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HopFed Bancorp, Inc. Reports Second Quarter Results

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HOPKINSVILLE, Ky.--(BUSINESS WIRE)--

HopFed Bancorp, Inc. (NASDAQ: HFBC) (the "Company"), the holding company for Heritage Bank USA, Inc. (the "Bank"), today reported results for the three and six month periods ended June 30, 2015. For the three month period ended June 30, 2015, the Company reported a net loss of $117,000, or $0.02 per share, basic and diluted, compared to net income of $925,000, or $0.13 per share basic and diluted, for the three month period ended June 30, 2014. For the six month period ended June 30, 2015, the Company's net income was $1.2 million, or $0.19 per share, basic and diluted, compared to net income of $1.3 million, or $0.17 per share basic and diluted, for the six month period ended June 30, 2014.

Commenting on the second quarter results, John E. Peck, President and Chief Executive Officer, said, "The Company's operating results were negatively impacted by the results of an absolute auction of two properties owned by the bank as other real estate owned, resulting in a loss of $741,000. At June 30, 2015, the balance of the Company's other real estate owned is $1.8 million," Mr. Peck concluded.

Financial Highlights

  • At June 30, 2015, the Company's tangible book value was $13.78 per share and tangible common equity ratio was 10.06%. The Company's tangible book value and common equity ratio computations do not include 570,830 shares of common stock held by the Company's ESOP that the Company has currently not committed to release.
  • The Company purchased 69,467 shares of its common stock in the three month period ended June 30, 2015, at a weighted average price of $12.83 per share. At June 30, 2015, the Company owns 973,191 shares of treasury stock at a weighted average cost of $12.49 per share.
  • At June 30, 2015, net loans totaled $554.8 million, a $15.5 million increase, as compared to December 31, 2014, and a $6.1 million increase as compared to March 31, 2015. The Company's current annualized growth rate of loans is 5.7%.
  • The Company's estimated Tier 1 Leverage Ratio and Total Risk Based Capital Ratio at June 30, 2015, were 10.65% and 17.26%, respectively. The Bank's Tier 1 Leverage Ratio and Total Risk Based Capital Ratio at June 30, 2015, were 10.56% and 17.18%, respectively.

Asset Quality

At June 30, 2015, the Company's level of non-accrual loans totaled $7.1 million, as compared to $3.2 million at December 31, 2014. A summary of non-accrual loans at June 30, 2015, and December 31, 2014, is as follows:

             
June 30, 2015 December 31, 2014
(Dollars in Thousands)
 
One-to-four family mortgages $ 1,456 $ 1,501
Home equity line of credit 48 ---
Multi-family 1,827 95
Land 1,982 215
Non-residential real estate 520 1,159
Farmland 209 115
Commercial loans   1,014   90
Total non-accrual loans $ 7,056 $ 3,175
 
 

For the three month period ended June 30, 2015, the Company placed two significant loan relationships into non-accrual status. Both relationships were previously classified as substandard due to known credit weaknesses. The first relationship includes both a single family property and 100% of the Company's multi-family non-accrual loans. The relationship was placed into non-accrual status after the borrowers filed for bankruptcy. The Company's current appraisals indicate that the value of the collateral adequately secures the relationship. However, we are in the process of obtaining new appraisals.

The second relationship encompasses 100% of our non-accrual land development portfolio. At March 31, 2015, the Company had a $630,000 specific reserve for this relationship. During the three month period ended June 30, 2015, the Company placed this relationship in non-accrual status and charged off $716,000.

At June 30, 2015, non-accrual loans plus other real estate owned totaled $8.9 million, or 1.01% of total assets. At December 31, 2014, non-accrual loans plus other real estate owned totaled $5.1 million, or 0.55% of total assets.

A summary of the activity in other real estate owned for the six month period ended June 30, 2015, is as follows:

     
Balance               Reduction     Gain (Loss)     Balance
12/31/2014     Foreclosures       Proceeds     in Values     on Sale     6/30/2015
(Dollars in Thousands)
One-to-four family mortgages $ 159 105 (116 ) --- (33 ) $ 115
Land 1,768 --- (124 ) --- (701 ) 943
Non-residential real estate   --- 737 ---   --- ---     737
 
Total $ 1,927 842 (240 ) --- (734 ) $ 1,795
 
 

A summary of the activity in loans classified as TDRs for the three and six month periods ended June 30, 2015, is as follows:

