Hopfed Bancorp (HFBC) 8-K Hopfed Bancorp, Inc. Reports Second Quarter Results

Exhibit 99.1

NEWS
FOR IMMEDIATE RELEASE	CONTACT:	John E. Peck President and CEO (270) 885-1171

HOPFED BANCORP, INC. REPORTS SECOND QUARTER RESULTS

HOPKINSVILLE, Ky. (July 26, 2010) – HopFed Bancorp, Inc. (NASDAQ: HFBC), (the “Company”) today reported results for the three and six month periods ended June 30, 2010. For the three month period ended June 30, 2010, net income available to common shareholders was $1,814,000, or $0.46 per share (basic and diluted), compared to net income available to common shareholders of $1,606,000, or $0.45 per share (basic and diluted), for the three month period ended March 31, 2010, and net income available to common shareholders of $854,000, or $0.24 per share (basic and diluted), for the three month period ended June 30, 2009. For the six month period ended June 30, 2010, net income available to common shareholders was $3,420,000, or $0.91 per share (basic and diluted) as compared to net income available to common shareholders of $1,866,000, or $0.52 per share (basic and diluted) for the six month period ended June 30, 2009.

Commenting on the three and six month periods ended June 30, 2010, John E. Peck, President and Chief Executive Officer, said, “The Company continues to perform well despite challenging economic conditions. The Company’s profitability levels are improving as we are able to reduce our cost of funds while continuing to grow our deposit base. The Company’s credit quality remains solid and we have experienced improved non-interest income performance from core operations.”

Financial Highlights

• On June 23, 2010, the Company successfully completed a public offering of 3.3 million shares of HopFed’s common stock at $9.00 per share, resulting in net proceeds of approximately $28.2 million. As a result, the Company’s Tier 1 Capital Ratio was 10.61% and our Total Risk Based Capital Ratio is 18.03% at June 30, 2010. On July 16, 2010, Howe Barnes, the sole underwriter of the offering, exercised a portion of their over-allotment option and purchased an additional 250,000 shares of the Company’s common stock with the Company receiving net proceeds of $2,137,500.

• Upon completion of the public offering, the Company made a $10 million injection of capital into Heritage Bank, the Company’s wholly owned thrift subsidiary. At June 30, 2010, the bank had a Tier One Capital Ratio of 8.91% and a Total Risk Based Capital Ratio of 15.03%.

• The Company’s provision for loan loss expense for the three and six month periods ended June 30, 2010, was $858,000 and $1,469,000, respectively, as compared to the provision for loan loss expense for the three and six month periods ending June 30, 2009, of $962,000 and $1,936,0000, respectively. The Company’s allowance for loan loss account equaled approximately 73.5% of the Company’s non-performing loans at June 30, 2010.

Asset Quality

At June 30, 2010, the Company’s non-performing loans totaled $11.7 million, or 1.83% of total loans, as compared to $11.2 million, or 1.72% of total loans at December 31, 2009. At June 30, 2010, non-performing assets totaled $14.1 million, or 1.28% of total assets, compared to $13.2 million, or 1.28% of total assets, at December 31, 2009. At June 30, 2010, the Company’s allowance for loan loss balance was $8.6 million, or 1.35% of total loans. For the six month period ended June 30, 2010, the Company’s net charge-offs totaled $1.7 million, an annualized rate of 0.54% of average loans. Management continues to identify and resolve problem loans within the Bank’s loan portfolio and has provided adequate reserves for all known and probable loan losses.

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HFBC Reports Second Quarter Results

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July 26, 2010

Net Interest Income

For the six month period ended June 30, 2010, the Company’s net interest income was $15.2 million, compared to $13.0 million for the six month period ended June 30, 2009. For the three month period ended June 30, 2010, the Company’s net interest income was $7.9 million, compared to $6.6 million for the three month period ended June 30, 2009, and $7.3 million for the three month period ended March 31, 2010. Net interest income for the three and six month periods ended June 30, 2010, was positively influenced by the successful resolution of a problem lending relationship, resulting in the collection of $525,000 in non-accrual interest.

The improvement in net interest income was also influenced by lower levels of interest expense. For the three month period ended June 30, 2010, the Company’s interest expense declined by $120,000 as compared to the three month period ended March 31, 2010, and declined by $1.0 million as compared to the three month period ended June 30, 2009. The decline of interest expense occurred despite a $24.9 million increase in average interest bearing liabilities during the three month period ended June 30, 2010, as compared to the three month period ended March 31, 2010. For the three month period ended June 30, 2010, interest bearing liabilities increased by $64.4 million as compared to the three month period ended June 30, 2009. For the three month periods ended March 31, 2010 and June 30, 2010, the Company’s quarterly cost of deposits declined from 2.27% to 2.14%, respectively.

