SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------------------- FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2002 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 000-23667 HOPFED BANCORP, INC. ---------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 61-1322555 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2700 Fort Campbell Boulevard, Hopkinsville, Kentucky 42240 - ---------------------------------------------------- ------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (270) 885-1171 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days. Yes X No ___ As of August 8, 2002, 3,630,396 shares of Common Stock were issued and outstanding. CONTENTS PAGE ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Financial Condition as of June 30, 2002 and December 31, 2001................................................................ 2 Consolidated Statements of Income for the Three-Month and Six-Month Periods Ended June 30, 2002 and 2001................................................. 3 Consolidated Statements of Comprehensive Income for the Three-Month and Six-Month Periods Ended June 30, 2002 and 2001................................... 4 Consolidated Statements of Cash Flows for the Six-Month Periods Ended June 30, 2002 and 2001................................................. 5 Notes to Unaudited Condensed Financial Statements..................................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................................. 8 Item 3. Quantitative and Qualitative Disclosures About Market Risk.......................................................................... 12 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders................................... 13 Item 6. Exhibits and Reports on Form 8-K...................................................... 14 SIGNATURES..................................................................................... 14 1 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS HOPFED BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION June 30, December 31, 2002 2001 ------------ ------------ (Unaudited) (In thousands) ASSETS Cash and due from banks............................... $ 4,387 $ 3,941 Interest-earning deposits in Federal Home Loan Bank ("FHLB")................................... 31 39 Federal funds sold.................................... 1,270 690 Securities available for sale......................... 78,388 100,519 Securities held to maturity, market value of $3,829 and $4,822 at June 30, 2002 and December 31, 2001, respectively...................... 3,679 4,462 Loans receivable, net of allowance for loan losses of $1,068 at June 30, 2002, and $923 at December 31, 2001................................. 208,799 170,016 Loans held for sale.................................. -- 928 Accrued interest receivable........................... 1,706 1,405 Premises and equipment, net........................... 3,374 3,315 Deferred tax asset.................................... 170 82 Other assets.......................................... 514 242 ------------ ------------ Total assets................................. $ 302,318 $ 285,639 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits........................................... $ 220,384 $ 200,316 Advances from borrowers for taxes and insurance.... 326 201 Advances from FHLB................................. 33,714 38,747 Dividends payable ................................. 396 399 Accrued expenses and other liabilities............. 2,516 2,387 ------------ ------------ Total liabilities............................ 257,336 242,050 ------------ ------------ Stockholders' Equity: Common stock....................................... 40 40 Additional paid in capital......................... 25,714 25,714 Retained earnings, substantially restricted........ 23,673 22,110 Treasury stock (at cost, 408,909 shares at June 30, 2002 and 407,767 shares at December 31, 2001................................. (4,857) (4,845) Accumulated other comprehensive income net of taxes...................................... 412 570 ------------ ------------ Total stockholders' equity................... 44,982 43,589 ------------ ------------ Total liabilities and stockholders' equity... $ 302,318 $ 285,639 ============ ============ The balance sheet at December 31, 2001 has been derived from the audited financial statements of that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See accompanying Notes to Unaudited Condensed Financial Statements. -2- HOPFED BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) For the Three Months For the Six Months Ended June 30, Ended June 30, -------------------------------------- ----------------------------------- 2002 2001 2002 2001 ----------------- ----------------- --------------- --------------- (Dollars in thousands, except per share data) Interest income: Interest on loans...................... $ 3,412 $ 2,810 $ 6,611 $ 5,470 Interest and dividends on investments.. 