HopFed Bancorp, Inc. (NASDAQ: HFBC) (the “Company”), the holding
company for Heritage Bank USA, Inc. (the “Bank”), today reported
results for the three month period ended March 31, 2017. For the
three month period ended March 31, 2017, the Company’s net income
was $935,000, or $0.15 per share basic and diluted, compared to
$509,000, or $0.08 per share basic and diluted, for the three month
period ended March 31, 2016.
Commenting on the first quarter results, John E. Peck, President
and Chief Executive Officer, said, “During the three month period
ended March 31, 2017, net loan balances increased by $11.2 million,
an annualized growth rate of 7.4%. The Company’s loan pipeline
remains encouraging as we continue to strive to improve our
profitability through disciplined loan growth.”
Mr. Peck continued, “The Company’s recently implemented changes
to our consumer transaction account product line has been a
success. At March 31, 2017, the Company’s transaction accounts
balances have increased by $14.1 million despite an overall
reduction in the number of accounts due to the elimination of free
checking. The Company’s core operating results continue to improve
and we are excited about the future of the Company,” Mr. Peck
concluded.
Financial Highlights
- The Company purchased 693 shares of its
common stock in the quarter at a weighted average price of $12.58
per share. At March 31, 2017, the Company holds 1,246,829 shares in
treasury stock with a weighted average cost of $12.32 per
share.
- At March 31, 2017, the Company’s
tangible book value was $14.04 per share and tangible
common equity ratio was 9.47%. The Company’s tangible book
value and common equity ratio computations do not include 488,161
unallocated shares of common stock held by the Company’s ESOP.
- The Bank’s Tier 1 Leverage Ratio,
Common Equity Tier 1 Capital Ratio and Total Risk Based Capital
Ratio at March 31, 2017 were 10.47%, 15.01% and 16.00%,
respectively. The Company’s Tier 1 Leverage Ratio, Common Equity
Tier 1 Capital Ratio and Total Risk Based Capital Ratio at March
31, 2017 were 10.55%, 15.14% and 16.13%, respectively.
- For the three month period ended March
31, 2017, net loan charge offs were $238,000, or 0.15% of average
loan balances.
Asset Quality
A summary of non-accrual loans at March 31,
2017 and December 31, 2016 is as follows:
March 31, 2017
December 31, 2016 (Dollars in Thousands)
One-to-four family mortgages $ 248 270 Home equity line of
credit 402 402 Land 7,234 7,675 Farmland 454 --- Non-residential
real estate 210 208 Consumer loans 3 3 Commercial loans
393 516 Total non-accrual loans
8,944 9,074
A summary of the activity in foreclosed assets
for the three month period ended March 31, 2017 is as follows:
Activity During
2017
Balance Reduction Gain (Loss) Balance 12/31/2016
Foreclosure Sales in Values
on Sale 3/31/2017 (Dollars in
Thousands) One-to-four family mortgages $ 135 --- --- ---
--- $ 135 HELOC 28 --- --- --- --- 28 Multi-family 1,775 --- ---
--- --- 1,775 Non-residential real estate
459
43 (329 ) ---
--- 173 Total
$ 2,397 43 (329
) --- --- $
2,111
Asset Quality (continued)
At March 31, 2017, the Company’s level of loans
classified as substandard was $26.3 million as compared to
$29.3 million at December 31, 2016. At March 31, 2017, the
Company’s classified loan to risk based capital ratio was 26.2%.
