Home Federal Bancorp, Inc. of Louisiana (NASDAQ: HFBL) reported net income of $638,000 for Q4 2024, down from $1.3 million in Q4 2023. For the full fiscal year 2024, net income was $3.6 million, compared to $5.7 million in FY 2023. The decrease was primarily due to lower net interest income and non-interest income, partially offset by decreased credit loss provisions and income taxes.
Key financial metrics for FY 2024:
Net interest margin: 3.08% (down from 3.73% in FY 2023)
Total assets: $637.5 million (3.5% decrease)
Net loans: $470.9 million (3.8% decrease)
Total deposits: $574.0 million (3.9% decrease)
Shareholders' equity: $52.8 million (4.5% increase)
The company adopted the CECL methodology for estimating credit losses on July 1, 2023, resulting in a $189,000 increase to the allowance for credit losses.
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Positive
Shareholders' equity increased by 4.5% to $52.8 million
Decrease in provision for credit losses by 95.4% for the full year
Increase in interest income by 19.7% for the full year
Cash and cash equivalents increased by 41.1% to $34.9 million
Negative
Net income decreased by 51% for Q4 and 37% for the full year
Net interest margin declined from 3.73% to 3.08% for the full year
Total assets decreased by 3.5% to $637.5 million
Net loans decreased by 3.8% to $470.9 million
Total deposits decreased by 3.9% to $574.0 million
Non-performing assets increased from $1.6 million to $2.0 million
News Market Reaction – HFBL
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On the day this news was published, HFBL gained 3.26%, reflecting a moderate positive market reaction.
Shreveport, Louisiana, July 26, 2024 (GLOBE NEWSWIRE) -- Home Federal Bancorp, Inc. of Louisiana (the “Company”) (Nasdaq: HFBL), the holding company of Home Federal Bank, reported net income for the three months ended June 30, 2024, of $638,000 compared to net income of $1.3 million reported for the three months ended June 30, 2023. The Company’s basic and diluted earnings per share were both $0.21, respectively, for the three months ended June 30, 2024, compared to basic and diluted earnings per share of $0.42 and $0.40, respectively, for the three months ended June 30, 2023. The Company reported net income of $3.6 million for the year ended June 30, 2024, compared to $5.7 million for the year ended June 30, 2023. The Company’s basic and diluted earnings per share were both $1.18 for the year ended June 30, 2024 compared to $1.89 and $1.80, respectively, for the year ended June 30, 2023.
The decrease in net income for the three months ended June 30, 2024, compared to the same period in 2023, resulted from a decrease in net interest income of $1.1 million, or 20.0%, partially offset by a decrease in non-interest expense of $207,000, or 4.9%, a decrease in provision for income taxes of $157,000, or 45.8%, a decrease in the provision of credit losses of $105,000, or 70.0%, and an increase in non-interest income of $2,000, or 0.4%, The decrease in net interest income for the three months ended June 30, 2024, compared to the same period in 2023, resulted from an increase in total interest expense of $1.2 million, or 50.5%, partially offset by an increase in total interest income of $70,000, or 0.9%. The Company’s average interest rate spread was 2.15% for the three months ended June 30, 2024, compared to 2.84% for the three months ended June 30, 2023. The Company’s net interest margin was 2.91% for the three months ended June 30, 2024, compared to 3.35% for the three months ended June 30, 2023.
