Home Federal Bancorp, Inc. of Louisiana

Home Federal Bancorp, Inc. of Louisiana operates as the holding company for Home Federal Bank, a federally chartered stock savings bank originally organized in 1924 as Home Building and Loan Association ¹. The Bank's home office and ten full service branch offices are located in Caddo, Bossier and Webster Parishes, Louisiana, serving the Shreveport-Bossier City-Minden combined statistical area ². The primary market area has a diversified economy with employment in services, government, and wholesale/retail trade, with service jobs being the largest component, largely health care related as Shreveport has become a regional hub for health care ³. The casino gaming industry also supports a significant number of service jobs, and the energy sector has a prominent role in the regional economy from oil and gas exploration and drilling ⁴. The industry is highly competitive, with competition for deposits coming from commercial banks, credit unions, and other savings institutions, including many large financial institutions with greater financial and marketing resources ⁵. Competition for real estate loans comes principally from mortgage banking companies, commercial banks, other savings institutions, and credit unions ⁶.

The Company faces significant competition both in attracting deposits and in making loans, with its most direct competition for deposits historically from commercial banks, credit unions, and other savings institutions in its primary market area ⁷. It also faces competition for investors' funds from short-term money market securities, mutual funds, and other corporate and government securities ⁸. The Company does not rely upon any individual group or entity for a material portion of its deposits ⁹. Its ability to attract and retain deposits depends on its ability to provide a rate of return, liquidity, and risk comparable to competing investment opportunities ¹⁰. Competition may increase as a result of the continuing reduction of restrictions on the interstate operations of financial institutions ¹¹.

Home Federal Bank's business primarily consists of attracting deposits from the general public and using those funds to originate loans ¹². As of June 30, 2026, Home Federal Bancorp's only business activities are to hold all of the outstanding common stock of Home Federal Bank ¹³. The Company is authorized to pursue other business activities permitted for savings and loan holding companies, including issuing additional shares of common stock to raise capital or support mergers or acquisitions and borrowing funds for reinvestment in Home Federal Bank ¹⁴. Deposits are the primary source of funds for lending and other investment purposes, supplemented by principal and interest payments on loans and investment securities ¹⁵. Borrowings may be used on a short-term basis to compensate for reductions in the availability of funds and on a longer-term basis for general business purposes ¹⁶.

The net loan portfolio amounted to $475.491 million at June 30, 2026, representing approximately 73.91% of total assets ¹⁷. One-to-four family residential loans amounted to $164.214 million, or 34.18% of the total loan portfolio ¹⁸. Commercial real estate loans amounted to $141.002 million, or 29.34% of the total loan portfolio ¹⁹. Multi-family residential loans were $30.641 million, or 6.38% of the total loan portfolio ²⁰. Land loans were $34.825 million, or 7.25% of the total loan portfolio ²¹. Construction loans were $25.435 million, or 5.29% of the total loan portfolio ²². Home equity and second mortgage loans were $3.177 million, or 0.66% of the total loan portfolio ²³. Equity lines of credit were $21.657 million, or 4.51% of the total loan portfolio ²⁴. Commercial business loans were $58.866 million, or 12.25% of the total loan portfolio ²⁵. Consumer non-real estate loans totaled $683,000, or 0.14% of the total loan portfolio ²⁶.

During fiscal 2026, the Company originated $50.915 million of one-to-four family residential loans and sold $30.046 million of such loans ²⁷. Total loan originations were $193.386 million, and loans purchased were $18.064 million, for total originations and purchases of $211.450 million ²⁸. Loans sold totaled $30.046 million, and loan principal repayments were $165.677 million ²⁹. The net increase in the loan portfolio was $14.601 million ³⁰. The Company recognized gain on sale of loans of $642,000 during fiscal 2026 ³¹. Loans were sold primarily to other financial institutions against forward sales commitments with servicing released and without recourse after a certain period of time, typically 90 days ³². The loans sold primarily consisted of long-term, fixed rate residential real estate loans ³³.

In February 2023, the Bank acquired First National Bank of Benton and its full service branch office in Benton, Louisiana ³⁴. At June 30, 2026, the Company had one subsidiary, Home Federal Bank, whose only subsidiary 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 ³⁵. Home Federal Bank had 72 full-time employees and 4 part-time employees at June 30, 2026 ³⁶. The Company's common stock is traded on the Nasdaq Capital Market under the symbol HFBL ³⁷. At September 25, 2026, Home Federal Bancorp had 166 shareholders of record ³⁸.

Total assets were $643.4 million at June 30, 2026, compared to $612.4 million at June 30, 2025 ³⁹. Net income for fiscal 2026 was $6.0 million, compared to $5.4 million for fiscal 2025 ⁴⁰. Diluted earnings per share were $1.97 for fiscal 2026, compared to $1.77 for fiscal 2025 ⁴¹. The allowance for credit losses amounted to $4.926 million at June 30, 2026, compared to $4.484 million at June 30, 2025 ⁴². Non-performing assets totaled $3.649 million at June 30, 2026, compared to $3.305 million at June 30, 2025 ⁴³.

