HopFed Bancorp, Inc : HopFed Bancorp, Inc. Reports Fourth Quarter Results

HOPKINSVILLE, Ky., Jan. 30, 2012 /PRNewswire/ -- HopFed Bancorp, Inc. (NASDAQ: HFBC) (the "Company"), the holding company for Heritage Bank (the "Bank"), today reported results for the three and twelve month periods ended December 31, 2011. For the three month period ended December 31, 2011, the Company's net income available to common shareholders was $2.1 million, or $0.28 per share basic and diluted, compared to net income available to common shareholders of $557,000, or $0.07 per share basic and diluted, for the three month period ended December 31, 2010. For the twelve month period ended December 31, 2011, the Company's net income available to common shareholders was $1.9 million, or $0.25 per share basic and diluted, compared to net income available to common shareholders of $5.5 million, or $0.96 per share basic and diluted, for the twelve month period ended December 31, 2010.

Commenting on the fourth quarter results, John E. Peck, President and Chief Executive Officer, said, "Management's focus on reducing the level of other real estate owned is paving the way for our improved financial performance. At December 31, 2011, the balance on other real estate owned totaled $2.3 million, compared to $9.8 million at December 31, 2010, and $10.0 million at June 30, 2011. For the three month period ended December 31, 2011, the Company incurred losses and expenses related to other real estate owned of $121,000, as compared to $586,000 for the three month period ended September 30, 2011. For the twelve month period ended December 31, 2011, losses and expenses related to other real estate owned totaled $2.0 million, as compared to a net gain of $57,000 for the year ended December 31, 2010. By reducing the balance in other real estate owned, we anticipate that future losses and operating cost associated with these properties will be minimal."

Mr. Peck continued, "The Company has made progress in reducing the amount of impaired assets. At March 31, 2011, the Company's total impaired assets increased to $80.1 million, due primarily to both international and local weather events and a weak national economy. At December 31, 2011, total impaired assets declined to $54.9 million, due to improvements in the local economy, improved profitability expectations in the agricultural sector and the sale of other real estate owned."

Financial Highlights

-- The Company and Bank's capital ratios remain strong. At December 31,
2011, the Company's tangible book value was $13.21 and our tangible
common equity ratio is 9.69%. The Bank's tier 1 capital and total risk
based capital ratios at December 31, 2011, are 10.18% and 17.63%,
respectively. The Company's tier 1 capital and total risk based capital
ratios are 11.71% and 20.26%, respectively.

-- At December 31, 2011, the Company's and Bank's net classified asset to
risk based capital ratios were 43.0% and 49.9%, respectively. Net
classified assets include all classified assets less any reserve
allocation against the allowance for loan losses. At June 30, 2011,
these ratios were 56.7% for the Company and 67.0% for the Bank.

-- At December 31, 2011, the Company's allowance for loan loss totaled
$11.3 million, or 1.98% of total loans and 183.62% of non-accrual loans.
In the three month period ended December 31, 2011, the Company charged
off approximately $2.5 million in loans previously reserved for and
classified as substandard. The loans in question have been written down
to a percentage of their new appraised values. These charge offs did
not materially affect the current required funding levels of the
allowance for loan loss account as management had previously allocated
adequate reserves for these loans.

-- For the three month period ended December 31, 2011, the Company's net
interest margin was 3.13%, as compared to 3.00% for the three month
period ended September 30, 2011, and 3.07% for the three month period
ended December 31, 2010.

Asset Quality

At December 31, 2011, the Company's level of non-accrual loans totaled $6.1 million, as compared to $4.3 million at September 30, 2011, and $5.0 million at December 31, 2010. The increase in non-accrual loans was the result of two out of market participation loans totaling $2.2 million being placed into non-accrual status. Prior to being placed into nonaccrual status, the Company incurred write downs of approximately $2.1 million on the book balances of these loans. At December 31, 2011, both loans were less than thirty days past due.

