Company Quick10K Filing
Heritage Nola Bancorp
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 2 $-0
10-Q 2019-11-13 Quarter: 2019-09-30
10-Q 2019-08-13 Quarter: 2019-06-30
10-Q 2019-05-08 Quarter: 2019-03-31
10-K 2019-03-29 Annual: 2018-12-31
10-Q 2018-11-13 Quarter: 2018-09-30
10-Q 2018-08-13 Quarter: 2018-06-30
10-Q 2018-05-14 Quarter: 2018-03-31
10-K 2018-03-30 Annual: 2017-12-31
10-Q 2017-11-13 Quarter: 2017-09-30
10-Q 2017-08-14 Quarter: 2017-06-30
10-Q 2017-06-26 Quarter: 2017-03-31
8-K 2020-02-12 Earnings, Exhibits
8-K 2019-11-19 Other Events, Exhibits
8-K 2019-08-30 Other Events, Exhibits
8-K 2019-05-16 Shareholder Vote, Exhibits
8-K 2019-05-09 Other Events, Exhibits
8-K 2019-02-15 Earnings, Exhibits
8-K 2018-08-20 Officers, Exhibits
8-K 2018-08-16 Shareholder Vote, Exhibits
8-K 2018-07-24 Other Events, Exhibits
8-K 2018-02-16 Earnings, Exhibits
HRGG 2019-09-30
Item 1. Consolidated Financial Statements
Item 2. Management’S Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II – Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 hrgg-20190930ex3112db780.htm
EX-31.2 hrgg-20190930ex312aba3c6.htm
EX-32 hrgg-20190930xex32.htm

Heritage Nola Bancorp Earnings 2019-09-30

HRGG 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
SCTF 0 0 0 0 -0 -0 -0 3.0 -33%
HRGG 122 98 0 0 0 2 15 0% 8.5 0%
HHEG 0 0 0 0 0 0 -0
MLAF 54 4 0 0 0 0 -15 0%
CCPTV 628 358 28 0 0 19 341 0% 18.1 0%
AGBP 0 0 0 0 0 0 -0 -0.0 1,567%
HEYU 0 1 0 0 -0 -0 -0 43% 0.4 -95%
RBTK 0 0 -1 -0 -0 0.2 68,693,800%
BHNY 9,066 8,030 237 0 0 3 -190 0% -75.7 0%
WESTG 0 0 0 0 -0 -0 -0 0.0 -8,540%

10-Q 1 hrgg-20190930x10q.htm 10-Q hrgg_Current_Folio_10Q

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

 

 

 

 

 

Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

 

 

 

For the quarterly period ended September 30, 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 No. 000‑55817

Heritage NOLA Bancorp, Inc.

(Exact name of registrant as specified in its charter)

 

Maryland

 

82-0688069

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification Number)

 

 

 

205 North Columbia Street
Covington, Louisiana

 

70433

(Address of Principal Executive Offices)

 

(Zip Code)

 

(985) 892‑4565

(Registrant’s telephone number)

N/A

(Former name or former address, 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 requirements for the past 90 days.

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

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 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  ☒

Smaller reporting company  ☒

 

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 Act). YES ◻ NO ☒

Securities registered pursuant to Section 12(b) of the Act:  None

 

 

As of November 5, 2019,  1,549,659 shares of the Company’s common stock, par value $0.01 per share, were issued and outstanding.

 

 

 

 

Heritage NOLA Bancorp, Inc. and Subsidiary

Form 10‑Q

Index

 

 

    

 

Page

 

 

Part I

 

 

 

 

 

Item 1. 

 

Consolidated Financial Statements

2

 

 

 

 

 

 

Consolidated Statements of Financial Condition as of September 30, 2019, (unaudited) and December 31, 2018

2

 

 

 

 

 

 

Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)

3

 

 

 

 

 

 

Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)

4

 

 

 

 

 

 

Consolidated Statements of Changes in Shareholder’s Equity for the Nine Months Ended September 30, 2019 and 2018 (unaudited)

5

 

 

 

 

 

 

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (unaudited)

6

 

 

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

7

 

 

 

 

Item 2. 