The decrease in net income for the year ended June 30, 2024, compared to the year ended June 30, 2023, resulted from a decrease in net interest income of $2.6 million, or 12.1%, a decrease in non-interest income of $515,000, or 24.5%, and an increase in non-interest expense of $413,000, or 2.6%, partially offset by a decrease in the provision of credit losses of $828,000, or 95.4%, and a decrease in provision for income taxes of $590,000, or 55.3%. The decrease in net interest income for the year ended June 30, 2024, compared to the year ended June 30, 2023, resulted from an increase in total interest expense of $7.8 million, or 154.2%, partially offset by an increase in total interest income of $5.2 million, or 19.7%. The increase in total interest expense for the year ended June 30, 2024, compared to the year ended June 30, 2023, was primarily due to a $7.5 million, or 166.3% increase in interest expense on deposits. The increase in interest expense on deposits was primarily due to an $87.5 million, or 69.4%, increase in average balance of certificates of deposit, combined with a 181 basis point increase in rate paid on certificates of deposit for the year ended June 30, 2024, compared to the year ended June 30, 2023. The Company’s average interest rate spread was 2.38% for the year ended June 30, 2024, compared to 3.37% for the year ended June 30, 2023. The Company’s net interest margin was 3.08% for the year ended June 30, 2024, compared to 3.73% for the year ended June 30, 2023.
On July 1, 2023, the Company adopted the new current expected credit loss (“CECL”) methodology for estimating credit losses. This resulted in a $189,000 increase to the allowance for credit losses (the “ACL”) and a one-time cumulative adjustment resulted in a $189,000 decrease to stockholders’ equity. For purchased credit deteriorated loans, the Company applied the guidance under CECL using the prospective transition approach. As a result, the Company adjusted the amortized cost basis of the purchased credit deteriorated loans by $170,000 to reclassify the purchase discount to the allowance for credit losses on July 1, 2023. The ACL account increased $359,000 from these two transactions. No provision expense was recorded in the first quarter of fiscal 2024, a recovery of credit losses of $16,000 was recorded in the second quarter of fiscal 2024, a provision of $11,000 was recorded in the third quarter of fiscal 2024 and a provision of $45,000 was recorded in the fourth quarter of fiscal 2024. As of June 30, 2024, the ACL was $4.6 million, and the ratio of ACL to gross loans was 0.96%. As of June 30, 2023, the ACL was $5.2 million, and the ratio of ACL to gross loans was 1.05%.
The following tables set forth the Company’s average balances and average yields earned and rates paid on its interest-earning assets and interest-bearing liabilities for the periods indicated.
For the Three Months Ended June 30,
2024
2023
Average Balance
Average Yield/Rate
Average Balance
Average Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Loans receivable
$
485,859
5.85
%
$
511,045
5.39
%
Investment securities
98,277
2.13
121,911
2.07
Interest-earning deposits
19,094
4.97
19,282
5.28
Total interest-earning assets
$
603,230
5.21
%
$
652,238
4.77
%
Interest-bearing liabilities:
Savings accounts
$
75,523
1.18
%
$
88,790
0.33
%
NOW accounts
67,460
0.72
71,102
0.34
Money market accounts
78,543
2.53
128,377
1.78
Certificates of deposit
224,791
4.42
181,439
3.13
Total interest-bearing deposits
446,317
2.98
469,708
1.81
Other bank borrowings
7,149
8.38
8,319
8.29
FHLB advances
-
-
583
5.51
Total interest-bearing liabilities
$
453,466
3.07
%
$
478,610
1.93
%
For the Year Ended June 30,
2024
2023
Average Balance
Average Yield/Rate
Average Balance
Average Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Loans receivable
$
499,237
5.81
%
$
442,469
5.30
%
Investment securities
106,526
2.33
113,332
1.95
Interest-earning deposits
8,550
4.34
22,001
4.43
Total interest-earning assets
$
614,313
5.19
%
$
577,802
4.61
%
Interest-bearing liabilities:
Savings accounts
$
74,135
0.65
%
$
105,850
0.29
%
NOW accounts
67,224
0.53
63,074
0.26
Money market accounts
93,178
2.46
106,146
1.02
Certificates of deposit
213,662
4.15
126,156
2.34
Total interest-bearing deposits
448,199
2.68
401,226
1.12
Other bank borrowings
8,700
8.45
6,784
7.28
FHLB advances
3,119
5.77
1,623
4.87
Total interest-bearing liabilities
$
460,018
2.81
%
$
409,633
1.24
%
The $2,000 increase in non-interest income for the three months ended June 30, 2024, compared to the same period in 2023, resulted from an increase in gain on sale of loans of $19,000, an increase in other non-interest income of $9,000, and an increase in income on bank owned life insurance of $3,000 partially offset by a decrease in service charges on deposit accounts of $29,000. The $515,000 decrease in non-interest income for the year ended June 30, 2024, compared to the year ended June 30, 2023, resulted from an increase in loss on sale of real estate of $415,000, a decrease in gain on sale of loans of $201,000, and a decrease in gain on sale of fixed assets of $4,000, partially offset by an increase in service charges on deposit accounts of $48,000, an increase in gain on sale of securities of $26,000, an increase in other non-interest income of $24,000, and an increase in income from bank owned life insurance of $7,000. The decrease in gain on sale of loans for the year ended June 30, 2024, was primarily due to a decrease in mortgage loan originations caused by the higher interest rate environment. The loss on sale of real estate for the year ended June 30, 2024, was primarily due to the bulk sale of twenty-one distressed rental properties in December 2023.