                         
Balance at New

Loss or

Transferred to Removed from

(Taken to)

Balance
12/31/14 TDR Foreclosure Held For Sale Non-accrual 06/30/15
(Dollars in Thousands)
 
Non-residential real estate $ 3,284 --- --- --- --- $ 3,284
 
Total performing TDR $ 3,284 --- --- --- -- $ 3,284
 
 

At June 30, 2015, the Company's level of loans classified as substandard was $28.7 million as compared to $37.4 million at December 31, 2014. At June 30, 2015, the Company's classified loan to risk-based capital ratio was 28.4%. The Company's specific reserve for impaired loans was $746,000 at June 30, 2015, and $1.5 million at December 31, 2014. A summary of the level of classified loans at June 30, 2015, is as follows:

                          Specific     Allowance
Allowance for
June 30, 2015 Special Impaired Loans       for Performing
Pass Mention Substandard Doubtful Total Impairment Loans
(Dollars in Thousands)
One-to-four family mortgages $ 143,385 42 2,858 --- 146,285 46 952
Home equity line of credit 33,182 --- 621 --- 33,803 --- 196
Junior liens 1,992 38 16 --- 2,046 --- 10
Multi-family 17,958 1,655 2,967 --- 22,580 --- 73
Construction 27,072 --- --- --- 27,072 --- 166
Land 14,425 44 10,052 --- 24,521 116 1,057
Non-residential real estate 149,727 640 9,672 --- 160,039 445 1,195
Farmland 40,311 681 232 --- 41,224 --- 367
Consumer loans 15,803 14 194 --- 16,011 48 299
Commercial loans   84,898 169 2,081 --- 87,148 91 473
 
Total $ 528,753 3,283 28,693 --- 560,729 746 4,788
 
 

Net Interest Income

For the three month period ended June 30, 2015, the Company's net interest income was $6.3 million, compared to $7.6 million for the three month period ended March 31, 2015, and $6.4 million for the three month period ended June 30, 2014. For the three month period ended June 30, 2015, the Company's net interest margin was 3.17%, as compared to 3.78% for the three month period ended March 31, 2015, and 3.02% for the three month period ended June 30, 2014.

The decline in linked quarter net interest income and net interest margin is largely the result of an $830,000 recovery of an investment security that was removed from non-accrual status during the three month period ended March 31, 2015. Additional, the Company's non-accrual loan portfolio increased from $2.1 million at March 31, 2015, to $7.1 million at June 30, 2015. The increase in non-accrual loans resulted in an $85,000 reduction in interest income on loans.

For the six month period ended June 30, 2015, the Company's net interest income was $13.9 million, as compared to $12.7 million for the six month period ended June 30, 2014. For the six month period ended June 30, 2015, the Company's interest expense was $3.2 million as compared to $4.7 million for the six month period ended June 30, 2014. The Company's reduced interest expense was largely the result of lower Federal Home Loan Bank borrowing balances and a reduced dependency on non-core funding. For the six month period ended June 30, 2015, the Company's net interest margin was 3.48%, as compared to 3.01% for the six month period ended June 30, 2014.

Non-interest Income

Non-interest income for the three month periods ended June 30, 2015, March 31, 2015, and June 30, 2014, was $1.9 million, respectively. On a linked quarter basis, total non-interest income declined by $45,000 largely due to a $283,000 decline in gains on the sale of securities. During the three month period ended March 31, 2015, the Company utilized proceeds from the sale of securities to fund a reduction in the size of FHLB borrowing balances. The decline in linked quarter gains on the sale of securities was partially offset by a $166,000 increase in the level of mortgage origination revenue.

During the three and six month periods ended June 30, 2015, mortgage origination revenue was $343,000 and $520,000, respectively, as compared to $133,000 and $191,000 for the three and six month period ended June 30, 2014. The growth in revenue is the result of a renewed success in building relationships with real estate agents and an increase in the amount of resources committed to the business.

For the three month period ended June 30, 2015, total non-interest income was $77,000 lower as compared to the three month period ended June 30, 2014. For the three month period ended June 30, 2015, service charge income was $720,000, representing a $128,000 decline as compared to the three month period ended June 30, 2014. For the six month period ended June 30, 2015, service charge income was $1.4 million, a $192,000 declined as compared to the six month period ended June 30, 2014. The decline in service charge income is the result of changes in regulations as well as customer utilization of overdraft services.