The Company intends to continue selling loans in the future to the extent the interest rate environment is unfavorable and interest rate risk is unacceptable ⁴⁴. The Company will continue to originate and sell a substantial amount of its fixed-rate conforming mortgages to correspondent banks ⁴⁵. The Company's residential loan originations primarily consist of conventional, rural development, FHA, and VA loans ⁴⁶. The Company expects to continue to concentrate its lending activity in its primary market area in Caddo, Bossier and Webster Parishes, Louisiana and the surrounding area ⁴⁷.

The Company plans to elect to use the Community Bank Leverage Ratio (CBLR) framework in its quarterly Call Report for the quarter ending September 30, 2026 ⁴⁸. Under the CBLR framework, the Bank will be required to maintain a Tier 1 leverage ratio greater than 8%, effective July 1, 2026 ⁴⁹. The Bank intends to opt in to the CBLR framework to reduce regulatory burden ⁵⁰.

The Company's investment strategy is established by the board of directors ⁵¹. The Company has authority to invest in various types of securities, including mortgage-backed securities, U.S. Treasury obligations, securities of various federal agencies and of state and municipal governments, certificates of deposit at federally insured banks and savings institutions, certain bankers' acceptances, and federal funds ⁵². The Company's mortgage-backed securities consist of Ginnie Mae securities, Freddie Mac securities, and Fannie Mae securities ⁵³.

The Company's capital allocation strategy includes the payment of dividends and the repurchase of shares of common stock, subject to regulatory policies ⁵⁴. The Federal Reserve Board has issued a policy statement regarding the payment of dividends and the repurchase of shares of common stock by bank holding companies that is applicable to savings and loan holding companies ⁵⁵. The policy provides that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the holding company appears consistent with the organization's capital needs, asset quality and overall financial condition ⁵⁶.

The Company faces headwinds from competition, which may increase as a result of the continuing reduction of restrictions on the interstate operations of financial institutions ⁵⁷. The Company also faces risks from changes in interest rates, which affect the demand for loans and the rates offered by competitors ⁵⁸. The Company's ability to attract and retain deposits depends on its ability to provide a rate of return, liquidity, and risk comparable to competing investment opportunities ⁵⁹.

The Company's asset quality is subject to risks from delinquent loans and non-performing assets. At June 30, 2026, delinquent loans 30-89 days overdue totaled $1.403 million, and loans 90 or more days overdue totaled $2.974 million ⁶⁰. Non-performing assets totaled $3.649 million, consisting of sixteen one-to-four family residential loans, two home equity loans, one commercial non-real estate loan, one commercial real-estate loan, one commercial real estate property in other real estate owned, and two residential lots in other real estate owned ⁶¹. The Company had $6.013 million in classified assets at June 30, 2026 ⁶².

The Company's regulatory environment is subject to change. The OCC implemented a risk-based supervisory approach for community banks effective January 1, 2026, which is intended to reduce supervisory burden ⁶³. The FDIC may increase assessment rates, and a significant increase in deposit insurance premiums could adversely affect the Bank's operating expenses and results of operations ⁶⁴. The Company is subject to federal and state privacy and cybersecurity laws and regulations, and non-compliance could lead to substantial regulatory imposed fines and penalties, damages from private causes of action and/or reputational harm ⁶⁵.

The Company faces significant competition in attracting deposits and making loans, with competition potentially increasing due to the continuing reduction of restrictions on the interstate operations of financial institutions ⁶⁶. The Company's loan portfolio is concentrated in real estate loans, which are subject to changes in property values and economic conditions ⁶⁷. The Company's allowance for credit losses may need to be adjusted as circumstances change, and future adjustments could significantly affect net income ⁶⁸. The Company's regulatory environment is subject to change, and the FDIC may increase assessment rates, which could adversely affect operating expenses and results of operations ⁶⁹. The Company's cybersecurity practices are subject to oversight by federal banking agencies, and although the Company has not experienced a material cybersecurity incident, there can be no guarantee that it will not experience such an incident in the future ⁷⁰.

Management's message emphasizes the Company's role as a community bank serving the Shreveport-Bossier City-Minden combined statistical area ⁷¹. The strategic priorities include maintaining a strong capital position, with Home Federal Bank exceeding each of its then applicable capital requirements at June 30, 2026, with common equity tier 1, tier 1 capital, total capital, leverage, and tangible capital ratios of 13.11%, 13.11%, 14.20%, 9.29%, and 9.29%, respectively ⁷². Management also emphasizes the importance of asset quality, with the allowance for credit losses at $4.926 million at June 30, 2026 ⁷³. The Company intends to continue to sell loans to manage interest rate risk ⁷⁴.