1,249 1,400 2,619 2,899 Time deposit interest income........... 18 170 36 313 ----------------- ----------------- --------------- --------------- Total interest income............. 4,679 4,380 9,266 8,682 ----------------- ----------------- --------------- --------------- Interest expense: Interest on deposits................... 1,663 2,267 3,326 4,413 Interest on advances................... 338 206 724 420 ----------------- ----------------- --------------- --------------- Total interest expense............ 2,001 2,473 4,050 4,833 ----------------- ----------------- --------------- --------------- Net interest income......................... 2,678 1,907 5,216 3,849 Provision for loan losses................... 90 42 180 102 ----------------- ----------------- --------------- --------------- Net interest income after provision for loan losses............................ 2,588 1,865 5,036 3,747 ----------------- ----------------- --------------- --------------- Non-interest income: Loan and other service fees............ 250 176 475 256 Gain on sale of AFS securities......... 143 -- 345 -- Other, net............................. 9 4 18 22 ----------------- ----------------- --------------- --------------- Total non-interest income......... 402 180 838 278 ----------------- ----------------- --------------- --------------- Non-interest expenses: Salaries and benefits.................. 527 490 1,049 1,050 Federal insurance premium.............. 8 15 17 23 Occupancy expense, net................. 158 24 305 82 Data processing........................ 85 47 176 92 Other operating expenses............... 363 441 730 704 ----------------- ----------------- --------------- --------------- Total non-interest expenses....... 1,141 1,017 2,277 1,951 ----------------- ----------------- --------------- --------------- Income before income taxes.................. 1,849 1,028 3,597 2,074 Income tax expense.......................... 624 367 1,239 744 ----------------- ----------------- --------------- --------------- Net income ................................. 1,225 661 2,358 1,330 ================= ================= =============== =============== Basic net income per share.................. $ 0.34 $ .17 $ 0.65 $ .35 Diluted net income per share............... $ 0.34 $ .17 $ 0.65 $ .35 Dividends per share......................... $ 0.11 $ .11 $ 0.22 $ .22 ================= ================= =============== =============== Weighted average shares outstanding......... 3,630,396 3,806,893 3,630,941 3,831,921 ================= ================= =============== =============== Weighted average shares outstanding, diluted 3,636,979 3,806,893 3,635,605 3,831,921 ================= ================= =============== =============== See accompanying Notes to Unaudited Condensed Financial Statements. -3- HOPFED BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) For the Three Months For the Six Months Ended June 30, Ended June 30, ---------------------------- ------------------------------ 2002 2001 2002 2001 ------------- ---------- -------------- ----------- (In thousands) $ 1,225 $ 661 $ 2,358 $ 1,330 Net income Other comprehensive income, net of tax Unrealized holding gains (losses) arising during period net of tax effect of ($187) and ($11) for the three months ended June 30, 2002 and 2001, respectively, and $81 and ($134) for the six months ended June 30, 2002 and 2001, respectively 362 20 (158) 261 Less: reclassification adjustment for gains Included in net income (94) 0 (227) 0 ------------- ---------- -------------- ----------- Comprehensive income $ 1,493 $ 681 $ 1,973 $ 1,591 ============= ========== ============== =========== See accompanying Notes to Unaudited Condensed Financial Statements -4- HOPFED BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Six Months Ended June 30, ------------------------------ 2002 2001 ------------- ------------ (In thousands) Cash flows from operating activities: Net cash provided by (used) in operating activities.. 2,431 (249) ------------- ------------ Cash flows from investing activities: Proceeds from maturities of held-to-maturity securities ......................................... 779 1,854 Proceeds from sale of available-for-sale securities.. 42,860 54,840 Purchases of available-for-sale securities........... (21,640) (46,205) Net increase in loans................................ (37,576) (16,522) Purchases of premises/equipment...................... (190) (285) ------------- ------------ Net cash used in investing activities................ (15,767) (6,318) ------------- ------------ Cash flows from financing activities: Net increase in demand deposits...................... 6,430 1,471 Net increase (decrease) in time deposits............. 13,638 17,738 Advances from (payments to) FHLB.................... (5,032) 960 Increase in advance payments by Borrowers for taxes and insurance................... 