Loading...
Docoh

Eureka Homestead Bancorp (ERKH)

Filed: 11 Mar 19, 5:06pm

 

Exhibit 99.3

 

 

 

CONVERSION VALUATION APPRAISAL REPORT

 

Prepared for:

 

Eureka Homestead Bancorp, Inc.

Metairie, Louisiana

 

 

 

As Of:

February 12, 2019

 

Prepared By:

 

Keller & Company, Inc.

555 Metro Place North

Suite 524

Dublin, Ohio 43017

(614) 766-1426

 

KELLER & COMPANY

 

 

 

 

KELLER & COMPANY, INC.

FINANCIAL INSTITUTION CONSULTANTS

555 METRO PLACE NORTH

SUITE 524

DUBLIN, OHIO 43017

 

 

 

(614) 766-1426 (614) 766-1459 FAX

 

February 27, 2019

 

Boards of Directors

Eureka Homestead Bancorp, Inc.

Eureka Homestead

1922 Veterans Boulevard

Metairie, Louisiana 70005

 

To the Boards:

 

We hereby submit our independent appraisal of the pro forma market value of the to be issued stock of the Eureka Homestead Bancorp, Inc. (the “Corporation”) which is the holding company of Eureka Homestead (“Eureka Homestead” or the “Bank”), Metairie, Louisiana. Such stock is to be issued in connection with the application by the Corporation to complete a stock offering, with the Corporation to own 100 percent of the stock of the Bank. This appraisal, as of February 12, 2019, was prepared and provided to the Bank in accordance with the regulatory appraisal requirements and regulations.

 

Keller & Company, Inc. is an independent, financial institution consulting firm that serves both thrift institutions and banks throughout the U.S. The firm is a full-service consulting organization, as described in more detail in Exhibit A, specializing in business and strategic plans, stock valuations, conversion and reorganization appraisals, market studies and fairness opinions for thrift institutions and banks. The firm has affirmed its independence in this transaction with the preparation of its Affidavit of Independence, a copy of which is included as Exhibit C.

 

Our appraisal is based on the assumption that the data provided to us by Eureka Homestead and the material provided to us by the independent auditor, T.E. Lott & Company, PA, are both accurate and complete. We did not verify the financial statements provided to us, nor did we conduct independent valuations of the Bank's assets and liabilities. We have also used information from other public sources, but we cannot assure the accuracy of such material.

 

In the preparation of this appraisal, we held discussions with the management of Eurreka Homestead, with the law firm of Luse Gorman, PC, Washington, D.C., the Bank's conversion counsel, and with T.E. Lott & Company, PA, the Bank’s outside auditor. Further, we viewed the Bank's local economy and primary market area and also reviewed the Bank's most recent Business Plan as part of our review process.

 

 

 

 

The Boards of Directors

Eureka Homestead Bancorp, Inc.

Eureka Homestead

February 27, 2019

Page 2

 

This valuation must not be considered to be a recommendation as to the purchase of stock in the Corporation, and we can provide no guarantee or assurance that any person who purchases shares of the Corporation's stock will be able to later sell such shares at a price equivalent to the price designated in this appraisal.

 

Our valuation will be further updated as required and will give consideration to any new developments in Eureka Homestead’s operations that have an impact on the results of operations or financial condition. Further, we will give consideration to any changes in general market conditions and to specific changes in the market for publicly traded thrift institutions. Based on the material impact of any such changes on the pro forma market value of the Corporation as determined by this firm, we will make necessary adjustments to the Corporation's appraised value in an appraisal update.

 

It is our opinion that as of February 12, 2019, the pro forma market value or appraised value of the Corporation is $16,000,000 at the midpoint, representing 1,600,000 shares at $10 per share. The pro forma valuation range of the Corporation is from a minimum of $13,600,000 to a maximum of $18,400,000, with a maximum, as adjusted, of $21,160,000, representing 1,360,000 shares, 1,840,000 shares and 2,116,000 shares at $10 per share at the minimum, maximum, and maximum, as adjusted, respectively.

 

The pro forma appraised value of Eureka Homestead Bancorp, Inc., as of February 12, 2019, is $16,000,000, at the midpoint.

 

Very truly yours,

 

/s/ KELLER & COMPANY, INC.

 

KELLER & COMPANY, INC.

 

 

 

 

 

 

CONVERSION VALUATION APPRAISAL REPORT

 

Prepared for:

 

Eureka Homestead Bancorp, Inc.

Metairie, Louisiana

 

 

 

As Of:

February 12, 2019

 

 

 

 

TABLE OF CONTENTS

 

  PAGE
   
INTRODUCTION1
   
I.Description of Eureka Homestead3
 General3
 Performance Overview7
 Income and Expense9
 Yields and Costs13
 Interest Rate Sensitivity14
 Lending Activities16
 Nonperforming Assets20
 Investments23
 Deposit Activities24
 Borrowings25
 Subsidiaries25
 Office Properties25
 Management25
   
II.Description of Primary Market Area27
   
III.Comparable Group Selection33
 Introduction33
 General Parameters34
 Merger/Acquisition34
 Trading Exchange35
 IPO Date35
 Geographic Location35
 Asset Size36
   
 Balance Sheet Parameters38
 Introduction38
 Cash and Investments to Assets38
 Mortgage-Backed Securities to Assets39
 One- to Four-Family Loans to Assets39
 Total Net Loans to Assets40
 Total Net Loans and Mortgage-Backed Securities to Assets40
 Borrowed Funds to Assets41
 Equity to Assets41
 Performance Parameters42
 Introduction42

 

 

 

 

TABLE OF CONTENTS (cont.)

 

  PAGE
   
III.Comparable Group Selection (cont.) 
 Performance Parameters (cont.)
 Return on Average Assets42
 Return on Average Equity43
 Net Interest Margin43
 Operating Expenses to Assets44
 Noninterest Income to Assets44
 Asset Quality Parameters45
 Introduction45
 Nonperforming Assets to Total Assets45
 Repossessed Assets to Assets45
 Loan Loss Reserve to Assets46
 The Comparable Group46
   
IV.Analysis of Financial Performance48
   
V.Market Value Adjustments51
 Earnings Performance51
 Market Area56
 Financial Condition57
 Asset, Loan and Deposit Growth60
 Dividend Payments61
 Subscription Interest62
 Liquidity of Stock63
 Management63
 Marketing of the Issue65
   
VI.Valuation Methods66
 Introduction66
 Price to Book Value Method68
 Price to Core Earnings Method70
 Price to Assets Method71
 Valuation Conclusion72

 

 

 

  

LIST OF EXHIBITS

 

NUMERICAL
EXHIBITS
PAGE
   
1Balance Sheet at December 31, 201875
2Balance Sheets at December 31, 2014 through 201776
3Statement of Income for the Year EndedDecember 31, 201877
4Statements of Income for the Years EndedDecember 31, 2014 through 201778
5Selected Financial Information79
6Income and Expense Trends80
7Normalized or Core Earnings81
8Performance Indicators82
9Volume/Rate Analysis83
10Yield and Cost Trends84
11Net Portfolio Value85
12Loan Portfolio Composition86
13Loan Maturity Schedule87
14Loan Originations, Purchases, Sales and Repayments88
15Loan Delinquencies89
16Nonperforming Assets90
17Classified Assets91
18Allowance for Loan Losses92
19Mix of Deposits93
20Certificates of Deposit by Rate and Maturity94
21Borrowed Funds Activity95
22Offices of Eureka Homestead96
23Management of the Bank97
24Key Demographic Data and Trends98
25Key Housing Data99
26Major Sources of Employment100
27Unemployment Rates101
28Market Share of Deposits102
29National Interest Rates by Quarter103

 

 

 

 

LIST OF EXHIBITS (cont.)

 

NUMERICAL 
EXHIBITS PAGE
30Thrift Share Data and Pricing Ratios104
31Key Financial Data and Ratios110
32Recently Converted Thrift Institutions116
33Acquisitions and Pending Acquisitions117
34Balance Sheets Parameters - Comparable Group Selection118
35Operating Performance and Asset Quality Parameters - Comparable Group Selection119
36Balance Sheet Ratios Final Comparable Group120
37Operating Performance and Asset Quality Ratios Final Comparable Group121
38Balance Sheet Totals - Final Comparable Group122
39Balance Sheet - Asset Composition Most Recent Quarter123
40Balance Sheet - Liability and Equity Most Recent Quarter124
41Income and Expense Comparison Trailing Four Quarters125
42Income and Expense Comparison as a Percent of Average Assets - Trailing Four Quarters126
43Yields, Costs and Earnings Ratios Trailing Four Quarters127
44Reserves and Supplemental Data128
45Valuation Analysis and Conclusions129
46Comparable Group Market, Pricings and Financial Ratios - Stock Prices as of February 12, 2019130
47Pro Forma Effects of Conversion Proceeds - Minimum131
48Pro Forma Effects of Conversion Proceeds - Midpoint132
49Pro Forma Effects of Conversion Proceeds - Maximum133
50Pro Forma Effects of Conversion Proceeds - Maximum, as Adjusted134
51Summary of Valuation Premium or Discount135

 

 

 

 

ALPHABETICAL EXHIBITSPAGE
   
ABackground and Qualifications136
BRB 20 Certification140
CAffidavit of Independence141

 

 

 

 

INTRODUCTION

 

Keller & Company, Inc. is an independent appraisal firm for financial institutions and has prepared this Conversion Valuation Appraisal Report ("Report") to provide the pro forma market value of the to-be-issued common stock of Eureka Homestead Bancorp, Inc. (theCorporation), a Maryland corporation, which will be formed as part of the conversion to own all of the to-be-issued shares of common stock of Eureka Homestead (Eureka Homesteador theBank), Metairie, Louisiana. The shares of common stock are to be issued in connection with the Banks Application for Approval of Conversion from a state-chartered mutual savings bank to a state-chartered stock savings bank.

 

The Application is being filed with the Federal Reserve Bank (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Securities and Exchange Commission ("SEC"). Such Application for Conversion has been reviewed by us, including the Prospectus and related documents, and discussed with the Banks management and the Banks conversion counsel, Luse Gorman Pomerenk & Schick, PC, Washington, D.C.

 

This conversion appraisal was prepared based on the guidelines used by the OCC entitledGuidelines for Appraisal Reports for the Valuation of Savings Institutions Converting from the Mutual to Stock Form of Organization,in accordance with application requirements and the Revised Guidelines for Appraisal Reports and represents a full appraisal report. The Report provides detailed exhibits based on the Revised Guidelines and a discussion on each of the factors that need to be considered. Our valuation will be updated in accordance with the Revised Guidelines and will consider any changes in market conditions for thrift institutions.

 

The pro forma market value is defined as the price at which the stock of the Corporation after conversion would change hands between a typical willing buyer and a typical willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, and with both parties having reasonable knowledge of relevant facts in an arm's-length transaction. The appraisal assumes the Bank is a going concern and that the shares issued by the Corporation in the conversion are sold in noncontrol blocks.

 

 1 

 

 

Introduction (cont.)

 

As part of our appraisal procedure, we have reviewed the audited financial statements for the five fiscal years ended December 31, 2014 through 2018, and discussed them with Eureka Homestead’s management and with Eureka Homestead’s current independent auditors, T.E. Lott & Company, PA, Columbus, Mississippi, and with Hannis T. Bourgeois, LLP, New Orleans, Louisiana, for prior financials. We have also discussed and reviewed with management other financial matters and have reviewed internal projections. We have reviewed the Corporation's preliminary Form AC and discussed it with management and with the Bank’s conversion counsel.

 

To gain insight into the Bank’s local market condition, we have traveled Eureka Homestead’s market area. We have studied the economic and demographic characteristics of the primary market area, and analyzed the Bank’s primary market area relative to Louisiana and the United States. We have also examined the competitive market within which Eureka Homestead operates, giving consideration to the area's numerous financial institution offices, mortgage banking offices, and credit union offices and other key market area characteristics, both positive and negative.

 

We have given consideration to the market conditions for securities in general and for publicly traded thrift stocks in particular. We have examined the performance of selected publicly traded thrift institutions and compared the performance of Eureka Homestead to those selected institutions.

 

Our valuation is not intended to represent and must not be interpreted to be a recommendation of any kind as to the desirability of purchasing the to-be-outstanding shares of common stock of the Corporation. Giving consideration to the fact that this appraisal is based on numerous factors that can change over time, we can provide no assurance that any person who purchases the stock of the Corporation in this mutual-to-stock conversion will subsequently be able to sell such shares at prices similar to the pro forma market value of the Corporation as determined in this conversion appraisal.

 

 2 

 

 

I.DESCRIPTION OF EUREKA HOMESTEAD

 

GENERAL

 

Eureka Homestead was organized in 1884 as a state-chartered mutual savings and loan association. In 2002, Eureka Homestead changed its charter to a federally chartered mutual savings bank with the name Eureka Homestead.

 

Eureka Homestead conducts its business from its main office located at 1922 Veterans Memorial Boulevard in Metairie, Louisiana. Eureka Homestead has no branch offices but does have a loan production office in New Orleans. The Banks primary retail market area is focused on Jefferson Parish, while the Banks lending market includes Jefferson Parish and Orleans Parish.

 

Eureka Homesteads deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation ("FDIC") in the Bank Insurance Fund ("BIF"). The Bank is also subject to certain reserve requirements of the Board of Governors of the Federal Reserve Bank (the "FRB"). Eureka Homestead is a member of the Federal Home Loan Bank (the "FHLB") of Dallas and is regulated by the Office of the Comptroller of the Currency. As of December 31, 2018, Eureka Homestead had assets of $98,070,000, deposits of $56,183,000 and equity of $12,239,000.

 

Eureka Homestead has been principally engaged in the business of serving the financial needs of the public in its local communities and throughout its primary market area as a community-oriented institution. Eureka Homestead has been most active in the origination of one- to four-family loans, which represented 95.4 percent of its loan originations during the fiscal year ended December 31, 2018. One- to four-family loan originations represented a smaller 93.5 percent of loan originations during the year ended December 31, 2017. At December 31, 2018, 93.2 percent of the Bank’s gross loans consisted of residential real estate loans on one- to four-family dwellings, compared to a larger 93.9 percent at December 31, 2017, with the primary sources of funds being retail deposits from residents in its local communities and to a much lesser extent, FHLB advances. The Bank is also an originator of commercial real estate loans, home equity loans, consumer loans, construction loans and multi-family loans. Consumer loans were minimal and include loans on deposit accounts and other secured and unsecured personal loans.

 

 3 

 

 

General (cont.)

 

The Bank had cash and investments, including mortgage-backed securities, of $9.6 million, or 9.8 percent of its assets, excluding FHLB stock which totaled $1,376,000 or 1.4 percent of assets at December 31, 2018. Deposits, principal payments, FHLB advances and equity have been the primary sources of funds for the Bank’s lending and investment activities.

 

The total amount of stock to be sold in the stock conversion will be $16.0 million or 1,600,000 shares at $10 per share based on the midpoint of the appraised value of $16.0 million. The net conversion proceeds will be $14.73 million, reflecting conversion expenses of $1.27 million. The actual cash proceeds to the Bank of $7.4 million will represent 50.0 percent of the net conversion proceeds at the midpoint. The ESOP will represent 8.00 percent of the gross shares issued or 128,000 shares at $10 per share, representing $1,280,000. The Bank’s net proceeds will be used to fund new loans and to invest in securities following their initial deployment to short term investments. The Bank may also use the proceeds to expand services, expand operations, diversify into other businesses, or for any other purposes authorized by law. The Corporation will use its proceeds to fund the ESOP or to purchase interest-bearing deposits and short- and intermediate-term government or federal agency securities.

 

The Bank has experienced a slight deposit increase of $464,000 over the past four fiscal years, with deposits increasing 0.8 percent from December 31, 2014, to December 31, 2018, or an average of 0.2 percent per year. From December 31, 2017, to December 31, 2018, deposits increased by $3.1 million or 5.8 percent, compared to an increase of 10.0 percent in fiscal 2017.

 

 4 

 

 

General (cont.)

 

The Bank experienced an increase in its loan portfolio during the previous four years of 2014 to 2017, while focusing on maintaining its favorable asset quality position, on strengthening its net interest margin and on maintaining a reasonable equity to assets ratio. In 2018, the Bank continued its loan growth but experienced smaller loan growth than in 2016 or 2017. Equity to assets increased from 11.86 percent of assets at December 31, 2014, to 12.48 percent at December 31, 2018.

 

The primary lending strategy of Eureka Homestead has been to focus on the origination of adjustable-rate and fixed-rate one-to four-family mortgage loans, the origination of multi-family loans and commercial real estate loans, the origination of home equity loans, the origination of construction loans and the origination of consumer loans.

 

The Bank’s share of one- to four-family mortgage loans has decreased slightly from 93.9 percent of gross loans at December 31, 2017, to 93.2 percent as of December 31, 2018. Multi-family loans increased from 3.4 percent of loans to 5.1 percent of loans, and commercial real estate loans decreased from 2.1 percent of loans to 1.4 percent from December 31, 2017, to December 31, 2018. All types of real estate loans as a group increased slightly from 99.4 percent of gross loans at December 31, 2017, to 99.7 percent at December 31, 2018. The increase in real estate loans was offset by the Bank’s decrease in consumer loans. The Bank’s share of consumer loans witnessed a decrease in their share of loans from 0.6 percent at December 31, 2017, to 0.3 percent at December 31, 2018.

 

Management's internal strategy has also included continued emphasis on maintaining an adequate and appropriate level of allowance for loan losses relative to loans and nonperforming assets in recognition of the more stringent requirements within the industry to establish and maintain a higher level of general valuation allowances and also in response to the Bank’s changing level of loans and nonperforming assets. At December 31, 2017, Eureka Homestead had $850,000 in its loan loss allowance or 1.08 percent of gross loans, and 366.68 percent of nonperforming loans with the loan loss allowance remaining at $850,000, representing a lesser 1.05 percent of gross loans and was not applicable relative to nonperforming loans because of the Bank’s absence of nonperforming loans.

 

 5 

 

 

General (cont.)

 

The basis of earnings for the Bank has been interest income from loans and investments with the net interest margin being the key determinant of net earnings followed by gains on loan sales with a continued emphasis on strengthening noninterest income and controlling noninterest expenses. With a primary dependence on net interest margin and gains on loan sales for earnings, current management will focus on striving to strengthen the Bank’s net interest margin without undertaking excessive credit risk combined with controlling the Bank’s interest risk position and increasing other components of noninterest income, controlling nonperforming assets, monitoring noninterest expenses and reducing interest expense.

 

 6 

 

 

PERFORMANCE OVERVIEW

 

The financial position of Eureka Homestead at fiscal year end December 31, 2014, through December 31, 2018, is shown in Exhibits 1 and 2, and the earnings performance of Eureka Homestead for the fiscal years 2014 through 2018 is shown in Exhibits 3 and 4. Exhibit 5 provides selected financial data at December 31, 2017 and 2018. Eureka Homestead has experienced a rise in its loan portfolio, a rise in its asset base, minimal change in cash and investments, and an increase in deposits from 2017 to 2018.

 

With regard to the Bank’s historical financial condition, Eureka Homestead has experienced a modest increase in assets from December 31, 2016, to December 31, 2017, with a moderate increase in loans, a moderate increase in deposits and a slight decrease in the dollar level of equity over the prior year. Then from December 31, 2017, to December 31, 2018, Eureka Homestead experienced modest growth in loans, a moderate rise in deposits, a modest rise in assets, a moderate rise in cash and investments, and a modest increase in equity.

 

The Bank witnessed an increase in assets of $3.4 million or 3.6 percent and an increase in deposits of $3.1 million or 5.8 percent for the period of December 31, 2017, to December 31, 2018. Over the past four fiscal periods, the Bank experienced its largest dollar increase in assets of $3.4 million in fiscal year 2018, due primarily to a $1.8 million increase in net loans, and a $1.7 million increase in cash and investments, with a $3.1 million increase in deposits and minimal change in FHLB advances.

 

Eureka Homestead’s net loan portfolio, which includes mortgage loans and nonmortgage loans, increased from $79.3 million at December 31, 2017, to $81.1 million at December 31, 2018, and represented a total increase of $1.8 million, or 2.3 percent.

 

Eureka Homestead has obtained funds through deposits and FHLB advances with a stronger use of FHLB advances totaling $26.0 million at December 31, 2018. The Bank’s competitive rates for deposits in its local market in conjunction with its focus on service have been the sources for competing for retail deposits. Deposits increased $4.6 million or 9.5 percent from fiscal 2016 to 2017 and a lesser $3.1 million or 5.8 percent from fiscal 2017 to 2018.

 

 7 

 

 

Performance Overview (cont.)

 

The Bank witnessed an increase in its dollar equity level from 2017 to 2018. At December 31, 2017, the Bank had an equity level of $11.9 million, representing a 12.61 percent equity to assets ratio and increased to $12.2 million at December 31, 2018, representing a higher 12.48 percent equity to assets ratio. The dollar level of equity decreased 0.2 percent from December 31, 2016, to December 31, 2017, and the equity ratio decreased from 12.97 percent of assets in 2016 to 12.61 percent in 2017.

 

 8 

 

 

INCOME AND EXPENSE

 

Exhibit 6 presents selected operating data for Eureka Homestead. This table provides key income and expense figures in dollars for the fiscal years of 2017 and 2018.

 

Eureka Homestead witnessed a moderate increase in its dollar level of interest income from fiscal 2017 to fiscal 2018. Interest income was $3.30 million in 2017 and a higher $3.74 million in 2018. The Bank’s interest expense experienced a moderate increase from fiscal year 2017 to 2018. Interest expense increased from $1.29 million in 2017 to $1.65 million in 2018, representing an increase of $364,000 or 28.2 percent. Interest income increased a larger $453,000 or 13.7 percent. Such increase in interest income from 2017 to 2018, notwithstanding the smaller dollar increase in interest expense, resulted in a dollar increase in annual net interest income but a decrease in net interest margin due to the rise in assets.

 

The Bank had $20,000 in provisions for loan losses in 2017 and had a smaller $11,000 credit in 2018. The impact of those loan loss provisions has been to provide Eureka Homestead with a general valuation allowance of $850,000 at December 31, 2018, or 1.05 percent of gross loans and a “not meaningful” ratio to nonperforming loans, due to the absence of nonperforming loans.

 

Total other income or noninterest income indicated a minimal decrease in dollars from 2017 to 2018. Noninterest income was $515,000 or 0.54 percent of assets in 2017, with $296,330 in fees on loans sold and a lesser $505,000 in fiscal year 2018 or 0.51 percent of assets in 2018, including $307,000 in fees on loans sold. Noninterest income normally consists primarily of fees on loans sold, service charges, BOLI insurance income, and other income.

 

The Bank’s general and administrative expenses or noninterest expenses decreased slightly from $2.261 million for the fiscal year of 2017 to $2.256 million for the fiscal year ended December 31, 2018, representing a decrease of 10.3 percent. On a percent of average assets basis, operating expenses decreased from 2.48 percent of average assets for the fiscal year ended December 31, 2017, to 2.30 percent for the fiscal year ended December 31, 2018.

 

 9 

 

 

Income and Expense (cont.)

 

The net earnings position of Eureka Homestead has indicated volatility in 2017 and 2018. The annual net income (loss) figures for the fiscal years of 2017 and 2018 were $(25,000) and $295,000, respectively, representing returns on average assets of (0.03) percent and 0.30 percent for fiscal years 2017, and 2018, respectively. The increase in ROAA in 2018 was due to an increase in net interest income and a credit for provision for loan losses.

 

Exhibit 7 provides the Bank’s normalized earnings or core earnings for the twelve months ended December 31, 2018. The Bank’s normalized earnings typically eliminate any nonrecurring or higher or lower than normal income and expense items. There were two income adjustments and two noninterest expense adjustments, resulting in the normalized income being less than actual income for the twelve months ended December 31, 2018, and equal to net income of $273,000. The core noninterest income adjustments were the loss on sale of securities of $55,000 and a $25,000 reduction related to a gain on real estate, and the core expense adjustments were a reduction in the credit for provision for loan losses and the elimination of the $23,000 credit for real estate owned write-down.

 

The key performance indicators comprised of selected performance ratios, asset quality ratios and capital ratios are shown in Exhibit 8 to reflect the results of performance. The Bank’s return on average assets changed from (0.03) percent in fiscal year 2017, to 0.30 percent in 2018, with the higher earnings in 2018 due to a credit for provision for loan losses, higher net interest income and lower taxes.

 

The Bank’s net interest rate spread was 2.24 percent in 2017 and a lower 2.12 percent in 2018. The Bank’s net interest margin also indicated a decreasing trend, declining from 2.40 percent in 2017 to 2.30 percent in 2018. Eureka Homestead’s net interest margin decreased 10 basis points from 2017 to 2018.

 

 10 

 

 

Income and Expense (cont.)

 

The Bank’s return on average equity improved from 2017 to 2018. The return on average equity improved from (0.20) percent in 2017, to 2.42 percent in 2018, due to a credit for provision for loan loss, higher net interest income and lower taxes.

 

Eureka Homestead’s ratio of average interest-earning assets to interest-bearing liabilities decreased slightly from 110.43 percent at December 31, 2017, to 109.92 percent at December 31, 2018. The Bank’s overall decrease in its ratio of interest-earning assets to interest-bearing liabilities is the result of the Bank’s increase in deposits.

 

The Bank’s ratio of noninterest expenses to average assets increased from 2.48 percent in fiscal year 2017 to 2.30 percent in fiscal year 2018. Another key noninterest expense ratio reflecting efficiency of operation is the ratio of noninterest expenses to noninterest income plus net interest income referred to as the "efficiency ratio." The industry norm is 52.8 percent for all thrifts and 50.9 percent for thrifts with assets of less than $100.0 million, with the lower the ratio indicating higher efficiency. The Bank has been characterized with a modestly lower level of efficiency historically reflected in its higher efficiency ratio, which decreased from 89.71 percent in 2017 to 86.96 percent in 2018.

 

Earnings performance can be affected by an institution's asset quality position. The ratio of nonperforming loans to total loans is a key indicator of asset quality. Eureka Homestead witnessed a modest decrease in its nonperforming loans ratio from 2017 to 2018, and the ratio is currently below the industry norm. Nonperforming loans, by definition, consist of loans delinquent 90 days or more, troubled debt restructurings that have not been performing for at least three months, and nonaccruing loans. Eureka Homestead’s nonperforming loans in 2017 consisted of nonaccrual loans and loans delinquent 90 days or more. The ratio of nonperforming loans to total loans was 0.29 percent of assets at December 31, 2017, and a lower zero percent of assets at December 31, 2018. The Bank’s ratio of nonperforming assets to total assets was zero percent at December 31, 2018, and decreased from 0.31 percent at December 31, 2017.