The $207,000 decrease in non-interest expense for the three months ended June 30, 2024, compared to the same period in 2023, resulted from decreases in data processing expense of $136,000, deposit insurance premium expense of $44,000, advertising expense of $43,000, professional fees of $33,000, amortization of core deposit intangible expense of $27,000, loan and collection expense of $19,000, and compensation and benefits expense of $7,000, partially offset by increases in occupancy and equipment expense of $37,000, franchise and bank shares tax expense of $23,000, audit and examination fees of $22,000, and other non-interest expense of $20,000. The $413,000 increase in non-interest expense for the year ended June 30, 2024, compared to the year ended June 30, 2023, resulted from increases in compensation and benefits expense of $436,000, audit and examination fees of $235,000, amortization of core deposit intangible expense of $160,000, franchise and bank shares tax expense of $125,000, other non-interest expense of $125,000, occupancy and equipment expense of $122,000, deposit insurance premium expense of $96,000, and advertising expense of $20,000, partially offset by decreases in professional fees of $676,000, data processing expense of $187,000, and loan and collection expense of $43,000. The decrease in professional fees for the year ended June 30, 2024, was primarily due to the acquisition of First National Bank of Benton, which increased professional fees for the year ended June 30, 2023. The increases in compensation and benefits expense were primarily due to additional branch and back office staff.
Total assets decreased $23.4 million, or 3.5%, from $660.9 million at June 30, 2023 to $637.5 million at June 30, 2024. The decrease in assets was comprised of decreases in net loans receivable of $18.6 million, or 3.8%, from $489.5 million at June 30, 2023 to $470.9 million at June 30, 2024, investment securities of $18.0 million, or 15.8%, from $114.0 million at June 30, 2023 to $96.0 million at June 30, 2024, core deposit intangible of $334,000, or 21.8%, from $1.5 million at June 30, 2023 to $1.2 million at June 30, 2024, deferred tax asset of $132,000, or 10.1%, from $1.3 million at June 30, 2023 to $1.2 million at June 30, 2024, other assets of $75,000, or 5.3%, from $1.4 million at June 30, 2023 to $1.3 million at June 30, 2024, accrued interest receivable of $15,000, or 0.8%, from $1.8 million at June 30, 2023 to $1.78 million at June 30, 2024, and partially offset by increases in cash and cash equivalents of $10.2 million, or 41.1%, from $24.8 million at June 30, 2023 to $34.9 million at June 30, 2024, loans-held-for-sale of $1.7 million, from $4,000 at June 30, 2023 to $1.7 million at June 30, 2024, premises and equipment of $1.7 million, or 10.5%, from $16.6 million at June 30, 2023 to $18.3 million at June 30, 2024, bank owned life insurance of $110,000, or 1.6%, from $6.7 million at June 30, 2023 to $6.8 million at June 30, 2024, and real estate owned of $50,000, or 13.6% from $368,000 at June 30, 2023 to $418,000 at June 30, 2024. The decrease in investment securities was primarily due to $16.8 million in principal payments. The increase in cash and cash equivalents from $24.8 million at June 30, 2023 to $34.9 million at June 30,2024 was mainly due to decreases in loans receivable and investment securities.