The Company’s specific reserve for impaired loans was $492,000 at
March 31, 2017 and $1,148,000 at December 31, 2016. A summary of
the level of classified loans at March 31, 2017, is as follows:
Specific Allowance
March 31,
2017 Special
Impaired Loans
Allowance for For Loans
Pass Mention
Substandard
Doubtful
Total Impairment Not
Impaired (Dollars in Thousands) One-to-four family mortgages
154,341 55 3,230 --- 157,626 --- 1,097 Home equity line of credit
36,132 --- 562 --- 36,694 --- 328 Junior liens 1,324 29 12 ---
1,365 --- 9 Multi-family 37,668 --- 815 --- 38,483 --- 593
Construction 17,386 --- --- --- 17,386 --- 141 Land 12,020 431
7,691 --- 20,142 105 328 Farmland 40,588 693 1,531 --- 42,812 35
631 Non-residential real estate 202,168 1,518 10,247 --- 213,933 53
1,288 Consumer loans 8,261 0 413 --- 8,674 98 142 Commercial loans
82,857 254 1,844
--- 84,955 201
1,115 Total
592,745
2,980 26,345 ---
622,070 492 5,672
Net Interest Income
For the three month period ended March 31, 2017, the Company’s
net interest income was $6.8 million, compared
to $6.7 million for the three month period ended March
31, 2016, and $6.6 million for the three month period ended
December 31, 2016, respectively. For the three month period ended
March 31, 2017, the improved levels of net interest income as
compared to March 31, 2016 is directly attributable to a $54.8
million increase in the average balance of loans outstanding during
the three month period ended March 31, 2017 as compared to the
three month period ended March 31, 2016. The growth in loan
balances for the three month period ended March 31, 2017 as
compared to the three month period ended March 31, 2016 helped to
offset a reduction in the average yield on loans. For the three
month periods ended March 31, 2017 and March 31, 2016, the average
yield on loans was 4.38% and 4.62%, respectively. For the three
month period ended March 31, 2017, the Company’s net interest
margin was 3.31%, as compared to 3.39% for the three month period
ended March 31, 2016.
For the three month periods March 31, 2017 and March 31, 2016,
interest expense was $1.4 million, respectively. For the three
month period ending March 31, 2017, the average cost of interest
bearing liabilities was 0.81%, as compared to 0.83% for the three
month period ended March 31, 2016. The average balance of interest
bearing liabilities for the three month periods ended March 31,
2017 and March 31, 2016 was $690.7 million and $678.7 million,
respectively.
Non-interest Income
Non-interest income for the three month period ended March 31,
2017 was $2.3 million, as compared to $2.0 million for the three
month periods ended March 31, 2016 and December 31, 2016. The most
significant reasons for the increase in non-interest income were
increases of income from bank owned life insurance and other
operating income. For the three month period ended March 31, 2017,
income from bank owned life insurance was $235,000, as compared to
$84,000 for the three month period ended March 31, 2016. The
increase in income from bank owned life insurance was the result of
death benefit paid during the three month period ended March 31,
2017. For the three month period ended March 31, 2017, other
operating income was $479,000, as compared to $176,000 for the
three month period ended March 31, 2016. In the three month period
ended March 31, 2017, the Company received approximately $250,000
from one time licensing fees.
For the three month period ended March 31, 2017, service charge
income increased by $127,000 and $110,000, respectively, as
compared to the three month periods ended March 31, 2016 and
December 31, 2016. For the three month period ended March 31, 2017,
the Company’s income on the origination of mortgage loans was
$334,000, as compared to $368,000 and $367,000 for the three month
periods ended March 31, 2016 and December 31, 2016.
The Company recognized net gains on the sale of securities of
$2,000, $291,000 and $190,000 for the three month periods ended
March 31, 2017, March 31, 2016 and December 31, 2016, respectively.
The decline in security gains is the result of a growing deposit
base, making it unnecessary for the Company to sell securities to
fund loan growth and increases in short term interest rates.
Non-interest Expense
For the three month period ended March 31, 2017, non-interest
expenses increased by $6,000 as compared to the three month period
ended March 31, 2016. For the three month period ended March 31,
2017, the Company’s salaries and benefits expense increased by
$248,000 as compared to the three month period ended March 31,
2016. The increase in compensation expense for the three month
period ended March 31, 2017 as compared to the three month period
ended March 31, 2016 is largely the result of a $67,000 increase in
health insurance benefits due to an increase in medical insurance
cost and a $146,000 increase in overall compensation. For the three
month period ended March 31, 2017, other operating expenses totaled
$846,000, as compared to $1.2 million for the three month period
ended March 31, 2016.