125 119 Net dividends paid................................... (795) (847) Purchase of treasury stock........................... (12) (1,437) ------------- ------------ Net cash used in financing activities................ 14,354 18,004 ------------- ------------ Increase in cash and cash equivalents..................... 1,018 11,437 Cash and cash equivalents, beginning of period............ 4,670 3,807 ------------- ------------ Cash and cash equivalents, end of period.................. 5,688 15,244 ============= ============ Supplemental disclosures of cash flow information......... Cash paid for income taxes........................... $ 1,405 $ 315 ============= ============ Cash paid for interest............................... $ 4,050 $ 4,405 ============= ============ See accompanying Notes to Unaudited Condensed Financial Statements. -5- NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION HopFed Bancorp, Inc. (the "Company") was formed at the direction of Heritage Bank, formerly known as Hopkinsville Federal Bank (the "Bank") to become the holding company of the Bank upon the conversion of the Bank from a federally chartered mutual savings bank to a federally chartered stock savings bank. The conversion was consummated on February 6, 1998. The Company's primary asset is the outstanding capital stock of the converted Bank, and its sole business is that of the converted Bank. The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) necessary for fair presentation have been included. The results of operations and other data for the six month period ended June 30, 2002 are not necessarily indicative of results that may be expected for the entire fiscal year ending December 31, 2002. The accompanying unaudited financial statements should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2001. The accounting policies followed by the Company are set forth in the Summary of Significant Accounting Policies in the Company's December 31, 2001 Consolidated Financial Statements. -6- 2. EARNINGS PER SHARE The following schedule reconciles the numerators and denominators of the basic and diluted earnings per share ("EPS") computations for the three and six-months ending June 30, 2002. Diluted common shares arise from the potentially dilutive effect of the Company's stock Options outstanding. Quarters Ended June 30 ----------------------------- 2002 2001 Basic EPS: Net income $ 1,225,000 $ 661,000 Average common shares outstanding 3,630,396 3,806,893 ------------ ------------- Earnings per share $ 0.34 $ 0.17 ------------ ------------- Diluted EPS: Net income $ 1,225,000 $ 661,000 Average common shares outstanding 3,630,396 3,806,893 Dilutive effect of stock options 6,583 -- ------------ ------------- Average diluted shares outstanding 3,636,979 3,806,893 ------------ ------------- Diluted earnings per share $ 0.34 $ 0.17 ------------ ------------- Six Months Ended June 30 ----------------------------- 2002 2001 Basic EPS: Net income $ 2,358,000 $ 1,330,000 Average common shares outstanding 3,630,941 3,831,921 ------------ ------------- Earnings per share $ 0.65 $ 0.35 ------------ ------------- Diluted EPS: Net income $ 2,358,000 $ 1,330,000 Average common shares outstanding 3,630,941 3,831,921 Dilutive effect of stock options 4,664 -- ------------ ------------- Average diluted shares outstanding 3,635,605 3,831,921 ------------ ------------- Diluted earnings per share $ 0.65 $ 0.35 ------------ ------------- -7- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2002 AND DECEMBER 31, 2001 Total assets increased by $16.7 million, from $285.6 million at December 31, 2001 to $302.3 million at June 30, 2002. Securities available for sale decreased from $100.5 million at December 31, 2001 to $78.4 million at June 30, 2002. Federal funds sold increased from $690,000 at December 31, 2001, to $1.3 million at June 30, 2002. At June 30, 2002, investments classified as "held to maturity" were carried at an amortized cost of $3.7 million and had an estimated fair market value of $3.8 million, and securities classified as "available for sale" had an estimated fair market value of $78.4 million. The loan portfolio increased $38.8 million during the six months ended June 30, 2002. Net loans totaled $208.8 million and $170.0 million at June 30, 2002 and December 31, 2001, respectively. For the six months ended June 30, 2002, the average yield on loans was 7.0%, compared to 7.69% for the year ended December 31, 2001. The allowance for loan losses totaled $ 1.1 million at June 30, 2002, an increase of $145,000 from the allowance of $923,000 December 31, 2001. The ratio of the allowance for loan losses to loans was 0.51% at June 30, 2002 and 0.55% at December 31, 2001. Also at June 30, 2002, non-performing loans were $478,000, or 0.23% of total loans, compared to $551,000, or .34% of total loans, at December 31, 2001, and the ratio of