Home Federal Bancorp of Louisiana's FY2026 net income rose 58.8% to $6.17M ($2.02 diluted EPS) as its net interest margin widened to 3.72% on higher loan yields and cheaper deposits while expenses held flat.
Net interest income
$22M
+16.7% YoY
Net interest margin
3.72%
Net income
$6.2M
+58.8% YoY
Diluted EPS
$2.02
+60.3% YoY
Efficiency ratio
65.7%
Net charge-off ratio
0.03%
CET1 capital ratio
13.1%
Net interest margin (NIM): what a bank earns on its loans and securities minus what it pays for deposits and borrowing, as a share of those assets. Efficiency ratio: operating costs per dollar of revenue (lower is better). Net charge-off (NCO) ratio: loans written off as unrecoverable, net of recoveries, as a share of average loans. CET1: the bank's core capital cushion against losses, as a share of risk-weighted assets.
Overview
Home Federal Bancorp, Inc. of Louisiana is the holding company for Home Federal Bank, an 11-office savings bank based in Shreveport that lends and takes deposits mainly in Caddo, Bossier and Webster Parishes in northwest Louisiana. It earned $6.17 million in its fiscal year ended June 30, 2026, up 58.8% from $3.89 million. Diluted earnings per share rose to $2.02 from $1.26.
Almost all of the improvement came from one line: net interest income (the interest the bank earns on loans and securities minus the interest it pays depositors and lenders) rose $3.12 million, or 16.7%, to $21.79 million. That happened with only modest balance-sheet growth: average interest-earning assets grew just 1.6%. The bank earned more on its loans and paid noticeably less on its deposits, and that widening gap did the work.
Key figures
Metric
FY2026 (year to Jun 30, 2026)
FY2025
YoY Change
Net interest income
$21.79M
$18.67M
+16.7%
Non-interest income
$2.67M
$2.01M
+33.3%
Total revenue (NII + non-interest income)
$24.46M
$20.68M
+18.3%
Non-interest expense
$16.08M
$16.15M
-0.4%
Read 0 community reports on Home Federal Bancorp, Inc. of Louisiana, or write your own.Write a report
Provision for (recovery of) credit losses
$0.59M
$(0.13)M
n/m
Net income
$6.17M
$3.89M
+58.8%
Diluted EPS
$2.02
$1.26
+60.3%
Net interest margin
3.72%
3.23%
+0.49 pts
Efficiency ratio (non-GAAP)
65.74%
78.11%
-12.37 pts
Return on average equity
10.70%
7.31%
+3.39 pts
Net charge-offs / average loans
0.03%
(0.01)%
+0.04 pts
Total loans (gross, period-end)
$480.5M
$465.6M
+3.2%
Total deposits (period-end)
$577.3M
$546.3M
+5.7%
Common equity tier 1 ratio (bank)
13.11%
13.59%
-0.48 pts
Book value per share
$19.31
$17.90
+7.9%
Revenue here is net interest income plus non-interest income, the usual "top line" for a bank. The efficiency ratio is the company's own non-GAAP figure: non-interest expense divided by that revenue. Lower means the bank spends less to earn each dollar. The company does not report a return on tangible common equity.
What drove the margin
The net interest margin (net interest income as a share of the bank's average interest-earning assets, the basic measure of how profitably a bank lends) jumped from 3.23% to 3.72%. The average-balance table in the 10-K shows both sides moving in the bank's favor:
FY2026 average balance
FY2026 yield / cost
FY2025 yield / cost
Loans receivable
$472.3M
6.25%
5.94%
Investment securities
$97.9M
2.37%
2.36%
Certificates of deposit
$203.0M
3.40%
3.92%
Money market accounts
$69.5M
1.97%
2.16%
Savings accounts
$92.4M
1.54%
1.71%
All interest-bearing liabilities
$434.0M
2.47%
2.73%
Asset side: interest income rose $2.04 million (6.7%) to $32.50 million, "primarily due to an increase in interest income from loans of $2.164 million." The loan portfolio's average yield rose 31 basis points (0.31 percentage points), which the 10-K attributes to "a higher interest rate environment." The shift in loan mix toward higher-yielding commercial and construction lending (below) likely contributed too.
Funding side: interest expense fell $1.08 million (9.2%) to $10.71 million, "primarily as a result of decreases in the average rate paid on money market accounts and certificates of deposit." The average certificate of deposit (CD) rate fell 52 basis points.
Rate, not volume: the filing's rate/volume analysis attributes $2.85 million of the $3.12 million increase in net interest income to rate changes and only $0.27 million to larger balances. This was a repricing story, not a growth story.
A helpful cushion: $129.3 million of average deposits sat in non-interest-bearing checking accounts, which cost the bank nothing, and period-end non-interest-bearing deposits rose 12.8% to $138.1 million.
