
|
76,013
|
|
|
78,381
|
|
|
185
|
|
|
195
|
|
|
|
|
|
|
|
|
|
|
Total
|
$ |
76,700
|
|
$ |
79,076
|
|
$ |
339
|
|
$ |
352
|
For the
six months ended December 31, 2009 and 2008, proceeds from the sale of
securities available-for-sale amounted to $4.7 million and $2.0 million,
respectively. Gross realized gains amounted to $186,000 and $33,000,
respectively.
The
following tables show information pertaining to gross unrealized losses on
securities available-for-sale at December 31, 2009 and June 30, 2009, aggregated
by investment category and length of time that individual securities have been
in a continuous loss position. There were no unrealized losses on
securities held-to-maturity at December 31, 2009 or June 30, 2009.
|
|
December
31, 2009
|
|
|
|
Less
Than Twelve Months
|
|
|
Over
Twelve Months
|
|
|
|
Gross
|
|
|
|
|
|
Gross
|
|
|
|
|
|
|
Unrealized
|
|
|
Fair
|
|
|
Unrealized
|
|
|
Fair
|
|
|
|
Losses
|
|
|
Value
|
|
|
Losses
|
|
|
Value
|
|
Securities
Available-for-Sale:
|
|
|
|
|
(In
Thousands)
|
|
|
|
Debt
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-Backed
Securities
|
|
$ |
1 |
|
|
$ |
137 |
|
|
$ |
4 |
|
|
$ |
1,640 |
|
Marketable
Equity Securities
|
|
|
-- |
|
|
|
-- |
|
|
|
630 |
|
|
|
1,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Securities Available-for-Sale
|
|
$ |
1 |
|
|
$ |
137 |
|
|
$ |
634 |
|
|
$ |
3,425 |
|
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note
2. Securities
(Continued)
|
|
|
|
|
|
Less
Than Twelve Months
|
|
|
Over
Twelve Months
|
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair
Value
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair
Value
|
|
|
|
Securities
Available-for-Sale:
|
|
|
|
|
(In
Thousands)
|
|
|
|
Debt
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-Backed
Securities
|
|
$ |
10 |
|
|
$ |
864 |
|
|
$ |
168 |
|
|
$ |
23,801 |
|
Marketable
Equity Securities
|
|
|
-- |
|
|
|
-- |
|
|
|
688 |
|
|
|
1,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Securities Available-for-Sale
|
|
$ |
10 |
|
|
$ |
864 |
|
|
$ |
856 |
|
|
$ |
25,528 |
|
The
Company’s investment in equity securities consists primarily of shares of an
adjustable rate mortgage loan mutual fund. The unrealized losses
associated with this fund were primarily caused by the investment downgrade of
certain non-agency private label mortgage-backed securities held by the fund and
uncertainty in spreads in the bond market for mortgage-related securities along
with the performance of a small number of the bonds within the
fund. Based on management’s assessment of the financial condition of
the Company, the Company has the ability and intent to hold these securities
until a recovery of fair value occurs, and accordingly, the Company does not
consider this investment to be other-than-temporarily impaired at December 31,
2009.
The
unrealized losses on the Company’s investment in mortgage-backed securities were
caused by interest rate changes. The contractual cash flows of these
investments are guaranteed by agencies of the U.S.
government. Accordingly, it is expected that these securities would
not be settled at a price less than the amortized cost of the Company’s
investment. Because the decline in market value is attributable to
changes in interest rates and not credit quality and because the Company has the
ability and intent to hold these investments until a recovery of fair value,
which may be maturity, the Company does not consider these investments to be
other-than-temporarily impaired at December 31, 2009.
At
December 31, 2009, securities with a carrying value of $3.9 million were pledged
to secure public deposits, and securities with a carrying value of $33.3 million
were pledged to secure FHLB advances.