Non-interest Income

Non-interest income for the three month period ended June 30, 2010, was $2.5 million, compared to $2.7 million for the three month period ended June 30, 2009. The decline in non-interest income for the three month period ended June 30, 2010, compared to June 30, 2009, was largely the result of a reduction in gains on the sale of investments. For the three months ended June 30, 2010, March 31, 2010, and June 30, 2009, the Company earned $232,000, $494,000 and $809,000, respectively, on gains on the sale of securities. For the six month period ended June 30, 2010 and June 30, 2009, gains on the sale of securities totaled $726,000 and $1.5 million, respectively.

Non-interest Expense

As compared to the three month period ended June 30, 2009, non-interest expenses for the three month period ended June 30, 2010, declined by $194,000. For the six month periods ended June 30, 2010 and June 30, 2009, non-interest expenses increased by $230,000. For the six month periods ended June 30, 2010 and June 30, 2009, the increase in the Company’s non-interest expenses was largely the result of a $219,000 increase in salaries and benefits.

Balance Sheet

Total assets were $1.1 billion at June 30, 2010, an increase of $76.6 million from December 31, 2009. During the same period, the Company’s deposits grew by $50.2 million, while gross loans declined by approximately $14.8 million. The Company’s total borrowings from the Federal Home Loan Bank of Cincinnati declined to $88.6 million at June 30, 2010, from $102.5 million at December 31, 2009.

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 websitewww.bankwithheritage.com.

Information contained in this press release, other than historical information, may be considered forward-looking 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.

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HFBC Reports Second Quarter Results

Page 3

July 26, 2010

HOPFED BANCORP, INC.

Selected Financial Data

(Table amounts in thousands, except percentages and book value per share data)

	Selected Financial Indicators as of:
	June 30, 2010			December 31, 2009
Total assets	$	1,106,431		$	1,029,876
Loans receivable, gross	$	636,428		$	651,206
Securities available for sale	$	368,868		$	289,691
Required investment in FHLB stock, at cost	$	4,377		$	4,281
Allowance for loan loss	$	8,571		$	8,851
Total deposits	$	844,345		$	794,144
Total FHLB borrowings	$	88,617		$	102,465
Repurchase agreements	$	41,061		$	36,060
Stockholders’ equity	$	113,806		$	79,949
Book value per share, gross	$	13.74		$	17.12
Tangible book value per share	$	13.60		$	16.80
Allowance for loan loss / Gross loans		1.35	%		1.36	%
Non-performing assets / Total asset		1.28	%		1.28	%
Non-performing loans / Total loans		1.83	%		1.72	%
Aggregate Troubled Debt Restructurings - Performing	$	10,472		$	10,890
Year to date net charge off ratio		0.54	%		0.23	%
Tier 1 Capital - Bank		8.91	%		8.05	%
Tier 1 Capital - Consolidated		10.61	%		8.38	%
Total Risk Based Capital - Bank		15.03	%		13.30	%
Total Risk Based Capital - Consolidated		18.03	%		13.75	%
Year to date tax equivalent net yield on interest earning assets		3.26	%		2.97	%

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HFBC Reports Second Quarter Results

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July 26, 2010

HOPFED BANCORP, INC.

Selected Financial Data

(Dollars in thousands)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2010		2009		2010		2009
Interest and dividend income:
Loans receivable	$	10,010	$	9,712	$	19,631	$	19,340
Investment in securities, taxable		3,035		3,205		5,957		6,491
Nontaxable securities available for sale		611		390		1,174		662
Interest-earning deposits		—		—		—		8
Total interest and dividend income		13,656		13,307		26,762		26,501
Interest expense:
Deposits		4,501		5,334		9,092		10,800
Advances from Federal Home Loan Bank		826		1,039		1,682		2,076
Repurchase agreements		204		196		406		390
Subordinated debentures		181		176		364		278
Total interest expense		5,712		6,745		11,544		13,544
Net interest income		7,944		6,562		15,218		12,957
Provision for loan losses		858		962		1,469		1,936
Net interest income after provision for loan losses		7,086		5,600		13,749		11,021
Non-interest income:
Service charges		1,036		1,098		2,021		2,022
Merchant card income		179		157		339		297
Gain on sale of loans		103		51		187		120
Gain on sale of securities		232		809		726		1,467
Income from bank owned life insurance		89		74		178		147
Financial services commission		286		250		483		476
Gain on sale of other real estate owned		268		—		293		—
Other operating income		263		302		538		571
Total non-interest income		2,456		2,741		4,765		5,100

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HFBC Reports Second Quarter Results

Page 5

July 26, 2010

HOPFED BANCORP, INC.

