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, 2013) – HopFed Bancorp, Inc. (NASDAQ: HFBC) (the “Company”), the holding company for Heritage Bank USA, Inc. (the “Bank”), today reported results for the three and six month periods ended June 30, 2013. For the three month period ended June 30, 2013, the Company’s net income available to common shareholders was $1.2 million, or $0.16 per share, basic and diluted, compared to net income available to common shareholders of $903,000, or $0.12 per share basic and diluted, for the three month period ended June 30, 2012. For the six month period ended June 30, 2013, the Company’s net income available to common shareholders was $2.2 million, or $0.29 per share, basic and diluted, compared to a net income attributable to common shareholders of $1.4 million, or $0.18 per share basic and diluted, for the six month period ended June 30, 2012.

Commenting on the second quarter results, John E. Peck, President and Chief Executive Officer, said, “Operating results improved modestly during the three month period ended June 30, 2013, as compared to the three months period ended March 31, 2013, due to an increase in gains on the sales of securities, an increase in the amount of service charge income and an increase in the amount of financial services commissions. The Company continues to carefully control our non-interest expenses as our linked quarter operating expenses declined by $150,000 and total operating expenses for the six month period ended June 30, 2013, were $140,000 lower as compared to the six month period ended June 30, 2012.”

Mr. Peck continued, “The Company’s non-accrual loans increased during the three month period ended June 30, 2013, as we placed a $6.3 million non-residential real estate relationship in non-accrual status and charged off approximately $1.3 million of that relationship in June 2013. The increase in non-accrual loans reduced interest income on loans by approximately $140,000. The increase in non-accruals did not result in an increase in the necessary funding level of the allowance for loan loss account or result in a material increase in the Company’s level of adversely classified assets.”

Mr. Peck concluded, “The Company continues to improve its deposit mix by reducing the Company’s reliance on time deposit funding. At June 30, 2013, the Company’s linked quarter non-interest expense declined by $120,000. In the three month period ending September 30, 2013, the Company has more than $60.0 million in time deposits re-pricing at a weighted average cost of 1.71%. The potential to lower our interest on deposit expense is likely to be offset by lower yields on loans and investments.”

Financial Highlights

• At June 30, 2013, the Company’s tangible book value was $13.05 per share and tangible common equity ratio was 10.31%. The reduction in book value at June 30, 2013, as compared to March 31, 2013, was the result of a lower level of unrealized gains on securities. The Bank’s Tier 1 Capital and Total Risk Based Capital Ratios at June 30, 2013, were 11.04% and 19.14%, respectively. The Company’s Tier 1 Capital and Total Risk Based Capital Ratios were 11.18% and 19.31%, respectively.

• At June 30, 2013, the Company’s allowance for loan loss totaled $9.4 million, or 1.75% of total loans and 79.6% of non-accrual loans. In the six month period ended June 30, 2013, the Company’s net charge offs totaled $2.0 million, or an annualized rate of 0.77% of average loans.

• For the three month period ended June 30, 2013, the Company’s net interest margin was 2.90%, as compared to 2.87% for the three month period ended June 30, 2012, and 2.99% for the three month period ended March 31, 2013. During the three month period ended June 30, 2013, net interest income was reduced by approximately $140,000 due to increases in non-accrual loans.

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HFBC Reports Second Quarter Results

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July 26, 2013

Asset Quality

At June 30, 2013, the Company’s level of non-accrual loans totaled $11.8 million, as compared to $7.7 million at December 31, 2012, and $7.1 million at March 31, 2013. The increase in non-accrual loans is largely the result of one non-residential real estate relationship of approximately $5.0 million being classified as non-accrual in June 2013.