Total liabilities decreased $25.7 million, or 4.2%, from $610.4 million at June 30, 2023 to $584.7 million at June 30, 2024. The decrease in liabilities was comprised of decreases in total deposits of $23.4 million, or 3.9%, from $597.4 million at June 30, 2023 to $574.0 million at June 30, 2024, other borrowings of $1.6 million, or 18.1%, from $8.6 million at June 30, 2023 to $7.0 million at June 30, 2024, other accrued expenses and liabilities of $727,000, or 18.6%, from $3.9 million at June 30, 2023 to $3.2 million at June 30, 2024, and advances from borrowers for taxes and insurance of $33,000, or 6.0%, from $554,000 at June 30, 2023 to $521,000 at June 30, 2024,. The decrease in deposits resulted from decreases in money market deposits of $28.7 million, or 25.1%, from $114.2 million at June 30, 2023 to $85.5 million at June 30, 2024, non-interest deposits of $15.2 million, or 10.5%, from $145.6 million at June 30, 2023 to $130.3 million at June 30, 2024, and savings deposits of $5.3 million, or 6.4%, from $81.9 million at June 30, 2023 to $76.6 million at June 30, 2024, partially offset by increases in certificates of deposit of $24.5 million, or 12.9%, from $190.4 million at June 30, 2023 to $214.9 million at June 30, 2024, and NOW accounts of $1.3 million, or 2.0%, from $65.3 million at June 30, 2023 to $66.6 million at June 30, 2024. The Company had no balances in brokered deposits at June 30, 2024 compared to $3.0 million at June 30, 2023. There was a shift of balances between deposit categories due to customers moving funds from lower yielding categories to higher yielding categories.
At June 30, 2024, the Company had $2.0 million of non-performing assets (defined as non-accruing loans, accruing loans 90 days or more past due, and other real estate owned) compared to $1.6 million on non-performing assets at June 30, 2023, consisting of three commercial non-real estate loans, five single-family residential loans, four home equity line-of-credit loans, and three single-family residences in other real estate owned at June 30, 2024, compared to seven single-family residential loans, two commercial non-real estate loans, one consumer loan and two single-family residences in other real estate owned at June 30, 2023. At June 30, 2024 the Company had five commercial non-real-estate loans, six single family residential loans, four home-equity line-of-credit loans, and one auto loan classified as substandard, compared to ten single family residential loans, three commercial non-real-estate loans, two commercial real estate loans, and three home equity line-of-credit loans classified as substandard at June 30, 2023. There were no loans classified as doubtful at June 30, 2024 or June 30, 2023.
Shareholders’ equity increased $2.3 million, or 4.5%, from $50.5 million at June 30, 2023 to $52.8 million at June 30, 2024. The increase in shareholders’ equity was comprised of current year net income of $3.6 million, the vesting of restricted stock awards, stock options, and the release of employee stock ownership plan shares totaling $501,000, proceeds from the issuance of common stock from the exercise of stock options of $373,000, and a decrease in the Company’s accumulated other comprehensive loss of $39,000, partially offset by dividends paid totaling $1.6 million, stock repurchases of $486,000, and CECL implementation totaling $189,000.
Home Federal Bancorp, Inc. of Louisiana is the holding company for Home Federal Bank which conducts business from its ten full-service banking offices and home office in northwest Louisiana.
Statements contained in this news release which are not historical facts may be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe”, “expect”, “anticipate”, “estimate”, and “intend”, or future or conditional verbs such as “will”, “would”, “should”, “could”, or “may”. We undertake no obligation to update any forward-looking statements.