A summary of non-accrual loans at December 31, 2011, and December 31, 2010, is as follows:

December 31, 2011 December 31, 2010
----------------- -----------------
(Dollars in Thousands)
----------------------

One-to-four family
mortgages 2,175 1,559
Home equity line of
credit 134 103
Multi-family --- 301
Construction --- 1,541
Land 3,561 363
Non-residential real
estate --- 1,043
Consumer loans 9 23
Commercial loans 254 97
--- ---
Total 6,133 5,030
===== =====

At December 31, 2011, non-accrual loans plus other real estate owned totaled $8.4 million, or 0.81% of total assets, as compared to $8.9 million, or 0.83% of total assets, at September 30, 2011, and $14.8 million, or 1.37% of total assets at December 31, 2010. The Company's level of other real estate owned has declined from $10.0 million at June 30, 2011, to $2.3 million at December 31, 2011.

A summary of the activity in other real estate owned for the nine month period ended December 31, 2011, is as follows:

Activity During 2011
--------------------
Gain
Balance Reduction (Loss) Balance
in
12/31/2010 Foreclosures Sales Values on Sales 12/31/2011
---------- ------------ ----- ------- -------- ----------
(Dollars in
Thousands)

One-to-four family mortgages 534 1,309 (1,083) (111) (9) 640
Multi-family 7,266 --- (4,624) (973) (925) 744
Construction 624 1,144 (1,577) (15) 54 230
Land 482 1,070 (1,325) (46) 463 644
Non-residential real estate 900 265 (1,027) (137) (1) ---
Consumer assets 6 167 (161) --- (3) 9
--- --- ---- --- --- ---

Total 9,812 3,955 (9,797) (1,282) (421) 2,267
===== ===== ====== ====== ==== =====

At December 31, 2011, the Company's levels of loans classified as substandard and doubtful were $53.2 million and $1.7 million, respectively, compared to $54.8 million and $2.0 million, respectively at September 30, 2011, and $57.1 million and $1.5 million, respectively, at December 31, 2010. The Company's specific reserve for impaired loans was $4.1 million at December 31, 2011, $6.0 million at September 30, 2011, and $4.3 million at December 31, 2010. For the twelve month period ended December 31, 2011, the Company's net charge-offs totaled $4.4 million, an annualized rate of 0.76% of average loans.

At December 31, 2011, the Company's level of performing Troubled Debt Restructurings ("TDRs") was $6.2 million, as compared to $8.0 million at December 31, 2010. A summary of the activity in loans classified as TDRs for the twelve month period ended December 31, 2011, is as follows:

Balance at New Loss or Removed due Balance at
December 31, to December
2010 TDR Foreclosure performance 31,2011
------------- --- ----------- ----------- ---------
(Dollars in
Thousands)

One-to-
four
family
mortgages 3,932 1,163 401 2,173 2,521
Home equity
line of
credit 114 --- --- 114 ---
Junior Lien --- 857 --- --- 857
Multi-
family 246 --- 5 241 ---
Construction 1,541 100 1,641 --- ---
Land 512 963 534 --- 941
Non-
residential
real
estate 3,915 1,540 1,228 860 3,367
Consumer
loans 69 27 9 54 33
Commercial
loans 700 102 235 442 125
--- --- --- --- ---
Total TDR 11,029 4,752 4,053 3,884 7,844
====== ===== ===== ===== =====

A summary of TDRs and non-performing TDRs at December 31, 2011, and December 31, 2010, is stated below:

December 31, December 31,
2011 2010
------------- -------------
(Dollars in Thousands)
----------------------

One-to-four family
mortgages $2,521 3,932
Home equity line of
credit --- 114
Junior lien 857 ---
Multi-family 246
Construction --- 1,541
Land 941 512
Non-residential real
estate 3,367 3,915
Consumer loans 33 69
Commercial loans 125 700

Total TDR $7,844 11,029
-- --
Less:
TDR in non-accrual
status
One-to-four family
mortgages (1,410) (1,181)
Home equity line of
credit --- ---
Junior lien (100) ---
Multi-family ---
Construction --- (1,338)
Land --- (512)
Non-residential real
estate (1)
Consumer loans (1) ---
Commercial loans (105) ---
---- ---
Total performing TDR $6,227 $7,998
== ==

For the twelve month period ended December 31, 2011, the Company has incurred approximately $1.0 million in losses on loans previously classified as TDR.

Net Interest Income

For the three month period ended December 31, 2011, the Company's net interest income was $7.2 million, compared to $6.9 million for the three month period ended September 30, 2011, and $7.3 million for the three month period ended December 31, 2010. For the twelve month period ended December 31, 2011, net interest income was $27.8 million, compared to $30.2 million for the twelve month period ended December 31, 2010. The Company has experienced positive net interest income trends in the last two quarters as we have chosen to focus on reducing our cost of funds during a time of weak loan demand and declining investment yields. The current strategy of allowing selected liabilities to leave the Company is likely to continue until a time of improved loan demand and stronger regional economic activity.

