HFBL 10-Q
Home Federal Bancorp, Inc. of Louisiana (HFBL)
10-Q
2025-11-10
For: 2025-09-30
View Original
Added on
April 09, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended: |
or
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the transition period from
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to
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| Commission file number: | |
| |
| (Exact name of registrant as specified in its charter) |
| | | |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
| | | |
| (Address of principal executive offices) | (Zip Code) |
| ( |
| (Registrant’s telephone number, including area code) |
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N/A
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(Former name, former address and former fiscal year, if changed since last report)
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| | | |
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. ☒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). ☒ 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. (Check One):
| Large accelerated filer | ☐ | 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 Exchange Act). ☐ Yes ☒ No
Shares of common stock, par value $0.01 per share, outstanding as of November 6, 2025: The registrant had 3,088,261 shares of common stock outstanding.
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Page
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PART I
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FINANCIAL INFORMATION
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Item 1:
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Financial Statements (Unaudited)
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1
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2
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3
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4
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5
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7
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Item 2:
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34 | |
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Item 3:
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41
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Item 4:
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41
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PART II
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OTHER INFORMATION
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Item 1:
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42
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Item 1A:
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42
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Item 2:
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42
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Item 3:
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42
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Item 4:
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42
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Item 5:
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42
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Item 6:
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43
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HOME FEDERAL BANCORP, INC. OF LOUISIANA
(In thousands except share and per share data)
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September 30, 2025
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June 30, 2025
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(Unaudited)
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ASSETS
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| Cash and Cash Equivalents (Includes Interest-Bearing Deposits with Other Banks of $ |
$ |
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$ |
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| Securities Available-for-Sale (amortized cost September 30, 2025: $ |
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| Securities Held-to-Maturity (fair value September 30, 2025: $ |
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Other Securities
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Loans Held-for-Sale
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| Loans Receivable, Net of Allowance for Credit Losses (September 30, 2025: $ |
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Accrued Interest Receivable
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Premises and Equipment, Net
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Bank Owned Life Insurance
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Goodwill
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Core Deposit Intangible
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Deferred Tax Asset
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Real Estate Owned
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Other Assets
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Total Assets
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$
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$
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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LIABILITIES
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Deposits:
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Non-interest bearing
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$
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$
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Interest-bearing
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Total Deposits
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Advances from Borrowers for Taxes and Insurance
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Other Borrowings
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Other Accrued Expenses and Liabilities
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Total Liabilities
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STOCKHOLDERS’ EQUITY
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| Preferred Stock - $ |
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| Common Stock - $ |
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Additional Paid-in Capital
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Unearned ESOP Stock
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( |
)
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( |
)
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Retained Earnings
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Accumulated Other Comprehensive Loss
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( |
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( |
)
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Total Stockholders’ Equity
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$
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$
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||||
See accompanying notes to consolidated financial statements.
HOME FEDERAL BANCORP, INC. OF LOUISIANA
(In thousands except per share data)
(Unaudited)
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Three Months Ended
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September 30,
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2025
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2024
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INTEREST INCOME
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Loans, including fees
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$
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$
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Investment securities
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Mortgage-backed securities
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Other interest-earning assets
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Total interest income
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INTEREST EXPENSE
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Deposits
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Other bank borrowings
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Total interest expense
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Net interest income
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PROVISION FOR (RECOVERY OF) CREDIT LOSSES
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( |
)
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Net interest income after provision for credit losses
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NON-INTEREST INCOME
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Gain on sale of loans
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Loss on sale of real estate
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( |
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Income on bank owned life insurance
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Service charges on deposit accounts
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Other income
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Total non-interest income
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NON-INTEREST EXPENSE
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Compensation and benefits
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Occupancy and equipment
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Data processing
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Audit and examination fees
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Franchise and bank shares tax
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Advertising
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Professional fees
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Loan and collection
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Amortization core deposit intangible
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Deposit insurance premium
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Other expenses
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Total non-interest expense
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Income before income taxes
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PROVISION FOR INCOME TAX EXPENSE (BENEFIT)
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( |
)
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NET INCOME
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$
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$
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EARNINGS PER SHARE
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Basic
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$
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$
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Diluted
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$
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$
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See accompanying notes to consolidated financial statements.
HOME FEDERAL BANCORP, INC. OF LOUISIANA
(In Thousands)
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For the Three Months Ended
September 30,
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2025
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2024
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(Unaudited)
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Net Income
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$
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$
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Other Comprehensive Income, Net of Tax
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Unrealized gains on securities available for sale:
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Unrealized holding gains arising during the period
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Income tax effect
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( |
)
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( |
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Total Other Comprehensive Income, Net of Tax
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Total Comprehensive Income
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$
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$
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See accompanying notes to consolidated financial statements.
HOME FEDERAL BANCORP, INC. OF LOUISIANA
THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
(In Thousands)
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Common
Stock
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Additional
Paid-in
Capital
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Unearned
ESOP
Stock
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Retained
Earnings
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Accumulated
Other
Comprehensive
Income (Loss)
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Total
Stockholders’
Equity
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|||||||||||||||||||
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(Unaudited)
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||||||||||||||||||||||||
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BALANCE – June 30, 2024
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$
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$
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$
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( |
)
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$
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$
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( |
)
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$
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ESOP Compensation Earned
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Stock Options Exercised
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Dividends Paid
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( |
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( |
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Stock Options Vested
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Company Stock Purchased
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( |
)
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( |
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Net Income
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Other Comprehensive Loss,
Unrealized Gain on Debt Securities,
Net of Tax
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BALANCE – September 30, 2024
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$
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$
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$
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( |
)
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$
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$
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( |
)
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$
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||||||||||
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BALANCE – June 30, 2025
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$
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$
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$
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( |
)
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$
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$
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( |
)
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$
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||||||||||
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ESOP Compensation Earned
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Stock Options Exercised
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Dividends Paid
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( |
)
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( |
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Stock Options Vested
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Company Stock Purchased
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( |
)
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( |
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Net Income
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Other Comprehensive Loss,
Unrealized Gain on Debt Securities,
Net of Tax
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BALANCE – September 30, 2025
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$
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$
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$
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( |
)
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$
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$
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( |
)
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$
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See accompanying notes to consolidated financial statements.
HOME FEDERAL BANCORP, INC. OF LOUISIANA
(In Thousands)
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Three Months Ended
September 30,
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||||||||
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2025
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2024
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(Unaudited)
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net Income
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$
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$
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Adjustments to Reconcile Net Income to Net
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Cash Provided by Operating Activities
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Gain on Sale of Loans
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( |
)
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( |
)
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Net Amortization and Accretion on Securities
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( |
)
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Amortization of Deferred Loan Fees
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( |
)
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( |
)
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Amortization of Purchased Loans
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( |
)
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( |
)
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Provision for (Recovery of) Loan Losses
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( |
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Depreciation of Premises and Equipment
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Loss on Sales of Real Estate
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ESOP Compensation Expense
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Stock Option Expense
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Deferred Income Tax Expense (Benefit)
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( |
)
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Increase in Cash Surrender Value on Bank Owned Life Insurance
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( |
)
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( |
)
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Amortization Core Deposit Intangible
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Changes in Assets and Liabilities:
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Origination and Purchase of Loans Held-for-Sale
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( |
)
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( |
)
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Sale and Principal Repayments on Loans Held-for-Sale
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Accrued Interest Receivable
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( |
)
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Other Operating Assets
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( |
)
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Other Operating Liabilities
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Net Cash Provided by Operating Activities
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CASH FLOWS FROM INVESTING ACTIVITIES
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Loan Originations and Purchases, Net
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( |
)
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Deferred Loan Fees Collected
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Acquisition of Premises and Equipment
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( |
)
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( |
)
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Proceeds from Sale of Premises and Equipment
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Proceeds from Sale of Real Estate
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Improvements to Real Estate Owned Prior to Disposition
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( |
)
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( |
)
|
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Changes in Federal Home Loan Bank Stock
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( |
)
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( |
)
|
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Activity in Available-for-Sale Securities:
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Principal Payments on Securities
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Purchase of Mortgage-Backed Securities
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( |
)
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( |
)
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Activity in Held-to-Maturity Securities:
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Principal Payments on Mortgage-Backed Securities
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Net Cash (Used in) Provided by Investing Activities
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( |
)
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See accompanying notes to consolidated financial statements.
HOME FEDERAL BANCORP, INC. OF LOUISIANA
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In Thousands)
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Three Months Ended
|
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September 30,
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2025
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2024
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(Unaudited)
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CASH FLOWS FROM FINANCING ACTIVITIES
|
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Net Increase (Decrease) in Deposits
|
$
|
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$
|
( |
)
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Dividends Paid
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( |
)
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( |
)
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Company Stock Purchased
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( |
)
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( |
)
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Net Increase in Advances from Borrowers for Taxes and Insurance
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Repayments of Other Bank Borrowings
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( |
)
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Proceeds from Stock Options Exercised
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Net Cash Provided by (Used in) Financing Activities
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( |
)
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NET INCREASE IN CASH AND CASH EQUIVALENTS
|
|
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||||||
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CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
$
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$
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|
||||
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CASH AND CASH EQUIVALENTS - END OF PERIOD
|
$
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$
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|
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SUPPLEMENTARY CASH FLOW INFORMATION
|
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Interest Paid on Deposits and Borrowed Funds
|
$
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$
|
|
||||
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Transfer from Loans to Other Real Estate Owned
|
|
|
||||||
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Income Taxes Paid
|
||||||||
See accompanying 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 three month period ended September 30, 2025 are not necessarily indicative of the results which may be expected for the fiscal year ending June 30,
2026. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K as of and for the year
ended June 30, 2025 (the "Company's 2025 Form 10-K").