In addition to factors previously disclosed in the reports filed by the Company with the Securities and Exchange Commission and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the strength of the United States economy in general and the strength of the local economies in which the Company conducts its operations; general economic conditions; legislative and regulatory changes; monetary and fiscal policies of the federal government; changes in tax policies, rates and regulations of federal, state and local tax authorities including the effects of the Tax Reform Act; changes in interest rates, deposit flows, the cost of funds, demand for loan products and the demand for financial services, competition, changes in the quality or composition of the Company’s loans, investment and mortgage-backed securities portfolios; geographic concentration of the Company’s business; fluctuations in real estate values; the adequacy of loan loss reserves; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; changes in accounting principles, policies or guidelines and other economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services and fees.
HOME FEDERAL BANCORP, INC. OF LOUISIANA
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In thousands except share and per share data)
June 30, 2024
June 30, 2023
(Unaudited)
ASSETS
Cash and Cash Equivalents (Includes Interest-Bearing Deposits with Other Banks of $25,505 and $22,215 at June 30, 2024 and June 30, 2023, Respectively)
$
34,948
$
24,765
Securities Available-for-Sale (amortized cost June 30, 2024: $30,348; June 30, 2023: $42,910, Respectively)
27,037
39,551
Securities Held-to-Maturity (fair value June 30, 2024: $54,450; June 30, 2023: $59,678, Respectively)
67,302
72,879
Other Securities
1,614
1,544
Loans Held-for-Sale
1,733
4
Loans Receivable, Net of Allowance for Credit Losses (June 30, 2024: $4,574; June 30, 2023: $5,173, Respectively)
470,852
489,493
Accrued Interest Receivable
1,775
1,790
Premises and Equipment, Net
18,303
16,561
Bank Owned Life Insurance
6,810
6,700
Goodwill
2,990
2,990
Core Deposit Intangible
1,199
1,533
Deferred Tax Asset
1,181
1,313
Real Estate Owned
418
368
Other Assets
1,350
1,424
Total Assets
$
637,512
$
660,915
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Deposits:
Non-interest bearing
$
130,334
$
145,553
Interest-bearing
443,673
451,808
Total Deposits
574,007
597,361
Advances from Borrowers for Taxes and Insurance
521
554
Other Borrowings
7,000
8,550
Other Accrued Expenses and Liabilities
3,181
3,908
Total Liabilities
584,709
610,373
SHAREHOLDERS’ EQUITY
Preferred Stock - $0.01 Par Value; 10,000,000 Shares Authorized; None Issued and Outstanding
-
-
Common Stock - $0.01 Par Value; 40,000,000 Shares Authorized: 3,144,168 and 3,133,351 Shares Issued and Outstanding at June 30, 2024 and June 30, 2023, Respectively
32
31
Additional Paid-in Capital
41,739
40,981
Unearned ESOP Stock
(408
)
(523
)
Retained Earnings
14,055
12,707
Accumulated Other Comprehensive Loss
(2,615
)
(2,654
)
Total Shareholders’ Equity
52,803
50,542
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
637,512
$
660,915
HOME FEDERAL BANCORP, INC. OF LOUISIANA
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (In thousands except share and per share data)
Three Months Ended
Year Ended
June 30,
June 30,
2024
2023
2024
2023
INTEREST INCOME
Loans, including fees
$
7,064
$
6,866
$
29,016
$
23,452
Investment securities
78
146
651
251
Mortgage-backed securities
441
483
1,826
1,954
Other interest-earning assets
236
254
371