allowance for loan losses to non-performing loans at June 30, 2002 and December 31, 2001 was 223.3% and 167.5%, respectively. The determination of the allowance for loan losses is based on management's analysis, performed on a quarterly basis. Various factors are considered in determining the necessary allowance for loan losses, including the market value of the underlying collateral, growth and composition of the loan portfolio, the relationship of the allowance for loan losses to outstanding loans, historical loss experience, delinquency trends and prevailing economic conditions. Although management believes the allowance for loan losses is adequate, there can be no assurance that additional provisions for loan losses will not be required or that losses on loans will not be incurred. Minimal losses on loans have been incurred in prior years. Real estate owned of $27,000 at June 30, 2002 represents one parcel of residential property on which the Bank held a first mortgage and acquired the property in a foreclosure sale initiated by the Bank. During the second quarter, the Bank reduced the outstanding balance of this asset by $10,000. At June 30, 2002, deposits increased to $220.4 million from $200.3 million at December 31, 2001, a net increase of $20.1 million. The average cost of deposits during the three and six month periods ended June 30, 2002 and the year ended December 31, 2001 was 3.08%, 3.15% and 4.83%, respectively. -8- Management continually evaluates the investment alternatives available to customers and adjusts the pricing on its deposit products to more actively manage its funding cost while remaining competitive in its market area. COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 Net Income. Net income for the six months ended June 30, 2002 was $2.4 million, compared to net income of $1.3 million for the six months ended June 30, 2001. The increase in net earnings for the six months resulted primarily from a $783,000 reduction in interest expense and significant loan growth. Net Interest Income. Net interest income for the six months ended June 30, 2002 was $5.2 million, compared to $3.8 million for the six months ended June 30, 2001. The increase in net interest income for the six months ended June 30, 2002 was primarily due to a reduction in interest expense and additional loans outstanding. For the six months ended June 30, 2002, the Bank's average yield on average interest-earning assets was 6.51%, compared to 7.49% for the six months ended June 30, 2001, and its average cost of interest-bearing liabilities was 3.38% for the six months ended June 30, 2002, compared to 5.04% for the six months ended June 30, 2001. As a result, the Bank's interest rate spread for the six months ended June 30, 2002 was 3.13%, compared to 2.45% for the six months ended June 30, 2001, and its net yield on interest-earning assets was 3.67% for the six months ended June 30, 2002, compared to 3.34% for the six months ended June 30, 2001. Interest Income. Interest income increased by $600,000 from $8.7 million to $9.3 million, or by 6.7%, during the six months ended June 30, 2002 compared to the same period in 2001. This increase primarily resulted from increased loan volume. The average balance of securities available for sale increased $7.3 million, from $80.2 million at June 30, 2001, to $87.5 million at June 30, 2002, while the average balance of securities held to maturity declined $1.8 million, from $6.9 million at June 30, 2001 to $4.1 million at June 30, 2002. In addition, average time deposits and other interest-earning cash deposits increased $4.1 million, from $150,000 at June 30, 2001 to $4.2 million at June 30, 2002. Overall, average total interest-earning assets for the six month period ended June 30, 2002 are $284.7 million. The ratio of average interest-earning assets to average interest-bearing liabilities declined from 120.8% for the six months ended June 30, 2001 to 119.0% for the six months ended June 30, 2002. Interest Expense. Interest expense declined by $783,000, or 16.2%, to $4.1 million for the six months ended June 30, 2002, compared to $4.8 million for the same period in 2001. The decline was attributable to the repricing of certificates of deposits to lower interest rates. The average cost of average interest-bearing deposits decreased from 5.08% for the six months ended June 30, 2001 to 3.26% for the six months ended June 30, 2002. Over the same periods, the average balance of deposits increased $37.5 million, from $173.8 million for the six months ended June 30, 2001 to $211.3 million for the six months ended June 30, 2002, or 21.6%. -9- Provision for Loan Losses. The allowance for loan losses is established through a provision for loan losses based on management's evaluation of the risk inherent in the loan portfolio and the general economy. Such evaluation considers numerous factors, including general economic conditions, loan portfolio