For the three month period ended December 31, 2011, the Company's net interest margin was 3.13%, as compared to 3.00% for the three month period ended September 30, 2011, and 3.07% for the three month period ended December 31, 2010. For the twelve month period ended December 31, 2011, the Company's net interest margin was 3.02% as compared to 3.19% for the twelve month period ended December 31, 2010. Significant enhancements to the Company's net interest margin will continue to be dependent on loan demand.

Non-interest Income

Non-interest income for the three month period ended December 31, 2011, was $2.4 million, as compared to $3.3 million for the three month period ended September 30, 2011, and $3.6 million for the three month period ended December 31, 2010. Non-interest income for the twelve month period ended December 31, 2011, was $10.1 million, as compared to $11.1 million at December 31, 2010.

The decline in non-interest income for the three month period ended December 31, 2011, as compared to the three month period ended September 30, 2011, was primarily the result of $600,000 reduction in gains on the sale of securities and a $141,000 impairment charge related to two private label CMO's which were tested for impairment during the quarter. The decline in non-interest income for the three month periods ended December 31, 2011, and December 31, 2010, was the result of a $1.1 million reduction in investment gains and the above mentioned impairment charge.

The $1.2 million decline in non-interest income for the twelve month period ended December 31, 2011, as compared to December 31, 2010, was the result of several factors, the most significant being the $600,000 decline in investment gains. However, most non-interest income producing items experienced a reduction in 2011 as compared to 2010. The lone exceptions were mortgage loan origination revenue and merchant card income, which increased from $590,000 and $698,000 for the twelve month period ended December 31, 2010, respectively, as compared to $720,000 and $768,000 for the twelve month period ended December 31, 2011, respectively.

Non-interest Expense

Non-interest expenses were $6.7 million, $7.1 million and $6.7 million for the three month periods ended December 31, 2011, September 30, 2011, and December 31, 2010, respectively. For the twelve month period ended December 31, 2011, noninterest expenses were $28.7 million, an increase of $2.5 million as compared to the twelve month period ended December 31, 2010.

For the twelve month period ended December 31, 2011, the increase in non-interest expense was largely the result of a $1.7 million loss on the sale of other real estate owned, a $145,000 loss on the disposal of equipment and a $500,000 increase in salaries and benefits expense, as compared to the twelve month period ended December 31, 2010. Other expense items increasing by more than 5% from the prior year include professional services and FDIC expenses.

Balance Sheet

Total assets were $1.04 billion at December 31, 2011, a decrease of $41.8 million as compared to December 31, 2010. The decline in assets is largely the result of a reduction in loans outstanding offset by a reduction in brokered deposits and Federal Home Loan Bank (FHLB) advances. At December 31, 2011, brokered deposits totaled $58.3 million, as compared to $91.4 million at December 31, 2010. At December 31, 2011, the $33.1 million decline in brokered deposits was slightly offset by a $3.3 million increase in retail deposits. At December 31, 2011, FHLB advances totaled $63.3 million, as compared to $81.9 million at December 31, 2010. The decline in FHLB advances was achieved through scheduled maturity and principal payments. Likewise, the decline in brokered deposits was the result of scheduled maturities not being replaced by management due to a lack of productive uses for the funds.

For the twelve month period ended December 31, 2011, gross loans declined by approximately $43.8 million, to $556.4 million as compared to $600.2 million at December 31, 2010. During the three month period ended December 31, 2011, the decline in loans included approximately $2.7 million in write downs of loan balances in which all future payments are dependent on the sale of all or a portion of the collateral. These loans have been classified as impaired for several quarters with significant reserves previously allocated against these credits.

The Company

HopFed Bancorp, Inc. is the holding company for Heritage Bank headquartered in Hopkinsville, Kentucky. The Bank has eighteen offices in western Kentucky and middle Tennessee in addition to its subsidiaries, Fall & Fall Insurance of Fulton, Kentucky, Heritage Solutions of Murray, Kentucky, Hopkinsville, Kentucky, Kingston Springs, Tennessee and Pleasant View, Tennessee, and Heritage Mortgage Services of Clarksville, Tennessee. The Bank offers a broad line of banking and financial products and services with the personalized focus of a community banking organization. More information about HopFed Bancorp and Heritage Bank may be found on its website www.bankwithheritage.com.

