HopFed Bancorp, Inc. Reports Third Quarter Results
- Press Release
- Source: HopFed Bancorp, Inc.
- On 9:00 am EDT, Monday October 26, 2009
HOPKINSVILLE, Ky., Oct. 26 /PRNewswire-FirstCall/ -- HopFed Bancorp, Inc. (Nasdaq: HFBC - News; the "Company") today reported results for the three and nine-month periods ended September 30, 2009. For the three month period ended September 30, 2009, net income (loss) available for common shareholders was ($2,875,000), or ($0.80) per share (basic and diluted), compared to $1,149,000, or $0.32 per share (basic and diluted) for the three month period ended September 30, 2008, and $854,000, or $0.24 per share (basic and diluted) for the three month period ended June 30, 2009. For the nine-month period ended September 30, 2009, net income (loss) available for common shareholders was ($1,009,000), or ($0.28) per share (basic and diluted) as compared to $3.9 million, or $1.09 per share basic and $1.08 per share diluted for the nine month period ended September 30, 2008.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| HFBC | 10.00 | 0.00 |
Commenting on the third quarter results, John E. Peck, president and chief executive officer, said, "The Company is disappointed to report the goodwill impairment charge. It is important to remember that the impairment charge is a noncash adjustment that does not affect the Company's capital ratios, statement of cash flows and liquidity. The Company's actions in the third quarter strengthen its balance sheet and establish a strong foundation for future growth."
Highlights from the Third Quarter
- As previously reported, the Company incurred a $5 million goodwill impairment charge that reduced after tax net income by $3.3 million, or $0.92 per share basic and diluted for the three and nine month periods ended September 30, 2009. The goodwill impairment charge eliminates all goodwill on the Company's books.
- Heritage Bank, the Company's wholly owned subsidiary, remains well capitalized by regulatory standards with a Tier One Capital Ratio of 7.89% and a Total Risked Based Capital Ratio of 13.2%.
- The Company's provision for loan loss expense was $1.4 million and $3.3 million for the three and nine month periods ended September 30, 2009, as compared to $805,000 and $1.7 million for the three and nine month periods ended September 30, 2008.
- The Company's allowance for loan loss account has increased by $2.3 million since the end of 2008 while net charges off for the nine month period ended September 30, 2009, were approximately $1.0 million.
- The Company's tangible book value per share is $16.98 at September 30, 2009, compared to $14.77 at December 31, 2008.
Asset Quality
The Company's asset quality remains strong. At September 30, 2009, the Company's non-performing loans total $7.3 million, or 1.12% of total loans. Non-performing assets total $8.8 million, or 0.86% of total assets. The Company's ratios of non-performing loans and non-performing assets at June 30, 2009, were 1.26% and 0.91%, respectively. The Company's allowance for loan loss balance is $8.4 million, or 1.28% to total loans and 115% of nonperforming loans. The Company's year to date net charge offs are $1.0 million, or 0.21% of average loans. During the three month period ended September 30, 2009, the Company's balance of foreclosed real estate increase from $900,000 to $1.4 million. The increase in foreclosed property balances is due to an increased time for marketing properties.
Net Interest Income
For the three and nine month periods ended September 30, 2009, the Company's net interest income was $6.9 million and $19.8 million, respectively compared to $5.9 million and $17.4 million for the same periods in 2008. The Company's net interest income for the three month period ended June 30, 2009, was $6.6 million. The Company's improved level of net interest income is the result of higher balances in interest earning assets and lower rates paid on deposit accounts. For the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009, the Company's net interest margin was 2.89%, 2.93% and 3.02%, respectively. The Company experienced a significant amount of time deposit renewals late in third quarter of 2009. Therefore, the Company anticipates that its cost to fund interest earning assets will continue to decline into the fourth quarter of 2009.