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 statement of financial condition date for potential recognition in the consolidated
financial statements. The effect of all subsequent events that provide additional evidence of conditions that existed at the statement of financial condition date are recognized in the consolidated financial statements as of September 30, 2025.
In preparing these consolidated financial statements, the Company evaluated the events and transactions that occurred through the date these consolidated financial statements were issued.
Segment Reporting
The Company determined that all of its banking operations serve a similar customer base, offer similar products and services, and are managed through similar processes. Therefore, the Company’s banking operations are aggregated into one reportable operating segment, which generates income principally from interest on loans and, to a lesser extent, securities investments, as well as from fees charged in connection with various loan and deposit services. The Chief Operating Decision Maker (“CODM”), is the President and Chief Executive Officer, who for the purposes of assessing performance, making operating decisions, and allocating Company resources, regularly reviews net income as reported in the accompanying consolidated statements of operations. The level of disaggregation and amounts of significant segment income and expenses that are regularly provided to the CODM are the same as those presented in the accompanying consolidated statements of operations. Likewise, the measure of segment assets is reported on the accompanying consolidated balance sheets as total assets.
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 balance sheets 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 credit losses.
7
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Accounting Policies (continued)
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 ten full-service banking offices and home office, located in Caddo, Bossier and Webster Parishes, Louisiana. The area served by the Bank is primarily the Shreveport-Bossier City-Minden combined statistical area; however, loan and deposit customers are found dispersed in a wider geographical area covering much of northwest Louisiana. As of September 30, 2025, 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.
Securities
Securities are being accounted for in accordance with FASB ASC 320’s, Investments, which requires the classification of securities
into one of three categories: Trading, Available-for-Sale, or Held-to-Maturity. Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates this classification periodically.
Investments in 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 cost, adjusted for amortization of the related premiums
and accretion of discounts, using the interest method. Investments in debt securities that are not classified as held-to-maturity 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 debt securities are excluded from earnings and reported in other comprehensive income.
The Company held no
Purchase premiums and discounts are recognized in interest income using the interest method over the term of the securities. Securities
are periodically reviewed for impairment. For debt securities in an unrealized loss position, the Company evaluates the securities to determine whether the decline is in the fair value below amortized cost basis (impairment) is due to credit
or non-credit related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. For available for sale investments, credit related impairment is recognized as an allowance for
credit losses (“ACL”) on the balance sheet, limited to the amount by which the amortized cost basis exceeds to the fair value, with a corresponding adjustment to earnings. For held to maturity investments, credit related impairment is
recognized as an ACL on the balance sheet, for the entire amount of credit loss, with a corresponding adjustment to earnings. Both the ACL and the adjustment to net income may be reversed if conditions change. However, if the Company intends
to sell an impaired available for sale security, or more likely than not will be required to sell such security before recovering the amortized cost basis, the entire impairment amount must be recognized in earnings with a corresponding
adjustment to the security's amortized cost basis. Because the security's amortized cost basis is adjusted to fair value, there is no ACL is such situation. Accrued interest is receivable is excluded from the estimate of credit losses.
8
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Accounting Policies (continued)
Securities (continued)
In evaluating securities in unrealized loss positions, for impairment and the criteria regarding intent or requirement to sell such securities, the Company considers the extent to which
fair value is less than amortized cost, whether the securities are issued by federal governments or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer's financial conditions, among
other factors.
The Bank has invested in Federal Home Loan Bank (“FHLB”) stock, and other similar correspondent banks, which is reflected at cost in these consolidated financial statements. As a member of the FHLB System, the Bank is required to purchase and maintain stock in an amount determined by the FHLB. The FHLB stock is redeemable at par value at the discretion of the FHLB.
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.
Loans Receivable
Loans receivable are stated as unpaid principal balances less ACL 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 Credit Losses
The Company has elected to exclude accrued interest receivable from the measurement of its ACL. When a loan is placed on non-accrual status, any outstanding accrued interest is reversed against interest income.
The ACL for loans is an estimate of the expected losses to be realized over the life of the loans in the portfolio. The ACL is determined for two distinct categories of loans: 1) loans evaluated collectively for expected credit losses and 2) loans evaluated individually for expected credit losses. The ACL also includes certain qualitative adjustments to the ASU 2016-13 model.
Loans Evaluated Collectively. Homogeneous loans are evaluated collectively for expected credit losses. The loan pools/segments with similar risk characteristics were
determined by Call Report codes.
Loans Evaluated Individually. Loans evaluated individually for expected credit losses could include loans on non-accrual status.
Management estimates the allowance balance using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. Adjustments to
historical loss information are made to incorporate our reasonable and supportable forecast of future losses at the portfolio segment level, as well as any necessary qualitative adjustments, including, but not limited to, changes in current and
expected future economic conditions, changes in industry experience and industry loan concentrations, changes in the volume and severity of nonperforming assets, changes in lending policies and personnel and changes in the competitive and
regulatory environment of the banking industry. Loans that do not share similar risk characteristics are individually evaluated and are excluded from the pooled loan analysis.
9
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Accounting Policies (continued)
Allowance for Credit Losses (continued)
Loans evaluated individually may have specific allocations assigned if the measured value of the loan using one of the noted techniques is less than its current carrying value. For loans measured using the fair value
of collateral, if the analysis determines that sufficient collateral value would be available for repayment of the debt, then no allocations would be assigned to those loans. Collateral could be in the form of real estate or business assets, such
as accounts receivable or inventory, in the case of commercial and industrial loans. Commercial and industrial loans may also be secured by real estate.
Management regularly reviews loans in the portfolio to assess credit quality indicators and to determine appropriate loan classification. For all loans, an internal risk rating process is used. The Company believes
that internal risk ratings are the most relevant credit quality indicator for these types of loans. Assigning risk ratings involves judgment. Risk ratings may be changed based on ongoing monitoring procedures, or if specific loan review assessments
identify a deterioration or an improvement in the loan.
The following is a summary of the Company’s internal risk rating categories:
| • |
Pass: Loans classified as pass are well protected by the current net worth or paying capacity of the obligor or by the fair value, less costs to acquire and sell the underlying collateral in a timely manner.
|
| • |
Pass Watch - Loans are considered marginal, meaning some weakness has been identified which could cause future impairment of repayment. However, these relationships are currently protected from any apparent loss by collateral.
|
| • |
Special Mention: Loans identified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the
loan or of the Bank’s credit position at some future date.
|
| • |
Substandard: Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses
that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
|
| • |
Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing
facts, conditions, and values, highly questionable and improbable.
|
| • |
Loss: This classification includes those loans which are considered uncollectible and of such little value that their continuance as loans is not warranted. Even though partial recovery may be possible in the future, it is not practical
or desirable to defer writing off these basically worthless loans. Accordingly, these loans are charged-off before period end.
|
The allocation of the ACL is reviewed to evaluate its appropriateness in relation to the overall risk profile of the loan portfolio. The Company considers risk factors such as: local and national economic conditions;
trends in delinquencies and non-accrual loans; the diversity of borrower industry types; and the composition of the portfolio by loan type.
10
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Accounting Policies (continued)
Allowance for Credit Losses (continued)
Qualitative and Other Adjustments to Allowance for Credit Losses: In addition to the quantitative credit loss estimates for loans evaluated collectively, qualitative factors that may not be fully captured in the
quantitative results are also evaluated. These include changes in lending policy, the nature and volume of the portfolio, overall business conditions in the economy, credit concentrations, competition, model imprecision, and legal and regulatory
requirements. Qualitative adjustments are judgmental and are based on Management’s knowledge of the portfolio and the markets in which the Company operates. Qualitative adjustments are evaluated and approved on a quarterly basis. Additionally, the
ACL includes other allowance categories that are not directly incorporated in the quantitative results. These include but are not limited to loans-in-process, trade acceptances and overdrafts.
Off Balance Sheet Credit Exposures. The ACL for off balance sheet credit exposures is recorded in other liabilities on the Consolidated Balance Sheet. This ACL represents
management’s estimate of expected losses in its unfunded loan commitments and other off balance sheet credit exposures, such as letters of credit and credit recourse on sold residential mortgage loans. The allowance for credit losses specific to
unfunded commitments is determined by estimating future draws and applying the expected loss rates on those draws. Future draws are based on historical averages of utilization rates (i.e., the likelihood of draws taken). The ACL for off balance
sheet credit exposures is increased or decreased by charges or reductions to expense, through the provision for credit losses. In addition to the ACL on loans held for investment, CECL requires a balance
sheet liability for unfunded commitments, which is recognized if both of the following conditions are met: (1) the Company has a present contractual obligation to extend credit; and (2) the obligation is not unconditionally cancellable by the
Company. Based on the language within the standard loan documents prepared for each Home Federal Bank commitment, all unfunded commitments are considered unconditionally cancellable and thus no CECL ACL is allocated.
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.
Real Estate Owned
Assets acquired through, or in lieu of, loan foreclosure are held-for-sale and carried at the lower of cost or current fair value minus estimated costs 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 |
||
| Furniture and Equipment |
Bank-Owned Life Insurance
The Bank 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.
11
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Accounting Policies (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 FASB 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 Company 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.
Stock-Based Compensation
GAAP requires all share-based payments to employees, including grants of employee stock options and share awards, to be recognized as expense in the consolidated statements of income based on their fair values. The
amount of compensation is measured at the fair value of the options or share awards when granted, and this cost is expensed over the required service period, which is normally the vesting period of the options or share awards.