Forward-Looking Information

Information contained in this press release, other than historical information, may be considered forwardlooking in nature and is subject to various risk, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on the Company's operating results, performance or financial condition are competition and the demand for the Company's products and services, and other factors as set forth in filings with the Securities and Exchange Commission.

HOPFED BANCORP, INC.
Balance Sheet
(Dollars in thousands)

December 31, December 31,
Assets 2011 2010
------ ------------- -------------
(Unaudited)

Cash and due
from banks $32,385 54,042
Interest-
earning
deposits in
Federal Home
Loan Bank 16,375 6,942
------ -----
Cash and cash
equivalents 48,760 60,984
Federal Home
Loan Bank
stock, at
cost 4,428 4,378
Securities
available for
sale 383,782 357,738
Loans
receivable,
net of
allowance for
loan losses
of
$11,262 at December 31, 2011, and $9,830 at December 31, 2010 556,360 600,215
Accrued
interest
receivable 6,183 6,670
Real estate
and other
assets owned 2,267 9,812
Bank owned
life
insurance 9,135 8,819
Premises and
equipment,
net 23,431 24,289
Deferred tax
assets 1,132 3,788
Intangible
asset 519 810
Other assets 4,823 5,088
----- -----
Total assets $1,040,820 1,082,591
========== =========

Liabilities
and
Stockholders'
Equity
-------------
Liabilities:
Deposits:
Non-interest-
bearing
accounts $79,550 69,139
Interest-
bearing
accounts
NOW accounts 130,114 138,936
Savings and
money market
accounts 70,443 63,848
Other time
deposits 519,988 555,006
------- -------
Total deposits 800,095 826,929

Advances from
Federal Home
Loan Bank 63,319 81,905
Repurchase
agreements 43,080 45,110
Subordinated
debentures 10,310 10,310
Advances from
borrowers for
taxes and
insurance 153 239
Dividends
payable 176 613
Accrued
expenses and
other
liabilities 5,204 6,041
----- -----
Total
liabilities 922,337 971,147
------- -------

This information is preliminary and based on
company data available at the time of the
presentation.

HOPFED BANCORP, INC.
Balance Sheet
(Dollars in thousands)

December 31, December
2011 31,2010
------------- ---------
(Unaudited)

Stockholders' equity
Preferred stock, par value
$0.01 per share;
authorized -500,000 shares;
18,400 shares issued and
outstanding with a
liquidation preference of
$18,400,000
at December 31, 2011, and
December 31, 2010 --- ---
Common stock, par value $.01
per share; authorized
15,000,000 shares; 7,895,336
issued and 7,492,420
outstanding at December 31,
2011, and 7,884,364 issued
and 7,481,448 outstanding at
December 31, 2010 (a) 79 77
Common stock warrants
(253,666 issued and
outstanding) (a) 556 556
Additional paid-in-capital 75,967 74,920
Retained earnings-
substantially restricted 39,591 39,994
Treasury stock (at cost,
402,916 shares at December
31, 2011,
and December 31, 2010) (5,076) (5,076)
Accumulated other
comprehensive income, net
of taxes 7,366 973
----- ---

Total stockholders' equity 118,483 111,444
------- -------

Total liabilities and
stockholders' equity $1,040,820 1,082,591
========== =========



(a) Shares and warrants
have been restated to
reflect
stock dividends distributed
through October 18, 2011

This information is preliminary and based on company data
available at the time of the presentation.

HOPFED BANCORP, INC.
Selected Financial Data
(Dollars in thousands)

For the Three Month For the Twelve Month
Periods Periods
Ended December 31, Ended December 31,
------------------ ------------------

2011 2010 2011 2010
---- ---- ---- ----

Interest
and
dividend
income:
Loans
receivable 8,239 9,010 33,493 38,037
Investment
in
securities,
taxable 2,462 2,801 10,465 11,911
Nontaxable
securities
available
for
sale 530 648 2,263 2,457
Interest-
earning
deposits 6 --- 19 12
--- --- --- ---
Total
interest
and
dividend
income 11,237 12,459 46,240 52,417
------ ------ ------ ------