For the six month period ended June 30, 2015, non-interest income was $3.8 million, as compared to $3.5 million for the six month period ended June 30, 2014. The increase in non-interest income for the six month period ended June 30, 2015, as compared to the same period in 2014 is largely the result of previously mentioned increases in mortgage origination revenue and gains on the sale of securities.

Non-interest Expense

On a linked quarter basis, the Company's non-interest expenses increased by $764,000. The most significant increases in operating expenses was an $748,000 increase in losses on the sale of real estate owned and a $139,000 increase in professional services expense. For the three month period ended June 30, 2015, the Company's salaries and benefits expenses declined by $180,000 as compared to the three month period ended March 31, 2015. The decline in linked quarter salary and benefits expense is largely due to seasonal factors.

For the three month period ended June 30, 2015, non-interest expenses increased by $787,000 as compared to the three month period ended June 30, 2014. For the three month period ended June 30, 2015, expense items increasing by more than 5% as compared to the three month period ended June 30, 2014, include:

             
Three Month Period Ended Dollar Percentage
06/30/15     06/30/14 Change Change
 
Salaries and benefits $ 4,004 $ 3,692 $ 312 8.45 %
Professional services $ 468 $ 341 $ 127 37.24 %

Loss on sale of other real estate owned

$ 741 $ 102 $ 639 626.47 %
Other expenses $ 498 $ 423 $ 75 17.73 %
 
 

For the six month period ended June 30, 2015, non-interest expenses were $15.7 million, an increase of $933,000 as compared to the six month period ended June 30, 2014. Generally, the same factors influenced increases in non-interest expenses for both the three and six month periods ended June 30, 2015, as compared to the three and six month periods ended June 30, 2014. For the six month period ended June 30, 2015, expense items increasing by more than 5% as compared to the six month period ended June 30, 2014, include:

             
Six Month Period Ended Dollar Percentage
06/30/15     06/30/14 Change Change
 
Salaries and benefits $ 8,188 $ 7,487 $ 701 9.36 %
Professional services $ 797 $ 628 $ 169 26.91 %

Loss on sale of other real estate owned

$ 734 $ 125 $ 609 487.20 %
Other expenses $ 930 $ 798 $ 132 16.54 %
 
 

For the three and six month periods ended June 30, 2015, the Company's loss on the sale of other real estate owned accounted for $639,000 and $609,000 of the increase in total non-interest expenses, respectively. The increase in salaries and benefits expenses is the result of an increased level of staffing for the Company's mortgage loan origination division and our loan production office in Nashville as well as increases in the cost of employer provided health insurance. The increase in professional services expense was largely the result of an increase in legal expenses.

Balance Sheet

At June 30, 2015, consolidated assets were $877.6 million, a decline of $58.2 million as compared to December 31, 2014. For the six month period ended June 30, 2015, the Company experienced a $11.5 million decrease in time deposits, a $25.0 million decrease in FHLB borrowings, a $20.7 million decrease in cash balances and a $15.5 million increase in net loan balances. To fund the growth in loan balances and reduction in FHLB borrowings and time deposits, the Company has reduced its balance in available for sale securities by $55.9 million, to $247.7 million at June 30, 2015, as compared to December 31, 2014.

The Company

Prior to June 5, 2013, HopFed Bancorp, Inc. was a federally chartered savings and loan holding company with Heritage Bank as its wholly owned thrift subsidiary. On June 5, 2013, Heritage Bank's legal name was changed to Heritage Bank USA, Inc., and its charter was converted to a Kentucky state chartered commercial bank with the Kentucky Department of Financial Institutions and the Federal Deposit Insurance Corporation as its regulators. Also on June 5, 2013, HopFed Bancorp, Inc. became a non-member federally chartered commercial bank holding company regulated by the Federal Reserve Board. HopFed Bancorp, Inc. is the holding company for Heritage Bank USA, Inc. headquartered in Hopkinsville, Kentucky. The Bank has eighteen offices in western Kentucky and middle Tennessee and a loan production office in Nashville, Tennessee. The Company has two additional operating divisions including Heritage Wealth Management of Murray, Kentucky, Hopkinsville, Kentucky, and Pleasant View, Tennessee, which offers a broad line of financial services. Heritage Mortgage Services of Clarksville, Tennessee, offers long term fixed rate 1- 4 family mortgages loans that are originated for the secondary market in all communities in the Company's general market area. The 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 USA, Inc. may be found 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 Condensed Balance Sheets
(Dollars in thousands)