 

 11 

 

 

Income and Expense (cont.)

 

Two other indicators of asset quality are the Bank’s ratios of allowance for loan losses to total loans and also to nonperforming loans. The Bank’s allowance for loan losses was 1.08 percent of loans at December 31, 2017, and decreased to 1.05 percent at December 31, 2018. As a percentage of nonperforming loans, Eureka Homesteads allowance for loan losses to nonperforming loans was 366.68 percent at December 31, 2017, and wasnot meaningfulat December 31, 2018, due to the absence of nonperforming assets.

 

Exhibit 9 provides the changes in net interest income due to rate and volume changes for the fiscal year 2018. For the year ended December 31, 2018, net interest income increased $84,000, due to an increase in interest income of $449,000, reduced by a $365,000 increase in interest expense. The increase in interest income was due to an increase due to volume of $337,000, accented by an increase due to rate of $112,000. The increase in interest expense was due to a $105,000 increase due to volume, accented by a $260,000 increase due to rate.

 

 12 

 

 

YIELDS AND COSTS

 

The overview of yield and cost trends for the years ended December 31, 2017 and 2018, and at December 31, 2018, can be seen in Exhibit 10, which offers a summary of key yields on interest-earning assets and costs of interest-bearing liabilities.

 

Eureka Homesteads weighted average yield on its loan portfolio increased 13 basis points from fiscal year 2017 to 2018, from 4.26 percent to 4.39 percent and then increased 19 basis points to 4.58 percent at December 31, 2018. The yield on investment securities increased 24 basis points from fiscal year 2017 to 2018, from 1.72 percent to 1.94 percent and increased 37 basis points to 2.31 percent at December 31, 2018. The yield on other interest-earning assets increased 67 basis points from fiscal year 2017 to 2018, from 1.17 percent to 1.84 percent, and then increased 80 basis points to 2.64 percent at December 31, 2018. The combined weighted average yield on all interest-earning assets increased 18 basis points from 3.94 percent in fiscal year 2017 to 4.12 percent in fiscal year 2018, and then increased to 4.36 percent at December 31, 2018.

 

Eureka Homesteads weighted average cost of interest-bearing liabilities increased 30 basis points to 2.00 percent from fiscal year 2017 to 2018, which was more than the Banks 18 basis point increase in yield, resulting in a decrease in the Banks net interest rate spread of 12 basis points from 2.24 percent to 2.12 percent from 2017 to 2018. Then the Banks interest rate spread increased 1 basis point to 2.13 percent at December 31, 2018. The Banks net interest margin decreased from 2.40 percent in fiscal year 2017 to 2.30 percent in fiscal year 2018, representing a decrease of 10 basis points.

 

The Bank’s ratio of average interest-earning assets to interest-bearing liabilities decreased from 110.43 percent for the year ended December 31, 2017, to 109.92 percent for the year ended December 31, 2018.

 

 13 

 

 

INTEREST RATE SENSITIVITY

 

Eureka Homestead has monitored its interest rate sensitivity position and focused on maintaining a moderate level of interest rate risk exposure by maintaining a minimal share of adjustable-rate residential mortgage loans, modest shares of commercial real estate and multi-family loans and a minimal share of consumer loans. Eureka Homestead recognizes the thrift industry’s historically higher interest rate risk exposure, which caused a negative impact on earnings and economic value of equity in the past as a result of significant fluctuations in interest rates, specifically rising rates in the past. Such exposure was due to the disparate rate of maturity and/or repricing of assets relative to liabilities commonly referred to as an institution’s “gap.” The larger an institution’s gap, the greater the risk (interest rate risk) of earnings loss due to a decrease in net interest margin and a decrease in economic value of equity or portfolio loss. In response to the potential impact of interest rate volatility and negative earnings impact, some institutions have taken steps to reduce their gap position. This frequently results in a decline in the institution’s net interest margin and overall earnings performance. Eureka Homestead has responded to the interest rate sensitivity issue by controlling its share of fixed-rate one- to four-family loans.

 

The Bank measures its interest rate risk through the use of its economic value of equity (“EVE”) of the expected cash flows from interest-earning assets and interest-bearing liabilities and any off-balance sheets contracts. The EVE for the Bank is calculated on a quarterly basis by an outside firm, showing the Bank’s EVE to asset ratio, the dollar change in EVE, and the change in the EVE ratio for the Bank under rising and falling interest rates. Such changes in the EVE ratio under changing rates are reflective of one of the Bank’s interest rate risk exposure measures. The second interest rate risk exposure measure used by the Bank is the change in its net interest income based on a one-year horizon and a rise in interest rates of 100, 200 and 300 basis points and a decrease in rates of 100 and 200 basis points.

 

There are numerous factors which have a measurable influence on interest rate sensitivity in addition to changing interest rates. Such key factors to consider when analyzing interest rate sensitivity include the loan payoff schedule, accelerated principal payments, deposit maturities, interest rate caps on adjustable-rate mortgage loans and deposit withdrawals.

 

 14 

 

 

Interest Rate Sensitivity (cont.)

 

Exhibit 11 provides the Bank’s EVE levels and ratios as of December 31, 2018, based on the most recent calculations and reflects the changes in the Bank’s EVE levels under rising and declining interest rates.

 

The Bank’s change in its EVE level at December 31, 2018, based on a rise in interest rates of 100 basis points was a 16.01 percent decrease, representing a dollar decrease in equity value of $2,136,000. In contrast, based on a decline in interest rates of 100 basis points, the Bank’s EVE level was estimated to increase 10.81 percent or $1,443,000 at December 31, 2018. The Bank’s exposure increases to a 34.75 percent decrease under a 200 basis point rise in rates, representing a dollar decrease in equity of $4,637,000. The Bank’s exposure based on a 200 basis point decrease in interest rates, was an increase of 15.57 percent or $2,078,000.

 

The Bank’s post shock EVE ratio based on a 200 basis point rise in interest rates is 9.61 percent and indicates a 396 basis point decrease from its 13.57 percent based on no change in interest rates.

 

The Bank’s percentage change in its net interest income based on a 100 basis point rise in rates is a decrease of 1.39 percent and an increase of 0.52 percent based on a 100 basis point decrease in rates. Based on a 200 basis point rise in rates, the Bank’s change in net interest income is a decrease of 3.23 percent.

 

The Bank is aware of its interest rate risk exposure under rapidly rising rates and falling rates. Due to Eureka Homestead’s recognition of the need to control its interest rate exposure, the Bank has pursued the origination of adjustable-rate loans. The Bank plans to increase its lending activity in the future and strive to maintain a modest share of adjustable-rate loans. The Bank will also continue to focus on strengthening its EVE ratio, recognizing the planned conversion and stock offering will strengthen the Bank’s equity level and EVE ratio, based on any change in interest rates.

 

 15 

 

 

LENDING ACTIVITIES

 

Eureka Homestead has focused its lending activity on the origination of conventional mortgage loans secured by one- to four-family dwellings, commercial real estate and multi-family loans and home equity loans, including a small level of consumer loans. Exhibit 12 provides a summary of Eureka Homestead’s loan portfolio by loan type at December 31, 2017 and 2018.

 

The primary loan type for Eureka Homestead has been residential loans secured by one- to four-family dwellings, representing a strong 93.2 percent of the Bank’s gross loans as of December 31, 2018. This share of loans has seen a minimal decrease from 93.9 percent at December 31, 2017. The second largest real estate loan type as of December 31, 2018, was multi-family loans, which comprised a moderate 5.1 percent of gross loans at December 31, 2018, compared to 3.4 percent as of December 31, 2017. The third largest real estate loan type was commercial real estate loans, which comprised a modest 1.4 percent of gross loans at December 31, 2018, compared to a larger 2.1 percent at December 31, 2017. These three real estate loan categories represented a strong 99.7 percent of gross loans at December 31, 2018, compared to a lesser 99.4 percent of gross loans at December 31, 2017.

 

The consumer loan category was the smallest loan category at December 31, 2018, and represented a minimal $211,000 or 0.3 percent of gross loans compared to 0.6 percent at December 31, 2017. The overall mix of loans has witnessed a minimal change from December 31, 2017, to December 31, 2018, with the Bank having increased its share of multi-family loans to offset its decreases in one- to four-family loans and commercial real estate loans.

 

 16 

 

 

Lending Activities (cont.)

 

The emphasis of Eureka Homestead’s lending activity is the origination of conventional mortgage loans secured by one- to four-family residences, with recent activity in the sale of a portion of these loans. Such residences are located primarily in Jefferson Parish and Orleans Parish, Louisiana. At December 31, 2018, 93.2 percent of Eureka Homestead’s gross loans consisted of loans secured by one- to four-family residential properties.

 

The Bank offers two types of adjustable-rate mortgage loans, ("ARMs") with adjustment periods of three years and five years. The interest rates on ARMs are generally indexed to the weekly average yield on U.S. Treasury rate securities adjusted to a constant maturity of one year plus a margin of 2.25 percent. ARMs have a maximum rate adjustment of 2.0 percent at each adjustment period and 5.0 percent for the life of the loan. Rate adjustments are computed by adding a stated margin to the index, the U.S. Treasury securities rate. The Bank normally retains all ARMs which it originates. The majority of ARMs have terms of up to 30 years, which is the maximum term offered, with some loans having terms of 15 and 20 years.

 

The Bank’s one- to four-family mortgage loans remain outstanding for shorter periods than their contractual terms, because borrowers have the right to refinance or prepay. These mortgage loans contain “due on sale” clauses which permit the Bank to accelerate the indebtedness of the loan upon transfer of ownership of the mortgage property.

 

The Bank’s other key mortgage loan product is a fixed-rate mortgage loan with Eureka Homestead’s fixed-rate mortgage loans having terms of 15 years, 20 years and 30 years. Fixed-rate mortgage loans have a maximum term of 30 years. These loans are generally written in accordance with Fannie Mae guidelines. The Bank’s fixed-rate and adjustable rate mortgage loans normally conform to the maximum loan limits.

 

 17 

 

 

Lending Activities (cont.)

 

The normal loan-to-value ratio for conventional mortgage loans to purchase or refinance one-to four-family dwellings generally does not exceed 80.0 percent at Eureka Homestead, even though the Bank is permitted to make loans up to a 95.0 percent of the purchase price or appraised value. While the Bank can make loans above 95.0 percent of loan-to-value, the Bank requires private mortgage insurance for the amount in excess of the 80.0 percent loan-to-value ratio for fixed-rate loans and adjustable-rate loans. Mortgage loans originated by the Bank include due-on-sale clauses enabling the Bank to adjust rates on fixed-rate loans in the event the borrower transfers ownership. The Bank maintains an escrow account for insurance and taxes on conventional one-to four family mortgage loans. On occasion, the Bank may allow the borrower to pay their own taxes and insurance, but proof of payment is required.

 

Eureka Homestead has also been an originator of adjustable-rate and fixed-rate commercial real estate loans and multi-family loans in the past and will continue to make multi-family and commercial real estate loans. The Bank had a total of $4.1 million in multi-family loans, and $1.2 million in multi-family loans at December 31, 2018, or a combined 6.5 percent of gross loans, compared to a combined $4.4 million and a lesser 5.5 percent, combined, of gross loans at December 31, 2017.

 

The major portion of commercial real estate and multi-family loans are secured by apartment buildings, small retail establishments, office buildings, and other mixed-use properties used for business. Most of the multi-family and commercial real estate loans are fully amortizing with an amortization period of 25 years. The maximum loan-to-value ratio is normally 75.0 percent for commercial real estate loans and multi-family loans.

 

Eureka Homestead is also an originator of construction loans. Construction loans have a normal term of 12 months and provide for interest only payments during the construction phase. Upon completion of construction, the construction loans convert to a longer-term permanent mortgage loan. Construction loans have a maximum loan-to-value ratio of 85.0 percent.

 

 18 

 

 

Lending Activities (cont.)

 

Eureka Homestead is also an originator of home equity loans, including a small level of consumer loans, with these loans totaling $1.6 million at December 31, 2018, and representing 2.0 percent of gross loans. Home equity loans have a fixed rate with a maximum term of 15 years. The normal maximum loan-to-value ratio is 90.0 percent. Eureka Homestead makes home equity loans to borrowers where the Bank holds the first mortgage as well as to borrowers where the Bank does not hold the first mortgage.

 

Exhibit 13 provides a loan maturity schedule and breakdown and summary of Eureka Homestead’s fixed- and adjustable-rate loans, indicating a strong majority of fixed-rate loans. At December 31, 2018, 99.2 percent of the Bank’s loans due after December 31, 2019, were fixed-rate and 0.8 percent were adjustable-rate. At December 31, 2018, the Bank had 0.7 percent of its loans due on or before December 31, 2018, or in one year or less, with 1.8 percent due by December 31, 2023, or in one to five years. The Bank had a strong 81.4 percent of its loans with a maturity of more than 15 years.

 

As indicated in Exhibit 14, Eureka Homestead experienced a modest decrease in its one- to four-family loan originations and total loan originations from fiscal year 2017 to 2018. Total loan originations in fiscal year 2017 were $27.0 million compared to a lesser $25.1 million in fiscal year 2018, reflective of the lower level of one- to four-family loans originated, decreasing from $25.3 million to $23.7 million. The decrease in one- to-four-family loan originations from 2017 to 2018 of $1.6 million represented 84.2 percent of the Bank’s $1.9 million decrease in total loan originations from 2017 to 2018, with multi-family loans decreasing $10,000. Consumer loans decreased $597,000.

 

Overall, loan originations exceeded loan sales, principal payments, charge-offs, loan repayments and other deductions in the years ended December 31, 2017 and 2018. In fiscal 2017, loan originations exceeded reductions by $8.8 millions, impacted by $11.0 million in loan sales, and then exceeded reductions by $1.6 million in 2018, impacted by $12.4 million in loan sales in the year ended December 31, 2018.

 

 19 

 

 

NONPERFORMING ASSETS

 

Eureka Homestead understands asset quality risk and the direct relationship of such risk to delinquent loans and nonperforming assets, including real estate owned. The quality of assets has been a key concern to financial institutions throughout many regions of the country. A number of financial institutions have dealt with higher levels of nonperforming assets in the past and have been forced to recognize significant losses, setting aside major valuation allowances. The level of nonperforming assets has decreased steadily and significantly over the past three years.

 

A sharp increase in nonperforming assets in the past was often related to specific regions of the country and was frequently associated with higher risk loans, including purchased commercial real estate loans and multi-family loans. Eureka Homestead has maintained a lower share of nonperforming assets and has experienced a modest decrease in its level of nonperforming assets, with nonperforming assets decreasing to zero in 2018.

 

Exhibit 15 provides a summary of Eureka Homestead’s delinquent loans at December 31, 2017 and 2018, indicating an overall decrease in the dollar amount of delinquent loans from December 31, 2017, to December 31, 2018. The Bank had $398,000 in loans delinquent 30 to 89 days at December 31, 2018. Loans delinquent 90 days or more were zero at December 31, 2018, with these two categories representing 0.49 percent of gross loans, with all of them one- to four-family real estate loans. At December 31, 2017, delinquent loans of 30 to 89 days totaled $613,000 or 0.76 percent of gross loans and loans delinquent 90 days or more were $86,000 for a combined total of $699,000 and a share of 0.87 percent of gross loans, compared to a lower $398,000 or 0.11 percent of gross loans, and a lower 0.49 percent of gross loans at December 31, 2018.

 

 20 

 

 

Nonperforming Assets (cont.)

 

It is normal procedure for Eureka Homestead’s board to review loans delinquent 90 days or more on a monthly basis, to assess their collectibility and possibly commence foreclosure proceedings. When a loan is delinquent 30 days, the Bank attempts to contact the borrower by phone. Such delinquent loans are also reported to the board of directors monthly. If the loan still remains delinquent after 90 days, the loan is considered in default, and a certified letter is generally sent to the borrower indicating the entire balance is due. The loan is then transferred to the appropriate collections personnel. The loan is placed on nonaccrual status. If the loan is not made current by no later than 120 days, foreclosure proceedings will begin.

 

Exhibit 16 provides a summary of Eureka Homestead’s nonperforming assets at December 31, 2017 and 2018. Nonperforming assets, by definition, include loans 90 days or more past due, nonaccruing loans, troubled debt restructurings that have not performed, and repossessed assets. The Bank carried a lower dollar level of nonperforming assets at December 31, 2018, relative to December 31, 2017. Eureka Homestead’s level of nonperforming assets was $384,000 at December 31, 2017, and a lower zero at December 31, 2018, which represented 0.31 percent of assets in 2017 and zero percent in 2018. The Bank’s nonperforming assets included $232,000 in nonaccrual loans, $86,000 in loans 90 days or more past due, no troubled debt restructurings, and $66,000 in real estate owned for a total of $384,000 at December 31, 2017. At December 31, 2018, nonperforming assets were zero or zero percent of assets with no loans 90 days or more past due, no nonaccrual loans, no troubled debt restructurings and no real estate owned.

 

Eureka Homestead’s levels of nonperforming assets were lower than its levels of classified assets. The Bank’s ratios of classified assets to assets, excluding special mention assets, were 0.87 percent of assets at December 31, 2017, and 0.59 percent at December 31, 2018 (reference Exhibit 17). The Bank’s classified assets consisted of $580,000 in substandard assets, with no assets classified as doubtful or loss at December 31, 2018, and totaled $828,000 in substandard assets at December 31, 2017.

 

Exhibit 18 shows Eureka Homestead’s allowance for loan losses at December 31, 2017 and 2018, indicating the activity and the resultant balances. Eureka Homestead has witnessed no change in its balance of allowance for loan losses, remaining at $850,000 at December 31, 2017, and at December 31, 2018. The Bank had provisions for loan losses of $20,000 in fiscal 2017 and $(11,000) in fiscal 2018.

 

 21 

 

 

Nonperforming Assets (cont.)

 

The Bank had total charge-offs of $70,000 in 2017 and zero in 2018, with recoveries of zero in 2017 and $11,000 in 2018. The Bank’s ratio of allowance for loan losses to gross loans was 1.08 percent at December 31, 2017, and a lower 1.05 percent at December 31, 2018. Allowance for loan losses to nonperforming loans was 366.38 percent at December 31, 2017, and “not meaningful” at December 31, 2018, due to the absence of nonperforming loans.

 

 22 

 

 

INVESTMENTS

 

The Bank’s investment and securities portfolio consists entirely of mortgage-backed securities. The Bank had $6.1 million in mortgage-backed securities at December 31, 2017, and a lesser $5.8 million at December 31, 2018. The Bank also had cash and interest-bearing deposits totaling $3.8 million at December 31, 2018, and a lesser $1.7 million at December 31, 2017. The Bank had $1,376,000 in FHLB stock at December 31, 2018. The weighted average yield on interest-bearing deposits was 1.84 percent for the year ended December 31, 2018, and 1.94 percent on securities available-for-sale.

 

 23 

 

 

DEPOSIT ACTIVITIES

 

The mix of average deposits by amount at December 31, 2017 and 2018, is provided in Exhibit 19. There has been a moderate change in total deposits and a minimal change in the deposit mix during this period. Total average deposits have increased from $47.6 million at December 31, 2017, to $55.6 million at December 31, 2018, representing an increase of $8.0 million or 16.8 percent. The balance of certificates of deposit has increased from $44.1 million at December 31, 2017, to $52.2 million at December 31, 2018, representing an increase of $8.1 million or 18.4 percent, while savings and money market accounts have decreased $204,000 from $3.6 million at December 31, 2017, to $3.4 million at December 31, 2018, or 5.7 percent. The balance of certificates of deposit includes $21.7 million in Quickrate certificates of deposit or 49.2 percent of total certificates of deposit at December 31, 2017, and a larger $24.8 million in Quickrate certificates of deposit or 47.5 percent of total certificates of deposit at December 31, 2018.

 

Exhibit 20 provides a breakdown of certificates of $100,000 or more by maturity as of December 31, 2018, and a breakdown of all certificates by rate and maturity at December 31, 2018. A moderate 22.9 percent of the Bank’s certificates of deposit of $100,000 or more mature in six months to one year, with 14.9 percent of certificates maturing in more than three years. The second largest category of certificates based on maturity was certificates maturing in one year to three years, which represented 22.1 percent of these certificates. The largest category based on maturity, for all certificates is one year or less, which represented 60.5 percent of certificates followed by certificates maturing in one year to two years, which represented 16.4 percent of certificates. Based on rate, the largest category was certificates with rates of 2.00 percent to 2.99 percent, which represented 51.8 percent of certificates followed by certificates with rates of 1.00 percent to 1.99 percent with 39.8 percent of total certificates.

 

 24 

 

 

BORROWINGS

 

Eureka Homestead has made regular use of FHLB advances (reference Exhibit 21) in each of the years ended December 31, 2017 and 2018. The Bank had total FHLB advances of $26.0 million at December 31, 2018, with a weighted average cost of 2.68 percent during the period and a balance of a similar $26.0 million at December 31, 2017, with a weighted average cost of a lower 2.57 percent during the period.

 

SUBSIDIARIES

 

Eureka Homestead has no owned subsidiaries.

 

OFFICE PROPERTIES

 

Eureka Homestead has one office location in Metairie, Louisiana, with no branches. The Bank has a loan office in New Orleans. The Bank owns its home office and leases its loan office. At December 31, 2018, the Banks total investment in fixed assets, based on depreciated cost, was $767,000 or 0.78 percent of assets.

 

MANAGEMENT

 

Alan T. Heintzen is the chief executive officer and has served in those capacities with Eureka Homestead since 1996. Mr. Heintzen is also chairman of the board of directors and the chief compliance officer. In accordance with the Bank’s succession plan, in July 2018, Mr. Heintzen relinquished the role of president, a position he had held since 1996 and the corresponding oversight of the day-to-day operations of Eureka Homestead and was elected chairman of the board and began working off-site from the Bank’s office. Including his 22 years of experience at Eureka Homestead, Mr. Heintzen has a total of 40 years of management experience in the banking profession. Mr. Heintzen’s experience provides the board with a perspective on the day-to-day operations of Eureka Homestead and assists the board in assessing the trends and developments in the financial institutions industry on a local and national basis.

 

 25 

 

 

Management (cont.)

 

Mr. Cecil A. Haskins, Jr., is the president and chief financial officer. He has held the position of president since July 2018 and the position of chief financial officer since September 1999. Mr. Haskins is a certified public accountant with audit and consulting experience for financial institutions nationally and internationally. Mr. Haskins’ experience provides the board with the necessary financial perspective and bank operations, and assists the board in the assessing trends and developments in the financial institutions industry on a local and national basis.

 

 26 

 

 

II.DESCRIPTION OF PRIMARY MARKET AREA

 

Eureka Homestead’s market area is focused on Metairie, Louisiana, where the Bank’s office is located, but also includes portions of both Jefferson Parish and Orleans Parish. Exhibit 24 shows the trends in population, households and income for Metairie, Jefferson Parish, Orleans Parish, Louisiana and the United States. The population trends indicate decreases in Metairie, Jefferson Parish and Orleans Parish for the period from 2000 to 2010, most likely due to the catastrophic effects of Hurricane Katrina in 2005, while Louisiana and the United States increased in population. Metairie, Jefferson Parish and Orleans Parish had population decreases of 5.2 percent, 5.0 percent and 29.1 percent, respectively. Louisiana’s and the United States’ populations increased by 1.4 percent and 9.7 percent, respectively, during the same time period. Through 2024, population is projected to increase by 3.2 percent, 3.5 percent and 21.5 percent in Metairie, Jefferson Parish and Orleans Parish, and by 5.8 percent in Louisiana and 10.7 percent in the United States.

 

More important is the trend in households. Metairie, Jefferson Parish and Orleans Parish experienced 6.0 percent, 3.7 percent and 24.5 percent decreases in households from 2000 through 2010, again due to Hurricane Katrina, compared to increases of 4.4 percent in Louisiana and 10.7 percent in the United States. All areas are projected to increase in households from 2010 through 2024 by 4.3 percent, 4.5 percent, 25.8 percent, 8.0 percent and 10.7 percent, respectively, in Metairie, Jefferson Parish, Orleans Parish, Louisiana and the United States.

 

Metairie had 2000 per capita income of $24,771, higher than all other areas, with Jefferson Parish at $19,953, Orleans Parish at $17,258, Louisiana at $16,912 and the United States at $22,162. Per capita income increased in all areas from 2000 to 2010. Metairie’s per capita income increased to a still high $31,901, Jefferson Parish and Orleans Parish increased in per capita income to $26,596 and $26,131, respectively. Louisiana’s per capita income increased to $24,264 and the United States’ increased to $26,059. In 2000, median household income in Metairie was $41,265, higher than all but the United States, with Jefferson Parish at $38,435, Orleans Parish at $27,133, Louisiana at $32,566 and the United States with a median household income $41,994. Median household income increased from 2000 to 2010 by 25.2 percent, 26.2 percent, 35.2 percent, 37.2 percent, and 19.2 percent to $51,676, $48,522, $36,681, $44,673, and $50,046 in Metairie, Jefferson Parish, Orleans Parish, Louisiana and the United States, respectively. All areas are also projected to show increases in their median household income levels from 2010 through 2024. Metairie is projected to experience a median household income increase of 20.6 percent to $62,321, while Jefferson Parish, Orleans Parish, Louisiana and the United States are projected to increase by 15.7 percent, 21.0 percent, 13.5 percent, and 25.7 percent, respectively, to $56,118, $44,388, $50,689, and $62,901 median household income, respectively, from 2010 to 2024.

 

 27 

 

 

Description of Primary Market Area (cont.)

 

Exhibit 25 provides a summary of key housing data for Metairie, Jefferson Parish, Orleans Parish, Louisiana and the United States. In 2000, Metairie had a lower rate of owner-occupancy of 61.8 percent, lower than all other areas except Orleans Parish, with Jefferson Parish at 63.9 percent, Orleans Parish at 46.5 percent, Louisiana at 67.9 percent and the United States at 66.2 percent. As a result, Metairie supported a higher rate of renter-occupied housing of 38.2 percent, compared to 36.1 percent in Jefferson Parish, 53.5 percent in Orleans Parish, 32.1 percent in Louisiana, and 33.8 percent in the United States. In 2010, owner-occupied housing increased in Metairie and Orleans Parish while decreasing slightly in Jefferson Parish, Louisiana and the United States. In 2010, owner-occupied housing was 62.1 percent in Metairie, 63.7 percent in Jefferson Parish, 47.8 percent in Orleans Parish, 67.2 percent in Louisiana and 65.4 percent in the United States.