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

 

 

 

 

Item 3. 

 

Quantitative and Qualitative Disclosures about Market Risk

29

 

 

 

 

Item 4. 

 

Controls and Procedures

29

 

 

 

 

 

 

Part II

 

 

 

 

 

Item 1. 

 

Legal Proceedings

30

 

 

 

 

Item 1A. 

 

Risk Factors

30

 

 

 

 

Item 2. 

 

Unregistered Sales of Equity Securities and Use of Proceeds

30

 

 

 

 

Item 3. 

 

Defaults upon Senior Securities

30

 

 

 

 

Item 4. 

 

Mine Safety Disclosures

30

 

 

 

 

Item 5. 

 

Other Information

30

 

 

 

 

Item 6. 

 

Exhibits

31

 

 

 

 

 

 

Signature Pages

32

 

 

1

Item 1.  Consolidated Financial Statements

 

Heritage NOLA Bancorp, Inc. and Subsidiary

Consolidated Statements of Financial Condition

September 30, 2019 (Unaudited) and December 31, 2018

(In Thousands)

 

 

 

 

 

 

 

 

 

September 30, 

 

December 31, 

 

    

2019

    

2018

ASSETS

 

 

  

 

 

  

Cash and Due from Banks

 

$

1,121

 

$

529

Interest Earning Deposits in Banks

 

 

2,910

 

 

3,886

Total Cash and Cash Equivalents

 

 

4,031

 

 

4,415

Interest Earning Time Deposits in Banks

 

 

6,823

 

 

3,586

Securities Available for Sale, at Fair Value

 

 

6,710

 

 

4,221

Securities Held to Maturity

 

 

425

 

 

518

Mortgage Loans Held for Sale

 

 

 —

 

 

580

Loans Receivable, Net of Unearned Income

 

 

104,418

 

 

97,721

Allowance for Loan Losses

 

 

(756)

 

 

(768)

Total Loans, Net

 

 

103,662

 

 

97,533

Premises and Equipment

 

 

5,349

 

 

5,137

Federal Home Loan Bank Stock

 

 

821

 

 

802

Bank Owned Life Insurance

 

 

2,141

 

 

2,102

Foreclosed Real Estate

 

 

 —

 

 

 —

Prepaid Expenses and Other Assets

 

 

1,252

 

 

1,107

Total Assets

 

$

131,214

 

$

119,421

 

 

 

  

 

 

 

LIABILITIES AND EQUITY

 

 

  

 

 

 

Interest Bearing Deposits

 

$

85,143

 

$

72,953

Noninterest Bearing Deposits

 

 

4,798

 

 

4,344

Total Deposits

 

 

89,941

 

 

77,297

 

 

 

 

 

 

 

Borrowed Funds

 

 

16,328

 

 

16,822

Advances from Borrowers for Taxes and Insurance

 

 

607

 

 

282

Accrued Expenses and Other Liabilities

 

 

1,235

 

 

903

Total Liabilities

 

 

108,111

 

 

95,304

 

 

 

 

 

 

 

Shareholders’ Equity

 

 

 

 

 

 

Preferred Stock, $0.01 Par Value, 1,000,000 Shares Authorized, None Issued

 

 

 —

 

 

 —

Common Stock, $0.01 Par Value, 9,000,000 Shares Authorized, 1,561,259 and 1,674,036 Shares Issued and Outstanding on September 30, 2019 and December 31, 2018

 

 

16

 

 

17

Additional Paid-in Capital

 

 

13,710

 

 

14,953

Unallocated common stock held by:

 

 

 

 

 

 

Employee Stock Ownership Plan (ESOP)

 

 

(1,217)

 

 

(1,217)

Retained Earnings

 

 

10,577

 

 

10,395

Accumulated Other Comprehensive Income (Loss)

 

 

17

 

 

(31)

Total Shareholders’ Equity

 

 

23,103

 

 

24,117

Total Liabilities and Shareholders’ Equity

 

$

131,214

 

$

119,421

 

The accompanying notes are an integral part of these financial statements.