3. Earnings
Per Share
Basic
earnings per common share are 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 six months ended December 31, 2009 and 2008 were calculated as
follows:
|
|
Three
Months Ended
December
31, 2009
|
|
|
Three
Months Ended
December
31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$ |
249,500 |
|
|
$ |
249,500 |
|
|
$ |
139,181 |
|
|
$ |
139,181 |
|
Weighted
average shares outstanding
|
|
|
3,243,737 |
|
|
|
3,243,737 |
|
|
|
3,258,275 |
|
|
|
3,258,275 |
|
Effect
of unvested common stock awards
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
Adjusted
weighted average shares used in
earnings
per share computation
|
|
|
3,243,737 |
|
|
|
3,243,737 |
|
|
|
3,258,275 |
|
|
|
3,258,275 |
|
Earnings
per share
|
|
$ |
0.08 |
|
|
$ |
0.08 |
|
|
$ |
0.04 |
|
|
$ |
0.04 |
|
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Earnings
Per Share (continued)
|
|
Six
Months Ended
December
31, 2009
|
|
|
Six
Months Ended
December
31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$ |
501,250 |
|
|
$ |
501,250 |
|
|
$ |
247,778 |
|
|
$ |
247,778 |
|
Weighted
average shares outstanding
|
|
|
3,250,893 |
|
|
|
3,250,893 |
|
|
|
3,256,074 |
|
|
|
3,256,074 |
|
Effect
of unvested common stock awards
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
Adjusted
weighted average shares used in
earnings
per share computation
|
|
|
3,250,893 |
|
|
|
3,250,893 |
|
|
|
3,256,074 |
|
|
|
3,256,074 |
|
Earnings
per share
|
|
$ |
0.15 |
|
|
$ |
0.15 |
|
|
$ |
0.08 |
|
|
$ |
0.08 |
|
For the
three months ended December 31, 2009 and 2008, there were weighted-average
outstanding options to purchase 158,134 and 169,741 shares, respectively, and
for the six months ended December 31, 2009 and 2008, there were weighted-average
outstanding options to purchase 158,134 and 169,861 shares, respectively, at
$9.85 per share. For the three and six months ended December 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.
4. 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”) 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
totaled 69,756 shares. 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 six months ended December 31, 2009,
12,611 shares vested and were released from the Recognition Plan Trust and
14,893 shares remained in the Recognition Plan Trust at December 31, 2009. As of
December 31, 2009, 2,290 Recognition Plan shares had been forfeited and are
available for future grant.
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.
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.
5. 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 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
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,
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. Stock
Option Plan (continued)
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 December 31, 2009, 16,255 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 FASB ASC Topic 718, Compensation – Stock
Compensation.
6. Fair
Value Accounting
The
Company has adopted FASB ASC Topic 820, Fair
Value Measurements and Disclosures, which requires disclosure of the fair
value of all financial instruments for which it is practical to estimate fair
value.
The
following methods and assumptions were used by the Bank in estimating fair
values of financial instruments:
Cash
and Cash Equivalents
|
|
The
carrying amount approximates the fair value of cash and cash
equivalents.
|
|
Securities
to be Held-to-Maturity and Available-for-Sale
|
|
Fair
values for investment securities, including mortgage-backed securities, are
based on quoted market prices, where available. If quoted market
prices are not available, fair values are based on quoted market prices of
comparable instruments. The carrying values of restricted or
non-marketable equity securities approximate their fair values. The
carrying amount of accrued investment income approximates its fair
value.
Mortgage
Loans Held-for-Sale
Because
these loans are normally disposed of within ninety days of origination, their
carrying value closely approximates the fair value of such loans.
Loans
Receivable
For
variable-rate loans that re-price frequently and with no significant changes in
credit risk, fair value approximates the carrying value. Fair values for other
loans are estimated using the discounted value of expected future cash
flows. Interest rates used are those being offered for loans with
similar terms to borrowers of similar credit quality. The carrying
amount of accrued interest receivable approximates its fair value.
Deposit
Liabilities
The fair
values for demand deposit accounts are, by definition, equal to the amount
payable on demand at the reporting date, that is, their carrying
amounts. Fair values for other deposit accounts are estimated using
the discounted value of expected future cash flows. The discount rate
is estimated using the rates currently offered for deposits of similar
maturities.
Advances
from Federal Home Loan Bank
The
carrying amount of short-term borrowings approximates their fair
value. The fair value of long-term debt is estimated using discounted
cash flow analyses based on current incremental borrowing rates for similar
borrowing arrangements.