A summary of non-accrual loans at June 30, 2013, and December 31, 2012, is as follows:

	June 30, 2013		December 31, 2012
	(Dollars in Thousands)
One-to-four family mortgages		1,131		2,243
Home equity line of credit		21		66
Junior lien		37		4
Multi-family		—		38
Construction		—		—
Land		2,256		2,768
Non-residential real estate		7,054		1,134
Farmland		781		648
Consumer loans		354		145
Commercial loans		177		617
Total non-accrual loans		11,811		7,663

A summary of the level of classified loans at June 30, 2013, is as follows:

									Total		Specific Reserve for Impairment		Reserve for Performing Loans
June 30, 2013	Pass		Special Mention		Impaired Loans
					Substandard		Doubful
	(Dollars in Thousands)
One-to-four family mortgages		151,332		1,169		5,348		31		157,880		794		1,583
Home equity line of credit		35,017		—		965		—		35,982		146		243
Junior liens		3,361		45		506		—		3,912		—		63
Multi-family		27,870		—		2,095		—		29,965		—		233
Construction		8,818		176		—		—		8,994		—		67
Land		22,186		7,441		9,519		—		39,146		1,305		415
Non-residential real estate		126,709		932		13,750		—		141,391		1,145		1,892
Farmland		45,086		352		4,862		—		50,300		—		462
Consumer loans		12,418		—		438		—		12,856		—		392
Commercial loans		53,890		435		2,930		—		57,255		177		482
Total		486,687		10,550		40,413		31		537,681		3,567		5,832

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HFBC Reports Second Quarter Results

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July 26, 2013

At June 30, 2013, non-accrual loans plus other real estate owned totaled $13.4 million, or 1.42% of total assets, as compared to $9.2 million, or 0.95% of total assets, at December 31, 2012. A summary of the activity in other real estate owned for the six month period ended June 30, 2013, is as follows:

			Activity During 2013
	Balance 12/31/2012		Foreclosures		Proceeds			Reduction in Values			Gain (Loss) on Sale			Balance 6/30/2013
			(Dollars in Thousands)
One-to-four family mortgages	$	258		548		(349	)		—			(10	)		447
Multi-family		—		—		—			—			—			—
Construction		130		—		(110	)		(110	)		90			—
Land		1,112		—		—			—			—			1,112
Non-residential real estate		44		40		—			(11	)		—			73
Consumer assets		4		5		(3	)		(4	)		(2	)		—
Total	$	1,548		593		(462	)		(125	)		78			1,632

At June 30, 2013, the Company’s level of loans classified as substandard and doubtful were $40.4 million and $31,000, respectively, as compared to $66.6 million and none, respectively, at December 31, 2012. At June 30, 2013, the Company’s classified loan to risk based capital ratio was 35.5%. The Company’s specific reserve for impaired loans was $3.6 million at June 30, 2013, and $3.8 million at December 31, 2012, respectively.

At June 30, 2013, the Company’s level of performing Troubled Debt Restructurings (“TDRs”) was $469,000, as compared to $11.0 million at December 31, 2012. A summary of the activity in loans classified as TDRs for the six month period ended June 30, 2013, is as follows:

											Removed
								Removed due to			from
	Balance at		New		Loss or			Payment or			(Taken to)			Balance at
	12/31/12		TDR		Foreclosure			Performance			Non-accrual			6/30/13
					(Dollars in Thousands)
One-to-four family mortgages	$	1,888		242		—			(1,863	)		—			267
Home equity line of credit		—		—		—			—			—			—
Junior Lien		96		—		—			(10	)		(86	)		—
Multi-family		234		—		—			(234	)		—			—
Construction		4,112		—		—			—			(4,112	)		—
Land		656		2,649		(393	)		(656	)		—			2,256
Non-residential real estate		3,173		266		(864	)		(3,344	)		4,112			3,343
Farmland		865		—		—			(865	)		—			—
Consumer loans		5		—		—			(1	)		—			4
Commercial loans		9		222		—			(1	)		—			230
Total performing TDR	$	11,038		3,379		(1,257	)		(6,974	)		(86	)		6,100

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HFBC Reports Second Quarter Results