2

Heritage NOLA Bancorp, Inc. and Subsidiary

Consolidated Statements of Income

For the Three and Nine Months Ended September 30, 2019 and 2018 (Unaudited)

(In Thousands, except for Earnings Per Share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

 

 

    

2019

    

2018

    

2019

    

2018

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

 

  

 

 

  

 

 

  

 

 

  

 

Loans, including Fees

 

$

1,367

 

$

1,238

 

$

3,892

 

$

3,533

 

Investment Securities

 

 

42

 

 

29

 

 

102

 

 

94

 

Other Interest Earning Assets

 

 

97

 

 

45

 

 

228

 

 

123

 

Total Interest Income

 

 

1,506

 

 

1,312

 

 

4,222

 

 

3,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

377

 

 

249

 

 

942

 

 

675

 

Borrowed Funds

 

 

106

 

 

68

 

 

326

 

 

182

 

Total Interest Expense

 

 

483

 

 

317

 

 

1,268

 

 

857

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

 

1,023

 

 

995

 

 

2,954

 

 

2,893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for Loan Losses

 

 

 —

 

 

 —

 

 

 —

 

 

 5

 

Net Interest Income after Provision for Loan Losses

 

 

1,023

 

 

995

 

 

2,954

 

 

2,888

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on Sale of Loans Originated for Sale

 

 

43

 

 

17

 

 

83

 

 

33

 

Loan Servicing Income

 

 

65

 

 

39

 

 

166

 

 

116

 

Other Income

 

 

35

 

 

29

 

 

95

 

 

81

 

Total Noninterest Income

 

 

143

 

 

85

 

 

344

 

 

230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits

 

 

624

 

 

546

 

 

1,804

 

 

1,502

 

Occupancy and Equipment

 

 

114

 

 

107

 

 

331

 

 

302

 

Data Processing

 

 

45

 

 

59

 

 

133

 

 

163

 

FDIC Insurance and Examination Fees

 

 

14

 

 

21

 

 

55

 

 

66

 

Director Compensation

 

 

18

 

 

18

 

 

54

 

 

54

 

Legal, Accounting and Professional Fees

 

 

65

 

 

83

 

 

211

 

 

199

 

Advertising

 

 

30

 

 

26

 

 

85

 

 

75

 

Telephone and Communications

 

 

17

 

 

15

 

 

51

 

 

44

 

Other

 

 

121

 

 

114

 

 

339

 

 

322

 

Total Noninterest Expense

 

 

1,048

 

 

989

 

 

3,063

 

 

2,727

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Income Tax Expense

 

 

118

 

 

91

 

 

235

 

 

391

 

Income Tax Expense

 

 

35

 

 

18

 

 

53

 

 

76

 

Net Income

 

$

83

 

$

73

 

$

182

 

$

315

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share: Basic

 

$

0.06

 

$

0.05

 

$

0.12

 

$

0.21

 

Diluted

 

$

0.06

 

$

0.05

 

$

0.12

 

$

0.21

 

 

The accompanying notes are an integral part of these financial statements.

3

Heritage NOLA Bancorp, Inc. and Subsidiary

Consolidated Statements of Comprehensive Income (Loss)

For the Three and Nine Months Ended September 30, 2019 and 2018 (Unaudited)

(In Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

 

 

    

2019

    

2018

    

2019

    

2018

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

83

 

$

73

 

$

182

 

$

315

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Comprehensive Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized Holding Gains (Losses) on Securities Available for Sale

 

 

(6)

 

 

(10)

 

 

61

 

 

(95)

 

Income Tax Effect

 

 

 1

 

 

 2

 

 

(13)

 

 

20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Other Comprehensive Income (Loss)

 

 

(5)

 

 

(8)

 

 

48

 

 

(75)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive Income

 

$

78

 

$

65

 

$

230

 

$

240

 

 

The accompanying notes are an integral part of these financial statements.

