Breaking News

Japan Unexpectedly Targets Bigger Expansion of Monetary Base; Yen Drops; Nikkei 225 Surges
Tweet TWEET

HopFed Bancorp, Inc. Reports First Quarter Results

  HopFed Bancorp, Inc. Reports First Quarter Results

Business Wire

HOPKINSVILLE, Ky. -- April 25, 2014

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, 2014. For the three month period ended March 31,
2014, the Company’s net income was $354,000, or $0.05 per share, basic and
diluted, compared to net income of $984,000, or $0.13 per share basic and
diluted, for the three month period ended March 31, 2013.

Commenting on the first quarter results, John E. Peck, President and Chief
Executive Officer, said, “The Company’s net interest income for the three
month period ended March 31, 2014, declined by $66,000 as compared to the
three month period ended December 31, 2013, and $71,000 as compared to the
three month period ended March 31, 2013. At March 31, 2014, net loans totaled
$536.0 million, a decline of $7.6 million as compared to December 31, 2013.
The Company’s loan pipeline remains relatively robust, but the Company’s
lending markets remain extremely competitive.

“The Company experienced a significant decline in non-interest income during
the three month period ended March 31, 2014, as compared to the three month
periods ended December 31, 2013, and March 31, 2013. On a linked quarter
basis, non-interest income declined by $694,000, or 30.2%. The linked quarter
decline in non-interest income was largely the result of a $412,000 gain on
the sale of the Company’s insurance assets in December 2013. As compared to
March 31, 2013, non-interest income declined by $885,000, or 35.6%. For the
three month period ended March 31, 2013, the Company recognized $627,000 in
gains on the sale of securities as compared to $13,000 for the three month
period ended March 31, 2014,” Mr. Peck concluded.

Financial Highlights

  *At March 31, 2014, the Company’s tangible book value was $13.10 per share
    and tangible commonequity ratio was 10.10%. The Bank’s Tier 1 Leverage
    Ratio and Total Risk Based Capital Ratio at March 31, 2014, were 10.65%
    and 18.21%, respectively. The Company’s Tier 1 Leverage Ratio and Total
    Risk Based Capital Ratio at March 31, 2014, were 11.09% and 18.88%,
    respectively.
  *The Company purchased 10,386 shares of its common stock in the quarter at
    a weighted average price of $11.49 per share. The Company has purchased a
    total of 86,854 shares since September 16, 2013, at a weighted average
    price of $11.19 per share.
  *At March 31, 2014, the Company’s allowance for loan loss totaled $8.9
    million, or 1.64% of total loans and 88.85% of non-accrual loans. In the
    three month period ended March 31, 2014, the Company’s net charge offs
    totaled $149,000, or an annualized rate of 0.11% of average loans.
  *For the three month period ended March 31, 2014, the Company’s net
    interest margin was 3.00%, as compared to 3.10% for the three month period
    ended December 31, 2013, and 2.99% for the three month period ended March
    31, 2013.

Asset Quality

At March 31, 2014, the Company’s level of non-accrual loans totaled $10.0
million, as compared to $10.1 million at December 31, 2013. A summary of
non-accrual loans at March 31, 2014, and December 31, 2013, is as follows:

                              March 31, 2014  December 31, 2013
                               (Dollars in Thousands)
                                                
One-to-four family mortgages   $     1,056      $      945
Home equity line of credit           49                1
Junior lien                          1                 2
Multi-family                         ---               ---
Construction                         ---               175
Land                                 1,217             1,218
Non-residential real estate          6,585             6,546
Farmland                             669               703
Consumer loans                       2                 13
Commercial loans                    453              463
Total non-accrual loans        $     10,032     $      10,066
                                                       

At each of March 31, 2014, and December 31, 2013, non-accrual loans plus other
real estate owned totaled $11.7 million, or 1.21% of total assets. A summary
of the activity in other real estate owned for the three month period ended
March 31, 2014, is as follows:

                 Activity During 2013
                  Balance                             Reduction  Gain    Balance
                                                                     (Loss)
                  12/31/2013  Foreclosures  Proceeds  in Values  on      3/31/2014
                                                                     Sale
                  (Dollars in Thousands)
One-to-four
family            $   350      166            (66   )    ---         (4   )   $  446
mortgages
Multi-family          ---      ---            ---        ---         ---         ---
Construction          ---      ---            ---        ---         ---         ---
Land                  1,124    ---            (71   )    ---         (19  )      1,034
Non-residential       200      ---            ---        ---         ---         200
real estate
Consumer assets      ---      ---            ---       ---         ---       ---
                                                                              
Total             $   1,674    166            (137  )    ---         (23  )   $  1,680
                                                                                 

The Company had no loans classified as performing Troubled Debt Restructurings
(“TDRs”) at March 31, 2014, and December 31, 2013.