Flat costs amplified the gain
Non-interest expense (salaries, occupancy, data processing and the like) slipped $66,000 to $16.08 million. Lower audit and examination fees (-$186,000), compensation (-$89,000) and data processing (-$89,000) offset a $200,000 write-down on one large foreclosed commercial property, which management said reflected "current market sentiment," adding that "no further adjustments are expected at this time." Because revenue rose 18.3% while costs were flat, the efficiency ratio fell from 78.1% to 65.7%. That operating leverage is the main reason earnings grew about three times faster than revenue.
Non-interest income rose $667,000 (33.3%) to $2.67 million, led by $258,000 more in gains on selling mortgage loans (loans sold rose to $30.0 million from $18.3 million), a $247,000 smaller loss on selling real estate, and $144,000 more in deposit service charges.
Two items pulled the other way. The provision for credit losses swung from a $126,000 recovery to a $594,000 charge, and income tax expense more than doubled to $1.61 million as the effective tax rate rose to 20.7% from 16.5%. Pre-tax income rose 67.3% to $7.79 million, faster than the 58.8% growth in net income.
Credit quality: small numbers, moving the wrong way
The provision for credit losses is money set aside for loans the bank expects may not be repaid. The 10-K ties this year's $594,000 charge to "growth in the loan portfolio and additional reserve allocations on certain existing problem loans based on updated valuation reports." The allowance rose to $4.93 million, or 1.03% of loans (0.96% a year earlier).
Non-performing assets (loans no longer paying as agreed, plus foreclosed property) rose to $3.65 million (0.57% of assets) from $3.31 million (0.54%).
Non-performing loans rose to 0.64% of net loans from 0.51%. The number of non-performing one-to-four family home loans rose to sixteen from six, and loans classified substandard in that category doubled from eight to sixteen, though these are individually small.
Actual losses stayed tiny: net charge-offs were 0.03% of average loans.
The allowance's coverage of non-performing loans fell to 162% from 192%.
None of these levels is alarming for a bank of this size, but every credit measure deteriorated modestly, and the provision is likely to remain a cost rather than a benefit.
Balance sheet and loan mix
Total assets grew 5.6% to $643.3 million. Gross loans rose 3.2% to $480.5 million, with the mix continuing to tilt away from home mortgages: one-to-four family residential loans fell to $164.2 million (34.2% of loans, from 37.6%), while construction loans more than doubled to $25.4 million and commercial business loans rose 8.7% to $58.9 million. Commercial real estate was $141.0 million, 29.3% of the book. Management says it has pursued commercial lending for its "generally higher yields and shorter anticipated lives" compared with single-family mortgages. That supports loan yields, but it also carries more credit risk.
Deposits rose 5.7% to $577.3 million, but the mix got more expensive: CDs rose $34.8 million (18.6%) to $222.1 million, while money market (-10.6%), NOW (-10.7%) and savings (-4.6%) balances all fell. $174.4 million of CDs (78.5% of the total) mature within a year, so their renewal rates will set much of next year's funding cost. Liquidity is ample: cash nearly doubled to $34.3 million, and the bank had no Federal Home Loan Bank advances outstanding and $136.4 million of unused borrowing capacity there.
Capital and shareholder returns
Stockholders' equity rose 6.4% to $58.8 million. Net income of $6.17 million and $1.84 million from stock-option exercises were partly offset by $3.33 million of share buybacks and $1.66 million of dividends (a 26.9% payout ratio, down from 41.9%). The bank's common equity tier 1 ratio (its highest-quality capital as a share of risk-weighted assets, a key regulatory safety measure) was 13.11%, down from 13.59% as loans grew faster than regulatory capital, but comfortably above requirements; the tier 1 leverage ratio was 9.29%. Return on average equity rose to 10.70% from 7.31%.
Takeaway: HFBL's 59% profit jump came almost entirely from repricing rather than growth: loan yields rose 31 basis points and CD costs fell 52, lifting the net interest margin to 3.72% while expenses stayed flat. With average earning assets up only 1.6% and credit costs starting to rise, fiscal 2027 profit depends on whether that margin holds, not on balance-sheet expansion.
Outlook
The company gives no numeric guidance. Our read on the drivers for fiscal 2027:
The deposit-cost tailwind is narrowing. CDs are now a larger share of deposits (38.5% at period-end versus 34.3% a year earlier), so funding costs are more sensitive to where CDs renew. The bank's own rate-shock table shows its net portfolio value (the present value of its assets minus its liabilities) falling slightly, by 0.65% to 1.49%, if rates drop 100 to 200 basis points, so lower rates are not a clear-cut benefit for it.
Loan yields should keep drifting up as mortgages run off and are replaced with commercial and construction loans; $55.9 million of loan commitments outstanding at year-end points to continued origination activity.
Credit costs are the swing factor. The rise in non-performing and substandard home loans is worth watching in the September-quarter 10-Q.
Buybacks add to per-share growth. A fourteenth repurchase program, for up to 100,000 shares, was announced in October 2025.