Home Federal Bancorp of Louisiana Earnings 2019-03-31

HFBL 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow

10-Q 1 form10q.htm FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q
(Mark One)
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:	March 31, 2019
or

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from		to

Commission file number:

001-35019

HOME FEDERAL BANCORP, INC. OF LOUISIANA
(Exact name of registrant as specified in its charter)

Louisiana		02-0815311
(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)
N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock (par value $.01 per share)	HFBL	Nasdaq Stock Market, LLC

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 every Interactive Data File required to be submitted 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 such files). [X] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[X]	Smaller reporting company	[X]
		Emerging growth company	[ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[ ] Yes

[X] No

Shares of common stock, par value $.01 per share, outstanding as of May 14, 2019: The registrant had 1,849,990 shares of common stock outstanding.

INDEX

		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	6

	Notes to Consolidated Financial Statements	8

Item 2:	Management's Discussion and Analysis of Financial Condition and Results of Operations	30

Item 3:	Quantitative and Qualitative Disclosures About Market Risk	38

Item 4:	Controls and Procedures	38

PART II	OTHER INFORMATION

Item 1:	Legal Proceedings	38

Item 1A:	Risk Factors	38

Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3:	Defaults Upon Senior Securities	39

Item 4:	Mine Safety Disclosures	39

Item 5:	Other Information	39

Item 6:	Exhibits	39

SIGNATURES

HOME FEDERAL BANCORP, INC. OF LOUISIANA

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

	March 31, 2019			June 30, 2018
	(In Thousands)

ASSETS
Cash and Cash Equivalents (Includes Interest-Bearing Deposits with Other Banks of $5,234 and $11,974 for March 31, 2019 and June 30, 2018, Respectively)	$	11,413		$	15,867
Securities Available-for-Sale		43,113			29,324
Securities Held-to-Maturity (Fair Value of $25,553 and $27,818, Respectively)		25,967			28,888
Loans Held-for-Sale		5,457			6,762
Loans Receivable, Net of Allowance for Loan Losses of $3,580 and $3,425, Respectively		323,783			317,493
Accrued Interest Receivable		1,289			1,146
Premises and Equipment, Net		13,538			12,243
Bank Owned Life Insurance		6,913			6,808
Deferred Tax Asset		1,044			1,102
Foreclosed Assets		1,200			1,177
Other Assets		640			840

Total Assets	$	434,357		$	421,650

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES
Deposits	$	382,108		$	360,260
Advances from Borrowers for Taxes and Insurance		459			725
Short-term Federal Home Loan Bank advances		292			5,282
Long-term Federal Home Loan Bank advances		1,134			6,355
Other Borrowings		--			300
Other Accrued Expenses and Liabilities		1,381			1,691
Total Liabilities		385,374			374,613

STOCKHOLDERS’ EQUITY
Preferred Stock – $.01 Par Value; 10,000,000 Shares Authorized; None Issued and Outstanding		--			--
Common Stock – $.01 Par Value; 40,000,000 Shares Authorized; 1,854,990 and 1,894,081 Shares Issued and Outstanding at March 31, 2019 and June 30, 2018, Respectively		23			23
Additional Paid-in Capital		35,794			35,057
Unearned ESOP Stock		(1,013	)		(1,100	)
Unearned RRP Trust Stock		2			(22	)
Retained Earnings		14,818			14,125
Accumulated Other Comprehensive Loss		(641	)		(1,046	)

Total Stockholders’ Equity		48,983			47,037

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	434,357		$	421,650

See accompanying notes to unaudited consolidated financial statements.

HOME FEDERAL BANCORP, INC. OF LOUISIANA

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	For the Three Months Ended March 31,					For the Nine Months Ended March 31,
	2019			2018		2019			2018
	(In Thousands, Except per Share Data)
INTEREST INCOME
Loans, Including Fees	$	4,530		$	4,179	$	13,593		$	12,743
Investment Securities		16			12		45			35
Mortgage-Backed Securities		396			298		1,012			826
Other Interest-Earning Assets		60			19		234			84
Total Interest Income		5,002			4,508		14,884			13,688

INTEREST EXPENSE
Deposits		1,149			768		3,108			2,213
Federal Home Loan Bank Borrowings		17			92		127			352
Other Borrowings		2			2		6			4
Total Interest Expense		1,168			862		3,241			2,569
Net Interest Income		3,834			3,646		11,643			11,119

PROVISION FOR LOAN LOSSES		100			350		450			850
Net Interest Income after Provision for Loan Losses		3,734			3,296		11,193			10,269

