10q10k10q10k.net

What changed in Home Federal Bancorp, Inc. of Louisiana's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Home Federal Bancorp, Inc. of Louisiana's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+182 added−196 removedSource: 10-K (2025-09-26) vs 10-K (2024-09-30)

Top changes in Home Federal Bancorp, Inc. of Louisiana's 2025 10-K

182 paragraphs added · 196 removed · 165 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

98 edited+12 added−17 removed150 unchanged
Biggest changeJune 30, 2024 2023 (Dollars in thousands) Total loans outstanding at end of period $ 475,524 $ 494,830 Average loans outstanding 499,237 442,469 Allowance for credit losses, beginning of period 5,173 4,451 Impact of ASU 2016-13 359 - Provision for credit losses 40 868 Recoveries 13 91 Charge-offs (1,011 ) (237 ) Allowance for credit losses, end of period $ 4,574 $ 5,173 Allowance for credit losses as a percent of non-performing loans 300.72 % 417.85 % Allowance for credit losses as a percent of loans outstanding 0.96 % 1.05 % 10 Table of Contents The following table shows how our allowance for credit losses is allocated by type of loan at each of the dates indicated. 2024 2023 Amount of Allowance Loan Category as a % of Total Loans Amount of Allowance Loan Category as a % of Total Loans (Dollars in thousands) One-to-four family residential $ 2,346 51.29 % $ 1,900 36.72 % Commercial – real estate secured 1,088 23.79 1,673 32.34 Multi-family residential 130 2.84 228 4.41 Land 175 3.83 274 5.30 Construction 103 2.25 254 4.91 Home Equity Loans and Lines of Credit 165 3.61 251 4.85 Commercial business 548 11.98 588 11.37 Consumer 19 0.41 5 0.10 Total $ 4,574 100.00 % $ 5,173 100.00 % Investment Securities We have authority to invest in various types of securities, including mortgage-backed securities, U.S.
Biggest changeJune 30, 2025 2024 Amount of Allowance Loan Category as a % of Total Loans Amount of Allowance Loan Category as a % of Total Loans (Dollars in thousands) One-to-four family residential $ 2,202 49.10 % $ 2,346 51.29 % Commercial – real estate secured 1,202 26.81 1,088 23.79 Multi-family residential 113 2.52 130 2.84 Land 165 3.68 175 3.83 Construction 74 1.65 103 2.25 Home Equity Loans and Lines of Credit 182 4.06 165 3.61 Commercial business 538 12.00 548 11.98 Consumer 8 0.18 19 0.41 Total $ 4,484 100.00 % $ 4,574 100.00 % Investment Securities We have authority to invest in various types of securities, including mortgage-backed securities, U.S.
Volcker Rule Regulations Regulations have been adopted by the federal banking agencies to implement the provisions of the Dodd-Frank Act, commonly referred to as the Volcker Rule.
Regulations have been adopted by the federal banking agencies to implement the provisions of the Dodd-Frank Act, commonly referred to as the Volcker Rule.
Prior to the Small Business Job Protection Act of 1996, bad debt reserves created prior to January 1, 1988 were subject to recapture into taxable income if Home Federal Bank failed to meet certain thrift asset and definitional tests. New federal legislation eliminated these savings association related recapture rules.
Prior to the Small Business Job Protection Act of 1996, bad debt reserves created prior to January 1, 1988 were subject to recapture into taxable income if Home Federal Bank failed to meet certain thrift asset and definitional tests. The federal legislation eliminated these savings association related recapture rules.
As insurer, the Federal Deposit Insurance Corporation is authorized to conduct examinations of and to require reporting by insured institutions. It also may prohibit any insured institution from engaging in any activity determined by regulation or order to pose a serious threat to the Federal Deposit Insurance Corporation.
As insurer, the Federal Deposit Insurance Corporation is authorized to conduct examinations of and to require reporting by insured institutions. It also may prohibit any insured institution from engaging in any activity determined by regulation or order to pose a serious threat to the Deposit Insurance Fund of the Federal Deposit Insurance Corporation.
Home Federal Bank’s authority to engage in transactions with its “affiliates” is limited by federal regulations and by Sections 23A and 23B of the Federal Reserve Act. In general, these transactions must be on terms which are as favorable to Home Federal Bank as comparable transactions with non-affiliates.
Limitations on Transactions with Affiliates. Home Federal Bank’s authority to engage in transactions with its “affiliates” is limited by federal regulations and by Sections 23A and 23B of the Federal Reserve Act. In general, these transactions must be on terms which are as favorable to Home Federal Bank as comparable transactions with non-affiliates.
Federal savings institution’s must also meet a tangible capital ratio of 1.5%. For purposes of the regulatory capital requirements, a higher risk weight (150%) is assigned to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property.
Federal savings institutions must also meet a tangible capital ratio of 1.5%. For purposes of the regulatory capital requirements, a higher risk weight (150%) is assigned to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property.
Regulatory guidance provides for prior regulatory consultation with respect to capital distributions in certain circumstances such as where the company’s net income for the past four quarters, net of dividends’ previously paid over that period, is insufficient to fully fund the dividend or the company’s overall rate of earnings retention is inconsistent with the company’s capital needs and overall financial condition.
Regulatory guidance provides for prior regulatory consultation with respect to capital distributions in certain circumstances such as where the company’s net income for the past four quarters, net of dividends previously paid over that period, is insufficient to fully fund the dividend or the company’s overall rate of earnings retention is inconsistent with the company’s capital needs and overall financial condition.
A bank that ceases to meet any qualifying criteria is provided with a two-quarter grace period to comply with the community bank leverage ratio requirements or the general capital regulations by the federal regulators. As of June 30, 2024, Home Federal Bank has not opted into the alternative framework.
A bank that ceases to meet any qualifying criteria is provided with a two-quarter grace period to comply with the community bank leverage ratio requirements or the general capital regulations by the federal regulators. As of June 30, 2025, Home Federal Bank has not opted into the alternative framework.
We will continue to sell loans in the future to the extent we believe the interest rate environment is unfavorable and interest rate risk is unacceptable. 4 Table of Contents Contractual Terms to Final Maturities. The following table shows the scheduled contractual maturities of our loans as of June 30, 2024, before giving effect to net items.
We will continue to sell loans in the future to the extent we believe the interest rate environment is unfavorable and interest rate risk is unacceptable. 4 Table of Contents Contractual Terms to Final Maturities. The following table shows the scheduled contractual maturities of our loans as of June 30, 2025, before giving effect to net items.
Additionally, at June 30, 2024, Home Federal Bank was a party to a Master Purchase Agreement with First National Bankers Bank whereby Home Federal Bank may purchase Federal Funds from First National Bankers Bank in an amount not to exceed $20.4 million. There were no amounts purchased under this agreement as of June 30, 2024.
Additionally, at June 30, 2025, Home Federal Bank was a party to a Master Purchase Agreement with First National Bankers Bank whereby Home Federal Bank may purchase Federal Funds from First National Bankers Bank in an amount not to exceed $20.4 million. There were no amounts purchased under this agreement as of June 30, 2025.
Subsidiaries At June 30, 2024, the Company had one subsidiary, Home Federal Bank. The Bank’s only subsidiary at such date was Metro Financial Services, Inc., which previously engaged in the sale of annuity contracts and does not currently engage in a meaningful amount of business.
Subsidiaries At June 30, 2025, the Company had one subsidiary, Home Federal Bank. The Bank’s only subsidiary at such date was Metro Financial Services, Inc., which previously engaged in the sale of annuity contracts and does not currently engage in a meaningful amount of business.
The Office of the Comptroller of the Currency’s capital regulation provides that such actions, through enforcement proceedings or otherwise, could require one or more of a variety of corrective actions. Prompt Corrective Action. The following table shows the amount of capital associated with the different capital categories set forth in the prompt corrective action regulations.
The Office of the Comptroller of the Currency’s capital regulation provides that such actions, through enforcement proceedings or otherwise, could require one or more of a variety of corrective actions. 19 Table of Contents Prompt Corrective Action. The following table shows the amount of capital associated with the different capital categories set forth in the prompt corrective action regulations.
Home Federal Bank’s authority to extend credit to its directors, executive officers, and 10% shareholders ("insiders"), as well as to entities controlled by such persons, is currently governed by the requirements of Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O of the Federal Reserve Board.
Home Federal Bank’s authority to extend credit to its directors, executive officers, and 10% shareholders (“insiders”), as well as to entities controlled by such persons, is currently governed by the requirements of Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O of the Federal Reserve Board.
However, under current law, pre-1988 reserves remain subject to recapture should Home Federal Bank make certain non-dividend distributions or cease to maintain a bank charter. At June 30, 2024, the total federal pre-1988 reserve was approximately $3.3 million.
However, under current law, pre-1988 reserves remain subject to recapture should Home Federal Bank make certain non-dividend distributions or cease to maintain a bank charter. At June 30, 2025, the total federal pre-1988 reserve was approximately $3.3 million.
Home Federal Bank’s business primarily consists of attracting deposits from the general public and using those funds to originate loans. As of June 30, 2024, Home Federal Bancorp’s only business activities are to hold all of the outstanding common stock of Home Federal Bank.
Home Federal Bank’s business primarily consists of attracting deposits from the general public and using those funds to originate loans. As of June 30, 2025, Home Federal Bancorp’s only business activities are to hold all of the outstanding common stock of Home Federal Bank.
These regulatory policies could affect the ability of Home Federal Bancorp to pay dividends, repurchase shares of common stock or otherwise engage in capital distributions. All savings institution subsidiaries of savings and loan holding companies like Home Federal Bank are required to meet a qualified thrift lender, or QTL, test to avoid certain restrictions on their operations.
These regulatory policies could affect the ability of Home Federal Bancorp to pay dividends, repurchase shares of common stock or otherwise engage in capital distributions. 17 Table of Contents All savings institution subsidiaries of savings and loan holding companies like Home Federal Bank are required to meet a qualified thrift lender, or QTL, test to avoid certain restrictions on their operations.
Home Federal Bank must also file an application or notice for prior approval with the Office of the Comptroller of the Currency if the total amount of its capital distributions (including each proposed distribution), for the applicable calendar year would exceed Home Federal Bank's net income for that year plus its retained net income for the previous two years, if Home Federal Bank is not an "eligible savings association" as defined in Office of the Comptroller of the Currency regulations or the capital distributions would violate a prohibition contained in any statute, regulation or agreement.
Home Federal Bank must also file an application or notice for prior approval with the Office of the Comptroller of the Currency if the total amount of its capital distributions (including each proposed distribution), for the applicable calendar year would exceed Home Federal Bank’s net income for that year plus its retained net income for the previous two years, if Home Federal Bank is not an “eligible savings association” as defined in Office of the Comptroller of the Currency regulations or the capital distributions would violate a prohibition contained in any statute, regulation or agreement.
Each of our five largest loans or groups of loans was originated with strong guarantor support to known borrowers in our market area and was performing in accordance with its terms at June 30, 2024.
Each of our five largest loans or groups of loans was originated with strong guarantor support to known borrowers in our market area and was performing in accordance with its terms at June 30, 2025.
We originate consumer loans primarily in order to accommodate our customers. The consumer loans at June 30, 2024 consist of loans secured by deposit accounts with us, automobile loans, overdraft, and other unsecured loans.
We originate consumer loans primarily in order to accommodate our customers. The consumer loans at June 30, 2025 consist of loans secured by deposit accounts with us, automobile loans, overdraft, and other unsecured loans.
Any residential mortgage loan originator who fails to satisfy these requirements will not be permitted to originate residential mortgage loans. 22 Table of Contents Anti-Money Laundering. All financial institutions, including savings associations, are subject to federal laws that are designed to prevent the use of the U.S. financial system to fund terrorist activities.
Any residential mortgage loan originator who fails to satisfy these requirements will not be permitted to originate residential mortgage loans. Anti-Money Laundering. All financial institutions, including savings associations, are subject to federal laws that are designed to prevent the use of the U.S. financial system to fund terrorist activities.
In addition, extensions of credit in excess of certain limits must be approved by the Home Federal Bank’s Board. At June 30, 2024, Home Federal was in compliance with the above restrictions. Incentive Compensation.
In addition, extensions of credit in excess of certain limits must be approved by the Home Federal Bank’s Board. At June 30, 2025, Home Federal was in compliance with the above restrictions. Incentive Compensation.
Due to repayments of the underlying loans, the actual maturities of mortgage-backed securities generally are substantially less than the scheduled maturities. The amounts reflect the fair value of our mortgage-backed securities at June 30, 2024.
Due to repayments of the underlying loans, the actual maturities of mortgage-backed securities generally are substantially less than the scheduled maturities. The amounts reflect the fair value of our mortgage-backed securities at June 30, 2025.
Home Federal Bancorp registered its common stock with the Securities and Exchange Commission under Section 12(b) of the Securities Exchange Act of 1934. Home Federal Bancorp is subject to the proxy and tender offer rules, insider trading reporting requirements and restrictions, and certain other requirements under the Securities Exchange Act of 1934.
Home Federal Bancorp registered its common stock with the Securities and Exchange Commission under Section 12(b) of the Securities Exchange Act of 1934. Home Federal Bancorp is subject to the proxy and tender offer rules, insider trading reporting requirements and restrictions, and certain other requirements under the Securities Exchange Act of 1934. Volcker Rule Regulations.
Such institutions are also considered "well-capitalized" for prompt corrective action purposes. The community bank leverage ratio was established at 9% Tier 1 capital to total average assets, effective January 1, 2020. Pursuant to federal legislation enacted in 2020, the community bank leverage ratio was temporarily lowered to 8% for 2020.
Such institutions are also considered “well-capitalized” for prompt corrective action purposes. The community bank leverage ratio was established at 9% Tier 1 capital to total average assets, effective January 1, 2020. Pursuant to federal legislation enacted in 2020, the community bank leverage ratio was temporarily lowered to 8% for 2020.
