Home Federal Bancorp, Inc. of Louisiana
For the period ended Dec 31, 2024. Filed Feb 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 12, 2025
HFBL$23.00+2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0001140361-24-046395
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-12.
0001140361-25-003986
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 69 previous paragraphs and 64 current paragraphs.
40 unchanged; 17 reworded; 7 added; 11 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Loans held-for-sale decreased $1.5 million, from $1.7 million at June 30, 2024 to $216,000 at December 31, 2024. The decrease in loans held-for-sale was due to the majority of originated loans being sold prior to December 31, 2024.
Current report
Shareholders’ Equity
Current report
The decrease in net income for the six months ended December 31, 2024, as compared to the same period in 2023 resulted primarily from a decrease of $1.2 million, or 11.4%, in net interest income and an increase of $71,000, or 62.3%, in provision for income taxes, partially offset by a decrease of $591,000, or 7.0%, in non-interest expense, an increase of $216,000, or 37.8%, in non-interest income, and an increase of $162,000 in the recovery of credit losses. The decrease in net interest income for the six months ended December 31, 2024, as compared to the same period in 2023, was primarily due to a decrease of $755,000, or 4.7%, in total interest income and an increase of $405,000, or 6.8%, in total interest expense. The Company’s average interest rate spread was 2.32% for the six months ended December 31, 2024 compared to 2.60% for the six months ended December 31, 2023. The Company’s net interest margin was 3.06% for the six months ended December 31, 2024 compared to 3.26% for the six months ended December 31, 2023.
Current report
The $351,000 increase in non-interest income for the three months ended December 31, 2024, compared to the prior year quarterly period, was primarily due to a decrease of $369,000 in loss on sale of real estate, an increase of $62,000 in other non-interest income, and an increase of $2,000 in income on bank owned life insurance, partially offset by a decrease of $71,000 in gain on sale of loans, an increase of $6,000 in loss on sale of securities, and a decrease of $5,000 in service charges on deposit accounts. The $216,000 increase in non-interest income for the six months ended December 31, 2024 compared to the prior year six-month period was primarily due to a decrease of $149,000 in loss on sale of real estate, an increase of $88,000 in other non-interest income, and an increase of $4,000 in income from bank owned life insurance, partially offset by a decrease of $14,000 in gain on sale of loans, an increase of $6,000 in loss on sale of securities, and a decrease of $5,000 in service charges on deposit accounts.
Current report
The $413,000 decrease in non-interest expense for the three months ended December 31, 2024, compared to the same period in 2023, is primarily attributable to decreases of $163,000 in franchise and bank shares tax expense, $132,000 in other non-interest expense, $99,000 in compensation and benefits expense, $80,000 in audit and examination fees, $53,000 in professional fees, $38,000 in advertising expense, $33,000 in deposit insurance premium expense, $13,000 in amortization of core deposit intangible expense, $7,000 in occupancy and equipment expense, and $2,000 in loan and collection expense. The decreases were partially offset by an increase of $207,000 in data processing expense. The $591,000 decrease in non-interest expense for the six months ended December 31, 2024, compared to the same six-month period in 2023, is primarily attributable to decreases of $153,000 in compensation and benefits expense, $151,000 in franchise and bank shares tax expense, $124,000 in advertising expense, $105,000 in other non-interest expense, $96,000 in professional fees, $50,000 in audit and examination fees, $34,000 in loan and collection expense, $34,000 in deposit insurance premium expense, and $33,000 in amortization of core deposit intangible expense. The decreases were partially offset by increases of $180,000 in data processing expense and $9,000 in occupancy and equipment expense.
Current report
There was an income tax expense of $187,000 and $185,000 for the three and six months ended December 31, 2024, respectively, resulting in an effective tax rate of 15.5% and 8.6%. There was an income tax benefit of $196,000 and an income tax expense of $114,000 for the three and six months ended December 31, 2023, respectively.
Removed paragraphs (11)
Previous report
Loans held-for-sale increased $535,000, from $1.7 million at June 30, 2024 to $2.3 million at September 30, 2024. The increase in loans held-for-sale results primarily from the increase in the origination volume during the first three months of fiscal year end 2025.