NON-INTEREST INCOME
Gain on Sale of Loans		305			285		1,071			1,320
(Loss) Gain on Sale of Real Estate and Fixed Assets		(117	)		--		(345	)		1
Gain on Sale of Securities		--			--		--			94
Income on Bank Owned Life Insurance		35			35		105			105
Service Charges on Deposit Accounts		246			223		712			660
Other Income		14			13		49			41
Total Non-Interest Income		483			556		1,592			2,221

NON-INTEREST EXPENSE
Compensation and Benefits		1,632			1,565		4,795			4,860
Occupancy and Equipment		323			345		971			1,017
Data Processing		108			165		405			497
Audit and Examination Fees		62			67		189			194
Franchise and Bank Shares Tax		97			96		295			296
Advertising		89			47		232			117
Legal Fees		136			107		433			396
Loan and Collection		83			53		209			205
Real Estate Owned Valuation Adjustment		--			--		75			--
Deposit Insurance Premium		7			27		59			95
Other Expense		184			201		556			582
Total Non-Interest Expense		2,721			2,673		8,219			8,259
Income Before Income Taxes		1,496			1,179		4,566			4,231

PROVISION FOR INCOME TAX EXPENSE		307			158		984			1,840
Net Income	$	1,189		$	1,021	$	3,582		$	2,391
EARNINGS PER COMMON SHARE:
Basic	$	0.68		$	0.57	$	2.02		$	1.33
Diluted	$	0.63		$	0.54	$	1.88		$	1.26
DIVIDENDS DECLARED	$	0.14		$	0.12	$	0.42		$	0.36

See accompanying notes to unaudited consolidated financial statements.

HOME FEDERAL BANCORP, INC. OF LOUISIANA

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	For the Three Months Ended March 31,					For the Nine Months Ended March 31,
	2019		2018			2019		2018
	(In Thousands)					(In Thousands)
Net Income	$	1,189	$	1,021		$	3,582	$	2,391

Other Comprehensive Income (Loss), Net of Tax
Unrealized Holding Gain /(Loss) on Securities Available-for-Sale, Net of Tax of $64 and $106 in 2019 and $179 and $270 in 2018		242		(473	)		405		(712	)

Total Comprehensive Income	$	1,431	$	548		$	3,987	$	1,679

See accompanying notes to unaudited consolidated financial statements.

HOME FEDERAL BANCORP, INC. OF LOUISIANA

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

THREE AND NINE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited)

Three Months Ended

	Common Stock		Additional Paid-in Capital		Unearned ESOP Stock			Unearned RRP Trust Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
								(In Thousands)
BALANCE – December 31, 2017	$	23	$	34,874	$	(1,158	)	$	(22	)	$	12,806		$	(591	)	$	45,932

Net Income		--		--		--			--			1,021			--			1,021

Changes in Unrealized Loss on Securities Available-for- Sale, Net of Tax Effects		--		--		--			--			116			(473	)		(357	)

RRP Shares Earned		--		--		--			--			--			--			--

Stock Options Vested		--		34		--			--			--			--			34

Common Stock Issuance for Stock Option Exercises		--		--		--			--			--			--			--

ESOP Compensation Earned		--		55		29			--			--			--			84

Company Stock Purchased		--		--		--			--			(75	)		--			(75	)

Dividends Declared		--		--		--			--			(229	)		--			(229	)

BALANCE – March 31, 2018	$	23	$	34,963	$	(1,129	)	$	(22	)	$	13,639		$	(1,064	)	$	46,410

BALANCE – December 31, 2018	$	23	$	35,586	$	(1,042	)	$	2		$	14,952		$	(883	)	$	48,638

Net Income		--		--		--			--			1,189			--			1,189

Changes in Unrealized Loss on Securities Available-for- Sale, Net of Tax Effects		--		--		--			--			--			242			242

Share Awards Earned		--		--		--			--			--			--			--

RRP Shares Earned		--		--		--			--			--			--			--

Stock Options Vested		--		37		--			--			--			--			37

Common Stock Issuance for Stock Option Exercises		--		111		--			--			--			--			111

ESOP Compensation Earned		--		60		29			--			--			--			89

Company Stock Purchased		--		--		--			--			(1,060	)		--			(1,060	)

Dividends Declared		--		--		--			--			(263	)		--			(263	)

BALANCE – March 31, 2019	$	23	$	35,794	$	(1,013	)	$	2		$	14,818		$	(641	)	$	48,983

See accompanying notes to unaudited consolidated financial statements.