Home Federal Bank is subject to the regulation of the Office of the Comptroller of the Currency, as its primary federal regulator, the Federal Deposit Insurance Corporation, as the insurer of its deposit accounts, and, to a limited extent, the Federal Reserve Board. 18 Table of Contents Insurance of Accounts.
Home Federal Bank is subject to the regulation of the Office of the Comptroller of the Currency, as its primary federal regulator, the Federal Deposit Insurance Corporation, as the insurer of its deposit accounts, and, to a limited extent, the Federal Reserve Board. Insurance of Accounts.
As of June 30, 2024, home equity and second mortgage loans were $2.6 million, or 0.6%, of the total loan portfolio, before net items. These loans are secured by the underlying equity in the borrower’s residence. We do not require that we hold the first mortgage on the properties that secure the second mortgage loans.
As of June 30, 2025, home equity and second mortgage loans were $ 2.5 million, or 0.54 %, of the total loan portfolio, before net items. These loans are secured by the underlying equity in the borrower’s residence. We do not require that we hold the first mortgage on the properties that secure the second mortgage loans.
In particular, amounts realizable on the sale of repossessed automobiles may be significantly reduced based upon the condition of the automobiles and the fluctuating demand for used automobiles. We offer loans secured by deposit accounts held with us. These loans amounted to $393,000, or 0.1% of the total loan portfolio, before net items, at June 30, 2024.
In particular, amounts realizable on the sale of repossessed automobiles may be significantly reduced based upon the condition of the automobiles and the fluctuating demand for used automobiles. We offer loans secured by deposit accounts held with us. These loans amounted to $ 381,000 , or 0.08 % of the total loan portfolio, before net items, at June 30, 2025.
General loss allowances established to cover possible losses related to assets classified substandard or doubtful may be included in determining an institution’s regulatory capital, while specific valuation allowances for loan losses do not qualify as regulatory capital. Federal examiners may disagree with an insured institution’s classifications and amounts reserved. At June 30, 2024, we had $3.8 million in classified assets.
General loss allowances established to cover possible losses related to assets classified substandard or doubtful may be included in determining an institution’s regulatory capital, while specific valuation allowances for loan losses do not qualify as regulatory capital. Federal examiners may disagree with an insured institution’s classifications and amounts reserved. At June 30, 2025, we had $4.5 million in classified assets.
The proposed rule would prohibit incentive-based compensation arrangements that encourage inappropriate risks by a covered institution (1) by providing an executive officer, employee, director, or principal shareholder of the covered institution with excessive compensation, fees, or benefits; or (2) that could lead to material financial loss to the covered financial institution.
The proposed rule would prohibit incentive-based compensation arrangements that encourage inappropriate risks by a covered institution (1) by providing an executive officer, employee, director, or principal shareholder of the covered institution with excessive compensation, fees, or benefits; or (2) that could lead to material financial loss to the covered financial institution. The proposed rule has not yet been finalized.
The amounts reflect the fair value of our mortgage-backed securities at June 30, 2024 and 2023.
The amounts reflect the fair value of our mortgage-backed securities at June 30, 2025 and 2024.
As of June 30, 2024, we were permitted to borrow up to an aggregate total of $186.4 million from the Federal Home Loan Bank of Dallas. We had no Federal Home Loan Bank advances outstanding at June 30, 2024 or June 30, 2023.
As of June 30, 2025, we were permitted to borrow up to an aggregate total of $ 56.4 million from the Federal Home Loan Bank of Dallas. We had no Federal Home Loan Bank advances outstanding at June 30, 2025 or June 30, 2024.
Future adjustments to the allowance could significantly affect net income. The following table shows changes in our allowance for credit losses during the periods presented. We had $1.0 million and $237,000 of loan charge-offs during fiscal 2024 and 2023, respectively. Bad debt recoveries amounted to $13,000 and $91,000 during fiscal 2024 and 2023, respectively.
Future adjustments to the allowance could significantly affect net income. The following table shows changes in our allowance for credit losses during the periods presented. We had $323,000 and $1.0 million of loan charge-offs during fiscal 2025 and 2024, respectively. Bad debt recoveries amounted to $ 359,000 and $13,000 during fiscal 2025 and 2024, respectively.
Real estate and other assets we acquire as a result of foreclosure or by deed-in-lieu of foreclosure are classified as real estate owned until sold. At June 30, 2024, we had $418,000 in other real estate owned consisting of two single family residences compared to $368,000 of real estate owned at June 30, 2023 consisting of two single family residences.
Real estate and other assets we acquire as a result of foreclosure or by deed-in-lieu of foreclosure are classified as real estate owned until sold. At June 30, 2025, we had $970,000 in other real estate owned consisting of one single family residence compared to $418,000 of real estate owned at June 30, 2024 consisting of two single family residences.
Our residential construction loans typically have terms of six to twelve months with a takeout letter from Home Federal for the permanent mortgage. Our commercial construction loans include owner occupied commercial properties, pre-sold property, and speculative office property. As of June 30, 2024, we held $1.7 million of speculative construction loans. Home Equity and Second Mortgage Loans.
Our residential construction loans typically have terms of six to twelve months with a takeout letter from Home Federal for the permanent mortgage. Our commercial construction loans include owner occupied commercial properties, pre-sold property, and speculative office property. As of June 30, 2025, we held $ 940,000 of speculative construction loans. Home Equity and Second Mortgage Loans.
As of June 30, 2024, land loans were $30.7 million, or 6.5%, of the total loan portfolio, before net items. Land loans include land which has been acquired for the purpose of development and unimproved land. Our loan policy provides for loan-to-value ratios of 50% for unimproved land loans.
As of June 30, 2025, land loans were $ 30.1 million, or 6.45 %, of the total loan portfolio, before net items. Land loans include land which has been acquired for the purpose of development and unimproved land. Our loan policy provides for loan-to-value ratios of 50% for unimproved land loans.
The amounts reflect the fair value of our securities at June 30, 2024.
The amounts reflect the fair value of our securities at June 30, 2025.
At June 30, 2024, our regulatory limit on loans to one borrower was $9.0 million, and the five largest loans or groups of loans to one borrower, including related entities, aggregated $5.5 million, $5.4 million, $5.0 million, $5.0 million, and $4.5 million.
At June 30, 2025, our regulatory limit on loans to one borrower was $ 9.6 million, and the five largest loans or groups of loans to one borrower, including related entities, aggregated $5.6 million, $ 5.4 million, $ 5.2 million, $ 5.2 million, and $ 4.9 million.
It is our practice to only originate a limited amount of loans for speculative development to borrowers with whom our lenders have a prior relationship. Construction Loans. As of June 30, 2024, construction loans were $15.7 million, or 3.3%, of the total loan portfolio, before net items. These included loans for the construction of residential and commercial property.
It is our practice to only originate a limited amount of loans for speculative development to borrowers with whom our lenders have a prior relationship. Construction Loans. As of June 30, 2025, construction loans were $ 11.2 million, or 2.41 %, of the total loan portfolio, before net items. These included loans for the construction of residential and commercial property.
Competition may increase as a result of the continuing reduction of restrictions on the interstate operations of financial institutions. Lending Activities General. At June 30, 2024, our net loan portfolio amounted to $470.9 million, representing approximately 73.9% of total assets at that date. Historically, our principal lending activity was the origination of one-to-four family residential loans.
Competition may increase as a result of the continuing reduction of restrictions on the interstate operations of financial institutions. Lending Activities General. At June 30, 2025, our net loan portfolio amounted to $461.0 million, representing approximately 75.64% of total assets at that date. Historically, our principal lending activity was the origination of one-to-four family residential loans.
Federal regulations require that Home Federal Bank comply with a Qualified Thrift Lender test. Under this test, Home Federal Bank is required to maintain at least 65% of its “portfolio assets” in certain “qualified thrift investments” on a monthly basis in at least nine months of the most recent twelve-month period.
Under this test, Home Federal Bank is required to maintain at least 65% of its “portfolio assets” in certain “qualified thrift investments” on a monthly basis in at least nine months of the most recent twelve-month period.
The Federal Reserve Board has long set forth in its regulations its "source of strength" policy, which requires bank holding companies to act as a source of strength to their subsidiary depository institutions by providing capital, liquidity and other support in times of financial stress.
The Federal Reserve Board has long set forth in its regulations its “source of strength” policy, which requires bank holding companies to act as a source of strength to their subsidiary depository institutions by providing capital, liquidity and other support in times of financial stress. This policy now also applies to savings and loan holding companies.
The following table shows certain information regarding our borrowings at or for the dates indicated: At or For the Year Ended June 30, 2024 2023 (Dollars in thousands) FHLB advances: Average balance outstanding $ 3,119 $ 1,919 Maximum amount outstanding at any month-end during the period 14,100 10,000 Balance outstanding at end of period -- -- Average interest rate during the period 5.77 % 5.20 % Weighted average interest rate at end of period 0.00 % 0.00 % At June 30, 2024, we had no outstanding advances from the Federal Home Bank of Dallas.
The following table shows certain information regarding our borrowings at or for the dates indicated: At or For the Year Ended June 30, 2025 2024 (Dollars in thousands) FHLB advances: Average balance outstanding $ 14 $ 3,119 Maximum amount outstanding at any month-end during the period - 14,100 Balance outstanding at end of period - - Average interest rate during the period 4.65 % 5.77 % Weighted average interest rate at end of period - % - % At June 30, 2025, we had no outstanding advances from the Federal Home Bank of Dallas.
At June 30, 2024, Home Federal Bank had no advances from the Federal Home Loan Bank and $186.4 million available on its credit line with the Federal Home Loan Bank. 23 Table of Contents As a member, Home Federal Bank is required to purchase and maintain stock in the Federal Home Loan Bank of Dallas.
At June 30, 2025, Home Federal Bank had no advances from the Federal Home Loan Bank and $56.4 million available on its credit line with the Federal Home Loan Bank. As a member, Home Federal Bank is required to purchase and maintain stock in the Federal Home Loan Bank of Dallas.
These loans are amortized on a monthly basis with principal and interest due each month, terms not in excess of 30 years, and generally include “due-on-sale” clauses. At June 30, 2024, $126.6 million, or 71%, of our one-to-four family residential mortgage loans were fixed-rate loans.
These loans are amortized on a monthly basis with principal and interest due each month, terms not in excess of 30 years, and generally include “due-on-sale” clauses. At June 30, 2025, $ 118.7 million, or 67.85%, of our one-to-four family residential mortgage loans were fixed-rate loans.
In accordance with accounting guidance, loan origination fees and points are deferred and amortized into income as an adjustment of yield over the life of the loan. 7 Table of Contents Asset Quality General. During fiscal 2024 our annual review commenced in September 2023 and was completed in October 2023. Our next annual review commenced in August 2024.
In accordance with accounting guidance, loan origination fees and points are deferred and amortized into income as an adjustment of yield over the life of the loan. 7 Table of Contents Asset Quality General. During fiscal 2025 our annual review commenced in August 2024 and was completed in October 2024. Our next annual review is tentatively scheduled for January 2026.
Although federal laws and regulations permit savings institutions to originate and purchase loans secured by real estate located throughout the United States, we concentrate our lending activity in our primary market area in Caddo, Bossier and Webster Parishes, Louisiana and the surrounding area.
(2) Includes net change of loans held for sale Although federal laws and regulations permit savings institutions to originate and purchase loans secured by real estate located throughout the United States, we concentrate our lending activity in our primary market area in Caddo, Bossier and Webster Parishes, Louisiana and the surrounding area.
At June 30, 2024, we were within each of the above lending limits. During fiscal 2024 and 2023, we sold $16.0 million and $24.9 million of loans, respectively. We recognized gain on sale of loans of $265,000 and $466,000 during fiscal 2024 and 2023, respectively. Loans were sold during these periods primarily to other financial institutions.
At June 30, 2025, we were within each of the above lending limits. During fiscal 2025 and 2024, we sold $18.3 million and $16.0 million of loans, respectively. We recognized gain on sale of loans of $384,000 and $265,000 during fiscal 2025 and 2024, respectively. Loans were sold during these periods primarily to other financial institutions.
In accordance with past practice, all loans are ratified by our board of directors. In recent periods, we have originated and sold a substantial amount of our fixed-rate conforming mortgages to correspondent banks. For the year ended June 30, 2024, we originated $49.7 million of one-to-four family residential loans and sold $16.0 million of such loans.
In accordance with past practice, all loans are ratified by our board of directors. In recent periods, we have originated and sold a substantial amount of our fixed-rate conforming mortgages to correspondent banks. For the year ended June 30, 2025, we originated $ 43.2 million of one-to-four family residential loans and sold $ 18.3 million of such loans.
This policy now also applies to savings and loan holding companies. 17 Table of Contents The Federal Reserve Board has promulgated consolidated capital requirements for depository institution holding companies that are no less stringent, both quantitatively and in terms of components of capital, than those applicable to their subsidiary depository institutions, including a community bank leverage ratio alternative.
The Federal Reserve Board has promulgated consolidated capital requirements for depository institution holding companies that are no less stringent, both quantitatively and in terms of components of capital, than those applicable to their subsidiary depository institutions, including a community bank leverage ratio alternative.
At June 30, 2024, the Company had $1.9 million of non-performing assets (defined as non-accruing loans, accruing loans 90 days or more past due, and other real estate owned) compared to $1.6 million on non-performing assets at June 30, 2023, consisting of three commercial non-real estate loans, five single-family residential loans, four home equity line-of-credit loans, and three single-family residences in other real estate owned at June 30, 2024, compared to seven single-family residential loans, two commercial non-real estate loans, one consumer loan and two single-family residences in other real estate owned at June 30, 2023.
At June 30, 2025, the Company had $3.3 million of non-performing assets (defined as non-accruing loans, accruing loans 90 days or more past due, and other real estate owned) compared to $1.9 million of non-performing assets at June 30, 2024, consisting of six one-to-four family residential loans, two home equity loans, three commercial non-real estate loans, two commercial real-estate loans and one single-family residence in other real estate owned at June 30, 2025, compared to five one-to-four family residential loans, four home equity loans, three commercial non-real estate loans, and two single-family residences in other real estate owned at June 30, 2024.