 
 

Assets

      June 30, 2015     December 31, 2014
(unaudited)
 
Cash and due from banks $ 16,538 34,389
Interest-earning deposits   3,145 6,050
Cash and cash equivalents 19,683 40,439
Federal Home Loan Bank stock, at cost 4,428 4,428
Securities available for sale 247,673 303,628
Loans held for sale 2,470 1,444

Loans receivable, net of allowance for loan losses of $5,534 at June 30, 2015, and $6,289 at December 31, 2014

554,806 539,264
Accrued interest receivable 3,873 4,576
Real estate and other assets owned 1,795 1,927
Bank owned life insurance 10,128 9,984
Premises and equipment, net 24,171 22,940
Deferred tax assets 1,668 2,261
Intangible asset --- 33
Other assets   6,918 4,861
Total assets $ 877,613 935,785
 
 

Liabilities and Stockholders' Equity

Liabilities:
Deposits:
Non-interest-bearing accounts $ 112,396 115,051
Interest-bearing accounts
Interest-bearing checking accounts 185,642 186,616
Savings and money market accounts 99,020 97,726
Other time deposits   320,461 331,915
Total deposits 717,519 731,308
Advances from Federal Home Loan Bank 9,000 34,000
Repurchase agreements 48,224 57,358
Subordinated debentures 10,310 10,310
Advances from borrowers for taxes and insurance 792 513
Dividends payable 296 301
Accrued expenses and other liabilities   3,216 3,593
Total liabilities   789,357 837,383
 
 

This information is preliminary and based on Company data available at the time of the presentation.

 
 
 
 
 
 

HOPFED BANCORP, INC.
Consolidated Condensed Balance Sheets, Continued
(Dollars in thousands)

 
      June 30, 2015     December 31, 2014
(unaudited)
 

Stockholders' equity:

Preferred stock, par value $0.01 per share; authorized - 500,000 shares; no shares issued and outstanding at June 30, 2015, and December 31, 2014

--- ---

Common stock, par value $.01 per share; authorized 15,000,000 shares; 7,950,436 issued and 6,977,245 outstanding at June 30, 2015, and 7,949,665 issued and 7,171,282 outstanding at December 31, 2014

79 79
Additional paid-in-capital 58,552 58,466
Retained earnings 46,455 45,729

Treasury stock- common (at cost, 973,191 shares at June 30, 2015, and 778,383 shares at December 31, 2014)

(12,159 ) (9,429 )

Unallocated ESOP shares (at cost 570,830 shares at June 30, 2015, and no shares at December 31, 2014

(7,525 ) ---
Accumulated other comprehensive income (loss), net of taxes   2,854   3,557  
 
Total stockholders' equity   88,256   98,402  
 
Total liabilities and stockholders' equity $ 877,613   935,785  
 
 

This information is preliminary and based on Company data available at the time of the presentation.

 
 
 
 
 
 

HOPFED BANCORP, INC.
Consolidated Condensed Statements of Income (Loss)
(Dollars in thousands)
Unaudited

 
      For the Three Month Periods       For the Six Month Periods
Ended June 30, Ended June 30,
       
2015 2014 2015 2014
Interest income:
Loans receivable $ 6,231 6,503 12,521 12,830
Securities available for sale - taxable 1,268 1,694 3,716 3,473
Securities available for sale - nontaxable 416 531 869 1,075
Interest-earning deposits   4 6   8 14
Total interest income   7,919 8,734   17,114 17,392
 
Interest expense:
Deposits 1,245 1,488 2,505 2,959
Advances from Federal Home Loan Bank 66 428 135 862
Repurchase agreements 118 245 238 494
Subordinated debentures   183 193   367 377
Total interest expense   1,612 2,354   3,245 4,692
 
Net interest income 6,307 6,380 13,869 12,700
Provision for loan losses   270 (261 ) 485 119
 
Net interest income after
provision for loan losses   6,037 6,641   13,384 12,581
 
Non-interest income:
Service charges 720 848 1,434 1,626
Merchant card income 286 276 556 535
Mortgage origination revenue 343 133 520 191
Gain on sale of securities 83 241 449 254
Income from bank owned life insurance 73 66 144 161
Financial services commission 194 168 353 374
Other operating income   169 213   325 402
Total non-interest income   1,868 1,945   3,781 3,543
 
 

This information is preliminary and based on Company data available at the time of the presentation.