 

Metairie’s 2000 median housing value was a higher $139,100, compared to Jefferson Parish at $105,300, Orleans Parish at $87,300, Louisiana at $85,000 and the United States at $119,600. The 2000 median rent in Metairie was $563, which was again higher than Jefferson Parish’s at $544, Orleans Parish’s at $488 and Louisiana’s at $466 but lower than the United States’ at $602. In 2010, median housing values had increased in Metairie to $210,900, in Jefferson Parish to $175,500, in Orleans Parish to $183,800, in Louisiana to $137,700 and in the United States to $179,900. The 2010 median rent levels were $886, $899, $922, $762, and $871 in Metairie, Jefferson and Orleans Parishes, Louisiana and the United States, respectively. More recently, in the 2017 American Community Survey (Census Bureau), median housing values were $223,000, $176,000, $205,000, $152,900 and $193,500 in Metairie, Jefferson Parish, Orleans Parish, Louisiana and the United States, respectively.

 

 28 

 

 

Description of Primary Market Area (cont.)

 

In 2000, the major source of employment for all areas by industry group, based on share of employment, was the services industry. The services industry was responsible for the majority of employment in Metairie, Jefferson Parish, Orleans Parish, Louisiana and the United States at percentages of 52.9 percent, 53.1 percent, 62.7 percent, 49.4 percent, and 46.7 percent, respectively (reference Exhibit 26). The wholesale/retail industry was the second major employer in all areas. The finance/insurance/real estate group was the third major employer in Metairie, the construction group was the third major employer in Jefferson Parish, the transportation/utilities group was the third major employer in Orleans Parish, and the manufacturing sector was the third major employer in Louisiana and the United States. The agriculture/mining group, construction group, manufacturing group, transportation/utilities, and information group combined to provide 21.6 percent of employment in Metairie. The agriculture/mining group, construction group, transportation/utilities group, information group and finance/insurance/real estate group combined for 22.2 percent of employment in Jefferson Parish. The agriculture/mining, construction group, wholesale/retail group, information group and the finance/insurance/real estate group combined for 19.1 percent of employment in Orleans Parish. The agriculture/mining group, construction group, transportation/utilities group, information group and finance/insurance/real estate group combined for 25.1 percent of employment in Louisiana and 23.9 percent in the United States.

 

 29 

 

 

Description of Primary Market Area (cont.)

 

In 2010, the services industry, wholesale/retail trade industry, and construction industry provided the first, second and third highest levels of employment, respectively, for Metairie, Orleans Parish and Louisiana, with the services, wholesale/retail trade industry and manufacturing industry indicating first, second and third highest levels in the United States. In Jefferson Parish, the services industry, wholesale/retail group and manufacturing group accounted for first, second and third higher levels of employment. The services group accounted for 55.7 percent, 50.3 percent, 64.6 percent, 52.3 percent and 53.2 percent of employment in Metairie, Jefferson and Orleans Parishes, Louisiana and the United States. The wholesale/retail accounted for 14.6 percent, 16.8 percent, 11.7 percent, 14.6 percent and 14.5 percent of employment in Metairie, Jefferson and Orleans Parishes, Louisiana and the United States. The construction group accounted for 10.0 percent of employment in Metairie, 6.4 percent employment in Orleans Parish and 8.4 percent of employment in Louisiana. Manufacturing accounting for 8.3 percent of employment in Jefferson Parish and 10.4 percent of employment in the United States. The remaining categories accounted for 19.7 percent of employment in Metairie, 24.6 percent of employment in Jefferson Parish, 17.3 percent of employment in Orleans Parish, 24.7 percent of employment in Louisiana, and 21.9 percent of employment in the United States.

 

Some of the largest employers in Jefferson Parish are:

 

Employer Employees  Product/Service
Ochsner Health System  16,771  Healthcare
East Jefferson General Hospital  3,000  Healthcare
Laitram, LLC  2,065  Manufacturing
West Jefferson Medical Cntr.  1,526  Healthcare
Jefferson Parish  1,440  Law Enforcement/Government
Audubon Engineering Co., LLC  950  Engineering
Blessey Marine Service, Inc.  832  Inland Water Passenger Transportation/Towing
Cornerstone Chemical Co  494  Chemical Manufacturer
Favrot & Shane AIA Architects  361  Architectural Services/Property Management
Southern Eureka Homestead Sales & Service  290  Wholesale/Distribution Beer and Ales
Geocent LLC  250  Software Engineering and Technology Consultant

 

 30 

 

 

Description of Primary Market Area (cont.)

 

The unemployment rate is another key economic indicator. Exhibit 27 shows the unemployment rates in Jefferson Parish, Orleans Parish, Louisiana and the United States in 2014 through 2018. Jefferson Parish has been characterized by lower unemployment rates than state levels. In 2014, Jefferson Parish had an unemployment rate of 6.0 percent, compared to unemployment rates of 6.9 percent in Orleans Parish, 6.4 percent in Louisiana and 6.2 percent in the United States. Jefferson Parish's unemployment rate decreased in 2015, as did those of Orleans Parish, Louisiana and the United States to 5.8 percent, 6.5 percent, 6.3 percent and 5.3 percent, respectively. In 2016, Jefferson Parish’s rate of unemployment decreased as did all other areas to 5.3 percent, 5.8 percent, 6.0 percent and 4.9 percent in Jefferson Parish, Orleans Parish, Louisiana and the United States, respectively. In 2017, Jefferson Parish’s rate of unemployment decreased to 4.5 percent compared to a decrease to 5.1 percent in Orleans Parish, 5.1 percent in Louisiana and to 4.4 percent in the United States. Through 2018, unemployment rates were lower in Jefferson Parish at 4.3 percent, Orleans Parish at 4.9 percent, Louisiana at 4.8 percent and the United States at 3.9 percent.

 

Exhibit 28 provides deposit data for banks and thrifts in Jefferson Parish. Eureka Homestead’s deposit base in Jefferson Parish was approximately $54.6 million or a 7.9 percent share of the total thrift deposits but a 0.5 percent share of the total deposits, which were approximately $10.7 billion as of June 30, 2018. The market area is dominated by banks, with bank deposits accounting for approximately 93.6 percent of deposits at June 30, 2018.

 

Exhibit 29 provides interest rate data for each quarter for the years 2014 through 2018. The interest rates tracked are the Prime Rate, as well as 90-Day, One-Year and Thirty-Year Treasury Bills. The Prime Rate was stable from 2014 to 2017, then increasing steadily in 2017 and continuing in 2018. Short term interest rates experienced a slightly rising trend in 2014 and 2015, then rising at a faster pace in 2016, 2017 and 2018, with the Thirty-Year Treasury rate decreasing in 2014, then rising in 2015, fluctuating in 2016 and then decreasing in 2017 but increasing in 2018.

 

 31 

 

 

SUMMARY

 

In summary, population and households decreased by in Metairie, Jefferson Parish and Orleans Parish from 2000 to 2010 because of the impact of Hurricane Katrina in 2005. Both are projected to increase by 2024. The 2010 per capita income and median household income levels in Metairie were higher than all other areas, with Jefferson Parish higher than the state 2010 per capita and median household income levels. Also, Jefferson Parishs unemployment rates have been lower than state rates. According to the 2010 Census, median housing values ranged from a low of $137,700 in Louisiana to a high of $210,900 in Metairie.

 

The Bank held deposits of approximately 7.9 percent of all thrift deposits in Jefferson Parish as of June 30, 2018, but represented only a 0.5 percent share of the total deposit base of $10.7 billion.

 

 32 

 

 

III.COMPARABLE GROUP SELECTION

 

Introduction

 

Integral to the valuation of the Corporation is the selection of an appropriate group of publicly traded thrift institutions, hereinafter referred to as the "comparable group". This section identifies the comparable group and describes each parameter used in the selection of each institution in the group, resulting in a comparable group based on such specific and detailed parameters, current financials and recent trading prices. The various characteristics of the selected comparable group provide the primary basis for making the necessary adjustments to the Corporation's pro forma value relative to the comparable group. There is also a recognition and consideration of financial comparisons with all publicly traded, FDIC-insured thrifts in the United States and all publicly traded, FDIC-insured thrifts in the Midwest region and in Louisiana.

 

Exhibits 30 and 31 present Share Data and Pricing Ratios and Key Financial Data and Ratios, respectively, both individually and in aggregate, for the universe of 107 publicly traded, FDIC-insured thrifts in the United States ("all thrifts"), excluding mutual holding companies, used in the selection of the comparable group and other financial comparisons. Exhibits 30 and 31 also subclassify all thrifts by region, including the 7 publicly traded Southwest thrifts ("Southwest thrifts") and the 4 publicly traded thrifts in Louisiana ("Louisiana thrifts"), and by trading exchange. Exhibit 30 presents prices, pricing ratios and price trends for all publicly traded FDIC-insured thrifts.

 

The selection of the comparable group was based on the establishment of both general and specific parameters using financial, operating and asset quality characteristics of the Corporation as determinants for defining those parameters. The determination of parameters was also based on the uniqueness of each parameter as a normal indicator of a thrift institution's operating philosophy and perspective. The parameters established and defined are considered to be both reasonable and reflective of the Corporations basic operation.

 

 33 

 

 

Introduction (cont.)

 

The general parameter requirements for the selection of the peer group candidates included a maximum asset size limit of $1.1 billion, a trading exchange requirement that each candidate be traded on one of the two major stock exchanges, the New York Stock Exchange or the NASDAQ, a geographic parameter that eliminates potential candidates located in the West, a merger and acquisition parameter that eliminates any potential candidate that is involved in a merger and acquisition transaction, and a recent conversion parameter that eliminates any institution that has not been converted from mutual to stock for at least four quarters or prior to December 31, 2018. Due to the general parameter requirement related to trading on NASDAQ or the New York Stock Exchange, the size of the peer group institutions results in larger institutions.

 

Inasmuch as the comparable group must consist of at least ten institutions, the parameters relating to asset size and geographic location have been expanded as necessary in order to fulfill this requirement.

 

Due to lack of comparability, there are no mutual holding companies included as potential comparable group candidates.

 

GENERAL PARAMETERS

 

Merger/Acquisition

 

The comparable group will not include any institution that is in the process of a merger or acquisition as the seller at December 31, 2018, due to the price impact of such a pending transaction.

 

 34 

 

 

Merger/Acquisition (cont.)

 

There are no pending merger/acquisition transactions involving thrift institutions that were potential comparable group candidates in the Corporation’s city, county or market area as indicated in Exhibit 33.

 

Trading Exchange

 

It is necessary that each institution in the comparable group be listed on one of the two major stock exchanges, the New York Stock Exchange or the National Association of Securities Dealers Automated Quotation System (NASDAQ). Such a listing indicates that an institution’s stock has demonstrated trading activity and is responsive to normal market conditions, which are requirements for listing. Of the 107 publicly traded, FDIC-insured savings institutions, excluding mutual holding companies, 3 are traded on the New York Stock Exchange and 54 are traded on NASDAQ. There were an additional 17 traded over the counter and 33 institutions are listed in the Pink Sheets, but they were not considered for the comparable group selection.

 

IPO Date

 

Another general parameter for the selection of the comparable group is the initial public offering ("IPO") date, which must be at least four quarterly periods prior to December 31, 2018, in order to insure at least four consecutive quarters of reported data as a publicly traded institution. The resulting parameter is a required IPO date prior to December 31, 2017.

 

Geographic Location

 

The geographic location of an institution is a key parameter due to the impact of various economic and thrift industry conditions on the performance and trading prices of thrift institution stocks. Although geographic location and asset size are the two parameters that have been developed incrementally to fulfill the comparable group requirements, the geographic location parameter has nevertheless eliminated regions of the United States distant to the Corporation, including the West regions.

 

 35 

 

 

Geographic Location (cont.)

 

The geographic location parameter consists of the Southwest, Midwest, North Central, Southeast and Northeast regions for a total of twenty states. To extend the geographic parameter beyond those states could result in the selection of similar thrift institutions with regard to financial conditions and operating characteristics, but with different pricing ratios due to their geographic regions. The result could then be an unrepresentative comparable group with regard to price relative to the parameters and, therefore, an inaccurate value.

 

Asset Size

 

Asset size was another key parameter used in the selection of the comparable group. The total asset size for any potential comparable group institution was $1.1 billion or less, due to the general similarity of asset mix and operating strategies of institutions within this asset range, compared to the Corporation, with assets of approximately $98.1 million. Such an asset size parameter was necessary to obtain an appropriate comparable group of at least ten institutions.

 

In connection with asset size, we did not consider the number of offices or branches in selecting or eliminating candidates, since that characteristic is directly related to operating expenses, which are recognized as an operating performance parameter.

 

 36 

 

 

SUMMARY

 

Exhibits 34 and 35 show the 22 institutions considered as comparable group candidates after applying the general parameters, with the outlined institutions being those ultimately selected for the comparable group using the balance sheet, performance and asset quality parameters established in this section.

 

 37 

 

 

BALANCE SHEET PARAMETERS

 

Introduction

 

The balance sheet parameters focused on seven balance sheet ratios as determinants for selecting a comparable group, as presented in Exhibit 34. The balance sheet ratios consist of the following:

 

1.Cash and investments to assets
2.Mortgage-backed securities to assets
3.One- to four-family loans to assets
4.Total net loans to assets
5.Total net loans and mortgage-backed securities to assets
6.Borrowed funds to assets
7.Equity to assets

 

The parameters enable the identification and elimination of thrift institutions that are distinctly and functionally different from the Corporation with regard to asset mix. The balance sheet parameters also distinguish institutions with a significantly different capital position from the Corporation. The ratio of deposits to assets was not used as a parameter as it is directly related to and affected by an institution's equity and borrowed funds ratios, which are separate parameters.

 

Cash and Investments to Assets

 

The Bank’s ratio of cash and investments to assets, excluding mortgage-backed securities, was 5.86 percent at December 31, 2018, and reflects the Bank’s share of cash and investments lower than the national and state averages of 18.5 percent and 14.6 percent, respectively. The Bank's investments have consisted of only interest-bearing deposits.

 

 38 

 

 

Cash & Investments to Assets (cont.)

 

For its three most recent fiscal years ended December 31, 2018, the Bank’s average ratio of cash and investments to assets was a lower 4.89 percent, ranging from a low of 1.75 percent in 2017 to high of 7.06 percent in 2016.

 

The parameter range for cash and investments is has been defined as 40.0 percent or less of assets, with a midpoint of 20.0 percent.

 

Mortgage-Backed Securities to Assets

 

At December 31, 2018, the Bank had $5.8 million in mortgage-backed securities, resulting in a 3.95 percent ratio, modestly lower than the national average of 4.49 percent and higher than the regional average of 2.59 percent for publicly traded thrifts. The Bank’s three most recent fiscal year average is 6.28 percent, which is higher than industry averages.

 

Inasmuch as many institutions purchase mortgage-backed securities as an alternative to both lending, relative to cyclical loan demand and prevailing interest rates, and other investment vehicles, this parameter is also fairly broad at 18.0 percent or less of assets and a midpoint of 9.0 percent.

 

One- to Four-Family Loans to Assets

 

The Bank’s lending activity has been focused on the origination of residential mortgage loans secured by one- to four-family dwellings. One- to four-family loans, excluding construction loans and home equity loans, represented 76.59 percent of the Bank's assets at December 31, 2018, which is lower than its ratio of 78.36 percent at December 31, 2017, and higher than its ratio of 74.50 percent at December 31, 2016. The parameter for this characteristic is 78.00 percent of assets or less in one- to four-family loans with a midpoint of 39.00 percent.

 

 39 

 

 

Total Net Loans to Assets

 

At December 31, 2018, the Bank had a 83.21 percent ratio of total net loans to assets and a higher three fiscal year average of 83.26 percent, compared to the national average of 75.29 percent and the regional average of 78.83 percent for publicly traded thrifts. The Bank's ratio of total net loans to assets changed from 76.7 percent of total assets at December 31, 2016, to 83.8 percent at December 31, 2017, to 83.2 percent at December 31, 2018.

 

The parameter for the selection of the comparable group is from 53.0 percent to 93.0 percent with a midpoint of 73.0 percent. The lower end of the parameter range relates to the fact that, as the referenced national and regional averages indicate, many institutions hold greater volumes of mortgage-backed securities as cyclical alternatives to lending, but may otherwise be similar to the Bank.

 

Total Net Loans and Mortgage-Backed Securities to Assets

 

As discussed previously, the Bank’s shares of mortgage-backed securities to assets and total net loans to assets were 3.95 percent and 83.21 percent, respectively, for a combined share of 87.16 percent. Recognizing the industry and regional ratios of 79.8 percent and 81.4 percent, respectively, the parameter range for the comparable group in this category is 70.0 percent to 95.0 percent, with a midpoint of 82.5 percent.

 

 40 

 

 

Borrowed Funds to Assets

 

The Bank had borrowed funds of $26.0 million or 26.54 percent of assets at December 31, 2018, which is significantly higher than the current industry average of 9.84 percent.

 

The use of borrowed funds by some institutions indicates an alternative to retail deposits and may provide a source of longer term funds. The federal insurance premium on deposits has also increased the attractiveness of borrowed funds. The institutional demand for borrowed funds has increased recently, due to higher rates paid on deposits and an increased level of lending activity. Many thrifts are aggressively seeking deposits, since quality lending opportunities have increased in the current economic environment.

 

The parameter range of borrowed funds to assets is 32.0 percent or less with a midpoint of 16.0 percent.

 

Equity to Assets

 

The Bank’s equity to assets ratio was 12.48 percent at December 31, 2018, 12.61 percent at December 31, 2017, and 12.96 percent at December 31, 2016, averaging 12.68 percent for the three fiscal years ended December 31, 2018. The Bank’s equity increased in each of the past four fiscal periods from December 31, 2014, to December 31, 2018. After conversion, based on the midpoint value of $16.0 million, with 50.0 percent of the net proceeds of the public offering going to the Bank, its equity is projected to increase to 18.59 percent of assets, with the Corporation’s equity at 22.59 percent of assets.

 

Based on those equity ratios, we have defined the equity ratio parameter to be 8.0 percent to 20.0 percent with a midpoint ratio of 16.0 percent.

 

 41 

 

 

PERFORMANCE PARAMETERS

 

Introduction

 

Exhibit 35 presents five parameters identified as key indicators of the Bank’s earnings performance and the basis for such performance both historically and during the year ended December 31, 2018. The primary performance indicator is the Bank's core return on average assets (ROAA). The second performance indicator is the Bank's core return on average equity (ROAE). To measure the Bank's ability to generate net interest income, we have used net interest margin. The supplemental source of income for the Bank is noninterest income, and the parameter used to measure this factor is the ratio of noninterest income to average assets. The final performance indicator is the Bank's ratio of operating expenses or noninterest expenses to average assets, a key factor in distinguishing different types of operations, particularly institutions that are aggressive in secondary market activities, which often results in much higher operating costs and overhead ratios.

 

Return on Average Assets

 

The key performance parameter is core ROAA. For the year ended December 31, 2018, the Bank’s core ROAA was 0.30 percent based on a core income after taxes of $273,000, as detailed in Item I of this Report. The net ROAA for the year ended December 31, 2017, was 0.31 percent on net income of $295,000. The Bank's ROAA in its prior two fiscal years of 2016 and 2017, was 0.16 percent and (0.03) percent, respectively, with a three fiscal year average ROAA of 0.14 percent based on net income.

 

Considering the historical and current earnings performance of the Bank, as well as the industry, the range for the ROAA parameter based on core income has been defined as less than 1.00 percent with a midpoint of 0.50 percent.

 

 42 

 

 

Return on Average Equity

 

The ROAE has been used as a secondary parameter to eliminate any institutions with an unusually high or low ROAE that is inconsistent with the Bank's position. This parameter does not provide as much meaning for a newly converted thrift institution as it does for established stock institutions, due to the unseasoned nature of the capital structure of the newly converted thrift and the inability to accurately reflect a mature ROAE for the newly converted thrift relative to other stock institutions.

 

The Bank’s core ROAE for the year ended December 31, 2018, was 2.42 percent based on its core earnings. In its most recent three fiscal years, the Bank's average ROAE was 1.19 percent, from a low of (0.21) percent in 2017 to a high of 2.45 percent in 2018.

 

The parameter range for ROAE for the comparable group, based on core income, is 9.00 percent or less with a midpoint of 4.50 percent.

 

Net Interest Margin

 

The Bank had a net interest margin of 2.32 percent for the year ended December 31, 2018, representing net interest income as a percentage of average interest-earning assets. The Bank's net interest margin levels in its two prior fiscal years of 2016 and 2017 were 2.46 percent and 2.40 percent, respectively, averaging 2.39 percent.

 

The parameter range for the selection of the comparable group is from a low of 2.00 percent to a high of 4.00 percent with a midpoint of 3.00 percent.

 

 43 

 

 

Operating Expenses to Assets

 

For the year ended December 31, 2018, the Bank had a 2.34 percent ratio of operating expense to average assets. In its two prior fiscal years of 2016 to 2017, the Bank’s expense ratio averaged 2.53 percent, from a low of 2.34 percent in fiscal year 2018 to a high of 2.56 percent in fiscal year 2016.

 

The operating expense to assets parameter for the selection of the comparable group is from a low of 1.30 percent to a high of 3.80 percent with a midpoint of 2.55 percent.

 

Noninterest Income to Assets

 

Compared to publicly traded thrifts, the Bank has experienced a lower level of noninterest income as a source of additional income due to its gains on loans sold. The Bank’s ratio of noninterest income to average assets was 0.52 percent for the year ended December 31, 2018. For its prior two fiscal years ended December 31, 2016, and 2017, the Bank’s ratios of noninterest income to average assets were 0.52 percent and 0.44 percent, respectively, for a three-year average of 0.49 percent.

 

The range for this parameter for the selection of the comparable group is 1.30 percent of average assets or less, with a midpoint of 0.65 percent.

 

 44 

 

  

ASSET QUALITY PARAMETERS

 

Introduction

 

The final set of financial parameters used in the selection of the comparable group are asset quality parameters, also shown in Exhibit 35. The purpose of these parameters is to insure that any thrift institution in the comparable group has an asset quality position similar to that of the Bank. The three defined asset quality parameters are the ratios of nonperforming assets to total assets, repossessed assets to total assets and loan loss reserves to total assets at the end of the most recent period.

 

Nonperforming Assets to Total Assets

 

The Bank’s ratio of nonperforming assets to assets was zero percent at December 31, 2018, which was lower than the national average of 0.49 percent for publicly traded thrifts and the average of 0.52 percent for Southwest thrifts. The Bank’s ratio of nonperforming assets to total assets averaged 0.44 percent for its most recent three fiscal years ended December 31, 2018, from a high of 1.01 percent at December 31, 2016, to a low of zero percent at December 31, 2018.

 

The comparable group parameter for nonperforming assets is 1.50 percent or less of total assets, with a midpoint of 0.75 percent.

 

Repossessed Assets to Assets

 

The Bank had no repossessed assets at December 31, 2018, representing a ratio to total assets of zero percent, following ratios of repossessed assets to total assets of 0.07 percent and zero percent at December 31, 2017, and December 31, 2016, respectively. National and regional averages were 0.12 percent and 0.07 percent, respectively, for publicly traded thrift institutions.

 

 45 

 

 

Repossessed Assets to Assets (cont.)

 

The range for the repossessed assets to total assets parameter is 0.80 percent of assets or less with a midpoint of 0.40 percent.

 

Loans Loss Reserves to Assets

 

The Bank had an allowance for loan losses of $850,000, representing a loan loss allowance to total assets ratio of 0.87 percent at December 31, 2018, which was lower than its 0.90 percent ratio at December 31, 2017, and lower than its 0.98 percent ratio at December 31, 2016.

 

The loan loss allowance to assets parameter range used for the selection of the comparable group required a minimum ratio of 0.40 percent of assets.

 

THE COMPARABLE GROUP

 

With the application of the parameters previously identified and applied, the final comparable group represents ten institutions identified in Exhibits 36, 37 and 38. The comparable group institutions range in size from $137.1 million to $1.12 billion with an average asset size of $610.3 million and have an average of 8.0 offices per institution. Two of the comparable group institutions are in New York, one each in Illinois, Ohio, Nebraska, Maryland, Louisiana, Pennsylvania, Massachusetts and Minnesota, and all ten are traded on NASDAQ.

 

 46 

 

 

The Comparable Group (cont.)

 

The comparable group institutions as a unit have a ratio of equity to assets of 10.9 percent, which is 6.7 percent lower than all publicly traded thrift institutions in the United States; and for the most recent four quarters indicated a core return on average assets of 0.59 percent, lower than all publicly traded thrifts at 0.89 percent and lower than the publicly traded Louisiana thrifts at 1.03 percent.

 

 47 

 

 

IV.ANALYSIS OF FINANCIAL PERFORMANCE

 

This section reviews and compares the financial performance of the Bank to all publicly traded thrifts, to publicly traded thrifts in the Southwest region and to Louisiana thrifts, as well as to the ten institutions constituting the Bank’s comparable group, as selected and described in the previous section. The comparative analysis focuses on financial condition, earning performance and pertinent ratios as presented in Exhibits 39 through 44.

 

As presented in Exhibits 39 and 40, at December 31, 2018, the Bank’s total equity of 12.48 percent of assets was modestly above the comparable group at 12.48 percent, higher than all thrifts at 11.71 percent, Southwest thrifts at 11.61 percent and higher than Louisiana thrifts at 11.51 percent. The Bank had an 83.21 percent share of net loans in its asset mix, higher than the comparable group at 80.29 percent, all thrifts at 75.29 percent and Southwest thrifts at 78.83 percent and higher than Louisiana thrifts at 76.45 percent. The Bank had a much lower 5.86 percent share of cash and investments with a higher 3.95 percent share of mortgage-backed securities. The comparable group had a higher 14.98 percent share of cash and investments and a lower 3.41 percent share of mortgage-backed securities. All thrifts had a 4.49 percent of assets in mortgage-backed securities and 18.52 percent in cash and investments. The Bank’s 57.29 percent share of deposits was much lower than the comparable group, all thrifts, Southwest thrifts and Louisiana thrifts, reflecting the Bank's much higher share of borrowed funds of 26.54 percent and higher share of equity of 12.58 percent. As ratios to assets, the comparable group had deposits of 80.27 percent and borrowings of 7.77 percent. All thrifts averaged a 77.31 percent share of deposits and 9.84 percent of borrowed funds, while Southwest thrifts had a 78.92 percent share of deposits and an 8.54 percent share of borrowed funds. Louisiana thrifts averaged a 81.56 percent share of deposits and a 6.27 percent share of borrowed funds. The Bank had no goodwill and intangible assets, compared to 0.49 percent for the comparable group, 0.83 percent for all thrifts, 0.84 percent for Southwest thrifts and 0.08 percent for Louisiana thrifts.