Home Federal Bank’s tax returns have not been audited during the past five years. Method of Accounting. For federal income tax purposes, Home Federal Bank reports income and expenses on the accrual method of accounting and used a June 30 tax year in 2024 for filing its federal income tax return. Bad Debt Reserves.
Our tax returns have not been audited during the past five years. Method of Accounting. For federal income tax purposes, Home Federal Bank reports income and expenses on the accrual method of accounting and used a June 30 tax year in 2025 for filing its federal income tax return. Taxable Distributions and Recapture.
It is the current policy of Home Federal Bank to lend in a first lien position on real property occupied as a commercial business property. Home Federal Bank offers fixed and variable rate commercial real estate loans.
Of those loans, $ 85.8 million, or 61.73 %, were owner occupied. It is the current policy of Home Federal Bank to lend in a first lien position on real property occupied as a commercial business property. Home Federal Bank offers fixed and variable rate commercial real estate loans.
June 30, 2024 2023 (Dollars in thousands) Non-accruing loans: One-to-four family residential $ 1,073 $ 1,164 Commercial — real estate secured -- -- Multi-family residential -- -- Commercial business 90 64 Land -- -- Construction -- -- Home equity loans and lines of credit and other consumer 240 -- Total non-accruing loans 1,403 1,228 Accruing loans 90 days or more past due: One-to-four family residential 116 -- Commercial — real estate secured -- -- Multi-family residential -- -- Commercial business -- -- Land -- -- Construction -- -- Home equity loans and lines of credit and other consumer -- -- Total non-performing loans(1) 1,519 1,228 Real estate owned, net 418 368 Total non-performing assets $ 1,937 $ 1,596 Troubled debt restructurings and modified loans to borrowers experiencing financial difficulty(2) 10 10 Total non-performing assets and troubled debt restructurings and modified loans to borrowers experiencing financial difficulty $ 1,947 $ 1,606 Total non-performing loans as a percent of loans, net 0.32 % 0.25 % Total non-performing assets as a percent of total assets 0.30 % 0.24 % Total non-performing assets and troubled debt restructurings and modified loans to borrowers experiencing financial difficulty as a percentage of total assets 0.31 % 0.24 % (1) Non-performing loans consist of non-accruing loans plus accruing loans 90 days or more past due.
June 30, 2025 2024 (Dollars in thousands) Non-accruing loans: One-to-four family residential $ 711 $ 1,073 Commercial — real estate secured 967 - Multi-family residential - - Commercial business 38 90 Land - - Construction - - Home equity loans and lines of credit and other consumer 367 240 Total non-accruing loans 2,083 1,403 Accruing loans 90 days or more past due: One-to-four family residential 252 116 Commercial — real estate secured - - Multi-family residential - - Commercial business - - Land - - Construction - - Home equity loans and lines of credit and other consumer - - Total non-performing loans(1) 2,335 1,519 Real estate owned, net 970 418 Total non-performing assets $ 3,305 $ 1,937 Troubled debt restructurings and modified loans to borrowers experiencing financial difficulty(2) 10 10 Total non-performing assets and troubled debt restructurings and modified loans to borrowers experiencing financial difficulty $ 3,315 $ 1,947 Total non-performing loans as a percent of loans, net 0.51 % 0.32 % Total non-performing assets as a percent of total assets 0.54 % 0.30 % Total non-performing assets and troubled debt restructurings and modified loans to borrowers experiencing financial difficulty as a percentage of total assets 0.54 % 0.31 % (1) Non-performing loans consist of non-accruing loans plus accruing loans 90 days or more past due.
If insurance of accounts is terminated, the accounts at the institution at the time of the termination, less subsequent withdrawals, shall continue to be insured for a period of six months to two years, as determined by the Federal Deposit Insurance Corporation. Management is aware of no existing circumstances which would result in termination of Home Federal Bank’s deposit insurance.
If insurance of accounts is terminated, the accounts at the institution at the time of the termination, less subsequent withdrawals, shall continue to be insured for a period of six months to two years, as determined by the Federal Deposit Insurance Corporation.
On July 26, 2023, the Securities and Exchange Commission issued a final rule that requires registrants, such as Home Federal Bancorp, to (i) report material cybersecurity incidents on Form 8-K, (ii) include updated disclosure in Forms 10-K and 10-Q of previously disclosed cybersecurity incidents and disclose previously undisclosed individually immaterial incidents when a determination is made that they have become material on an aggregated basis, (iii) disclose cybersecurity policies and procedures and governance practices, including at the board and management levels in Form 10-K, and (iv) disclose the board of directors' cybersecurity expertise.
Non-compliance with federal or similar state privacy and cybersecurity laws and regulations could lead to substantial regulatory imposed fines and penalties, damages from private causes of action and/or reputational harm. 22 Table of Contents On July 26, 2023, the Securities and Exchange Commission issued a final rule that requires registrants, such as Home Federal Bancorp, to (i) report material cybersecurity incidents on Form 8-K, (ii) include updated disclosure in Forms 10-K and 10-Q of previously disclosed cybersecurity incidents and disclose previously undisclosed individually immaterial incidents when a determination is made that they have become material on an aggregated basis, (iii) disclose cybersecurity policies and procedures and governance practices, including at the board and management levels in Form 10-K, and (iv) disclose the board of directors’ cybersecurity expertise.
The allowance methodology for prior periods is disclosed in our 2023 Annual Report on Form 10-K. The Company has elected to exclude accrued interest receivable from the measurement of its allowance for credit losses. When a loan is placed on non-accrual status, any outstanding accrued interest is reversed against interest income.
The Company has elected to exclude accrued interest receivable from the measurement of its allowance for credit losses. When a loan is placed on non-accrual status, any outstanding accrued interest is reversed against interest income.
Year Ended June 30, 2024 2023 (In thousands) Net deposits (withdrawals) $ (35,365 ) $ 60,288 Interest credited 12,011 5,082 Total (decrease) increase in deposits $ (23,354 ) $ 65,370 The following table presents, by various interest rate categories and maturities, the amount of certificates of deposit at June 30, 2024.
Year Ended June 30, 2025 2024 (In thousands) Net deposits (withdrawals) $ (38,817 ) $ (35,365 ) Interest credited 11,100 12,011 Total (decrease) increase in deposits $ (27,717 ) $ (23,354 ) The following table presents, by various interest rate categories and maturities, the amount of certificates of deposit at June 30, 2025.
For these purposes, “Louisiana taxable income” means net income which is earned by us within or derived from sources within the State of Louisiana, after adjustments permitted under Louisiana law, including a federal income tax deduction. In addition, Home Federal Bank is subject to the Louisiana Shares Tax which is imposed on the assessed value of a company’s stock.
For these purposes, “Louisiana taxable income” means net income which is earned by us within or derived from sources within the State of Louisiana, after adjustments permitted under Louisiana law, including a federal income tax deduction.
At June 30, 2024, Home Federal Bank believes it meets the QTL test. Community Reinvestment Act.
At June 30, 2025, Home Federal Bank believes it meets the QTL test. 20 Table of Contents Community Reinvestment Act.
At June 30, 2024, Home Federal Bank had $1.4 million in Federal Home Loan Bank stock, which was in compliance with the applicable requirement.
At June 30, 2025, Home Federal Bank had $400,000 in Federal Home Loan Bank stock, which was in compliance with the applicable requirement.
The required reserves must be maintained in the form of vault cash or an account at a Federal Reserve Bank. At June 30, 2024, Home Federal Bank was not required to maintain any reserve balances. 24 Table of Contents TAXATION Federal Taxation General.
The required reserves must be maintained in the form of vault cash or an account at a Federal Reserve Bank. As of June 30, 2025, the reserve ratio requirement remained at zero percent and Home Federal Bank was not required to maintain any reserve balance. 23 Table of Contents TAXATION Federal Taxation General.
At or For the Year Ended June 30, 2024 2023 (Dollars in thousands) Mortgage-backed securities at beginning of period $ 103,631 $ 108,322 Purchases -- 6,278 Repayments (9,702 ) (11,029 ) Sales -- -- Amortizations of premiums and discounts, net 71 60 Mortgage-backed securities at end of period $ 94,000 $ 103,631 Weighted average yield at end of period 1.80 % 1.84 % 13 Table of Contents Sources of Funds General.
At or For the Year Ended June 30, 2025 2024 (Dollars in thousands) Mortgage-backed securities at beginning of period $ 94,000 $ 103,631 Purchases 12,695 - Repayments (10,348 ) (9,702 ) Sales (157 ) - Amortizations of premiums and discounts, net 215 71 Mortgage-backed securities at end of period $ 96,405 $ 94,000 Weighted average yield at end of period 1.85 % 1.80 % 13 Table of Contents Sources of Funds General.
At June 30, 2024, one-to-four family residential loans amounted to $178.3 million, or 37.5% of the total loan portfolio. We have sold a substantial amount of our fixed-rate conforming one-to-four family residential loans to correspondent banks. Commercial real estate loans amounted to $143.5 million, or 30.2% of the total loan portfolio, at June 30, 2024.
At June 30, 2025, one-to-four family residential loans amounted to $ 175.0 million, or 37.59 % of the total loan portfolio. We have sold a substantial amount of our fixed-rate conforming one-to-four family residential loans to correspondent banks. Commercial real estate loans amounted to $ 138.9 million, or 29.84 % of the total loan portfolio, at June 30, 2025.
“Qualified thrift investments” include various types of loans made for residential and housing purposes, investments related to such purposes, including certain mortgage-backed and related securities and consumer loans. If Home Federal Bank fails the QTL test, it must operate under certain restrictions on its activities. The Dodd-Frank Act made noncompliance potentially subject to agency enforcement action for violation of law.
“Qualified thrift investments” include various types of loans made for residential and housing purposes, investments related to such purposes, including certain mortgage-backed and related securities and consumer loans. If Home Federal Bank fails the QTL test, it must operate under certain restrictions on its activities and may be required to convert to a national bank.
June 30, 2024 2023 30 – 89 Days Overdue 90 or More Days Overdue 30 – 89 Days Overdue 90 or More Days Overdue Number of Loans Principal Balance Number of Loans Principal Balance Number of Loans Principal Balance Number of Loans Principal Balance (Dollars in thousands) One-to-four family residential 7 $ 1,319 4 $ 1,189 3 $ 927 1 $ 1,175 Commercial – real estate secured -- -- -- -- -- -- -- -- Multi-family residential -- -- -- -- -- -- -- -- Commercial business -- -- 2 90 3 63 -- -- Land -- -- -- -- 1 36 -- -- Construction -- -- -- -- -- -- -- -- Home equity loans and lines of credit and other consumer 3 62 3 240 3 54 -- -- Total delinquent loans 10 $ 1,381 9 $ 1,519 10 $ 1,080 1 $ 1,175 Delinquent loans to total net loans 0.29 % 0.32 % 0.22 % 0.24 % Delinquent loans to total loans 0.29 % 0.32 % 0.22 % 0.24 % 8 Table of Contents Non-Performing Assets.
June 30, 2025 2024 30 – 89 Days Overdue 90 or More Days Overdue 30 – 89 Days Overdue 90 or More Days Overdue Number Principal Number Principal Number Principal Number Principal of Loans Balance of Loans Balance of Loans Balance of Loans Balance (Dollars in thousands) One-to-four family residential 9 $ 1,027 6 $ 963 7 $ 1,319 4 $ 1,189 Commercial – real estate secured 1 99 2 967 - - - - Multi-family residential - - - - - - - - Commercial business 1 8 3 38 - - 2 90 Land 1 17 - - - - - - Construction - - - - - - - - Home equity loans and lines of credit and other consumer 2 77 2 367 3 62 3 240 Total delinquent loans 14 $ 1,228 13 $ 2,335 10 $ 1,381 9 $ 1,519 Delinquent loans to total net loans 0.27 % 0.51 % 0.29 % 0.32 % Delinquent loans to total loans 0.26 % 0.50 % 0.29 % 0.32 % 8 Table of Contents Non-Performing Assets.
Equity Lines of Credit. As of June 30, 2024, lines of credit secured by a borrower’s equity in real estate were $17.0 million, or 3.6%, of the total loan portfolio, before net items. The unused portion of equity lines was $14.8 million at June 30, 2024.
Equity Lines of Credit. As of June 30, 2025, lines of credit secured by a borrower’s equity in real estate were $ 20.4 million, or 4.37 %, of the total loan portfolio, before net items. The unused portion of equity lines was $ 13.1 million at June 30, 2025.
It is our policy that commercial real estate secured lines of credit are limited to a maximum of 85% of the appraised value of the property and shall not exceed three to five year amortizations. Multi-Family Residential Loans. As of June 30, 2024, multi-family residential loans were $37.1 million, or 7.8%, of the total loan portfolio, before net items.
It is our policy that commercial real estate secured lines of credit are limited to a maximum of 85% of the appraised value of the property and shall not exceed three to five year amortizations. Multi-Family Residential Loans.
Employees Home Federal Bank had 78 full-time employees and three part-time employees at June 30, 2024.
Employees Home Federal Bank had 67 full-time employees and 9 part-time employees at June 30, 2025.
June 30, 2024 2023 (In thousands) Fixed rate: GNMA $ 2,813 $ 4,114 FHLMC 27,979 35,291 FNMA 46,135 47,461 Total fixed rate 76,927 86,866 Adjustable rate: GNMA 971 210 FHLMC 3 5 FNMA -- -- Total adjustable-rate 974 215 Total mortgage-backed securities $ 77,901 $ 87,081 Information regarding the contractual maturities and weighted average yield of our mortgage-backed securities portfolio at June 30, 2024 is presented below.