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 require that recognized revenue, expenses, gains, and losses be included in net income. Although certain changes in assets and liabilities,
such as unrealized gains and losses on available-for-sale debt securities, are reported as a separate component of the equity section of the consolidated statements of financial conditions along with net income, they are components of comprehensive
income.
12
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Accounting Policies (continued)
Recent Accounting Pronouncements
FASB ASC Topic 280 “Segment Reporting: Improvements to Reportable Segments Disclosures” Update No. 2023-07 (“ASU 2023-07”). ASU 2023-07 became effective for the Company for the fiscal year ended June
30, 2025 and will be applied in interim periods beginning after June 30, 2025. ASU 2023-07 requires public entities to
disclose the title and position of the entity’s CODM and an explanation of how the CODM utilizes the reported measures of profit or loss to assess segment performance and allocate resources, significant segment expenses, an amount and
description for other segment items, and, on an interim basis, certain segment related disclosures that previously were required only on an annual basis. ASU 2023-07 also clarifies that entities with a single reportable segment are subject to both new and existing segment reporting
requirements and that an entity is permitted to disclose multiple measures of segment profit or loss, provided that certain criteria are met. The adoption of ASU 2023-07 did not have a material
impact on the Company’s consolidated financial statements.
13
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
2. Securities
The amortized cost and fair value of securities with gross unrealized gains and losses follows:
|
September 30, 2025
|
||||||||||||||||
|
Gross
|
Gross
|
|||||||||||||||
|
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
|
Securities Available-for-Sale
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
|
(In Thousands)
|
||||||||||||||||
|
Debt Securities
|
||||||||||||||||
|
FHLMC Mortgage-Backed Certificates
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
FNMA Mortgage-Backed Certificates
|
|
|
|
|
||||||||||||
|
GNMA Mortgage-Backed Certificates
|
|
|
|
|
||||||||||||
|
Total Debt Securities
|
|
|
|
|
||||||||||||
|
|
||||||||||||||||
|
Total Securities Available-for-Sale
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Securities Held-to-Maturity
|
||||||||||||||||
|
Debt Securities
|
||||||||||||||||
|
FHLMC Mortgage-Backed Certificates
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
FNMA Mortgage-Backed Certificates
|
|
|
|
|
||||||||||||
|
GNMA Mortgage-Backed Certificates
|
|
|
|
|
||||||||||||
|
Total Debt Securities
|
|
|
|
|
||||||||||||
|
Municipal Bonds
|
|
|
|
|
||||||||||||
|
Total Securities Held-to-Maturity
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
14
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
2. Securities (continued)
|
June 30, 2025
|
||||||||||||||||
|
Gross
|
Gross
|
|||||||||||||||
|
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
|
Securities Available-for-Sale
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
|
|
(In Thousands)
|
|||||||||||||||
|
Debt Securities
|
|
|||||||||||||||
|
FHLMC Mortgage-Backed Certificates
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
FNMA Mortgage-Backed Certificates
|
|
|
|
|
||||||||||||
|
GNMA Mortgage-Backed Certificates
|
|
|
|
|
||||||||||||
|
Total Debt Securities
|
|
|
|
|
||||||||||||
|
Municipal Bonds
|
|
|
|
|
||||||||||||
|
Total Securities Available-for-Sale
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Securities Held-to-Maturity
|
||||||||||||||||
|
Debt Securities
|
||||||||||||||||
|
FHLMC Mortgage-Backed Certificates
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
FNMA Mortgage-Backed Certificates
|
|
|
|
|
||||||||||||
|
GNMA Mortgage-Backed Certificates
|
|
|
|
|
||||||||||||
|
Total Debt Securities
|
|
|
|
|
||||||||||||
|
Municipal Bonds
|
|
|
|
|
||||||||||||
|
Total Securities Held-to-Maturity
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
The amortized cost and fair value of securities by contractual maturity at September 30, 2025 follows:
|
Available-for-Sale
|
Held-to-Maturity
|
|||||||||||||||
|
Amortized
|
Fair
|
Amortized
|
Fair
|
|||||||||||||
|
Cost
|
Value
|
Cost
|
Value
|
|||||||||||||
|
(In Thousands)
|
||||||||||||||||
|
Debt Securities
|
||||||||||||||||
|
One through Five Years
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
After Five through Ten Years
|
|
|
|
|
||||||||||||
|
Over Ten Years
|
|
|
|
|
||||||||||||
| |
|
|
|
|||||||||||||
|
Municipal Bonds
|
||||||||||||||||
|
Within One Year or Less
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
After Five through Ten Years
|
|
|
|
|
||||||||||||
| |
|
|
|
|||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
15
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
2. Securities (continued)
The amortized cost and fair value of securities by contractual maturity at June 30, 2025, follows:
|
Available-for-Sale
|
Held-to-Maturity
|
|||||||||||||||
|
Amortized
|
Fair
|
Amortized
|
Fair
|
|||||||||||||
|
Cost
|
Value
|
Cost
|
Value
|
|||||||||||||
|
(In Thousands)
|
||||||||||||||||
|
Debt Securities
|
||||||||||||||||
|
One through Five Years
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
After Five through Ten Years
|
|
|
|
|
||||||||||||
|
Over Ten Years
|
|
|
|
|
||||||||||||
| |
|
|
|
|||||||||||||
|
Municipal Bonds
|
||||||||||||||||
|
Within One Year or Less
|
|
|
|
|
||||||||||||
|
After Five through Ten Years
|
|
|
|
|
||||||||||||
| |
|
|
|
|||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
The following tables show information pertaining to gross unrealized losses on securities available-for-sale and held-to-maturity at September 30, 2025 and June 30, 2025 aggregated by investment category and length of time that individual securities have been in a continuous loss position.
|
September 30, 2025
|
||||||||||||||||
|
Less Than Twelve Months
|
Over Twelve Months
|
|||||||||||||||
|
Gross
|
Gross
|
|||||||||||||||
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
|||||||||||||
|
Losses
|
Value
|
Losses
|
Value
|
|||||||||||||
|
(In Thousands)
|
||||||||||||||||
|
Securities Available-for-Sale
|
||||||||||||||||
|
Mortgage-Backed Securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Total Securities Available-for-Sale
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
September 30, 2025
|
||||||||||||||||
|
Less Than Twelve Months
|
Over Twelve Months
|
|||||||||||||||
|
Gross
|
Gross
|
|||||||||||||||
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
|||||||||||||
|
Losses
|
Value
|
Losses
|
Value
|
|||||||||||||
|
(In Thousands)
|
||||||||||||||||
|
Securities Held-to-Maturity
|
||||||||||||||||
|
Mortgage-Backed Securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Municipals
|
|
|
|
|
||||||||||||
|
|
||||||||||||||||
|
Total Securities Held-to-Maturity
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
16
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
2. Securities (continued)
|
June 30, 2025
|
||||||||||||||||
|
Less Than Twelve Months
|
Over Twelve Months
|
|||||||||||||||
|
Gross
|
Gross
|
|||||||||||||||
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
|||||||||||||
|
Losses
|
Value
|
Losses
|
Value
|
|||||||||||||
|
(In Thousands)
|
||||||||||||||||
|
Securities Available-for-Sale
|
||||||||||||||||
|
Mortgage-Backed Securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Total Securities Available-for-Sale
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
June 30, 2025
|
||||||||||||||||
|
Less Than Twelve Months
|
Over Twelve Months
|
|||||||||||||||
|
Gross
|
Gross
|
|||||||||||||||
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
|||||||||||||
|
Losses
|
Value
|
Losses
|
Value
|
|||||||||||||
|
(In Thousands)
|
||||||||||||||||
|
Securities Held-to-Maturity
|
||||||||||||||||
|
Mortgage-Backed Securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Municipals
|
|
|
|
|
||||||||||||
|
|
||||||||||||||||
|
Total Securities Held-to-Maturity
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
At September 30, 2025, the Company’s security portfolio consisted of 80 securities, 50 of which were in an unrealized loss position. At June 30, 2025, the Company’s security portfolio consisted of 74 securities, 53 of which were in an unrealized loss position. The unrealized losses on the Company’s investment in mortgage-backed securities at September 30, 2025 and June 30, 2025 were caused by interest rate changes. The contractual cash flows of these investments are guaranteed by agencies of the U.S. government. Accordingly, it is expected that these securities would not be settled at a price less than the amortized cost of the Company’s investment. Because the decline in market value is attributable to changes in interest rates and not credit quality and because the Company has the ability and intent to hold these investments until a recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2025.
At September 30, 2025 and June 30, 2025, securities with a carrying value of $23.921 million and $24.517 million, respectively, were pledged to secure certain deposits, borrowings, and other liabilities.
17
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Loans Receivable
Loans receivable are summarized as follows:
|
September 30, 2025
|
June 30, 2025
|
|||||||
|
(In Thousands)
|
||||||||
|
Loans Secured by Mortgages on Real Estate
|
||||||||
|
One-to-Four Family Residential
|
$
|
|
$
|
|
||||
|
Commercial
|
|
|
||||||
|
Multi-Family Residential
|
|
|
||||||
|
Land
|
|
|
||||||
|
Construction
|
|
|
||||||
|
Equity and Second Mortgage
|
|
|
||||||
|
Equity Lines of Credit
|
|
|
||||||
|
Total Mortgage Loans
|
|
|
||||||
|
Commercial Loans
|
|
|
||||||
|
Consumer Loans
|
||||||||
|
Loans on Savings Accounts
|
|
|
||||||
|
Other Consumer Loans
|
|
|
||||||
|
Total Consumer Other Loans
|
|
|
||||||
|
Total Loans
|
|
|
||||||
|
Less: Allowance for Credit Losses
|
( |
)
|
( |
)
|
||||
|
Unamortized Loan Fees
|
( |
)
|
( |
)
|
||||
|
Net Loans Receivable
|
$
|
|
$
|
|
||||
Credit Quality Indicators
The Company segregates loans into risk categories based on the pertinent information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit
documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans according to credit risk. Loans classified as substandard or identified as special mention are
reviewed quarterly by management to evaluate the level of deterioration, improvement, and impairment, if any, as well as assign the appropriate risk category.
