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

Exhibit 99.1

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

HOPFED BANCORP, INC. REPORTS THIRD QUARTER RESULTS

HOPKINSVILLE, Ky. (October 28, 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 nine month periods ended September 30, 2013. For the three month period ended September 30, 2013, the Company’s net income available to common shareholders was $536,000, or $0.07 per share, basic and diluted, compared to net income available to common shareholders of $819,000, or $0.11 per share basic and diluted, for the three month period ended September 30, 2012. For the nine month period ended September 30, 2013, the Company’s net income available to common shareholders was $2.7 million, or $0.36 per share, basic and diluted, compared to a net income attributable to common shareholders of $2.2 million, or $0.29 per share basic and diluted, for the nine month period ended September 30, 2012.

Commenting on the third quarter results, John E. Peck, President and Chief Executive Officer, said, “The Company’s net interest income for the three month period ended September 30, 2013, improved compared to the three month periods ending June 30, 2013, and September 30, 2012. The improved levels of net interest income are the result of our ability to reduce our interest expense by $298,000 on a linked quarter basis. As compared to the three month period ended September 30, 2012, total interest expense declined by approximately $1.6 million in the three month period ended September 30, 2013.”

Mr. Peck continued, “The Company’s non-interest expenses for the three and nine month periods ending September 30, 2013, remain relatively unchanged as compared to the same periods in 2012. On a linked quarter basis, non-interest expenses declined $141,000 despite an increase in non-interest expense associated with the termination of a merger agreement. We continue to focus on operating as efficiently as possible while focusing our energies to grow our loan portfolio in a safe and prudent manner.”

Mr. Peck concluded, “We recently announced a stock purchase program of 375,000 shares as well as an increase in our quarterly dividend payments. These announcements reflect the confidence of the Board of Directors and Management in the future of the Company.”

Financial Highlights

• At September 30, 2013, the Company’s tangible book value was $12.92 per share and tangible common equity ratio was 10.32%. The reduction in book value at September 30, 2013, as compared to December 31, 2012, 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 September 30, 2013, were 10.71% and 18.36%, respectively. The Company’s Tier 1 Capital and Total Risk Based Capital Ratios were 11.04% and 19.20%, respectively.

• At September 30, 2013, the Company’s allowance for loan loss totaled $9.4 million, or 1.74% of total loans and 77.7% of non-accrual loans. In the nine month period ended September 30, 2013, the Company’s net charge offs totaled $2.4 million, or an annualized rate of 0.61% of average loans.

• For the three month period ended September 30, 2013, the Company’s net interest margin was 3.04%, as compared to 2.67% for the three month period ended September 30, 2012, and 2.99% for the three month period ended June 30, 2013.

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HFBC Reports Third Quarter Results

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October 28, 2013

Asset Quality

At September 30, 2013, the Company’s level of non-accrual loans totaled $12.1 million, as compared to $7.7 million at December 31, 2012, and $11.8 million at June 30, 2013. A summary of non-accrual loans at September 30, 2013, and December 31, 2012, is as follows:

	September 30, 2013		December 31, 2012
	(Dollars in Thousands)
One-to-four family mortgages		865		2,243
Home equity line of credit		275		66
Junior lien		2		4
Multi-family		—		38
Construction		—		—
Land		2,257		2,768
Non-residential real estate		7,187		1,134
Farmland		744		648
Consumer loans		316		145
Commercial loans		482		617
Total non-accrual loans		12,128		7,663

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

											Specific		Allowance
					Impaired Loans						Allowance		for
September 30, 2013			Special								for		Performing
	Pass		Mention		Substandard		Doubtful		Total		Impairment		Loans
	(Dollars in Thousands)
One-to-four family mortgages	$	151,028		1,423		5,406		—		157,857		755		1,386
Home equity line of credit		34,195		—		877		—		35,072		66		218
Junior liens		3,163		44		369		—		3,576		17		85
Multi-family		28,433		—		—		—		28,433		—		350
Construction		9,182		176		—		—		9,358		—		69
Land		19,523		1,789		16,209		—		37,521		828		298
Non-residential real estate		135,008		2,183		14,304		—		151,495		1,573		2,105
Farmland		45,275		807		4,826		—		50,908		—		439
Consumer loans		11,769		—		540		—		12,309		119		459
Commercial loans		52,089		96		2,746		—		54,931		44		607
Total	$	489,665		6,518		45,277		—		541,460		3,402		6,016

