Home Federal Bancorp, Inc. of Louisiana Reports Results of Operations for the Three Months and Twelve Months Ended June 30, 2016

Shreveport, Louisiana, July 28, 2016 (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, 2016 of $980,000, an increase of $125,000, or 14.6% compared to net income of $855,000 reported for the three months ended June 30, 2015. The Company’s basic and diluted earnings per share were $0.53 and $0.52, respectively, for the three months ended June 30, 2016, compared to basic and diluted earnings per share of $0.44 and $0.43, respectively, for the three months ended June 30, 2015.

The Company reported net income of $3.38 million for the year ended June 30, 2016, an increase of $22,000, or 0.7%, compared to $3.36 million for the year ended June 30, 2015. The Company’s basic and diluted earnings per share were $1.80 and $1.74, respectively, for the year ended June 30, 2016, compared to $1.70 and $1.65, respectively, for the year ended June 30, 2015.

The increase in net income for the three months ended June 30, 2016, resulted primarily from an increase of $235,000, or 7.5%, in net interest income, and a $155,000, or 19.6%, increase in non-interest income, partially offset by a $214,000, or 8.4%, increase in non-interest expense, and a $51,000, or 11.7%, increase in the provision for income tax expense. The increase in net interest income for the three months ended June 30, 2016, was due to a $210,000, or 5.5%, increase in total interest income, and a decrease of $25,000, or 3.8%, in aggregate interest expense primarily due to a decrease in interest paid on deposits.  The Company’s average interest rate spread was 3.69% for the three months ended June 30, 2016, compared to 3.48% for the three months ended June 30, 2015. The Company’s net interest margin was 3.85% for the three months ended June 30, 2016, compared to 3.66% for the three months ended June 30, 2015. The increase in the average interest rate spread on a comparative quarterly basis was primarily the result of an increase of 15 basis points in average yield on interest-earning assets.  The increase in net interest margin was primarily the result of a higher average volume of interest earning assets for the three months ended June 30, 2016 compared to the prior year quarterly period.

The increase in net income for the year ended June 30, 2016, resulted primarily from a $557,000, or 4.5%, increase in net interest income, an increase of $293,000, or 9.9%, in non-interest income, a decrease of $29,000, or 9.7%, in the provision for loan losses, and a decrease of $17,000, or 1.0%, in income tax expense, partially offset by an $874,000, or 8.8%, increase in non-interest expense. The increase in net interest income for the year ended June 30, 2016 was primarily due to a $686,000, or 4.6%, increase in total interest income, partially offset by a $129,000, or 5.2%, increase in interest expense on borrowings and deposits.  The Company’s average interest rate spread was 3.53% for the year ended June 30, 2016, compared to 3.58% for the year ended June 30, 2015.  The Company’s net interest margin was 3.71% for the year ended June 30, 2016, compared to 3.76% for the year ended June 30, 2015.  The decreases in net interest margin and average interest rate spread were attributable primarily to a decrease of six basis points in average yield on interest earning assets.

The following table sets forth the Company’s average balances and average yields earned and rates paid on its interest-earning assets and interest-bearing liabilities for the periods indicated.

				For the Three Months Ended June 30,
					2016								2015
				Average				Average				Average				Average
				Balance				Yield/Rate				Balance				Yield/Rate
				(Dollars in thousands)
	Interest-earning assets:
	Loans receivable			$	300,776				5.06	%		$	280,206				5.08	%
	Investment securities				46,037				1.63				47,993				1.81
	Interest-earning deposits				3,443				0.45				14,227				0.25
	Total interest-earning assets			$	350,256				4.57	%		$	342,426				4.42	%
	Interest-bearing liabilities:
	Savings accounts			$	28,442				0.41	%		$	18,304				0.30	%
	NOW accounts				37,663				0.63				31,861				0.86
	Money market accounts				49,182				0.32				44,477				0.31
	Certificates of deposit				133,949				1.27				143,456				1.31
	Total interest-bearing deposits				249,236				0.89				238,098				0.99
	Other Bank Borrowing				4				3.80			--				--
	FHLB advances				37,852				0.81				38,431				0.69
	Total interest-bearing liabilities			$	287,092				0.88	%		$	276,529				0.94	%
				For the Year Ended June 30,
					2016								2015
				Average				Average				Average				Average
				Balance				Yield/Rate				Balance				Yield/Rate
				(Dollars in thousands)
	Interest-earning assets:
	Loans receivable	$	287,405						5.09	%		$	269,408				5.11	%
	Investment securities		43,562						1.78				51,965				1.92
	Interest-earning deposits		15,604						0.36				5,585				0.26
	Total interest-earning assets	$	346,571						4.46	%		$	326,958				4.52	%
	Interest-bearing liabilities:
	Savings accounts	$	23,993						0.38	%		$	14,762				0.23	%
	NOW accounts		35,797						0.79				29,821				0.76
	Money market accounts		47,953						0.31				43,770				0.32
	Certificates of deposit		141,160						1.28				133,605				1.37
	Total interest-bearing deposits		248,903						0.94				221,958				1.01
Other bank borrowings			421						4.25				65				4.25
	FHLB advances		30,277						0.87				40,858				0.60
	Total interest-bearing liabilities	$	279,601						0.93	%		$	262,881				0.94	%