June 30, 2025 2024 (In thousands) Fixed rate: GNMA $ 5,326 $ 2,813 FHLMC 31,257 27,979 FNMA 46,538 46,135 Total fixed rate 83,121 76,927 Adjustable rate: GNMA 692 971 FHLMC 3 3 FNMA - - Total adjustable-rate 695 974 Total mortgage-backed securities $ 83,816 $ 77,901 Information regarding the contractual maturities and weighted average yield of our mortgage-backed securities portfolio at June 30, 2025 is presented below.
At June 30, 2024, Home Federal Bancorp had available an $11.0 million line of credit agreement with First National Bankers Bank, maturing on August 29, 2024. The line is secured by Home Federal Bank’s common stock and bears interest at the Prime Rate, which is subject to change when adjustments are made to Wall Street Journal Prime.
At June 30, 2025, Home Federal Bancorp had a $4.0 million outstanding loan with First National Bankers Bank, which matures on February 5, 2034. The loan is secured by Home Federal Bank’s common stock and bears interest at the Prime Rate, which is subject to change when adjustments are made to Wall Street Journal Prime.
The Incentive Compensation Guidance provides that enforcement actions may be taken against a banking organization if its incentive compensation arrangements or related risk-management control or governance processes pose a risk to the organization’s safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies.
The Incentive Compensation Guidance provides that enforcement actions may be taken against a banking organization if its incentive compensation arrangements or related risk-management control or governance processes pose a risk to the organization’s safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies. 21 Table of Contents On May 6, 2024, the Office of the Comptroller of the Currency approved a notice of proposed rule-making to implement section 956 of the Dodd–Frank Act.
Regulation of Home Federal Bancorp Home Federal Bancorp, a Louisiana corporation, is a registered savings and loan holding company within the meaning of Section 10 of the Home Owners’ Loan Act and is subject to regulation, examination and supervision by the Federal Reserve Board, as well as certain reporting requirements.
None of these employees are covered by a collective bargaining agreement, and we believe that we enjoy good relations with our personnel. 16 Table of Contents REGULATION Regulation of Home Federal Bancorp Home Federal Bancorp, a Louisiana corporation, is a registered savings and loan holding company within the meaning of Section 10 of the Home Owners’ Loan Act and is subject to regulation, examination and supervision by the Federal Reserve Board, as well as certain reporting requirements.
The formula for deriving the assessed value is to calculate 15% of the sum of: (a) 20% of our capitalized earnings, plus (b) 80% of our taxable stockholders’ equity, minus (c) 50% of our real and personal property assessment. Various items may also be subtracted in calculating a company’s capitalized earnings. 25 Table of Contents Item 1A.
The formula for deriving the assessed value is to calculate 15% of the sum of: (a) 20% of Home Federal Bank’s capitalized earnings, plus (b) 80% of Home Federal Bank’s taxable stockholders’ equity, minus (c) 50% of Home Federal Bank’s real and personal property assessment.
The loan-to-value ratios, maturities, and other provisions of the loans made by us generally have reflected the policy of making less than the maximum loan permissible under applicable regulations, in accordance with sound lending practices, market conditions, and underwriting standards established by us.
As of June 30, 2025, one-to-four family residential loans were $ 175.0 million, or 37.59 %, of the total loan portfolio, before net items. 5 Table of Contents The loan-to-value ratios, maturities, and other provisions of the loans made by us generally have reflected the policy of making less than the maximum loan permissible under applicable regulations, in accordance with sound lending practices, market conditions, and underwriting standards established by us.
June 30, 2024 2023 Amount Percent of Total Deposits Amount Percent of Total Deposits (Dollars in thousands) Certificate accounts: 0.00% - 0.99% $ 13,964 2.43 % $ 19,248 3.22 % 1.00% - 1.99% 1,323 0.23 11,630 1.95 2.00% - 2.99% 698 0.12 14,647 2.45 3.00% - 3.99% 2,137 0.37 50,365 8.43 4.00% - 4.99% 146,242 25.48 93,037 15.58 5.00% - 5.99% 50,528 8.81 1,456 0.24 Total certificate accounts 214,892 37.44 190,383 31.87 Transaction accounts: Passbook savings 76,643 13.35 81,895 13.71 Non-interest-bearing demand accounts 130,334 22.71 145,553 24.37 NOW accounts 66,613 11.60 65,335 10.94 Money market 85,525 14.90 114,195 19.11 Total transaction accounts 359,115 62.56 406,978 68.13 Total deposits $ 574,007 100.00 % $ 597,361 100.00 % 14 Table of Contents The following table shows the average balance of each type of deposit and the average rate paid on each type of deposit for the periods indicated.
June 30, 2025 2024 Amount Percent of Total Deposits Amount Percent of Total Deposits (Dollars in thousands) Certificate accounts: 0.00% - 0.99% $ 9,207 1.69 % $ 13,964 2.43 % 1.00% - 1.99% 6 - 1,323 0.23 2.00% - 2.99% 22,739 4.16 698 0.12 3.00% - 3.99% 84,775 15.52 2,137 0.37 4.00% - 4.99% 64,248 11.76 146,242 25.48 5.00% - 5.99% 6,382 1.17 50,528 8.81 Total certificate accounts 187,357 34.30 214,892 37.44 Transaction accounts: Savings accounts 95,627 17.50 76,643 13.35 Non-interest-bearing demand accounts 122,416 22.41 130,334 22.71 NOW accounts 67,119 12.29 66,613 11.60 Money market 73,771 13.50 85,525 14.90 Total transaction accounts 358,933 65.70 359,115 62.56 Total deposits $ 546,290 100.00 % $ 574,007 100.00 % 14 Table of Contents The following table shows the average balance of each type of deposit and the average rate paid on each type of deposit for the periods indicated.
Amounts at June 30, 2024 which Mature in One Year or Less Weighted Average Yield Over One Year Through Five Years Weighted Average Yield Over Five Through Ten Years Weighted Average Yield Over Ten Years Weighted Average Yield (Dollars in thousands) Bonds and other debt securities: Mortgage-backed securities $ -- -- % $ 4 4.34 % $ 2,643 2.52 % $ 75,254 1.77 % Municipals -- -- 571 5.35 -- -- 1,015 5.00 US Treasury securities 2,000 1.97 -- -- -- -- -- -- Equity securities(1): FNBB stock -- -- -- -- -- -- 250 0.92 FHLB stock -- -- -- -- -- -- 1,364 5.22 Total investment securities $ 2,000 1.97 % $ 575 5.35 % $ 2,643 2.52 % $ 77,883 1.87 % (1) None of the listed equity securities has a stated maturity.
Amounts at June 30, 2025 which Mature in One Year or Less Weighted Average Yield Over One Year Through Five Years Weighted Average Yield Over Five Through Ten Years Weighted Average Yield Over Ten Years Weighted Average Yield (Dollars in thousands) Bonds and other debt securities: Mortgage-backed securities $ - - % $ 8 5.73 % $ 8,762 1.83 % $ 75,046 1.84 % Municipals 567 5.35 - - 1,002 0.51 - - Equity securities(1): FNBB stock - - - - - - 250 0.01 FHLB stock - - - - - - 400 0.03 Total investment securities $ 567 5.35 % $ 8 5.73 % $ 9,764 2.34 % $ 75,696 1.87 % (1) None of the listed equity securities has a stated maturity.
June 30, 2024 2023 Amount Percent of Total Loans Amount Percent of Total Loans (Dollars in thousands) Real estate loans: One-to-four family residential(1) $ 178,347 37.51 % $ 179,579 36.29 % Commercial – real estate secured: Owner occupied 97,571 20.52 104,974 21.22 Non-owner occupied 45,889 9.65 43,467 8.78 Total commercial-real estate secured 143,460 30.17 148,441 30.00 Multi-family residential 37,092 7.80 28,849 5.83 Land 30,737 6.46 26,841 5.42 Construction 15,704 3.30 28,035 5.67 Home equity loans and second mortgage loans 2,634 0.56 2,450 0.50 Equity lines of credit 17,046 3.58 23,817 4.81 Total real estate loans 425,020 89.38 438,012 88.52 Commercial business 49,256 10.36 55,364 11.19 Consumer non-real estate loans: Savings accounts 393 0.08 372 0.07 Consumer loans 855 0.18 1,082 0.22 Total non-real estate loans 50,504 10.62 56,818 11.48 Total loans 475,524 100.00 % 494,830 100.00 % Less: Allowance for credit losses (4,574 ) (5,173 ) Deferred loan fees (98 ) (164 ) Net loans receivable (1) $ 470,852 $ 489,493 (1) Does not include loans held-for-sale amounting to $1.7 million and $4,000 at June 30, 2024 and 2023, respectively.
June 30, 2025 2024 Percent Percent of Total of Total Amount Loans Amount Loans (Dollars in thousands) Real estate loans: One-to-four family residential(1) $ 174,978 37.59 % $ 178,347 37.51 % Commercial – real estate secured: Owner occupied 85,761 18.82 97,571 20.52 Non-owner occupied 53,159 11.42 45,889 9.65 Total commercial-real estate secured 138,920 29.84 143,460 30.17 Multi-family residential 32,283 6.93 37,092 7.80 Land 30,054 6.45 30,737 6.46 Construction 11,226 2.41 15,704 3.30 Home equity loans and second mortgage loans 2,520 0.54 2,634 0.56 Equity lines of credit 20,354 4.37 17,046 3.58 Total real estate loans 410,335 88.13 425,020 89.38 Commercial business 54,138 11.63 49,256 10.36 Consumer non-real estate loans: Savings accounts 381 0.08 393 0.08 Consumer loans 739 0.16 855 0.18 Total non-real estate loans 55,258 11.87 50,504 10.62 Total loans 465,593 100.00 % 475,524 100.00 % Less: Allowance for credit losses (4,484 ) (4,574 ) Deferred loan fees (105 ) (98 ) Net loans receivable (1) $ 461,004 $ 470,852 (1) Does not include loans held-for-sale amounting to $1.5 million and $1.7 million at June 30, 2025 and 2024, respectively.
Under the latter circumstance, the weighted average yield on loans decreases as higher yielding loans are repaid or refinanced at lower rates. 5 Table of Contents One-to-Four Family Residential Real Estate Loans. As of June 30, 2024, one-to-four family residential loans were $178.3 million, or 37.5%, of the total loan portfolio, before net items.
Under the latter circumstance, the weighted average yield on loans decreases as higher yielding loans are repaid or refinanced at lower rates. One-to-Four Family Residential Real Estate Loans.
Regulatory Capital Regulations Federal regulations require depository institutions to meet several minimum capital standards: a common equity Tier 1 capital to risk-based assets ratio of 4.5%, a Tier 1 capital to risk-based assets ratio of 6.0%, a total capital to risk-based assets ratio of 8%, and a Tier 1 capital to total assets leverage ratio of 4%.
Federally insured savings institutions are required by the OCC to meet several minimum levels of capital including: a common equity Tier 1 capital to risk-based assets ratio of 4.5%, a Tier 1 capital to risk-based assets ratio of 6.0%, a total capital to risk-based assets ratio of 8%, and a Tier 1 capital to total assets leverage ratio of 4%.
June 30, 2024 2023 Amortized Cost Fair Value Amortized Cost Fair Value (In thousands) Securities Held-to-Maturity: Mortgage-backed securities $ 66,017 $ 53,230 $ 71,568 $ 58,447 Municipals 1,285 1,220 1,311 1,231 Total Securities Held-to-Maturity 67,302 54,450 72,879 59,678 Securities Available-for-Sale: Mortgage-backed securities 27,982 24,671 32,063 28,634 Municipals 365 366 1,068 1,076 US Treasury Securities 2,000 2,000 9,779 9,841 Total Securities Available for sale 30,347 27,037 42,910 39,551 Equity Securities 250 250 250 250 FNBB stock 1,364 1,364 1,294 1,294 FHLB stock 1,614 1,614 1,544 1,544 Total Investment Securities $ 99,263 $ 83,101 $ 117,333 $ 100,773 11 Table of Contents The following table sets forth the amount of investment securities which contractually mature during each of the periods indicated and the weighted average yields for each range of maturities at June 30, 2024.
June 30, 2025 2024 Amortized Cost Fair Value Amortized Cost Fair Value (In thousands) Securities Held-to-Maturity: Mortgage-backed securities $ 60,075 $ 49,935 $ 66,017 $ 53,230 Municipals 1,259 1,204 1,285 1,220 Total Securities Held-to-Maturity 61,334 51,139 67,302 54,450 Securities Available-for-Sale: Mortgage-backed securities 36,330 33,881 27,982 24,671 Municipals 365 365 365 366 US Treasury Securities - - 2,000 2,000 Total Securities Available for sale… 36,695 34,246 30,347 27,037 Equity Securities FNBB stock 250 250 250 250 FHLB stock 400 400 1,364 1,364 650 650 1,614 1,614 Total Investment Securities $ 98,679 $ 86,035 $ 99,263 $ 83,101 11 Table of Contents The following table sets forth the amount of investment securities which contractually mature during each of the periods indicated and the weighted average yields for each range of maturities at June 30, 2025.

… 47 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−0 removed10 unchanged
Biggest changeAlthough the Company and Bank have not, as of the date of this Annual Report on Form 10-K, experienced a cybersecurity threat or incident that materially affected their business strategy, results of operations or financial condition, there can be no guarantee that the Company or Bank will not experience such an incident in the future. 26 Table of Contents
Biggest changeAlthough the Company and Bank have not, as of the date of this Annual Report on Form 10-K, experienced a cybersecurity threat or incident that materially affected their business strategy, results of operations or financial condition, there can be no guarantee that the Company or Bank will not experience such an incident in the future. 25 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed2 unchanged
Biggest changeTexas Street, Bossier City, LA Owned 1,468 37,097 Building/ ATM (Northwood Branch) 5841 North Market Street, Shreveport, LA Owned 1,480 27,243 Building/ ATM (Pierremont Road Branch) 925 Pierremont Road , Shreveport, LA Owned 1,968 58,594 Building (2) 614 Market Street, Shreveport, LA Owned(2) 323 -- Building/ATM (Huntington Branch) 6903 Pines Road, Shreveport, LA Owned 1,830 11,616 Building/ATM (Minden Branch) 412 Homer Road, Minden, LA Owned 3,085 20,425 Building/ATM (Benton Branch) 104 Sibley Street, Benton, LA Owned $ 709 $ 74,822 (1) The building is owned but the land is subject to an operating lease with a ten-year term expiring March 15, 2028.