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HFBC Reports Third Quarter Results

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October 28, 2013

At September 30, 2013, non-accrual loans plus other real estate owned totaled $13.6 million, or 1.45% 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 nine month period ended September 30, 2013, is as follows:

	Activity During 2013
	Balance							Reduction			Gain (Loss)			Balance
	12/31/2012		Foreclosures		Proceeds			in Values			on Sale			9/30/2013
	(Dollars in Thousands)
One-to-four family mortgages	$	258		758		(790	)		(8	)		34			252
Multi-family		—		—		—			—			—			—
Construction		130		—		(110	)		(110	)		90			—
Land		1,112		—		—			—			—			1,112
Non-residential real estate		44		40		(18	)		(11	)		18			73
Consumer assets		4		7		(3	)		(4	)		(2	)		2
Total	$	1,548		805		(921	)		(133	)		140			1,439

At September 30, 2013, the Company’s level of loans classified as substandard was $45.3 million as compared to $66.6 million at December 31, 2012. At September 30, 2013, the Company’s classified loan to risk based capital ratio was 39.2%. The Company’s specific reserve for impaired loans was $3.4 million at September 30, 2013, and $3.8 million at December 31, 2012, respectively.

At September 30, 2013, the Company has no loans classified as Troubled Debt Restructurings (“TDRs”) as compared to $11.0 million at December 31, 2012. A summary of the activity in loans classified as TDRs for the nine month period ended September 30, 2013, is as follows:

	Balance at 12/31/12		New TDR		Loss or Foreclosure			Removed due to Payment or Performance			Removed from (Taken to) Non-accrual			Balance at 9/30/13
	(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	)					(2,575	)		—
Farmland		865		—		—			(865	)		—			—
Consumer loans		5		—		—			(5	)		—			—
Commercial loans		9		222		—			(231	)		—			—
Total performing TDR	$	11,038		3,379		(1,257	)		(3,864	)		(9,296	)		—

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HFBC Reports Third Quarter Results

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October 28, 2013

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

		September 30, 2013		December 31, 2012
		(Dollars in Thousands)
One-to-four family mortgages			—		1,888
Home equity line of credit			—		—
Junior lien			—		196
Multi-family			—		234
Construction			—		4,112
Land			—		3,424
Non-residential real estate			—		3,173
Farmland	��		—		909
Consumer loans			—		5
Commercial loans			—		128
Total TDR			—		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			—		(2,768	)
Non-residential real estate			—		(44	)
Consumer loans			—		—
Commercial loans			—		(119	)
Total performing TDR			—	$	11,038

Net Interest Income

For the three month period ended September 30, 2013, the Company’s net interest income was $6.3 million, compared to $5.9 million for the three month period ended September 30, 2012, and $6.2 million for the three month period ended June 30, 2013. For the three month period ended September 30, 2013, the Company’s net interest margin was 3.04%, as compared to 2.67% for the three month period ended September 30, 2012, and 2.90% for the three month period ended June 30, 2013.

For the nine month period ended September 30, 2013, the Company’s net interest income was $18.9 million, as compared to $19.4 million for the nine month period ended September 30, 2012. For the nine month period ended September 30, 2013, the Company’s net interest margin was 2.98%, as compared to 2.84% for the nine month period ended September 30, 2012.

The increase in the Company’s net interest income and net interest margin are largely the result of significant balances of time deposits that matured in the second and third quarters of 2013. The Company anticipates that the full benefit of the deposit maturities will be realized in the fourth quarter of 2013. The Company does not anticipate that it can make material reductions in its deposit structure for the next few quarters as the weighted average cost of upcoming maturities are generally below 1.00%.

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HFBC Reports Third Quarter Results

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October 28, 2013

Non-interest Income

Non-interest income for the three month period ended September 30, 2013, was $1.8 million, as compared to $2.9 million for the three month period ended September 30, 2012, and $2.8 million for the three month period ended June 30, 2013. Non-interest income for the nine month periods ended September 30, 2013, and September 30, 2012, was $7.1 million and $7.5 million, respectively.