Non-interest Income
Non-interest income for the three month periods ended September 30, 2009, and September 30, 2008, was $2.1 million as compared to $2.7 million for the three month period ended June 30, 2009. The reduction in non-interest income for the three month period ended September 30, 2009, compared to June 30, 2009, related to a $700,000 reduction in security gains. Other non-interest income measurements are largely unchanged at September 30, 2009, as compared to June 30, 2009.
Non-interest Expense
For the nine month periods ended September 30, 2009, and September 30, 2008, non-interest expenses excluding goodwill impairment charges increased by $2.7 million. Other operating expenses with significant increases during the nine month period ended September 30, 2009, compared to September 30, 2008, includes a $1.4 million increase in deposit and examination fees, a $600,000 increase in compensation expense, a $200,000 increase in occupancy expenses and a $250,000 increase in data processing expenses. For the three month periods ended June 30, 2009, and September 30, 2009, operating expenses less goodwill declined approximately $100,000.
Balance Sheet
Total assets are $1.0 billion at September 30, 2009, an increase of $54.6 million from December 31, 2008. During the same period, the Company's deposits have grown at a 9.8% annualized rate to $765.4 million while loans have grown at an annualized rate of 4.5% to $656.5 million. The Company's total borrowing from the Federal Home Loan Bank of Cincinnati has declined to $125.3 million at September 30, 2009, from $130.0 million at December 31, 2008. In the nine month period ended September 30, 2009, the Company's investment portfolio grew by $58.5 million to $305.5 million.
HopFed Bancorp, Inc. is the holding company for Heritage Bank headquartered in Hopkinsville, Kentucky. The Bank has eighteen offices in western Kentucky and middle Tennessee as well as Fall & Fall Insurance of Fulton, Kentucky, Heritage Solutions of Murray, Kentucky, Hopkinsville, Kentucky, Kingston Springs, Tennessee and Pleasant View, Tennessee, and Heritage Mortgage Services of Clarksville, Tennessee. 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 may be found on its website http://www.bankwithheritage.com.
Information contained in this press release, other than historical information, may be considered forwardlooking 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.
HOPFED BANCORP, INC.
Selected Financial Data
(Dollars in thousands)
Selected Financial Indicators as of:
------------------------------------
September 30, June 30, December 31,
2009 2009 2008
------------- ---------- ------------
Total assets $1,022,123 $1,001,794 $967,560
Loans receivable, gross 656,471 644,538 634,489
Securities available for sale 305,462 290,092 246,952
Securities held to maturity --- 413 454
Required investment in FHLB
stock, at cost 4,281 4,281 4,050
Allowance for loan loss 8,429 7,427 6,133
Total deposits 765,381 743,547 713,005
Total FHLB borrowings 125,307 129,141 130,012
Repurchase agreements 32,926 31,438 28,680
Stockholders' equity 80,694 79,809 78,284
Book value per share, gross $17.33 $17.08 $16.67
Tangible book value per share $16.98 $15.30 $14.77
Allowance for loan loss / Gross loans 1.28% 1.15% 0.97%
Non-performing assets / Total asset 0.86% 0.91% 0.86%
Non-performing loans / Total loans 1.12% 1.26% 1.16%
Annualized net charge off ratio 0.21% 0.21% 0.20%
Tier 1 Capital - Bank 7.89% 7.80% 7.77%
Total Risk Based Capital - Bank 13.23% 13.01% 12.62%
Year to date tax equivalent net yield
on interest earning assets 2.95% 2.91% 3.04%
HOPFED BANCORP, INC.