Loans excluded from the scope of the quarterly review process above are generally identified as pass credits until: (a) they become past due; (b) management becomes aware of a deterioration in the credit worthiness
of the borrower; or (c) the customer contacts the Company for a modification. In these circumstances, the loan is specifically evaluated for potential classification and the need to allocate reserves or charge-off.
The Company uses the following definitions for risk ratings:
Pass - Loans classified as pass are well protected by the current net worth or paying capacity of the obligor or by the fair value, less cost to acquire and sell the underlying collateral in a timely manner.
Pass Watch – Loans are considered marginal, meaning some weakness has been identified which could cause future impairment of repayment. However, these relationships are currently protected from any apparent loss by
collateral and are still considered a pass.
18
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Loans Receivable (continued)
Credit Quality Indicators (continued)
Special Mention - Loans identified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the
repayment prospects for the loan or of the bank’s credit position at some future date.
Substandard - Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined
weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of
currently existing facts, conditions, and values, highly questionable and improbable.
Loss - This classification includes those loans which are considered uncollectible and of such little value that their continuance as loans is not warranted. Even though partial recovery may be possible in the
future, it is not practical or desirable to defer writing off these basically worthless loans. Accordingly, these loans are charged-off before period end.
19
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Loans Receivable (continued)
Not
Credit Quality Indicators (continued)
The following table summarizes designated internal risk categories by portfolio segment and loan class, by origination year, as of September 30, 2025:
|
Term Loans Amortized Cost by Origination Year
|
Revolving | |||||||||||||||||||||||||||||||
|
As of September 30, 2025
|
2025
|
2024
|
2023
|
2022
|
2021
|
Prior
|
Lines
|
Total
|
||||||||||||||||||||||||
|
(In Thousands)
|
||||||||||||||||||||||||||||||||
|
One-to-four family residential
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total one-to-four family residential
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Commercial
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total commercial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Multi-family residential
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total multi-family residential
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Land
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total land
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
20
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Loans Receivable (continued)
Credit Quality Indicators (continued)
|
Term Loans Amortized Cost by Origination Year
|
||||||||||||||||||||||||||||||||
|
As of September 30, 2025
|
2025
|
2024
|
2023
|
2022
|
2021
|
Prior
|
Revolving Lines
|
Total
|
||||||||||||||||||||||||
|
(In Thousands)
|
||||||||||||||||||||||||||||||||
|
Construction
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total construction
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Equity loans and lines of credit
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total home equity and lines of credit
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Commercial loans
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total commercial loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Consumer loans
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total consumer loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Total
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||||||||||||||
21
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Loans Receivable (continued)
Credit Quality Indicators (continued)
The following table summarizes designated internal risk categories by portfolio segment and loan class, by origination year, as of June 30, 2025:
|
Term Loans Amortized Cost by Origination Year
|
||||||||||||||||||||||||||||||||
|
As of June 30, 2025
|
2025
|
2024
|
2023
|
2022
|
2021
|
Prior
|
Revolving Lines
|
Total
|
||||||||||||||||||||||||
|
(In Thousands)
|
||||||||||||||||||||||||||||||||
|
One-to-four family residential
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass and Watch
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total one-to-four family residential
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Commercial
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass and Watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total commercial
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Multi-family residential
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass and Watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total multi-family residential
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
-
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Land
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass and Watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total land
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Construction
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass and Watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total construction
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Equity loans and lines of credit
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass and Watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total home equity and lines of credit
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
22
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Loans Receivable (continued)
Credit Quality Indicators (continued)
|
Term Loans Amortized Cost by Origination Year
|
||||||||||||||||||||||||||||||||
|
As of June 30, 2025
|
2025
|
2024
|
2023
|
2022
|
2021
|
Prior
|
Revolving Lines
|
Total
|
||||||||||||||||||||||||
|
(In Thousands)
|
||||||||||||||||||||||||||||||||
|
Commercial loans
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass and Watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total commercial loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Consumer loans
|
||||||||||||||||||||||||||||||||
|
Risk rating
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total consumer loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Total
|
||||||||||||||||||||||||||||||||
|
Pass
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Pass and Watch
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Special mention
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Substandard
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Current period gross charge-offs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
23
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Loans Receivable (continued)
Credit Quality Indicators (continued)
The following tables present an aging analysis of past due loans, segregated by class of loans, as of September 30, 2025 and June 30, 2025:
|
September 30, 2025
|
30-59 Days
Past Due |
60-89
Days Past
Due
|
90 Days
or More
|
Total
Past Due
|
Current
|
Total
Loans
Receivable
|
Recorded
Investment
> 90 Days
and
Accruing
|
|||||||||||||||||||||
|
(In Thousands)
|
||||||||||||||||||||||||||||
|
Real Estate Loans:
|
||||||||||||||||||||||||||||
|
One-to-Four Family
Residential
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
|
Commercial
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Multi-Family Residential
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Land
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Construction
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Equity and Second Mortgage
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Equity Lines of Credit
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Commercial Loans
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Consumer Loans
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
|
June 30, 2025
|
30-59 Days
Past Due
|
60-89
Days Past
Due
|
90 Days
or More
|
Total
Past Due
|
Current
|
Total
Loans
Receivable
|
Recorded
Investment
> 90 Days
and
Accruing
|
|||||||||||||||||||||
|
(In Thousands)
|
||||||||||||||||||||||||||||
|
Real Estate Loans:
|
||||||||||||||||||||||||||||
|
One-to-Four Family
Residential
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
|
Commercial
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Multi-Family Residential
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Land
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Construction
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Equity and Second Mortgage
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Equity Lines of Credit
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Commercial Loans
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Consumer Loans
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
There was no 36 ,000 and $113 ,000, respectively.
24
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Loans Receivable (continued)
Credit Quality Indicators (continued)
The change in the allowance for credit losses by loan portfolio class and recorded investment in loans for the three months ended September 30, 2025 and year ended June 30, 2025 was as follows:
|
Real Estate Loans
|
||||||||||||||||||||||||||||||||||||
|
September 30, 2025
|
1-4 Family
Residential
|
Commercial
|
Multi-
Family
|
Land
|
Construction
|
Home
Equity
Loans and
Lines of
Credit
|
Commercial
Loans
|
Consumer
Loans
|
Total
|
|||||||||||||||||||||||||||
|
(In Thousands)
|
||||||||||||||||||||||||||||||||||||
|
Allowance for credit losses:
|
||||||||||||||||||||||||||||||||||||
|
Beginning Balances
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
|
Charge-Offs
|
|
( |
)
|
|
|
|
|
|
|
( |
)
|
|||||||||||||||||||||||||
|
Recoveries
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Current Provision
|
( |
)
|
|
|
|
( |
)
|
|
( |
)
|
|
|
||||||||||||||||||||||||
|
Ending Balances
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
|
Real Estate Loans
|
||||||||||||||||||||||||||||||||||||
|
June 30, 2025
|
1-4 Family
Residential
|
Commercial
|
Multi-
Family
|
Land
|
Construction
|
Home
Equity
Loans and
Lines of
Credit
|
Commercial
Loans
|
Consumer
Loans
|
Total
|
|||||||||||||||||||||||||||
|
(In Thousands)
|
||||||||||||||||||||||||||||||||||||
|
Allowance for credit losses:
|
||||||||||||||||||||||||||||||||||||
|
Beginning Balances
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
|
Charge-Offs
|
( |
)
|
( |
)
|
|
|
|
( |
)
|
( |
)
|
( |
)
|
( |
)
|
|||||||||||||||||||||
|
Recoveries
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Current Provision
|
( |
)
|
|
( |
)
|
( |
)
|
( |
)
|
|
( |
)
|
|
( |
)
|
|||||||||||||||||||||
|
Ending Balances
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
25
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Loans Receivable (continued)
Credit Quality Indicators (continued)
The Company held loans that were individually evaluated for credit losses at September 30, 2025 and June 30, 2025 for which the repayment, on the basis of our assessment at the reporting date, is expected to be provided substantially through
the operation or sale of the collateral and the borrower is experiencing financial difficulty. The ACL for these collateral-dependent loans is primarily based on the fair value of the underlying collateral at the reporting date. The following
describes the types of collateral that secure collateral dependent loans:
| • |
One-to four-family first mortgages are primarily secured by first liens on residential real estate.
|
| • |
Commercial real estate loans are primarily secured by office and industrial buildings, warehouses, retail shopping facilities and various special purpose properties, including self-storage facilities, hotels and restaurants.
|
| • | Multi-family loans are primarily secured by residential property that include |
| • |
Construction and land loans are primarily secured by residential and commercial properties, which are under construction and/or redevelopment, and by raw land.
|
| • |
Home equity loans and lines are primarily secured by first and junior liens on residential real estate.
|
| • |
Commercial and industrial loans considered collateral dependent are primarily secured by accounts receivable, inventory and equipment.
|
| • |
Consumer loans considered collateral dependent are primarily secured by titled vehicles.
|
The following table presents loans individually evaluated for impairment, segregated by class of loans, as of September 30, 2025 and June 30, 2025:
|
September 30, 2025
|
June 30, 2025
|
|||||||||||||||
|
Loan Balance
|
Specific Allocations
|
Loan Balance
|
Specific Allocations
|
|||||||||||||
|
(In Thousands)
|
||||||||||||||||
|
Real Estate Loans:
|
||||||||||||||||
|
One-to-Four Family Residential
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Commercial
|
|
|
|
|
||||||||||||
|
Land
|
|
|
|
|
||||||||||||
|
Home Equity Loans and Lines of Credit
|
|
|
|
|
||||||||||||
|
Commercial Loans
|
|
|
|
|
||||||||||||
|
Consumer Loans
|
|
|
|
|
||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
The Bank has no commitments to loan additional funds to borrowers whose loans were previously in non-accrual status. As of September 30, 2025, there were no residential loans in the process of foreclosure.