Previous report
Stockholders’ Equity
Previous report
The decrease in net income for the three months ended September 30, 2024, compared to the same period in 2023, resulted from a decrease in net interest income of $857,000, or 16.2%, and a decrease in non-interest income of $134,000, or 30.9%, partially offset by a decrease in non-interest expense of $177,000, or 4.2%, a decrease in provision for income taxes of $312,000, or 100.6%, and a recovery in the provision for credit losses of $223,000.
Previous report
Net Interest Income
Previous report
Comparison of Operating Results for the Three Months Ended September 30, 2024 and 2023 (continued)
Previous report
The $134,000 decrease in non-interest income for the three months ended September 30, 2024, compared to the same period in 2023, resulted from an increase in loss on sale of real estate of $220,000, partially offset by an increase in gain on sale of loans of $58,000, an increase in other non-interest income of $26,000, and an increase in income on bank owned life insurance of $2,000.
Previous report
The $177,000 decrease in non-interest expense for the three months ended September 30, 2024, compared to the same period in 2023, resulted from decreases in advertising expense of $86,000, compensation and benefits expense of $54,000, professional fees of $43,000, loan and collection expense of $32,000, data processing expense of $26,000, amortization of core deposit intangible expense of $20,000, and deposit insurance premium expense of $1,000, partially offset by increases in audit and examination fees of $30,000, other non-interest expense of $28,000, occupancy and equipment expense of $15,000, and franchise and bank shares tax expense of $12,000.
Previous report
The decrease in other non-operating expense was primarily due to communication expense, correspondent bank fees, and fraud expense related to deposit checking accounts. The aggregate compensation expense recognized by the Company for its Stock Options, Share Awards and employee stock ownership plan, amounted to $122,000 and $132,000 for the three months ended September 30, 2024 and September 30, 2023, respectively.
Previous report
The Louisiana bank shares tax is assessed on the Bank’s equity and earnings. For the three months ended September 30, 2024, the Company recognized franchise and bank shares tax expense of $168,000 compared to $156,000, for the same period in 2023.
Previous report
The $2,000 recovery for income taxes for the three months ended September 30, 2024, was due to an audit adjustment for the year ending June 30, 2024. Income taxes amounted to $310,000 for the three months ended September 30, 2023, resulting in an effective tax rate of 20.3%.
Previous report
Comparison of Operating Results for the Three Months Ended September 30, 2024 and 2023 (continued)
Reworded paragraphs (17)
Previous wording
There were no changes made to the Company's internal control over financial reporting that occurred during the quarter ended September 30, 2024 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Current wording
There were no changes made to the Company's internal control over financial reporting that occurred during the six months ended December 31, 2024 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Previous wording
At September 30, 2024, the Company reported total assets of $628.4 million, a decrease of $9.1 million, or 1.4%, compared to total assets of $637.5 million at June 30, 2024. The decrease in assets was comprised of decreases in net loans receivable of $16.8 million, or 3.6%, from $470.9 million at June 30, 2024 to $454.0 million at September 30, 2024, real estate owned of $296,000, or 70.8% from $418,000 at June 30, 2024 to $122,000 at September 30, 2024, premises and equipment of $238,000, or 1.3%, from $18.3 million at June 30, 2024 to $18.1 million at September 30, 2024, core deposit intangible of $74,000, or 6.2%, from $1.2 million at June 30, 2024 to $1.1 million at September 30, 2024, and accrued interest receivable of $14,000, or 0.8%, from $1.78 million at June 30, 2024 to $1.76 million at September 30, 2024, partially offset by increases in cash and cash equivalents of $6.1 million, or 17.4%, from $34.9 million at June 30, 2024 to $41.0 million at September 30, 2024, investment securities of $1.4 million, or 1.5%, from $96.0 million at June 30, 2024 to $97.4 million at September 30, 2024, loans-held-for-sale of $535,000, or 30.9%, from $1.7 million at June 30, 2024 to $2.3 million at September 30, 2024, other assets of $224,000, or 16.6%, from $1.4 million at June 30, 2024 to $1.6 million at September 30, 2024, deferred tax asset of $29,000, or 2.5%, from $1.18 million at June 30, 2024 to $1.21 million at September 30, 2024, and bank owned life insurance of $29,000, or 0.4%, from $6.81 million at June 30, 2024 to $6.84 million at September 30, 2024. The increase in investment securities was primarily due to $4.0 million in security purchases and a $1.3 million reduction in unrealized losses on available for sale securities, partially offset by $3.5 million in principal payments.