Selected Financial Data
(Dollars in thousands)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Interest and dividend income:
Loans receivable $9,898 $10,345 $29,238 $31,323
Investment in securities, taxable 3,179 1,750 9,670 5,068
Nontaxable securities available for
sale 428 153 1,090 477
Interest-earning deposits --- 23 8 118
--- -- - ---
Total interest and dividend
Income 13,505 12,271 40,006 36,986
------ ------ ------ ------
Interest expense:
Deposits 5,237 4,967 16,037 15,331
Advances from Federal Home Loan
Bank 1,032 985 3,108 3,018
Repurchase agreements 198 256 588 856
Subordinated debentures 168 121 446 405
--- --- --- ---
Total interest expense 6,635 6,329 20,179 19,610
----- ----- ------ ------
Net interest income 6,870 5,942 19,827 17,376
Provision for loan losses 1,379 805 3,315 1,682
----- --- ----- -----
Net interest income after
provision for loan losses 5,491 5,137 16,512 15,694
----- ----- ------ ------
Non-interest income:
Service charges 1,118 1,250 3,140 3,420
Merchant card income 153 148 450 432
Gain on sale of loans 69 7 189 112
Gain on sale of securities 114 16 1,581 718
Income from bank owned life insurance 73 68 220 203
Financial services commission 262 321 738 840
Other operating income 296 240 867 826
--- --- --- ---
Total non-interest income 2,085 2,050 7,185 6,551
----- ----- ----- -----
HOPFED BANCORP, INC.
Selected Financial Data
(Dollars in thousands, except share and per share data)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Non-interest expenses:
Salaries and benefits $3,086 $2,875 $9,304 $8,667
Occupancy expense 814 726 2,312 2,112
Data processing expense 666 582 1,936 1,685
State deposit tax 154 128 465 384
Intangible amortization expense 146 204 553 643
Impairment charge on goodwill 4,989 --- 4,989 ---
Professional services expense 242 265 777 815
Advertising expense 333 313 976 910
Postage and communications expense 157 162 480 476
Supplies expense 91 86 262 253
Deposit insurance and
examination expense 798 146 1,683 319
Other operating expenses 199 126 681 430
--- --- --- ---
Total non-interest expense 11,675 5,613 24,418 16,694
------ ----- ------ ------
Income (loss) before income
tax expense (4,099) 1,574 (721) 5,551
Income tax expense (benefit) (1,484) 425 (483) 1,649
------- --- ----- -----
Net income (loss) ($2,615) $1,149 ($238) $3,902
-------- ------ ------ ------
Less:
Dividend on preferred shares $232 --- $688 ---
Accretion dividend on
preferred shares $28 --- $83 ---
--- --- --- ---
Net income (loss) available
to common stockholders ($2,875) $1,149 ($1,009) $3,902
======== ====== ======== ======
Net income (loss) available
to common stockholders
Per share, basic ($0.80) $0.32 ($0.28) $1.09
======= ===== ======= =====
Per share, diluted ($0.80) $0.32 ($0.28) $1.08
======= ===== ======= =====
Dividend per share $0.12 $0.12 $0.36 $0.36
===== ===== ===== =====
Weighted average shares
outstanding - basic 3,571,716 3,578,924 3,565,827 3,592,525
========= ========= ========= =========
Weighted average shares
outstanding - diluted 3,571,716 3,583,018 3,565,827 3,604,581
========= ========= ========= =========
HOPFED BANCORP, INC.
Reconciliation of Non-GAAP Measures Presented in Earnings Release
(Dollars in thousands, except per share data)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Total non-interest expense 11,675 5,613 24,418 16,694
Goodwill impairment charge 4,989 --- 4,989 ---
----- --- ----- ---
Operating expenses 6,686 5613 19,429 16,694
===== ==== ====== ======
Net income (loss)
available to common
shareholders as reported ($2,875) $1,149 ($1,009) $3,902
Goodwill impairment, net
of tax benefit 3,293 --- 3,293 ---
----- --- ----- ---
Adjusted earnings $418 $1,149 $2,284 $3,902
==== ====== ====== ======
Basic earnings (loss) per
common share as reported ($0.80) $0.32 ($0.28) $1.09
Goodwill impairment, net
of tax benefit 0.92 --- 0.92 ---
---- --- ---- ---
Adjusted basic common
earnings per common share $0.12 $0.32 $0.64 $1.09
===== ===== ===== =====
Diluted earnings (loss)
per common share as reported ($0.80) $0.32 ($0.28) $1.08
Goodwill impairment, net
of tax benefit 0.92 --- 0.92 ---
---- --- ---- ---
Adjusted basic common
earnings per common share $0.12 $0.32 $0.64 $1.08
===== ===== ===== =====
Use of Non-GAAP financial measures
The above table presents computations and other financial information excluding the goodwill impairment charge (nonGAAP). The goodwill impairment charge is included in the financial results presented in accordance with generally accepted accounting principles (GAAP). The Company believes that the exclusion of goodwill impairment in expressing net operating income (loss), operating expenses and earnings (loss) per share data provides a more meaningful basis for period to period comparisons which will assist investors in analyzing the operating performance and comparable periods in the prior years with the internally prepared projections. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited.