As of September 30, 2025, there were no loans whose terms were modified for borrowers who may be experiencing financial difficulties.
At September 30, 2025 and June 30, 2025, accrued interest receivable on loans was $1.673 million and $1.624 million, respectively, and included within accrued interest receivable on the consolidated balance sheets.
26
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
4. Deposits
Deposits at September 30, 2025 and June 30, 2025 consist of the following classifications:
|
September 30, 2025
|
June 30, 2025
|
|||||||
|
(In Thousands)
|
||||||||
|
Non-Interest Bearing
|
$
|
|
$
|
|
||||
|
NOW Accounts
|
|
|
||||||
|
Money Markets
|
|
|
||||||
|
Passbook Savings
|
|
|
||||||
| |
|
|||||||
|
Certificates of Deposit
|
|
|
||||||
|
Total Deposits
|
$
|
|
$
|
|
||||
5. Earnings Per Share
Basic earnings per common share is computed based on the weighted average number of shares outstanding. Diluted earnings per share is computed based on the weighted average number of shares outstanding and common share equivalents that would arise from the exercise of dilutive securities. Earnings per share for the three months ended September 30, 2025 and 2024 were calculated as follows:
|
Three Months Ended
September 30,
|
||||||||
|
2025
|
2024
|
|||||||
|
(In Thousands, Except Per Share Data)
|
||||||||
|
Net income
|
$
|
|
$
|
|
||||
|
Weighted average shares outstanding – basic
|
|
|
||||||
|
Effect of dilutive common stock equivalents
|
|
|
||||||
|
Adjusted weighted average shares outstanding – diluted
|
|
|
||||||
|
Basic earnings per share
|
$
|
|
$
|
|
||||
|
Diluted earnings per share
|
$
|
|
$
|
|
||||
For the three months ended September 30, 2025 and 2024, there were outstanding options to purchase 331,500 and 317,852 shares, respectively, at a weighted average exercise price of $11.85 and $11.85 per share, respectively. For the quarter ended September 30, 2025 and 2024, 40,255 options and 13,430 options, respectively, were included in the computation of diluted earnings per share.
The following table presents the components of weighted average outstanding shares for purposes of calculating earnings per share:
|
Three Months Ended
September 30,
|
||||||||
|
2025
|
2024
|
|||||||
|
(In Thousands)
|
||||||||
|
Average common shares issued
|
|
|
||||||
|
Average unearned ESOP shares
|
( |
)
|
( |
)
|
||||
|
Average Company stock purchased
|
( |
)
|
( |
)
|
||||
|
Weighted average shares outstanding
|
|
|
||||||
27
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
6. Stock-Based Compensation
Stock Incentive Plans
On November 12, 2014, the stockholders of the Company approved the adoption of the Company’s 2014 Stock Incentive Plan (the 2014 Stock Incentive Plan) for the benefit of employees and non-employee directors as an incentive to contribute to the success of the Company and to reward employees for outstanding performance and the attainment of targeted goals. The 2014 Stock Incentive Plan covers a total of 300,000 shares (as adjusted), of which no more than 75,000 shares (as adjusted), or 25 % of the plan, may be share awards. The balance of the plan is reserved for stock option awards which would total 225,000 (as adjusted) stock options assuming all the stock awards are issued. All incentive stock options granted under the 2014 Stock Incentive Plan are intended to comply with the requirements of Section 422 of the Internal Revenue Code. On January 31, 2024, the Company granted a total of 4,000 stock options to a key employee vesting ratably over three years commencing February 1, 2024. On July 24, 2024, the Company granted a total of 1,600 plan share awards and 23,000 stock options to directors, officers and key employees vesting ratably over five years. The 2014 Stock Incentive Plan cost is recognized over the five year vesting period. The 2014 Stock Incentive Plan terminated on August 13, 2024 , however, the 1,280 plan share awards and 153,600 outstanding options as of September 30, 2025 will remain in effect for the remainder of their five-year vesting and original ten year terms, respectively. A total of 117,600 stock options granted on October 26, 2015, that were due to expire on October 26, 2025, was exercised in October, 2025.
On November 13, 2019, the stockholders of the Company approved the adoption of the Company’s 2019 Stock Incentive Plan (the “2019 Stock Incentive Plan,” together with the 2014 Stock Incentive Plan, the “Stock Incentive Plans”) which provides for a total of 250,000 62,500 shares (as adjusted), or 25 %, may be granted as stock awards. The balance of the plan is reserved for stock option awards. The Stock Incentive Plans costs are recognized over the five year vesting period. As of September 30, 2025, there are no plan share awards and 800 stock options available for future grants under the 2019 Stock Incentive Plan.
For the three months ended September 30, 2025 and 2024, compensation expense charged to operations for stock options granted under the Stock Incentive Plans was $23 ,000 and $26 ,000, respectively.
7. Related Party Transactions
In the ordinary course of business, the Bank makes loans to its directors and officers. These loans are made on substantially the same terms and conditions, including interest rates and collateral, as those prevailing at the same time for comparable transactions with other customers and do not involve more than normal credit risk or present other unfavorable features. Certain directors and executive officers were indebted to the Bank in the approximate aggregate amount of $4.443 million and $4.383 million at September 30, 2025 and June 30, 2025.
8. Fair Value Disclosures
The following disclosure is made in accordance with the requirements of ASC 825, Financial Instruments. Financial instruments are defined as cash and contractual rights
and obligations that require settlement, directly or indirectly, in cash. In cases where quoted market prices are not available, fair values have been estimated using the present value of future cash flows or other valuation techniques. The
results of these techniques are highly sensitive to the assumptions used, such as those concerning appropriate discount rates and estimates of future cash flows, which require considerable judgment. Accordingly, estimates presented herein are
not necessarily indicative of the amounts the Company could realize in a current settlement of the underlying financial instruments.
ASC 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. These disclosures should not be interpreted as representing an aggregate measure of the
underlying value of the Company.
28
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
8. Fair Value Disclosures (continued)
The following methods and assumptions were used by the Company in estimating fair values of financial instruments:
Cash and Cash Equivalents
The carrying amount approximates the fair value of cash and cash equivalents.
Investment Securities
Fair values for investment securities, including mortgage-backed securities, are based on quoted market prices, where available. If quoted market prices are not available, fair values are
based on quoted market prices of comparable instruments. The carrying values of restricted or non-marketable equity securities approximate their fair values. The carrying amount of accrued investment income approximates its fair value.
Mortgage Loans Held-for-Sale
Because these loans are normally disposed of within ninety days of origination, their carrying value closely approximates the fair value of such loans.
Loans Receivable
For variable-rate loans that re-price frequently and with no significant changes in credit risk, fair value approximates the carrying value. Fair values for other loans are
estimated using the discounted value of expected future cash flows. Interest rates used are those being offered currently for loans with similar terms to borrowers of similar credit quality. The carrying amount of accrued interest receivable
approximates its fair value.
Other Real Estate Owned
Other real estate owned, which is obtained through the foreclosure process, is valued utilizing the appraised collateral value. Collateral values are estimated using level II inputs based on
observable market data or Level III inputs based on customizing discounting criteria.
Deposit Liabilities
The fair values for demand deposit accounts are, by definition, equal to the amount payable on demand at the reporting date, that is, their carrying amounts. Fair values for other deposit
accounts are estimated using the discounted value of expected future cash flows. The discount rate is estimated using the rates currently offered for deposits of similar maturities.
Advances from Federal Home Loan Bank and Other Borrowings
The carrying amount of short-term borrowings approximates their fair value. The fair value of long-term debt is estimated using discounted cash flow analyses based on current incremental
borrowing rates for similar borrowing arrangements.
29
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
8. Fair Value Disclosures (continued)
At September 30, 2025 and June 30, 2025, the carrying amount and estimated fair values of the Company’s financial instruments were as follows:
|
September 30, 2025
|
||||||||||||||||||||
|
Carrying
|
Estimated
|
|||||||||||||||||||
|
Value
|
Fair Value
|
Level 1 | Level 2 | Level 3 | ||||||||||||||||
|
(In Thousands)
|
||||||||||||||||||||
|
Financial Assets
|
||||||||||||||||||||
|
Cash and Cash Equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
Debt Securities Available-for-Sale
|
|
|
|
|
|
|||||||||||||||
|
Securities Held-to-Maturity
|
|
|
|
|
|
|||||||||||||||
|
Other Securities
|
|
|
|
|
|
|||||||||||||||
|
Loans Held-for-Sale
|
|
|
|
|
|
|||||||||||||||
|
Loans Receivable, Net
|
|
|
|
|
|
|||||||||||||||
|
Financial Liabilities
|
||||||||||||||||||||
|
Deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
Other Borrowings
|
|
|
|
|
|
|||||||||||||||
|
June 30, 2025
|
||||||||||||||||||||
|
Carrying
|
Estimated
|
|||||||||||||||||||
|
Value
|
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||
|
(In Thousands)
|
||||||||||||||||||||
|
Financial Assets
|
||||||||||||||||||||
|
Cash and Cash Equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
Debt Securities Available-for-Sale
|
|
|
|
|
|
|||||||||||||||
|
Securities Held-to-Maturity
|
|
|
|
|
|
|||||||||||||||
|
Other Securities
|
|
|
|
|
|
|||||||||||||||
|
Loans Held-for-Sale
|
|
|
|
|
|
|||||||||||||||
|
Loans Receivable, Net
|
|
|
|
|
|
|||||||||||||||
|
Financial Liabilities
|
||||||||||||||||||||
|
Deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
Other Borrowings
|
|
|
|
|
|
|||||||||||||||
The Company follows the guidance of FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 affirms a framework for measuring fair value and
expands disclosures about fair value measurements.