Asset Quality (continued)

At March 31, 2014, the Company’s level of loans classified as substandard was
$39.0 million as compared to $42.6million at December 31, 2013. At March 31,
2014, the Company’s classified loan to risk-based capital ratio was 34.08%.
The Company’s specific reserve for impaired loans was $2.0 million at March
31, 2014, and $1.9 million at December 31, 2013. A summary of the level of
classified loans net of unearned fees, at March 31, 2014, is as follows:

                                                                       Specific    Allowance
                                        Impaired Loans                       Allowance    for
March 31, 2014                Special                                       for          Performing
                  Pass        Mention   Substandard   Doubtful   Total       Impairment   Loans
                  (Dollars in Thousands)
One-to-four
family            $ 150,717   904       2,336         ---        $ 153,957   $    580     $   1,571
mortgages
Home equity         33,404    ---       543           ---          33,947         ---         221
line of credit
Junior liens        2,764     42        23            ---          2,829          ---         27
Multi-family        23,871    4,899     ---           ---          28,770         ---         267
Construction        11,278    ---       ---           ---          11,278         ---         ---
Land                16,058    3,464     14,632        ---          34,154         722         577
Non-residential     141,275   345       12,320        ---          154,083        546         2,366
real estate
Farmland            41,605    488       5,658         ---          47,608         ---         754
Consumer loans      14,604    ---       656           ---          15,260         160         520
Commercial         58,822    1,399     2,877         ---         63,098        ---        602
loans
                                                                                          
Total             $ 494,398   11,541    39,045        ---        $ 544,984   $    2,008   $   6,905
                                                                                              

Net Interest Income

For the three month period ended March 31, 2014, the Company’s net interest
income was $6.3 million, compared to$6.4million for each of the three month
periods ended December 31, 2013, and March 31, 2013. For the three month
period ended March 31, 2014, the Company’s net interest margin was 3.00%, as
compared to 3.10% for the three month period ended December 31, 2013, and
2.99% for the three month period ended March 31, 2013.

The decline in net interest income was the result of lower average balances
and yields on loans, offsetting lower levels of interest expense. For the
three month period ended March 31, 2014, interest income on loans was $6.3
million, declining $251,000 and $555,000, as compared to the three month
periods ended December 31, 2013, and March 31, 2013. For the three month
period ended March 31, 2014, the average yield on loans was 4.75%, compared to
4.96% and 5.27% for the three month periods ended December 31, 2013, and March
31, 2013, respectively.

For the three month period ended March 31, 2014, interest expense was $2.3
million, declining $39,000 and $576,000 as compared to the three month periods
ended December 31, 2013 and March 31, 2013, respectively. For the three month
period ending March 31, 2014, the average cost of interest bearing liabilities
was 1.23%, as compared to 1.28% and 1.51% for the three month periods ended
December 31, 2013 and March 31, 2013, respectively.

Non-interest Income

Non-interest income for the three month period ended March 31, 2014, was $1.6
million, as compared to $2.3 million for the three month period ended December
31, 2013, and $2.5 million for the three month period ended March 31, 2013.
The decline in non-interest income for the three month period ended March 31,
2014, as compared to the three month period ended December 31, 2013, was
primarily the result of a $412,000 gain on the sale of the Company’s insurance
assets in December of 2013. Additionally, the Company earned $94,000 in
non-interest income related to the Company’s insurance assets in the three
month period ended December 31, 2013. Despite the reduction in non-interest
income, the Company’s insurance assets were marginally profitable,
contributing less than $60,000 in net income to the Company during the twelve
month period ended December 31, 2013.