Interest
expense:
Deposits 3,028 3,979 14,207 17,384
Advances
from
Federal
Home
Loan
Bank 611 792 2,557 3,292
Repurchase
agreements 241 212 909 831
Subordinated
debentures 191 182 742 739
--- --- --- ---
Total
interest
expense 4,071 5,165 18,415 22,246
----- ----- ------ ------

Net
interest
income 7,166 7,294 27,825 30,171
----- ----- ------ ------
Provision
for
loan
losses 476 3,169 5,921 5,970
--- ----- ----- -----

Net
interest
income
after
provision
for
loan
losses 6,690 4,125 21,904 24,201
----- ----- ------ ------

Non-
interest
income:
Service
charges 985 948 3,813 3,922
Merchant
card
income 197 179 768 698
Mortgage
origination
revenue 295 199 720 590
Gain
on
sale
of
securities 600 1,718 2,897 3,504
Other
than
temporarily
impairment
on
available
for
sale
securities (141) --- (155) ---
Income
from
bank
owned
life
insurance 66 81 315 344
Financial
services
commission 203 195 894 971
Other
operating
income 224 292 941 1,077
--- --- --- -----
Total
non-
interest
income 2,429 3,612 10,193 11,106
----- ----- ------ ------

This information is preliminary and based on company
data available at the time of the presentation.

HOPFED BANCORP, INC.
Selected Financial Data
(Dollars in thousands, except share and per share data)

For the Three Month For the Twelve Month
Periods Periods
Ended December 31, Ended December 31,
------------------ ------------------

2011 2010 2011 2010
---- ---- ---- ----
Non-interest
expenses:
Salaries
and
benefits 3,279 3,139 13,266 12,762
Occupancy
expense 817 807 3,269 3,158
Data
processing
expense 589 706 2,645 2,807
State
deposit
tax 151 162 627 640
Intangible
amortization
expense 65 81 292 358
Professional
services
expense 386 293 1,372 1,225
Deposit
insurance
and
examination
expense 417 560 2,021 2,107
Advertising
expense 304 341 1,235 1,115
Postage
and
communications
expense 128 131 549 557
Supplies
expense 105 117 399 404
Loss
on
disposal
of
equipment --- --- 145 ---
(Gain)
Loss
on
sale
of
real
estate
owned 61 35 1,703 (321)
Real
estate
owned
expenses 60 46 276 264
Other
operating
expenses 319 286 894 1,102
--- --- --- -----
Total
non-
interest
expense 6,681 6,704 28,693 26,178
----- ----- ------ ------

Income
before
income
tax
expense 2,438 1,033 3,404 9,129
Income
tax
expense 109 216 484 2,613
--- --- --- -----

Net
income 2,329 817 2,920 6,516
----- --- ----- -----
Less:
Dividend
on
preferred
shares 232 232 920 920
Accretion
dividend
on
preferred
shares 28 28 111 111
--- --- --- ---

Net
income
available
to
common
shareholders $2,069 $557 $1,889 $5,485
====== ==== ====== ======
Net income
available to
common
shareholders
Per
share,
basic $0.28 $0.07 $0.25 $0.96
===== ===== ===== =====
Per
share,
diluted $0.28 $0.07 $0.25 $0.96
===== ===== ===== =====
Dividend
per
share $0.02 $0.08 $0.20 $0.40
===== ===== ===== =====

Weighted
average
shares
outstanding
-
basic
(a) 7,484,420 7,462,092 7,460,294 5,732,495
========= ========= ========= =========
Weighted
average
shares
outstanding
-
diluted
(a) 7,484,420 7,462,092 7,460,294 5,732,495
========= ========= ========= =========


(a) Weighted
average
shares have
been adjusted
to
reflect a 2%
stock
dividend on
October 18,
2011.

This information is preliminary and based on company
data available at the time of the presentation.