 
 
 
 
 
 

HOPFED BANCORP, INC.
Consolidated Condensed Statements of Income (Loss), Continued
(Dollars in thousands, except share and per share data)
(Unaudited)

 
      For the Three Month Periods       For the Six Month Periods
Ended June 30, Ended June 30,
       
2015 2014 2015 2014
Non-interest expenses:
Salaries and benefits $ 4,004 3,692 8,188 7,487
Occupancy 752 808 1,490 1,717
Data processing 701 736 1,393 1,464
Bank franchise tax 251 398 499 644
Intangible amortization 16 33 32 65
Professional services 468 341 797 628
Deposit insurance and examination 151 183 268 380
Advertising expense 340 341 646 655
Postage and communications 134 140 266 283
Supplies expense 111 158 257 303
Loss on real estate owned 741 102 734 125
Real estate owned expense 67 92 204 222
Other operating expenses   498     423   930   798
Total non-interest expense   8,234     7,447   15,704   14,771
 
Income (loss) before income tax (329 ) 1,139 1,461 1,353
Income tax expense (benefit)   (212 )   214   223   74
 
Net income (loss)   ($117 )   925   1,238   1,279
Net income (loss) per share:
Basic   ($0.02 ) $ 0.13 $ 0.19 $ 0.17
Diluted   ($0.02 ) $ 0.13 $ 0.19 $ 0.17
Dividend per share $ 0.04   $ 0.04 $ 0.08 $ 0.08
 
Weighted average shares outstanding - basic   6,425,687     7,376,726   6,588,845   7,396,627
Weighted average shares outstanding - diluted   6,425,687     7,376,726   6,588,845   7,396,627
 
 

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)

 
      For the Three     Change from
Months Ended Prior Quarter
   
6/30/2015 3/31/2015
 
Interest income:
Loans receivable $ 6,231 6,290 (59 )
Securities available for sale - taxable 1,268 2,448 (1,180 )
Securities available for sale - nontaxable 416 453 (37 )
Interest-earning deposits   4 4 0  
Total interest income   7,919 9,195 (1,276 )
 
Interest expense:
Deposits 1,245 1,260 (15 )
Advances from Federal Home Loan Bank 66 69 (3 )
Repurchase agreements 118 120 (2 )
Subordinated debentures   183 184 (1 )
Total interest expense   1,612 1,633 (21 )
 
Net interest income 6,307 7,562 (1,255 )
Provision for loan losses   270 215 55  
 

Net interest income after provision for loan losses

  6,037 7,347 (1,310 )
 
Non-interest income:
Service charges 720 714 6
Merchant card income 286 270 16

Mortgage origination revenue

343 177 166
Gain on sale of securities 83 366 (283 )
Income from bank owned life insurance 73 71 2
Financial services commission 194 159 35
Other operating income   169 156 13  
Total non-interest income   1,868 1,913 (45 )
 
 

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)

 
      For the Three     Change from
Months Ended Prior Quarter
   
6/30/2015 3/31/2015
 
Non-interest expenses:
Salaries and benefits $ 4,004 4,184 (180 )
Occupancy 752 738 14
Data processing 701 692 9
Bank franchise tax 251 248 3
Intangible amortization 16 16 0
Professional services 468 329 139
Deposit insurance and examination 151 117 34
Advertising 340 306 34
Postage and communications 134 132 2
Supplies 111 146 (35 )
(Gain) loss on real estate owned 741 (7 ) 748
Real estate owned 67 137 (70 )
Other operating   498     432   66  
 
Total non-interest expense   8,234     7,470   764  
 
Income (loss) before income tax expense (329 ) 1,790 (2,119 )
Income tax expense (benefit)   (212 )   435   (647 )
 
Net income (loss)   ($117 ) $ 1,355   ($1,472 )
Net income (loss) per share:
 
Basic   ($0.02 ) $ 0.20   ($0.22 )
Fully diluted   ($0.02 ) $ 0.20   ($0.22 )
Dividend per share $ 0.04   $ 0.04  
 
Weighted average shares outstanding - basic   6,425,687     6,732,456  
Weighted average shares outstanding - diluted   6,425,687     6,732,456  
 
 