HOPFED BANCORP, INC.
Selected Financial Data
(Dollars in thousands)
For the Three
Months Ended
----------------------- --------
Change
from Prior
9/30/2009 6/30/2009 Quarter
--------- --------- ---------
Interest and dividend income:
Loans receivable $9,898 $9,712 $186
Investment in securities, taxable $3,179 3,205 (26)
Nontaxable securities available
for sale $428 390 38
Interest-earning deposits --- --- --
Total interest and dividend
income 13,505 13,307 198
------ ------ ---
Interest expense:
Deposits 5,237 5,334 (97)
Advances from Federal Home Loan Bank 1,032 1,039 (7)
Repurchase agreements 198 196 2
Subordinated debentures 168 176 (8)
--- ---
Total interest expense 6,635 6,745 (110)
----- ----- -----
Net interest income 6,870 6,562 308
Provision for loan losses 1,379 962 417
----- --- ---
Net interest income after
provision for loan losses 5,491 5,600 (109)
----- ----- -----
Non-interest income:
Service charges 1,118 1,098 20
Merchant card income 153 157 (4)
Gain on sale of loans 69 51 18
Gain on sale of securities 114 809 (695)
Income from bank owned life insurance 73 74 (1)
Financial services commission 262 250 12
Other operating income 296 302 (6)
--- ---
Total non-interest income 2,085 2,741 (656)
----- ----- -----
HOPFED BANCORP, INC.
Selected Financial Data
(Dollars in thousands, except share and per share data)
For the Three
Months Ended
----------------------- --------
Change
from Prior
9/30/2009 6/30/2009 Quarter
--------- --------- --------
Non-interest expenses:
Salaries and benefits 3,086 3,172 (86)
Occupancy expense 814 750 64
Data processing expense 666 639 27
State deposit tax 154 155 (1)
Intangible amortization
expense 146 203 (57)
Impairment charge on
goodwill 4,989 --- 4,989
Professional
services expense 242 223 19
Advertising expense 333 320 13
Postage and communications
expense 157 164 (7)
Supplies expense 91 91 0
Deposit insurance
and examination expense 798 722 76
Other operating expenses 199 342 (143)
--- --- -----
Total non-interest expense 11,675 6,781 4,894
------ ----- -----
Income (loss) before
income tax expense (4,099) 1,560 (5,659)
Income tax expense
(benefit) (1,484) 449 (1,933)
------- --- -------
Net income (loss)
available to common
stockholders ($2,615) $1,111 (3,726)
-------- ------ -------
Less:
Dividends on
preferred shares 232 229 3
Accretion dividend
on preferred shares 28 28 -
-- -- -
Net income (loss)
available to common
stockholders ($2,875) $854 (3,729)
-------- ---- -------
Net income (loss)
available to common
stockholders
Per share, basic ($0.80) $0.24 (1.04)
======= ===== ======
Per share, diluted ($0.80) $0.24 (1.04)
======= ===== ======
Dividends per share $0.12 $0.12 ---
===== ===== ===
Weighted average shares
outstanding - basic 3,571,716 3,568,814
========= =========
Weighted average shares
outstanding - diluted 3,571,716 3,568,814
========= =========
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