4

Heritage NOLA Bancorp, Inc. and Subsidiary

Consolidated Statements of Changes in Shareholders’ Equity

For the Nine Months Ended September 30, 2019 and 2018 (Unaudited)

(In Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

Additional

 

Unallocated

 

 

 

 

Other

 

 

 

 

 

Common

 

Paid In

 

ESOP

 

Retained

 

Comprehensive

 

 

 

 

    

Stock

    

Capital

    

Shares

    

Earnings

    

Income (Loss)

    

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2018

 

$

17

 

$

15,440

 

$

(1,270)

 

$

9,977

 

$

 7

 

$

24,171

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Compensation Expense related to restricted shares

 

 

 —

 

 

 9

 

 

 —

 

 

 —

 

 

 —

 

 

 9

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Compensation Expense related to stock options

 

 

 —

 

 

 6

 

 

 —

 

 

 —

 

 

 —

 

 

 6

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Net Income

 

 

 —

 

 

 —

 

 

 —

 

 

315

 

 

 —

 

 

315

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Other Comprehensive Income (Loss)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(75)

 

 

(75)

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Balance at September 30, 2018

 

$

17

 

$

15,455

 

$

(1,270)

 

$

10,292

 

$

(68)

 

$

24,426

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Balance at January 1, 2019

 

$

17

 

$

14,953

 

$

(1,217)

 

$

10,395

 

$

(31)

 

$

24,117

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Compensation Expense related to restricted shares

 

 

 —

 

 

116

 

 

 —

 

 

 —

 

 

 —

 

 

116

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Compensation Expense related to stock options

 

 

 —

 

 

77

 

 

 —

 

 

 —

 

 

 —

 

 

77

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Stock Shares Repurchased

 

 

(1)

 

 

(1,436)

 

 

 —

 

 

 —

 

 

 —

 

 

(1,437)

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Net Income

 

 

 —

 

 

 —

 

 

 —

 

 

182

 

 

 —

 

 

182

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Other Comprehensive Income (Loss)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

48

 

 

48

 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Balance at September 30, 2019

 

$

16

 

$

13,710

 

$

(1,217)

 

$

10,577

 

$

17

 

$

23,103

 

The accompanying notes are an integral part of these financial statements.

5

Heritage NOLA Bancorp, Inc. and Subsidiary

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2019 and 2018 (Unaudited)

(In Thousands)

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 

 

    

2019

    

2018

 

 

 

 

 

 

 

Cash Flows from Operating Activities

 

 

  

 

 

  

Net Income

 

$

182

 

$

315

Adjustments to Reconcile Net Income (Loss) to Net Cash from Operating Activities

 

 

 

 

 

 

Provision for Loan Losses

 

 

 —

 

 

 5

Provision for Depreciation

 

 

165

 

 

148

Deferred Income Tax Expense (Benefit)

 

 

(18)

 

 

(11)

Change in Mortgage Servicing Rights

 

 

(41)

 

 

(10)

(Accretion) Amortization of Premiums and Discounts on Securities

 

 

20

 

 

27

(Accretion) Amortization of Deferred Loan Origination Fees

 

 

19

 

 

43

Gain on Sale of Loans Originated for Sale

 

 

(83)

 

 

(33)

Originations of Loans Held for Sale

 

 

(5,066)

 

 

(1,986)

Loss on disposal of Premise and Equipment

 

 

 —

 

 

 5

Stock dividends on FHLB Stock

 

 

(19)

 

 

(13)

Compensation expense related to stock benefit plans

 

 

193

 

 

15

Proceeds from Loans Held for Sale

 

 

5,729

 

 

2,019

Gain or Loss on Sale of Foreclosed Real Estate

 

 

 —

 

 

(1)

(Increase) Decrease in Accrued Interest Receivable

 

 

(18)

 

 

(15)

(Increase) Decrease in Bank Owned Life Insurance

 