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July 26, 2013

A summary of TDRs and non-performing TDRs at June 30, 2013, and December 31, 2012, is stated below:

	June 30, 2013			December 31, 2012
	(Dollars in Thousands)
One-to-four family mortgages	$	267			1,888
Home equity line of credit		—			—
Junior lien		—			196
Multi-family		—			234
Construction		—			4,112
Land		2,256			3,424
Non-residential real estate		3,343			3,173
Farmland		—			909
Consumer loans		4			5
Commercial loans		230			128
Total TDR		6,100			14,069
Less:
TDR in non-accrual status
One-to-four family mortgages		—			—
Home equity line of credit		—			—
Junior lien		—			(100	)
Multi-family		—			—
Construction		—			—
Land		(2,256	)		(2,768	)
Non-residential real estate		(3,248	)		(44	)
Consumer loans		—			—
Commercial loans		(127	)		(119	)
Total performing TDR	$	469		$	11,038

Net Interest Income

For the three month period ended June 30, 2013, the Company’s net interest income was $6.2 million, compared to $6.7 million for the three month period ended June 30, 2012, and $6.4 million for the three month period ended March 31, 2013.

For the three month period ended June 30, 2013, the Company’s net interest margin was 2.90%, as compared to 2.87% for the three month period ended June 30, 2012, and 2.99% for the three month period ended March 31, 2013.

For the six month period ended June 30, 2013, the Company’s net interest income was $12.6 million, as compared to $13.5 million for the six month period ended June 30, 2012. For the six month period ended June 30, 2013, the Company’s net interest margin was 2.94%, as compared to 2.93% for the six month period ended June 30, 2012.

The declines in the Company’s net interest income and net interest margin are largely the result of declining average loan balances and investment securities. Furthermore, the yields on all classes of earning assets continue to decline as both short term and long term rates are near record low levels. The Company’s results for the three and six month periods ended June 30, 2013, were negatively impacted by a substantial increase in non-accrual loans.

Non-interest Income

Non-interest income for the three month period ended June 30, 2013, was $2.8 million, as compared to $2.6 million for the three month period ended June 30, 2012, and $2.5 million for the three month period ended March 31, 2013.Non-interest income for the six month periods ended June 30, 2013, and June 30, 2012, was $5.3 million and $4.6 million, respectively. The increase in non-interest income for the three month period ended June 30, 2013, as compared to the three month periods ended June 30, 2012, and March 31, 2013, was primarily the result of an increase in gains on the sale of securities.

The Company recognized net gains on the sale of securities of $789,000, $630,000, and $627,000 for the three month periods ended June 30, 2013, June 30, 2012, and March 31, 2013, respectively. The Company recognized net gains on the sales of securities of $1.4 million and $674,000, for the six month periods ended June 30, 2013, and June 30, 2012, respectively.

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HFBC Reports Second Quarter Results

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July 26, 2013

For the three and six month periods ended June 30, 2013, the Company’s revenue related to the origination of fixed rate mortgage loans was $212,000 and $412,000, respectively, as compared to $263,000 and $466,000 for the same periods in 2012. The Company earned $347,000 and $644,000 in commission from our financial services production during the three and six month periods ended June 30, 2013, as compared to $271,000 and $498,000, respectively for the same periods in 2012.

Non-interest Expense

Non-interest expenses were $7.1 million, $7.4 million and $7.3 million for the three month periods ended June 30, 2013, June 30, 2012, and March 31, 2013, respectively. For the six months ended June 30, 2013, and June 30, 2012, non-interest expenses were $14.4 million and $14.5 million, respectively.

On a linked quarter basis, professional services expenses increased by $156,000. The increase in professional services expense was largely the result of the Company’s contested proxy vote. On a linked quarter basis, the Company has experienced a modest decline in most operating expense line items. For the three month period ended June 30, 2013, the Company’s salaries and benefits expense declined by $134,000 as compared to the previous quarter, and total operating expenses declined by $150,000, each as compared to the previous quarter.