HOPFED BANCORP, INC.
Selected Financial Data
(Dollars in thousands)

For the Three
Months Ended
------------
Change
from
Prior
12/31/2011 9/30/2011 Quarter
---------- --------- --------

Interest
and
dividend
income:
Loans
receivable 8,239 8,332 (93)
Investment
in
securities,
taxable 2,462 2,581 (119)
Nontaxable
securities
available
for sale 530 532 (2)
Interest-
earning
deposits 6 5 1
--- --- ---
Total
interest
and
dividend
income 11,237 11,450 (213)
------ ------ ----

Interest
expense:
Deposits 3,028 3,543 (515)
Advances
from
Federal
Home Loan
Bank 611 625 (14)
Repurchase
agreements 241 238 3
Subordinated
debentures 191 186 5
--- --- ---
Total
interest
expense 4,071 4,592 (521)
----- ----- ----

Net
interest
income 7,166 6,858 308
----- ----- ---
Provision
for loan
losses 476 475 1
--- --- ---

Net
interest
income
after
provision
for loan
losses 6,690 6,383 307
----- ----- ---

Non-
interest
income:
Service
charges 985 1,020 (35)
Merchant
card
income 197 194 3
Mortgage
origination
revenue 295 295 0
Gain on
sale of
securities 600 1,247 (647)
Income
from bank
owned
life
insurance 68 84 (16)
Other than
temporarily
impairment
on
available
for sale
securities (141) --- (141)
Financial
services
commission 203 272 (69)
Other
operating
income 222 169 53
--- --- ---

Total non-
interest
income 2,429 3,281 (852)
----- ----- ----

This information is preliminary and based on company
data available at the time of the presentation.

HOPFED BANCORP, INC.
Selected Financial Data
(Dollars in thousands, except share and per share
data)

For the Three
Months Ended
------------
Change
from
Prior
12/31/2011 9/30/2011 Quarter
---------- --------- --------

Non-
interest
expenses:
Salaries
and
benefits $3,279 3,309 (30)
Occupancy
expense 817 867 (50)
Data
processing
expense 589 653 (64)
State
deposit
tax 151 151 0
Intangible
amortization
expense 65 65 ---
Professional
services
expense 386 293 93
Deposit
insurance
and
examination
expense 417 445 (28)
Advertising
expense 304 324 (20)
Postage and
communications
expense 128 140 (12)
Supplies
expense 105 96 9
Loss on
disposal
of
equipment --- 5 (5)
Loss on
sale of
real
estate
owned 61 570 (509)
Real estate
owned
expenses 60 16 44
Other
operating
expenses 319 193 126
--- --- ---

Total non-
interest
expense 6,681 7,127 (446)
----- ----- ----

Income
before
income tax
expense 2,438 2,537 (99)
Income tax
expense 109 909 (800)
--- --- ----

Net income 2,329 1,628 701
----- ----- ---
Less:
Dividend on
preferred
shares 232 232 ---
Accretion
dividend
on
preferred
shares 28 28 ---
--- --- ---
Net income
(loss)
available
(attributable)
to common
stockholders $2,069 1,368 701
====== ===== ===
Net income
(loss)
available
(attributable)
to common
stockholders
Per share,
basic $0.28 $0.18 0.10
===== ===== ====
Per share,
diluted $0.28 $0.18 0.10
===== ===== ====
Dividend
per share $0.02 $0.02
===== =====

Weighted
average
shares
outstanding
-basic 7,484,420 7,481,448
========= =========
Weighted
average
shares
outstanding
-diluted 7,484,420 7,481,448
========= =========

This information is preliminary and based on company
data available at the time of the presentation.

HOPFED BANCORP, INC.
Selected Financial Data

The table below adjusts tax-free investment
income for the three month periods ended
December 31, 2011, and December 31, 2010, by
$249,000 and $298,000, respectively; for a
tax equivalent rate using a cost of funds
rate of 2.00% for the three month period
ended December 31, 2011, and 2.50% for the
three month period ended December 31, 2010.
The table adjusts tax-free loan income by
$8,000 for three month period ended December
31, 2011 and $10,000 for the three month
period ended December 31, 2010, for a tax
equivalent rate using the same cost of funds
rate:

Average Income & Average Average Income & Average
Balance Expense Rates Balance Expense Rates
12/31/2011 12/31/2011 12/31/2011 12/31/2010 12/31/2010 12/31/2010
---------- ---------- ---------- ---------- ---------- ----------
(Dollars in
Thousands, Except
Percentages)

Loans, net $560,987 $8,247 5.88% $613,376 $9,019 5.88%
Investments AFS
taxable 314,703 $2,463 3.13% 311,026 2,801 3.60%
Investment AFS tax
free 63,809 779 4.89% 67,343 946 5.62%
Overnight funds 10,747 6 0.22% --- --- ---
------ --- ---- --- --- ---