HOME FEDERAL BANCORP, INC. OF LOUISIANA

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

THREE AND NINE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited)

Nine Months Ended

	Common Stock		Additional Paid-in Capital		Unearned ESOP Stock			Unearned RRP Trust Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
								(In Thousands)
BALANCE – June 30, 2017	$	23	$	34,516	$	(1,215	)	$	(46	)	$	13,320		$	(352	)	$	46,246

Net Income		--		--		--			--			2,391			--			2,391

Changes in Unrealized Gain on Securities Available-for- Sale, Net of Tax Effects		--		--		--			--			116			(712	)		(596	)

RRP Shares Earned		--		--		--			24			--			--			24

Stock Options Vested		--		102		--			--			--			--			102

Common Stock Issuance for Stock Option Exercises		--		191		--			--			--			--			191

ESOP Compensation Earned		--		154		86			--			--			--			240

Company Stock Purchased		--		--		--			--			(1,493	)		--			(1,493	)

Dividends Declared		--		--		--			--			(695	)		--			(695	)

BALANCE – March 31, 2018	$	23	$	34,963	$	(1,129	)	$	(22	)	$	13,639		$	(1,064	)	$	46,410

BALANCE – June 30, 2018	$	23	$	35,057	$	(1,100	)	$	(22	)	$	14,125		$	(1,046	)	$	47,037

Net Income		--		--		--			--			3,582			--			3,582

Changes in Unrealized Gain on Securities Available-for- Sale, Net of Tax Effects		--		--		--			--			--			405			405

Share Awards Earned		--		135		--			--			--			--			135

RRP Shares Earned		--		--		--			24			--			--			24

Stock Options Vested		--		105		--			--			--			--			105

Common Stock Issuance for Stock Option Exercises		--		309		--			--			--			--			309

ESOP Compensation Earned		--		188		87			--			--			--			275

Company Stock Purchased		--		--		--			--			(2,097	)		--			(2,097	)

Dividends Declared		--		--		--			--			(792	)		--			(792	)

BALANCE – March 31, 2019	$	23	$	35,794	$	(1,013	)	$	2		$	14,818		$	(641	)	$	48,983

See accompanying notes to unaudited consolidated financial statements.

HOME FEDERAL BANCORP, INC. OF LOUISIANA

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
	March 31,
	2019			2018
	(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	3,582		$	2,391
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
Bad Debt Recovery		2			25
Net Amortization and Accretion on Securities		79			130
Loss/(Gain) on Sale of Real Estate		345			(1	)
Gain on Sale of Loans		(1,071	)		(1,320	)
Gain on Sale of Securities		--			(94	)
Amortization of Deferred Loan Fees		(147	)		(115	)
Depreciation of Premises and Equipment		363			378
ESOP Expense		275			240
Stock Option Expense		105			102
Recognition and Retention Plan Expense		21			21
Deferred Income Tax		(58	)		444
Valuation Adjustment Real Estate Owned		75			60
Provision for Loan Losses		450			850
Increase in Cash Surrender Value on Bank Owned Life Insurance		(105	)		(105	)
Share Awards Expense		102			101
Changes in Assets and Liabilities:
Loans Held-for-Sale – Originations and Purchases		(42,338	)		(58,068	)
Loans Held-for-Sale – Sale and Principal Repayments		44,713			67,631
Accrued Interest Receivable		(143	)		(81	)
Other Operating Assets		200			374
Other Operating Liabilities		(310	)		(428	)

Net Cash Provided by Operating Activities		6,140			12,535

CASH FLOWS FROM INVESTING ACTIVITIES
Loan Originations and Purchases, Net of Principal Collections		(6,977	)		(2,953	)
Deferred Loan Fees Collected		89			221
Acquisition of Premises and Equipment		(2,412	)		(178	)
Proceeds from Sale of Real Estate		469			--
Activity in Available-for-Sale Securities:
Principal Payments on Mortgage-Backed Securities		5,154			6,262
Sale of Securities		--			3,555
Purchases of Securities		(18,496	)		(7,717	)
Activity in Held-to-Maturity Securities:
Principal Payments on Mortgage-Backed Securities		2,952			2,217
Purchase of Securities		--			(1,174	)

Net Cash (Used in) Provided by Investing Activities		(19,221	)		233

See accompanying notes to unaudited consolidated financial statements.