composition, prior loss experience, the estimated fair value of the underlying collateral and other factors that warrant recognition in providing for an adequate loan loss allowance. The Bank determined that an additional $180,000 provision for loan losses was required for the six months ended June 30, 2002. In addition, the Bank determined to recognize an additional expense of $10,000 to reduce the outstanding balance of one parcel of real estate owned. Non-Interest Expenses. There was a $326,000 increase in total non-interest expenses in the six months ended June 30, 2002 compared to the same period in 2001, due to several factors, including the opening of new offices in Benton and Murray, Kentucky. Income Taxes. The effective tax rate for the six months ended June 30, 2002 was 34%, compared to 35.9% for the same period in 2001. COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2002 AND 2001 Net Income. Net income for the three months ended June 30, 2002 was $1.2 million compared to net income of $661,000 for the three months ended June 30, 2001. The increase in net income for the three months ended June 30, 2002 was the result of several factors, including reduced interest expense, loan portfolio growth, and growth in non-interest income. Net Interest Income. Net interest income for the three months ended June 30, 2002 and June 30, 2001 was $2.7 million and $1.9 million, respectively. For the three months ended June 30, 2002, the average yield on total interest-earning assets was 6.51%, compared to 7.43% for the three months ended June 30, 2001, and the average cost of interest-bearing liabilities was 3.34% for the three months ended June 30, 2002, compared to 5.03% for the three months ended June 30, 2001. As a result, the interest rate spread for the three months ended June 30, 2002 was 3.17%, compared to 2.40% for the three months ended June 30, 2001, and the net yield on interest-earning assets was 3.72% for the three months ended June 30, 2002, compared to 3.23% for the three months ended June 30, 2001. Interest Income. Interest income increased by $299,000, from $4.4 million to $4.7 million, or by 6.8%, during the three months ended June 30, 2002 compared to the same period in 2001. The average balance of securities available for sale increased $3.3 million, from $78.1 million at June 30, 2001 to $81.4 million at June 30, 2002, while the average balance of securities held to maturity declined $2.4 million, from $6.4 million at June 30, 2001 to $4.0 million at June 30, 2002. In addition, average time deposits and other interest-earning cash deposits increased $3.9 million, from $126,000 at June 30, 2001 to $4.0 million at June 30, 2002. The average balance of loans receivable at June 30, 2002 was $198.2 million, an increase of $48.4 million from the average balance at June 30, 2001. Overall, average total interest-earning assets for the quarter ended June 30, 2002 was $287.6 million. The ratio of average interest-earning assets to average interest-bearing liabilities was 119.9% for the three months periods ended June 30, 2001 and June 30, 2002. -10- Interest Expense. Interest expense declined $472,000, or 19.1%, to $2.0 million for the three months ended June 30, 2002, compared to $2.5 million for the same period in 2001. The decline was attributable to lower interest rates. The average cost of average interest-bearing deposits decreased from 5.07% at June 30, 2001 to 3.23% at June 30, 2002. Over the same period, the average balance of deposits increased $27.2 million, from $178.8 million at June 30, 2001 to $206.0 million at June 30, 2002, or 15.2%. The average balance of advances from the FHLB was $33.8 million at June 30, 2002, compared to $18.0 million at June 30, 2001. Provision for Loan Losses. The Bank determined that an additional $90,000 provision for loan losses was required for the three months ended June 30, 2002, compared to an additional $42,000 provision for the three months ended June 30, 2001. The Bank incurred a provision for loss against non-earning assets in the amount of $10,000 to reduce the outstanding balance of one parcel of real estate owned. Non-Interest Expenses. There was an approximate $124,000 increase in total non-interest expenses in the three months ended June 30, 2002 compared to the same period in 2001, primarily due to opening a new branch office in Benton, Kentucky. Income Taxes. The effective tax rate for the three months ended June 30, 2002 was 33.7%. The effective tax rate for the three month period ending June 30, 2001 was 35.7%. The decline in the effective tax rate is the result of the Bank purchasing tax-exempt municipal bonds. LIQUIDITY AND CAPITAL RESOURCES The Company has no business other than that of the Bank. Management believes that dividends that may be paid by the Bank to the Company will provide sufficient funds for its initial operations and liquidity needs. However, no assurance can be given