For the three month period ended March 31, 2014, service charge income
declined by $153,000 and $75,000, respectively, as compared to the three month
periods ended December 31, 2013 and March 31, 2013. For the three month period
ended March 31, 2014, merchant card income was $259,000, an increase of $3,000
and $36,000, respectively, as compared to the three month periods ended
December 31, 2013 and March 31, 2013. Typically, the Company’s service charge
and merchant fee income are highest in the fourth quarter of each year and
lowest in the first quarter of each year.

For the three month period ended March 31, 2014, the Company’s income on the
origination of mortgage loans was $58,000, a decline from the $200,000 of
income earned during the three month period ended March 31, 2013. The decline
in mortgage origination income was largely the result of higher, long term
interest rates, as the market rate on a thirty-year, fixed rate mortgage has
increased significantly since March 31, 2013, virtually eliminating
refinancing activity.

The Company recognized net gains on the sale of securities of $13,000,
$44,000, and $627,000 for the three month periods ended March 31, 2014,
December 31, 2013, and March 31, 2013, respectively. As interest rates have
increased, the Company has experienced a reduction in its unrealized gain on
the sale of securities, limiting the opportunities to harvest gains from the
investment portfolio.

Non-interest Expense

On a linked quarter basis, the Company’s non-interest expenses increased by
$68,000. The most significant increases in operating expenses were a $359,000
increase in salaries and benefits and a $108,000 increase in deposit insurance
expense. The most significant reductions in operating expense line items were
those expenses related to losses on real estate owned and the management of
those assets for a combined decrease of $210,000, a $106,000 decline in
advertising expenses and a $190,000 decline in other operating expenses.

For the three month period ended March 31, 2014, non-interest expenses
increased by $50,000 as compared to the three month period ended March 31,
2013. At March 31, 2014, the Company’s state deposit taxes increased by
$104,000; and our data processing expenses increased by $78,000, each as
compared to the three month period ended March 31, 2013.

Balance Sheet

At March 31, 2014, consolidated assets were $965.0 million, a decline of $8.6
million as compared to December31,2013. For the three month period ended
March 31, 2014, the Company experienced a $10.9 million decrease in time
deposits, a $5.5 million decrease in FHLB borrowings, a $20.4 million decrease
in cash balances and a $7.7 million decrease in net loan balances. The Company
invested excess liquidity in securities as the balance of available for sale
securities increased $22.6 million to $341.5 million.

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. TheBank haseighteen offices in
western Kentucky and middle 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
financialproducts and services with the personalized focus of a community
banking organization. More information about HopFed Bancorpand 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 andis subject to
various risk, uncertainties, and assumptions. Should one or more of these
risks or uncertainties materialize, orshould the underlying assumptions prove
incorrect, actual results may vary materially from those anticipated,
estimated orexpected. 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 infilings 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, 2014   December 31,
                                                                  2013
                                               (unaudited)
                                                                  
Cash and due from banks                        $    25,449        37,229
Interest-earning deposits                          8,730         18,619
Cash and cash equivalents                           34,179        55,848
Federal Home Loan Bank stock, at cost               4,428         4,428
Securities available for sale                       341,538       318,910
Loans held for sale                                 152           ---
Loans receivable, net of allowance for
loan losses of $8,913 at March 31, 2014,            535,951       543,632
and $8,682 at December 31, 2013
Accrued interest receivable                         4,447         5,233
Real estate and other assets owned                  1,680         1,674
Bank owned life insurance                           9,764         9,677
Premises and equipment, net                         23,063        23,108
Deferred tax assets                                 3,327         4,610
Intangible asset                                    97            130
Other assets                                       6,398         6,399
Total assets                                   $    965,024       973,649
                                                                  
                                                                  
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest-bearing accounts                  $    105,848       105,252
Interest-bearing accounts
Interest-bearing checking accounts                  190,804       183,643
Savings and money market accounts                   93,780        92,106
Other time deposits                                371,094       381,996
Total deposits                                      761,526       762,997
                                                                  
Advances from Federal Home Loan Bank                41,280        46,780
Repurchase agreements                               50,129        52,759
Subordinated debentures                             10,310        10,310
Advances from borrowers for taxes and               572           521
insurance
Dividends payable                                   309           326
Accrued expenses and other liabilities             3,385         4,239
Total liabilities                                  867,511       877,932


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, 2014   December 31, 2013
                                          (unaudited)
                                                             