Current wording
At December 31, 2024, the Company reported total assets of $607.8 million, a decrease of $29.7 million, or 4.7%, compared to total assets of $637.5 million at June 30, 2024. The decrease in assets was comprised of decreases in cash and cash equivalents of $15.4 million, or 44.1%, from $34.9 million at June 30, 2024 to $19.5 million at December 31, 2024, net loans receivable of $12.2 million, or 2.6%, from $470.9 million at June 30, 2024 to $458.7 million at December 31, 2024, loans-held-for-sale of $1.5 million, or 87.5%, from $1.7 million at June 30, 2024 to $216,000 at December 31, 2024, premises and equipment of $459,000, or 2.5%, from $18.3 million at June 30, 2024 to $17.8 million at December 31, 2024, real estate owned of $418,000, or 100.0% from $418,000 at June 30, 2024 to none at December 31, 2024, investment securities of $264,000, or 0.3%, from $96.0 million at June 30, 2024 to $95.7 million at December 31, 2024, and core deposit intangible of $146,000, or 12.2%, from $1.2 million at June 30, 2024 to $1.1 million at December 31, 2024, partially offset by increases in deferred tax asset of $357,000, or 30.2%, from $1.2 million at June 30, 2024 to $1.5 million at December 31, 2024, other assets of $195,000, or 14.4%, from $1.3 million at June 30, 2024 to $1.5 million at December 31, 2024, bank owned life insurance of $58,000, or 0.9%, from $6.81 million at June 30, 2024 to $6.87 million at December 31, 2024, and accrued interest receivable of $12,000, or 0.7%, from $1.78 million at June 30, 2024 to $1.79 million at December 31, 2024.
Previous wording
Cash and cash equivalents increased $6.1 million, or 17.4%, from $34.9 million at June 30, 2024 to $41.0 million at September 30, 2024. The increase in cash and cash equivalents was primarily due to decreases in loans receivable.
Current wording
Cash and cash equivalents decreased $15.4 million, or 44.1%, from $34.9 million at June 30, 2024 to $19.5 million at December 31, 2024. The decrease in cash and cash equivalents was primarily due to a reduction in total deposits.
Previous wording
Loans receivable, net, decreased by $16.8 million, or 3.6%, to $454.0 million at September 30, 2024 compared to $470.9 million at June 30, 2024. The decrease in loans receivable, net was primarily due to decreases in construction loans of $7.9 million, commercial real estate loans of $2.9 million, multi-family residential loans of $2.7 million, land loans of $2.5 million, commercial non-real estate loans of $2.0 million, one-to-four-family residential loans of $619,000, and equity and second mortgage loans of $32,000, partially offset by decreases in equity line-of-credit loans of $1.8 million and consumer loans of $184,000.
Current wording
Loans receivable, net, decreased by $12.2 million, or 2.6%, to $458.7 million at December 31, 2024 compared to $470.9 million at June 30, 2024. The decrease in loans receivable, net was primarily due to decreases in commercial real estate loans of $9.6 million, multi-family residential loans of $7.4 million, construction loans of $5.2 million, and land loans of $476,000, partially offset by increases in commercial non-real estate loans of $7.3 million, equity line-of-credit loans of $2.5 million, one-to-four family residential loans of $546,000, consumer loans of $198,000, and equity and second mortgage loans of $11,000.
Previous wording
Investment securities amounted to $97.4 million at September 30, 2024, compared to $96.0 million at June 30, 2024, an increase of $1.4 million, or 1.5%. The increase in investment securities was primarily due to security purchases of $4.0 million and a $1.3 decrease in market value losses on available-for-sale securities, partially offset by $3.5 million principal repayments on mortgage backed securities.
Current wording
Investment securities amounted to $95.7 million at December 31, 2024 compared to $96.0 million at June 30, 2024, a decrease of $264,000, or 0.3%. The decrease in investment securities was primarily due to $6.4 million in principal repayments on mortgage backed securities, and a $657,000 increase in securities sold, partially offset by security purchases of $6.7 million.