 

 48 

 

 

Analysis of Financial Performance (cont.)

 

Operating performance indicators are summarized in Exhibits 41, 42 and 43 and provide a synopsis of key sources of income and key expense items for the Bank in comparison to the comparable group, all thrifts, and regional thrifts for the trailing four quarters.

 

As shown in Exhibit 43, for the year ended December 31, 2018, the Bank had a lower yield on average interest-earning assets relative to the comparable group, all thrifts, Southwest thrifts and Louisiana thrifts. The Bank's yield on interest-earning assets was 4.15 percent compared to the comparable group at 4.19 percent, all thrifts at 4.11 percent, Southwest thrifts at 5.19 percent and Louisiana thrifts at 4.95 percent.

 

The Bank's cost of funds for the twelve months ended December 31, 2018, was much higher than the comparable group and all thrifts, Southwest thrifts, and Louisiana thrifts. The Bank had an average cost of interest-bearing liabilities of 2.09 percent compared to 1.05 percent for the comparable group, 1.17 percent for all thrifts, 1.15 percent for Southwest thrifts and 1.08 percent for Louisiana thrifts. The Bank's yield on interest-earning assets and cost of funds resulted in a net interest spread of 2.07 percent, which was lower than the comparable group at 3.13 percent, all thrifts at 2.89 percent, lower than Southwest thrifts at 4.03 percent and Louisiana thrifts at 3.86 percent. The Bank generated a net interest margin of 2.32 percent for the year ended December 31, 2018, based on its ratio of net interest income to average interest-earning assets, which was lower than the comparable group ratio of 3.33 percent. All thrifts averaged a higher 3.10 percent net interest margin for the trailing four quarters, with Southwest thrifts at 4.29 percent; and Louisiana thrifts averaged a higher 4.10 percent.

 

The Bank’s major source of earnings is interest income, as indicated by the operations ratios presented in Exhibit 42. The Bank had $(11,000) in provision for loan losses during the twelve months ended December 31, 2018, representing (0.01) percent of average assets. The average provision for loan losses for the comparable group was 0.09 percent, with all thrifts at 0.08 percent, Southwest thrifts at 0.19 percent and Louisiana thrifts at 0.18 percent.

 

 49 

 

 

Analysis of Financial Performance (cont.)

 

The Bank's total noninterest income was $505,000 or 0.53 percent of average assets for the year ended December 31, 2018. The Bank’s ratio of noninterest income to average assets was lower than the comparable group at 0.74 percent, and lower than all thrifts at 0.82 percent, Southwest thrifts at 1.11 percent and lower than Louisiana thrifts at 0.58 percent. For the year ended December 31, 2018, the Bank’s operating expense ratio was 2.34 percent of average assets, lower than the comparable group at 2.80 percent, all thrifts at 2.87 percent, Southwest thrifts at 3.73 percent, and Louisiana thrifts at 2.81 percent.

 

The overall impact of the Bank’s income and expense ratios is reflected in its net income and return on assets. For the year ended December 31, 2018, the Bank had a net ROAA of 0.31 and core ROAA of 0.30 percent. For its most recent four quarters, the comparable group had a higher net ROAA of 0.64 percent and a higher core ROAA of 0.59 percent. All publicly traded thrifts averaged a higher net ROAA of 0.91 percent and a higher 0.89 percent core ROAA, with Southwest thrifts a 0.99 percent net ROAA and a 1.02 percent core ROAA. The twelve month net and core ROAA for the 4 Louisiana thrifts was 1.03 percent and 1.03 percent, respectively.

 

 50 

 

 

V.MARKET VALUE ADJUSTMENTS

 

This is a conclusive section where adjustments are made to determine the pro forma market value or appraised value of the Corporation based on a comparison of Eureka Homestead with the comparable group. These adjustments will take into consideration such key items as earnings performance, primary market area, financial condition, asset and deposit growth, dividend payments, subscription interest, liquidity of the stock to be issued, management, and market conditions or marketing of the issue. It must be noted that all of the institutions in the comparable group have their differences among themselves and relative to the Bank, and, as a result, such adjustments become necessary.

 

EARNINGS PERFORMANCE

 

In analyzing earnings performance, consideration was given to net interest income, the amount and volatility of interest income and interest expense relative to changes in market area conditions and to changes in overall interest rates, the quality of assets as it relates to the presence of problem assets which may result in adjustments to earnings due to provisions for loan losses, the balance of current and historical nonperforming assets and real estate owned, the balance of valuation allowances to support any problem assets or nonperforming assets, the amount and volatility of noninterest income, and the amount and ratio of noninterest expenses. The earnings performance analysis was based on the Bank’s respective net and core earnings for the year ended December 31, 2018, with comparisons to the core earnings of the comparable group, all thrifts and other geographical subdivisions.

 

 51 

 

 

Earnings Performance (cont.)

 

As discussed earlier, the Bank has experienced increases in its assets in three of the past four fiscal years and loans in each of the past four fiscal years and increases in deposits in two of the past four fiscal years, with increases experienced for assets in 2016, 2017 and 2018 and increases in deposits in 2017 and 2018. The Bank has experienced lower positive earnings in four of the past five fiscal years and has focused on controlling its lower balance of nonperforming assets; monitoring and strengthening its ratio of interest sensitive assets relative to interest sensitive liabilities by maintaining a moderate share of cash and investments and adjustable-rate loans, thereby maintaining its overall interest rate risk; reducing its cost of funds; strengthening its moderate level of noninterest income; and strengthening its net interest margin. Historically, the Bank has been characterized with its lower yields and higher costs of funds, which have resulted in a lower net interest margin that has been historically much lower than industry averages due to its lower yield on earning assets even with its lower cost of funds, with the margin trend experiencing minimal decrease over the past two years, and a 2.32 percent net interest margin for the year ended December 31, 2018, was lower than the industry average of 3.10 percent and lower than the comparable group average of 3.33 percent. During its prior two fiscal years, Eureka Homestead’s ratio of interest expense to interest-bearing liabilities has decreased from 2.66 percent in fiscal year 2016 to 2.24 percent in 2017. The Bank’s ratio then decreased to 2.09 percent for the year ended December 31, 2018, which was higher than the average of 1.05 percent for the comparable group and higher than the average of 1.17 percent for all thrifts. Following the conversion, the Bank will continue to control its operating expenses, strive to increase its net interest margin, strive to increase its noninterest income, gradually increase its core net income, increase its return on assets, continue to control its balance of nonperforming and classified assets, and closely monitor its interest rate risk.

 

The Bank has experienced a modest decrease in loan origination activity from fiscal year 2017 to 2018. Total loan originations in fiscal year 2017 were $27.0 million with a net loan change of an increase of $8.8 million including $11.0 million in loan sales and no loan purchases. Gross loan originations were a smaller $25.1 million in fiscal year 2018, with no loan purchases and $12.4 million in loan sales. This level of originations in 2018 resulted in a net increase in loans of $1.6 million in 2018, noticeably lower than the $8.8 million increase in 2017.

 

 52 

 

 

Earnings Performance (cont.)

 

From December 31, 2017, to December 31, 2018, one- to four-family loans and commercial real estate loans, multi-family loans, commercial real estate loans and consumer loans have experienced various movements in their balances. Commercial real estate loans and consumer loans indicated dollar decreases of $1.5 million and $277,000, respectively, from December 31, 2017, to December 31, 2018. One- to four-family loans increased in dollars by $1.0 million or 1.3 percent, from December 31, 2017, to December 31, 2018. Multi-family loans increased by $2.5 million or 147.1 percent from December 31, 2017, to December 31, 2018. Overall, the Bank’s lending activities resulted in a total loan increase of $1.7 million or 2.1 percent and a net loan increase of $1.7 million or 2.2 percent from December 31, 2017, to December 31, 2018.

 

The impact of Eureka Homestead’s primary lending efforts has been to generate a yield on average interest-earning assets of 4.15 percent for the year ended December 31, 2018, compared to a higher 4.19 percent for the comparable group, 4.06 percent for all thrifts and 5.19 percent for Southwest thrifts. The Bank’s ratio of interest income to average assets was 3.88 percent for the year ended December 31, 2018, lower than the comparable group at 3.95 percent, all thrifts at 3.92 percent and Southwest thrifts at 4.92 percent, reflecting the Bank's lower yield.

 

Eureka Homestead’s 2.09 percent cost of interest-bearing liabilities for the year ended December 31, 2018, was higher than the comparable group at 1.05 percent, higher than all thrifts at 1.17 percent, higher than Southwest thrifts at 1.15 percent and higher than Louisiana thrifts at 1.08 percent. The Bank's resulting net interest spread of 2.07 percent for the year ended December 31, 2018, was lower the comparable group at 3.13 percent and lower than all thrifts at 2.89 percent, Southwest thrifts at 4.03 percent and lower than Louisiana thrifts at 3.86 percent. The Bank's net interest margin of 2.32 percent, based on average interest-earning assets for the year ended December 31, 2018, was lower than the comparable group at 3.33 percent, lower than all thrifts at 3.10 percent, Southwest thrifts at 4.29 percent and Louisiana thrifts at 4.10 percent.

 

The Bank's ratio of noninterest income to average assets was a higher 0.52 percent for the year ended December 31, 2018, which was lower than the comparable group at 0.74 percent, lower than all thrifts at 0.82 percent and Southwest thrifts at 1.11 percent.

 

 53 

 

 

Earnings Performance (cont.)

 

The Bank's operating expenses were lower than the comparable group, all thrifts, Southwest thrifts and Louisiana thrifts. For the year ended December 31, 2018, Eureka Homestead had an operating expenses to average assets ratio of 2.34 percent, compared to 2.80 percent for the comparable group, 2.87 percent for all thrifts, 3.73 percent for Southwest thrifts and 2.81 percent for Louisiana thrifts.

 

For the year ended December 31, 2018, Eureka Homestead generated a lower ratio of noninterest income, a lower ratio of noninterest expenses and a much lower net interest margin relative to its comparable group. The Bank had (0.01) percent in provision for loan losses during the year ended December 31, 2018, compared to the comparable group at 0.09 percent of assets, all thrifts at 0.08 percent and Southwest thrifts at 0.19 percent. The Bank’s allowance for loan losses to total loans of 1.03 percent was lower than the comparable group and lower than all thrifts. The Bank’s reserves to nonperforming assets was “not meaningful” due to the absence of nonperforming assets relative to the comparable group at 460.67 percent and all thrifts at 146.94 percent.

 

As a result of its operations, the Bank's core income for the year ended December 31, 2018, was lower than the comparable group and its net income was also lower. Based on net earnings, the Bank had a return on average assets of 0.31 percent for the year ended December 31, 2018, and a return on average assets of (0.03) percent and 0.16 percent in fiscal years 2017 and 2016, respectively. The Bank’s core return on average assets was 0.30 percent for the year ended December 31, 2018, as detailed in Exhibit 7. For their most recent four quarters, the comparable group had a higher net ROAA of 0.64 percent and a higher core ROAA of 0.59 percent, while all thrifts indicated a higher net ROAA and higher core ROAA of 0.91 percent and 0.89 percent, respectively. Southwest thrifts indicated a net ROAA of 0.99 percent and a core ROAA of 1.02 percent.

 

 54 

 

 

Earnings Performance (cont.)

 

Following its conversion, Eureka Homestead’s earnings will continue to be dependent on a combination of the overall trends in interest rates, the consistency, reliability and variation of its net interest income, noninterest income, overhead expenses and its asset quality and its future needs for provisions for loan losses. Earnings are projected to represent a 0.24 percent ROAA in 2019 and then 0.24 percent in 2020. The Bank’s ratio of noninterest income to average assets decreased from fiscal 2017 to 2018. The decrease in noninterest income in fiscal 2018 was due to the Bank’s losses on the sale of securities. Overhead expenses indicated a minimal decrease overall during the past two fiscal years, impacted by the lower compensation costs.

 

In recognition of the foregoing earnings related factors, considering Eureka Homestead’s historical and current performance measures, as well as Business Plan projections, a downward adjustment has been made to the Corporation’s pro forma market value for earnings performance.

 

 55 

 

 

MARKET AREA

 

Eureka Homestead’s market area is focused on Metairie, Louisiana, where the Bank’s office is located, but also includes portions of both Jefferson Parish and Orleans Parish. The population trends indicate decreases in Metairie, Jefferson Parish and Orleans Parish for the period from 2000 to 2010, most likely due to the catastrophic effects of Hurricane Katrina in 2005, while Louisiana and the United States increased in population. Through 2024, both population and households are projected to increase in Metairie, Jefferson and Orleans Parishes, Louisiana and the United States.

 

Metairie had higher per capita and median household income than all other areas, and Orleans Parish had a much lower median household income level than all other areas.

 

In 2010, median housing values were $210,900 in Metairie, $175,500 in Jefferson Parish, $183,800 in Orleans Parish, $137,700 in Louisiana and $179,900 in the United States.

 

Also, Jefferson Parish has been characterized with lower unemployment rates than the state, and Orleans Parish has been characterized with generally higher unemployment rates than the state, with all areas having higher unemployment rates than those of the United States. Through 2018, Jefferson Parish had an unemployment rate of 4.3 percent, with Orleans Parish at 4.9 percent, Louisiana at 4.8 percent and the United States at 3.9 percent.

 

The Bank held 7.9 percent of the total thrift deposits in the market area as of June 30, 2018, which represented only a 0.5 percent share of the total deposit base of $10.7 billion.

 

In recognition of the foregoing factors, we believe that no adjustment is warranted for the Banks market area.

 

 56 

 

 

FINANCIAL CONDITION

 

The financial condition of Eureka Homestead is discussed in Section I and shown in Exhibits 1, 2, 5, and 12 through 21, and is compared to the comparable group in Exhibits 38, 39, and 40. The Bank's ratio of total equity to total assets was 12.48 percent at December 31, 2018, which was above the comparable group at 10.93 percent and higher than all thrifts at 11.71 percent and Louisiana thrifts at 11.51 percent. Based on the conversion completed at the midpoint of the valuation range, the Corporation's pro forma equity to assets ratio will be 22.59 percent, and the Bank's pro forma equity to assets ratio will increase to 18.59 percent.

 

The Bank's mix of assets and liabilities indicates both similarities to and variations from its comparable group. Eureka Homestead had a higher 83.21 percent ratio of net loans to total assets at December 31, 2018, compared to the comparable group at 80.3 percent. All thrifts indicated a lower 75.3 percent, as did Southwest thrifts at 78.8 percent. The Bank's 5.86 percent share of cash and investments, excluding mortgage-backed securities, was lower than the comparable group at 15.0 percent, while all thrifts were at 18.5 percent and Southwest thrifts were at 14.6 percent. Eureka Homestead’s 3.95 percent of mortgage-backed securities was modestly higher than the comparable group at 3.4 percent and lower than all thrifts at 4.5 percent and higher than Southwest thrifts at 2.6 percent.

 

The Bank's 57.29 percent ratio of deposits to total assets was lower than the comparable group at 80.3 percent, lower than all thrifts at 77.3 percent and lower than Southwest thrifts at 78.9 percent. Eureka Homestead’s lower ratio of deposits was due to its higher share of borrowed funds. Eureka Homestead had a higher equity to asset ratio of 12.5 percent, compared to the comparable group at 10.9 percent of total assets, with all thrifts at 11.7 percent and Southwest thrifts at 11.6 percent. Eureka Homestead had a higher share of borrowed funds to assets of 26.54 percent at December 31, 2018, moderately higher than the comparable group at 7.8 percent and higher than all thrifts at 9.8 percent and higher than Southwest thrifts at 8.5 percent. In fiscal year 2018, total deposits increased by $3.1 million or 5.8 percent and increased from $53.1 million to $56.2 million. During fiscal year 2017, Eureka Homestead’s deposits increased by $4.8 million or 10.0 percent from $48.3 million to $53.1 million.

 

 57 

 

 

Financial Condition (cont.)

 

Eureka Homestead had no assets in combined goodwill and intangible assets and had a lower share of repossessed real estate at December 31, 2018. The Bank had no repossessed real estate or zero percent of assets at December 31, 2018. This compares to ratios of 0.56 percent for goodwill and intangible assets and 0.49 percent for real estate owned for the comparable group. All thrifts had a goodwill and intangible assets ratio of 0.49 percent and a real estate owned ratio of 0.12 percent.

 

The financial condition of Eureka Homestead is impacted by its lower than average balance of nonperforming assets of zero or zero percent of total assets at December 31, 2018, compared to a higher 0.56 percent for the comparable group, 0.49 percent for all thrifts, 0.52 percent for Southwest thrifts and a higher 0.26 percent for Louisiana thrifts. The Bank's ratio of nonperforming assets to total assets was 1.01 percent at December 31, 2016, and 0.31 percent at December 31, 2017.

 

At December 31, 2018, Eureka Homestead had $850,000 of allowances for loan losses, which represented 0.87 percent of assets and 1.03 percent of total loans. The comparable group indicated similar allowance ratios, relative to assets and loans, equal to 0.86 percent of assets and 1.05 percent of total loans, while all thrifts had allowances relative to assets and loans that averaged a lower 0.72 percent of assets and a higher 1.06 percent of total loans. Also of major importance is an institution's ratio of allowances for loan losses to nonperforming assets, since a portion of nonperforming assets might eventually be charged off. Eureka Homestead’s $850,000 of allowances for loan losses, relative to a zero percent level of nonperforming assets at December 31, 2018, was “not meaningful,” compared to the comparable group's 460.67 percent, with all thrifts at 146.94 percent, Southwest thrifts at 132.14 percent and Louisiana thrifts at 197.62 percent. Eureka Homestead’s ratio of net charge-offs to average total loans was zero percent for the year ended December 31, 2018, compared to a higher 0.09 percent for the comparable group, 0.07 percent for all thrifts and 0.09 percent for Southwest thrifts.

 

 58 

 

 

Financial Condition (cont.)

 

Eureka Homestead has a moderate level of interest rate risk. The change in the Bank’s EVE level at December 31, 2018, reflecting the most current information available, based on a rise in interest rates of 100 basis points was a 16.01 percent decrease, representing a dollar decrease in equity value of $2,136,000.The Banks exposure increases to a 34.75 percent decrease in its EVE level under a 200 basis point rise in rates, representing a dollar decrease in equity of $4,637,000. The Banks post shock EVE ratio at December 31, 2018, assuming a 200 basis point rise in interest rates was 9.61 percent and indicated a 396 basis point decrease from its 13.57 percent based on no change in interest rates.

 

Compared to the comparable group, with particular attention to the Bank’s equity level, asset quality position level and asset and liability mix, we believe that no adjustment is warranted for Eureka Homestead’s current financial condition, due to the Bank’s higher equity position, recognizing its recently lower share of nonperforming assets and similar share of allowance for loan losses to loans, lower share of cash and investments, and higher level of interest rate risk.

 

 59 

 

 

ASSET, LOAN AND DEPOSIT GROWTH

 

During its most recent two fiscal years, Eureka Homestead has been characterized by moderate changes in assets, loans and deposits relative to its comparable group. The Bank’s average annual asset change from December 31, 2016, to December 31, 2018, was an increase of 3.1 percent. This increase compares to a larger 3.6 percent increase for the comparable group, a higher 3.7 percent for all thrifts, and a higher 4.2 percent for Southwest thrifts. The Bank’s increase in assets is reflective of its increases in loans and deposits in 2017 of 12.01 percent and 10.02 percent, respectively. Eureka Homestead’s deposits indicate an average annual increase of 6.05 percent from December 31, 2016, to December 31, 2018, compared to average growth rates of 3.4 percent for the comparable group, 2.9 percent for all thrifts and 3.8 percent for Southwest thrifts.

 

Eureka Homestead’s deposits indicated an increase of 5.9 percent from fiscal 2017 to 2018. Annual deposit change was growth rates of 3.4 percent for the comparable group, 2.9 percent for all thrifts and 3.8 percent for Southwest thrifts. The Bank had a larger $26.0 million in borrowed funds or 26.54 percent of assets at December 31, 2018, compared to the comparable group at 7.8 percent and had a similar $26.0 million in borrowed funds for the Bank at

December 31, 2017, or 27.5 percent of assets.

 

Recognizing its moderate increase in deposits in 2018, after stronger growth in 2017 and a decrease in 2015, and considering the demographics, competition and deposit base trends in its market area, the Bank’s ability to increase its asset, loan and deposit bases in the future is somewhat limited, with its ability to increase its market share by competitively pricing its loan and deposit products, maintaining a high quality of service to its customers and strengthening its loan origination activity. Eureka Homestead’s primary market area parish of Jefferson experienced decreases in population and households between 2000 and 2010 with a projected population increase from 2010 to 2024 of a modest 3.5 percent. The Bank’s primary market area parish also indicated 2010 per capita income modestly above Louisiana’s and similar to that of the United States, and the median household income level in Jefferson Parish was above the state level and below the national level in 2010. In 2010, the median housing value in Jefferson Parish at $175,500 was higher than that of Louisiana at $137,700 and lower than the United States at $179,900, with median rents lower than both.

 

 60 

 

 

Asset, Loan and Deposit Growth (cont.)

 

The total deposit base in Jefferson Parish decreased by 2.4 percent from June 30, 2017, to June 30, 2018; and during that period, the number of financial institution offices in Jefferson Parish decreased by eight. In June 30, 2018, Eureka Homestead’s deposit market share of thrifts in Jefferson Parish was 7.9 percent, increasing from 7.3 percent in 2017.

 

Based on all the foregoing factors, we have concluded that no adjustment to the Corporation’s pro forma value is warranted for asset, loan and deposit growth.

 

DIVIDEND PAYMENTS

 

The Corporation has no plans to pay an initial cash dividend. The payment of cash dividends will depend upon such factors as earnings performance, financial condition, capital position, growth, asset quality and regulatory limitations. Five of the ten institutions in the comparable group paid cash dividends during the most recent twelve months for an average dividend yield of 1.33 percent and an average payout ratio of 19.70 percent. During that twelve month period, the average dividend yield was 0.45 percent for the four Louisiana thrifts; and the average dividend yield was 2.48 percent and the average payout ratio was 25.53 percent for all thrifts.

 

In our opinion, a downward adjustment to the pro forma market value of the Corporation is warranted related to dividend payments.

 

 61 

 

 

SUBSCRIPTION INTEREST

 

In 2018, investors' interest in financial institution new issues experienced a decrease. Such interest decline is possibly related to the volatility in financial institution stocks and the rising interest rate environment. The selective and conservative reaction of IPO investors appears generally to be related to a number of analytical, economic and market-related factors, including the financial performance and condition of the converting thrift institution, the strength of the local and national economy, housing market conditions, general market conditions for financial institution stocks and stocks overall, aftermarket price trends and the expectation of increased merger/acquisition activity in the thrift industry and their higher pricing multiples.

 

Eureka Homestead will direct its offering initially to depositors and residents in its market area. The board of directors and officers anticipate purchasing approximately $525,000 or 3.3 percent of the stock offered to the public based on the appraised midpoint valuation. The Bank will form an ESOP, which plans to purchase 8.0 percent of the total shares issued in the conversion.

 

The Bank has secured the services of FIG Partners, LLC, to assist in the marketing and sale of the conversion stock.

 

Based on the size of the offering, recent banking conditions, current market conditions, the terms of the offering, recent subscription levels for conversions, and aftermarket performance, we believe that a downward adjustment is warranted for the Bank’s anticipated subscription interest.

 

 62 

 

 

LIQUIDITY OF THE STOCK

 

The Corporation will offer its shares through a subscription and Eureka Homestead offering with the assistance of FIG Partners, LLC. The stock of the Corporation will be traded on OTC Pink Marketplace.

 

The Bank's total public offering is considerably smaller in size than the average market value of the comparable group. The comparable group has an average market value of $70.8 million for the stock outstanding compared to a midpoint value of $16.0 million for the Corporation, less the ESOP of 128,000 shares, and the estimated 52,500 shares to be purchased by senior officers and directors. The Corporation’s public market capitalization will be approximately 22.5 percent of the size of the public market capitalization of the comparable group. Of the ten institutions in the comparable group, all trade on Nasdaq with those ten institutions indicating an average daily trading volume of over 4,400 shares during the last four quarters.

 

The comparable group has an average of 4,696,667 shares outstanding compared to 1,600,000 shares outstanding for the Corporation based on the midpoint valuation.

 

Based on the average market capitalization, shares outstanding and daily trading volume of the comparable group, we have concluded that a moderate downward adjustment to the Corporation’s pro forma market value is warranted relative to the liquidity of its stock.

 

MANAGEMENT

 

Alan T. Heintzen is the chief executive officer and has served in those capacities with Eureka Homestead since 1996. Mr. Heintzen is also chairman of the board of directors and the chief compliance officer. In accordance with the Bank’s succession plan, in July 2018, Mr. Heintzen relinquished the role of president, a position he had held since 1996 and the corresponding oversight of the day-to-day operations of Eureka Homestead and was elected chairman of the board and began working off-site from the Bank’s office. Including his 22 years of experience at Eureka Homestead, Mr. Heintzen has a total of 40 years of management experience in the banking profession. Mr. Heintzen’s experience provides the board with a perspective on the day-to-day operations of Eureka Homestead and assists the board in assessing the trends and developments in the financial institutions industry on a local and national basis.

 

 63 

 

 

Management (cont.)

 

Mr. Cecil A. Haskins, Jr., is the president and chief financial officer. He has held the position of president since July 2018 and the position of chief financial officer since September 1999. Mr. Haskins is a certified public accountant with audit and consulting experience for financial institutions nationally and internationally. Mr. Haskins’ experience provides the board with the necessary financial perspective and bank operations, and assists the board in the assessing trends and developments in the financial institutions industry on a local and national basis.

 

During its two most recent fiscal years, Eureka Homestead has been able to control its net interest spread and demonstrated a strong level of core noninterest income. The Bank experienced positive earnings in 2018 and a loss in 2017. The Bank’s asset quality position has remained favorable in 2017 and 2018, with nonperforming assets being lower than industry overages. Eureka Homestead’s interest rate risk has been moderate, primarily as a result of its higher share of fixed-rate one- to four-family mortgage loans of 92.6 percent of loans. The Bank’s core earnings and core return on assets have been below industry averages, along with its net interest margin, impacted by a much higher cost of funds. Management is confident that the Bank is positioned for stable profitability following its conversion, impacted by its planned shrinkage in loans combined with an increase in cash and investments and a decrease in borrowed funds.