974
Total interest income
7,819
7,749
31,864
26,631
INTEREST EXPENSE
Deposits
3,310
2,119
11,998
4,506
Federal Home Loan Bank borrowings
-
8
180
79
Other bank borrowings
149
172
735
494
Total interest expense
3,459
2,299
12,913
5,079
Net interest income
4,360
5,450
18,951
21,552
PROVISION FOR CREDIT LOSSES
45
150
40
868
Net interest income after provision for credit losses
4,315
5,300
18,911
20,684
NON-INTEREST INCOME
Gain on sale of loans
81
62
265
466
Loss on sale of real estate
-
-
(415
)
-
Gain on sale of fixed assets
-
-
-
4
Gain on sale of securities
-
-
26
-
Income on bank owned life insurance
28
25
110
103
Service charges on deposit accounts
373
402
1,524
1,476
Other income
24
15
74
50
Total non-interest income
506
504
1,584
2,099
NON-INTEREST EXPENSE
Compensation and benefits
2,387
2,394
9,524
9,088
Occupancy and equipment
577
540
2,202
2,080
Data processing
142
278
655
842
Audit and examination fees
93
71
549
314
Franchise and bank shares tax
168
145
656
531
Advertising
58
101
360
340
Professional fees
114
147
557
1,233
Loan and collection
31
50
155
198
Amortization core deposit intangible
76
103
334
174
Deposit insurance premium
104
148
393
297
Other expenses
247
227
1,041
916
Total non-interest expense
3,997
4,204
16,426
16,013
Income before income taxes
824
1,600
4,069
6,770
PROVISION FOR INCOME TAX EXPENSE
186
343
476
1,066
NET INCOME
$
638
$
1,257
$
3,593
$
5,704
EARNINGS PER SHARE
Basic
$
0.21
$
0.42
$
1.18
$
1.89
Diluted
$
0.21
$
0.40
$
1.18
$
1.81
Three Months Ended
Year Ended
June 30,
June 30,
2024
2023
2024
2023
Selected Operating Ratios(1):
Average interest rate spread
2.15
%
2.84
%
2.38
%
3.37
%
Net interest margin
2.91
%
3.35
%
3.08
%
3.73
%
Return on average assets
0.40
%
0.73
%
0.55
%
0.92
%
Return on average equity
5.07
%
9.24
%
7.01
%
11.57
%
Asset Quality Ratios(2):
Non-performing assets as a percent of total assets
0.31
%
0.24
%
0.31
%
0.24
%
Allowance for credit losses as a percent of non-performing loans(3)
228.70
%
417.85
%
228.70
%
417.85
%
Allowance for credit losses as a percent of total loans receivable(3)
0.96
%
1.05
%
0.96
%
1.05
%
Per Share Data:
Shares outstanding at period end
3,144,168
3,133,351
3,144,168
3,133,351
Weighted average shares outstanding:
Basic
3,056,633
3,015,858
3,044,081
3,020,748
Diluted
3,020,939
3,113,769
3,045,009
3,152,885
_______________________________________
(1)
Ratios for the three-month period are annualized.
(2)
Asset quality ratios are end of period ratios.
(3)
Prior to July 1, 2023, the incurred loss methodology was used to estimate credit losses. Subsequent to that date, credit losses are estimated using the CECL methodology.
FAQ
What was Home Federal Bancorp's (HFBL) net income for Q4 2024?
Home Federal Bancorp (HFBL) reported net income of $638,000 for the fourth quarter of fiscal year 2024.
How did HFBL's full-year 2024 net income compare to 2023?
HFBL's net income for the full fiscal year 2024 was $3.6 million, compared to $5.7 million in fiscal year 2023, representing a decrease of 37%.
What was HFBL's net interest margin for fiscal year 2024?
HFBL's net interest margin for fiscal year 2024 was 3.08%, down from 3.73% in fiscal year 2023.
How did HFBL's total assets change in fiscal year 2024?
HFBL's total assets decreased by 3.5% from $660.9 million at June 30, 2023, to $637.5 million at June 30, 2024.
What was the change in HFBL's shareholders' equity for fiscal year 2024?
HFBL's shareholders' equity increased by 4.5%, from $50.5 million at June 30, 2023, to $52.8 million at June 30, 2024.