 

(39)

 

 

(38)

(Increase) Decrease in Prepaid Expenses and Other Assets

 

 

(81)

 

 

25

Increase (Decrease) in Accrued Expenses and Other Liabilities

 

 

332

 

 

194

 

 

 

 

 

 

 

Net Cash provided by (used in) Operating Activities

 

 

1,275

 

 

689

 

 

 

  

 

 

  

Cash Flows from Investing Activities

 

 

  

 

 

  

Purchases of Securities Available for Sale

 

 

(3,258)

 

 

 —

Principal Collected on Securities Available for Sale

 

 

814

 

 

923

Principal Collected on Securities Held to Maturity

 

 

89

 

 

99

Purchase of Federal Home Loan Bank Stock

 

 

 —

 

 

 —

Net Change in Interest-earning Time Deposits at Banks

 

 

(3,237)

 

 

249

Net (Increase) Decrease in Loans

 

 

(6,728)

 

 

(5,654)

Purchases of Premises and Equipment

 

 

(377)

 

 

(1,235)

Proceeds from Sales of Foreclosed Real Estate

 

 

 —

 

 

85

 

 

 

  

 

 

 

Net Cash provided by (used in) Investing Activities

 

 

(12,697)

 

 

(5,533)

 

 

 

  

 

 

  

Cash Flows from Financing Activities

 

 

  

 

 

  

Net Increase (Decrease) in Deposits

 

 

12,644

 

 

6,223

Shares Repurchased

 

 

(1,437)

 

 

 —

Advances from Borrowers for Taxes and Insurance

 

 

325

 

 

338

Borrowed Funds

 

 

8,300

 

 

8,750

Repayments of Borrowed Funds

 

 

(8,794)

 

 

(10,062)

 

 

 

  

 

 

 

Net Cash provided by (used in) Financing Activities

 

 

11,038

 

 

5,249

 

 

 

  

 

 

 

Net Change in Cash and Cash Equivalents

 

 

(384)

 

 

405

 

 

 

  

 

 

 

Cash and Cash Equivalents - Beginning of Period

 

 

4,415

 

 

4,038

 

 

 

  

 

 

 

Cash and Cash Equivalents - End of Period

 

$

4,031

 

$

4,443

 

 

 

  

 

 

 

Supplemental Disclosure of Cash Flow Information

 

 

  

 

 

 

Cash paid during the period for:

 

 

  

 

 

 

Interest Paid on Deposits

 

$

931

 

$

674

Interest Paid on Borrowed Funds

 

$

326

 

$

176

Income Taxes Paid

 

$

53

 

$

76

 

The accompanying notes are an integral part of these financial statements.

6

Heritage NOLA Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements (Unaudited)

Note A – Basis of Presentation

The accompanying unaudited consolidated financial statements of Heritage NOLA Bancorp, Inc. and Subsidiary (the “Company”) 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, comprehensive income, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America.

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 three and nine month periods ended September 30, 2019 are not necessarily indicative of the results which may be expected for the entire year. These statements should be read in conjunction with the Financial Statements and notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the Securities and Exchange Commission (“SEC”). Reference is made to the accounting policies of the Company described in the Notes to the Financial Statements contained in the Annual Report.

In preparing the financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s financial condition, results of operations, comprehensive income, changes in shareholders’ equity and cash flows for the interim periods presented. These adjustments are of a normal recurring nature and include appropriate estimated provisions.

The consolidated financial statements include Heritage NOLA Bancorp, Inc. and its wholly-owned subsidiary, Heritage Bank of St. Tammany (the “Bank”), together referred to as the Company. Intercompany transactions and balances have been eliminated in consolidation.

Certain reclassifications have been made to the 2018 financial information in order to conform to the 2019 financial statement presentation. Such reclassifications had no effect on previously reported net income.

 

Note B – Recent Accounting Pronouncements

Emerging Growth Company Status

The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as the Company is an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to other public companies. An emerging growth company may elect to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the company is first required to file a registration statement. The Company has elected to use the extended transition period described above and intends to maintain its emerging growth company status as allowed under the JOBS Act.