On a linked quarter basis, the Company’s other operating
expenses declined by $143,000. On a linked quarter basis, salaries
and benefits increased by $482,000 due to end of year salary
increases, additional payroll taxes resulting from the beginning of
a new year, increases in health insurance benefits and seasonal
vacation accruals. On a linked quarter basis, seasonal changes in
vacation accruals accounted for $231,000 of the increase in salary
and benefits expense and health insurance benefits accounted for
$71,000 of the increase in salary and benefits expense. On a linked
quarter basis, foreclosed assets expense increased by $159,000.
Balance Sheet
At March 31, 2017, consolidated assets were $923.3 million, an
increase of $31.8 million as compared to
December 31, 2016. For the three month period ended March
31, 2017, the Company experienced an $18.8 million increase in time
deposits, a $24.3 million increase in cash balances, and an $11.2
million increase in net loan balances. For the three month period
ended March 31, 2017, the Company’s non-interest bearing and
interest bearing checking accounts increased by $5.2 million and
$8.2 million, respectively.
The Company
Heritage Bank USA, Inc. (“Heritage Bank”) is a Kentucky state
chartered commercial bank with the Kentucky Department of Financial
Institutions and the Federal Deposit Insurance Corporation as its
regulators. HopFed Bancorp, Inc., the holding company for Heritage
Bank, is a non-member federally chartered commercial bank holding
company regulated by the Federal Reserve Board. Heritage Bank
has eighteen offices in western Kentucky and middle Tennessee
and loan production offices in Nashville, Tennessee and Brentwood,
Tennessee. The Company offers a broad line of financial services
through Heritage Wealth Management of Murray, Kentucky,
Hopkinsville, Kentucky, and Pleasant View, Tennessee. Heritage
Mortgage Services of Clarksville, Tennessee, offers long term fixed
rate 1-4 family mortgage loans that are originated for the
secondary market in all communities in the Company’s general market
area. Heritage Bank offers a broad line of banking and
financial products and services with the personalized focus of
a community banking organization. More information about HopFed
Bancorp and Heritage Bank is located on its website
www.bankwithheritage.com.
Forward-Looking Information
Information contained in this press release, other than
historical information, may be considered forward-looking in nature
and is subject to various risk, uncertainties, and
assumptions. Should one or more of these risks or uncertainties
materialize, or should the underlying assumptions prove
incorrect, actual results may vary materially from those
anticipated, estimated or expected. Among the key factors that
may have a direct bearing on the Company’s operating results,
performance or financial condition are competition and the demand
for the Company’s products and services, and other factors as set
forth in filings with the Securities and Exchange Commission.
The Company undertakes no duty to update any forward-looking
statement to conform the statement to actual results or changes in
the Company’s expectations. Certain tabular presentations may not
reconcile because of rounding.
HOPFED BANCORP, INC.
Consolidated Balance Sheets
(Dollars in thousands)
Assets
March 31, 2017 December 31, 2016
(Unaudited) Cash and due from banks $ 30,663 21,779 Interest
bearing deposits in banks
19,408
3,970 Cash and cash equivalents 50,071 25,749 Federal
Home Loan Bank stock, at cost 4,428 4,428 Securities available for
sale 207,580 209,480 Loans held for sale 1,091 1,094
Loans receivable, net of allowance for
loan losses of $6,164 at March 31, 2017 and $6,112 at December 31,
2016
615,480 604,286 Accrued interest receivable 3,121 3,799 Foreclosed
assets, net 2,111 2,397 Bank owned life insurance 10,120 10,662
Premises and equipment, net 23,225 23,461 Deferred tax assets 2,918
3,052 Other assets
3,162 3,078
Total assets
923,307 891,486
Liabilities and
Stockholders’ Equity
Liabilities: Deposits: Non-interest-bearing accounts $ 136,333
131,145 Interest-bearing accounts NOW accounts 217,562 209,347
Savings and money market accounts 100,009 99,312 Other time
deposits
311,839 293,078 Total
deposits 765,743 732,882 Advances from Federal Home Loan
Bank 11,000 11,000 Repurchase agreements 45,492 47,655 Subordinated
debentures 10,310 10,310 Advances from borrowers for taxes and
insurance 867 766 Accrued expenses and other liabilities
2,434 2,445 Total liabilities
835,846 805,058
This information is preliminary and based
on company data available at the time of the presentation.