The decline in non-interest income for the three month period ended September 30, 2013, as compared to the three month periods ended September 30, 2012, and June 30, 2013, was primarily the result of a $400,000 other than temporary impairment on the trust preferred security in the Company’s investment portfolio and a reduced amount of gains on the sale of securities. In June 2008, the Company purchased a $2.0 million private placement trust preferred security issued by First Financial Services Corporation (“FFKY”) of Elizabethtown, Kentucky. The security has a thirty year maturity and is scheduled to pay an 8% annualized dividend quarterly. In October 2010, the Company was informed that, pursuant to the trust preferred agreement, FFKY would defer future dividends due to asset quality and capital issues at FFKY.

The Company has continually reviewed all quarterly regulatory filings to determine the future viability of FFKY. Despite asset quality improvements at FFKY, we have determined that it is unlikely that FFKY will be able to resume dividend payments prior to the five year deferral period (set to expire in October 2015) provided for in the trust preferred agreement. Therefore, we have determined that the Company’s investment in FFKY is permanently impaired and should be written down accordingly. At September 30, 2013, the Company reduced the value of its FFKY investment by $400,000, or 20%, through an expense other than temporary impairment charge.

The Company recognized net gains on the sale of securities of $201,000, $944,000, and $789,000 for the three month periods ended September 30, 2013, September 30, 2012, and June 30, 2013, respectively. The Company recognized net gains on the sales of securities of $1.6 million, for the nine month periods ended September 30, 2013, and September 30, 2012, respectively.

For the three and nine month periods ended September 30, 2013, the Company’s revenue related to the origination of fixed rate mortgage loans was $147,000 and $559,000, respectively, as compared to $218,000 and $684,000 for the same periods in 2012. The recent increase in the long term interest rates has negatively affected the demand for secondary market mortgage loans, reducing our income in the three month period ended September 30, 2013. The Company earned $314,000 and $958,000 in commission from our financial services production during the three and nine month periods ended September 30, 2013, as compared to $280,000 and $778,000, respectively, for the same periods in 2012. The Company’s wealth management employees report increased interest in non-FDIC insured products as interest rates remain low and the United States equity markets continue to improve.

Non-interest Expense

Non-interest expenses were $7.0 million, $7.0 million and $7.1 million for the three month periods ended September 30, 2013, September 30, 2012, and June 30, 2013, respectively. For the nine months ended September 30, 2013, and September 30, 2012, non-interest expenses were $21.4 million and $21.5 million, respectively.

On a linked quarter basis, professional services expenses declined by $56,000 despite the Company incurring charges in excess of $150,000 related to the previously announced termination of a merger agreement with Sumner Bank and Trust. On a linked quarter basis, the Company has experienced a modest decline in most operating expense line items.

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HFBC Reports Third Quarter Results

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October 28, 2013

Balance Sheet

At September 30, 2013, consolidated assets were $935.5 million, a decrease of $32.1 million as compared to December 31, 2012. The decline in assets is largely the result of a $54.1 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 nine month period ended September 30, 2013, gross loans increased by approximately $5.8 million, to $541.4 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, 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.

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 Third Quarter Results

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October 28, 2013

HOPFED BANCORP, INC.

Consolidated Balance Sheets

(Dollars in thousands)

Assets	September 30, 2013		December 31, 2012
	(unaudited)
Cash and due from banks	$	24,566		31,563
Interest-earning deposits		3,777		5,613
Cash and cash equivalents		28,343		37,176
Federal Home Loan Bank stock, at cost		4,428		4,428
Securities available for sale		322,776		356,345
Loans receivable, net of allowance for loan losses of $9,418 at September 30, 2013, and $10,648 at December 31, 2012		532,013		524,985
Accrued interest receivable		5,042		5,398
Real estate and other assets owned		1,439		1,548
Bank owned life insurance		9,574		9,323
Premises and equipment, net		21,707		22,557
Deferred tax assets		4,033		—
Intangible asset		162		292
Other assets		5,936		5,637
Total assets	$	935,453		967,689
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest-bearing accounts	$	98,437		94,083
Interest-bearing accounts
NOW accounts		155,655		147,047
Savings and money market accounts		89,869		81,643
Other time deposits		382,976		437,092
Total deposits		726,937		759,865
Advances from Federal Home Loan Bank		47,276		43,741
Repurchase agreements		48,182		43,508
Subordinated debentures		10,310		10,310
Advances from borrowers for taxes and insurance		822		396
Dividends payable		326		180
Deferred tax liability		—		568
Accrued expenses and other liabilities		4,882		4,122
Total liabilities		838,735		862,690

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

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HFBC Reports Third Quarter Results

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October 28, 2013

HOPFED BANCORP, INC.

