HFBL's Loan Portfolio Shrinks to $461M Amidst Origination Dip

TL;DR

**HFBL's loan portfolio contraction and declining originations are a red flag, signaling a tough fight for growth in a competitive Louisiana market.**

AI Summary

Home Federal Bancorp, Inc. of Louisiana (HFBL) reported a net loan portfolio of $461.0 million as of June 30, 2025, representing 75.64% of total assets. This marks a decrease from $470.852 million in net loans receivable at June 30, 2024. One-to-four family residential loans constituted $175.0 million, or 37.59%, of the total loan portfolio, while commercial real estate loans amounted to $138.9 million, or 29.84%. Total loan originations decreased to $156.430 million for the year ended June 30, 2025, from $210.038 million in the prior year. The company sold $18.3 million of one-to-four family residential loans in fiscal 2025, generating a gain on sale of $384,000, an increase from $265,000 in fiscal 2024. The Bank expanded its physical presence by acquiring First National Bank of Benton and its branch in Benton, Louisiana, in February 2023. Key risks include significant competition for deposits and loans from larger financial institutions and interest rate volatility affecting mortgage markets.

Why It Matters

Home Federal Bancorp's shrinking loan portfolio and decreased originations, down to $156.430 million from $210.038 million, signal potential challenges in asset growth and profitability for investors. The competitive landscape, dominated by larger financial institutions with superior resources, could further pressure HFBL's market share in the Shreveport-Bossier City-Minden area. For employees, this could mean slower growth opportunities, while customers might see less aggressive loan offerings compared to competitors. The acquisition of First National Bank of Benton in February 2023 indicates a strategic effort to expand, but its impact on overall growth needs close monitoring in a highly competitive regional banking market.

Risk Assessment

Risk Level: medium — The company faces significant competition from larger financial institutions with greater financial and marketing resources, as explicitly stated in the 'Competition' section. The net loan portfolio decreased by $9.848 million from $470.852 million in 2024 to $461.004 million in 2025, and total loan originations dropped by $53.608 million, indicating potential difficulty in sustaining growth and market share.

Analyst Insight

Investors should closely monitor HFBL's future loan origination trends and net interest margin, as the current decline in originations and portfolio size could impact future earnings. Evaluate the effectiveness of the First National Bank of Benton acquisition in driving deposit and loan growth to offset competitive pressures.

Key Numbers

• $461.0M — Net Loan Portfolio (Decreased from $470.852 million at June 30, 2024)
• 75.64% — Net Loan Portfolio as % of Total Assets (Represents the proportion of assets in loans at June 30, 2025)
• $175.0M — One-to-Four Family Residential Loans (37.59% of total loan portfolio at June 30, 2025)
• $138.9M — Commercial Real Estate Loans (29.84% of total loan portfolio at June 30, 2025)
• $156.430M — Total Loan Originations (FY2025) (Decreased from $210.038 million in FY2024)
• $18.3M — Loans Sold (FY2025) (Increased from $16.0 million in FY2024)
• $384,000 — Gain on Sale of Loans (FY2025) (Increased from $265,000 in FY2024)
• $9.6M — Regulatory Limit on Loans to One Borrower (At June 30, 2025)
• 3,058,169 — Common Stock Outstanding (As of September 22, 2025)
• $27.1M — Aggregate Value of Public Float (Based on $12.55 per share on December 31, 2024)

Key Players & Entities

• Home Federal Bancorp, Inc. of Louisiana (company) — holding company
• Home Federal Bank (company) — federally chartered stock savings bank
• First National Bank of Benton (company) — acquired bank
• Nasdaq Stock Market, LLC (regulator) — exchange where common stock is registered
• Office of the Comptroller of the Currency (regulator) — permits lending limits
• Federal Reserve Act (regulator) — governs expense sharing agreements
• Shreveport-Bossier City-Minden (company) — primary market area
• Fannie Mae (company) — underwriting standards for loans
• Freddie Mac (company) — underwriting standards for loans
• Dodd-Frank Consumer Protection Act (regulator) — governs appraisal management