Accrued
Interest Payable
The
carrying amount of accrued interest payable on deposits and borrowings
approximates the fair value.
Off-Balance
Sheet Credit-Related Instruments
Fair
values for outstanding mortgage loan commitments to lend are based on fees
currently charged to enter into similar agreements, taking into account the
remaining term of the agreements, customer credit quality, and changes in
lending rates. The fair value of interest rate floors and caps
contained in some loan servicing agreements and
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6.
|
Fair
Value Accounting (continued)
|
variable
rate mortgage loan contracts are considered immaterial within the context of
fair value disclosure requirements. Accordingly, no fair value
estimate is provided for these instruments.
At
December 31, 2009, the carrying amount and estimated fair values of the
Company’s financial instruments were as follows:
|
|
|
|
|
|
|
|
|
Carrying
|
|
|
Estimated
|
|
|
Carrying
|
|
|
Estimated
|
|
|
|
(In
Thousands)
|
|
|
(In
Thousands)
|
|
Financial
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$ |
13,416 |
|
|
$ |
13,416 |
|
|
$ |
10,007 |
|
|
$ |
10,007 |
|
Securities
Available-for-Sale
|
|
|
80,861 |
|
|
|
80,861 |
|
|
|
92,647 |
|
|
|
92,647 |
|
Securities to be
Held-to-Maturity
|
|
|
2,177 |
|
|
|
2,190 |
|
|
|
2,184 |
|
|
|
2,195 |
|
Loans
Held-for-Sale
|
|
|
1,540 |
|
|
|
1,540 |
|
|
|
1,277 |
|
|
|
1,277 |
|
Loans
Receivable
|
|
|
70,417 |
|
|
|
73,980 |
|
|
|
46,948 |
|
|
|
50,461 |
|
Accrued Interest
Receivable
|
|
|
562 |
|
|
|
562 |
|
|
|
543 |
|
|
|
543 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
95,794 |
|
|
|
98,208 |
|
|
|
86,146 |
|
|
|
88,314 |
|
Accrued Interest
Payable
|
|
|
118 |
|
|
|
118 |
|
|
|
157 |
|
|
|
157 |
|
Advances from
Borrowers
|
|
|
65 |
|
|
|
65 |
|
|
|
137 |
|
|
|
137 |
|
Advances from
FHLB
|
|
|
42,542 |
|
|
|
44,078 |
|
|
|
35,997 |
|
|
|
37,088 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Off-Balance
Sheet Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage Loan
Commitments
|
|
|
-- |
|
|
|
111 |
|
|
|
-- |
|
|
|
69 |
|
The
estimated fair values presented above could be materially different than net
realizable value and are only indicative of the individual financial
instrument’s fair value. Accordingly, these estimates should not be
considered an indication of the fair value of the Company taken as a
whole.
On July
1, 2008, the Company adopted SFAS No. 157, Fair Value Measurement, now
codified in FASB ASC Topic 820, Fair Value Measurements and
Disclosures ("ASC 820"). ASC 820 affirms a framework for
measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 was issued to establish a uniform
definition of fair value. The definition of fair value is
market-based as opposed to company-specific, and includes the
following:
§
|
Defines
fair value as the price that would be received to sell an asset or paid to
transfer a liability, in either case, through an orderly transaction
between market participants at a measurement date and establishes a
framework for measuring fair value;
|
§
|
Establishes
a three-level hierarchy for fair value measurements based upon the
transparency of inputs to the valuation of an asset or liability as of the
measurement date;
|
§
|
Nullifies
the guidance in EITF 02-3, which required the deferral of profit at
inception of a transaction involving a derivative financial instrument in
the absence of observable data supporting the valuation
technique;
|
§
|
Eliminates
large position discounts for financial instruments quoted in active
markets and requires consideration of the company’s creditworthiness when
valuing liabilities; and
|
§
|
Expands
disclosures about instrument that are measured at fair
value.
|
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. Fair
Value Accounting (continued)
ASC 820
establishes a three-level valuation hierarchy for disclosure of fair value
measurements. The valuation hierarchy favors the transparency of
inputs to the valuation of an asset or liability as of the measurement
date. The three levels are defined as follows:
§
|
Level
1 – Fair value is based upon quoted prices (unadjusted) for identical
assets or liabilities in active markets in which the Company can
participate.