Balance Sheet

At June 30, 2013, consolidated assets were $949.4 million, a decrease of $18.3 million as compared to December 31, 2012. The decline in assets is largely the result of a $29.0 million reduction in time deposits as the Company has chosen to allow selected high cost deposit funding to leave the Company. The Company has funded the outflow of deposits by the sale of securities.

For the six month period ended June 30, 2013, gross loans increased by approximately $2.1 million, to $537.7 million as compared to $535.6 million at December 31, 2012. In the Company’s market area, desirable lending opportunities remain limited at this time, making meaningful loan growth challenging.

The Company

Prior to June 5, 2013, HopFed Bancorp, Inc. was a federally chartered savings and loan holding company with Heritage Bank as its wholly owned thrift subsidiary. On June 5, 2013, Heritage Bank’s legal name was changed to Heritage Bank USA, Inc. and its charter was converted to a Kentucky state chartered commercial bank with the Kentucky Department of Financial Institutions and the Federal Deposit Insurance Corporation as its regulators. Also on June 5, 2013, HopFed Bancorp, Inc. became a non-member federally chartered commercial bank holding company regulated by the Federal Reserve Board. HopFed Bancorp, Inc. is the holding company for Heritage Bank USA, Inc. headquartered in Hopkinsville, Kentucky. The Bank has eighteen offices in western Kentucky and middle Tennessee in addition to its subsidiary, Fall & Fall Insurance of Fulton, Kentucky. The Company has two additional operating divisions including Heritage Wealth Management of Murray, Kentucky, Hopkinsville, Kentucky, Kingston Springs, Tennessee and Pleasant View, Tennessee, which offers a broad line of financial services. Heritage Mortgage Services of Clarksville, Tennessee offers long term fixed rate 1- 4 family mortgages loans that are originated for the secondary market in all communities in the Company’s general market area. 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 USA, Inc. may be found on its websitewww.bankwithheritage.com.

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HFBC Reports Second Quarter Results

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July 26, 2013

Forward-Looking Information

Information contained in this press release, other than historical information, may be consideredforward-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. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations. Certain tabular presentations may not reconcile because of rounding.

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HFBC Reports Second Quarter Results

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July 26, 2013

HOPFED BANCORP, INC.

Balance Sheet

(Dollars in thousands)

	June 30, 2013		December 31, 2012
	(unaudited)
Assets
Cash and due from banks	$	20,070		31,563
Interest-earning deposits		9,633		5,613
Cash and cash equivalents		29,703		37,176
Federal Home Loan Bank stock, at cost		4,428		4,428
Securities available for sale		338,936		356,345
Loans receivable, net of allowance for loan losses of $9,399 at June 30, 2013, and $10,648 at December 31, 2012		528,282		524,985
Accrued interest receivable		4,919		5,398
Real estate and other assets owned		1,632		1,548
Bank owned life insurance		9,486		9,323
Premises and equipment, net		21,853		22,557
Deferred tax assets		3,383		—
Intangible asset		195		292
Other assets		6,578		5,637
Total assets	$	949,395		967,689
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest-bearing accounts	$	94,426		94,083
Interest-bearing accounts
Interest bearing checking accounts		154,444		147,047
Savings and money market accounts		85,735		81,643
Other time deposits		408,059		437,092
Total deposits		742,664		759,865
Advances from Federal Home Loan Bank		45,768		43,741
Repurchase agreements		47,072		43,508
Subordinated debentures		10,310		10,310
Advances from borrowers for taxes and insurance		697		396
Dividends payable		177		180
Deferred tax liability		—		568
Accrued expenses and other liabilities		4,634		4,122
Total liabilities		851,322		862,690

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

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HFBC Reports Second Quarter Results

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July 26, 2013

HOPFED BANCORP, INC.