Stockholders' equity
Preferred stock, par value $0.01 per
share; authorized - 500,000 shares;          ---             ---
no shares issued and outstanding at
March 31, 2014, and December 31, 2013
Common stock, par value $.01 per
share; authorized
15,000,000 shares; 7,927,287 issued
and 7,437,517 outstanding at March           79              79
31, 2014, and 7,927,287 issued and
7,447,903 outstanding at December 31,
2013
Additional paid-in-capital                   58,333          58,302
Retained earnings                            44,753          44,694
Treasury stock- common (at cost,
489,770 shares at March 31, 2014, and        (6,049   )      (5,929      )
479,384 shares at December 31, 2013)
Accumulated other comprehensive             397            (1,429      )
income (loss), net of taxes
                                                             
Total stockholders' equity                  97,513         95,717      
                                                             
Total liabilities and stockholders'       $  965,024        973,649     
equity


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,
                                                                
                                            2014                      2013
Interest and dividend income:
Loans receivable                            $      6,327              6,882
Investment in securities, taxable                  1,779              1,832
Nontaxable securities available                    544                585
for sale
Interest-earning deposits                         8                  6
Total interest and dividend                       8,658              9,305
income
                                                                      
Interest expense:
Deposits                                           1,471              2,046
Advances from Federal Home Loan                    434                444
Bank
Repurchase agreements                              249                242
Subordinated debentures                           184                182
Total interest expense                            2,338              2,914
                                                                      
Net interest income                               6,320              6,391
Provision for loan losses                         380                376
                                                                      
Net interest income after
provision for loan losses                         5,940              6,015
                                                                      
Non-interest income:
Service charges                                    778                853
Merchant card income                               259                223
Mortgage origination revenue                       58                 200
Gain on sale of securities                         13                 627
Income from bank owned life                        95                 75
insurance
Financial services commission                      206                297
Other operating income                            189                208
Total non-interest income                         1,598              2,483


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,
                                                             
                                        2014                     2013
Non-interest expenses:
Salaries and benefits                   $   3,795                   3,848
Occupancy expense                           909                     845
Data processing expense                     728                     650
State deposit tax                           246                     142
Intangible amortization expense             32                      49
Professional services expense               314                     393
Deposit insurance and                       287                     232
examination expense
Advertising expense                         197                     333
Postage and communications                  143                     139
expense
Supplies expense                            145                     136
Loss on sale of real estate                 23                      35
owned
Real estate owned expenses                  130                     76
Other operating expenses                   375                   396
Total non-interest expense                 7,324                 7,274
                                                                 
Income before income tax                    214                     1,224
expense
Income tax expense                         (140        )          240
                                                                 
Net income                              $   354                   984
Net income per share:
Basic                                   $   0.05                $  0.13
Fully diluted                           $   0.05                $  0.13
Dividend per share                      $   0.04                $  0.02
                                                                 
Weighted average shares                    7,416,716             7,488,445
outstanding - basic
Weighted average shares                    7,416,716             7,488,445
outstanding - diluted


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 Months Ended   
                                                               Change from
                                  3/31/2014       12/31/2013     Prior Quarter
                                                                 
Interest and dividend income:
Loans receivable                  $    6,327      6,578          (251     )
Investment in securities,              1,779      1,636          143
taxable
Nontaxable securities                  544        543            1
available for sale
Interest-earning deposits             8          6              2        
Total interest and dividend           8,658      8,763          (105     )
income
                                                                 
Interest expense:
Deposits                               1,471      1,510          (39      )
Advances from Federal Home             434        445            (11      )
Loan Bank
Repurchase agreements                  249        237            12
Subordinated debentures               184        185            (1       )
Total interest expense                2,338      2,377          (39      )
                                                                 
Net interest income                   6,320      6,386          (66      )
Provision for loan losses             380        396            (16      )
                                                                 
Net interest income after             5,940      5,990          (50      )
provision for loan losses
                                                                 
Non-interest income:
Service charges                        778        931            (153     )
Merchant card income                   259        256            3
Mortgage origination revenue           58         75             (17      )
Gain on sale of securities             13         44             (31      )
Income from bank owned life            95         103            (8       )
insurance
Financial services commission          206        292            (86      )
Gain on sale of assets                 ---        412            (412     )
Other operating income                189        179            10       
                                                                 
Total non-interest income             1,598      2,292          (694     )


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)


                           Months Ended                      
                                                               Change from
                             3/31/2014         12/31/2013        Prior Quarter
                                                                 
Non-interest expenses:
Salaries and benefits        $ 3,795             3,436           359
Occupancy expense              909               870             39
Data processing expense        728               747             (19       )
State deposit tax              246               149             97
Intangible amortization        32                32              ---
expense
Professional services          314               338             (24       )
expense
Deposit insurance and          287               179             108
examination expense
Advertising expense            197               303             (106      )
Postage and                    143               140             3
communications expense
Supplies expense               145               107             38
Loss on sale of other          ---               12              (12       )
assets
Loss on sale of real           23                147             (124      )
estate owned
Real estate owned              130               216             (86       )
expenses
Other operating expenses      375             580            (205      )
                                                                 
Total non-interest            7,324           7,256          68        
expense
                                                                 
Income before income tax       214               1,026           (812      )
expense
Income tax expense            (140      )      (50       )     (90       )
                                                                 
Net income                   $ 354             1,076          (722      )
Net income (loss)
available (attributable)
to common stockholders
Per share, basic             $ 0.05           $ 0.14           (0.09     )
Per share, diluted           $ 0.05           $ 0.14           (0.09     )
Dividend per share           $ 0.04           $ 0.04      
                                                                 
Weighted average shares       7,416,716       7,430,970 
outstanding - basic
Weighted average shares       7,416,716       7,430,970 
outstanding - diluted


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, 2014,
and March 31, 2013, by $266,000 and $282,000, respectively, for a tax equivalent rate using a cost of
funds rate of 1.20 for the three month period ended March 31, 2014, and 1.50% for the three month
period ended March 31, 2013. The table adjusts tax-free loan income by $1,000 for three month periods
ended March 31, 2014, and March 31, 2013, respectively, for a tax equivalent rate using the same cost
of funds rate:

                Average      Income &     Average      Average      Income &     Average
                  Balance        Expense        Rates          Balance        Expense        Rates
                  03/31/2014     03/31/2014     03/31/2014     03/31/2013     03/31/2013     03/31/2013
                                                                                             
Loans             $  532,720     $  6,328       4.75   %       $  522,705     $  6,883       5.27   %
Investments          266,780        1,779       2.67   %          284,378        1,832       2.58   %
AFS taxable
Investments          67,294         810         4.81   %          75,689         867         5.15   %
AFS tax free
Interest
earning             12,569        8          0.25   %         9,882         6          0.24   %
deposits
                                                                                             
Total
interest             879,363       8,925      4.06   %          892,654       9,588      4.30   %
earning
assets
                                                                                             
Other assets        84,187                                      85,058
                                                                                             
Total assets      $  963,550                                   $  977,712
                                                                                             
                                                                                             
                                                                                             
Retail time       $  332,033        963         1.16   %       $  384,815        1,499       1.56   %
deposits
Brokered             46,119         145         1.26   %          47,100         184         1.56   %
deposits
Interest
bearing              184,114        321         0.70   %          164,074        330         0.80   %
checking
accounts
MMDA and
savings              93,325         42          0.18   %          80,687         33          0.16   %
accounts
FHLB                 45,808         434         3.79   %          43,558         444         4.08   %
borrowings
Repurchase           49,362         249         2.02   %          43,032         242         2.25   %
agreements
Subordinated        10,310        184        7.14   %         10,310        182        7.06   %
debentures
                                                                                             
Total
interest             761,071       2,338      1.23   %          773,576       2,914      1.51   %
bearing
liabilities
                                                                                             
Non-interest
bearing              100,237                                      94,100
deposits
Other
non-interest         4,429                                        4,989
bearing
liabilities
                                                                                             
Stockholders'       97,813                                      105,047
equity
                                                                                             
Total
liabilities
and               $  963,550                                   $  977,712
stockholders'
equity
                                                                                             
Net change in
interest
earning
assets and                       $  6,587                                    $  6,674 
interest
bearing
liabilities
Interest rate                                   2.83   %                                     2.79   %
spread
Net interest                       3.00  %                                     2.99  %
margin


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



Contact:

HopFed Bancorp, Inc.
John E. Peck, 270-885-1171
President and CEO
 
Press spacebar to pause and continue. Press esc to stop.