 

Overall, we believe the Bank to be professionally and knowledgeably managed, as are the comparable group institutions. It is our opinion that no adjustment to the pro forma market value of the Corporation is warranted for management.

 

 64 

 

 

MARKETING OF THE ISSUE

 

The necessity to build a new issue discount into the stock price of a new conversion continues to be a closely examined issue in recognition of uncertainty among investors as a result of the thrift industry's continued high level of competition, dependence on interest rate trends, volatility in the stock market, speculation on future changes, current legislation related to the regulation of financial institutions, and their restrictions to generating selected income.

 

We believe that a new issue discount applied to the price to book valuation approach is appropriate and necessary in this offering, recognizing the Bank’s volatile earnings. In our opinion, recent market trends cause us to conclude that a modest new issue discount is warranted in the case of this offering. Consequently, at this time we have made a modest downward adjustment to the Corporation's pro forma market value related to a new issue discount.

 

 65 

 

 

VI.VALUATION METHODS

 

Introduction

 

Historically, the most frequently used method for determining the pro forma market value of common stock for thrift institutions by this firm has been the price to book value ratio method, due to the volatility of earnings in the thrift industry. As earnings in the thrift industry have improved, more emphasis has been placed on the price to earnings method, particularly considering increases in stock prices during these last two years. However, as provisions for loan losses decreased significantly and became negative for some, the price to book value method continues to be pertinent and meaningful in the objective of discerning commonality and comparability among institutions. In determining the pro forma market value of the Corporation, primary emphasis has been placed on the price to book value method, with additional analytical and correlative attention to the price to earnings method and the price to assets method.

 

In recognition of the volatility and variance in earnings, the continued differences in asset and liability repricing and the frequent disparity in value between the price to book approach and the price to earnings approach, a third valuation method, the price to net assets method, has also been used. The price to assets method is used less often for valuing ongoing institutions, but becomes more useful in valuing converting institutions when the equity position and earnings performance of the institutions under consideration are different.

 

In addition to the pro forma market value, we have defined a valuation range with the minimum of the range being 85.0 percent of the pro forma market value, the maximum of the range being 115.0 percent of the pro forma market value and the super maximum being 115.0 percent of the maximum. The pro forma market value or appraised value will also be referred to as the “midpoint value.”

 

 66 

 

 

Introduction (cont.)

 

In applying each of the valuation methods, consideration was given to the adjustments to the Bank's pro forma market value discussed in Section V. Downward adjustments were made for the Bank’s earnings, liquidity of the stock, dividend, subscription interest, asset, loan and deposit growth, and marketing of the issue. No adjustments were made for the Bank’s market area, management and financial condition.

 

 67 

 

 

PRICE TO BOOK VALUE METHOD

 

In the valuation of thrift institutions, the price to book value method focuses on an institution's financial condition, and does not give as much consideration to the institution's long term performance and value as measured by earnings. Due to the earnings volatility of many thrift stocks, the price to book value method is frequently used by investors who rely on an institution's financial condition rather than earnings performance. Although this method is, under certain circumstances, considered somewhat less meaningful for institutions that provide a consistent earnings trend, it remains significant and reliable when an institution’s performance or general economic conditions are experiencing volatile or uncustomary trends related to internal or external factors, and serves as a complementary and correlative analysis to the price to earnings and price to assets approaches.

 

The pro forma equity used in the valuation was $12,239,000, which is based on the Bank’s December 31, 2018, equity level. The Bank’s tangible equity was an identical $12,239,000.

 

Exhibit 46 shows the average and median price to book value ratios for the comparable group which were 109.76 percent and 112.37 percent, respectively. The full comparable group indicated a moderate pricing range, from a low of 86.59 percent (Severn Bancorp) to a high of 121.65 percent (Prudential Bancorp). The comparable group had higher average and median price to tangible book value ratios of 116.02 percent and 116.90 percent, respectively, with a range of 87.17 percent to 148.08 percent. Excluding the low and the high in the group, the comparable group's price to book value ratio range narrowed to a low of 99.50 percent and a high of 119.47 percent, and the comparable group’s price to tangible book value ratio range also narrowed modestly from a low of 100.75 percent to a high of 128.35 percent.

 

Considering the foregoing factors in conjunction with the adjustments made in Section V, we have determined a fully converted pro forma price to book value ratio of 63.86 percent and a price to tangible book value ratio of 63.86 percent at the midpoint. The price to book value ratio increases from 59.28 percent at the minimum to 71.53 percent at the super maximum, while the price to tangible book value ratio increases from 59.28 percent at the minimum to 71.53 percent at the super maximum.

 

 68 

 

 

Price to Book Value Method (cont.)

 

The Corporation's pro forma price to book value and price to tangible book value ratios of 63.86 percent and 63.86 percent, respectively, as calculated using the prescribed formulary computation indicated in Exhibit 45, are influenced by the Bank's capitalization, asset quality position, earnings performance, ESOP level, local market and public ownership, as well as subscription interest in thrift stocks and overall market and economic conditions. The Corporation's ratio of equity to assets after conversion at the midpoint of the valuation range will be approximately 22.59 percent compared to 11.01 percent for the comparable group (reference Exhibit 46). Based on the price to book value ratio and the Bank's total pro forma equity of $12,239,000 at December 31, 2018, the indicated pro forma market value of the Corporation using this approach is $16,000,000 at the midpoint (reference Exhibit 45).

 

 69 

 

 

PRICE TO CORE EARNINGS METHOD

 

The foundation of the price to core earnings method is the determination of the core earnings based to be used, followed by the calculation of an appropriate price to core earnings multiple. The Corporation’s after tax core earnings for the year ended December 31, 2018, were $273,000 (reference Exhibit 7) and its net earnings were $295,000 for that period. To opine the pro forma market value of the Corporation using the price to core earnings method, we applied the core earnings base of $273,000.

 

In determining the fully converted price to core earnings multiple, we reviewed the ranges of the price to core earnings and the price to net earnings multiples for the comparable group and all publicly traded thrifts. As indicated in Exhibit 45, the average price to core earnings multiple for the comparable group was 25.05, while the median was a lower 16.97. The average price to net earnings multiple was 21.82, and the median multiple was 15.39. The range of the price to core earnings multiple for the comparable group was from a low of 12.33 to a high of 54.84. The range in the price to core earnings multiple for the comparable group, excluding the high and low ranges, was from a low multiple of 14.33 to a high of 47.75 times earnings for eight of the ten institutions in the group, indicating a modest narrowing of the range.

 

Consideration was given to the adjustments to the Corporation’s pro forma market value discussed in Section V. In recognition of those adjustments, we have determined a fully converted price to core earnings multiple of 50.40 at the midpoint, based on the Corporation’s core earnings of $273,000 for the year ended December 31, 2018. The Corporation’s fully converted core earnings multiple of 50.40 is higher than its net earnings multiple, which was 46.88 times earnings.

 

 70 

 

 

PRICE TO ASSETS METHOD

 

The final valuation method is the price to assets method. This method is not frequently used, since the calculation incorporates neither an institution's equity position nor its earnings base. Additionally, the prescribed formulary computation of value using the pro forma price to assets method does not recognize the runoff of deposits concurrently allocated to the purchase of conversion stock, returning a pro forma price to assets ratio below its true level following conversion.

 

Exhibit 46 indicates that the average price to assets ratio for the comparable group was 12.12 percent and the median was 11.79 percent. The range in the price to assets ratios for the comparable group varied from a low of 10.10 percent (First Community Bankshares) to a high of 18.17 percent (Eagle Financial Bancorp). The range narrows modestly with the elimination of the two extremes in the group to a low of 10.33 percent and a high of 13.77 percent.

 

Consistent with the previously noted adjustments, it is our opinion that an appropriate price to assets ratio for the Corporation is 14.43 percent at the midpoint, which ranges from a low of 12.50 percent at the minimum to 18.33 percent at the super maximum. Based on the Bank's December 31, 2018, asset base of $98,070,000, the indicated pro forma market value of the Corporation using the price to assets method is $16,000,000 at the midpoint (reference Exhibit 44).

 

 71 

 

 

VALUATION CONCLUSION

 

Exhibit 51 provides a summary of the valuation premium or discount for each of the valuation ranges when compared to the comparable group based on each of the fully converted valuation approaches. At the midpoint value, the price to book value ratio of 63.86 percent for the Corporation represents a discount of 41.81 percent relative to the comparable group and decreases to a discount of 34.83 percent at the super maximum. The price to assets ratio of 14.43 percent at the midpoint represents a premium of 19.11 percent, increasing to a premium of 51.32 percent at the super maximum. The price to core earnings multiple at the midpoint represents a premium of 70.49 percent and represents a premium of 114.96 percent at the super maximum.

 

It is our opinion that as of February 12, 2019, the pro forma market value of the Corporation is $16,000,000 at the midpoint, representing 1,600,000 shares at $10.00 per share. The pro forma valuation range of the Corporation is from a minimum of $13,600,000 or 1,360,000 shares at $10.00 per share to a maximum of $18,400,000 or 1,840,000 shares at $10.00 per share, and then to a super maximum of $21,160,000 or 2,116,000 shares at $10.00 a share, with such range being defined as 15 percent below the appraised value to 15 percent above the appraised value and then 15 percent above the maximum.

 

The appraised value of Eureka Homestead Bancorp, Inc., as of February 12, 2019, is $16,000,000 at the midpoint.

 

 72 

 

 

EXHIBITS

 

 73 

 

 

NUMERICAL

 

EXHIBITS

 

 74 

 

 

EXHIBIT 1

 

EUREKA HOMESTEAD

METAIRIE, LOUISIANA

 

Balance Sheet

At December 31, 2018

(In thousands)

 

  At December 31, 
  2018 
    
ASSETS    
Cash and cash equivalents $3,090 
Interest-bearing deposits  750 
Investment securities available-for-sale, at fair value  5,781 
Loans receivable, net  81,072 
Loans held-for-sale  533 
Accrued interest receivable  337 
Federal Home Loan Bank stock  1,376 
Premises and equipment, net  767 
Cash surrender value of life insurance  3,950 
Deferred tax asset  280 
Prepaid expenses and other assets  134 
     
Total assets $98,070 
     
LIABILITIES AND EQUITY    
     
LIABILITIES    
Deposits $56,183 
Advances from Federal Home Loan Bank  26,030 
Advance Payments by borrowers for taxes and insurance  1,447 
Accrued expenses and other liabilities  2,171 
Total liabilities  85,831 
     
EQUITY    
Retained earnings  12,335 
Accumulated other comprehensive (loss) income  (96)
Total equity  12,239 
     
Total liabilities and equity $98,070 

 

Source: Eureka Homestead's audited financial statement

 

 75 

 

 

EXHIBIT 2

 

EUREKA HOMESTEAD

METAIRIE, LOUISIANA

 

Balance Sheets

At December 31, 2014, 2015, 2016 and 2017

 

  December 31, 
  2017  2016  2015  2014 
ASSETS                
Cash and cash equivalents $713,005  $1,570,684  $1,091,399  $2,541,194 
Interest-bearing deposits  946,761   4,941,761   8,910,575   5,996,000 
Investment securities available-for-sale, at fair value  6,145,756   7,740,524   10,642,313   22,078,919 
Loans receivable, net  79,328,214   70,816,299   63,972,023   61,837,136 
Loans held-for-sale  593,000   199,500 ��     
Accrued interest receivable  379,615   369,719   362,625   441,158 
Federal Home Loan Bank stock  1,340,800   1,314,500   1,297,700   1,243,200 
Premises and equipment, net  772,748   794,622   815,586   863,044 
Cash surrender value of life insurance  3,855,718   3,761,510   3,665,288   3,391,922 
Deferred tax asset  335,464   531,470   505,910   478,594 
Prepaid expenses and other assets  225,401   238,456   323,576   340,126 
Total assets $94,636,482  $92,279,045  $91,586,995  $99,211,293 
                 
LIABILITIES AND EQUITY                
                 
LIABILITIES                
Deposits $53,091,648  $48,254,985  $48,377,132  $55,699,354 
Advances from Federal Home Loan Bank  26,017,242   28,640,910   28,360,540   28,829,196 
Advances payments by borrowers for taxes and insurance  1,308,699   1,260,212   1,085,782   1,101,987 
Accrued expenses and other liabilities  2,281,867   2,159,395   1,936,727   1,810,002 
Total liabilities  82,699,456   80,315,502   79,760,181   87,440,539 
                 
EQUITY                
Retained earnings  12,039,932   12,047,770   11,905,928   11,854,300 
Accumulated other comprehensive (loss) income  (102,906)  (84,227)  (79,114)  (83,546)
                 
Total equity  11,937,026   11,963,543   11,826,814   11,770,754 
                 
Total liabilities and retained earnings $94,636,482  $92,279,045  $91,586,995  $99,211,293 

 

Source: Eureka Homestead's audited financial statements

 

 76 

 

 

EXHIBIT 3

 

EUREKA HOMESTEAD

METAIRIE, LOUISIANA

 

Statement of Income

For the Year Ended December 31, 2018

(In thousands)

 

 

  Year Ended 
  December 31, 
  2018 
Interest income:    
Loans receivable $3,555 
Investment securities  119 
Interest-bearing deposits  69 
Total interest income  3,743 
     
Interest expense:    
Deposits  928 
Advances from Federal Home Loan Bank  726 
Total interest expense  1,654 
     
Net interest income  2,089 
     
Provision for loan losses  (11)
Net interest income after provision for loan losses  2,100 
     
Noninterest income:    
Service charges and other income  124 
Fees on loans sold  307 
Net (Loss) on sales of available-for-sale securities  (55)
Net income on sales/write-downs of other real estate  23 
Income from life insurance  106 
Total noninterest income  505 
     
Noninterest expense:    
Salaries and employee benefits  1,412 
Occupancy expense  196 
SAIF deposit insurance premium and  examination fees  80 
Data processing  112 
Accounting and consulting  132 
Other real estate expense  1 
Insurance  71 
Legal fees  7 
Other  245 
Total noninterest expense  2,256 
     
Income before income taxes  349 
     
Income taxes  54 
     
Net income $295 

 

Source: Eureka Homestead's audited financial statement

 

 77 

 

 

EXHIBIT 4

 

EUREKA HOMESTEAD

METAIRIE, LOUISIANA

 

Statements of Income (Loss)

Years Ended December 31, 2014, 2015, 2016 and 2017

 

  December 31, 
  2017  2016  2015  2014 
Interest income:                
Loans receivable $3,138,778  $2,990,297  $2,786,475  $2,841,655 
Investment securities  119,623   150,692   312,072   401,915 
Interest-bearing deposits  36,552   33,894   47,331   16,597 
Total interest income  3,294,953   3,174,883   3,145,878   3,260,167 
                 
Interest expense:                
Deposits  564,276   522,982   553,180   632,448 
Advances from Federal Home Loan Bank  725,394   730,237   722,530   659,105 
Total interest expense  1,289,670   1,253,219   1,275,710   1,291,553 
                 
Net interest income  2,005,283   1,921,664   1,870,168   1,968,614 
                 
Provision for loan losses  20,000      (52,152)  7,834 
                 
Net interest income after provision for loan losses  1,985,283   1,921,664   1,922,320   1,960,780 
                 
Noninterest income:                
Service charges and other income  96,533   77,260   48,133   48,173 
Fees on loans sold  296,330   362,116   271,791   266,161 
Net income (loss) on sales of available-for-sale securities     (1,300)  (24,042)  40,072 
Net income on sales/write-downs of other real estate     3,230   31,201   4,874 
Income from life insurance  122,247   122,155   122,012   105,018 
Total noninterest income  515,110   563,461   449,095   464,298 
                 
Noninterest expense:                
Salaries and employee benefits  1,499,517   1,538,204   1,492,135   1,543,588 
Occupancy expense  208,950   202,309   214,960   254,282 
SAIF deposit insurance premium and examination fees  76,284   87,823   117,440   113,977 
Data processing  103,414   107,103   101,893   101,936 
Accounting and consulting  82,309   94,331   93,995   84,155 
Other real estate expense  6,316   1,036   48,813   35,375 
Insurance  74,574   75,118   74,514   75,113 
Legal fees  7,525   5,807   13,698   9,430 
Other  202,276   240,924   191,939   185,092 
Total noninterest expense  2,261,165   2,352,655   2,349,387   2,402,948 
                 
Income before income taxes  239,228   132,470   22,028   22,130 
                 
Income tax expense (benefit)  263,999   (9,372)  (29,600)  (65,600)
                 
Net income (loss) $(24,771) $141,842  $51,628  $87,730 

 

Source: Eureka Homestead's audited financial statements

 

 78 

 

 

EXHIBIT 5

 

Selected Financial Information

At December 31, 2017 and 2018

 

  At December 31, 
  2018  2017 
  (In thousands) 
Selected Financial Condition Data:        
         
Total assets $98,070  $94,636 
Cash and cash equivalents  3,090   713 
Interest-bearing deposits  750   947 
Securities available-for-sale  5,781   6,146 
Loans, net  81,072   79,328 
FHLB stock  1,376   1,341 
Premises and equipment, net  767   773 
Cash surrender value of life insurance  3,950   3,856 
Deposits  56,183   53,091 
FHLB advances  26,030   26,017 
Accrued expenses and other liabilities  2,171   2,282 
Total equity  12,239   11,937 

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 79 

 

 

EXHIBIT 6

 

Income and Expense Trends

For the Years Ended December 31, 2017 and 2018

 

  For the Years Ended 
  December 31, 
  2018  2017 
  (In thousands) 
Selected Operations Data:        
Interest income $3,743  $3,295 
Interest expense  1,654   1,290 
Net interest income  2,089   2,005 
Provision for loan losses  (11)  20 
Net interest income after provision for loan losses  2,100   1,985 
Noninterest income  505   515 
Noninterest expense  2,256   2,261 
Income before income tax expense  349   239 
Income tax expense  54   264 
Net income (loss) $295  $(25)

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 80 

 

 

EXHIBIT 7

 

EUREKA HOMESTEAD

Normalized or Core Earnings

Twelve Months Ended December 31, 2018

 

  Twelve Months 
  Ended 
  December 31, 
  2018 
    
NET    
Net income before taxes $349,000 
     
Taxes  54,000 
     
Net income $295,000 
     
CORE    
Net income before taxes $349,000 
     
Income adjustments:    
Loss on sale of securities  55,000 
Gains on real estate  (25,000)
     
Expense adjustments:    
Real estate owned write-down  (23,000)
Provision for loan loss  (11,000)
     
Net income before taxes  345,000 
     
Taxes @ 21.0%  72,000 
     
Core income $273,000 

 

Source: Eureka Homestead's audited financial statements

 

 81 

 

 

EXHIBIT 8

 

Performance Indicators

At or for the Years Ended December 31, 2017 and 2018

 

  Years Ended 
  December 31, 
  2018  2017 
Selected Financial Ratios and Other Data        
         
Performance Ratios:        
Return (loss) on average assets  0.30%  (0.03)%
Return (loss) on average equity  2.42%  (0.20)%
Interest rate spread(1)  2.12%  2.24%
Net interest margin(2)  2.30%  2.40%
Efficiency ratio(3)  86.96%  89.71%
Noninterest expense to average total assets  2.30%  2.48%
Average interest-earning assets to average interest-bearing liabilities  109.92%  110.43%
Average equity to average total assets  12.39%  13.37%
         
Asset Quality Ratios:        
Nonperforming assets to total assets  %  0.31%
Nonperforming loans to total loans(4)  %  0.29%
Allowance for loan losses to nonperforming loans(4)  %  366.68%
Allowance for loan losses to total loans  1.05%  1.08%
         
Capital Ratios:        
Total capital to risk-weighted assets (bank only)  25.98%  25.64%
Common equity Tier 1 capital to risk-weighted assets (bank only)  24.72%  24.38%
Tier 1 capital to risk-weighted assets (bank only)  24.72%  24.38%
Tier 1 capital to adjusted total assets (bank only)  12.23%  12.80%

 

(1)Represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the year.
(2)The net interest margin represents net interest income as a percent of average interest-earning assets for the year.
(3)The efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
(4)There were no nonperforming loans at December 31, 2018.

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 82 

 

 

EXHIBIT 9

 

Volume/Rate Analysis

For the Years Ended December 31, 2018 vs. 2017

 

  Year Ended December 31, 
  2018 vs 2017 
  Increase (Decrease)    
  Due to    
  Volume  Rate  Total 
  (Dollars in thousands) 
Interest-earning assets:            
Loans, net $324  $92  $416 
Investment securities  4   (4)  0 
Other interest-earning assets  9   24   33 
Total interest-earning assets $337  $112  $449 
             
Interest-bearing liabilities:            
Savings accounts $0  $0  $0 
Certificates of deposit  116   248   364 
Total deposits  116   248   364 
Borrowings  (11)  12   1 
Total interest-bearing liabilities  105   260   365 
             
Change in net interest income $232  $(148) $84 

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 83 

 

 

EXHIBIT 10

 

Yield and Cost Trends

At December 31, 2018, and

For the Years Ended December 31, 2017 and 2018

 

     For the Years Ended 
  At December 31,  December 31, 
  2018  2018  2017 
  Yield/  Yield/  Yield/ 
  Rate  Rate  Rate 
Interest-earning assets:            
Loans, net  4.58%  4.39%  4.26%
Investment securities  2.31%  1.94%  1.72%
Other interest-earning assets  2.64%  1.84%  1.17%
Total interest-earning assets  4.36%  4.12%  3.94%
Interest-bearing liabilities:            
Savings/Money Market accounts  0.20%  0.20%  0.20%
Certificates of deposit  2.08%  1.76%  1.26%
Total interest-bearing deposits  1.97%  1.67%  1.18%
Borrowings  2.78%  2.68%  2.57%
Total interest-bearing liabilities  2.23%  2.00%  1.70%
             
Net interest rate spread(1)      2.12%  2.24%
             
Net interest margin(2)     2.30%  2.40%
             
Average interest-earning assets to  interest-bearing liabilities     109.92%  110.43%

 

(1)Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2)Net interest margin represents net interest income divided by average total interest-earning assets.

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 84 

 

 

EXHIBIT 11

 

Net Portfolio Value

At December 31, 2018

 

            NPV as a Percentage of 
Change in     Estimated Increase  Present Value of Assets(3) 
Interest Rates  Estimated  (Decrease) in NPV  MPV  Increase/ 
(Basis Points)(1)  EVE(2)  $ Amount  Percent  Ratio(4)  (Decrease) 
(Dollars in thousands)     (Basis Points) 
                 
 +300  $6,111  $(7,234)  (54.20)  7.06%  (650.86)
 +200   8,708   (4,637)  (34.75)  9.61%  (395.75)
 +100   11,209   (2,136)  (16.01)  11.84%  (172.29)
    13,345         13.57%   
 -100   14,788   1,443   10.81   14.57%  100.43 
 -200   15,423   2,078   15.57   14.84%  127.76 

 

(1)Assumes an instantaneous uniform change in interest rates at all maturities.
(2)EVE is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.
(3)Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.
(4)NPV Ratio represents NPV divided by the present value of assets.

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 85 

 

 

EXHIBIT 12

 

Loan Portfolio Composition

At December 31, 2017 and 2018

(Dollars in thousands)

 

  At December 31, 
  2018  2017 
  Amount  Percent  Amount  Percent 
One- to four-family residential:                
Owner-occupied(1) (2) $64,027   79.40% $63,271   80.10%
Nonowner-occupied  11,158   13.80%  10,889   13.80%
Multi-family  4,117   5.10%  2,701   3.40%
Commercial real estate and land  1,175   1.50%  1,666   2.10%
Consumer  211   0.20%  488   0.60%
Total loans receivable  80,688   100.0%  79,015   100.0%
                 
Deferred loan costs (fees)  1,234       1,163     
Allowance for loan losses  (850)      (850)    
                 
Total loans receivable, net $81,072      $79,328     

 

(1)At December 31, 2018 and 2017, includes $1.0 million and $2.1 million, respectively, of construction loans.
(2)At December 31, 2018 and 2017, includes $1.6 million and $1.4 million, respectively, of home equity loans.