The $155,000 increase in non-interest income for the three months ended June 30, 2016, compared to the prior year quarterly period was due to an increase of $138,000 in gain on sale of loans and an increase of $20,000 in service charges on deposit accounts, partially offset by a decrease of $2,000 in income on Bank Owned Life Insurance and $1,000 in other non-interest income.  The $293,000 increase in non-interest income for the year ended June 30, 2016, compared to the prior year period was primarily due to increases of $214,000 in gain on sale of loans and an increase of $103,000 in service charges on deposit accounts, partially offset by a $10,000 decrease in gain on sale of securities, a decrease of $8,000 in other non-interest income and a $6,000 decrease in income on Bank Owned Life Insurance. The Company sells most of its long term fixed rate residential mortgage loan originations primarily in order to manage interest rate risk.

The $214,000 increase in non-interest expense for the three months ended June 30, 2016, compared to the same period in 2015, is primarily attributable to increases of $110,000 in compensation and benefits expense, $40,000 in other non-interest expense, $30,000 in occupancy and equipment expense, $19,000 in loan and collections expense, $16,000 in legal fees, $11,000 in franchise and bank shares taxes, and $7,000 in audit and examination fees.  These increases were partially offset by decreases of $11,000 in advertising expense, $5,000 in data processing expense, and $3,000 in deposit insurance premiums. The $874,000 increase in non-interest expense for the year ended June 30, 2016, compared to the year ended June 30, 2015, is primarily attributable to increases of $553,000 in compensation and benefits expense, $84,000 in franchise and bank shares taxes, $82,000 in legal fees, $70,000 in other non-interest expense, $43,000 in deposit insurance premiums, $41,000 in occupancy and equipment expense, $35,000 in data processing expense, and $30,000 in audit and examination fees. These increases were partially offset by a decrease of $51,000 in loan and collection expense, and $13,000 in advertising expense.

At June 30, 2016, the Company reported total assets of $381.7 million, an increase of $11.9 million, or 3.2%, compared to total assets of $369.8 million at June 30, 2015. The increase in assets was comprised primarily of increases in loans receivable, net of $22.4 million, or 8.3%, from $268.4 million at June 30, 2015, to $290.8 million at June 30, 2016, investment securities of $5.6 million, or 11.9%, from $46.9 million at June 30, 2015 to $52.5 million at June 30, 2016, premises and equipment, net of $2.2 million, or 21.4% from $10.2 million at June 30, 2015, to $12.4 million at June 30, 2016, and other assets of $357,000, or 4.0%, from $9.0 million at June 30, 2015 to $9.3 million at June 30, 2016.  These increases were partially offset by a decrease in cash and cash equivalents of $16.4 million, or 77.5%, from $21.2 million at June 30, 2015, to $4.8 million at June 30, 2016, and a decrease in loans held for sale of $2.3 million, or 16.1%, from $14.2 million at June 30, 2015, to $11.9 million at June 30, 2016.  The increase in premises and equipment, net was primarily due to the completion costs on a new branch location in Bossier City and the acquisition of real estate and construction costs for our new branch location in the North Shreveport area that opened in May 2016.  The decrease in cash and cash equivalents was primarily used to fund loan growth.

The following table shows total loans originated and sold during the periods indicated.

	Year Ended
	June 30,
		2016				2015			% Change
	(In thousands)
Loan originations:
One- to four-family residential	$	115,449			$	103,052				12.0	%
Commercial — real estate secured:
Owner occupied		48,076				69,849				(31.2	)%
Non-owner occupied		8,169				5,307				53.9	%
Multi-family residential		5,914				3,035				94.9	%
Commercial business		33,092				48,309				(31.5	)%
Land		8,302				7,176				15.7	%
Construction		19,538				26,920				(27.4	)%
Home equity loans and lines of credit and other consumer		9,351				8,974				4.2	%
Total loan originations	$	247,891			$	272,622				(9.1	)%
Loans sold	$	(101,295	)		$	(86,806	)			16.7	%

Included in the $19.5 million and $26.9 million of construction loan originations for the years ended June 30, 2016 and 2015, respectively, are approximately $18.5 million and $18.3 million, respectively, of one- to four-family residential construction loans and $1.0 million and $8.6 million, respectively, of commercial and multi-family construction loans, all of which are primarily located in the Company’s market area.

