Home Federal Bancorp, Inc. of Louisiana, a Louisiana chartered corporation,
became the holding company for Home Federal Bank ("Home Federal Bank"
or the "Bank") on December 22, 2010, upon completion of the Bank's
second step conversion from the mutual holding company form of organization
to the stock holding company form of organization. As part of the conversion,
all outstanding shares of the former Home Federal Bancorp, Inc. of Louisiana
common stock (other than those owned by Home Federal Mutual Holding Company)
were converted into the right to receive 0.9110 of a share, and cash in lieu
of fractional shares, of Home Federal Bancorp common stock resulting in approximately
1,100,609 shares issued in the exchange. In addition, a total of 1,945,220 shares
of common stock of Home Federal Bancorp were sold in subscription, community
and syndicated community offerings to certain depositors and borrowers of the
Bank, the Bank's Employee Stock Ownership Plan and other investors for $10.00
per share, or $19.5 million in the aggregate. Treasury stock held was cancelled.
The net proceeds of the offering were approximately $18.0 million, after offering
expenses.
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 headquarters and main office, four
additional full service branch offices and agency office are located in Shreveport
and Bossier City, Louisiana and serve the Shreveport-Bossier City metropolitan
area. Home Federal Bank's business primarily consists of attracting deposits
from the general public and using those funds to originate loans. At our agency
office, we offer security brokerage and advisory services through a third party
provider.
As of June 30, 2015, 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 persons are not separately compensated
by Home Federal Bancorp.
Pursuant to the regulations under Sections 23A and 23B of the Federal Reserve
Act, Home Federal Bank and Home Federal Bancorp have entered into an expense
sharing agreement. Under this agreement, Home Federal Bancorp will reimburse
Home Federal Bank for the time that employees of Home Federal Bank devote to
activities of Home Federal Bancorp, the portion of the expense of the annual
independent audit attributable to Home Federal Bancorp and all expenses attributable
to Home Federal Bancorp's public filing obligations under the Securities Exchange
Act of 1934.
The types of loans that we may originate are subject to federal and state laws
and regulations. Interest rates charged on loans are affected principally by
the demand for such loans and the supply of money available for lending purposes
and the rates offered by our competitors. These factors are, in turn, affected
by general and economic conditions, the monetary policy of the federal government,
including the Federal Reserve Board, legislative and tax policies, and governmental
budgetary matters.
A savings institution generally may not make loans to one borrower and related
entities in an amount which exceeds 15% of its unimpaired capital and surplus,
although loans in an amount equal to an additional 10% of unimpaired capital
and surplus may be made to a borrower if the loans are fully secured by readily
marketable securities. In addition, upon application the Office of the Comptroller
of the Currency permits a savings institution to lend up to an additional 15%
of unimpaired capital and surplus to one borrower to develop domestic residential
housing units.
Our lending activities are subject to written underwriting standards and loan
origination procedures established by the board of directors and management.
When applicable, loans originated are also subject to the underwriting standards
of Fannie Mae, Freddie Mac, HUD, VA, USDA and correspondent banks that purchase
loans we originate. Loan originations are obtained through a variety of sources,
primarily from existing customers, local realtors and builders. Written loan
applications are taken by one of our loan officers. The loan officer also supervises
the procurement of credit reports, income and asset documentation and other
documentation involved with a loan. All appraisals are ordered through an approved
appraisal management company in compliance with the Dodd-Frank Consumer Protection
Act. Under our lending policy, a title insurance policy is required on most
mortgage loans, with the exception of certain smaller loan amounts where our
policy requires a title opinion only. We also require fire and extended coverage
casualty insurance in order to protect the properties securing the real estate
loans. Borrowers must also obtain flood insurance policies when the property
is in a flood hazard area.
Our loan approval process is intended to assess the borrower's ability to repay
the loan, the viability of the loan and the value of the property that will
secure the loan. All residential loans originated for sale to FNMA or other
investor banks that receive an Approve-Eligible recommendation on the automated
underwriting feedback certificate that is applicable for each loan type must
be approved by a Bank mortgage underwriter. Loans that do not receive an Approve-Eligible
recommendation must be approved by a Bank mortgage underwriter and the Senior
Vice President of Mortgage. In addition, all loans originated to be held on
the Bank's portfolio must be approved by a Bank mortgage underwriter and the
Senior Vice President of Mortgage for loans up to $500,000, and for loans up
to $1.0 million by the senior credit officer. Commercial real estate secured
loans and lines of credit and commercial business loans up to $1.0 million must
be approved by the Senior Credit Officer or the President/Chief Executive Officer
or the Chairman of the Board, up to $2.0 million by two of the following three
officers, Senior Credit Officer, President/Chief Executive Officer, Chairman
of the Board, and in excess of $2.0 million by the Executive Committee. In accordance
with past practice, all loans are ratified by our board of directors.
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