Biggest changeTexas Street, Bossier City, LA Owned 1,412 29,346 Building/ ATM (Northwood Branch) 5841 North Market Street, Shreveport, LA Owned 1,520 22,788 Building/ ATM (Pierremont Road Branch) 925 Pierremont Road , Shreveport, LA Owned 1,884 46,195 Building (2) 614 Market Street, Shreveport, LA Owned (2 ) 313 - Building/ATM (Huntington Branch) 6903 Pines Road, Shreveport, LA Owned 1,753 12,379 Building/ATM (Minden Branch) 412 Homer Road, Minden, LA Owned 1,807 20,380 Building/ATM (Benton Branch) 104 Sibley Street, Benton, LA Owned $ 738 $ 79,039 (1) The building is owned but the land is subject to an operating lease with a ten-year term expiring March 15, 2028.
The following table sets forth certain information, as of June 30, 2024, relating to Home Federal Bank’s offices, and one property acquired for potential future administrative offices which is presently vacant.
The following table sets forth certain information, as of June 30, 2025, relating to Home Federal Bank’s offices, and one property acquired for potential future administrative offices which is presently vacant.
Description/Address Leased/Owned Net Book Value of Property Amount of Deposits (Dollars in thousands) Building (Home Office) 222 Florida Street, Shreveport, LA Owned $ 1,672 $ -- Building/ATM (Market Street Branch) 624 Market Street, Shreveport, LA Owned 661 65,915 Building/ATM (Youree Drive Branch) 6363 Youree Drive, Shreveport, LA Owned(1) 607 160,649 Building/ATM (Southern Hills Branch) 9449 Mansfield Road, Shreveport, LA Owned 1,753 65,090 Building/ATM (Viking Drive Branch) 2555 Viking Drive, Bossier City, LA Owned 1,562 52,556 Building/ATM (Stockwell Branch) 7964 E.
Description/Address Leased/Owned Net Book Value of Property Amount of Deposits (Dollars in thousands) Building (Home Office) 222 Florida Street, Shreveport, LA Owned $ 1,592 $ - Building/ATM (Market Street Branch) 624 Market Street, Shreveport, LA Owned 595 76,643 Building/ATM (Youree Drive Branch) 6363 Youree Drive, Shreveport, LA Owned (1 ) 568 147,647 Building/ATM (Southern Hills Branch) 9449 Mansfield Road, Shreveport, LA Owned 1,645 61,390 Building/ATM (Viking Drive Branch) 2555 Viking Drive, Bossier City, LA Owned 1,548 50,483 Building/ATM (Stockwell Branch) 7964 E.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed1 unchanged
Biggest changeThe Company’s repurchases of its common stock during the quarter ended June 30, 2024, including stock-for-stock option exercises are set forth in the table below: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (a) April 1, 2024 – April 30, 2024 10,648 $ 12.19 10,648 49,071 May 1, 2024 – May 31, 2024 2,500 11.45 2,500 46,571 June 1, 2024 – June 30, 2024 25,536 11.35 25,536 21,035 Total 38,684 $ 11.59 38,684 21,035 Notes to this table: (a) On March 7, 2024, the Company announced that its Board of Directors approved the twelfth stock repurchase program for the repurchase of up to 60,000 shares.
Biggest changeThe Company’s repurchases of its common stock during the quarter ended June 30, 2025, including stock-for-stock option exercises are set forth in the table below: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (a) April 1, 2025 – April 30, 2025 28,500 $ 13.28 28,500 53,831 May 1, 2025– May 31, 2025 - - 53,831 June 1, 2025– June 30, 2025 13,500 13.16 13,500 40,331 Total 42,000 $ 13.24 42,000 40,331 Notes to this table: (a) On November 1, 2024, the Company announced that its Board of Directors approved the thirteenth stock repurchase program for the repurchase of up to 100,000 shares.
The twelfth stock repurchase program does not have an expiration date. Item 6. [Reserved]
The thirteenth stock repurchase program does not have an expiration date. Item 6. [Reserved]
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) Home Federal Bancorp’s common stock is traded on the Nasdaq Capital Market under the symbol “HFBL.” At September 23, 2024, Home Federal Bancorp had 178 shareholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) Home Federal Bancorp’s common stock is traded on the Nasdaq Capital Market under the symbol “HFBL.” At September 22, 2025, Home Federal Bancorp had 173 shareholders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

60 edited+5 added−14 removed45 unchanged
Biggest changeAt June 30, 2024 2023 (In thousands) Selected Financial and Other Data: Total assets $ 637,512 $ 660,915 Cash and cash equivalents 34,948 24,765 Securities available for sale 27,037 39,551 Securities held to maturity 67,302 74,423 Loans held-for-sale 1,733 4 Loans receivable, net 470,852 489,493 Deposits 574,007 597,361 Federal Home Loan Bank advances -- -- Other Borrowings 7,000 8,550 Total Stockholders’ equity 52,803 50,542 As of or for the Year Ended June 30, 2024 2023 (Dollars in thousands, except per share amounts) Selected Operating Data: Total interest income $ 31,864 $ 26,631 Total interest expense 12,913 5,079 Net interest income 18,951 21,552 Provision for loan losses 40 868 Net interest income after provision for loan losses 18,911 20,684 Total non-interest income 1,584 2,099 Total non-interest expense 16,426 16,013 Income before income tax expense 4,069 6,770 Income tax expense 476 1,066 Net income $ 3,593 $ 5,704 Earnings per share of common stock: Basic $ 1.18 $ 1.89 Diluted $ 1.18 $ 1.81 31 Table of Contents As of or for the Year Ended June 30, 2024 2023 Selected Operating Ratios(1): Average yield on interest-earning assets 5.19 % 4.61 % Average rate on interest-bearing liabilities 2.81 1.24 Average interest rate spread(2) 2.38 3.37 Net interest margin(2) 3.08 3.73 Average interest-earning assets to average interest-bearing liabilities 133.54 141.05 Net interest income after provision for loan losses to non-interest expense 115.13 129.17 Total non-interest expense to average assets 2.51 2.59 Efficiency ratio(3) 79.99 67.71 Return on average assets 0.55 0.92 Return on average equity 7.01 11.57 Average equity to average assets 7.83 7.98 Dividend payout ratio 43.66 27.00 Selected Financial and Other Data (Continued) Selected Quality Ratios(4): Non-performing loans as a percent of loans receivable, net 0.32 % 0.25 % Non-performing assets as a percent of total assets 0.30 0.24 Allowance for credit losses as a percent of total loans receivable 0.96 1.05 Net charge-offs to average loans receivable 0.20 0.03 Allowance for credit losses as a percent of non-performing loans 300.72 417.85 Bank Capital Ratios(4): Common Equity Tier 1 13.29 % 12.79 % Tier 1 Capital 13.29 12.79 Total Capital 14.35 13.95 Leverage 8.99 8.69 Tangible Capital 8.99 8.69 Other Data: Offices (branch and home) 11 10 Employees (full-time) 78 74 (1) With the exception of end of period ratios, all ratios are based on average monthly balances during the indicated periods.
Biggest changeAt June 30, 2025 2024 (In thousands) Selected Financial and Other Data: Total assets $ 609,492 $ 637,512 Cash and cash equivalents 17,347 34,948 Securities available for sale 34,246 27,037 Securities held to maturity 61,334 67,302 Loans held-for-sale 1,540 1,733 Loans receivable, net 461,004 470,852 Deposits 546,290 574,007 Other Borrowings 4,000 7,000 Total Stockholders’ equity 55,205 52,803 As of or for the Year Ended June 30, 2025 2024 (Dollars in thousands, except per share amounts) Selected Operating Data: Total interest income $ 30,462 $ 31,864 Total interest expense 11,791 12,913 Net interest income 18,671 18,951 Provision for (recovery of) loan losses (126 ) 40 Net interest income after provision for loan losses 18,797 18,911 Total non-interest income 2,005 1,584 Total non-interest expense 16,148 16,426 Income before income tax expense 4,654 4,069 Income tax expense 766 476 Net income $ 3,888 $ 3,593 Earnings per share of common stock: Basic $ 1.27 $ 1.18 Diluted $ 1.26 $ 1.17 As of or for the Year Ended June 30, 2025 2024 Selected Operating Ratios(1): Average yield on interest-earning assets 5.28 % 5.19 % Average rate on interest-bearing liabilities 2.73 2.81 Average interest rate spread(2) 2.55 2.38 Net interest margin(2) 3.23 3.08 Average interest-earning assets to average interest-bearing liabilities 133.86 133.54 Net interest income after provision for loan losses to non-interest expense 116.40 115.13 Total non-interest expense to average assets 2.62 2.51 Efficiency ratio(3) 78.11 79.99 Return on average assets 0.63 0.55 Return on average equity 7.31 7.01 Average equity to average assets 8.62 7.83 Dividend payout ratio(4) 41.90 43.66 30 Table of Contents Selected Financial and Other Data (Continued) As of or for the Year Ended June 30, 2025 2024 Selected Quality Ratios(5): Non-performing loans as a percent of loans receivable, net 0.51 % 0.32 % Non-performing assets as a percent of total assets 0.54 0.30 Allowance for credit losses as a percent of total loans receivable 0.96 0.96 Net charge-offs to average loans receivable (0.01 ) 0.20 Allowance for credit losses as a percent of non-performing loans 191.99 300.72 Bank Capital Ratios(5): Common Equity Tier 1 13.59 % 13.29 % Tier 1 Capital 13.59 13.29 Total Capital 14.67 14.35 Leverage 9.40 8.99 Tangible Capital 9.40 8.99 Other Data: Offices (branch and home) 11 11 Employees (full-time) 67 78 (1) With the exception of end of period ratios, all ratios are based on average monthly balances during the indicated periods.
Allowance for Credit Losses . We have identified the calculation of the allowance for credit losses as a critical accounting policy, due to the higher degree of judgment and complexity than our other significant accounting policies. Business Combinations. Acquisition Accounting . Acquisitions are accounted for under the acquisition method of accounting.
We have identified the calculation of the allowance for credit losses as a critical accounting policy, due to the higher degree of judgment and complexity than our other significant accounting policies. Business Combinations. Acquisition Accounting . Acquisitions are accounted for under the acquisition method of accounting.
We expect to continue to emphasize commercial lending in the future in order to improve the yield on our portfolio. 28 Table of Contents Home Federal Bancorp’s operations and profitability are subject to changes in interest rates, applicable statutes and regulations, and general economic conditions, as well as other factors beyond our control.
We expect to continue to emphasize commercial lending in the future in order to improve the yield on our portfolio. 27 Table of Contents Home Federal Bancorp’s operations and profitability are subject to changes in interest rates, applicable statutes and regulations, and general economic conditions, as well as other factors beyond our control.
Core deposit intangibles are tested for impairment if events and circumstances indicate the carrying amount of the asset may not be recoverable from future cash flows. 30 Table of Contents Selected Financial and Other Data Set forth below is selected consolidated financial and other data of Home Federal Bancorp.
Core deposit intangibles are tested for impairment if events and circumstances indicate the carrying amount of the asset may not be recoverable from future cash flows. 29 Table of Contents Selected Financial and Other Data Set forth below is selected consolidated financial and other data of Home Federal Bancorp.
Additionally, at June 30, 2024, Home Federal Bank was a party to a Master Purchase Agreement with First National Bankers Bank, whereby Home Federal Bank may purchase Federal Funds from First National Bankers Bank in an amount not to exceed $20.4 million. There were no amounts purchased under this agreement as of June 30, 2024.
Additionally, at June 30, 2025, Home Federal Bank was a party to a Master Purchase Agreement with First National Bankers Bank, whereby Home Federal Bank may purchase Federal Funds from First National Bankers Bank in an amount not to exceed $20.4 million. There were no amounts purchased under this agreement as of June 30, 2025.
(2) Includes retained earnings and accumulated other comprehensive loss. (3) Interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average rate on interest-bearing liabilities. (4) Net interest margin is net interest income divided by net average interest-earning assets. 34 Table of Contents Rate/Volume Analysis.
(2) Includes retained earnings and accumulated other comprehensive loss. (3) Interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average rate on interest-bearing liabilities. (4) Net interest margin is net interest income divided by net average interest-earning assets. 33 Table of Contents Rate/Volume Analysis.
We intend to continue to pursue opportunities to expand our market area by opening additional de novo banking offices and possibly through acquisitions of other financial institutions and banking related businesses. We expect to focus on contiguous areas to our current locations in Caddo, Bossier and Webster Parishes.
We intend to continue to pursue opportunities to expand our market area by opening additional de novo banking offices and possibly through acquisitions of other financial institutions and banking related businesses. We expect to focus on contiguous areas to our current locations in Caddo, Bossier and Webster Parishes. • Maintain Our Asset Quality .
The information at or for the years ended June 30, 2024 and 2023 is derived in part from the audited financial statements that appear in this Form 10-K.
The information at or for the years ended June 30, 2025 and 2024 is derived in part from the audited financial statements that appear in this Form 10-K.
There were no loans classified as doubtful at June 30, 2024 or June 30, 2023. Non-Interest Income.
There were no loans classified as doubtful at June 30, 2025 or June 30, 2024. Non-Interest Income.
Our effective tax rate was 11.7% for fiscal 2024 and 15.7% for fiscal 2023 . Exposure to Changes in Interest Rates Our ability to maintain net interest income depends upon our ability to earn a higher yield on interest-earning assets than the rates we pay on deposits and borrowings.