Total liabilities increased $11.9 million, or 3.6%, from $326.4 million at June 30, 2015, to $338.3 million at June 30, 2016, primarily due to an increase in advances from the Federal Home Loan Bank of Dallas of $9.3 million, or 24.1%, to $47.7 million at June 30, 2016, compared to $38.4 million at June 30, 2015, and an increase in total deposits of $1.6 million, or 0.6%, to $287.8 million at June 30, 2016, compared to $286.2 million at June 30, 2015.  The increase in borrowings was primarily used to fund the increase in investment securities at June 30, 2016. The increase in deposits was primarily due to a $10.6 million, or 57.6%, increase in savings deposits from $18.4 million at June 30, 2015 to $29.0 million at June 30, 2016, a $6.6 million, or 21.2%, increase in NOW accounts from $31.2 million at June 30, 2015 to $37.8 million at June 30, 2016, a $3.7 million, or 8.1%, increase in money market deposits from $45.6 million at June 30, 2015 to $49.3 million at June 30, 2016, partially offset by a decrease of $13.5 million, or 9.2%, in certificates of deposit from $146.0 million at June 30, 2015 to $132.5 million at June 30, 2016 and a $5.7 million, or 12.7%, decrease in non-interest demand deposits from $45.0 million at June 30, 2015 to $39.3 million at June 30, 2016.  The Company has changed its deposit strategy to lower certificate of deposit rates and attract more savings deposits, NOW accounts, money market deposits, and non-interest demand deposit accounts.  The $5.7 million decrease in non-interest demand deposit accounts was primarily due to a reduction in balances of several large commercial accounts related to one customer. At June 30, 2016, the Company had $8.2 million in brokered deposits compared to $12.7 million at June 30, 2015. The brokered certificates of deposit which have maturity dates greater than twelve months are callable by Home Federal Bank after twelve months pursuant to early redemption provisions. The $4.5 million, or 35.4%, decrease in brokered deposits at June 30, 2016 compared to June 30, 2015 was primarily a result of Home Federal Bank replacing the brokered deposits with core deposits as part of our current strategy to reduce our reliance on brokered certificates of deposit.

At June 30, 2016, the Company had $114,000 of non-performing assets compared to $120,000 of non-performing assets at June 30, 2015, consisting of two single-family residential loans, at both June 30, 2016 and June 30, 2015 and one property that was collateral for a loan and held as other real estate owned at June 30, 2015. At June 30, 2016, the Company had two single-family residential loans, one commercial real estate loan, and nine commercial business loans to one borrower classified as substandard, compared to one single-family residential loan and one line of credit classified as substandard at June 30, 2015.  There were no loans classified as doubtful at June 30, 2016 or 2015.  After fiscal year end June 30, 2016, a one- to four-family residential loan secured by a vacant lot in an established residential subdivision in the amount of $556,000 was placed on non-accrual status.  The loan was 69 days past due and designated as special mention at year-end and is now more than 90 days past due.  The Company is continuing to monitor the credit and believes that it is well-collateralized.

Shareholders’ equity remained unchanged at $43.4 million at June 30, 2016 and June 30, 2015.  Increases to shareholders’ equity consisted of net income of $3.4 million, the vesting of restricted stock awards, stock options and the release of employee stock ownership plan shares totaling $574,000 and proceeds from the issuance of common stock from the exercise of stock options of $96,000.  These increases in shareholders’ equity were offset by dividends paid totaling $660,000, acquisition of Company stock of $3.4 million, and a decrease in the Company’s accumulated other comprehensive income of $16,000.

The Company repurchased 148,614 shares of its common stock during the year ended June 30, 2016 at an average price per share of $22.56. On December 9, 2015, the Company announced that its Board of Directors approved a sixth stock repurchase program for the repurchase of up to 102,000 shares.  As of June 30, 2016, there were a total of 31,811 shares remaining for repurchase under the program.

Home Federal Bancorp, Inc. of Louisiana is the holding company for Home Federal Bank which conducts business from its six full-service banking offices and home office in northwest Louisiana.

Statements contained in this news release which are not historical facts may be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts.  They often include words like “believe,” “expect,” “anticipate,” “estimate” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.”  We undertake no obligation to update any forward-looking statements.