Previous wording
Premises and equipment, net decreased $238,000, or 1.3%, to $18.1 million at September 30, 2024 compared to $18.3 million at June 30, 2024.
Current wording
Premises and equipment, net decreased $459,000, or 2.5%, to $17.8 million at December 31, 2024 compared to $18.3 million at June 30, 2024.
Previous wording
At September 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 $1.9 million on non-performing assets at June 30, 2024, consisting of two commercial non-real estate loans, five single-family residential loans, four home equity line-of-credit loans, and one single-family residence in other real estate owned at September 30, 2024, compared to five single-family residential loans, three commercial non-real estate loans, four home equity line-of-credit loans and three single-family residences in other real estate owned at June 30, 2024. At September 30, 2024 the Company had five commercial non-real-estate loans, one commercial real-estate loan, six single family residential loans, four home-equity line-of-credit loans, and one auto loan classified as substandard, compared to six single family residential loans, five commercial non-real-estate loans, four home equity line-of-credit loans and one auto loan classified as substandard at June 30, 2024. There were no loans classified as doubtful at September 30, 2024 or June 30, 2024.
Current wording
At December 31, 2024, the Company had $1.8 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 on non-performing assets at June 30, 2024, consisting of five one-to-four family residential loans, five home equity loans, two commercial non-real estate loans, and one commercial real-estate loan at December 31, 2024, 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. At December 31, 2024 the Company had eight one-to-four family residential loans, five 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. There were no loans classified as doubtful at December 31, 2024 or June 30, 2024.
Previous wording
Total liabilities decreased $10.6 million, or 1.8%, from $584.7 million at June 30, 2024 to $574.1 million at September 30, 2024. The decrease in liabilities was comprised of decreases in total deposits of $9.4 million, or 1.6%, from $574.0 million at June 30, 2024 to $564.6 million at September 30, 2024, and other borrowings of $1.5 million, or 21.4%, from $7.0 million at June 30, 2024 to $5.5 million at September 30, 2024, partially offset by increases in other accrued expenses and liabilities of $252,000, or 7.9%, from $3.2 million at June 30, 2024 to $3.4 million at September 30, 2024, and advances from borrowers for taxes and insurance of $123,000, or 23.6%, from $521,000 at June 30, 2024 to $644,000 at September 30, 2024. The decrease in deposits resulted from decreases in certificates of deposit of $17.5 million, or 8.2%, from $214.9 million at June 30, 2024 to $197.3 million at September 30, 2024, and money market deposits of $5.9 million, or 6.9%, from $85.5 million at June 30, 2024 to $79.6 million at September 30, 2024, partially offset by increases in savings deposits of $9.2 million, or 12.0%, from $76.6 million at June 30, 2024 to $85.8 million at September 30, 2024, non-interest deposits of $3.0 million, or 2.3%, from $130.3 million at June 30, 2024 to $133.3 million at September 30, 2024, and NOW accounts of $1.9 million, or 2.8%, from $66.6 million at June 30, 2024 to $68.5 million at September 30, 2024. The Company had no balances in brokered deposits at September 30, 2024 or June 30, 2024.
Current wording
Total liabilities decreased $30.9 million, or 5.3%, from $584.7 million at June 30, 2024 to $553.8 million at December 31, 2024. The decrease in liabilities was comprised of decreases in total deposits of $27.5 million, or 4.8%, from $574.0 million at June 30, 2024 to $546.5 million at December 31, 2024, other borrowings of $3.0 million, or 42.9%, from $7.0 million at June 30, 2024 to $4.0 million at December 31, 2024, advances from borrowers for taxes and insurance of $252,000, or 48.4%, from $521,000 at June 30, 2024 to $269,000 at December 31, 2024, and other accrued expenses and liabilities of $164,000, or 5.2%, from $3.2 million at June 30, 2024 to $3.0 million at December 31, 2024. The decrease in deposits resulted from decreases in certificates of deposit of $30.8 million, or 14.3%, from $214.9 million at June 30, 2024 to $184.1 million at December 31, 2024, money market deposits of $12.2 million, or 14.3%, from $85.5 million at June 30, 2024 to $73.3 million at December 31, 2024, and non-interest deposits of $1.9 million, or 1.5%, from $130.3 million at June 30, 2024 to $128.4 million at December 31, 2024, partially offset by increases in savings deposits of $16.7 million, or 21.7%, from $76.6 million at June 30, 2024 to $93.3 million at December 31, 2024, and NOW accounts of $796,000, or 1.2%, from $66.6 million at June 30, 2024 to $67.4 million at December 31, 2024. The Company had no balances in brokered deposits at December 31, 2024 or June 30, 2024.