Our effective tax rate was 16.5% for fiscal 2025 and 11.7% for fiscal 2024 . Exposure to Changes in Interest Rates Our ability to maintain net interest income depends upon our ability to earn a higher yield on interest-earning assets than the rates we pay on deposits and borrowings.
Net portfolio value is the difference between incoming and outgoing discounted cash flows from assets, liabilities, and off-balance sheet contracts. Net Portfolio Value. Our interest rate sensitivity is monitored by management through the use of a model which internally generates estimates of the change in our net portfolio value (“NPV”) over a range of interest rate scenarios.
Our interest rate sensitivity is monitored by management through the use of a model which internally generates estimates of the change in our net portfolio value (“NPV”) over a range of interest rate scenarios. NPV is the present value of expected cash flows from assets, liabilities, and off-balance sheet contracts.
As of June 30, 2024, the allowance for credit losses was $4.6 million, and the ratio of allowance for credit losses to gross loans was 0.96%. As of June 30, 2023, the allowance for credit losses was $5.2 million, and the ratio of allowance for credit losses to gross loans was 1.05%.
As of June 30, 2025, the allowance for credit losses was $4.5 million, and the ratio of allowance for credit losses to gross loans was 0.96%. As of June 30, 2024, the allowance for credit losses was $4.6 million, and the ratio of allowance for credit losses to gross loans was 0.96%.
The average interest rate spread decreased from 3.37% for fiscal 2023 to 2.38% for fiscal 2024, while the average balance of interest-earning assets increased from $577.8 million to $614.3 million during the same periods. The percentage of average interest-earning assets to average interest-bearing liabilities decreased to 133.54% for fiscal 2024 compared to 141.05% for fiscal 2023.
The average interest rate spread increased from 2.38% for fiscal 2024 to 2.55% for fiscal 2025, while the average balance of interest-earning assets decreased from $614.3 million to $577.2 million during the same periods. The percentage of average interest-earning assets to average interest-bearing liabilities increased to 133.86% for fiscal 2025 compared to 133.54% for fiscal 2024.
At June 30, 2024, the Company had $1.9 million of non-performing assets (defined as non-accruing loans, accruing loans 90 days or more past due, and other real estate owned) compared to $1.6 million on non-performing assets at June 30, 2023, consisting of three commercial non-real estate loans, five single-family residential loans, four home equity line-of-credit loans, and three single-family residences in other real estate owned at June 30, 2024, compared to seven single-family residential loans, two commercial non-real estate loans, one consumer loan and two single-family residences in other real estate owned at June 30, 2023.
At June 30, 2025, the Company had $3.3 million of non-performing assets (defined as non-accruing loans, accruing loans 90 days or more past due, and other real estate owned) compared to $1.9 million of non-performing assets at June 30, 2024, consisting of six one-to-four family residential loans, two home equity loans, three commercial non-real estate loans, two commercial real-estate loans, and one single-family residence in other real estate owned at June 30, 2025, compared to five one-to-four family residential loans, four home equity loans, three commercial non-real estate loans, and three single-family residences in other real estate owned at June 30, 2024.
The Company’s average interest rate spread was 2.38% for the year ended June 30, 2024, compared to 3.37% for the year ended June 30, 2023. The Company’s net interest margin was 3.08% for the year ended June 30, 2024, compared to 3.73% for the year ended June 30, 2023. Net Interest Income.
The Company’s average interest rate spread was 2.55% for the year ended June 30, 2025, compared to 2.38% for the year ended June 30, 2024. The Company’s net interest margin was 3.23% for the year ended June 30, 2025, compared to 3.08% for the year ended June 30, 2024. Net Interest Income.
See Notes 9 and 14 to the Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K. 38 Table of Contents Impact of Inflation and Changing Prices The consolidated financial statements and related financial data presented herein regarding Home Federal Bancorp have been prepared in accordance with accounting principles generally accepted in the United States of America, which generally require the measurement of financial position and operating results in terms of historical dollars, without considering changes in relative purchasing power over time due to inflation.
Impact of Inflation and Changing Prices The consolidated financial statements and related financial data presented herein regarding Home Federal Bancorp have been prepared in accordance with accounting principles generally accepted in the United States of America, which generally require the measurement of financial position and operating results in terms of historical dollars, without considering changes in relative purchasing power over time due to inflation.
Home Federal Bancorp, Inc. of Louisiana had net income of $3.6 million in fiscal 2024 compared to net income of $5.7 million in fiscal 2023.
Home Federal Bancorp, Inc. of Louisiana had net income of $3.9 million in fiscal 2025 compared to net income of $3.6 million in fiscal 2024.
Total loan originations amounted to $209.9 million for fiscal 2024 and $244.0 million for fiscal 2023, while loans sold amounted to $16.0 million and $24.9 million during the same respective periods. We have invested excess funds from loan payments and prepayments and loan sales in investment securities classified as available-for-sale.
Total loan originations amounted to $156.4 million for fiscal 2025 and $210.0 million for fiscal 2024, while loans sold amounted to $18.3 million and $16.0 million during the same respective periods. We have invested excess funds from loan payments and prepayments and loan sales in investment securities classified as available-for-sale.
At June 30, 2024 the Company had five commercial non-real-estate loans, six single family residential loans, four home-equity line-of-credit loans, and one auto loan classified as substandard, compared to ten single family residential loans, three commercial non-real-estate loans, two commercial real estate loans, and three home equity line-of-credit loans classified as substandard at June 30, 2023.
At June 30, 2025 the Company had eight one-to-four family residential loans, two home equity loans, five commercial non-real-estate loans, two commercial real-estate loans, and one consumer loan classified as substandard, compared to six one-to-four family residential loans, five commercial non-real-estate loans, four home equity loans and one consumer loan classified as substandard at June 30, 2024.
The increase in shareholders’ equity was comprised of current year net income of $3.6 million, the vesting of restricted stock awards, stock options, and the release of employee stock ownership plan shares totaling $500,000, proceeds from the issuance of common stock from the exercise of stock options of $373,000, and a decrease in the Company’s accumulated other comprehensive loss of $39,000, partially offset by dividends paid totaling $1.6 million, stock repurchases of $487,000, and CECL implementation totaling $189,000. 33 Table of Contents Average Balances, Net Interest Income Yields Earned and Rates Paid.
The increase in stockholders’ equity was comprised of net income for the year ended June 30, 2025 of $3.9 million, a decrease in the Company’s accumulated other comprehensive loss of $681,000, the vesting of restricted stock awards, stock options, and the release of employee stock ownership plan shares totaling $424,000, and proceeds from the issuance of common stock from the exercise of stock options of $111,000, partially offset by dividends paid totaling $1.6 million, and stock repurchases of $1.1 million. 32 Table of Contents Average Balances, Net Interest Income Yields Earned and Rates Paid.
Net interest income amounted to $19.0 million for fiscal year 2024, a decrease of $2.6 million, or 12.1%, compared to $21.6 million for fiscal year 2023. The decrease primarily resulted from an increase in total interest expense of $7.8 million, partially offset by an increase in total interest income of $5.2 million .
Net interest income amounted to $18.7 million for fiscal year 2025, a decrease of $280,000, or 1.5%, compared to $19.0 million for fiscal year 2024. The decrease primarily resulted from a decrease in total interest income of $1.4 million, partially offset by a decrease in total interest expense of $1.1 million .
The decrease in assets was comprised of decreases in net loans receivable of $18.6 million, or 3.8%, from $489.5 million at June 30, 2023 to $470.9 million at June 30, 2024, investment securities of $18.0 million, or 15.8%, from $114.0 million at June 30, 2023 to $96.0 million at June 30, 2024, core deposit intangible of $334,000, or 21.8%, from $1.5 million at June 30, 2023 to $1.2 million at June 30, 2024, deferred tax asset of $132,000, or 10.1%, from $1.3 million at June 30, 2023 to $1.2 million at June 30, 2024, other assets of $74,000, or 5.2%, from $1.4 million at June 30, 2023 to $1.3 million at June 30, 2024, accrued interest receivable of $15,000, or 0.8%, from $1.8 million at June 30, 2023 to $1.78 million at June 30, 2024, and partially offset by increases in cash and cash equivalents of $10.2 million, or 41.1%, from $24.8 million at June 30, 2023 to $34.9 million at June 30, 2024, loans-held-for-sale of $1.7 million, from $4,000 at June 30, 2023 to $1.7 million at June 30, 2024, premises and equipment of $1.7 million, or 10.5%, from $16.6 million at June 30, 2023 to $18.3 million at June 30, 2024, bank owned life insurance of $110,000, or 1.6%, from $6.7 million at June 30, 2023 to $6.8 million at June 30, 2024, and real estate owned of $50,000, or 13.6% from $368,000 at June 30, 2023 to $418,000 at June 30, 2024.
The decrease in assets was comprised of decreases in cash and cash equivalents of $17.6 million, or 50.4%, from $34.9 million at June 30, 2024 to $17.3 million at June 30, 2025, net loans receivable of $9.9 million, or 2.1%, from $470.9 million at June 30, 2024 to $461.0 million at June 30, 2025, premises and equipment of $1.0 million, or 5.7%, from $18.3 million at June 30, 2024 to $17.3 million at June 30, 2025, core deposit intangible of $284,000, or 23.7%, from $1.2 million at June 30, 2024 to $915,000 at June 30, 2025, loans-held-for-sale of $193,000, or 11.1%, from $1.7 million at June 30, 2024 to $1.5 at June 30, 2025, other assets of $45,000, or 3.3%, from $1.35 million at June 30, 2024 to $1.31 million at June 30, 2025, and deferred tax asset of $18,000, or 1.5%, from $1.18 million at June 30, 2024 to $1.16 million at June 30, 2025, partially offset by increases in real estate owned of $552,000, or 132.1% from $418,000 at June 30, 2024 to $970,000 at June 30, 2025, investment securities of $277,000, or 0.3%, from $96.0 million at June 30, 2024 to $96.2 million at June 30, 2025, bank owned life insurance of $116,000, or 1.7%, from $6.8 million at June 30, 2024 to $6.9 million at June 30, 2025, and accrued interest receivable of $61,000, or 3.4%, from $1.78 million at June 30, 2024 to $1.84 million at June 30, 2025.
At June 30, 2024, Home Federal Bank exceeded each of its capital requirements with common equity t ier 1, tier 1 capital, total capital, leverage, and tangible capital ratios of 13.29%, 13.29%, 14.35%, 8.99%, and 8.99% , respectively.
At June 30, 2025, Home Federal Bank exceeded each of its capital requirements with common equity tier 1, tier 1 capital, total capital, leverage, and tangible capital ratios of 13.59%, 13.59%, 14.67%, 9.40%, and 9.40%, respectively.
Although commercial loans are generally considered to have greater credit risk than other certain types of loans, we attempt to mitigate such risk by originating such loans in our market area to known borrowers. 32 Table of Contents Cash and cash equivalents increased $10.2 million, or 41.1%, from $24.8 million at June 30, 2023 to $34.9 million at June 30, 2024.
Although commercial loans are generally considered to have greater credit risk than other certain types of loans, we attempt to mitigate such risk by originating such loans in our market area to known borrowers. 31 Table of Contents Securities available-for-sale increased $7.2 million, or 26.7%, from $27.0 million at June 30, 2024 to $34.2 million at June 30, 2025.
The average rate paid on certificates of deposit increased from 2.34% for fiscal 2023 to 4.15% for fiscal 2024.
The average rate paid on certificates of deposit decreased from 4.15% for fiscal 2024 to 3.92% for fiscal 2025.
The decrease in liabilities was comprised of decreases in total deposits of $23.4 million, or 3.9%, from $597.4 million at June 30, 2023 to $574.0 million at June 30, 2024, other borrowings of $1.6 million, or 18.1%, from $8.6 million at June 30, 2023 to $7.0 million at June 30, 2024, other accrued expenses and liabilities of $727,000, or 18.6%, from $3.9 million at June 30, 2023 to $3.2 million at June 30, 2024, and advances from borrowers for taxes and insurance of $33,000, or 6.0%, from $554,000 at June 30, 2023 to $521,000 at June 30, 2024,.
The decrease in liabilities was comprised of decreases in total deposits of $27.7 million, or 4.8%, from $574.0 million at June 30, 2024 to $546.3 million at June 30, 2025, and other borrowings of $3.0 million, or 42.9%, from $7.0 million at June 30, 2024 to $4.0 million at June 30, 2025, partially offset by an increase in other accrued expenses and liabilities of $273,000, or 8.6%, from $3.2 million at June 30, 2024 to $3.5 million at June 30, 2025, and advances from borrowers for taxes and insurance of $22,000, or 4.2%, from $521,000 at June 30, 2024 to $543,000 at June 30, 2025.
(4) Asset quality ratios and capital ratios are end of period ratios, except for net charge-offs to average loans receivable. Changes in Financial Condition Total assets decreased $23.4 million, or 3.5%, from $660.9 million at June 30, 2023 to $637.5 million at June 30, 2024.
(4) Reflects dividends paid during the fiscal year divided by net income. (5) Asset quality ratios and capital ratios are end of period ratios, except for net charge-offs to average loans receivable. Changes in Financial Condition Total assets decreased $28.0 million, or 4.4%, from $637.5 million at June 30, 2024 to $609.5 million at June 30, 2025.
Forward-Looking Statements This Annual Report on Form 10-K contains certain forward-looking statements (as defined in the Securities Exchange Act of 1934 and the regulations thereunder). Forward-looking statements are not historical facts but instead represent only the beliefs, expectations or opinions of Home Federal Bancorp and its management regarding future events, many of which, by their nature, are inherently uncertain.
Forward-looking statements are not historical facts but instead represent only the beliefs, expectations or opinions of Home Federal Bancorp and its management regarding future events, many of which, by their nature, are inherently uncertain.