HOPFED BANCORP, INC.
Consolidated Balance Sheets,
Continued
(Dollars in thousands)
March 31, 2017
December 31, 2016 (Unaudited)
Stockholders’ equity
Preferred stock, par value $0.01 per
share; authorized - 500,000 shares; no shares issued or outstanding
at March 31, 2017 and December 31, 2016
--- ---
Common stock, par value $.01 per share;
authorized 15,000,000 shares; 7,963,378 issued and 6,716,549
outstanding at March 31, 2017 and 7,963,378 issued and 6,717,242
outstanding at December 31, 2016
80 80 Additional paid-in-capital 58,705 58,660 Retained earnings
49,721 49,035
Treasury stock, at cost (1,246,829 shares
at March 31, 2017 and 1,246,136 shares at December 31, 2016)
(15,356 ) (15,347 )
Unearned ESOP Shares, at cost (488,161 at
March 31, 2017 and 498,346 shares at December 31, 2016)
(6,414 ) (6,548 ) Accumulated other comprehensive income
725 548
Total stockholders’ equity
87,461 86,428
Total liabilities and stockholders’
equity
$ 923,307 891,486
This information is preliminary and based
on company data available at the time of the presentation.
HOPFED BANCORP, INC.
Consolidated Condensed Statements of
Income
(Dollars in thousands)
(Unaudited)
For the Three Month Periods Ended March 31,
2017 2016 Interest and
dividend income: Loans $ 6,736 6,465 Investment in securities,
taxable 1,118 1,247 Nontaxable securities available for sale 283
353 Interest-bearing deposits
23
16 Total interest and dividend income
8,160 8,081 Interest expense:
Deposits 1,167 1,095 FHLB borrowings 32 73 Repurchase agreements
103 143 Subordinated debentures
104
94 Total interest expense
1,406
1,405 Net interest income 6,754 6,676 Provision
for loan losses
291 458
Net interest income after provision for
loan losses
6,463 6,218 Non-interest
income: Service charges 804 677 Merchant card 302 291 Mortgage
origination income 334 368 Gain on sale of investments 2 291 Income
from bank owned life insurance 235 84 Income from financial
services 140 133 Other operating income
479
176 Total non-interest income
2,296 2,020
This information is preliminary and based
on company data available at the time of the presentation.
HOPFED BANCORP, INC.
Consolidated Condensed Statements of
Income, Continued
(Dollars in thousands, except share and
per share data)
(Unaudited)
For the Three Month Periods Ended March 31,
2017 2016 Non-interest
expenses: Salaries and benefits $ 4,236 3,988 Occupancy expense 775
787 Data processing 764 727 State deposit tax 231 248 Professional
services 348 335 Advertising 381 320 Foreclosure, net 108 68 Other
operating expenses
846
1,210 Total non-interest expense
7,689 7,683 Income before
income tax expense 1,070 555 Income tax expense
135 46 Net income 935
509 Net income per share: Basic
$
0.15 $ 0.08 Fully diluted
$ 0.15 $ 0.08
Dividend per share
$ 0.04 $
0.04 Weighted average shares outstanding -
basic
6,218,706 6,297,755
Weighted average shares outstanding - diluted
6,218,706 6,297,755
This information is preliminary and based
on company data available at the time of the presentation.
HOPFED BANCORP, INC.
Selected Financial Data
(Dollars in thousands)
(Unaudited)
For the three-months ended
Change from
03/31/17
12/31/16 Prior Quarter Interest and
dividend income: Loans $ 6,736 6,603 133 Investment in securities,
taxable 1,118 1,051 67 Nontaxable securities available for sale 283
289 (6 ) Interest-bearing deposits
23
8 15
Total interest and dividend income
8,160 7,951 209
Interest expense: Deposits 1,167 1,094 73 FHLB
borrowings 32 29 3 Repurchase agreements 103 87 16 Subordinated
debentures
104 101 3
Total interest expense
1,406
1,311 95 Net interest
income 6,754 6,640 114 Provision for loan losses
291 63 228
Net interest income after provision for
loan losses
6,463 6,577 (114
) Non-interest income: Service charges 804 694
110 Merchant card 302 311 (9 ) Mortgage origination income 334 367
(33 ) Gain on sale of investments 2 190 (188 ) Income from bank
owned life insurance 235 78 157 Income from financial services 140
159 (19 ) Other operating income
479
201 278 Total non-interest income
2,296 2,000 296
This information is preliminary and based
on company data available at the time of the presentation
HOPFED BANCORP, INC.