Previous wording
Stockholders’ equity increased $1.5 million, or 2.8%, from $52.8 million at June 30, 2024 to $54.3 million at September 30, 2024. The increase in stockholders’ equity was comprised of net income for the three month period of $941,000, the vesting of restricted stock awards, stock options, and the release of employee stock ownership plan shares totaling $93,000, proceeds from the issuance of common stock from the exercise of stock options of $19,000, and a decrease in the Company’s accumulated other comprehensive loss of $1.0 million, partially offset by dividends paid totaling $409,000, and stock repurchases of $182,000.
Current wording
Shareholders’ equity increased $1.1 million, or 2.1%, from $52.8 million at June 30, 2024 to $53.9 million at December 31, 2024. The increase in shareholders’ equity was comprised of net income for the six-month period of $2.0 million, the vesting of restricted stock awards, stock options, and the release of employee stock ownership plan shares totaling $311,000, and proceeds from the issuance of common stock from the exercise of stock options of $19,000, partially offset by an increase in the Company’s accumulated other comprehensive loss of $10,000, dividends paid totaling $816,000, and stock repurchases of $335,000.
Previous wording
The Bank is required to meet minimum capital standards promulgated by the Office of the Comptroller of the Currency (“OCC”). At September 30, 2024, Home Federal Bank’s regulatory capital was well in excess of the minimum capital requirements. At September 30, 2024, 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 13.19%, 13.19%, 14.29%, 9.02%, and 9.02%, respectively.
Current wording
The Bank is required to meet minimum capital standards promulgated by the Office of the Comptroller of the Currency (“OCC”). At December 31, 2024, Home Federal Bank’s regulatory capital was well in excess of the minimum capital requirements. At December 31, 2024, Home Federal Bank exceeded each of its regulatory capital requirements with common equity tier 1, tier 1 capital, total capital, leverage, and tangible capital ratios of 13.23%, 13.23%, 14.37%, 8.94%, and 8.94%, respectively.
Previous wording
Comparison of Operating Results for the Three Months Ended September 30, 2024 and 2023
Current wording
Comparison of Operating Results for the Three and Six Months Ended December 31, 2024 and 2023
Previous wording
The decrease in net interest income for the three months ended September 30, 2024, compared to the same period in 2023, resulted from an increase in total interest expense of $524,000, or 18.8%, and a decrease in total interest income of $333,000, or 4.1%. The Company’s average interest rate spread was 2.23% for the three months ended September 30, 2024, compared to 2.68% for the three months ended September 30, 2023. The Company’s net interest margin was 2.98% for the three months ended September 30, 2024, compared to 3.37% for the three months ended September 30, 2023.
Current wording
The increase in net income for the three months ended December 31, 2024, as compared to the same period in 2023 resulted primarily from a decrease of $413,000, or 9.7%, in non-interest expense and an increase of $351,000, or 256.2%, in non-interest income, partially offset by an increase of $383,000, or 195.4%, in provision for income taxes, a decrease of $303,000, or 6.2%, in net interest income, and an increase of $61,000, or 381.3%, in the provision for credit losses. The decrease in net interest income for the three months ended December 31, 2024, as compared to the same period in 2023, was primarily due to a decrease of $422,000, or 5.2%, in total interest income, partially offset by a decrease of $119,000, or 3.7%, in total interest expense. The Company’s average interest rate spread was 2.40% for the three months ended December 31, 2024, compared to 2.45% for the three months ended December 31, 2023. The Company’s net interest margin was 3.12% for the three months ended December 31, 2024, compared to 3.14% for the three months ended December 31, 2023.
Previous wording
The $223,000 recovery in the provision for credit losses for the three months ended September 30, 2024 over the three months ended September 30, 2023 was due to a decrease in loans receivable, net.