FAQ

Risk Factors

• Intense Competition [high — market]: HFBL faces significant competition for both deposits and loans from larger financial institutions. This competition can impact market share and profitability, especially in its primary market area of northwest Louisiana.
• Interest Rate Volatility [high — market]: Interest rate fluctuations, particularly in the mortgage market, pose a risk. Rising rates can decrease demand for mortgage loans and affect the value of existing mortgage-backed securities, while falling rates can lead to lower yields on new loans and increased refinancing activity.
• Cybersecurity Threats [medium — operational]: As a financial institution, HFBL is exposed to cybersecurity risks, including data breaches and system disruptions. The company's reliance on technology necessitates robust security measures to protect customer data and maintain operational integrity.
• Regulatory Compliance [medium — regulatory]: HFBL operates under various federal and state banking regulations. Non-compliance can lead to penalties, fines, and reputational damage. The company must adhere to regulations such as Sections 23A and 23B of the Federal Reserve Act.
• Loan Portfolio Concentration [medium — financial]: The loan portfolio is heavily concentrated in one-to-four family residential loans (37.59%) and commercial real estate loans (29.84%). While diversified, significant exposure to these sectors makes the company vulnerable to downturns in these specific markets.
• Decreasing Loan Originations [medium — financial]: Total loan originations decreased to $156.430 million in FY2025 from $210.038 million in FY2024. This decline suggests a potential slowdown in business activity or a more cautious lending approach, impacting future revenue growth.

Industry Context

Home Federal Bancorp operates as a community bank in northwest Louisiana, a region with a diversified economy primarily driven by services, government, and trade. The banking industry is characterized by intense competition from larger institutions, requiring community banks like HFBL to focus on customer relationships and niche markets. Trends such as digital transformation and evolving regulatory landscapes also shape the competitive environment.

Regulatory Implications

As a federally chartered stock savings bank and a savings and loan holding company, HFBL is subject to stringent federal and state regulations. Compliance with capital requirements, lending limits (e.g., loans to one borrower), and consumer protection laws is critical. The company must also navigate regulations like Sections 23A and 23B of the Federal Reserve Act, which govern transactions between the bank and its holding company.

What Investors Should Do

1. Monitor loan portfolio trends, particularly the performance of one-to-four family residential and commercial real estate loans.
2. Assess the impact of interest rate volatility on HFBL's net interest margin and loan demand.
3. Evaluate the competitive landscape and HFBL's strategies for deposit gathering and loan acquisition.
4. Review cybersecurity measures and disaster recovery plans.

Key Dates

• 2023-02-01: Acquisition of First National Bank of Benton — Expanded the Bank's physical presence and market reach in Louisiana, adding a branch in Benton.
• 2024-06-30: End of Fiscal Year 2024 — Reported net loans receivable of $470.852 million and loan originations of $210.038 million.
• 2025-06-30: End of Fiscal Year 2025 — Reported net loan portfolio of $461.0 million (down from FY2024), loan originations of $156.430 million (down from FY2024), and sold $18.3 million in loans.

Glossary

Loan-to-Value Ratio (LTV)

The ratio of a loan amount to the appraised value of the property securing the loan. A lower LTV generally indicates lower risk for the lender. (HFBL's policy generally limits the maximum LTV on one-to-four family residential loans to 90%, indicating a conservative lending approach.)

Net Loan Portfolio

The total amount of loans a financial institution has issued, minus any allowances for loan losses. It represents the net value of outstanding loans. (At $461.0 million as of June 30, 2025, it is the largest asset class for HFBL, representing 75.64% of total assets.)

Loan Originations

The total amount of new loans issued by a financial institution during a specific period. (A key indicator of business activity and future revenue. HFBL saw a decrease in originations from $210.038 million in FY2024 to $156.430 million in FY2025.)