|
§
|
Level
2 – Fair value is based upon (a) quoted prices for similar assets or
liabilities in active markets; (b) quoted prices for identical or similar
assets or liabilities in markets that are not active, that is, markets in
which there are few transactions for the asset or liability, the prices
are not current, or price quotations vary substantially either over time
or among market makers, or in which little information is released
publicly; (c) inputs other than quoted prices that are observable for the
asset or liability or (d) inputs that are derived principally from or
corroborated by observable market data by correlation or other
means.
|
§
|
Level
3 – Fair value is based upon inputs that are
unobservable for the asset or liability. These inputs reflect
the Company’s own assumptions about the assumptions that market
participants would use in pricing the asset or liability (including
assumptions about risk). These inputs are developed based on
the best information available in the circumstances, which include the
Company’s own data. The Company’s own data used to develop unobservable
inputs are adjusted if information indicates that market participants
would use different assumptions.
|
A
financial instrument’s categorization within the valuation hierarchy is based
upon the lowest level of input that is significant to the fair value
measurement.
Fair
values of assets and liabilities measured on a recurring basis at December 31,
2009 and June 30, 2009 are as follows:
December
31, 2009
|
|
Fair
Value Measurements Using:
|
|
|
|
|
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets
|
|
|
Significant
Other
Observable
Inputs
|
|
|
|
|
Available-for-Sale
|
|
|
|
|
(In Thousands) |
|
|
|
|
Debt
Securities
|
|
$ |
-- |
|
|
$ |
79,076 |
|
|
$ |
79,076 |
|
Equity
Securities
|
|
1,785
|
|
|
|
-- |
|
|
1,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
1,785 |
|
|
$ |
79,076 |
|
|
$ |
80,861 |
|
June 30,
2009
|
|
Fair
Value Measurements Using:
|
|
|
|
|
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets
|
|
|
Significant
Other
Observable
Inputs
|
|
|
|
|
Available-for-Sale
|
|
|
|
|
(In Thousands) |
|
|
|
|
Debt
Securities
|
|
$ |
-- |
|
|
$ |
90,920 |
|
|
$ |
90,920 |
|
Equity
Securities
|
|
1,727
|
|
|
|
-- |
|
|
1,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
1,727 |
|
|
$ |
90,920 |
|
|
$ |
92,647 |
|
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. Recent
Accounting Pronouncements
In June
2009, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No.
166, Accounting for Transfers
of Financial Assets, an amendment of FASB Statement No. 140 (“SFAS
166”). This statement is not yet included in the codification, but
will impact ASC 860, Transfers
and Servicing. This statement prescribes the information that
a reporting entity must provide in its financial reports about a transfer of
financial assets; the effects of a transfer on its financial position, financial
performance and cash flows; and a transferor’s continuing involvement in
transferred financial assets. Specifically, among other aspects, SFAS
166 amends Statement of Financial Standard No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, or SFAS
140, by removing the concept of a qualifying special-purpose entity from SFAS
140 and removes the exception from applying FIN 46(R) to variable interest
entities that are qualifying special-purpose entities. It also
modifies the financial-components approach used in SFAS 140. SFAS 166 is
effective for fiscal years beginning after November 15, 2009. The
Company is continuing to evaluate the impact that this pronouncement will have
on our consolidated financial position and results of operations.
In June
2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation
No. 46(R) (“SFAS 167”). This statement is not yet included in
the codification, but will impact ASC 810, Consolidation. This
statement amends FASB Interpretation No. 46, Consolidation of Variable Interest
Entities (revised December 2003) — an interpretation of ARB No. 51, or
FIN 46(R), to require an enterprise to determine whether its variable interest
or interests give it a controlling financial interest in a variable interest
entity. The primary beneficiary of a variable interest entity is the
enterprise that has both (1) the power to direct the activities of a variable
interest entity that most significantly impact the entity’s economic performance
and (2) the obligation to absorb losses of the entity that could potentially be
significant to the variable interest entity or the right to receive benefits
from the entity that could potentially be significant to the variable interest
entity. SFAS 167 also amends FIN 46(R) to require ongoing
reassessments of whether an enterprise is the primary beneficiary of a variable
interest entity. SFAS 167 is effective for fiscal years beginning
after November 15, 2009. The Company is continuing to evaluate the
impact that this pronouncement will have on our consolidated financial position
and results of operations.