Selected Financial Data
(Dollars in thousands, except share and
per share data)
(Unaudited)
For the three-months ended
Change from
3/31/17
12/31/16 Prior Quarter
Non-interest expenses: Salaries and benefits $ 4,236 3,754 482
Occupancy expense 775 775 --- Data processing 764 767 (3 ) State
deposit tax 231 247 (16 ) Professional services 348 396 (48 )
Advertising 381 334 47 Foreclosure, net 108 (51 ) 159 Other
operating expenses
846 989
(143 ) Total non-interest expense
7,689 7,211
478 Income before income tax expense
1,070 1,366 (296 ) Income tax expense
135
260 (125 ) Net
income
$ 935 1,106
(171 ) Net income per share Basic
$ 0.15 $ 0.18
(0.03 ) Fully diluted
$ 0.15 $ 0.18
(0.03 ) Dividend per share
$ 0.04 $ 0.04
Weighted average shares outstanding - basic
6,218,706 6,193,278
Weighted average shares outstanding - diluted
6,218,706 6,193,278
This information is preliminary and based
on company data available at the time of the presentation.
HOPFED BANCORP, INC.
Selected Financial Data
The table below adjusts tax-free investment income for the
three month periods ended March 31, 2017 and March 31, 2016, by
$141,000 and $174,000, respectively; for a tax equivalent rate
using a cost of funds rate of 0.81% for the three month period
ended March 31, 2017 and 0.83% for the three month period ended
March 31, 2016. The table adjusts tax-free loan income by $9,000
for the three month period ended March 31, 2017, and $5,000 for the
three month period ended March 31, 2016, for a tax equivalent rate
using the same cost of funds rate: Average
Income and Average Average
Income and Average Balance Expense
Rates Balance Expense Rates
3/31/2017
3/31/2017 3/31/2017
3/31/2016 3/31/2016
3/31/2016 (Table Amounts in Thousands, Except
Percentages) Loans receivable, net $ 615,382 6,745 4.38 % $ 560,544
6,470 4.62 % Taxable securities AFS 176,824 1,118 2.53 % 197,761
1,247 2.52 % Non-taxable securities AFS 33,868 424 5.00 % 42,098
527 5.01 % Other interest bearing deposits
9,260 23 0.99
% 9,491 16
0.67 % Total interest earning
assets 835,334
8,310 3.98
% 809,894
8,260 4.08
% Other assets
73,527
85,874 Total assets
$
908,861 $ 895,768
Retail time deposits $ 259,086 664 1.03 % $ 264,308 640 0.97 %
Brokered deposits 46,040 135 1.17 % 35,986 99 1.10 % Interest
bearing checking 219,696 326 0.59 % 213,336 311 0.58 % Saving /
MMDA 100,282 42 0.17 % 97,391 45 0.18 % FHLB borrowings 13,433 32
0.95 % 13,593 73 2.15 % Repurchase agreements 41,840 103 0.98 %
43,744 143 1.31 % Subordinated debentures
10,310 104 4.03
% 10,310 94
3.65 % Total interest bearing
liabilities 690,687
1,406 0.81
% 678,668
1,405 0.83
% Non-interest bearing deposits 126,809 122,926
Other liabilities 3,993 4,706
Stockholders’ equity
87,372 89,468
Total liabilities and stockholders’
equity
$ 908,861 $
895,768 Net interest income
$
6,904 $ 6,855 Net
interest spread
3.17 % 3.25
% Net interest margin
3.31
% 3.39 %
This information is preliminary and based
on company data available at the time of the presentation.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170426005171/en/
HopFed Bancorp, Inc.John E. Peck, 270-885-1171President and
CEO
HopFed Bancorp (NASDAQ:HFBC)
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