Consolidated Balance Sheets, Continued

(Dollars in thousands)

	September 30, 2013			December 31, 2012
	(unaudited)
Stockholders’ equity
Preferred stock, par value $0.01 per share; authorized - 500,000 shares; no shares outstanding at September 30, 2013, and 18,400 shares issued and outstanding at December 31, 2012		—			—
Common stock, par value $.01 per share; authorized 15,000,000 shares; 7,927,287 issued and 7,574,267 outstanding at September 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		58,262			76,288
Retained earnings		43,916			41,829
Treasury stock- preferred (at cost, none at September 30, 2013, and 18,400 shares at December 31, 2012)		—			(18,400	)
Treasury stock- common (at cost, 453,020 shares at September 30, 2013, and 402,916 shares at December 31, 2012)		(5,635	)		(5,076	)
Accumulated other comprehensive income, net of taxes		96			9,723
Total stockholders’ equity		96,718			104,999
Total liabilities and stockholders’ equity	$	935,453			967,689

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

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HFBC Reports Third Quarter Results

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October 28, 2013

HOPFED BANCORP, INC.

Consolidated Condensed Statements of Income

(Dollars in thousands)

Unaudited

	For the Three Month Periods Ended September 30,					For the Nine Month Periods Ended September 30,
	2013			2012		2013			2012
Interest and dividend income:
Loans receivable		6,605			7,403		20,163			22,617
Investment in securities, taxable		1,641			2,014		5,237			6,823
Nontaxable securities available for sale		544			573		1,676			1,695
Interest-earning deposits		5			6		18			20
Total interest and dividend income		8,795			9,996		27,094			31,155
Interest expense:
Deposits		1,622			2,640		5,604			8,279
Advances from Federal Home Loan Bank		445			1,017		1,335			2,155
Repurchase agreements		245			236		717			721
Subordinated debentures		184			185		548			553
Total interest expense		2,496			4,078		8,204			11,708
Net interest income		6,299			5,918		18,890			19,447
Provision for loan losses		426			506		1,208			1,775
Net interest income after provision for loan losses		5,873			5,412		17,682			17,672
Non-interest income:
Service charges		949			963		2,739			2,874
Merchant card income		245			212		727			620
Mortgage origination revenue		147			218		559			684
Gain on sale of securities		201			944		1,617			1,618
Other than temporary impairment		(400	)		—		(400	)		—
Income from bank owned life insurance		88			80		250			238
Financial services commission		314			280		958			778
Other operating income		225			200		630			641
Total non-interest income		1,769			2,897		7,080			7,453

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

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HFBC Reports Third Quarter Results

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October 28, 2013

HOPFED BANCORP, INC.

Consolidated Condensed Statements of Income, Continued

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

(Unaudited)

	For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,
	2013			2012			2013			2012
Non-interest expenses:
Salaries and benefits		3,735			3,447			11,297			10,515
Occupancy		878			875			2,605			2,614
Data processing		652			610			1,948			1,863
State bank tax		143			161			432			485
Intangible amortization		33			48			130			178
Professional services		493			435			1,435			1,320
Deposit insurance and examination		137			419			548			1,272
Advertising expense		292			324			933			952
Postage and communications		149			146			427			444
Supplies expense		159			64			388			280
Loss on disposal of equipment		—			5			—			13
(Gain) loss on real estate owned		(54	)		68			(7	)		287
Real estate owned expenses		78			19			186			90
Other operating		289			350			1,060			1,196
Total non-interest expense		6,984			6,971			21,382			21,509
Income before income tax expense		658			1,338			3,380			3,616
Income tax expense		122			263			694			652
Net income		536			1,075			2,686			2,964
Less:
Dividend on preferred shares		—			229			—			689
Accretion dividend on preferred shares		—			27			—			83
						��
Net income available to common shareholders	$	536		$	819		$	2,686		$	2,192
Net income available to common shareholders
Per share, basic	$	0.07		$	0.11		$	0.36		$	0.29
Per share, diluted	$	0.07		$	0.11		$	0.36		$	0.29
Dividend per share	$	0.04		$	0.02		$	0.08		$	0.06
Weighted average shares outstanding - basic		7,483,582			7,487,283			7,483,606			7,485,571
Weighted average shares outstanding - diluted		7,483,582			7,485,283			7,483,606			7,485,571

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

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HFBC Reports Third Quarter Results

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October 28, 2013

HOPFED BANCORP, INC.

Selected Financial Data

(Dollars in thousands)

	For the Three Months Ended
	9/30/2013			6/30/2013		Change from Prior Quarter
Interest and dividend income:
Loans receivable		6,605			6,676		(71	)
Investment in securities, taxable		1,641			1,764		(123	)
Nontaxable securities available for sale		544			547		(3	)
Interest-earning deposits		5			7		(2	)
Total interest and dividend income		8,795			8,994		(199	)
Interest expense:
Deposits		1,622			1,936		(314	)
Advances from Federal Home Loan Bank		445			446		(1	)
Repurchase agreements		245			230		15
Subordinated debentures		184			182		2
Total interest expense		2,496			2,794		(298	)
Net interest income		6,299			6,200		99
Provision for loan losses		426			406		20
Net interest income after provision for loan losses		5,873			5,794		79
Non-interest income:
Service charges		949			937		12
Merchant card income		245			259		(14	)
Mortgage origination revenue		147			212		(65	)
Gain on sale of securities		201			789		(588	)
Other than temporary impairment		(400	)		—		(400	)
Income from bank owned life insurance		88			87		1
Financial services commission		314			347		(33	)
Other operating income		225			197		28
Total non-interest income		1,769			2,828		(1,059	)

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

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HFBC Reports Third Quarter Results

Page 12

October 28, 2013

HOPFED BANCORP, INC.

Selected Financial Data

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

	For the Three Months Ended
	9/30/2013			6/30/2013		Change from Prior Quarter
Non-interest expenses:
Salaries and benefits	$	3,735			3,714		21
Occupancy expense		878			882		(4	)
Data processing expense		652			646		6
State deposit tax		143			147		(4	)
Intangible amortization expense		33			48		(15	)
Professional services expense		493			549		(56	)
Deposit insurance and examination expense		137			179		(42	)
Advertising expense		292			308		(16	)
Postage and communications expense		149			139		10
Supplies expense		159			93		66
(Gain) Loss on sale of real estate owned		(54	)		12		(66	)
Real estate owned expenses		78			32		46
Other operating expenses		289			375		(86	)
					-86
Total non-interest expense		6,984			7,038		(140	)
Income before income tax expense		658			1,584		(926	)
Income tax expense		122			332		(210	)
Net income		536			1,252		(716	)
Net income (loss) available (attributable) to common stockholders
Per share, basic	$	0.07		$	0.16		(0.09	)
Per share, diluted	$	0.07		$	0.16		(0.09	)
Dividend per share	$	0.02		$	0.02
Weighted average shares outstanding - basic		7,483,582			7,488,906
Weighted average shares outstanding - diluted		7,483,582			7,488,906

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

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HFBC Reports Third Quarter Results

Page 13

October 28, 2013

HOPFED BANCORP, INC.

Selected Financial Data

The table below adjusts tax-free investment income for the nine month periods ended September 30, 2013, and September 30, 2012, by $811,000 and $798,000, respectively; for a tax equivalent rate using a cost of funds rate of 1.40% for the nine month period ended September 30, 2013, and 1.80% for the nine month period ended September 30, 2012. The table adjusts tax-free loan income by $6,000 for nine month period ended September 30, 2013, and $7,000 for the nine month period ended September 30, 2012, for a tax equivalent rate using the same cost of funds rate:

	Average Balance 9/30/2013		Income and Expense 9/30/2013			Average Rates 9/30/2013			Average Balance 9/30/2012		Income and Expense 9/30/2012			Average Rates 9/30/2012
	(Dollars in Thousands, Except Percentages)
Loans	$	527,054	$	20,169			5.10	%	$	545,464	$	22,624			5.53	%
Investments AFS taxable		275,934		5,237			2.53	%		322,091		6,823			2.82	%
Investment AFS tax free		71,269		2,488			4.66	%		67,714		2,493			4.91	%
Interest bearing deposits		8,851		18			0.27	%		14,918		20			0.18	%
Total interest earning assets		883,108		27,912			4.21	%		950,187		31,960			4.48	%
Other assets		79,779								87,878
Total assets	$	962,887							$	1,038,065
Retail time deposits	$	370,917		4,018			1.44	%	$	444,553		6,538			1.96	%
Brokered deposits		44,002		525			1.59	%		52,558		754			1.91	%
Now accounts		163,493		952			0.78	%		145,015		888			0.82	%
MMDA and savings accounts		84,823		109			0.17	%		73,983		99			0.18	%
FHLB borrowings		43,602		1,335			4.08	%		61,336		2,155			4.68	%
Repurchase agreements		41,556		717			2.30	%		40,968		721			2.35	%
Subordinated debentures		10,310		548			7.09	%		10,310		553			7.15	%
Total interest bearing liabilities		758,703		8,204			1.44	%		828,723		11,708			1.88	%
Non-interest bearing deposits		94,695								82,800
Other liabilities		4,361								5,717
Shareholders equity		105,128								120,825
Total liabilities and shareholder equity	$	962,887							$	1,038,065
Net interest income			$	19,708							$	20,252
Interest rate spread							2.77	%							2.60	%
Net interest margin				2.98	%							2.84	%

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

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HFBC Reports Third Quarter Results

Page 14

October 28, 2013

HOPFED BANCORP, INC.

Selected Financial Data

The table below adjusts tax-free investment income for the three month periods ended September 30, 2013, and September 30, 2012, by $264,000 and $273,000, respectively; for a tax equivalent rate using a cost of funds rate of 1.35% for the three month period ended September 30, 2013, and 2.00% for the three month period ended September 30, 2012. The table adjusts tax-free loan income by $2,000 for three month periods ended September 30, 2013, and September 30, 2012, respectively, for a tax equivalent rate using the same cost of funds rate:

	Average Balance 9/30/2013		Income & Expense 9/30/2013			Average Rates 9/30/2013			Average Balance 9/30/2012		Income & Expense 9/30/2012			Average Rates 9/30/2012		��
	(Dollars in Thousands, Except Percentages)
Loans	$	530,086	$	6,607			4.99	%	$	540,811	$	7,405			5.48	%
Investments AFS taxable		260,326		1,641			2.52	%		308,578		2,014			2.61	%
Investment AFS tax free		66,882		808			4.83	%		69,420		846			4.87	%
Fed Funds		7,237		5			0.28	%		10,555		6			0.23	%
Total interest earning assets		864,531		9,061			4.19	%		929,364		10,271			4.42	%
Other assets		75,930								87,537
Total assets	$	940,461							$	1,016,901
Retail time deposits	$	352,291		1,141			1.30	%	$	430,568		2,064			1.92	%
Brokered deposits		43,353		163			1.50	%		49,181		258			2.10	%
Now accounts		159,419		279			0.70	%		140,424		285			0.81	%
MMDA and savings accounts		87,687		39			0.18	%		75,031		33			0.18	%
FHLB borrowings		43,634		445			4.08	%		58,962		1,017			6.90	%
Repurchase agreements		43,448		245			2.26	%		39,093		236			2.41	%
Subordinated debentures		10,310		184			7.14	%		10,310		185			7.18	%
Total interest bearing liabilities		740,142		2,496			1.35	%		803,569		4,078			2.03	%
Non-interest bearing deposits		96,343								84,079
Other liabilities		5,013								6,284
Stockholders’ equity		98,963								122,969
Total liabilities and stockholders’ equity	$	940,461							$	1,016,901
Net interest income			$	6,565							$	6,193
Interest rate spread							2.84	%							2.39	%
Net yield on interest earning assets				3.04	%							2.67	%

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