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 86 

 

 

EXHIBIT 13

 

Loan Maturity Schedule

At December 31, 2018

 

  One- to four             
  Family             
Due During the Years Residential     Commercial       
Ending December 31, Real Estate  Multi-family  Real Estate  Consumer  Total 
    
2019 $367  $  $  $211  $578 
2020  125            125 
2021  63            63 
2022 to 2023  709            709 
2024 to 2028  3,094            3,094 
2029 to 2033  8,902   1,094   432      10,428 
2033 and beyond  61,925   3,023   743      65,691 
Total $75,185  $4,117  $1,175  $211  $80,688 

 

Fixed and Adjustable-Rate Loan Schedule

 

  Due After December 31, 2019 
  Fixed  Adjustable  Total 
  (Dollars in thousands) 
          
One- to four-family residential $74,389  $429  $74,818 
Multi-family  3,881   236   4,117 
Commercial real estate  1,175      1,175 
Consumer        0 
Total $79,445  $665  $80,110 

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 87 

 

 

EXHIBIT 14

 

Loan Originations, Purchases, Sales and Repayments

For the Years Ended December 31, 2017 and 2018

 

  Years Ended 
  December 31, 
  2018  2017 
  (In thousands) 
       
Total loans at beginning of period $79,608  $70,826 
Loans originated:        
Real estate:        
One- to four-family residential  23,668   25,250 
Multi-family  1,087   1,097 
Commercial  323    
Consumer  67   664 
Total loans originated  25,145   27,011 
         
Loans sold:        
Real estate:        
One- to four-family residential  12,350   10,978 
Total loans sold  12,350   10,978 
         
Other:        
Principal repayments and other  11,183   7,251 
         
Net loan activity  1,612   8,782 
         
Total loans, including loans held-for-sale, at end of period $81,220  $79,608 

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 88 

 

 

EXHIBIT 15

 

Loan Delinquencies

At December 31, 2018

 

  Loans Delinquent For       
  30-89 Days  90 Days and Over  Total 
  Number  Amount  Number  Amount  Number  Amount 
  (Dollars in thousands) 
                   
At December 31, 2018                        
                         
Real estate:                        
One- to four-family residential  4  $398     $   4  $398 
Multi-family                  
Commercial real estate                  
Consumer                  
                         
Total  4  $398   0  $0   4  $398 
                         
At December 31, 2017                        
                         
Real estate:                        
One- to four-family residential  8  $613   2  $86   10  $699 
Multi-family                  
Commercial real estate                  
Consumer                  
                         
Total  8  $613   2  $86   10  $699 

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 89 

 

 

EXHIBIT 16

 

Nonperforming Assets

At December 31, 2017 and 2018

 

  At December 31, 
  2018  2017 
  (Dollars in thousands) 
       
Nonaccrual loans:        
Real estate:        
One- to four-family residential $  $232 
Multi-family      
Commercial real estate      
Consumer      
     Total Total nonaccrual loans  0   232 
         
Accruing loans 90 days or more past due:        
Real estate:        
One- to four-family residential     86 
Multi-family      
Commercial real estate      
Consumer      
Total loans 90 days or more past due     86 
         
Total nonaccrual loans and accruing loans 90 days or more past due  0   318 
         
Real estate owned  0   66 
         
Total nonperforming assets $0  $384 
         
Accruing troubled debt restructurings:        
Real estate:        
One- to four-family residential $  $ 
Multi-family      
Commercial real estate      
Consumer      
Total Total $0  $0 
         
Ratios:        
Total nonperforming loans to total loans  0.00%  0.29%
Total nonperforming assets to total assets  0.00%  0.31%
Total nonperforming loans and troubled debt restructurings to total loans  0.00%  0.29%
Total nonperforming assets and troubled debt restructurings to total assets  0.00%  0.31%

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 90 

 

 

EXHIBIT 17

 

Classified Assets

At December 31, 2017 and 2018

(Dollars in thousands)

 

  At 
  December 31, 
  2018  2017 
       
Substandard assets $580  $828 
Doubtful assets      
Loss assets      
Total classified assets $580  $828 

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 91 

 

 

EXHIBIT 18

 

Allowance for Loan Losses

For the Years Ended December 31, 2017 and 2018

 

  At or for the Years Ended 
  December 31, 
  2018  2017 
  (Dollars in thousands) 
       
Balance at beginning of year $850  $900 
         
Charge-offs:        
Real estate:        
One- to four-family residential     (70)
Multi-family      
Commercial       
Consumer      
Total charge-offs  0   (70)
         
Recoveries:        
Real estate:  11    
One- to four-family residential      
Multi-family      
Commercial      
Consumer      
Total recoveries  11   0 
         
Net (charge-offs) recoveries  11   (70)
         
Provision for loan losses  (11)  20 
         
Balance at end of year $850  $850 
         
Ratios:        
Net charge-offs (recoveries) to average loans outstanding  0.01%  (0.10)%
Allowance for loan losses to nonperforming loans at end of year(1)  n/a   366.38%
Allowance for loan losses to total loans at end of year  1.05%  1.08%

 

(1)Not applicable

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 92 

 

 

EXHIBIT 19

 

Mix of Average Deposit Accounts

For the Years Ended December 31, 2017 and 2018

 

  For the Years Ended December 31, 
  2018  2017 
  (Dollars in thousands) 
             
  Average  Percent  Average  Percent 
  Balance  of Total  Balance  of Total 
Savings (passbook and money market) $3,384   6.1% $3,588   7.5%
Certificates of deposit:                
Quickrate CDs  24,773   44.6%  21,717   45.6%
Retail CDs  18,510   33.3%  16,706   35.1%
Municipal CDs  7,802   14.0%  5,627   11.8%
Brokered CDs  1,138   2.0%  2   N/A 
                 
Total deposits $55,607   100.0% $47,640   100.0%

 

Source: Eureka Homesteadl Bancorp, Inc.'s Prospectus

 

 93 

 

 

EXHIBIT 20

 

Certificates of Deposit of $100,000 or More by Maturity and

All Certificates of Deposit By Rate and Maturity

As of December 31, 2018

 

  At 
  December 31, 
  2018 
  (In thousands) 
    
Three months or less $7,705 
Over three months through six months  8,989 
Over six months through one year  9,452 
Over one year to three years  9,182 
Over three years  6,201 
     
Total $41,529 

 

  At December 31, 2018 
  Period to Maturity 
                 Percentage 
  Less Than  Over One  Over Two        of Total 
  or Equal to  Year to Two  Years to  Over Three     Certificate 
  One Year  Years  Three Years  Years  Total  Accounts 
  (Dollars in thousands)    
Interest Rate:                        
Less than or equal to 1.00% $2,119  $71  $  $  $2,190   4.1%
1.00% - 1.99%  14,939   3,821   1,030   1,306   21,096   39.8%
2.00% - 2.99%  14,772   4,476   3,076   5,103   27,427   51.8%
3.00% - 3.99%  249   348   249   1,437   2,283   4.3%
                         
Total $32,079  $8,716  $4,355  $7,846  $52,996   100.0%

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 94 

 

  

EXHIBIT 21

 

Borrowed Funds

For the Years Ended December 31, 2017 and 2018

 

  At or for the Years Ended 
  December 31, 
  2018  2017 
  (In thousands) 
FHLB advances:        
Balance at end of period $26,030  $26,017 
         
Average balance during period  27,068   28,177 
         
Maximum outstanding at any month end  31,025   30,311 
         
Weighted average interest rate at end of period  2.78%  2.54%
         
Average interest rate during period  2.68%  2.57%

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 95 

 

  

EXHIBIT 22

 

OFFICES OF EUREKA HOMESTEAD

METAIRIE, LOUISIANA

As of December 31, 2018

 

  Owned Net Book Value 
  or of 
Location Leased Real Property 
      
Main Office      
1922 Beterans Memorial Blvd.      
Metairie, Louisiana 70005 Owned $767,000(1)
       
Loan Office      
720 Harrison Avenue, Suite A      
New Orleans, Louisiana 70124 Leased    
       
Total   $767,000 

 

(1) The Bank also owns a disaster relief storage facility in Baton Rouge, Louisiana, with a net book value of $269,000.

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 96 

 

 

EXHIBIT 23

 

DIRECTORS AND MANAGEMENT OF COMMUNITY

At December 31, 2018

 

      Director Term
Name(1) Position(s) Held with the Bank Age Since Expires
         
Alan T. Heintzen Chairman of the Board and Chief Executive Officer 66 1996 2021
Cecil A. Haskins, Jr. President, Chief Financial Officer and Director 63 2014 2020
Creed W. Brierre, St. Director 72 2000 2022
Patrick M. Gibbs Director 71 2010 2022
Nick O. Sagona, Jr. Director 71 2013 2021
Robert M. Shofstahl Director 71 1995 2020
Wilbur A. Toups, Jr. Director 78 1995 2020

 

(1)The mailing address for each person listed is1922 Veterans Memorial Boulevard, Metairie, Lousiana 70005

 

Source: Eureka Homestead Bancorp, Inc.'s Prospectus

 

 97 

 

  

EXHIBIT 24

 

Key Demographic Data and Trends

ZIP Codes 45208, 45238 and 45248,

Metairie CDP, Jefferson Parish, Orleans Parish,

Louisiana and the United States

2000, 2010 and 2024

 

  2000  2010  % Change  2024  % Change 
Population                    
Metairie CDP  146,136   138,481   (5.2)%  142,864   3.2%
Jefferson Parish  455,466   432,552   (5.0)%  447,703   3.5%
Orleans Parish  484,674   343,829   (29.1)%  417,803   21.5%
Louisiana  4,468,976   4,533,372   1.4%  4,795,943   5.8%
United States  281,421,906   308,745,538   9.7%  341,924,340   10.7%
                     
Households                    
Metairie CDP  63,741   59,915   (6.0)%  62,470   4.3%
Jefferson Parish  176,234   169,647   (3.7)%  177,309   4.5%
Orleans Parish  188,251   142,158   (24.5)%  178,873   25.8%
Louisiana  1,656,053   1,728,360   4.4%  1,866,827   8.0%
United States  105,480,101   116,716,292   10.7%  129,182,991   10.7%
                     
Per Capita Income                    
Metairie CDP $24,771  $31,901   28.8%      
Jefferson Parish  19,953   26,596   33.3%      
Orleans Parish  17,258   26,131   51.4%      
Louisiana  16,912   24,264   43.5%      
United States  22,162   26,059   17.6%      
                     
Median Household Income                    
Metairie CDP $41,265  $51,676   25.2% $62,321   20.6%
Jefferson Parish  38,435   48,522   26.2%  56,118   15.7%
Orleans Parish  27,133   36,681   35.2%  44,388   21.0%
Louisiana  32,566   44,673   37.2%  50,689   13.5%
United States  41,994   50,046   19.2%  62,901   25.7%

 

Source: U.S. Census and Mergent Intellect

 

 98 

 

  

EXHIBIT 25

 

Key Housing Data

Metairie CDP, Jefferson Parish, Orleans Parish,

Louisiana and the United States

2000 & 2010

 

  2000  2010 
Occupied Housing Units        
Metairie CDP  63,741   59,915 
Jefferson Parish  176,234   169,647 
Orleans Parish  188,251   142,158 
Louisiana  1,656,053   1,728,360 
United States  105,480,101   116,716,292 
         
Occupancy Rate        
Metairie CDP        
Owner-Occupied  61.8%  62.1%
Renter-Occupied  38.2%  37.9%
         
Jefferson Parish        
Owner-Occupied  63.9%  63.7%
Renter-Occupied  36.1%  36.3%
         
Orleans Parish        
Owner-Occupied  46.5%  47.8%
Renter-Occupied  53.5%  52.2%
         
Louisiana        
Owner-Occupied  67.9%  67.2%
Renter-Occupied  32.1%  22.8%
         
United States        
Owner-Occupied  66.2%  65.4%
Renter-Occupied  33.8%  34.6%
         
Median Housing Values        
Metairie CDP $139,100  $210,900 
Jefferson Parish  105,300   175,500 
Orleans Parish  87,300   183,800 
Louisiana  85,000   137,700 
United States  119,600   179,900 
         
Median Rent        
Metairie CDP $563  $886 
Jefferson Parish  544   899 
Orleans Parish  488   922 
Louisiana  466   762 
United States  602   871 

 

Source: U.S. Census Bureau

 

 99 

 

  

EXHIBIT 26

 

Major Sources of Employment by Industry Group

Metairie CDP, Jefferson Parish, Orleans Parish,

Louisiana and the United States

2000 and 2010

 

  2000 
  Metairie  Jefferson  Orleans     United 
Industry Group CDP  Parish  Parish  Louisiana  States 
                
Agriculture/Mining  1.0%  1.8%  1.0%  4.2%  1.9%
Construction  7.0%  9.5%  4.9%  7.9%  6.8%
Manufacturing  5.7%  6.9%  5.2%  10.1%  14.1%
Wholesale/Retail  16.5%  15.2%  12.3%  15.4%  15.3%
Transportation/Utilities  5.4%  5.7%  5.9%  5.3%  5.2%
Information  2.5%  1.7%  2.4%  2.0%  3.1%
Finance, Insurance & Real Estate  9.0%  6.1%  5.6%  5.7%  6.9%
Services  52.9%  53.1%  62.7%  49.4%  46.7%

 

  2010 
  Metairie  Jefferson  Orleans     United 
  CDP  Parish  Parish  Louisiana  States 
                
Agriculture/Mining  0.9%  1.9%  1.3%  4.6%  1.9%
Construction  10.0%  7.7%  6.4%  8.4%  6.2%
Manufacturing  4.7%  8.3%  4.2%  8.1%  10.4%
Wholesale/Retail  14.6%  16.8%  11.7%  14.6%  14.5%
Transportation/Utilities  5.2%  5.9%  4.7%  5.1%  4.9%
Information  1.8%  2.2%  1.7%  1.5%  2.2%
Finance, Insurance & Real Estate  7.1%  6.9%  5.4%  5.4%  6.7%
Services  55.7%  50.3%  64.6%  52.3%  53.2%

 

Source: Bureau of the Census

 

 100 

 

  

EXHIBIT 27

 

Unemployment Rates

Jefferson and Orleans Parishes, Louisiana and the United States

For the Years 2012 through 2016

 

Location 2014  2015  2016  2017  2018 
                
Jefferson Parish  6.0%  5.8%  5.3%  4.5%  4.3%
                     
Orleans Parish  6.9%  6.5%  5.8%  5.1%  4.9%
                     
Louisiana  6.4%  6.3%  6.0%  5.1%  4.8%
                     
United States  6.2%  5.3%  4.9%  4.4%  3.9%

 

Source: Local Area Unemployment Statistics - U.S. Bureau of Labor Statistics

 

 101 

 

  

EXHIBIT 28

 

Market Share of Deposits

Jefferson Parish

June 30, 2018

 

  Jefferson  Eureka  Eureka 
  Parish's  Homestead's  Homestead's 
  Deposits  Deposits  Share 
  ($000)  ($000)  (%) 
          
Banks $10,061,231       
Thrifts  688,553  $54,556   7.9%
Total $10,749,784  $54,556   0.5%

 

Source: FDIC

 

 102 

 

 

EXHIBIT 29 

 

National Interest Rates by Quarter

2014 - 2018

 

  1st Qtr.  2nd Qtr.  3rd Qtr.  4th Qtr. 
  2014  2014  2014  2014 
             
Prime Rate  3.25%  3.25%  3.25%  3.25%
90-Day Treasury Bills  0.05%  0.04%  0.13%  0.07%
1-Year Treasury Bills  0.13%  0.11%  0.14%  0.13%
30-Year Treasury Notes  3.56%  3.34%  3.07%  2.75%

 

  1st Qtr.  2nd Qtr.  3rd Qtr.  4th Qtr. 
  2015  2015  2015  2015 
             
Prime Rate  3.25%  3.25%  3.25%  3.50%
90-Day Treasury Bills  0.03%  0.01%  0.01%  0.16%
1-Year Treasury Bills  0.26%  0.28%  0.32%  0.62%
30-Year Treasury Notes  2.54%  3.20%  2.87%  3.01%

 

  1st Qtr.  2nd Qtr.  3rd Qtr.  4th Qtr. 
  2016  2016  2016  2016 
             
Prime Rate  3.50%  3.50%  3.50%  3.75%
90-Day Treasury Bills  0.24%  0.30%  0.32%  0.51%
1-Year Treasury Bills  0.53%  0.58%  0.57%  0.81%
30-Year Treasury Notes  2.61%  2.26%  2.40%  2.97%

 

  1st Qtr.  2nd Qtr.  3rd Qtr.  4th Qtr. 
  2017  2017  2017  2017 
             
Prime Rate  4.00%  4.25%  4.25%  4.50%
90-Day Treasury Bills  0.92%  1.01%  1.04%  1.37%
1-Year Treasury Bills  1.17%  1.24%  1.31%  1.76%
30-Year Treasury Notes  2.92%  2.84%  2.86%  2.74%

 

  1st Qtr.  2nd Qtr.  3rd Qtr.  4th Qtr. 
  2018  2018  2018  2018 
             
Prime Rate  4.75%  5.00%  5.25%  5.50%
90-Day Treasury Bills  1.74%  1.89%  2.15%  2.40%
1-Year Treasury Bills  2.09%  2.33%  2.57%  2.63%
30-Year Treasury Notes  2.97%  2.98%  3.19%  3.02%

 

Source:The Wall Street Journal

 

 103 

 

 

EXHIBIT 30

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED SAVINGS INSTITUTIONS

(EXCLUDING MUTUAL HOLDING COMPANIES)

PRICES AS OF DECEMBER 31, 2018

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

        PER SHARE  PRICING RATIOS 
           52 Week  Earnings     12 Month  Price/Net  Price/Core  Price/  Price/Tang.  Price/ 
        Price  Change  (EPS)  Assets  Div.  Earnings  Earnings  Book Value  Book Value  Assets 
    State Exchange ($)  (%)  ($)  ($)  ($)  (X)  (X)  (X)  (X)  (X) 
                                     
SZBI SOUTHFIRST BANCSHARES AL OTC PINK  3.50   (20.8)  0.01   120.03   0.19   NM   26.92   25.98   25.98   2.92 
AX AXOS FINANCIAL CA NYSE  25.18   NM   2.50   155.84   0.00   10.07   10.07   158.17   171.64   16.16 
BYFC BROADWAY FINANCIAL CORP CA NASDAQ  1.09   (53.8)  0.07   22.36   0.05   15.57   54.50   40.07   40.07   4.87 
MLGF MALAGA FINANCIAL CORPORATION CA OTC BB  26.00   (12.1)  2.53   168.81   0.87   10.28   10.32   113.99   113.99   15.40 
PROV PROVIDENT FINANCIAL HOLDINGS CA NASDAQ  15.70   (14.7)  0.66   154.31   1.00   23.79   29.62   105.30   106.15   10.17 
SIFI SI FINANCIAL GROUP CT NASDAQ  12.79   (13.0)  0.53   132.67   0.07   24.13   24.13   93.84   105.18   9.64 
UBNK UNITED FINANCIAL BANCORP CT NASDAQ  14.73   (16.5)  1.12   141.02   0.47   13.15   13.04   106.12   130.70   10.45 
WSFS WSFS FINANCIAL CORP DE NASDAQ  37.54   (21.5)  2.99   224.78   0.40   12.56   13.27   149.68   195.32   16.70 
ABCB AMERIS BANCORP GA NASDAQ  31.44   (34.8)  1.82   240.63   0.35   17.27   16.63   106.29   179.04   13.07 
TBNK TERRITORIAL BANCORP HI NASDAQ  25.66   (16.9)  1.79   209.22   1.07   14.34   14.42   113.99   114.10   12.26 
WCFB WCF BANCORP IA NASDAQ  7.95   (16.5)  0.07   45.30   0.00   113.57   NM   109.50   109.81   17.55 
AJSB AJS BANCORP IL OTC BB  15.26   2.4   0.10   85.05   1.16   152.60   NM   122.18   122.28   17.94 
AFBA ALLIED FIRST BANCORP IL OTC BB  1.05   (40.0)  (0.71)  62.29   0.00   NM   NM   14.96   14.96   1.69 
BFFI BEN FRANKLIN FINANCIAL IL OTC BB  6.86   (28.5)  (0.23)  73.65   0.00   NM   NM   85.43   85.43   9.31 
GTPS GREAT AMERICAN BANCORP IL OTC BB  29.05   (3.3)  1.58   373.69   1.47   18.39   18.50   76.03   81.76   7.77 
IROQ IF BANCORP IL NASDAQ  20.10   2.2   0.45   169.31   0.00   44.67   49.02   111.42   112.86   11.87 
MCPH MIDLAND CAPITAL HOLDINGS CORP IL OTC PINK  25.21   0.8   (0.26)  304.24   0.00   NM   NM   88.02   88.02   8.29 
OTTW OTTAWA SAVINGS BANCORP IL OTC BB  13.33   (7.7)  0.30   81.97   0.00   44.43   45.97   103.90   107.24   16.26 
RYFL ROYAL FINANCIAL IL OTC BB  14.30   (6.2)  1.26   162.04   1.30   11.35   11.26   78.31   83.19   8.82 
SUGR SUGAR CREEK FINANCIAL CORP IL OTC BB  10.10   (22.6)  0.09   123.21   0.00   112.22   144.29   73.24   73.24   8.20 
DSFN DSA FINANCIAL CORP IN OTC PINK  12.00   0.1   0.58   88.62   1.48   20.69   20.69   111.52   114.39   13.54 
FDLB FIDELITY FEDERAL BANCORP IN OTC PINK  40.00   60.0   NM   932.55   0.00   2.04   3.21   37.04   37.83   4.29 
FBPI FIRST BANCORP OF INDIANA IN OTC BB  19.05   (15.3)  0.72   245.44   0.63   26.46   22.95   84.86   104.10   7.76 
FCAP FIRST CAPITAL IN NASDAQ  41.00   11.6   2.33   234.30   1.06   17.60   17.23   183.77   204.18   17.50 
NWIN NORTHWEST INDIANA BANCORP IN OTC BB  43.00   (3.4)  2.66   353.21   4.04   16.17   19.63   138.80   152.10   12.17 

 

 104 

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED SAVINGS INSTITUTIONS

(EXCLUDING MUTUAL HOLDING COMPANIES)

PRICES AS OF DECEMBER 31, 2018

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

        PER SHARE  PRICING RATIOS 
           52 Week  Earnings     12 Month  Price/Net  Price/Core  Price/  Price/Tang.  Price/ 
        Price  Change  (EPS)  Assets  Div.  Earnings  Earnings  Book Value  Book Value  Assets 
    State Exchange ($)  (%)  ($)  ($)  ($)  (X)  (X)  (X)  (X)  (X) 
                                     
TDCB THIRD CENTURY BANCORP IN OTC BB  10.75   (16.0)  0.66   133.97   0.00   16.29   16.04   79.93   81.01   8.02 
WEIN WEST END INDIANA BANCSHARES IN OTC BB  24.50   (15.2)  1.28   289.44   0.00   19.14   17.25   89.22   91.83   8.46 
CFFN CAPITOL FEDERAL FINANCIAL KS NASDAQ  12.78   (4.7)  0.70   67.01   0.84   18.26   18.26   129.75   131.48   19.07 
PBSK POAGE BANKSHARES KY NASDAQ  25.31   20.5   (0.34)  126.00   1.72   NM   NM   153.86   161.11   20.09 
CTUY CENTURY NEXT FINANCIAL CORP��LA OTC BB  30.00   2.6   2.94   292.10   0.00   10.20   10.31   109.69   109.69   10.27 
FPBF FPB FINANCIAL CORP LA OTC PINK  25.25   43.5   1.74   144.16   0.00   14.51   14.43   174.74   175.10   17.52 
HRGG HERITAGE NOLA BANCORP LA OTC PINK  12.60   5.4   0.36   67.30   0.00   35.00   35.00   119.89   122.21   18.72 
HFBL HOME FED BANCORP OF LOUISIANA LA NASDAQ  28.85   2.6   2.08   226.33   1.06   13.87   13.61   115.77   115.77   12.75 
BHBK BLUE HILLS BANCORP MA NASDAQ  21.24   5.7   0.86   103.42   0.00   24.70   25.90   161.89   167.24   20.54 
BLMT BSB BANCORP INC. MA NASDAQ  27.78   (5.0)  2.09   304.71   0.00   13.29   13.29   136.91   137.66   9.12 
HONE HARBORONE BANCORP MA NASDAQ  15.96   (16.7)  0.45   87.80   0.00   35.47   35.47   189.77   220.14   18.18 
MELR MELROSE BANCORP MA NASDAQ  18.91   (5.5)  0.67   122.90   0.00   28.22   41.11   132.33   132.33   15.39 
EBSB MERIDIAN BANCORP MA NASDAQ  14.30   (30.6)  0.97   106.50   0.19   14.74   17.23   114.22   118.18   13.43 
PLRM PILGRIM BANCSHARES MA OTC BB  22.84   20.1   0.69   117.49   0.00   33.10   32.63   196.56   196.56   19.44 
PVBC PROVIDENT BANCORP MA NASDAQ  21.60   (18.3)  0.85   94.94   0.00   25.41   44.08   182.59   182.59   22.75 
RNDB RANDOLPH BANCORP MA NASDAQ  13.95   (9.1)  (0.57)  98.57   0.00   NM   NM   126.36   142.35   14.15 
WEBK WELLESLEY BANCORP MA NASDAQ  29.20   (1.7)  2.31   331.05   0.10   12.64   12.86   105.30   105.42   8.82 
WNEB WESTERN NEW ENGLAND BANCORP MA NASDAQ  9.80   (10.1)  0.47   72.91   0.73   20.85   20.42   125.80   135.55   13.44 
HBK HAMILTON BANCORP MD NASDAQ  13.90   (9.7)  (1.51)  145.97   0.00   NM   NM   96.26   118.10   9.52 
MBCQ MB BANCORP MD OTC BB  13.95   (11.4)  0.54   76.61   0.00   25.83   51.67   111.33   111.33   18.21 
SVBI SEVERN BANCORP MD NASDAQ  7.88   8.6   0.51   69.76   0.19   15.45   16.42   88.04   88.74   11.30 
FBC FLAGSTAR BANCORP MI NYSE  26.47   (29.3)  1.60   324.46   0.00   16.54   16.14   100.46   134.43   8.16 
NWBB NEW BANCORP MI OTC BB  15.80   (18.1)  1.15   164.23   0.00   13.74   13.86   76.66   83.60   9.62 
SBT STERLING BANCORP MI NASDAQ  7.10   (44.1)  1.02   60.32   0.09   6.96   6.96   117.74   121.58   11.77 
STBI STURGIS BANCORP MI OTC BB  20.00   6.4   2.04   213.12   0.74   9.80   10.36   100.50   121.51   9.38 

 

 105 

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED SAVINGS INSTITUTIONS

(EXCLUDING MUTUAL HOLDING COMPANIES)

PRICES AS OF DECEMBER 31, 2018

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

        PER SHARE  PRICING RATIOS 
           52 Week  Earnings     12 Month  Price/Net  Price/Core  Price/  Price/Tang.  Price/ 
        Price  Change  (EPS)  Assets  Div.  Earnings  Earnings  Book Value  Book Value  Assets 
    State Exchange ($)  (%)  ($)  ($)  ($)  (X)  (X)  (X)  (X)  (X) 
                                     