that the Company will not have a need for additional funds in the future. The Bank is subject to certain regulatory limitations with respect to the payment of dividends to the Company. The Bank's principal sources of funds for operations are deposits from its primary market areas, principal and interest payments on loans, proceeds from maturing investment securities and the net conversion proceeds received by it. The principal uses of funds by the Bank include the origination of mortgage and consumer loans and the purchase of investment securities. The Bank is required by current federal regulations to maintain specified liquid assets of at least 5% of its net withdrawable accounts plus short-term borrowings. Short-term liquid assets (those maturing in one year or less) may not be less than 1% of the Bank's liquidity base. At June 30, 2002, the Bank met all regulatory liquidity requirements, and management believes that the liquidity levels maintained are adequate to meet potential deposit outflows, loan demand and normal operations. The Bank must satisfy three capital standards: a ratio of core capital to adjusted total assets of 4.0%, a tangible capital standard expressed as 1.5% of total adjusted assets, and a combination of core and "supplementary" capital equal to 8.0% of risk-weighted assets. At June 30, 2002, the Bank exceeded all regulatory capital requirements. The table below presents certain information relating to the Bank's capital compliance at June 30, 2002. -11- Amount Percent -------- -------- (Dollars in thousands) Tangible Capital.................... $ 41,644 13.85% Core Capital........................ $ 41,638 13.85% Risk-Based Capital.................. $ 43,307 23.69% At June 30, 2002, the Bank had outstanding commitments to originate loans totaling $21.8 million. Management believes that the Bank's sources of funds are sufficient to fund all of its outstanding commitments. Certificates of deposits which are scheduled to mature in one year or less from June 30, 2002 totaled $77.0 million. Management believes that a significant percentage of such deposits will remain with the Bank. In March of 2002, the Bank announced a definitive agreement to purchase the business assets and liabilities of Old National Bancorp located and assigned to Fulton, Kentucky. These assets include Fall & Fall Insurance Agency and two retail banking locations. The purchase of these assets is scheduled to close in September 2002 and will result in the Bank acquiring approximately $95 million dollars in deposits, $40 million dollars in loans, and more than $40 million dollars in treasury securities with a final maturity of less than one month. FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements. Additional written or oral forward-looking statements may be made by the Company from time to time in filings with the Securities and Exchange Commission or otherwise. The words "believe," "expect," "seek," and "intend" and similar expressions identify forward-looking statements, which speak only as of the date the statement is made. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may include, but are not limited to, projections of income or loss, expenditures, acquisitions, plans for future operations, financing needs or plans relating to services of the Company, as well as assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements. The Company does not undertake, and specifically disclaims, any obligation to publicly release the results of revisions which may be made to forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company monitors whether material changes in market risk have occurred since year-end. The Company is unable to predict future changes in market rates and their impact on the Company's profitability. The Company does not believe that material changes in market risk exposures have occurred since December 31, 2001. -12- PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On May 15, 2002, the Company held its Annual Meeting of Stockholders at which the following matters were considered and voted on: Proposal I - Election of Directors: Nominees For Withheld - -------- --------- -------- Boyd Clark 2,746,490 36,683 Dr. Harry Dempsey 2,736,683 46,490 Gilbert Lee 2,735,121 48,052 There were no abstentions or broker non-votes. Proposal II - Ratification of Rayburn, Betts and Bates, P.C. CPA's as the Bank's independent auditors. For Against Abstain 2,757,954 18,721 6,488 There were no broker non-votes. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 99.1 Certification of Financial Statements -13- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HOPFED BANCORP, INC. Date: August 12, 2002 /s/ John E. Peck ------------------------------------- John E. Peck President and Chief Executive Officer Date: August 12, 2002 /s/ Billy C. Duvall ------------------------------------- Billy C. Duvall Vice President, Chief Financial Officer and Treasurer -14-