In May 2014, the FASB issued ASU No. 2014‑09, Revenue from Contracts with Customers. The provisions of the update requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In March 2016, the FASB issued ASU 2016‑08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the guidance in determining revenue recognition as principal versus agent. In April 2016, the FASB issued ASU 2016‑10, Identifying Performance Obligations and Licensing, which provides guidance in accounting for immaterial performance obligations and shipping and handling. In May 2016, the FASB issued ASU 2016‑12, Narrow-Scope Improvements and Practical Expedients which provides clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for noncash consideration and completed contracts at transition. This ASU also provides a practical expedient for contract modifications. For an emerging growth company,

7

the amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The Company is currently assessing the amendment but does not anticipate it will have a material impact on our Consolidated Financial Statements.

In January 2016, the FASB issued ASU No. 2016‑01, Financial Instruments - Overall (Subtopic 825‑ 10), Recognition and Measurement of Financial Assets and Financial Liabilities. The provisions of the update require equity investments to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment. The update also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. It also eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities, and eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet. ASU No. 2016‑01 requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. It also requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The update requires separate presentation of financial assets and financial liabilities by category and form on the balance sheet or the accompanying notes to the financial statements. In addition, the update clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The adoption of this ASU is not expected to have a material impact on the Company’s Consolidated Financial Statements.

In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842), Conforming Amendments Related to Leases. This ASU amends the codification regarding leases in order to increase transparency and comparability. The ASU requires companies to recognize lease assets and liabilities on the statement of condition and disclose key information about leasing arrangements. A lessee would recognize a liability to make lease payments and a right-of-use asset representing its right to use the leased asset for the lease term. On October 18, 2019, the FASB approved an effective date delay applicable to emerging growth companies until January 2021. The adoption of this ASU is not expected to have a material effect on the Company’s Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016‑13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The amendments introduce an impairment model that is based on expected credit losses (“ECL”), rather than incurred losses, to estimate credit losses on certain types of financial instruments (ex. loans and held to maturity securities), including certain off-balance sheet financial instruments (ex. commitments to extend credit and standby letters of credit that are not unconditionally cancellable). The ECL should consider historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments, over the contractual term. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. Financial instruments with similar risk characteristics may be grouped together when estimating the ECL. The ASU also amends the current available for sale security impairment model for debt securities whereby credit losses relating to available for sale debt securities should be recorded through an allowance for credit losses. On October 18, 2019, the FASB approved an effective date delay applicable to emerging growth companies until January 2023. The amendments will be applied through a modified retrospective approach, resulting in a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently planning for the implementation of this accounting standard. It is too early to assess the impact this guidance will have on our Consolidated Financial Statements.

In August 2016, FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. The amendments in this ASU clarify the proper classification for certain cash receipts and cash payments, including clarification on debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, among others. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years beginning after December

8

15, 2019. The Company is currently assessing the amendment but does not anticipate it will have a material impact on our Consolidated Financial Statements.

In June 2018, FASB issued ASU No. 2018‑07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment”. The amendments in this ASU expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company is currently assessing the amendment but does not anticipate it will have a material impact on our Consolidated Financial Statements.

In August 2018, FASB issued ASU 2018‑13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments in this ASU modify the disclosure requirements related to fair value. Certain provisions under ASU 2018‑13 require prospective application, while other provisions require retrospective application to all period presented in the consolidated financial statements upon adoption. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing the amendment but does not anticipate it will have a material impact on our Consolidated Financial Statements.

 

Note C – Investment Securities

The amortized costs and estimated fair values of investment securities classified as available for sale and held to maturity as of September 30, 2019 and December 31, 2018 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2019

 

 

 

 

 

Gross

 

Gross

 

 

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

(in thousands)

    

Cost

    

Gains

    

(Losses)

    

Value

Available for Sale: