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HopFed Bancorp, Inc. Reports First Quarter Results

Stocks in this article: HFBC

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 common equity 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 (Loss)   Balance
12/31/2013   Foreclosures   Proceeds   in Values   on Sale   3/31/2014
(Dollars in Thousands)
One-to-four family mortgages $ 350 166 (66 ) --- (4 ) $ 446
Multi-family --- --- --- --- --- ---
Construction --- --- --- --- --- ---
Land 1,124 --- (71 ) --- (19 ) 1,034
Non-residential real estate 200 --- --- --- --- 200
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.

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