ASC 820 was issued to establish a uniform definition of fair value. The definition of fair value is market-based as opposed to company-specific and includes the following:
| • |
Defines fair value as the price that would be received to sell an asset or paid to transfer a liability, in either case, through an orderly transaction between market participants at a measurement date and establishes a framework for
measuring fair value;
|
| • |
Establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date;
|
| • |
Nullifies the guidance in EITF 02-3, which required the deferral of profit at inception of a transaction involving a derivative financial instrument in the absence of observable data supporting the valuation technique;
|
| • |
Eliminates large position discounts for financial instruments quoted in active markets and requires consideration of the company’s creditworthiness when valuing liabilities; and
|
| • |
Expands disclosures about instruments that are measured at fair value.
|
30
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
8. Fair Value Disclosures (continued)
The standard establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy favors the transparency of inputs to the valuation of an asset or liability as of the
measurement date. The three levels are defined as follows:
| • |
Level 1 – Fair value is based upon quoted prices unadjusted for identical assets or liabilities in active markets in which the Company can participate.
|
| • |
Level 2 – Fair value is based upon (a) quoted prices for similar assets or liabilities in active markets; (b) quoted prices for identical or similar assets or liabilities in markets that are not active, that is, markets in which
there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers, or in which little information is released publicly; (c) inputs other
than quoted prices that are observable for the asset or liability; or (d) inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
| • |
Level 3 – Fair value is based upon inputs that are unobservable for the asset or liability. These inputs reflect the Company’s own assumptions about the assumptions that market participants
would use in pricing the asset or liability (including assumptions about risk). These inputs are developed based on the best information available in the circumstances, which include the Company’s own data. The Company’s own data used
to develop unobservable inputs are adjusted if information indicates that market participants would use different assumptions.
|
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The preceding methods described may produce a fair value calculation that may not be indicative of the net realizable value or reflective of future fair values. Furthermore, although the Company believes its
valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement
at the reporting date. There have been no changes in the methodologies used during the three months ended September 30, 2024.
Fair values of assets and liabilities measured on a recurring basis at September 30, 2025 and June 30 2025 are as follows:
|
Fair Value Measurements
|
||||||||||||||||
|
September 30, 2025
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
||||||||||||
|
(In Thousands)
|
||||||||||||||||
|
Available-for-Sale
|
||||||||||||||||
|
Debt Securities
|
||||||||||||||||
|
FHLMC
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
FNMA
|
|
|
|
|
||||||||||||
|
GNMA
|
|
|
|
|
||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
31
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
8. Fair Value Disclosures (continued)
|
Fair Value Measurements
|
||||||||||||||||
|
June 30, 2025
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
||||||||||||
|
(In Thousands)
|
||||||||||||||||
|
Available-for-Sale
|
||||||||||||||||
|
Debt Securities
|
||||||||||||||||
|
FHLMC
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
FNMA
|
|
|
|
|
||||||||||||
|
GNMA
|
|
|
|
|
||||||||||||
|
Municipal Bonds
|
|
|
|
|
||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Fair values of assets and liabilities measured on a non-recurring basis at September 30, 2025 and June 30, 2025 are as follows:
|
Fair Value Measurements
|
||||||||||||||||
|
September 30, 2025
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
||||||||||||
|
(In Thousands)
|
||||||||||||||||
|
Assets:
|
||||||||||||||||
|
Impaired Loans,
|
||||||||||||||||
|
Net of Allowance
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Other Real Estate Owned,
|
||||||||||||||||
|
Net of Allowance
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Fair Value Measurements
|
||||||||||||||||
|
June 30, 2025
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
||||||||||||
|
(In Thousands)
|
||||||||||||||||
|
Assets:
|
||||||||||||||||
|
Impaired Loans,
|
||||||||||||||||
|
Net of Allowance
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Other Real Estate Owned,
|
||||||||||||||||
|
Net of Allowance
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
9. Leases
A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration.
Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branches with terms extending through 2058. Substantially all of the Company’s leases are classified as operating leases, and
therefore, were previously not recognized on the Company’s consolidated statements of condition. Right-of-use (“ROU”) assets and corresponding lease liabilities are recognized on the consolidated statements of condition under other assets and
other accrued expenses and liabilities, respectively.
32
HOME FEDERAL BANCORP, INC. OF LOUISIANA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
9. Leases (continued)
At September 30, 2025 and June 30 2025, the carrying amounts of the ROU assets and corresponding lease liabilities were as follows:
|
(In Thousands)
|
September 30, 2025
|
June 30, 2025
|
|||||||
|
Lease Right-of-Use Assets
|
Classification
|
||||||||
|
Operating lease right-of-use assets
|
|
$
|
|
$
|
|
||||
|
Total Lease Right-of-Use Assets
|
$
|
|
$
|
|
|||||
|
Lease Liabilities
|
|||||||||
|
Operating lease liabilities
|
|
$
|
|
$
|
|
||||
|
Total Lease Liabilities
|
$
|
|
$
|
|
|||||
The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term.
| September 30, 2025 | June 30, 2025 | |||||||
| Weighted-average remaining lease term | ||||||||
| Operating leases | | | ||||||
| Weighted-average discount rate | ||||||||
| Operating leases | | % | | % |
| ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
General
The Company’s results of operations are primarily dependent on the results of Home Federal Bank (the “Bank”), its wholly owned subsidiary. The Bank’s results of operations depend, to a large extent, on net
interest income, which is the difference between the income earned on its loan and investment portfolios and the cost of funds, consisting of the interest paid on deposits and borrowings. Results of operations are also affected by
provisions for loan losses and loan sale activities. Non-interest expense principally consists of compensation and employee benefits, office occupancy and equipment expense, data processing, and other expenses. Our results of operations
are also significantly affected by general economic and competitive conditions, particularly changes in interest rates, government policies, and actions of regulatory authorities. Future changes in applicable law, regulations, or
government policies may materially impact our financial condition and results of operations.
The Bank operates from its main office in Shreveport, Louisiana and ten full-service branch offices located in Shreveport, Bossier City, Benton and Minden, Louisiana. The Company’s primary market area is
the Shreveport-Bossier City-Minden combined statistical area.
Critical Accounting Policies
The accounting and financial reporting policies of the Company conform to accounting principles generally accepted in the United States of America and to general practices within the banking industry.
Accordingly, the consolidated financial statements require certain estimates, judgments, and assumptions, which are believed to be reasonable, based upon the information available. These estimates and assumptions affect the reported
amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the periods presented. Critical accounting policies comprise those that management believes are the most
critical to aid in fully understanding and evaluating our reported financial results. These policies require numerous estimates or economic assumptions that may prove inaccurate or may be subject to variations which may significantly
affect our reported results and financial condition for the period or in future periods.
There were no changes made to the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2025 that materially affected, or are reasonably likely to
materially affect, the Company’s internal control over financial reporting.
Allowance for Credit Losses. The Company has identified the calculation of the allowance for credit losses as a critical accounting policy, due to the higher degree
of judgment and complexity than its other significant accounting policies.
Income Taxes. Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax
asset or liability is determined based on the tax effects of the temporary differences between the book and tax basis of the various assets and liabilities and gives current recognition to changes in tax rates and laws. The realization
of our deferred tax assets principally depends upon our achieving projected future taxable income. We may change our judgments regarding future profitability due to future market conditions and other factors. We may adjust our deferred
tax asset balances, if our judgments change.
Discussion of Financial Condition Changes from June 30, 2025 to September 30, 2025
General
At September 30, 2025, the Company reported total assets of $622.630 million, an increase of $13.138 million, or 2.2%, compared to total assets of $609.492 million at June 30, 2025. The increase in assets resulted from increases in cash and cash equivalents of $9.145 million, or 52.7%, from 17.347 million at June 30, 2025 to $26.492 million at September 30, 2025, net loans receivable of $3.352
million, or 0.7%, from $461.004 million at June 30, 2025 to $464.356 million at September 30, 2025, investment securities of $1.547 million, or 1.6%, from $96.230 million at June 30, 2025 to $97.777 million at September 30, 2025, bank
owned life insurance of $28,000, or 0.4%, from $6.926 million at June 30, 2025 to $6.954 million at September 30, 2025, and accrued interest receivable of $18,000, or 1.0%, from $1.836 million at June 30, 2025 to $1.854 million at
September 30, 2025, partially offset by decreases in premises and equipment, net, of $258,000, or 1.5%, from $17.266 million at June 30, 2025 to $17.008 million at September 30, 2025, loans-held-for-sale of $224,000, or 14.5%, from $1.540
million at June 30, 2025 to $1.316 million at September 30, 2025, real estate owned of $187,000, or 19.3% from $970,000 at June 30, 2025 to $783,000 at September 30, 2025, deferred tax asset of $120,000, or 10.3%, from $1.163 million at
June 30, 2025 to $1.043 million at September 30, 2025, other assets of $96,000, or 7.4%, from $1.305 million at June 30, 2025 to $1.209 million at September 30, 2025, and core deposit intangible of $67,000, or 7.3%, from $915,000 at June
30, 2025 to $848,000 at September 30, 2025.