In August
2009, the FASB issues Accounting Standards Update (“ASU”) 2009-05, Fair Value Measurements and
Disclosures, which updates ASC 820, Fair Value Measurements and
Disclosures. The updated guidance affirms that the objective
of fair value when the market for an asset is not active is the price that would
be received to sell the asset in an orderly transaction and clarifies and
includes additional factors for determining whether there has been a significant
decrease in market activity for an asset when the market for that asset is not
active. It also requires an entity to base its conclusion about
whether a transaction was not orderly on the weight of the
evidence. This guidance is effective beginning October 1,
2009. The Company does not expect that the guidance will have a
significant impact on our financial position or results of
operations.
The above
pronouncements are not expected to have a significant impact on the consolidated
financial statements of the Company.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
General
The
Company was formed by the Bank in connection with the Bank’s reorganization and
commenced operations on January 18, 2005. The Company’s results of
operations are primarily dependent on the results of the Bank, which became a
wholly owned subsidiary upon completion of the reorganization. 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
conditions 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.
Discussion
of Financial Condition Changes from June 30, 2009 to December 31,
2009
At
December 31, 2009, total assets amounted to $172.2 million compared to $154.8
million at June 30, 2009, an increase of approximately $17.5 million, or
11.3%. This increase was primarily due to an increase in loans
receivable and held for sale of $23.7 million, or 49.2%, an increase in cash and
cash equivalents of $3.4 million, or 34.1%, and an increase in premises and
equipment, net, of $1.9 million, partially offset by a decrease in the Company’s
securities investments of $11.8 million, or 12.4%.
The
increase in loans was primarily due to the origination of new loans by the
commercial lending department. The decrease in securities was caused
by normal principal pay downs and securities sold amounting to $13.0 million,
partially offset by an increase in the fair value of the securities of $1.1
million. The increase in premises and equipment is largely attributable to the
acquisition of land for $1.5 million, to be used for a new branch
location.
The
Company’s total liabilities amounted to $139.9 million at December 31, 2009, an
increase of approximately $16.4 million, or 13.3%, compared to total liabilities
of $123.5 million at June 30, 2009. The primary reason for the
increase in liabilities was due to an increase in deposits of $9.6 million, or
11.2%, and a $6.5 million, or 18.2%, increase in advances from the Federal Home
Loan Bank.
Stockholders’
equity increased $1.0 million, or 3.2%, to $32.3 million at December 31, 2009
compared to $31.3 million at June 30, 2009. This increase was
primarily the result of the change in the Company’s accumulated
other
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL
|
|
CONDITION
AND RESULTS OF OPERATIONS
(Continued)
|
comprehensive
income associated with the change in unrealized gain on securities
available-for-sale, net of tax, of $713,000, the recognition of net income of
$501,000 for the six months ended December 31, 2009, and the distribution of
shares associated with the Company’s Recognition and Retention Plan ("RRP") of
$124,000. These increases were offset by dividends of $147,000 paid
during the six months ended December 31, 2009, and the acquisition of treasury
shares at a cost of $208,000.
The Bank
is required to meet minimum capital standards promulgated by the Office of
Thrift Supervision (“OTS”). At December 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 Six Month Periods Ended December 31, 2009
and 2008
General
Net
income amounted to $249,000 for the three months ended December 31, 2009
compared to $139,000 for the same period in
2008, an increase of $110,000, or 79.1%. The increase was primarily
due to a $487,000, or 55.3%, increase in net interest income for the three
months ended December 31, 2009 compared to the same period in 2008 and a
$271,000 increase in gain on sales of investments and loans for the 2009 period
compared to none for the same period in 2008, partially offset by increases of
$596,000 in non-interest expense and $56,000 in income taxes. The increase in
net interest income for the three months ended December 31, 2009 was primarily
due to an increase in interest income and fees from higher loan originations as
a result of the hiring of additional loan officers since 2008, and a decrease in
the Company’s cost of funds for the three months ended December 31, 2009,
compared to the prior year period. The increase in non-interest
expense was primarily due to an increase in compensation and benefits expense
and other expenses associated with the Company’s growth, including the hiring of
officers in connection with the commencement of commercial lending activities
and the expansion and improvement of the Company's offices.
For the
six months ended December 31, 2009, net income amounted to $501,000, compared to
$248,000 for the
same period in 2008, an increase of $253,000, or 102.0%. The increase
was primarily due to an $898,000, or 51.3%, increase in net interest income and
a $286,000 increase in non-interest income, partially offset by increases of
$801,000 in non-interest expense and $130,000 in income taxes. The increase in
non-interest expense was primarily attributable to an increase of $623,000, or
77.3%, in compensation and benefits. Similar to the increase for the
quarter ended December 31, 2009, the increase in net interest income for the six
month period was primarily due to an increase in interest income and fees from
higher loan originations and a decrease in the Company’s cost of
funds.
Net Interest
Income
Net
interest income for the three months ended December 31, 2009 was $1.4 million,
an increase of $487,000, or 55.3%, in comparison to $880,000 for the three
months ended December 31, 2008. This increase was primarily due to an
increase of $364,000 in total interest income and a decrease of $123,000 in the
Company’s cost of funds. The increase in total interest income was
primarily due to an increase in interest income generated from loans of
$679,000, partially offset by decreases in interest income from mortgage-backed
securities, investment securities and other interest-earning assets of $299,000,
$14,000 and $2,000, respectively. The cost of funds from both deposits and
Federal Home Loan Bank borrowings decreased during the period.
Net
interest income for the six months ended December 31, 2009, was $2.6 million, an
increase of $898,000, or 51.3%, in comparison to $1.8 million for the six months
ended December 31, 2008. This increase was primarily due to an
increase of $704,000 in total interest income, and a decrease of $194,000 in
total interest expense. The increase in total interest income was
primarily due to an increase in interest income generated from loans of $1.2
million, partially offset by decreases in interest income generated from
mortgage-backed securities, investment securities and other interest-earning
assets of $435,000, $35,000 and $16,000, respectively. The cost of funds from
both deposits and Federal Home Loan Bank borrowings decreased during this
period.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL
|
|
CONDITION
AND RESULTS OF OPERATIONS
(Continued)
|
The
Company’s average interest rate spread was 2.50% and 2.82% for the three and six
months ended December 31, 2009, compared to 1.69% and 1.74% for the three and
six months ended December 31, 2008. The Company’s net interest margin
was 2.56% and 3.33% for the three and six months ended December 31, 2009,
compared to 2.42% and 2.48% for the three and six months ended December 31,
2008. The increase in net interest margin and average interest rate
spread is attributable primarily to the increase in commercial loan volume and
related income in conjunction with a decrease in cost associated with deposits
and advances from the Federal Home Loan Bank. While the interest rate spread
remained relatively stable, net interest income increased primarily due to the
increase in volume of average interest-earning assets.
Provision for Losses on
Loans
Based on
an analysis of historical experience, the volume and type of lending conducted
by Home Federal, 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’s
loan portfolio, no provisions for loan losses were made during the three and six
months ended December 31, 2009 or 2008. Home Federal’s allowance for
loan losses was $453,000, or 0.64% of total loans, at December 31, 2009 compared
to $226,000, or 0.78%, of total loans at December 31, 2008. At
December 31, 2009, Home Federal had one non-performing loan of
$15,000. At December 31, 2008, Home Federal had no non-performing
loans or other non-performing assets. There can be no assurance that
the loan loss allowance will be sufficient to cover losses on non-performing
assets in the future.
Non-interest
Income
Total
non-interest income amounted to $285,000 for the three months ended December 31,
2009, compared to $10,000 for the same period in 2008. The increase
was primarily due to an increase of $186,000 in gain on sale of investments and
an increase of $85,000 in gain on sale of loans for the three months ended
December 31, 2009 compared to none for the same period in 2008.
Total
non-interest income amounted to $339,000 for the six months ended December 31,
2009, compared to $53,000 for the same period in 2008. The increase
was primarily due to an increase in gain on sale of securities of $153,000 and
an increase in gain on sale of loans of $129,000.
Non-interest
Expense
Total
non-interest expense increased $596,000, or 87.8%, for the three months ended
December 31, 2009 compared to the prior year period. The increase in
non-interest expense was primarily due to an increase in compensation and
benefits expense of $408,000, or 99.8%, over the prior year period and an
increase in other operating expenses of $198,000, or 101.0%.
Total
non-interest expense increased $801,000, or 56.1%, for the six months ended
December 31, 2009 compared to the prior year period. The increase was
primarily due to an increase of $623,000, or 77.3%, in compensation and benefits
expense, an increase in other operating expense of $144,000, and the decrease of
$133,000 in the recognition of merger and stock issuance costs. The increase in
all non-interest expense categories for the three and six month periods ended
December 31, 2009 are primarily attributable to the hiring of new personnel and
operating costs of new and expanding commercial loan activities.
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 six-months ended
December 31, 2008 was a result of this action.
The
increase in compensation and benefits expense was a result of normal
compensation increases including stock options and recognition and retention
plan expense and the hiring of additional commercial loan officers and Home
Federal's
President and Chief Operating Officer.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL
|
|
CONDITION
AND RESULTS OF OPERATIONS
(Continued)
|
Compensation
expense recognized by the Company for its Stock Option and Recognition and
Retention Plans amounted to $15,000 and $32,000, respectively, for the three
months ended December 31, 2009 and 2008, and $29,000 and $63,000, respectively,
for the six months ended December 31, 2009 and 2008.
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 six months ended
December 31, 2009, the Company recognized franchise and bank shares tax expense
of $37,000 and $75,000, respectively.
Income
Taxes
Income
taxes amounted to $128,000 and $72,000 for the three months ended December 31,
2009 and 2008, respectively, resulting in effective tax rates of 34.0% for both
periods. Income taxes amounted to $258,000 and $128,000 for the six months ended
December 31, 2009 and 2008, respectively, resulting in an effective tax rate of
34.0% for both periods.
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 $1.3 million at December
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 provides an additional source of funds. At
December 31, 2009, Home Federal Bank had $42.5 million in advances from the
Federal Home Loan Bank of Dallas.
At
December 31, 2009, Home Federal Bank had outstanding loan commitments of $11.1
million to originate loans. At December 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 us, 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.
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 December 31, 2009, Home Federal Bank exceeded each
of its capital requirements with ratios of 17.36%, 17.36% and 43.42%,
respectively.
HOME
FEDERAL BANCORP, INC. OF LOUISIANA
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL
|
|
CONDITION
AND RESULTS OF OPERATIONS
(Continued)
|
Off-Balance
Sheet Arrangements
At
December 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 Company’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
Chief 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 Chief 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 second quarter of fiscal 2010:
|
|
Total
Number of Shares
|
|
|
Average
Price
Paid
per
|
|
|
Total
Number of Shares Purchased as Part of
Publicly
Announced
Plans or
|
|
|
Maximum
Number of Shares that May Yet Be Purchased Under the Plans or
|
|
Month
#1 October 1, 2009 – October 31, 2009
|
|
|
-- |
|
|
$ |
-- |
|
|
|
-- |
|
|
|
95,130 |
|
Month
#2 November 1, 2009 – November 30, 2009
|
|
|
1,493 |
|
|
|
8.32 |
|
|
|
1,493 |
|
|
|
93,637 |
|
Month
#3 December 1, 2009 – December 31, 2009
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
93,637 |
|
Total
|
|
|
1,493 |
|
|
$ |
8.32 |
|
|
|
1,493 |
|
|
|
93,637 |
|
_____________________
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
|
|
Certification
Pursuant to 18 U.S.C Section
1350
|
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:
|
February
16, 2010
|
By:
|
/s/
Daniel R. Herndon
|
|
|
|
Daniel
R. Herndon
|
|
|
|
President
and Chief Executive Officer
|
|
|
|
|
|
|
|
|
Date:
|
February
16, 2010
|
By:
|
/s/
Clyde D. Patterson
|
|
|
|
Clyde
D. Patterson
|
|
|
|
Executive
Vice President and Chief Financial Officer
|
|
|
|
(principal
financial
officer)
|