Home Federal Bancorp, Inc. of Louisiana
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands)
	June 30,
		2016				2015
	(Unaudited)
ASSETS
Cash and cash equivalents	$	4,756			$	21,166
Securities available for sale at fair value		50,173				44,885
Securities held to maturity (fair value June 30, 2016: $2,349;   June 30, 2015: $2,010)		2,349				2,010
Loans held-for-sale		11,919				14,203
Loans receivable, net of allowance for loan losses (June 30, 2016: $2,845;   June 30, 2015: $2,515)		290,827				268,427
Premises and equipment, net		12,366				10,188
Other assets		9,311				8,954
Total assets	$	381,701			$	369,833
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits	$	287,822			$	286,238
Advances from the Federal Home Loan Bank of Dallas		47,665				38,411
Other Borrowings		400			--
Other liabilities		2,422				1,798
Total liabilities		338,309				326,447
Shareholders’ equity		43,392				43,386
Total liabilities and shareholders’ equity	$	381,701			$	369,833

Home Federal Bancorp, Inc. of Louisiana
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
		Three Months Ended								Year Ended
		June 30,								June 30,
			2016				2015				2016				2015
		(Unaudited)								(Unaudited)
Interest income
Loans, including fees		$	3,807			$	3,561			$	14,628			$	13,762
Investment securities			4				2				11				7
Mortgage-backed securities			183				216				763				989
Other interest-earning assets			4				9				56				14
Total interest income			3,998				3,788				15,458				14,772
Interest expense
Deposits			552				587				2,329				2,234
Federal Home Loan Bank borrowings			76				66				263				244
Other bank borrowings		--				--					18				3
Total interest expense			628				653				2,610				2,481
Net interest income			3,370				3,135				12,848				12,291
Provision for loan losses			90				90				271				300
Net interest income after provision for loan losses			3,280				3,045				12,577				11,991
Non-interest income
Gain on sale of loans			748				610				2,492				2,278
Gain on sale of securities		--				--				--					10
Income on Bank Owned Life Insurance			38				40				157				163
Service charges on deposit accounts			148				128				559				456
Other income			12				13				46				54
Total non-interest income			946				791				3,254				2,961
Non-interest expense
Compensation and benefits			1,755				1,645				6,814				6,261
Occupancy and equipment			302				272				1,091				1,050
Data processing			145				150				562				527
Audit and examination fees			56				49				246				216
Franchise and bank shares tax			83				72				349				265
Advertising			55				66				236				249
Legal fees			62				46				412				330
Loan and collection			90				71				281				332
Deposit insurance premium			42				45				207				164
Other expenses			170				130				612				542
	Total non-interest expense		2,760				2,546				10,810				9,936
	Income before income taxes		1,466				1,290				5,021				5,016
	Provision for income tax expense		486				435				1,644				1,661
	NET INCOME	$	980			$	855			$	3,377			$	3,355
	EARNINGS PER SHARE
	Basic	$	0.53			$	0.44			$	1.80			$	1.70
	Diluted	$	0.52			$	0.43			$	1.74			$	1.65

	Three Months Ended								Year Ended
	June 30,								June 30,
		2016				2015				2016				2015
	(Unaudited)
Selected Operating Ratios(1):
Average interest rate spread		3.69	%			3.48	%			3.53	%			3.58	%
Net interest margin		3.85	%			3.66	%			3.71	%			3.76	%
Return on average assets		1.04	%			0.93	%			0.91	%			0.96	%
Return on average equity		8.65	%			7.64	%			7.44	%			7.45	%
Asset Quality Ratios(2):
Non-performing assets as a percent of total assets		0.03	%			0.03	%			0.03	%			0.03	%
Allowance for loan losses as a percent of
non-performing loans		2,501.99	%			3,143.75	%			2,501.99	%			3,143.75	%
Allowance for loan losses as a percent of total loans
receivable		0.97	%			0.93	%			0.97	%			0.93	%
Per Share Data:
Shares outstanding at period end		1,967,955				2,109,606				1,967,955				2,109,606
Weighted average shares outstanding:
Basic		1,833,466				1,939,888				1,877,388				1,978,232
Diluted		1,893,570				1,991,663				1,941,702				2,031,859
Tangible book value at period end	$	22.05			$	20.57			$	22.05			$	20.57
____________
(1)  Ratios for the three month periods are annualized.
(2)  Asset quality ratios are end of period ratios.

            CONTACT: 
James R. Barlow
President and Chief Executive Officer
(318) 222-1145