Cash and cash equivalents increased $9.145 million, or 52.7%, from $17.347 million at June 30, 2025 to $26.492 million at September 30, 2025. The increase in cash and
cash equivalents was primarily due to increases in deposits.
Loans Receivable, Net
Loans receivable, net, increased by $3.352 million, or 0.7%, to $464.356 million at September 30, 2025 compared to $461.004 million at June 30, 2025. The increase in loans receivable, net was primarily due
to increases in land loans of $12.237 million, multi-family residential loans of $1.189 million, commercial real estate loans of $1.099 million, equity and second mortgage loans of $216,000, and equity line-of-credit loans of $140,000,
partially offset by decreases in construction loans of $6.170 million, one-to-four-family residential loans of $3.425 million, commercial non-real estate loans of $1.824 million, and consumer loans of $218,000.
Loans Held-for-Sale
Loans held-for-sale decreased $224,000, from $1.540 million at June 30, 2025 to $1.316 million at September 30, 2025.
Investment Securities
Investment securities amounted to $97.777 million at September 30, 2025, compared to $96.230 million at June 30, 2025, an increase of $1.547 million, or 1.6%. The increase in investment securities was
primarily due to security purchases of $4.386 million and a $501,000 decrease in market value losses on available-for-sale securities, partially offset by $3.425 million principal repayments on mortgage backed securities.
Discussion of Financial Condition Changes from June 30, 2025 to September 30, 2025 (continued)
Premises and Equipment, Net
Premises and equipment, net decreased $258,000, or 1.5%, to $17.008 million at September 30, 2025 compared to $17.266 million at June 30, 2025.
Asset Quality
At September 30, 2025, the Company had $2.225 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 $3.305
million of non-performing assets at June 30, 2025, consisting of seven one-to-four family residential loans, three home equity loans, one commercial non-real estate loan, one land loan, and one
single-family residence in other real estate owned at September 30, 2025, compared to six one-to-four family residential loans, two home equity loans, three commercial non-real estate loans, two commercial real estate loans and one
single-family residences in other real estate owned at June 30, 2025. At September 30, 2025 the Company had ten one-to-four family residential loans, three home equity loans, three commercial non-real estate loans, one commercial real
estate loans, one land loan and one consumer loan classified as substandard, compared to eight one-to-four family residential loans, five commercial non-real estate loans, two home equity loans, two commercial real estate loans and one
consumer loan classified as substandard at June 30, 2025. There were no loans classified as doubtful at September 30, 2025 or June 30, 2025.
Total Liabilities
Total liabilities increased $11.752 million, or 2.1%, from $554.287 million at June 30, 2025 to $566.039 million at September 30, 2025. The increase in liabilities resulted from increases in total deposits
of $10.898 million, or 2.0%, from $546.290 million at June 30, 2025 to $557.188 million at September 30, 2025, other accrued expenses and liabilities of $610,000, or 17.7%, from $3.454 million at June 30, 2025 to $4.064 million at
September 30, 2025, and advances from borrowers for taxes and insurance of $244,000, or 44.9%, from $543,000 at June 30, 2025 to $787,000 at September 30, 2025. The increase in deposits resulted from increases in certificates of deposit
of $12.917 million, or 6.9%, from $187.357 million at June 30, 2025 to $200.274 million at September 30, 2025, non-interest deposits of $5.025 million, or 4.1%, from $122.416 million at June 30, 2025 to $127.441 million at September 30,
2025, and NOW accounts of $1.670 million, or 2.5%, from $67.119 million at June 30, 2025 to $68.789 million at September 30, 2025, partially offset by decreases in money market deposits of $4.848 million, or 6.6%, from $73.771 million at
June 30, 2025 to $68.923 million at September 30, 2025, and savings deposits of $3.866 million, or 4.0%, from $95.627 million at June 30, 2025 to $91.761 million at September 30, 2025. The Company had no balances in brokered deposits at
September 30, 2025 or June 30, 2025.
Stockholders’ Equity
Stockholders’ equity increased $1.386 million, or 2.5%, from $55.205 million at June 30, 2025 to $56.591 million at September 30, 2025. The increase in stockholders’ equity
resulted from net income for the quarter ended September 30, 2025 of $1.599 million, a decrease in the Company’s accumulated other comprehensive loss of $395,000, the vesting of restricted stock awards, stock options, and the release of
employee stock ownership plan shares totaling $63,000, and proceeds from the issuance of common stock from the exercise of stock options of $23,000, partially offset by dividends paid totaling $415,000, and stock repurchases of $279,000.
Discussion of Financial Condition Changes from June 30, 2025 to September 30, 2025 (continued)
Regulatory Capital
The Bank is required to meet minimum capital standards promulgated by the Office of the Comptroller of the Currency (“OCC”). At September 30, 2025, Home Federal Bank’s regulatory capital was well in excess
of the minimum capital requirements. At September 30, 2025, Home Federal Bank exceeded each of its capital requirements with common equity tier 1, tier 1 capital, total capital, leverage, and tangible capital ratios of 13.33%, 13.33%,
14.35%, 9.35%, and 9.35%, respectively.
Comparison of Operating Results for the Three Months Ended September 30, 2025 and 2024
General
The increase in net income for the three months ended September 30, 2025, as compared to the same period in 2024, resulted from an increase of $834,000, or 18.8%, in net interest income, an increase of
$350,000, or 116.7%, in non-interest income, a decrease of $160,000, or 4.0%, in non-interest expense, partially offset by an increase of $420,000 in the provision for income taxes, and an increase of $266,000, or 119.3%, in the provision
for credit losses.
Net Interest Income
The increase in net interest income for the three months ended September 30, 2025, as compared to the same period in 2024, resulted from a decrease of $565,000, or 17.0%, in total interest expense and an
increase of $269,000, or 3.5%, in total interest income. The Company’s average interest rate spread was 2.99% for the three months ended September 30, 2025, compared to 2.23% for the three months ended September 30, 2024. The Company’s
net interest margin was 3.63% for the three months ended September 30, 2025, compared to 2.98% for the three months ended September 30, 2024.
Provision for Credit Losses
The increase in the provision for credit losses was primarily due to a $223,000 recovery for the three months ended September 30, 2024, resulting from a decrease in net loans receivable during the period.
Non-interest Income
The $350,000 increase in non-interest income for the three months ended September 30, 2025, compared to the prior year quarterly period, resulted from a decrease of $254,000 in loss on sale of real estate,
an increase of $50,000 in gain on sale of loans, an increase of $32,000 in service charges on deposit accounts, and an increase of $14,000 in other non-interest income. The $254,000 loss on sale of real estate for the prior year related
to a one-to-four family residence in other real estate owned that was sold during the period.
Comparison of Operating Results for the Three Months Ended September 30, 2025 and 2024 (continued)
Non-interest Expense
The $160,000 decrease in non-interest expense for the three months ended September 30, 2025, compared to the same period in 2024, resulted from decreases of $152,000 in compensation and benefits expense,
$63,000 in audit and examination fees, $33,000 in franchise and bank shares tax, $32,000 in professional fees, $28,000 in advertising expense, $7,000 in amortization of core deposit intangible expense, partially offset by increases of
$117,000 in data processing expense, $17,000 in other non-interest expense, $14,000 in loan and collection expense, $4,000 in occupancy and equipment expense, and $3,000 in deposit insurance premium expense.
The aggregate compensation expense recognized by the Company for its Stock Options, Share Awards and employee stock ownership plan, amounted to $96,000 and $122,000 for the three months ended September 30,
2025 and September 30, 2024, respectively.
The Louisiana bank shares tax is assessed on the Bank’s equity and earnings. For the three months ended September 30, 2025, the Company recognized franchise and bank shares tax expense of $135,000 compared
to $168,000, for the same period in 2024.
Income Taxes
Income taxes amounted to $418,000 for the three months ended September 30, 2025, resulting in an effective tax rate of 20.7%. The $2,000 recovery for income taxes for the three months ended September 30,
2024, was due to an audit adjustment for the year ending June 30, 2024.
Comparison of Operating Results for the Three Months Ended September 30, 2025 and 2024 (continued)
Average Balances, Net Interest Income, Yields Earned, and Rates Paid. The following table shows for the periods
indicated the total dollar amount of interest from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net
interest margin. Tax-exempt income and yields have not been adjusted to a tax-equivalent basis. All average balances are based on monthly balances. Management does not believe that the monthly averages differ significantly from what
the daily averages would be.
|
|
Three Months Ended September 30,
|
|||||||||||||||||||||||
|
|
2025
|
2024
|
||||||||||||||||||||||
|
|
Average
Balance
|
Interest
|
Average
Yield/
Rate
|
Average
Balance
|
Interest
|
Average
Yield/
Rate
|
||||||||||||||||||
|
|
(Dollars In Thousands)
|
|||||||||||||||||||||||
|
Interest-earning assets:
|
||||||||||||||||||||||||
|
Loans receivable
|
$
|
463,931
|
$
|
7,271
|
6.22
|
%
|
$
|
466,170
|
$
|
6,895
|
5.87
|
%
|
||||||||||||
|
Investment securities
|
96,390
|
555
|
2.28
|
96,749
|
510
|
2.09
|
||||||||||||||||||
|
Interest-earning deposits
|
15,105
|
184
|
4.83
|
25,617
|
336
|
5.20
|
||||||||||||||||||
|
Total interest-earning assets
|
575,426
|
8,010
|
5.52
|
%
|
588,536
|
7,741
|
5.22
|
%
|
||||||||||||||||
|
Non-interest-earning assets
|
39,797
|
39,968
|
||||||||||||||||||||||
|
Total assets
|
$
|
615,223
|
$
|
628,504
|
||||||||||||||||||||
|
Interest-bearing liabilities:
|
||||||||||||||||||||||||
|
Savings accounts
|
$
|
94,102
|
400
|
1.69
|
%
|
$
|
82,556
|
336
|
1.61
|
%
|
||||||||||||||
|
NOW accounts
|
65,801
|
188
|
1.13
|
72,787
|
201
|
1.10
|
||||||||||||||||||
|
Money market accounts
|
73,599
|
384
|
2.07
|
75,216
|
449
|
2.37
|
||||||||||||||||||
|
Certificate accounts
|
194,016
|
1,701
|
3.48
|
204,019
|
2,211
|
4.30
|
||||||||||||||||||
|
Total interest-bearing deposits
|
427,518
|
2,673
|
2.48
|
434,578
|
3,197
|
2.92
|
||||||||||||||||||
|
Other Borrowings
|
4,000
|
76
|
7.54
|
5,989
|
117
|
7.75
|
||||||||||||||||||
|
FHLB advances
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
|
Total interest-bearing liabilities
|
$
|
431,518
|
2,749
|
2.53
|
%
|
$
|
440,567
|
3,314
|
2.98
|
%
|
||||||||||||||
|
Non-interest-bearing liabilities:
|
||||||||||||||||||||||||
|
Non-interest-bearing demand accounts
|
123,401
|
131,407
|
||||||||||||||||||||||
|
Other liabilities
|
4,545
|
4,926
|
||||||||||||||||||||||
|
Total liabilities
|
559,464
|
576,900
|
||||||||||||||||||||||
|
Total Stockholders’ Equity(1)
|
55,759
|
51,604
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Total liabilities and stockholders’ equity
|
$
|
615,223
|
$
|
628,504
|
||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Net interest-earning assets
|
$
|
143,908
|
$
|
147,969
|
||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Net interest income; average interest rate spread(2)
|
$
|
5,261
|
2.99
|
%
|
$
|
4,427
|
2.23
|
%
|
||||||||||||||||
|
Net interest margin(3)
|
3.63
|
%
|
2.98
|
%
|
||||||||||||||||||||
|
Average interest-earning assets to average interest-bearing liabilities
|
133.35
|
%
|
133.59
|
%
|
||||||||||||||||||||
|
|
||||||||||||||||||||||||
| (1) |
Includes retained earnings and accumulated other comprehensive loss.
|
| (2) |
Interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average rate on interest-bearing liabilities.
|
| (3) |
Net interest margin is net interest income divided by net average interest-earning assets.
|
Liquidity and Capital Resources
The Bank maintains levels of liquid assets deemed adequate by management. The Bank adjusts its liquidity levels to fund deposit outflows, repay its borrowings, and to fund loan commitments. The Bank also
adjusts liquidity as appropriate to meet asset and liability management objectives.
The Bank’s primary sources of funds are deposits, amortization and prepayment of loans and mortgage-backed securities, maturities of investment securities and other short-term investments, loan sales, and
earnings and funds provided from operations. While scheduled principal repayments on loans and mortgage-backed securities are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by general
interest rates, economic conditions, and competition. The Bank sets the interest rates on its deposits to maintain a desired level of total deposits. In addition, the Bank invests excess funds in short-term interest-earning accounts and
other assets which provide liquidity to meet lending requirements. The Bank’s deposit accounts with the Federal Home Loan Bank of Dallas amounted to $13.756 million at September 30, 2025.
A significant portion of the Bank’s liquidity consists of securities classified as available-for-sale and cash and cash equivalents. The Bank’s primary sources of cash are net income, principal repayments
on loans and mortgage-backed securities, and increases in deposit accounts. If the Bank requires funds beyond its ability to generate them internally, borrowing agreements exist with the Federal Home Loan Bank of Dallas which provides
an additional source of funds. At September 30, 2025, The Bank had no advances from the Federal Home Loan Bank of Dallas and had $57.205 million in borrowing capacity. Additionally, at
September 30, 2025, the Bank was a party to a Master Purchase Agreement with First National Bankers Bank whereby Home Federal Bank may purchase Federal Funds from First National Bankers Bank in an amount not to exceed $19.900 million.
There were no amounts purchased under this agreement as of September 30, 2025. At September 30, 2025, Home Federal Bancorp had a
$4.000 million outstanding loan with First National Bankers Bank, which matures on February 5, 2034.
At September 30, 2025, the Bank had outstanding loan commitments of $55.106 million to originate loans and commitments under unused lines of credit of $14.160 million. At September 30, 2025, certificates of
deposit scheduled to mature in less than one year totaled $156.356 million. Based on prior experience, management believes that a significant portion of such deposits will remain with us, although
there can be no assurance that this will be the case. The Bank intends to utilize its high levels of liquidity to fund its lending activities. If additional funds are required to fund lending activities, Home Federal Bank intends to
sell its securities classified as available-for-sale, as needed.
At September 30, 2025, Home Federal Bank exceeded each of its capital requirements with common equity tier 1, tier 1 capital, total capital, leverage, and tangible capital ratios of 13.33%, 13.33%, 14.35%,
9.35%, and 9.35%, respectively.
Off-Balance Sheet Arrangements
At September 30, 2025, the Company did not have any off-balance sheet arrangements as defined by Securities and Exchange Commission rules.
Impact of Inflation and Changing Prices
The financial statements and related financial data presented herein have been prepared in accordance with instructions to Form 10-Q which require the measurement of financial position and operating results
in terms of historical dollars without considering changes in relative purchasing power over time due to inflation.
Unlike most industrial companies, virtually all of the Company’s assets and liabilities are monetary in nature. As a result, interest rates generally have a more significant impact on a financial
institution’s performance than does the effect of inflation.
Forward-Looking Statements
This Form 10-Q contains certain forward-looking statements and information relating to the Company that are based on the beliefs of management, as well as assumptions made by and information currently
available to management. In addition, in those and other portions of this document the words “anticipate”, “believe”, “estimate”, “except”, “intend”, “should”, and similar expressions, or the negative thereof, as they relate to the
Company or the Company’s management are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future looking events and are subject to certain risks, uncertainties, and
assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary from those described herein as anticipated, believed, estimated, expected, or
intended. The Company does not intend to update these forward-looking statements.
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 Form 10-Q, 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.
| ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Not applicable.
| ITEM 4. |
CONTROLS AND PROCEDURES
|
Evaluation of Disclosures Controls and Procedures. Under the supervision and with the participation of our management including our President
and Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial officer), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the President and Chief Executive Officer and the Chief Financial Officer have
concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that the Company files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the applicable time periods specified by the Securities and Exchange Commission’s rules and forms.
Changes in Internal Control over Financial Reporting. There has been no change in the Company’s internal control over financial reporting during
the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II
| ITEM 1. |
LEGAL PROCEEDINGS
|
The Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business which involve amounts in the aggregate
believed by management to be immaterial to the financial condition of the Company.
| ITEM 1A. |
RISK FACTORS
|
Not applicable.
| ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
| (a) |
Not applicable.
|
| (b) |
Not applicable.
|
| (c) |
Purchases of Equity Securities
|
The table below sets forth the Company’s repurchases any of its common stock during the quarter ended September 30, 2025, including stock-for-stock option
exercises.
|
Period
|
Total Number of
Shares
Purchased
|
Average
Price Paid
per Share
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
|
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans or
Programs (a)
|
|||||||||||||
|
July 1, 2025 – July 31, 2025
|
9,115
|
$
|
13.85
|
9,115
|
31,216
|
||||||||||||
|
August 1, 2025 – August 31, 2025
|
11,600
|
13.35
|
11,600
|
19,616
|
|||||||||||||
|
September 1, 2025 – September 30, 2025
|
-
|
-
|
-
|
19,616
|
|||||||||||||
|
Total
|
20,715
|
$
|
13.56
|
20,715
|
19,616
|
||||||||||||
Notes to this table:
| (a) |
On November 1, 2024, the Company announced that its Board of Directors approved the thirteenth stock repurchase program for the repurchase of up to 100,000 shares. The thirteenth stock repurchase program does not have an
expiration date.
|
| ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES
|
Not applicable.
| ITEM 4. |
MINE SAFETY DISCLOSURES
|
Not applicable.
| ITEM 5. |
OTHER INFORMATION
|
| ITEM 6. |
EXHIBITS
|
|
No.
|
Description
|
|||
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
||||
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
||||
|
Certification Pursuant to 18 U.S.C Section 1350
|
||||
|
101.INS
|
Inline XBRL Instance Document
|
|||
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|||
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|||
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|||
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|||
|
101.DEF
|
Inline XBRL Taxonomy Extension Definitions Linkbase Document
|
|||
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
43
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
HOME FEDERAL BANCORP, INC. OF LOUISIANA
|
||
|
Date: November 10, 2025
|
By:
|
/s/ Brad Ezernack
|
|
Brad Ezernack
|
||
|
Executive Vice President and Chief Financial Officer
|
||
|
(Duly authorized officer and principal financial and
|
||
|
accounting officer)
|
||