Total interest
earning assets 950,246 11,495 4.84% 991,745 12,766 5.15%
------- ------ ------- ------

Other assets 97,842 106,882
------ -------

Total assets $1,048,088 $1,098,627
========== ==========

Retail time
deposits $463,586 2,421 2.09% $476,490 3,087 2.59%
Brokered deposits 63,738 300 1.88% 75,733 395 2.09%
Now accounts 133,464 287 0.86% 140,795 463 1.32%
MMDA and savings
accounts 71,250 21 0.12% 66,001 34 0.21%
FHLB borrowings 67,747 610 3.60% 89,120 792 3.55%
Repurchase
agreements 40,550 241 2.38% 44,787 212 1.89%
Subordinated
debentures 10,310 191 7.41% 10,310 182 7.06%
------ --- ---- ------ --- ----

Total interest
bearing
liabilities 850,645 4,071 1.91% 903,236 5,165 2.29%
------- ----- ------- -----

Non-interest
bearing deposits 75,169 70,288
Other liabilities 6,153 5,497

Stockholders'
equity 116,121 119,606
------- -------

Total liabilities
and stockholders'
equity $1,048,088 $1,098,627
========== ==========

Net interest
income $7,424 $7,601
====== ======
Interest rate
spread 2.93% 2.86%
==== ====
Net
yield
on
interest
earning
assets 3.13% 3.07%
==== ====

This information is preliminary and based on
company data available at the time of the
presentation.

HOPFED BANCORP, INC.
Selected Financial Data

The table below adjusts tax-free investment
income for the twelve month periods ended
December 31, 2011, and December 31, 2010, by
$1,065,000 and $1,130,000, respectively; for
a tax equivalent rate using a cost of funds
rate of 2.00% for the twelve month period
ended December 31, 2011, and 2.50% for the
twelve month period ended December 31, 2010.
The table adjusts tax-free loan income by
$34,000 for twelve month period ended
December 31, 2011, and $52,000 for the twelve
month period ended December 31, 2010, for a
tax equivalent rate using the same cost of
funds rate:

Average Income & Average Average Income & Average
Balance Expense Rates Balance Expense Rates
12/31/2011 12/31/2011 12/31/2011 12/31/2010 12/31/2010 12/31/2010
---------- ---------- ---------- ---------- ---------- ----------

Loans $575,133 $33,527 5.83% $629,633 $38,089 6.05%
Investments
AFS
taxable 308,022 10,465 3.40% 289,556 11,923 4.12%
Investment
AFS
tax
free 66,104 3,328 5.03% 63,179 3,587 5.68%
Federal
funds 9,075 19 0.21% --- --- ---
----- --- ---- --- --- ---

Total
interest
earning
assets 958,334 47,339 4.94% 982,368 53,599 5.46%
------- ------ ------- ------

Other
assets 108,997 101,119
------- -------

Total
assets $1,067,331 $1,083,487
========== ==========



Retail
time
deposits $469,052 10,908 2.33% $488,531 13,629 2.79%
Brokered
deposits 78,996 1,642 2.08% 82,226 1,959 2.38%
Now
accounts 136,828 1,543 1.13% 128,096 1,666 1.30%
MMDA
and
savings
accounts 68,347 114 0.17% 63,565 130 0.20%
FHLB
borrowings 71,352 2,557 3.58% 92,830 3,292 3.55%
Repurchase
agreements 39,894 909 2.28% 42,442 831 1.96%
Subordinated
debentures 10,310 742 7.20% 10,310 739 7.17%
------ --- ---- ------ --- ----

Total
interest
bearing
liabilities 874,779 18,415 2.11% 908,000 22,246 2.45%
------- ------ ------- ------

Non-
interest
bearing
deposits 72,961 68,901
Other
non-
interest
bearing
liabilities 4,562 4,651

Stockholders'
equity 115,029 101,935
------- -------

Total
liabilities
and
stockholders'
equity $1,067,331 $1,083,487
========== ==========

Net
change
in
interest
earning
assets
and
interest
bearing
liabilities $28,924 $31,353
======= =======
Interest
rate
spread 2.83% 3.01%
==== ====
Net
yield
on
interest
earning
assets 3.02% 3.19%
==== ====

This information is preliminary and based on
company data available at the time of the
presentation.

SOURCE HopFed Bancorp, Inc.