Balance Sheet

(Dollars in thousands)

	June 30, 2013			December 31, 2012
	(unaudited)
Stockholders’ equity
Preferred stock, par value $0.01 per share; authorized - 500,000 shares; 18,400 shares issued and no shares outstanding at June 30, 2013, and December 31, 2012.		—			—
Common stock, par value $.01 per share; authorized 15,000,000 shares; 7,905,955 issued and 7,503,039 outstanding at June 30, 2013, and 7,905,728 issued and 7,502,812 outstanding at December 31, 2012		79			79
Common stock warrant		—			556
Additional paid-in-capital		76,634			76,288
Retained earnings		43,679			41,829
Treasury stock- preferred (at cost, 18,400 shares at June 30, 2013, and December 31, 2012)		(18,400	)		(18,400	)
Treasury stock- common (at cost, 402,916 shares at June 30, 2013, and December 31, 2012)		(5,076	)		(5,076	)
Accumulated other comprehensive income, net of taxes		1,157			9,723
Total stockholders’ equity		98,073			104,999
Total liabilities and stockholders’ equity	$	949,395			967,689

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

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HFBC Reports Second Quarter Results

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July 26, 2013

HOPFED BANCORP, INC.

Selected Financial Data

(Dollars in thousands)

	For the Three Month Periods				For the Six Month Periods
	Ended June 30,				Ended June 30,
	2013		2012		2013		2012
Interest and dividend income:
Loans receivable		6,676		7,413		13,558		15,214
Investment in securities, taxable		1,764		2,434		3,596		4,809
Investment in securities, non-taxable		547		547		1,132		1,122
Interest-earning deposits		7		6		13		14
Total interest and dividend income		8,994		10,400		18,299		21,159
Interest expense:
Deposits		1,936		2,755		3,982		5,639
Advances from Federal Home Loan Bank		446		565		890		1,138
Repurchase agreements		230		237		472		485
Subordinated debentures		182		181		364		368
Total interest expense		2,794		3,738		5,708		7,630
Net interest income		6,200		6,662		12,591		13,529
Provision for loan losses		406		400		782		1,269
Net interest income after provision for loan losses		5,794		6,262		11,809		12,260
Non-interest income:
Service charges		937		973		1,790		1,911
Merchant card income		259		212		482		408
Mortgage origination revenue		212		263		412		466
Gain on sale of securities		789		630		1,416		674
Income from bank owned life insurance		87		79		162		158
Financial services commission		347		271		644		498
Other operating income		197		211		405		441
Total non-interest income		2,828		2,639		5,311		4,556

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

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HFBC Reports Second Quarter Results

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July 26, 2013

HOPFED BANCORP, INC.

Selected Financial Data

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

	For the Three Month Periods				For the Six Month Periods
	Ended June 30,				Ended June 30,
	2013		2012		2013		2012
Non-interest expenses:
Salaries and benefits		3,714		3,561		7,562		7,068
Occupancy expense		882		884		1,727		1,739
Data processing expense		646		627		1,296		1,252
State bank tax		147		162		289		324
Intangible amortization expense		48		65		97		130
Professional services expense		549		498		942		886
Deposit insurance and examination expense		179		434		411		853
Advertising expense		308		324		641		628
Postage and communications expense		139		157		278		298
Supplies expense		93		105		229		216
Loss on disposal of equipment		—		2		—		8
Loss on sale of real estate owned		12		72		47		219
Real estate owned expenses		32		25		108		71
Other operating expenses		375		523		771		846
Total non-interest expense		7,124		7,439		14,398		14,538
Income before income tax expense		1,498		1,462		2,722		2,278
Income tax expense		332		300		572		389
Net income		1,166		1,162		2,150		1,889
Less:
Dividend on preferred shares		—		231		—		460
Accretion dividend on preferred shares		—		28		—		56
Net income available to common shareholders	$	1,166	$	903	$	2,150	$	1,373
Net income available to common shareholders
Per share, basic	$	0.16	$	0.12	$	0.29	$	0.18
Per share, diluted	$	0.16	$	0.12	$	0.29	$	0.18
Dividend per share	$	0.02	$	0.02	$	0.04	$	0.04
Weighted average shares outstanding - basic		7,488,906		7,485,283		7,488,788		7,484,498
Weighted average shares outstanding - diluted		7,488,906		7,485,283		7,488,788		7,484,498

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

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HFBC Reports Second Quarter Results

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July 26, 2013

HOPFED BANCORP, INC.