HOME FEDERAL BANCORP, INC. OF LOUISIANA

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)

	Nine Months Ended
	March 31,
	2019			2018
	(In Thousands)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Deposits	$	21,848		$	18,149
Proceeds from Federal Home Loan Bank Advances		--			183,775
Repayments of Advances from Federal Home Loan Bank		(10,210	)		(215,976	)
Repayments of Other Borrowings		(750	)		(350	)
Net Decrease in Advances from Borrowers for Taxes and Insurance		(266	)		(183	)
Dividends Paid		(792	)		(695	)
Company Stock Purchased		(2,097	)		(1,493	)
Proceeds from Stock Options Exercised		309			191
Proceeds from Other Bank Borrowings		450			350
Plan Share Distributions		135			--

Net Cash Provided by (Used in) Financing Activities		8,627			(16,232	)

NET DECREASE IN CASH AND CASH EQUIVALENTS		(4,454	)		(3,464	)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		15,867			11,905

CASH AND CASH EQUIVALENTS - END OF PERIOD	$	11,413		$	8,441

SUPPLEMENTARY CASH FLOW INFORMATION
Interest Paid on Deposits and Borrowed Funds	$	2,603		$	2,407
Income Taxes Paid		1,068			1,236
Market Value Adjustment for Gain (Loss) on Securities Available-for-Sale		513			(814	)

See accompanying notes to unaudited 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 (“Home Federal Bank” or 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 nine month period ended March 31, 2019 are not necessarily indicative of the results which may be expected for the fiscal year ending June 30, 2019.

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”).

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 effect 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 March 31, 2019. In preparing these financial statements, the Company evaluated the events and transactions that occurred through the date these financial statements were issued.

Use of Estimates

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

Home Federal Bancorp, Inc. of Louisiana, a Louisiana corporation, is the fully public stock holding company for Home Federal Bank located in Shreveport, Louisiana. 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 the Comptroller of the Currency. The Company is a savings and loan holding company regulated by the Board of Governors of the Federal Reserve System. Services are provided to the Bank’s customers by nine full-service banking offices and home office, located in Caddo and Bossier Parishes, Louisiana. The Bank opened its seventh full-service banking office during the quarter ended March 31, 2019. The area served by the Bank is primarily the Shreveport-Bossier City metropolitan area; however, loan and deposit customers are found dispersed in a wider geographical area covering much of northwest Louisiana. As of March 31, 2019, the Bank had one wholly-owned subsidiary, Metro Financial Services, Inc., which previously engaged in the sale of annuity contracts and does not currently engage in a meaningful amount of business.

Cash and Cash Equivalents

For purposes of the Consolidated Statements of Cash Flows, cash and cash equivalents include cash on hand, balances due from banks, and federal funds sold, all of which mature within ninety days.

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Summary of Accounting Policies (continued)

Securities

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 Held-for-Sale

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

Loans receivable are stated as unpaid principal balances less allowances for loan losses and unamortized deferred loan fees. Net nonrefundable fees (loan origination fees, commitment fees, discount points) and costs associated with lending activities are being deferred and subsequently amortized into income as an adjustment of yield on the related interest earning assets using the interest method. Interest income on contractual loans receivable is recognized on the accrual method. Unearned discount on property improvement and automobile loans is deferred and amortized on the interest method over the life of the loan.

Allowance for Loan Losses

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectability 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.

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Summary of Accounting Policies (continued)

Allowance for Loan Losses (continued)

A loan is considered impaired when, based on current information or events, it is probable that the Bank will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. When a loan is impaired, the measurement of such impairment is based upon the fair value of the collateral of the loan. If the fair value of the collateral is less than the recorded investment in the loan, the Bank will recognize the impairment by creating a valuation allowance with a corresponding charge against earnings. A loan is considered a troubled debt restructuring (“TDR”) if the Company, for economic or legal reasons related to a debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. Concessions granted under a TDR typically involve a temporary or permanent reduction in payments or interest rate or an extension of a loan’s stated maturity date at less than a current market rate of interest. Loans identified as TDRs are designated as impaired.

An allowance is also established for uncollectible interest on loans classified as substandard. 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 known and inherent losses in the existing loan portfolio both probable and reasonable to estimate.

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. Estimated useful lives are as follows:

	Buildings and Improvements	10 - 40 Years
	Furniture and Equipment	3 - 10 Years

Bank-Owned Life Insurance

The Company has purchased life insurance contracts on the lives of certain key employees. The Bank is the beneficiary of these policies. These contracts are reported at their cash surrender value, and changes in the cash surrender value are included in non-interest income.