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 six month periods ended June 30, 2015, and June 30, 2014, by $429,000 and $524,000, respectively, for a tax equivalent rate using a cost of funds rate of 0.94% for the six month period ended June 30, 2015, and 1.25% for the six month period ended June 30, 2014. The table adjusts tax-free loan income by $7,000 and $6,000, respectively, for six month periods ended June 30, 2015, and June 30, 2014, respectively, 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
6/30/2015 6/30/2015 6/30/2015 6/30/2014 6/30/2014 6/30/2014
(Table Amounts in Thousands, Except Percentages)
Loans $ 547,071 12,528 4.58 % $ 535,830 12,836 4.79 %
Investments AFS taxable 214,920 3,716 3.46 % $ 264,596 3,473 2.63 %
Investment AFS tax free 55,281 1,298 4.70 % $ 66,303 1,599 4.82 %
Federal funds   6,046 8   0.26 % $ 11,225 14   0.25 %
 
Total interest earning assets 823,318 17,550   4.26 % 877,954 17,922   4.08 %
 
Other assets   73,916   81,908
 
Total assets $ 897,234 $ 959,862
 
Retail time deposits 290,499 1,676 1.15 % 326,464 1,890 1.16 %
Brokered deposits 34,006 190 1.12 % 44,061 291 1.32 %
MMDA & Savings 100,242 101 0.20 % 93,630 96 0.21 %
Interest bearing checking 192,921 538 0.56 % 189,518 682 0.72 %
FHLB borrowings 20,685 135 1.31 % 43,775 862 3.94 %
Repurchase agreements 41,999 238 1.13 % 47,670 494 2.07 %
Subordinated debentures   10,310 367   7.12 %   10,310 377   7.31 %
 
Total interest bearing liabilities 690,662 3,245   0.94 % 755,428 4,692   1.24 %
 
Non-interest bearing deposits 111,120 101,987
Other liabilities 3,413 4,525
 
Stockholders' equity   92,039   97,922
 

Total liabilities and stockholders' equity

$ 897,234 $ 959,862
 
Net interest income 14,305   13,230  
 
Net interest spread 3.32 % 2.84 %
 
Net interest margin 3.48 % 3.01 %
 
 

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 June 30, 2015, and June 30, 2014, by $205,000 and $259,000, respectively, for a tax equivalent rate using a cost of funds rate of 0.94% for the three month period ended June 30, 2015, and 1.20% for the three month period ended June 30, 2014. The table adjusts tax-free loan income by $5,000 for three month period ended June 30, 2015, and $3,000 for the three month period ended June 30, 2014, respectively, 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
6/30/2015 6/30/2015 6/30/2015 6/30/2014 6/30/2014 6/30/2014
(Table Amounts in Thousands, Except Percentages)
Loans $ 552,992 6,236 4.51 % $ 538,895 6,506 4.83 %
Investments AFS taxable 209,907 1,268 2.42 % 266,815 1,694 2.54 %
Investment AFS tax free 52,960 621 4.69 % 65,323 790 4.84 %
Federal funds   6,107 4   0.26 %   9,899 6   0.24 %
 
Total interest earning assets 821,966 8,129   3.96 % 880,932 8,996   4.08 %
 
Other assets   68,467   76,307
 
Total assets $ 890,433 $ 957,239
 
Retail time deposits 288,618 831 1.15 % 320,957 927 1.16 %
Brokered deposits 32,669 94 1.15 % 42,024 146 1.39 %
MMDA & Savings 100,776 51 0.20 % 93,932 54 0.23 %

Interest bearing checking

194,224 269 0.55 % 194,863 361 0.74 %
FHLB borrowings 18,231 66 1.45 % 41,764 428 4.10 %
Repurchase agreements 41,478 118 1.14 % 45,997 245 2.13 %
Subordinated debentures   10,310 183   7.10 %   10,310 193   7.49 %
 
Total interest bearing liabilities 686,306 1,612   0.94 % 749,847 2,354   1.26 %
 
Non-interest bearing deposits 110,379 103,717
Other liabilities 3,353 4,522
 
Stockholders' equity   90,395   99,153
 

Total liabilities and stockholders' equity

$ 890,433 $ 957,239
 
Net interest income 6,517   6,642  
 
Interest rate spread 3.02 % 2.82 %
 
Net interest margin 3.17 % 3.02 %
 
 

This information is preliminary and based on Company data available at the time of the presentation.

 
 
 
 

HopFed Bancorp, Inc.
John E. Peck, 270-885-1171
President and CEO

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