Selected Financial Data

(Dollars in thousands)

		For the Three Months Ended
		6/30/2013		3/31/2013		Change from Prior Quarter
Interest and dividend income:
Loans receivable			6,676		6,882		(206	)
Investment in securities, taxable			1,764		1,832		(68	)
Investment in securities, non-taxable			547		585		(38	)
Interest-earning deposits			7		6		1
Total interest and dividend income			8,994		9,305		(311	)
Interest expense:
Deposits			1,936		2,046		(110	)
Advances from Federal Home Loan Bank			446		444		2
Repurchase agreements			230		242		(12	)
Subordinated debentures			182		182		—
Total interest expense			2,794		2,914		(120	)
Net interest income			6,200		6,391		(191	)
Provision for loan losses			406		376		30
Net interest income after provision for loan losses			5,794		6,015		(221	)
Non-interest income:
Service charges			937		853		84
Merchant card income			259		223		36
Mortgage orgination revenue			212		200		12
Gain on sale of securities	��		789		627		162
Income from bank owned life insurance			87		75		12
Financial services commission			347		297		50
Other operating income			197		208		(11	)
Total non-interest income			2,828		2,483		345

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

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HFBC Reports Second Quarter Results

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July 26, 2013

HOPFED BANCORP, INC.

Selected Financial Data

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

	Months Ended
	6/30/2013		3/31/2013		Change from Prior Quarter
Non-interest expenses:
Salaries and benefits	$	3,714		3,848		(134	)
Occupancy expense		882		845		37
Data processing expense		646		650		(4	)
State bank tax		147		142		5
Intangible amortization expense		48		49		(1	)
Professional services expense		549		393		156
Deposit insurance and examination expense		179		232		(53	)
Advertising expense		308		333		(25	)
Postage and communications expense		139		139		—
Supplies expense		93		136		(43	)
Loss on sale of real estate owned		12		35		(23	)
Real estate owned expenses		32		76		(44	)
Other operating expenses		375		396		(21	)
Total non-interest expense		7,124		7,274		(150	)
Income before income tax expense		1,498		1,224		274
Income tax expense		332		240		92
Net income		1,166		984		182
Net income available to common stockholders
Per share, basic	$	0.16	$	0.13		0.03
Per share, diluted	$	0.16	$	0.13		0.03
Dividend per share	$	0.02	$	0.02
Weighted average shares outstanding - basic		7,488,906		7,488,445
Weighted average shares outstanding - diluted		7,488,906		7,488,445

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

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HFBC Reports Second Quarter Results

Page 13

July 26, 2013

HOPFED BANCORP, INC.

Selected Financial Data

The table below adjusts tax-free investment income for the six month periods ended June 30, 2013, and June 30, 2012, by $545,000 and $533,000, respectively; for a tax equivalent rate using a cost of funds rate of 1.50% for the six month period ended June 30, 2013, and 1.80% for the six month period ended June 30, 2012. The table adjusts tax-free loan income by $4,000 for six month period ended June 30, 2012, and $5,000 for the six month period ended June 30, 2012, for a tax equivalent rate using the same cost of funds rate:

	Average Balance 6/30/2013		Income and Expense 6/30/2013			Average Rates 6/30/2013			Average Balance 6/30/2012		Income and Expense 6/30/2012			Average Rates 6/30/2012
	(Table Amounts in Thousands, Except Percentages)
Loans	$	525,448		13,562			5.16	%	$	547,815		15,219			5.56	%
Investments AFS taxable		283,867		3,596			2.53	%	$	329,809		4,809			2.92	%
Investment AFS tax free		73,499		1,677			4.56	%	$	66,852		1,655			4.95	%
Interest earning deposits		9,672		13			0.27	%	$	14,762		14			0.19	%
Total interest earning assets		892,486		18,848			4.22	%		959,238		21,697			4.52	%
Other assets		79,201								89,115
Total assets	$	971,687							$	1,048,353
Retail time deposits		378,326		2,877			1.52	%		451,622		4,459			1.97	%
Brokered deposits		46,390		362			1.56	%		54,265		510			1.88	%
Saving & MMDA		83,367		70			0.17	%		73,453		66			0.18	%
Now accounts		165,564		673			0.81	%		147,336		604			0.82	%
FHLB borrowings		43,586		890			4.08	%		62,537		1,138			3.64	%
Repurchase agreements		40,595		472			2.33	%		41,915		485			2.31	%
Subordinated debentures		10,310		364			7.06	%		10,310		368			7.14	%
Total interest bearing liabilities		768,138		5,708			1.49	%		841,438		7,630			1.81	%
Non-interest bearing deposits		93,857								82,153
Other liabilities		4,944								5,212
Stockholders’ equity		104,748								119,550
Total liabilities and stockholders’ equity	$	971,687							$	1,048,353
Net interest income				13,140								14,067
Net interest spread							2.73	%							2.71	%
Net interest margin				2.94	%							2.93	%

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

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HFBC Reports Second Quarter Results

Page 14

July 26, 2013

HOPFED BANCORP, INC.

Selected Financial Data

The table below adjusts tax-free investment income for the three month periods ended June 30, 2013, and June 30, 2012, by $263,000 and $260,000, respectively; for a tax equivalent rate using a cost of funds rate of 1.50% for the three month period ended June 30, 2013, and 1.80% for the three month period ended June 30, 2012. The table adjusts tax-free loan income by $2,000 for three month period ended June 30, 2013 and $3,000 for the three month period ended June 30, 2012, for a tax equivalent rate using the same cost of funds rate:

	Average Balance 6/30/2013		Income and Expense 6/30/2013			Average Rates 6/30/2013			Average Balance 6/30/2012		Income and Expense 6/30/2012			Average Rates 6/30/2012
	(Table Amounts in Thousands, Except Percentages)
Loans	$	528,160		6,678			5.06	%	$	544,056		7,416			5.45	%
Investments AFS taxable		283,262		1,764			2.49	%		339,125		2,434			2.87	%
Investment AFS tax free		71,333		810			4.54	%		68,035		807			4.74	%
Interest earning deposits		9,465		7			0.30	%		13,632		6			0.18	%
Total interest earning assets		892,220		9,259			4.15	%		964,848		10,663			4.42	%
Other assets		73,757								79,426
Total assets	$	965,977							$	1,044,274
Retail time deposits		371,908		1,378			1.48	%		445,784		2,186			1.96	%
Brokered deposits		45,688		178			1.56	%		51,185		226			1.77	%
Savings & MMDA		86,018		37			0.17	%		74,472		33			0.18	%
Now accounts		167,038		343			0.82	%		150,813		310			0.82	%
FHLB borrowings		43,612		446			4.09	%		62,105		565			3.64	%
Repurchase agreements		38,185		230			2.41	%		39,788		237			2.38	%
Subordinated debentures		10,310		182			7.06	%		10,310		181			7.02	%
Total interest bearing liabilities		762,759		2,794			1.47	%		834,457		3,738			1.79	%
Non-interest bearing deposits		93,616								83,803
Other liabilities		4,891								4,158
Stockholders’ equity		104,711								121,856
Total liabilities and stockholders’ equity	$	965,977							$	1,044,274
Net interest income				6,465								6,925
Interest rate spread							2.68	%							2.63	%
Net interest margin				2.90	%							2.87	%

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