Gain on Sale of Loans

The profit realized when a financial institution sells loans it has originated into the secondary market. (HFBL generated $384,000 in FY2025 from selling $18.3 million of one-to-four family residential loans, an increase from the prior year.)

Combined Statistical Area (CSA)

A designation by the U.S. Office of Management and Budget that combines metropolitan and micropolitan statistical areas that have economic ties. (HFBL's primary market area is the Shreveport-Bossier City-Minden CSA in northwest Louisiana, indicating its geographic focus.)

Year-Over-Year Comparison

Compared to the prior fiscal year ending June 30, 2024, Home Federal Bancorp, Inc. of Louisiana (HFBL) experienced a decrease in its net loan portfolio from $470.852 million to $461.0 million. Total loan originations also saw a significant decline, falling from $210.038 million to $156.430 million. While the company sold more loans ($18.3 million vs. $16.0 million) and generated a higher gain on sale ($384,000 vs. $265,000), the overall reduction in loan origination volume suggests a potential slowdown. No new significant risks were explicitly detailed, but the existing risks of competition and interest rate volatility remain pertinent.

Key Financial Figures

• $12.55 — is based on the closing sales price of $12.55 per share of the Registrant's Common St
• $461.0 m — 025, our net loan portfolio amounted to $461.0 million, representing approximately 75.64
• $5.6 m — including related entities, aggregated $5.6 million, $ 5.4 million, $ 5.2 million, $
• $1.5 million — nclude loans held-for-sale amounting to $1.5 million and $1.7 million at June 30, 2025 and 2
• $1.7 million — -for-sale amounting to $1.5 million and $1.7 million at June 30, 2025 and 2024, respectively
• $500,000 — e President of Mortgage for loans up to $500,000, and for loans up to $1.0 million by th
• $1.0 million — ans up to $500,000, and for loans up to $1.0 million by the Senior Credit Officer. Commercia
• $2.0 million — dent and Chief Executive Officer, up to $2.0 million by the Senior Credit Officer and the Ch
• $18.3 million — . During fiscal 2025 and 2024, we sold $18.3 million and $16.0 million of loans, respectivel
• $16.0 million — 025 and 2024, we sold $18.3 million and $16.0 million of loans, respectively. We recognized g
• $384,000 — We recognized gain on sale of loans of $384,000 and $265,000 during fiscal 2025 and 202
• $265,000 — d gain on sale of loans of $384,000 and $265,000 during fiscal 2025 and 2024, respective
• $56.3 m — initial rate plus 2%. At June 30, 2025, $56.3 million, or 32.15 %, of our one-to-four f

Filing Documents

• ef20050366_10k.htm (10-K) — 5711KB
• ef20050366_ex19-1.htm (EX-19.1) — 61KB
• ef20050366_ex23-0.htm (EX-23.0) — 3KB
• ef20050366_ex31-1.htm (EX-31.1) — 11KB
• ef20050366_ex31-2.htm (EX-31.2) — 13KB
• ef20050366_ex32-0.htm (EX-32.0) — 5KB
• image00001.jpg (GRAPHIC) — 7KB
• image1.jpg (GRAPHIC) — 27KB
• image00002.jpg (GRAPHIC) — 4KB
• image00003.jpg (GRAPHIC) — 7KB
• 0001140361-25-036293.txt ( ) — 25672KB
• hfbl-20250630.xsd (EX-101.SCH) — 102KB
• hfbl-20250630_cal.xml (EX-101.CAL) — 165KB
• hfbl-20250630_def.xml (EX-101.DEF) — 453KB
• hfbl-20250630_lab.xml (EX-101.LAB) — 1554KB
• hfbl-20250630_pre.xml (EX-101.PRE) — 852KB
• ef20050366_10k_htm.xml (XML) — 6622KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 25 Item 1B. Unresolved Staff Comments 25 Item 1C. Cybersecurity 25 Item 2.

Properties

Properties 26 Item 3.

Legal Proceedings

Legal Proceedings 26 Item 4. Mine Safety Disclosures 26 PART II. Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 27 Item 6. [Reserved] 27 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosure About Market Risk 38 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 39 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 91 Item 9A.