NPV is the present value of expected cash flows from assets, liabilities, and off-balance sheet contracts. The NPV ratio, under any interest rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario.
The NPV ratio, under any interest rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario.
The decrease in deposits resulted from decreases in money market deposits of $28.7 million, or 25.1%, from $114.2 million at June 30, 2023 to $85.5 million at June 30, 2024, non-interest bearing deposits of $15.2 million, or 10.5%, from $145.6 million at June 30, 2023 to $130.3 million at June 30, 2024, and savings deposits of $5.3 million, or 6.4%, from $81.9 million at June 30, 2023 to $76.6 million at June 30, 2024, partially offset by increases in certificates of deposit of $24.5 million, or 12.9%, from $190.4 million at June 30, 2023 to $214.9 million at June 30, 2024, and NOW accounts of $1.3 million, or 2.0%, from $65.3 million at June 30, 2023 to $66.6 million at June 30, 2024.
The decrease in deposits resulted from decreases in certificates of deposit of $27.5 million, or 12.8%, from $214.9 million at June 30, 2024 to $187.4 million at June 30, 2025, money market deposits of $11.7 million, or 13.7%, from $85.5 million at June 30, 2024 to $73.8 million at June 30, 2025, and non-interest deposits of $7.9 million, or 6.1%, from $130.3 million at June 30, 2024 to $122.4 million at June 30, 2025, partially offset by increases in savings deposits of $19.0 million, or 24.8%, from $76.6 million at June 30, 2024 to $95.6 million at June 30, 2025, and NOW accounts of $506,000, or 0.8%, from $66.6 million at June 30, 2024 to $67.1 million at June 30, 2025.
Conversely, interest rate ceilings limit the amount by which the yield on an adjustable rate loan may increase to no more than six percentage points over the rate at the time of origination.
Conversely, interest rate ceilings limit the amount by which the yield on an adjustable rate loan may increase to no more than six percentage points over the rate at the time of origination. Finally, we intend to place a greater emphasis on shorter-term consumer loans and commercial business loans in the future.
Net interest margin decreased to 3.08% for fiscal 2024 compared to 3.73% for fiscal 2023. 35 Table of Contents Interest income increased $5.2 million, or 19.7%, to $31.9 million for fiscal 2024 compared to $26.6 million for fiscal 2023, primarily due to an increase in interest income from loans of $5.6 million, and an increase of $400,000 in interest income from investment securities.
Net interest margin increased to 3.23% for fiscal 2025 compared to 3.08% for fiscal 2024. 34 Table of Contents Interest income decreased $1.4 million, or 4.4%, to $30.5 million for fiscal 2025 compared to $31.9 million for fiscal 2024, primarily due to a decrease in interest income from loans of $1.7 million, and a decrease of $326,000 in interest income from investment securities.
The $515,000 decrease in non-interest income for the year ended June 30, 2024, compared to the year ended June 30, 2023, resulted from an increase in loss on sale of real estate of $415,000, a decrease in gain on sale of loans of $201,000, and a decrease in gain on sale of fixed assets of $4,000, partially offset by an increase in service charges on deposit accounts of $48,000, an increase in gain on sale of securities of $26,000, an increase in other non-interest income of $24,000, and an increase in income from bank owned life insurance of $7,000.
The $421,000 increase in non-interest income for the year ended June 30, 2025 compared to the prior year was primarily due to a decrease of $150,000 in loss on sale of real estate, an increase of $134,000 in other non-interest income, an increase of $119,000 in gain on sale of loans, an increase of $44,000 in service charges on deposit accounts, and an increase of $6,000 in income from bank owned life insurance, partially offset by an increase of $32,000 in loss on sale of securities.
We intend to utilize our high levels of liquidity to fund our lending activities. If additional funds are required to fund lending activities, we intend to sell our securities classified as available-for-sale, as needed.
In addition, the cost of such deposits could be significantly higher upon renewal in a rising interest rate environment. We intend to utilize our high levels of liquidity to fund our lending activities. If additional funds are required to fund lending activities, we intend to sell our securities classified as available-for-sale, as needed.
The combined effect of changes in both rate and volume has been allocated proportionately to the change due to rate and the change due to volume. 2024 vs. 2023 2023 vs. 2022 Increase (Decrease) Total Increase (Decrease) Total Due to Increase Due to Increase Rate Volume (Decrease) Rate Volume (Decrease) (In thousands) Interest income: Investment securities $ 404 $ (132 ) $ 272 $ 464 $ 232 $ 696 Loans receivable, net 2,555 3,009 5,564 1,988 3,963 5,951 Interest-earning deposits (8 ) (595 ) (603 ) 906 (156 ) 750 Total interest-earning assets 2,951 2,282 5,233 3,358 4,039 7,397 Interest expense: Savings accounts 260 (93 ) 167 7 (88 ) (81 ) NOW accounts 180 11 191 95 12 107 Money market accounts 1,350 (132 ) 1,218 953 17 970 Certificate accounts 3,868 2,048 5,916 1,223 517 1,740 Total deposits 5,658 1,834 7,492 2,278 458 2,736 FHLB advances and other borrowings 129 213 342 261 205 466 Total interest-bearing liabilities 5,787 2,047 7,834 2,539 663 3,202 Increase (Decrease) in net interest income $ (2,836 ) $ 235 $ (2,601 ) $ 819 $ 3,376 $ 4,195 Comparison of Operating Results for the Years Ended June 30, 2024 and 2023 General .
The combined effect of changes in both rate and volume has been allocated proportionately to the change due to rate and the change due to volume. 2025 vs. 2024 2024 vs. 2023 Increase (Decrease) Total Increase (Decrease) Total Due to Increase Due to Increase Rate Volume (Decrease) Rate Volume (Decrease) (In thousands) Interest income: Investment securities $ 30 $ (241 ) $ (211 ) $ 404 $ (132 ) $ 272 Loans receivable, net 590 (2,260 ) (1,670 ) 2,555 3,009 5,564 Interest-earning deposits (46 ) 525 479 (8 ) (595 ) (603 ) Total interest-earning assets 574 (1,976 ) (1,402 ) 2,951 2,282 5,233 Interest expense: Savings accounts 960 105 1,065 260 (93 ) 167 NOW accounts 449 17 466 180 11 191 Money market accounts (229 ) (411 ) (640 ) 1,350 (132 ) 1,218 Certificate accounts (433 ) (1,015 ) (1,448 ) 3,868 2,048 5,916 Total deposits 747 (1,304 ) (557 ) 5,658 1,834 7,492 FHLB advances and other borrowings (44 ) (521 ) (565 ) 129 213 342 Total interest-bearing liabilities 703 (1,825 ) (1,122 ) 5,787 2,047 7,834 Increase (Decrease) in net interest income $ (129 ) $ (151 ) $ (280 ) $ (2,836 ) $ 235 $ (2,601 ) Comparison of Operating Results for the Years Ended June 30, 2025 and 2024 General .
The decrease in net interest income for the year ended June 30, 2024, compared to the year ended June 30, 2023, resulted from an increase in total interest expense of $7.8 million, or 154.2%, partially offset by an increase in total interest income of $5.2 million, or 19.7%.
The decrease in net interest income for the year ended June 30, 2025, as compared to the year ended June 30, 2024, was primarily due to a decrease of $1.4 million, or 4.4%, in total interest income, partially offset by a decrease of $1.1 million, or 8.7%, in total interest expense.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements, as defined by Securities and Exchange Commission rules, and have not had any such arrangements during the two years ended June 30, 2024.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements, as defined by Securities and Exchange Commission rules, and have not had any such arrangements during the two years ended June 30, 2025. See Notes 9 and 14 to the Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K.
The decrease in net income for the year ended June 30, 2024, compared to the year ended June 30, 2023, resulted from a decrease in net interest income of $2.6 million, or 12.1%, a decrease in non-interest income of $515,000, or 24.5%, and an increase in non-interest expense of $413,000, or 2.6%, partially offset by a decrease in the provision of credit losses of $828,000, or 95.4%, and a decrease in provision for income taxes of $590,000, or 55.3%.
The increase in net income for the year ended June 30, 2025, as compared to the year ended June 30, 2024, resulted primarily from an increase of $421,000, or 26.6%, in non-interest income, a decrease of $278,000, or 1.7%, in non-interest expense, and an increase of $166,000 in the recovery of credit losses, partially offset by an increase of $290,000, or 60.9%, in the provision for income taxes and a decrease of $280,000, or 1.5%, in net interest income.
Interest rates do not necessarily move in the same direction or in the same magnitude as the prices of goods and services, since such prices are affected by inflation to a larger extent than interest rates.
Interest rates do not necessarily move in the same direction or in the same magnitude as the prices of goods and services, since such prices are affected by inflation to a larger extent than interest rates. 37 Table of Contents Forward-Looking Statements This Annual Report on Form 10-K contains certain forward-looking statements (as defined in the Securities Exchange Act of 1934 and the regulations thereunder).
June 30, 2024 2023 Average Average Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate (Dollars in thousands) Interest-earning assets: Loans receivable(1) $ 499,237 $ 29,016 5.81 % $ 442,469 $ 23,452 5.30 % Investment securities 106,526 2,477 2.33 113,332 2,205 1.95 Interest-earning deposits 8,550 371 4.34 22,001 974 4.43 Total interest-earning assets 614,313 31,864 5.19 % 577,802 26,631 4.61 % Non-interest-earning assets 40,597 40,255 Total assets $ 654,910 $ 618,057 Interest-bearing liabilities: Savings accounts 74,135 479 0.65 % 105,850 312 0.29 % NOW accounts 67,224 355 0.53 63,074 164 0.26 Money market accounts 93,178 2,296 2.46 106,146 1,078 1.02 Certificates of deposit accounts 213,661 8,868 4.15 126,156 2,952 2.34 Total interest-bearing deposits 448,198 11,998 2.68 401,226 4,506 1.12 FHLB advances 3,119 180 5.77 1,623 79 4.87 Other bank borrowings 8,700 735 8.45 6,784 494 7.28 Total interest-bearing liabilities 460,017 12,913 2.81 % 409,633 5,079 1.24 % Non-interest-bearing liabilities: Non-interest-bearing demand accounts 139,330 155,885 Other liabilities 4,289 3,224 Total liabilities 603,636 568,742 Total stockholders’ equity(2) 51,274 49,315 Total liabilities and equity $ 654,910 $ 618,057 Net interest-earning assets $ 154,296 $ 168,169 Net interest income; average interest rate spread(3) $ 18,951 2.38 % $ 21,552 3.37 % Net interest margin(4) 3.08 % 3.73 % Average interest-earning assets to average interest-bearing liabilities 133.54 % 141.05 % (1) Includes loans held for sale.
June 30, 2025 2024 Average Average Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate (Dollars in thousands) Interest-earning assets: Loans receivable(1) $ 460,356 $ 27,346 5.94 % $ 499,237 $ 29,016 5.81 % Investment securities 96,178 2,266 2.36 106,526 2,477 2.33 Interest-earning deposits 20,647 850 4.12 8,550 371 4.34 Total interest-earning assets 577,181 30,462 5.28 % 614,313 31,864 5.19 % Non-interest-earning assets 40,105 40,597 Total assets $ 617,286 $ 654,910 Interest-bearing liabilities: Savings accounts 90,458 1,544 1.71 % 74,135 479 0.65 % NOW accounts 70,375 821 1.17 67,224 355 0.53 Money market accounts 76,494 1,656 2.16 93,178 2,296 2.46 Certificates of deposit accounts 189,204 7,420 3.92 213,661 8,868 4.15 Total interest-bearing deposits 426,531 11,441 2.68 448,198 11,998 2.68 FHLB advances 14 - 4.65 3,119 180 5.77 Other bank borrowings 4,650 350 7.53 8,700 735 8.45 Total interest-bearing liabilities 431,195 11,791 2.73 % 460,017 12,913 2.81 % Non-interest-bearing liabilities: Non-interest-bearing demand accounts 128,336 139,330 Other liabilities 4,538 4,289 Total liabilities 564,069 603,636 Total stockholders’ equity(2) 53,217 51,274 Total liabilities and equity $ 617,286 $ 654,910 Net interest-earning assets $ 145,986 $ 154,296 Net interest income; average interest rate spread(3) $ 18,671 2.55 % $ 18,951 2.38 % Net interest margin(4) 3.23 % 3.08 % Average interest-earning assets to average interest-bearing liabilities 133.86 % 133.54 % (1) Includes loans held for sale.
Securities held-to-maturity decreased $5.6 million, or 7.7%, from $72.9 million at June 30, 2023 to $67.3 million at June 30, 2024. This decrease was primarily due to principal repayments of $5.6 million. Total liabilities decreased $25.7 million, or 4.2%, from $610.4 million at June 30, 2023 to $584.7 million at June 30, 2024.
This increase resulted primarily from purchases of $12.7 million in securities, partially offset by principal repayments of $5.9 million. Securities held-to-maturity decreased $6.0 million, or 8.9%, from $67.3 million at June 30, 2024 to $61.3 million at June 30, 2025. This decrease was primarily due to principal repayments of $6.0 million.
We have maintained a significant portfolio of available-for-sale securities during the past few years in order to better position the Company for a rising interest rate environment in the long term. At June 30, 2024 and 2023, securities available-for-sale amounted to $27.0 million and $39.6 million, respectively, or 4.24% and 6.04%, respectively, of total assets at such dates. Quantitative Analysis.
We have maintained a significant portfolio of available-for-sale securities during the past few years in order to better position the Company for a rising interest rate environment in the long term.
The increase in the average balance of loans receivable was primarily due to new loans originated by our commercial lending division. The average yield of the loan portfolio increased by 51 basis points during fiscal 2024 mainly due to a higher interest rate environment.
The average yield of the loan portfolio increased by 13 basis points during fiscal 2025 mainly due to a higher interest rate environment.
Loans receivable, net decreased $18.6 million, or 3.8%, from $489.5 million at June 30, 2023 to $470.9 million at June 30, 2024.