Selected Financial Data

(Dollars in thousands, except share and per share data)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2010		2009		2010		2009
Non-interest expenses:
Salaries and benefits	$	3,207	$	3,172	$	6,437	$	6,218
Occupancy expense		767		750		1,556		1,498
Data processing expense		707		639		1,396		1,270
State deposit tax		160		155		317		311
Intangible amortization expense		98		203		195		407
Professional services expense		345		223		597		535
Deposit insurance and examination expense		407		722		788		885
Advertising expense		271		320		512		643
Postage and communications expense		147		164		282		323
Supplies expense		99		91		192		171
Real estate owned expenses		87		61		182		85
Other operating expenses		292		281		519		397
Total non-interest expense		6,587		6,781		12,973		12,743
Income before income tax expense		2,955		1,560		5,541		3,378
Income tax expense		884		449		1,610		1,001
Net income		2,071		1,111	$	3,931	$	2,377
Less:
Dividend on preferred shares		229		229	$	456	$	456
Accretion dividend on preferred shares		28		28	$	55	$	55
Net income available to common stockholders	$	1,814	$	854	$	3,420	$	1,866
Net income available to common stockholders
Per share, basic	$	0.46	$	0.24	$	0.91	$	0.52
Per share, diluted	$	0.46	$	0.24	$	0.91	$	0.52
Dividend per share	$	0.12	$	0.12	$	0.24	$	0.24
Weighted average shares outstanding—basic		3,937,542		3,568,814		3,757,614		3,568,257
Weighted average shares outstanding—diluted		3,939,369		3,568,814		3,757,614		3,568,257

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HFBC Reports Second Quarter Results

Page 6

July 26, 2010

HOPFED BANCORP, INC.

Selected Financial Data

(Dollars in thousands)

	For the Three Months Ended				Change from Prior Quarter
	6/30/2010		3/31/2010
Interest and dividend income:
Loans receivable	$	10,010	$	9,621	$	389
Investment in securities, taxable		3,030		2,922		108
Nontaxable securities available for sale		611		563		48
Interest-earning deposits		5		—		5
Total interest and dividend income		13,656		13,106		550
Interest expense:
Deposits		4,501		4,591		(90	)
Advances from Federal Home Loan Bank		826		856		(30	)
Repurchase agreements		204		202		2
Subordinated debentures		181		183		(2	)
Total interest expense		5,712		5,832		(120	)
Net interest income		7,944		7,274		670
Provision for loan losses		858		611		247
Net interest income after provision for loan losses		7,086		6,663		423
Non-interest income:
Service charges		1,036		985		51
Merchant card income		179		160		19
Gain on sale of loans		103		84		19
Gain on sale of securities		232		494		(262	)
Income from bank owned life insurance		89		89		0
Gain on sale of real estate owned		268		25		243
Financial services commission		286		197		89
Other operating income		263		275		(12	)
Total non-interest income		2,456		2,309		147

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HFBC Reports Second Quarter Results

Page 7

July 26, 2010

HOPFED BANCORP, INC.

Selected Financial Data

(Dollars in thousands, except share and per share data)

	For the Three Months Ended				Change from Prior Quarter
	6/30/2010		3/31/2010
Non-interest expenses:
Salaries and benefits	$	3,207	$	3,230	$	(23	)
Occupancy expense		767		789		(22	)
Data processing expense		707		689		18
State deposit tax		160		157		3
Intangible amortization expense		98		97		1
Professional services expense		345		252		93
Deposit insurance and examination expense		407		381		26
Advertising expense		271		241		30
Postage and communications expense		147		135		12
Supplies expense		99		93		6
Expenses related to real estate owned		87		95		(8	)
Other operating expenses		292		227		65
Total non-interest expense		6,587		6,386		201
Income before income tax expense		2,955		2,586		369
Income tax expense		884		726		158
Net income		2,071		1,860		211
Less:
Dividend on preferred shares		229		227		2
Accretion dividend on preferred shares		28		27		1
Net income available to common stockholders	$	1,814	$	1,606		208
Net income available to common stockholders
Per share, basic	$	0.46	$	0.45	$	0.01
Per share, diluted	$	0.46	$	0.45	$	0.01
Dividend per share	$	0.12	$	0.12
Weighted average shares outstanding—basic		3,937,542		3,578,073
Weighted average shares outstanding—diluted		3,939,369		3,578,073

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HFBC Reports Second Quarter Results

Page 8

July 26, 2010

HOPFED BANCORP, INC.