Controls and Procedures

Controls and Procedures 91 Item 9B. Other Information 91 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 92 PART III. Item 10. Directors, Executive Officers and Corporate Governance 92 Item 11.

Executive Compensation

Executive Compensation 92 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 92 Item 13. Certain Relationships and Related Transactions and Director Independence 93 Item 14. Principal Accountant Fees and Services 93 PART IV. Item 15. Exhibit and Financial Statement Schedules 93 Item 16. Form 10-K Summary 93

SIGNATURES

SIGNATURES 94 ii Table of Contents PART I

Business

Item 1. Business Home Federal Bancorp, Inc. of Louisiana, a Louisiana chartered corporation ("Home Federal Bancorp" or the "Company"), is the holding company for Home Federal Bank ("Home Federal Bank" or the "Bank"). Home Federal Bank is a federally chartered stock savings bank originally organized in 1924 as Home Building and Loan Association. The Bank reorganized into the mutual holding company structure in January 2005 and changed its name to "Home Federal Bank" in 2009 as part of its business strategy to be recognized as a community bank. Home Federal Bank's home office and ten full service branch offices are located in Caddo, Bossier and Webster Parishes, Louisiana and serve the Shreveport-Bossier 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. Home Federal Bancorp is authorized to pursue other business activities permitted by applicable laws and regulations for savings and loan holding companies, which may include the issuance of additional shares of common stock to raise capital or to support mergers or acquisitions and borrowing funds for reinvestment in Home Federal Bank. Home Federal Bancorp does not own or lease any property but instead uses the premises, equipment, and furniture of Home Federal Bank. At the present time, Home Federal Bancorp employs only persons who are officers of Home Federal Bank to serve as officers of Home Federal Bancorp and may also use the support staff of Home Federal Bank from time to time. These other persons are not separately compensated by Home Federal Bancorp. Pursuant to the regulations under Sections 23A and 23B of the Federal Reserv

Business

Business Land Construction Home Equity Loans and Lines of Credit and Other Consumer Total (In thousands) Amounts due after June 30, 2025 in: One year or less $ 15,027 $ 16,918 $ 7,265 $ 14,738 $ 16,605 $ 5,045 $ 4,309 $ 79,907 After one year through two years 18,825 21,699 7,158 2,646 4,060 4,551 5,710 64,649 After two years through three years 27,259 23,571 462 8,220 2,115 130 1,993 63,750 After three years through five years 21,467 44,754 2,473 18,895 5,888 1,500 232 95,209 After five years through ten years 7,779 29,174 2,637 7,909 653 - 1,551 49,703 After ten years through fifteen years 9,040 1,159 11,161 1,730 86 - 10,036 33,212 After fifteen years 75,581 1,645 1,127 - 647 - 163 79,163 Total $ 174,978 $ 138,920 $ 32,283 $ 54,138 $ 30,054 $ 11,226 $ 23,994 $ 465,593 The following table sets forth the dollar amount of all loans at June 30, 2025, before net items, due after June 30, 2026, which have fixed interest rates or which have floating or adjustable interest rates. Floating or Fixed-Rate Adjustable-Rate Total (In thousands) One-to-four family residential $ 103,697 $ 56,254 $ 159,951 Commercial — real estate secured 116,162 5,840 122,002 Multi-family residential 25,008 10 25,018 Commercial business 37,287 2,113 39,400 Land 9,289 4,160 13,449 Construction 6,026 155 6,181 Home equity loans and lines of credit and other consumer 7,421 12,264 19,685 Total $ 304,890 $ 80,796 $ 385,686 Scheduled contractual maturities of loans do not necessarily reflect the actual expected term of the loan portfolio. The average life of mortgage loans is substantially less than their average contractual terms because of prepayments. The average life of mortgage loans tends to increase when current mortgage loan rates are higher than rates on existing mortgage loans and, conversely, decrease when rates on current mortgage loans are lower t

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