Current wording
The $45,000 provision and $178,000 recovery in the provision for credit losses for the three and six months ended December 31, 2024, respectively, was due to a slight increase in loans receivable, net, for the quarter and an overall decrease in loans receivable, net for the six months.
Previous wording
The Bank’s primary sources of funds are deposits, amortization and prepayment of loans and mortgage-backed securities, maturities of investment securities and other short-term investments, loan sales, and earnings and funds provided from operations. While scheduled principal repayments on loans and mortgage-backed securities are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. The Bank sets the interest rates on its deposits to maintain a desired level of total deposits. In addition, the Bank invests excess funds in short-term interest-earning accounts and other assets which provide liquidity to meet lending requirements. The Bank’s deposit accounts with the Federal Home Loan Bank of Dallas amounted to $1.4 million at September 30, 2024.
Current wording
The Bank’s primary sources of funds are deposits, amortization and prepayment of loans and mortgage-backed securities, maturities of investment securities and other short-term investments, loan sales, and earnings and funds provided from operations. While scheduled principal repayments on loans and mortgage-backed securities are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. The Bank sets the interest rates on its deposits to maintain a desired level of total deposits. In addition, the Bank invests excess funds in short-term interest-earning accounts and other assets which provide liquidity to meet lending requirements. The Bank’s deposit accounts with the Federal Home Loan Bank of Dallas amounted to $12.8 million at December 31, 2024.
Previous wording
A significant portion of the Bank’s liquidity consists of securities classified as available-for-sale and cash and cash equivalents. The Bank’s primary sources of cash are net income, principal repayments on loans and mortgage-backed securities, and increases in deposit accounts. If the Bank requires funds beyond its ability to generate them internally, borrowing agreements exist with the Federal Home Loan Bank of Dallas which provides an additional source of funds. At September 30, 2024, The Bank had no advances from the Federal Home Loan Bank of Dallasand had $179.4 million in borrowing capacity. Additionally, at September 30, 2024, the 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 September 30, 2024. In addition, the Company had available an $11.0 million line of credit agreement at September 30, 2024 with First National Bankers Bank. At September 30, 2024, there was an $5.5 million balance in the credit line.
Current wording
A significant portion of the Bank’s liquidity consists of securities classified as available-for-sale and cash and cash equivalents. The Bank’s primary sources of cash are net income, principal repayments on loans and mortgage-backed securities, and increases in deposit accounts. If the Bank requires funds beyond its ability to generate them internally, borrowing agreements exist with the Federal Home Loan Bank of Dallas which provides an additional source of funds. At December 31, 2024, The Bank had no advances from the Federal Home Loan Bank of Dallasand had $66.2 million in additional borrowing capacity. Additionally, at December 31, 2024, the 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 December 31, 2024. In addition, the Company had available an $11.0 million line of credit agreement at December 31, 2024 with First National Bankers Bank. At December 31, 2024, there was a $4.0 million balance in the credit line.
Previous wording
At September 30, 2024, the Bank had outstanding loan commitments of $35.7 million to originate loans and commitments under unused lines of credit of $13.6 million. At September 30, 2024, certificates of deposit scheduled to mature in less than one year totaled $167.7 million. 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. The Bank intends to utilize its high levels of liquidity to fund its lending activities. If additional funds are required to fund lending activities, Home Federal Bank intends to sell its securities classified as available-for-sale, as needed.
Current wording
At December 31, 2024, the Bank had outstanding loan commitments of $35.5 million to originate loans and commitments under unused lines of credit of $12.6 million. At December 31, 2024, certificates of deposit scheduled to mature in less than one year totaled $171.4 million. 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. The Bank intends to utilize its high levels of liquidity to fund its lending activities. If additional funds are required to fund lending activities, Home Federal Bank intends to sell its securities classified as available-for-sale, as needed.
Previous wording
At September 30, 2024, 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 13.19%, 13.19%, 14.29%, 9.02%, and 9.02%, respectively.
Current wording
At December 31, 2024, the Bank exceeded each of its regulatory capital requirements with tangible common equity tier 1, tier 1 capital, total capital, leverage, and tangible capital ratios of 13.23%, 13.23%, 14.37%, 8.94%, and 8.94%, respectively.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Discussion of Financial Condition Changes from June 30, 2024 to September 30, 2024 (continued)