Selected Financial Data

The table below adjusts tax-free investment income for the six month periods ended June 30, 2010 and June 30, 2009, by $540,000 and $297,000, respectively; for a tax equivalent rate using a cost of funds rate of 2.62% for June 30, 2010, and 3.00% for June 30, 2009. The table adjusts tax-free loan income by $32,000 for June 30, 2010, and $27,000 for June 30, 2009, for a tax equivalent rate using the same cost of funds rate:

	Average Balance 6/30/2010		Income and Expense 6/30/2010			Average Rates 6/30/2010		Average Balance 6/30/2009		Income and Expense 6/30/2009			Average Rates 6/30/2009
	(Table Amounts in Thousands, Except Percentages)
Loans	$	641,078	$	19,663		6.13	%	$	622,881	$	19,367		6.22	%
Investments AFS taxable		263,182		5,957		4.53	%		253,455		6,481		5.11	%
Investment AFS tax free		59,064		1,714		5.80	%		30,510		959		6.29	%
Investment Held to maturity		—		—		—			434		10		4.61	%
Federal funds		—		—		—			4,935		8		0.32	%
Total interest earning assets		963,324		27,334		5.67	%		912,215		26,825		5.88	%
Other assets		97,329							79,132
Total assets	$	1,060,653						$	991,347
Interest bearing retail deposits	$	672,748	$	8,017		2.38	%	$	613,090	$	9,511		3.10	%
Brokered deposits		84,813		1,075		2.53	%		67,506		1,289		3.82	%
FHLB borrowings		96,219		1,682		3.50	%		123,622		2,076		3.36	%
Repurchase agreements		39,208		406		2.07	%		31,389		390		2.48	%
Subordinated debentures		10,310		364		7.06	%		10,310		278		5.39	%
Total interest bearing liabilities		903,298		11,544		2.56	%		845,917		13,544		3.20	%
Non-interest bearing deposits		67,657							60,377
Other liabilities		4,582							4,874
Stockholders’ equity		85,116							80,179
Total liabilities and stockholders’ equity	$	1,060,653						$	991,347
Net change in interest earning assets and interest bearing liabilities			$	15,790		3.11	%			$	13,281		2.68	%
Net yield on interest earning assets				3.28	%						2.91	%

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HFBC Reports Second Quarter Results

Page 9

July 26, 2010

HOPFED BANCORP, INC.

Selected Financial Data

The table below adjusts tax-free investment income for the three month periods ended June 30, 2010 and June 30, 2009, by $281,000 and $175,000, respectively; for a tax equivalent rate using a cost of funds rate of 2.50% for June 30, 2010, and 3.00% for June 30, 2009. The table adjusts tax-free loan income by $14,000 for June 30, 2010, and $8,000 for June 30, 2009, for a tax equivalent rate using the same cost of funds rate:

	Average Balance 6/30/2010		Income and Expense 6/30/2010			Average Rates 6/30/2010		Average Balance 6/30/2009		Income and Expense 6/30/2009			Average Rates 6/30/2009
	(Table Amounts in Thousands, Except Percentages)
Loans	$	639,548	$	10,024		6.27	%	$	627,045	$	9,720		6.20	%
Investments AFS taxable		277,749		3,035		4.37	%		256,961		3,200		4.98	%
Investment AFS tax free		62,688		892		5.69	%		35,625		565		6.35	%
Investment Held to maturity		—		—		—			423		5		4.73	%
Federal funds		—		—		—			25		0		0.00	%
Total interest earning assets		979,985		13,951		5.69	%		920,079		13,490		5.86	%
Other assets		97,661							79,824
Total assets	$	1,077,646						$	999,903
Interest bearing retail deposits	$	687,335	$	3,982		2.32	%	$	617,712	$	4,735		3.07	%
Brokered deposits		84,376		519		2.46	%		68,732		599		3.49	%
FHLB borrowings		93,288		826		3.54	%		123,168		1,039		3.37	%
Repurchase agreements		40,345		204		2.02	%		31,292		196		2.51	%
Subordinated debentures		10,310		181		7.02	%		10,310		176		6.83	%
Total interest bearing liabilities		915,654		5,712		2.50	%		851,214		6,745		3.17	%
Non-interest bearing deposits		68,845							62,329
Other liabilities		6,061							5,168
Stockholders’ equity		87,086							81,192
Total liabilities and stockholders’ equity	$	1,077,646						$	999,903
Net change in interest earning assets and interest bearing liabilities			$	8,239		3.19	%			$	6,745		2.69	%
Net yield on interest earning assets				3.36	%						2.93	%

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