HMNF HMN FINANCIAL MN NASDAQ  19.61   2.7   1.43   159.94   1.30   13.71   15.69   117.92   122.56   12.26 
REDW REDWOOD FINANCIAL MN OTC PINK  70.00   55.6   8.48   707.38   3.42   8.25   8.12   87.69   104.95   9.90 
CFDB CENTRAL FEDERAL S&L ASSN OF ROLLA MO OTC PINK  13.30   (8.3)  0.13   43.06   0.00   102.31   102.31   105.14   105.14   30.89 
NASB NASB FINANCIAL MO OTC BB  38.00   1.3   4.05   277.22   3.87   9.38   9.18   119.16   127.39   13.71 
KSBI KS BANCORP NC OTC BB  27.00   (10.3)  2.37   297.32   2.76   11.39   11.59   103.25   103.25   9.08 
LSFG LIFESTORE FINANCIAL GROUP NC OTC PINK  28.25   17.7   2.22   269.07   0.00   12.73   13.08   100.53   103.71   10.50 
UBNC UNION BANK NC OTC PINK  14.35   (13.6)  0.91   122.10   0.27   15.77   15.60   114.53   144.66   11.75 
EQFN EQUITABLE FINANCIAL CORP NE NASDAQ  10.94   0.4   0.61   99.94   0.00   17.93   21.04   102.34   113.37   10.95 
MCBK MADISON COUNTY FINANCIAL NE OTC PINK  25.10   0.0   1.67   150.92   0.79   15.03   15.59   95.18   99.09   16.63 
KRNY KEARNY FINANCIAL CORP NJ NASDAQ  12.78   (11.6)  0.26   68.09   0.28   49.15   49.15   101.11   122.65   18.77 
MSBF MB BANCORP NJ NASDAQ  18.24   2.5   0.73   107.08   0.44   24.99   24.99   166.73   166.73   17.03 
NFBK NORTHFIELD BANCORP NJ NASDAQ  13.50   (21.0)  0.57   86.53   0.38   23.68   23.68   102.20   108.78   15.60 
OCFC OCEANFIRST FINANCIAL CORP NJ NASDAQ  22.50   (14.3)  1.14   156.53   0.54   19.74   19.57   105.68   161.64   14.37 
ORIT ORITANI FINANCIAL CORP NJ NASDAQ  14.81   (9.7)  0.95   88.19   1.30   15.59   16.27   122.60   122.60   16.79 
PFS PROVIDENT FINANCIAL SERVICES NJ NYSE  23.92   (11.3)  1.53   145.23   0.93   15.63   15.84   120.08   175.11   16.47 
BCTF BANCORP 34 NM NASDAQ  14.30   (3.1)  0.17   109.51   0.00   84.12   65.00   112.60   113.49   13.06 
CARV CARVER BANCORP NY NASDAQ  3.44   18.2   0.94   166.29   0.00   3.66   NM   26.36   26.44   2.07 
DCOM DIME COMMUNITY BANCSHARES NY NASDAQ  16.83   (19.7)  1.48   171.92   0.57   11.37   14.89   102.06   112.73   9.79 
ESBK ELMIRA SAVINGS BANK NY NASDAQ  18.85   (7.8)  1.36   163.61   0.90   13.86   19.23   114.38   149.72   11.52 
FSBC FSB COMMUNITY BANKSHARES NY NASDAQ  17.00   0.0   0.24   167.38   0.00   70.83   73.91   112.36   115.65   10.16 
NYCB NEW YORK COMMUNITY BANCORP NY NYSE  9.21   (29.3)  0.93   104.51   0.68   9.90   9.90   66.45   103.72   8.81 
PDLB PDL COMMUNITY BANCORP NY NASDAQ  12.65   (16.7)  0.07   53.14   0.00   180.71   180.71   182.01   182.01   23.81 
SNNF SENECA FIN CORP NY OTC PINK  8.00   (8.7)  0.36   97.35   0.00   22.22   22.22   99.50   99.50   8.22 
SNNY SUNNYSIDE BANCORP NY OTC BB  12.00   (29.4)  (0.42)  103.92   0.00   NM   NM   93.60   93.60   11.55 
TRST TRUSTCO BANK CORP NY NY NASDAQ  6.89   (25.1)  0.55   50.59   0.26   12.53   12.76   139.47   139.76   13.62 

 

 106 

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED SAVINGS INSTITUTIONS

(EXCLUDING MUTUAL HOLDING COMPANIES)

PRICES AS OF DECEMBER 31, 2018

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

        PER SHARE  PRICING RATIOS 
           52 Week  Earnings     12 Month  Price/Net  Price/Core  Price/  Price/Tang.  Price/ 
        Price  Change  (EPS)  Assets  Div.  Earnings  Earnings  Book Value  Book Value  Assets 
    State Exchange ($)  (%)  ($)  ($)  ($)  (X)  (X)  (X)  (X)  (X) 
                                     
CNNB CINCINNATI BANCORP OH OTC BB  12.00   15.1   0.68   100.95   0.34   17.65   20.69   108.01   114.50   11.89 
CCSB COMM SAVINGS BANCORP OH OTC BB  13.15   NM   (1.89)  112.76   0.00   NM   NM   77.58   77.58   11.66 
CIBN COMMUNITY INVESTORS BANCORP OH OTC PINK  16.70   4.7   1.51   186.55   0.39   11.06   12.10   99.64   103.99   8.95 
EFBI EAGLE FIN BANCORP OH NASDAQ  15.28   (5.5)  0.39   84.75   0.00   39.18   50.93   120.31   120.31   18.03 
FDEF FIRST DEFIANCE FINANCIAL CORP OH NASDAQ  24.47   (52.9)  2.13   151.86   0.59   11.49   11.71   126.85   178.22   16.11 
FNFI FIRST NILES FINANCIAL OH OTC PINK  7.00   (37.2)  0.29   88.18   0.28   24.14   22.58   70.64   70.64   7.94 
HCFL HOME CITY FINANCIAL CORP OH OTC PINK  37.35   29.7   2.31   200.91   1.18   16.17   16.10   161.76   161.76   18.59 
HLFN HOME LOAN FINANCIAL CORP OH OTC BB  30.25   16.3   2.29   137.86   1.33   13.21   13.38   184.79   185.58   21.94 
PPSF PEOPLES-SIDNEY FINANCIAL CORP OH OTC PINK  11.15   8.8   0.56   92.44   0.72   19.91   19.91   90.87   90.87   12.06 
PFOH PERPETUAL FEDERAL SAVINGS BANK OH OTC PINK  29.25   6.4   2.44   159.85   1.18   11.99   12.39   99.52   99.52   18.30 
UCFC UNITED COMMUNITY FINANCIAL CORP OH NASDAQ  8.87   (2.8)  0.61   55.66   0.51   14.54   14.78   163.05   182.14   15.94 
VERF VERSAILLES FINANCIAL CORP OH OTC BB  36.00   50.0   0.78   137.26   0.00   46.15   46.15   128.34   128.34   26.23 
BNCL BENEFICIAL MUTUAL BANCORP PA NASDAQ  14.18   (13.8)  0.41   78.29   0.48   34.59   35.45   102.53   121.72   18.11 
ESSA ESSA BANCORP PA NASDAQ  15.42   (1.6)  0.60   155.21   0.00   25.70   25.28   104.76   114.99   9.93 
HARL HARLEYSVILLE SAVINGS FINANCIAL PA OTC PINK  23.15   (0.4)  2.08   205.43   1.27   11.13   11.58   120.64   120.64   11.27 
NWBI NORTHWEST BANCSHARES PA NASDAQ  16.86   0.8   0.98   93.49   0.67   17.20   17.20   140.38   191.37   18.03 
PBIP PRUDENTIAL BANCORP PA NASDAQ  17.25   (2.0)  0.83   120.21   0.56   20.78   19.83   127.40   134.77   14.35 
QNTO QUAINT OAK BANCORP PA OTC PINK  12.00   (7.7)  0.85   129.64   0.25   14.12   14.63   110.40   115.72   9.26 
STND STANDARD FINANCIAL CORP PA OTC BB  30.25   0.6   1.76   204.27   0.62   17.19   16.53   110.97   142.49   14.81 
CASH META FINANCIAL GROUP SD NASDAQ  19.23   (79.2)  1.32   148.98   0.15   14.57   14.35   100.73   202.42   12.91 
SFBK SFB BANCORP TN OTC PINK  32.50   7.6   1.16   263.68   0.76   28.02   20.44   85.84   87.32   12.33 
UNTN UNITED TENNESSEE BANKSHARES TN OTC PINK  21.00   (2.8)  1.73   245.59   0.73   12.14   12.28   83.00   83.00   8.55 
STXB SPIRIT OF TEXAS BANCSHARES TX NASDAQ  21.75   NM   1.08   112.24   0.00   20.14   20.14   192.14   213.24   19.38 
TBK TRIUMPH BANCORP TX NASDAQ  29.62   (6.0)  1.53   173.33   0.00   19.36   18.51   125.72   186.88   17.09 
FSBW FS BANCORP WA NASDAQ  42.24   (22.6)  4.56   320.17   0.39   9.26   9.37   115.00   126.66   13.19 

 

 107 

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED SAVINGS INSTITUTIONS

(EXCLUDING MUTUAL HOLDING COMPANIES)

PRICES AS OF DECEMBER 31, 2018

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

        PER SHARE  PRICING RATIOS 
           52 Week  Earnings     12 Month  Price/Net  Price/Core  Price/  Price/Tang.  Price/ 
        Price  Change  (EPS)  Assets  Div.  Earnings  Earnings  Book Value  Book Value  Assets 
    State Exchange ($)  (%)  ($)  ($)  ($)  (X)  (X)  (X)  (X)  (X) 
                                     
RVSB RIVERVIEW BANCORP WA NASDAQ  7.16   (17.4)  0.62   50.77   0.13   11.55   11.74   114.01   142.63   14.10 
TSBK TIMBERLAND BANCORP WA NASDAQ  24.00   (9.6)  2.30   137.23   0.60   10.43   10.53   145.81   155.64   17.49 
HWIS HOME BANCORP WISCONSIN WI OTC PINK  12.60   (2.3)  (0.04)  161.41   0.00   NM   NM   105.09   105.09   7.81 
WSBF WATERSTONE FINANCIAL WI NASDAQ  16.67   (2.2)  0.97   65.99   0.93   17.19   17.92   119.67   120.19   25.26 
WBBW WESTBURY BANCORP WI OTC BB  20.50   NM   1.29   223.31   0.85   15.89   15.77   99.03   99.85   9.18 

 

 108 

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED SAVINGS INSTITUTIONS

(EXCLUDING MUTUAL HOLDING COMPANIES)

PRICES AS OF DECEMBER 31, 2018

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

  PER SHARE  PRICING RATIOS 
     52 Week  Earnings     12 Month  Price/Net  Price/Core  Price/  Price/Tang.  Price/ 
  Price  Change  (EPS)  Assets  Div.  Earnings  Earnings  Book Value  Book Value  Assets 
  ($)  (%)  ($)  ($)  ($)  (X)  (X)  (X)  (X)  (X) 
                               
ALL INSTITUTIONS                                        
AVERAGE  19.54   (6.61)  1.11   162.96   0.52   25.63   25.18   112.53   123.57   13.34 
HIGH  70.00   60.00   8.48   932.55   4.04   180.71   180.71   196.56   220.14   30.89 
LOW  1.05   (79.20)  (1.89)  22.36   0.00   2.04   3.21   14.96   14.96   1.69 
                                         
AVERAGE FOR STATE                                        
LA  24.18   13.53   1.78   182.47   0.26   18.40   18.34   130.02   130.69   14.82 
                                         
AVERAGE BY REGION                                        
MID-ATLANTIC  18.13   (7.26)  0.90   126.78   0.49   20.20   21.84   116.52   136.04   14.74 
MIDWEST  19.76   (3.27)  0.85   182.25   0.61   22.44   19.66   105.08   111.53   12.52 
NORTH CENTRAL  24.10   (5.41)  2.05   188.86   1.15   34.78   22.73   107.49   124.02   15.99 
NORTHEAST  15.62   (10.44)  0.76   132.99   0.19   27.18   29.23   124.19   133.19   13.09 
SOUTHEAST  22.58   (8.14)  1.46   222.63   0.72   13.90   16.65   88.49   103.85   9.74 
SOUTHWEST  23.20   6.43   1.41   160.71   0.15   28.17   25.29   135.79   148.05   15.54 
WEST  20.88   (18.39)  1.88   152.34   0.51   13.16   18.82   113.29   121.36   12.96 
                                         
AVERAGE BY EXCHANGE                                        
NYSE  21.20   (17.48)  1.64   182.51   0.40   13.04   12.99   111.29   146.23   12.40 
NASDAQ  17.96   (11.55)  0.97   131.87   0.38   25.18   24.76   122.69   138.21   14.42 
OTC BB  20.58   (4.80)  1.10   177.35   0.77   25.03   21.47   103.09   107.94   12.26 
OTC PINK  21.83   6.30   1.32   217.29   0.59   18.06   19.05   99.42   102.69   12.19 

 

 109 

 

 

EXHIBIT 31

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED FDIC-INSURED SAVINGS INSTITUTIONS

MOST RECENT FOUR QUARTERS

 

      ASSETS AND EQUITY  PROFITABILITY  CAPITAL ISSUES 
      Total  Total  Total     Core     Core    Number of  Mkt. Value 
      Assets  Equity  Tang. Equity  ROAA  ROAA  ROAE  ROAE    Shares  of Shares 
    State ($000)  ($000)  ($000)  (%)  (%)  (%)  (%)  Exchange Outstanding  ($000) 
                                           
SZBI SOUTHFIRST BANCSHARES AL  84,260   9,458   9,458   0.01   0.10   0.07   0.93  OTC PINK  702,000   2,457 
AX AXOS FINANCIAL CA  9,791,520   1,000,247   921,892   1.64   1.65   16.71   16.75  NYSE  62,831,731   1,582,103 
BYFC BROADWAY FINANCIAL CORP CA  417,335   50,855   50,837   0.32   0.07   2.59   0.56  NASDAQ  18,662,402   20,342 
MLGF MALAGA FINANCIAL CORPORATION CA  1,068,569   144,414   144,414   1.52   1.51   11.39   11.34  OTC BB  6,330,000   164,580 
PROV PROVIDENT FINANCIAL HOLDINGS CA  1,157,454   111,817   110,944   0.42   0.34   4.33   3.47  NASDAQ  7,500,860   117,764 
SIFI SI FINANCIAL GROUP CT  1,596,497   164,012   146,355   0.41   0.41   3.97   3.97  NASDAQ  12,033,734   153,911 
UBNK UNITED FINANCIAL BANCORP CT  7,212,544   709,818   576,577   0.80   0.81   8.18   8.25  NASDAQ  51,146,888   753,394 
WSFS WSFS FINANCIAL CORP DE  7,159,842   798,822   612,238   1.35   1.28   12.53   11.86  NASDAQ  31,852,190   1,195,731 
ABCB AMERIS BANCORP GA  11,428,994   1,404,977   833,821   0.90   0.93   7.79   8.08  NASDAQ  47,496,966   1,493,305 
TBNK TERRITORIAL BANCORP HI  2,025,572   217,957   217,723   0.85   0.85   8.03   8.00  NASDAQ  9,681,579   248,429 
WCFB WCF BANCORP IA  116,027   18,592   18,535   0.14   (0.22)  0.91   (1.42) NASDAQ  2,561,542   20,364 
AJSB AJS BANCORP IL  182,855   26,842   26,840   0.12   0.07   0.78   0.45  OTC BB  2,149,860   32,807 
AFBA ALLIED FIRST BANCORP IL  84,208   9,488   9,488   (1.12)  (1.46)  (9.86)  (12.93) OTC BB  1,351,892   1,419 
BFFI BEN FRANKLIN FINANCIAL IL  94,276   10,276   10,276   (0.30)  (0.40)  (3.11)  (4.21) OTC BB  1,280,000   8,781 
GTPS GREAT AMERICAN BANCORP IL  165,798   16,952   15,763   0.41   0.40   4.16   4.11  OTC BB  443,680   12,889 
IROQ IF BANCORP IL  655,454   69,833   68,939   0.28   0.25   2.50   2.29  NASDAQ  3,871,408   77,815 
MCPH MIDLAND CAPITAL HOLDINGS CORP IL  113,361   10,673   10,673   (0.08)  (0.08)  (0.89)  (0.89) OTC PINK  372,600   9,393 
OTTW OTTAWA SAVINGS BANCORP IL  277,304   43,408   42,065   0.38   0.37   2.41   2.30  OTC BB  3,383,160   45,098 
RYFL ROYAL FINANCIAL IL  406,247   45,778   43,097   0.74   0.75   6.93   6.99  OTC BB  2,507,112   35,852 
SUGR SUGAR CREEK FINANCIAL CORP IL  96,329   10,779   10,779   0.08   0.05   0.69   0.48  OTC BB  781,830   7,896 
DSFN DSA FINANCIAL CORP IN  119,565   14,513   14,146   0.67   0.67   5.51   5.51  OTC PINK  1,349,146   16,190 
FDLB FIDELITY FEDERAL BANCORP IN  787,787   91,235   89,329   2.24   1.43   18.84   12.01  OTC PINK  844,763   33,791 
FBPI FIRST BANCORP OF INDIANA IN  429,319   39,272   32,005   0.29   0.34   3.18   3.67  OTC BB  1,749,165   33,322 
FCAP FIRST CAPITAL IN  786,360   74,881   67,407   1.01   1.03   10.32   10.52  NASDAQ  3,356,144   137,602 
NWIN NORTHWEST INDIANA BANCORP IN  1,069,917   93,855   85,629   0.83   0.68   8.97   7.39  OTC BB  3,029,157   130,254 

 

 110 

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED FDIC-INSURED SAVINGS INSTITUTIONS

MOST RECENT FOUR QUARTERS

 

      ASSETS AND EQUITY  PROFITABILITY  CAPITAL ISSUES 
      Total  Total  Total     Core     Core    Number of  Mkt. Value 
      Assets  Equity  Tang. Equity  ROAA  ROAA  ROAE  ROAE    Shares  of Shares 
    State ($000)  ($000)  ($000)  (%)  (%)  (%)  (%)  Exchange Outstanding  ($000) 
                                           
TDCB THIRD CENTURY BANCORP IN  158,132   15,875   15,662   0.51   0.51   5.04   5.07  OTC BB  1,180,321   12,688 
WEIN WEST END INDIANA BANCSHARES IN  308,351   29,257   28,427   0.44   0.49   4.75   5.29  OTC BB  1,065,336   26,101 
CFFN CAPITOL FEDERAL FINANCIAL KS  9,463,253   1,391,622   1,372,669   1.08   1.08   7.26   7.29  NASDAQ  141,225,516   1,804,862 
PBSK POAGE BANKSHARES KY  440,641   57,535   54,944   (0.27)  (0.30)  (2.12)  (2.36) NASDAQ  3,497,243   88,515 
CTUY CENTURY NEXT FINANCIAL CORP LA  306,710   28,720   28,720   1.04   1.03   11.33   11.22  OTC BB  1,050,000   31,500 
FPBF FPB FINANCIAL CORP LA  382,026   38,292   38,214   1.26   1.27   12.70   12.79  OTC PINK  2,650,000   66,913 
HRGG HERITAGE NOLA BANCORP LA  115,709   18,075   17,717   0.55   0.55   3.47   3.46  OTC PINK  1,719,236   21,662 
HFBL HOME FED BANCORP OF LOUISIANA LA  428,684   47,206   47,206   0.94   0.96   8.46   8.61  NASDAQ  1,894,105   54,645 
BHBK BLUE HILLS BANCORP MA  2,782,027   352,828   341,496   0.85   0.81   6.76   6.50  NASDAQ  26,899,594   571,347 
BLMT BSB BANCORP INC. MA  2,972,085   197,950   196,835   0.72   0.72   10.86   10.84  NASDAQ  9,753,797   270,960 
HONE HARBORONE BANCORP MA  2,853,688   273,352   235,814   0.53   0.53   5.44   5.44  NASDAQ  32,503,843   518,761 
MELR MELROSE BANCORP MA  318,477   37,033   37,033   0.56   0.38   4.78   3.28  NASDAQ  2,591,424   49,004 
EBSB MERIDIAN BANCORP MA  5,775,613   679,143   656,403   0.94   0.81   7.93   6.82  NASDAQ  54,233,331   775,537 
PLRM PILGRIM BANCSHARES MA  265,726   26,287   26,287   0.59   0.60   6.10   6.21  OTC BB  2,261,619   51,655 
PVBC PROVIDENT BANCORP MA  914,648   113,968   113,968   0.90   0.52   7.42   4.24  NASDAQ  9,634,368   208,102 
RNDB RANDOLPH BANCORP MA  590,232   66,083   58,694   (0.61)  (0.68)  (5.05)  (5.61) NASDAQ  5,987,796   83,530 
WEBK WELLESLEY BANCORP MA  835,964   70,035   69,939   0.71   0.70   8.60   8.48  NASDAQ  2,525,186   73,735 
WNEB WESTERN NEW ENGLAND BANCORP MA  2,147,502   229,485   212,915   0.66   0.67   5.92   6.04  NASDAQ  29,453,808   288,647 
HBK HAMILTON BANCORP MD  498,706   49,328   40,215   (1.00)  (1.04)  (10.67)  (11.08) NASDAQ  3,416,414   47,488 
MBCQ MB BANCORP MD  150,196   24,570   24,570   0.71   0.36   4.41   2.21  OTC BB  1,960,620   27,351 
SVBI SEVERN BANCORP MD  885,696   113,616   112,800   0.78   0.74   5.81   5.52  NASDAQ  12,695,801   100,043 
FBC FLAGSTAR BANCORP MI  18,697,239   1,518,394   1,134,902   0.52   0.53   6.34   6.51  NYSE  57,625,439   1,525,345 
NWBB NEW BANCORP MI  118,089   14,816   13,593   0.68   0.67   5.74   5.68  OTC BB  719,031   11,361 
SBT STERLING BANCORP MI  3,197,600   319,443   309,470   1.75   1.75   18.22   18.21  NASDAQ  53,012,283   376,387 
STBI STURGIS BANCORP MI  447,439   41,773   34,561   0.99   0.93   10.64   10.06  OTC BB  2,099,491   41,990 

 

 111 

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED FDIC-INSURED SAVINGS INSTITUTIONS

MOST RECENT FOUR QUARTERS

 

      ASSETS AND EQUITY  PROFITABILITY  CAPITAL ISSUES 
      Total  Total  Total     Core     Core    Number of  Mkt. Value 
      Assets  Equity  Tang. Equity  ROAA  ROAA  ROAE  ROAE    Shares  of Shares 
    State ($000)  ($000)  ($000)  (%)  (%)  (%)  (%)  Exchange Outstanding  ($000) 
                                           
HMNF HMN FINANCIAL MN  737,224   76,664   73,737   0.91   0.79   8.48   7.39  NASDAQ  4,609,440   90,391 
REDW REDWOOD FINANCIAL MN  310,221   35,011   29,253   1.24   1.26   10.75   10.93  OTC PINK  438,551   30,699 
CFDB CENTRAL FEDERAL S&L ASSN OF ROLLA MO  70,075   20,585   20,585   0.31   0.31   1.03   1.03  OTC PINK  1,627,220   21,642 
NASB NASB FINANCIAL MO  2,047,222   235,536   220,257   1.51   1.54   12.79   13.08  OTC BB  7,384,851   280,624 
KSBI KS BANCORP NC  389,338   34,241   34,241   0.82   0.80   8.95   8.80  OTC BB  1,309,500   35,357 
LSFG LIFESTORE FINANCIAL GROUP NC  282,523   29,509   28,599   0.82   0.80   8.05   7.83  OTC PINK  1,050,000   29,663 
UBNC UNION BANK NC  731,365   75,052   59,433   0.77   0.77   7.39   7.41  OTC PINK  5,990,000   85,957 
EQFN EQUITABLE FINANCIAL CORP NE  289,827   30,989   27,984   0.61   0.52   5.89   5.03  NASDAQ  2,900,000   31,726 
MCBK MADISON COUNTY FINANCIAL NE  399,927   69,878   67,118   1.13   1.09   6.45   6.21  OTC PINK  2,650,000   66,515 
KRNY KEARNY FINANCIAL CORP NJ  6,656,211   1,236,081   1,018,826   0.44   0.44   2.27   2.27  NASDAQ  97,753,800   1,249,294 
MSBF MB BANCORP NJ  590,349   60,341   60,341   0.69   0.69   6.82   6.82  NASDAQ  5,513,165   100,560 
NFBK NORTHFIELD BANCORP NJ  4,286,415   654,528   614,882   0.69   0.68   4.40   4.34  NASDAQ  49,534,774   668,719 
OCFC OCEANFIRST FINANCIAL CORP NJ  7,573,407   1,029,844   673,679   0.78   0.78   6.04   6.07  NASDAQ  48,382,370   1,088,603 
ORIT ORITANI FINANCIAL CORP NJ  4,111,298   563,002   563,002   1.07   1.03   7.96   7.66  NASDAQ  46,619,858   690,440 
PFS PROVIDENT FINANCIAL SERVICES NJ  9,709,633   1,331,736   913,062   1.05   1.04   7.78   7.71  NYSE  66,857,212   1,599,225 
BCTF BANCORP 34 NM  372,774   43,231   42,896   0.16   0.21   1.37   1.78  NASDAQ  3,404,065   48,678 
CARV CARVER BANCORP NY  615,047   48,270   48,109   0.53   (1.06)  6.93   (13.75) NASDAQ  3,698,664   12,723 
DCOM DIME COMMUNITY BANCSHARES NY  6,294,193   603,577   546,582   0.86   0.66   8.95   6.83  NASDAQ  36,612,153   616,183 
ESBK ELMIRA SAVINGS BANK NY  570,992   57,512   43,929   0.85   0.61   8.32   6.00  NASDAQ  3,490,000   65,787 
FSBC FSB COMMUNITY BANKSHARES NY  325,268   29,407   28,559   0.14   0.14   1.56   1.53  NASDAQ  1,943,253   33,035 
NYCB NEW YORK COMMUNITY BANCORP NY  51,246,654   6,794,015   4,356,630   0.91   0.91   6.73   6.71  NYSE  490,341,864   4,516,049 
PDLB PDL COMMUNITY BANCORP NY  981,089   128,339   128,339   0.13   0.13   1.00   0.99  NASDAQ  18,463,028   233,557 
SNNF SENECA FIN CORP NY  192,658   15,902   15,902   0.39   0.39   4.53   4.52  OTC PINK  1,978,923   15,831 
SNNY SUNNYSIDE BANCORP NY  82,458   10,171   10,171   (0.40)  (0.40)  (3.20)  (3.22) OTC BB  793,500   9,522 
TRST TRUSTCO BANK CORP NY NY  4,885,879   477,118   476,565   1.07   1.07   11.30   11.24  NASDAQ  96,585,930   665,477 

 

 112 

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED FDIC-INSURED SAVINGS INSTITUTIONS

MOST RECENT FOUR QUARTERS

 

      ASSETS AND EQUITY  PROFITABILITY  CAPITAL ISSUES 
      Total  Total  Total     Core     Core    Number of  Mkt. Value 
      Assets  Equity  Tang. Equity  ROAA  ROAA  ROAE  ROAE    Shares  of Shares 
    State ($000)  ($000)  ($000)  (%)  (%)  (%)  (%)  Exchange Outstanding  ($000) 
                                           