Loans receivable, net decreased $9.9 million, or 2.1%, from $470.9 million at June 30, 2024 to $461.0 million at June 30, 2025.
As of June 30, 2024, Home Federal Bank had $143.5 million of commercial real estate loans, 30.2% of the total loan portfolio, and $49.3 million of commercial business loans, 10.4% of the total loan portfolio.
As of June 30, 2025, Home Federal Bank had $138.9 million of commercial real estate loans, 29.8% of the total loan portfolio, and $54.1 million of commercial business loans, 11.6% of the total loan portfolio.
These policies require numerous estimates or economic assumptions that may prove inaccurate or may be subject to variations which may significantly affect our reported results and financial condition for the period or in future periods. 29 Table of Contents During the year ended June 30, 2024, we implemented new current expected credit loss accounting policies, procedures, and controls as part of our adoption of ASU No. 2016-13 and subsequent ASUs issued to amend ASC Topic 326.
These policies require numerous estimates or economic assumptions that may prove inaccurate or may be subject to variations which may significantly affect our reported results and financial condition for the period or in future periods. 28 Table of Contents Allowance for Credit Losses .
At June 30, 2024, our commercial real estate loans amounted to $143.5 million, or 30.2% of the total loan portfolio. Our commercial business loans amounted to $49.3 million, or 10.4% of the total loan portfolio.
At June 30, 2025, our commercial real estate loans amounted to $138.9 million, or 29.8% of the total loan portfolio. Our commercial business loans amounted to $54.1 million, or 11.6% of the total loan portfolio.
If we require funds beyond our ability to generate them internally, we have borrowing agreements with the Federal Home Loan Bank of Dallas, which provide an additional source of funds. At June 30, 2024, we had no advances from the Federal Home Loan Bank of Dallas and had $186.4 million in additional borrowing capacity.
At June 30, 2025, we had no advances from the Federal Home Loan Bank of Dallas and had $56.4 million in additional borrowing capacity.
Shareholders’ equity increased $2.3 million, or 4.5%, from $50.5 million at June 30, 2023 to $52.8 million at June 30, 2024.
The Company had no balances in brokered deposits at June 30, 2025 or June 30, 2024. Stockholders’ equity increased $2.4 million, or 4.5%, from $52.8 million at June 30, 2024 to $55.2 million at June 30, 2025.
Interest expense increased $7.8 million, or 154.2%, to $12.9 million for fiscal 2024 compared to $5.1 million for fiscal 2023, primarily as a result of increases in the average rate paid on interest-bearing deposits. Provision for Credit Losses. On July 1, 2023, we adopted the new current expected credit loss (“CECL”) methodology for estimating credit losses.
Interest expense decreased $1.1 million, or 8.7%, to $11.8 million for fiscal 2025 compared to $12.9 million for fiscal 2024, primarily as a result of decreases in the average rate paid on money market accounts and certificates of deposit. Provision for Credit Losses.
We adjust our liquidity levels to fund deposit outflows, repay our borrowings, and to fund loan commitments. We also adjust liquidity, as appropriate, to meet asset and liability management objectives.
Liquidity and Capital Resources Home Federal Bancorp maintains levels of liquid assets deemed adequate by management. Our liquidity ratio averaged 19.6% for the quarter ended June 30, 2025. We adjust our liquidity levels to fund deposit outflows, repay our borrowings, and to fund loan commitments. We also adjust liquidity, as appropriate, to meet asset and liability management objectives.
In addition, we invest excess funds in short-term interest-earning accounts and other assets, which provide liquidity to meet lending requirements. Our deposit accounts with the Federal Home Loan Bank of Dallas amounted to $185,000 and $5.0 million at June 30, 2024 and 2023, respectively.
In addition, we invest excess funds in short-term interest-earning accounts and other assets, which provide liquidity to meet lending requirements.
Because of an increase in our average rate on our interest-bearing assets, partially offset by an increase in our rate on total interest bearing liabilities, our net interest margin decreased from 3.73% to 3.08% during fiscal 2024 compared to 2023, and our net interest income decreased $2.6 million to $19.0 million for fiscal 2024 as compared to $21.6 million for fiscal 2023.
Because of an increase in the weighted-average yield on our interest-earning assets, together with a decrease in our rate on total interest bearing liabilities, our average interest rate spread increased from 2.38% to 2.55% during fiscal 2025 compared to 2024, and our net interest income decreased $280,000 to $18.8 million for fiscal 2025 as compared to $19.0 million for fiscal 2024, primarily due to a $37.1 million decrease in average balance of interest earning assets.
The $413,000 increase in non-interest expense for the year ended June 30, 2024, compared to the year ended June 30, 2023, resulted from increases in compensation and benefits expense of $436,000, audit and examination fees of $235,000, amortization of core deposit intangible expense of $160,000, franchise and bank shares tax expense of $125,000, other non-interest expense of $125,000, occupancy and equipment expense of $122,000, deposit insurance premium expense of $96,000, and advertising expense of $20,000, partially offset by decreases in professional fees of $676,000, data processing expense of $187,000, and loan and collection expense of $43,000.
The $278,000 decrease in non-interest expense for the year ended June 30, 2025, compared to the year ended June 30, 2024, is primarily attributable to decreases of $584,000 in compensation and benefits expense, $217,000 in franchise and bank shares tax expense, $215,000 in advertising expense, $68,000 in other non-interest expense, $62,000 in professional fees, $49,000 in amortization of core deposit intangible expense, $46,000 in deposit insurance premium expense, and $21,000 in loan and collection expense.
Based on prior experience, management believes that a significant portion of such deposits will remain with us, although there can be no assurance that this will be the case. In addition, the cost of such deposits could be significantly higher upon renewal in a rising interest rate environment.
At June 30, 2025, certificates of deposit scheduled to mature in one year or less totaled $172.6 million, or 92.14% of total certificates of deposit. Based on prior experience, management believes that a significant portion of such deposits will remain with us, although there can be no assurance that this will be the case.
The Office of the Comptroller of the Currency provides a quarterly report on the potential impact of interest rate changes upon the market value of portfolio equity. Management reviews the quarterly reports from the Office of the Comptroller of the Currency, which show the impact of changing interest rates on net portfolio value.
Management reviews the quarterly reports from the Office of the Comptroller of the Currency, which show the impact of changing interest rates on net portfolio value. Net portfolio value is the difference between incoming and outgoing discounted cash flows from assets, liabilities, and off-balance sheet contracts. Net Portfolio Value.
In May 2024, we moved our full-service branch location in Minden, Louisiana to a permanent facility located at 412 Homer Road, Minden, Louisiana. • Maintain Our Asset Quality . At June 30, 2024, our non-performing assets totaled $2.0 million, or 0.31% of total assets. We had $418,000 in other real estate owned at June 30, 2024.
At June 30, 2025, our non-performing assets totaled $3.3 million, or 0.54% of total assets. We had $970,000 in other real estate owned at June 30, 2025.
The increases in compensation and benefits expense were primarily due to additional branch and back office staff. 36 Table of Contents Provision for Income Tax Expense. The provision for income taxes amounted to $476,000 and $1.1 million for the fiscal years ended June 30, 2024 and 2023, respectively.
Upon discovery of the issue, we negotiated a discounted settlement to resolve the outstanding invoices, which resulted in the increase for the year ended June 30, 2025. Provision for Income Tax Expense. The provision for income taxes amounted to $766,000 and $476,000 for the fiscal years ended June 30, 2025 and 2024, respectively.
The following table sets forth our NPV as of June 30, 2024: Change in Interest Rates in Net Portfolio Value NPV as % of Portfolio Value of Assets Basis Points (Rate Shock) Amount $ Change % Change NPV Ratio Change (Dollars in thousands) 300 $ 67,371 $ (9,374 ) (12.21 )% 12.47 % (0.63 )% 200 72,060 (4,685 ) (6.10 ) 12.95 (0.15 ) 100 73,616 (3,129 ) (4.08 ) 12.85 (0.24 ) Static 76,745 -- -- -- -- (100) 83,780 7,035 9.17 14.11 1.02 (200) 88,883 12,138 15.82 14.69 1.60 Qualitative Analysis.
The following table sets forth our NPV as of June 30, 2025: Change in Interest Rates in Net Portfolio Value NPV as % of Portfolio Value of Assets Basis Points (Rate Shock) Amount $ Change % Change NPV Ratio Change (Dollars in thousands) 300 $ 71,719 $ (6,457 ) (8.26 )% 13.47 % (0.18 )% 200 75,195 (2,981 ) (3.81 ) 13.77 0.12 100 77,742 (434 ) (0.56 ) 13.90 0.25 Static 78,176 - - 13.65 - (100) 78,709 533 0.68 13.44 (0.21 ) (200) 79,170 994 1.27 13.21 (0.44 ) Qualitative Analysis.
A significant portion of our liquidity consists of securities classified as available-for-sale and cash and cash equivalents. Our primary sources of cash are net income, principal repayments on loans and mortgage-backed securities, and increases in deposit accounts.
Our primary sources of cash are net income, principal repayments on loans and mortgage-backed securities, and increases in deposit accounts. If we require funds beyond our ability to generate them internally, we have borrowing agreements with the Federal Home Loan Bank of Dallas, which provide an additional source of funds.
Removed
The decrease in investment securities was primarily due to $17.7 million in principal payments. The increase in cash and cash equivalents from $24.8 million at June 30, 2023 to $34.9 million at June 30, 2024 was mainly due to decreases in loans receivable and investment securities.
Added
Total liabilities decreased $30.4 million, or 5.2%, from $584.7 million at June 30, 2024 to $554.3 million at June 30, 2025.
Removed
The increase in cash and cash equivalents was primarily due to decreases in loans receivable and investment securities. Securities available-for-sale decreased $12.6 million, or 31.6%, from $39.6 million at June 30, 2023 to $27.0 million at June 30, 2024. This decrease resulted primarily from purchases of $2.7 million in securities, partially offset by principal repayments of $12.1 million.
Added
The decreases were partially offset by increases of $784,000 in data processing expense, $152,000 in occupancy and equipment expense, and $48,000 in audit and examination fees. The increase in data processing expense resulted from a billing discrepancy with our core processor, which had failed to issue invoices for certain services dating back to December 2022.
Removed
The Company had no balances in brokered deposits at June 30, 2024 compared to $3.0 million at June 30, 2023. There was a shift of balances between deposit categories due to customers moving funds from lower yielding categories to higher yielding categories.
Added
At June 30, 2025 and 2024, securities available-for-sale amounted to $34.2 million and $27.0 million, respectively, or 5.62% and 4.24%, respectively, of total assets at such dates. 35 Table of Contents Quantitative Analysis. The Office of the Comptroller of the Currency provides a quarterly report on the potential impact of interest rate changes upon the market value of portfolio equity.
Removed
The increase in total interest expense for the year ended June 30, 2024, compared to the year ended June 30, 2023, was primarily due to a $7.5 million, or 166.3% increase in interest expense on deposits.
Added
Our deposit accounts with the Federal Home Loan Bank of Dallas amounted to $9.1 million and $185,000 at June 30, 2025 and 2024, respectively. 36 Table of Contents A significant portion of our liquidity consists of securities classified as available-for-sale and cash and cash equivalents.
Removed
The increase in interest expense on deposits was primarily due to an $87.5 million, or 69.4%, increase in average balance of certificates of deposit, combined with a 181 basis point increase in rate paid on certificates of deposit for the year ended June 30, 2024, compared to the year ended June 30, 2023.
Added
At June 30, 2025, Home Federal Bancorp had a $4.0 million outstanding loan with First National Bankers Bank, which matures on February 5, 2034. At June 30, 2025, the Company had outstanding loan commitments of $50.5 million to originate loans and commitments under unused lines of credit of $13.1 million.
Removed
This resulted in a $189,000 increase to the allowance for credit losses and a one-time cumulative adjustment resulted in a $189,000 decrease to stockholders’ equity. For purchased credit deteriorated loans, we applied the guidance under CECL using the prospective transition approach.
Removed
As a result, we adjusted the amortized cost basis of the purchased credit deteriorated loans by $170,000 to reclassify the purchase discount to the allowance for credit losses on July 1, 2023. The allowance for credit losses account increased $359,000 from these two transactions.
Removed
No provision expense was recorded in the first quarter of fiscal 2024, a recovery of credit losses of $16,000 was recorded in the second quarter of fiscal 2024, a provision of $11,000 was recorded in the third quarter of fiscal 2024 and a provision of $45,000 was recorded in the fourth quarter of fiscal 2024.
Removed
The decrease in gain on sale of loans for the year ended June 30, 2024, was primarily due to a decrease in mortgage loan originations caused by the higher interest rate environment.
Removed
The loss on sale of real estate for the year ended June 30, 2024, was primarily due to the bulk sale of twenty-one distressed rental properties in December 2023. Non-Interest Expense.
Removed
The decrease in professional fees for the year ended June 30, 2024, was primarily due to the acquisition of First National Bank of Benton, which increased professional fees for the year ended June 30, 2023.
Removed
Finally, we intend to place a greater emphasis on shorter-term consumer loans and commercial business loans in the future. 37 Table of Contents Liquidity and Capital Resources Home Federal Bancorp maintains levels of liquid assets deemed adequate by management. Our liquidity ratio averaged 20.4% for the quarter ended June 30, 2024.
Removed
In addition, Home Federal Bancorp had available an $11.0 million line of credit agreement at June 30, 2024 with First National Bankers Bank, maturing on August 29, 2024. At June 30, 2024 there was a $7.0 million balance in the credit line.
Removed
At June 30, 2024, the Company had outstanding loan commitments of $38.3 million to originate loans and commitments under unused lines of credit of $14.8 million. At June 30, 2024, certificates of deposit scheduled to mature in one year or less totaled $185.6 million, or 86.4% of total certificates of deposit.

Other HFBL 10-K year-over-year comparisons