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Summary of Accounting Policies (continued)

Allowance for Loan Losses (continued)

Income Taxes

The Company and its wholly-owned subsidiary file a consolidated Federal income tax return on a fiscal year basis. Each entity pays its pro-rata share of income taxes in accordance with a written tax-sharing agreement.

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 basis 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.

The Company follows the provisions of the Income Taxes Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740. ASC 740 prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on various related matters such as derecognition, interest, penalties, and disclosures required. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

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.

Earnings per Share

Earnings per share are computed based upon the weighted average number of common shares outstanding during the period.

Non-Direct Response Advertising

The Company expenses all advertising costs, except for direct-response advertising, as incurred. Non-direct response advertising costs were $232,000 and $117,000 for the nine months ended March 31, 2019 and 2018, respectively.

In the event the Company incurs expense for material direct-response advertising, it will be amortized over the estimated benefit period. Direct-response advertising consists of advertising whose primary purpose is to elicit sales to customers who could be shown to have responded specifically to the advertising and results in probable future benefits. For the nine months ended March 31, 2019 and 2018, the Company did not incur any amount of direct-response advertising.

Stock-Based Compensation

GAAP requires all share-based payments to employees, including grants of employee stock options and recognition and retention share awards, to be recognized as expense in the statement of operations based on their fair values. The amount of compensation is measured at the fair value of the options or recognition and retention share awards when granted, and this cost is expensed over the required service period, which is normally the vesting period of the options or recognition and retention awards.

HOME FEDERAL BANCORP, INC. OF LOUISIANA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Summary of Accounting Policies (continued)

Reclassification

Certain financial statement balances included in the prior year consolidated financial statements have been reclassified to conform to the current period presentation.

Comprehensive Income

Accounting principles generally accepted in the United States of America re

Closing Price ($)	Shares Out (MM)	Market Cap ($MM)
$32.57	2	$60

10-Q	2019-03-31	Quarter: 2019-03-31
10-Q	2018-12-31	Quarter: 2018-12-31
10-Q	2018-09-30	Quarter: 2018-09-30
10-K	2018-06-30	Annual: 2018-06-30
10-Q	2018-03-31	Quarter: 2018-03-31
10-Q	2017-12-31	Quarter: 2017-12-31
10-Q	2017-09-30	Quarter: 2017-09-30
10-K	2017-06-30	Annual: 2017-06-30
10-Q	2017-03-31	Quarter: 2017-03-31
10-Q	2016-12-31	Quarter: 2016-12-31
10-Q	2016-09-30	Quarter: 2016-09-30
10-K	2016-06-30	Annual: 2016-06-30
10-Q	2016-03-31	Quarter: 2016-03-31
10-Q	2015-12-31	Quarter: 2015-12-31
10-Q	2015-09-30	Quarter: 2015-09-30
10-K	2015-06-30	Annual: 2015-06-30
10-Q	2015-03-31	Quarter: 2015-03-31
10-Q	2015-02-05	Quarter: 2015-02-05
10-Q	2014-09-30	Quarter: 2014-09-30
10-K	2014-06-30	Annual: 2014-06-30
10-Q	2014-03-31	Quarter: 2014-03-31
10-Q	2013-12-31	Quarter: 2013-12-31

8-K	2019-07-10	Regulation FD, Exhibits
8-K	2019-04-25	Earnings, Exhibits
8-K	2019-04-10	Regulation FD, Exhibits
8-K	2019-01-24	Exhibits
8-K	2019-01-24	Exhibits
8-K	2019-01-09	Regulation FD, Exhibits
8-K	2018-12-12	Exhibits
8-K	2018-11-14	Shareholder Vote
8-K	2018-10-25	Earnings, Exhibits
8-K	2018-10-10	Regulation FD, Exhibits
8-K	2018-07-31	Earnings, Exhibits
8-K	2018-07-09	Regulation FD, Exhibits
8-K	2018-04-26	Earnings, Exhibits
8-K	2018-04-11	Regulation FD, Exhibits
8-K	2018-01-30	Earnings, Exhibits
8-K	2018-01-10	Regulation FD, Exhibits

ILMN	Illumina	46,650
GMLP	Golar Lng Partners	820
ATTO	Atento	257
MVC	MVC Capital	160
CRVS	Corvus Pharmaceuticals	121
GFED	Guaranty Federal Bancshares	107
CHFS	CHF Solutions	8
OMTK	Omnitek Engineering	0
SADDP	Saddlebrook Resorts	0
AGHI	Affinion Group Holdings	0

EX-31.1	exh311.htm
EX-31.2	exh312.htm
EX-32.0	exh320.htm