CNNB CINCINNATI BANCORP OH  176,963   19,471   18,367   0.68   0.58   6.25   5.34  OTC BB  1,752,947   21,035 
CCSB COMM SAVINGS BANCORP OH  49,760   7,479   7,479   (1.65)  (2.09)  (10.68)  (13.52) OTC BB  441,290   5,803 
CIBN COMMUNITY INVESTORS BANCORP OH  148,342   13,324   12,771   0.81   0.74   9.18   8.38  OTC PINK  795,192   13,280 
EFBI EAGLE FIN BANCORP OH  137,775   20,646   20,646   0.47   0.36   3.08   2.36  NASDAQ  1,625,708   24,841 
FDEF FIRST DEFIANCE FINANCIAL CORP OH  3,098,191   393,457   280,129   1.43   1.41   11.36   11.15  NASDAQ  20,401,461   499,224 
FNFI FIRST NILES FINANCIAL OH  98,164   11,032   11,032   0.33   0.35   2.88   3.05  OTC PINK  1,113,172   7,792 
HCFL HOME CITY FINANCIAL CORP OH  169,996   19,533   19,533   1.17   1.17   10.00   10.02  OTC PINK  846,120   31,603 
HLFN HOME LOAN FINANCIAL CORP OH  206,786   24,556   24,443   1.65   1.63   14.18   14.02  OTC BB  1,500,000   45,375 
PPSF PEOPLES-SIDNEY FINANCIAL CORP OH  110,437   14,655   14,655   0.60   0.60   4.60   4.55  OTC PINK  1,194,643   13,320 
PFOH PERPETUAL FEDERAL SAVINGS BANK OH  394,833   72,589   72,589   1.52   1.47   8.45   8.17  OTC PINK  2,470,000   72,248 
UCFC UNITED COMMUNITY FINANCIAL CORP OH  2,778,580   271,376   242,938   1.13   1.10   11.18   10.93  NASDAQ  49,922,514   442,813 
VERF VERSAILLES FINANCIAL CORP OH  53,171   10,864   10,864   0.54   0.54   2.82   2.82  OTC BB  387,367   13,945 
BNCL BENEFICIAL MUTUAL BANCORP PA  5,870,975   1,037,146   873,392   0.53   0.52   3.00   2.95  NASDAQ  74,985,517   1,063,295 
ESSA ESSA BANCORP PA  1,828,833   173,431   158,049   0.39   0.39   4.13   4.15  NASDAQ  11,782,718   181,690 
HARL HARLEYSVILLE SAVINGS FINANCIAL PA  769,967   71,914   71,914   1.01   0.97   11.06   10.63  OTC PINK  3,748,015   86,767 
NWBI NORTHWEST BANCSHARES PA  9,657,091   1,240,676   909,713   1.06   1.06   8.27   8.30  NASDAQ  103,293,480   1,741,528 
PBIP PRUDENTIAL BANCORP PA  1,080,407   121,718   115,045   0.75   0.79   6.01   6.31  NASDAQ  8,987,356   155,032 
QNTO QUAINT OAK BANCORP PA  258,192   21,647   20,663   0.68   0.65   8.04   7.77  OTC PINK  1,991,623   23,899 
STND STANDARD FINANCIAL CORP PA  981,497   131,002   102,004   0.86   0.90   6.50   6.78  OTC BB  4,804,992   145,351 
CASH META FINANCIAL GROUP SD  5,835,080   747,726   371,979   1.05   1.07   9.96   10.16  NASDAQ  39,167,280   753,187 
SFBK SFB BANCORP TN  69,061   9,916   9,748   0.45   0.62   3.04   4.18  OTC PINK  261,914   8,512 
UNTN UNITED TENNESSEE BANKSHARES TN  203,101   20,927   20,927   0.70   0.69   6.85   6.78  OTC PINK  827,000   17,367 
STXB SPIRIT OF TEXAS BANCSHARES TX  1,101,354   111,094   100,099   1.00   1.00   9.89   9.91  NASDAQ  9,812,481   213,421 
TBK TRIUMPH BANCORP TX  4,537,100   616,641   414,800   1.05   1.10   7.91   8.29  NASDAQ  26,175,759   775,326 
FSBW FS BANCORP WA  1,189,916   136,514   123,926   1.56   1.54   12.88   12.75  NASDAQ  3,716,460   156,983 

 

 113 

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED FDIC-INSURED SAVINGS INSTITUTIONS

MOST RECENT FOUR QUARTERS

 

      ASSETS AND EQUITY  PROFITABILITY  CAPITAL ISSUES 
      Total  Total  Total     Core     Core    Number of  Mkt. Value 
      Assets  Equity  Tang. Equity  ROAA  ROAA  ROAE  ROAE    Shares  of Shares 
    State ($000)  ($000)  ($000)  (%)  (%)  (%)  (%)  Exchange Outstanding  ($000) 
                                           
RVSB RIVERVIEW BANCORP WA  1,147,224   141,973   113,542   1.23   1.20   10.13   9.93  NASDAQ  22,598,712   161,807 
TSBK TIMBERLAND BANCORP WA  1,015,687   121,818   114,140   1.70   1.68   14.63   14.50  NASDAQ  7,401,177   177,628 
HWIS HOME BANCORP WISCONSIN WI  145,134   10,780   10,780   (0.03)  (0.09)  (0.36)  (1.26) OTC PINK  899,190   11,330 
WSBF WATERSTONE FINANCIAL WI  1,916,995   404,644   402,812   1.52   1.46   6.97   6.70  NASDAQ  29,049,939   484,262 
WBBW WESTBURY BANCORP WI  817,184   75,747   75,113   0.58   0.59   6.26   6.32  OTC BB  3,659,437   75,018 

 

 114 

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED FDIC-INSURED SAVINGS INSTITUTIONS

MOST RECENT FOUR QUARTERS

 

  ASSETS AND EQUITY  PROFITABILITY  CAPITAL ISSUES 
  Total  Total  Total     Core     Core    Number of  Mkt. Value 
  Assets  Equity  Tang. Equity  ROAA  ROAA  ROAE  ROAE    Shares  of Shares 
  ($000)  ($000)  ($000)  (%)  (%)  (%)  (%)  Exchange Outstanding  ($000) 
                                       
ALL INSTITUTIONS                                      
AVERAGE  2,399,825   292,460   230,848   0.91   0.89   7.53   7.35    20,709,248   315,939 
MEDIAN  590,349   69,833   60,341   0.71   0.68   6.50   6.31     3,490,000   73,735 
HIGH  51,246,654   6,794,015   4,356,630   2.24   1.75   18.84   18.21     490,341,864   4,516,049 
LOW  49,760   7,479   7,479   (1.65)  (2.09)  (10.68)  (13.75)    261,914   1,419 
                                       
AVERAGE FOR STATE                                      
LA  308,282   33,073   32,964   1.03   1.03   9.57   9.63     1,828,335   43,680 
                                       
AVERAGE BY REGION                                      
MID-ATLANTIC  3,651,101   509,377   404,964   0.87   0.85   6.27   6.17     33,775,289   597,942 
MIDWEST  1,081,627   109,029   92,837   0.84   0.81   8.23   7.99     7,270,223   122,983 
NORTH CENTRAL  2,140,984   291,845   244,680   1.10   1.10   8.35   8.36     22,507,156   344,446 
NORTHEAST  4,450,440   527,824   396,529   0.85   0.81   7.05   6.70     42,520,605   474,607 
SOUTHEAST  1,884,092   226,297   142,318   0.87   0.90   7.69   7.95     8,233,911   238,945 
SOUTHWEST  1,034,908   129,037   98,522   0.99   1.02   8.10   8.38     6,672,235   173,164 
WEST  2,226,660   240,699   224,677   1.40   1.39   13.24   13.11     17,340,365   328,705 
                                       
AVERAGE BY EXCHANGE                                      
NYSE  22,361,262   2,661,098   1,831,622   0.93   0.93   7.70   7.71     169,414,062   2,305,681 
NASDAQ  2,757,473   343,358   285,895   0.90   0.87   7.34   7.08     26,526,779   414,272 
OTC  401,302   45,055   42,120   0.90   0.88   7.98   7.82     2,129,852   50,291 
OTC PINK  270,759   31,568   30,229   1.04   0.92   8.90   7.92     1,614,514   31,220 

 

 115 

 

 

EXHIBIT 32

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

RECENT STANDARD CONVERSIONS

PRICE CHANGES FROM IPO DATE

June 30, 2017 through February 12, 2019

 

        Percentage Price Change 
        From Initial Trading Date 
    Conversion   One  One  One  Through 
Company Name Ticker Date Exchange Day  Week  Month  2/12/2019 
                   
Eagle Financial Bancorp EFBI 7/21/2017 NASDAQ  14.92   60.80   60.00   57.20 
FFBW, Inc. FFBW 10/11/2017 NASDAQ  15.30   11.00   11.00   11.00 
Heritage NOLA Bancorp HRGG 7/13/2017 OTC MKT  15.00   13.50   13.50   29.00 
Seneca Financial SNNF 10/12/2017 OTC MKT  18.00   (8.50)  (10.00)  (19.00)
SSB Bancorp SSBP 1/26/2018 OTC MKT  (5.50)  (7.50)  (4.00)  (10.00)
Columbia Financial CLBK 4/20/2018 NASDAQ  54.20   66.30   70.70   59.30 
CBM Bancorp CBMB 9/28/2018 NASDAQ  28.00   26.30   22.00   30.00 
1895 Bancorp of Wisconsin BCOW 1/09/2019 NASDAQ  (4.00)  (1.80)  (5.20)  (6.90)
                       
    AVERAGE    16.99%  20.01%  19.75%  18.83%
    MEDIAN    15.15   12.25   12.25   20.00 
    HIGH    54.20   66.30   70.70   59.30 
    LOW    (5.50)  (8.50)  (10.00)  (19.00)

 

 116 

 

 

EXHIBIT 33

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

RECENT ACQUISITIONS AND PENDING ACQUISITIONS

COUNTY, CITY OR MARKET AREA OF EUREKA HOMESTEAD

 

NONE

(that were potential comparable group candidates)

 

 117 

 

 

EXHIBIT 34

 

KELLER & COMPANY

Dublin, Ohio

(614) 766-1426

 

COMPARABLE GROUP SELECTION

 

BALANCE SHEET PARAMETERS

Most Recent Quarter

 

General Parameters:

Regions: Mid-Atlantic, MIdwest, Northcentral, Northeast, Southeast and Southwest

Trades on NYSE or NASDAQ

Asset size: < $1.2 Billion

No Recent Acquisition Announcement

 

                     Total       
         Cash &     1-4 Fam.  Total Net  Net Loans  Borrowed    
      Total  Securities/  MBS/  Loans/  Loans/  & MBS/  Funds/  Equity/ 
      Assets  Assets  Assets  Assets  Assets  Assets  Assets  Assets 
      ($000)  (%)  (%)  (%)  (%)  (%)  (%)  (%) 
                             
  EUREKA HOMESTEAD BANCORP, INC. LA  98,070   5.86   3.95   76.59   83.21   87.16   26.54   12.48 
                                     
 
 
 
 
DEFINED PARAMETERS FOR
INCLUSION IN COMPARABLE GROUP
 
 
 
 
 
 
 
 
 
< 1,200,000
 
 
 
 
 
 
 
< 40.00
 
 
 
 
 
 
 
< 18.00
 
 
 
 
 
 
 
<  78.00
 
 
 
 
 
 
53.00 -
93.00
 
 
 
 
 
 
70.00 - 95.00 
 
 
 
 
 
 
< 32.00
 
 
 
 
 
 
8.00 -
16.00
 
 
                                     
WCFB WCF BANCORP IA  116,027   36.20   20.41   47.92   55.18   75.59   29.19   16.02 
IROQ IF BANCORP IL  655,454   20.61   6.87   20.11   73.91   80.78   22.48   10.65 
FCAP FIRST CAPITAL IN  786,360   39.07   4.04   16.32   54.80   58.84   9.54   9.52 
PBSK POAGE BANKSHARES KY  440,641   117.82   2.06   35.95   71.63   73.68   14.93   13.06 
HFBL HOME FED BANCORP OF LOUISIANA LA  428,684   15.41   6.75   31.95   77.03   83.78   12.54   11.01 
MELR MELROSE BANCORP MA  318,477   11.94   0.00   58.65   83.51   83.51   23.57   11.63 
PVBC PROVIDENT BANCORP MA  914,648   7.04   2.83   11.85   87.12   89.95   15.73   12.46 
RNDB RANDOLPH BANCORP MA  590,232   10.68   2.90   54.26   79.45   82.35   25.05   11.20 
WEBK WELLESLEY BANCORP MA  835,964   11.00   1.04   56.95   86.14   87.18   19.13   8.38 
HBK HAMILTON BANCORP MD  498,706   16.21   7.43   37.77   76.19   83.63   21.07   9.89 
SVBI SEVERN BANCORP MD  885,696   17.52   2.95   37.45   76.83   79.78   20.73   12.83 
HMNF HMN FINANCIAL MN  737,224   17.37   0.03   20.16   79.49   79.52   10.40   10.40 
EQFN EQUITABLE FINANCIAL CORP NE  289,827   2.68   0.07   22.37   92.35   92.42   13.24   10.69 
MSBF MB BANCORP NJ  590,349   11.02   4.20   27.42   83.82   88.03   24.13   10.22 
BCTF BANCORP 34 NM  372,774   9.16   3.41   17.41   77.64   81.06   30.84   11.60 
CARV CARVER BANCORP NY  615,047   28.43   9.35   20.81   69.36   78.71   7.85   7.85 
ESBK ELMIRA SAVINGS BANK NY  570,992   8.30   0.03   52.56   81.09   81.12   15.50   10.07 
FSBC FSB COMMUNITY BANKSHARES NY  325,268   8.53   0.05   70.29   85.80   85.85   31.73   9.04 
PDLB PDL COMMUNITY BANCORP NY  981,089   4.75   0.09   39.60   91.11   91.20   17.62   13.08 
EFBI EAGLE FIN BANCORP OH  137,775   9.93   0.00   57.28   80.41   80.41   14.99   14.99 
PBIP PRUDENTIAL BANCORP PA  1,080,407   38.49   16.31   29.53   55.81   72.11   25.58   11.27 
STXB SPIRIT OF TEXAS BANCSHARES TX  1,101,354   7.06   2.37   28.12   86.07   88.43   16.89   10.09 

 

 118 

 

 

EXHIBIT 35

 

KELLER & COMPANY

Dublin, Ohio

(614) 766-1426

 

COMPARABLE GROUP SELECTION

 

OPERATING PERFORMANCE AND ASSET QUALITY RATIOS

Most Recent Four Quarters

 

General Parameters:

Regions: Mid-Atlantic, MIdwest, Northcentral, Northeast, Southeast and Southwest

Trades on NYSE or NASDAQ

Asset size: < $1.2 Billion

No Recent Acquisition Announcement

 

         OPERATING PERFORMANCE  ASSET QUALITY 
               Net  Operating  Noninterest          
      Total  Core  Core  Interest  Expenses/  Income/  NPA/  REO/  Reserves/ 
      Assets  ROAA  ROAE  Margin(2)  Assets  Assets  Assets  Assets  Assets 
      ($000)  (%)  (%)  (%)  (%)  (%)  (%)  (%)  (%) 
                                
  EUREKA HOMESTEAD BANCORP, INC. LA  98,070   0.30   2.42   2.32   2.34   0.52   0.00   0.00   0.87 
                                         
 
 
 
 
DEFINED PARAMETERS FOR
INCLUSION IN COMPARABLE GROUP
 
 
 
 
 
 
 
 
 
< 1,200,000
 
 
 
 
 
 
 
< 1.00
 
 
 
 
 
 
 
< 9.00
 
 
 
 
 
 
2.00 -
4.00
 
 
 
 
 
 
1.30 -
3.80
 
 
 
 
 
 
 
< 1.30
 
 
 
 
 
 
 
< 1.50
 
 
 
 
 
 
 
< 0.80
 
 
 
 
 
 
 
> 0.40
 
 
                                         
WCFB WCF BANCORP IA  116,027   (0.22)  (1.42)  2.91   2.86   0.79   0.71   0.41   0.45 
IROQ IF BANCORP IL  655,454   0.25   2.29   2.71   2.55   0.64   0.83   0.76   0.94 
FCAP FIRST CAPITAL IN  786,360   1.03   10.52   3.61   2.76   0.87   0.75   0.40   0.53 
PBSK POAGE BANKSHARES KY  440,641   (0.30)  (2.36)  3.71   3.63   0.63   1.66   0.18   0.71 
HFBL HOME FED BANCORP OF LOUISIANA LA  428,684   0.96   8.61   3.73   2.49   0.61   0.64   0.43   0.82 
MELR MELROSE BANCORP MA  318,477   0.38   3.28   2.48   1.60   0.06   0.11   0.00   0.43 
PVBC PROVIDENT BANCORP MA  914,648   0.52   4.24   4.10   2.80   0.49   0.80   0.00   1.22 
RNDB RANDOLPH BANCORP MA  590,232   (0.68)  (5.61)  2.93   5.13   1.84   0.48   0.01   0.66 
WEBK WELLESLEY BANCORP MA  835,964   0.70   8.48   3.04   2.04   0.28   0.14   0.00   0.78 
HBK HAMILTON BANCORP MD  498,706   (1.04)  (11.08)  3.03   2.55   0.46   1.37   0.15   0.61 
SVBI SEVERN BANCORP MD  885,696   0.74   5.52   3.62   2.61   0.65   0.68   0.03   0.91 
HMNF HMN FINANCIAL MN  737,224   0.79   7.39   3.79   3.22   0.94   0.80   0.06   1.20 
EQFN EQUITABLE FINANCIAL CORP NE  289,827   0.52   5.03   3.60   3.07   0.89   1.41   0.08   1.39 
MSBF MB BANCORP NJ  590,349   0.69   6.82   3.21   1.95   0.14   0.48   0.00   0.96 
BCTF BANCORP 34 NM  372,774   0.21   1.78   4.01   7.11   4.01   1.43   0.00   0.87 
CARV CARVER BANCORP NY  615,047   (1.06)  (13.75)  2.99   4.66   2.29   1.64   0.04   0.78 
ESBK ELMIRA SAVINGS BANK NY  570,992   0.61   6.00   3.28   2.82   0.83   0.79   0.01   0.77 
FSBC FSB COMMUNITY BANKSHARES NY  325,268   0.14   1.53   2.89   3.20   0.76   0.03   0.00   0.46 
PDLB PDL COMMUNITY BANCORP NY  981,089   0.13   0.99   3.68   3.30   0.29   0.67   0.00   1.26 
EFBI EAGLE FIN BANCORP OH  137,775   0.36   2.36   3.36   3.77   1.27   0.59   0.16   0.86 
PBIP PRUDENTIAL BANCORP PA  1,080,407   0.79   6.31   2.47   1.42   0.29   1.33   0.09   0.48 
STXB SPIRIT OF TEXAS BANCSHARES TX  1,101,354   1.00   9.91   4.49   3.31   0.66   0.37   0.02   0.56 

 

 119 

 

 

EXHIBIT 36

 

KELLER & COMPANY

Dublin, Ohio

(614) 766-1426

 

FINAL COMPARABLE GROUP

 

BALANCE SHEET RATIOS

Most Recent Quarter

 

                     Total       
         Cash &     1-4 Fam.  Total Net  Net Loans  Borrowed    
      Total  Securities/  MBS/  Loans/  Loans/  & MBS/  Funds/  Equity/ 
      Assets  Assets  Assets  Assets  Assets  Assets  Assets  Assets 
      ($000)  (%)  (%)  (%)  (%)  (%)  (%)  (%) 
                             
  EUREKA HOMESTEAD BANCORP, INC. LA  98,070   5.86   3.95   76.59   83.21   87.16   26.54   12.48 
                                     
 
 
 
 
DEFINED PARAMETERS FOR
INCLUSION IN COMPARABLE GROUP
 
 
 
 
 
 
 
 
 
< 1,200,000
 
 
 
 
 
 
 
< 40.00
 
 
 
 
 
 
 
< 18.00
 
 
 
 
 
 
 
<  78.00
 
 
 
 
 
 
53.00 -
93.00
 
 
 
 
 
 
70.00 -
95.00
 
 
 
 
 
 
 
< 32.00
 
 
 
 
 
 
8.00 -
16.00
 
 
                                     
EFBI EAGLE FIN BANCORP OH  137,775   9.93   0.00   57.28   80.41   80.41   14.99   14.99 
EQFN EQUITABLE FINANCIAL CORP NE  289,827   2.68   0.07   22.37   92.35   92.42   13.24   10.69 
FSBC FSB COMMUNITY BANKSHARES NY  325,268   8.53   0.05   70.29   85.80   85.85   31.73   9.04 
HFBL HOME FED BANCORP OF LOUISIANA LA  428,684   15.41   6.75   31.95   77.03   83.78   12.54   11.01 
ESBK ELMIRA SAVINGS BANK NY  570,992   8.30   0.03   52.56   81.09   81.12   15.50   10.07 
IROQ IF BANCORP IL  655,454   20.61   6.87   20.11   73.91   80.78   22.48   10.65 
HMNF HMN FINANCIAL MN  737,224   17.37   0.03   20.16   79.49   79.52   10.40   10.40 
WEBK WELLESLEY BANCORP MA  835,964   11.00   1.04   56.95   86.14   87.18   19.13   8.38 
SVBI SEVERN BANCORP MD  885,696   17.52   2.95   37.45   76.83   79.78   20.73   12.83 
PBIP PRUDENTIAL BANCORP PA  1,080,407   38.49   16.31   29.53   55.81   72.11   25.58   11.27 
                                     
    AVERAGE  594,729   14.98   3.41   39.86   78.89   82.29   18.63   10.93 
    MEDIAN  613,223   13.21   0.55   34.70   79.95   80.95   17.31   10.67 
    HIGH  1,080,407   38.49   16.31   70.29   92.35   92.42   31.73   14.99 
    LOW  137,775   2.68   0.00   20.11   55.81   72.11   10.40   8.38 

 

 120 

 

 

EXHIBIT 37

 

KELLER & COMPANY

Dublin, Ohio

(614) 766-1426

 

FINAL COMPARABLE GROUP

 

OPERATING PERFORMANCE AND ASSET QUALITY RATIOS

Most Recent Four Quarters

 

         OPERATING PERFORMANCE  ASSET QUALITY 
               Net  Operating  Noninterest          
      Total  Core  Core  Interest  Expenses/  Income/  NPA/  REO/  Reserves/ 
      Assets  ROAA  ROAE  Margin  Assets  Assets  Assets  Assets  Assets 
      ($000)  (%)  (%)  (%)  (%)  (%)  (%)  (%)  (%) 
                                
  EUREKA HOMESTEAD BANCORP, INC. LA  98,070   0.30   2.42   2.32   2.34   0.52   0.00   0.00   0.87 
                                         
 
 
 
 
DEFINED PARAMETERS FOR
INCLUSION IN COMPARABLE GROUP
 
 
 
 
 
 
 
 
 
< 1,200,000
 
 
 
 
 
 
 
< 1.00
 
 
 
 
 
 
 
< 9.00
 
 
 
 
 
 
2.00 -
4.00
 
 
 
 
 
 
1.30 -
3.80
 
 
 
 
 
 
 
< 1.30
 
 
 
 
 
 
 
< 1.50
 
 
 
 
 
 
 
< 0.80
 
 
 
 
 
 
 
> 0.40
 
 
                                         
EFBI EAGLE FIN BANCORP OH  137,775   0.36   2.36   3.36   3.77   1.27   0.59   0.16   0.86 
EQFN EQUITABLE FINANCIAL CORP NE  289,827   0.52   5.03   3.60   3.07   0.89   1.41   0.08   1.39 
FSBC FSB COMMUNITY BANKSHARES NY  325,268   0.14   1.53   2.89   3.20   0.76   0.03   0.00   0.46 
HFBL HOME FED BANCORP OF LOUISIANA LA  428,684   0.96   8.61   3.73   2.49   0.61   0.64   0.43   0.82 
ESBK ELMIRA SAVINGS BANK NY  570,992   0.61   6.00   3.28   2.82   0.83   0.79   0.01   0.77 
IROQ IF BANCORP IL  655,454   0.25   2.29   2.71   2.55   0.64   0.83   0.76   0.94 
HMNF HMN FINANCIAL MN  737,224   0.79   7.39   3.79   3.22   0.94   0.80   0.06   1.20 
WEBK WELLESLEY BANCORP MA  835,964   0.70   8.48   3.04   2.04   0.28   0.14   0.00   0.78 
SVBI SEVERN BANCORP MD  885,696   0.74   5.52   3.62   2.61   0.65   0.68   0.03   0.91 
PBIP PRUDENTIAL BANCORP PA  1,080,407   0.79   6.31   2.47   1.42   0.29   1.33   0.09   0.48 
                                         
    AVERAGE  594,729   0.59   5.35   3.25   2.72   0.72   0.72   0.16   0.86 
    MEDIAN  613,223   0.66   5.76   3.32   2.72   0.71   0.74   0.07   0.84 
    HIGH  1,080,407   0.96   8.61   3.79   3.77   1.27   1.41   0.76   1.39 
    LOW  137,775   0.14   1.53   2.47   1.42   0.28   0.03   0.00   0.46 

 

 121 

 

 

EXHIBIT 38

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

COMPARABLE GROUP CHARACTERISTICS AND BALANCE SHEET TOTALS

 

             Most Recent Quarter 
               
                   Total  Goodwill       
        Number    Total  Int. Earning  Net  and  Total  Total 
        of    Assets  Assets  Loans  Intang.  Deposits  Equity 
        Offices Exchange  ($000)  ($000)  ($000)  ($000)  ($000)  ($000) 
                              
SUBJECT                           
                              
EUREKA HOMESTEAD BANCORP, INC. METAIRIE LA 1  -   98,070   88,886   81,072   0   56,183   12,239 
                                     
COMPARABLE GROUP                                
EFBI EAGLE FIN BANCORP CINCINNATI OH 3  NASDAQ   137,085   123,868   113,316   0   112,943   20,849 
ESBK ELMIRA SAVINGS BANK ELMIRA NY 13  NASDAQ   590,217   511,278   478,077   13,513   492,784   57,949 
EQFN EQUITABLE FINANCIAL CORP GRAND ISLAND NE 6  NASDAQ   292,321   268,411   271,775   2,972   251,485   31,645 
FSBC FSB COMMUNITY BANKSHARES FAIRPORT NY 5  NASDAQ   326,569   305,804   281,748   812   222,622   29,661 
HMNF HMN FINANCIAL ROCHESTER MN 14  NASDAQ   711,235   702,276   586,628   2,912   627,693   79,737 
HFBL HOME FED BANCORP OF LOUISIANA SHREVEPORT LA 7  NASDAQ   425,956   392,605   322,274   0   374,035   48,710 
IROQ IF BANCORP WATSEKA IL 7  NASDAQ   664,274   609,907   494,162   896   498,089   72,727 
PBIP PRUDENTIAL BANCORP PHILADELPHIA PA 11  NASDAQ   1,115,161   966,071   588,511   6,640   758,967   126,216 
SVBI SEVERN BANCORP ANNAPOLIS MD 6  NASDAQ   970,655   850,046   672,292   771   782,988   115,798 
WEBK WELLESLEY BANCORP WELLESLEY MA 6  NASDAQ   869,482   813,877   737,061   96   718,403   71,951 
                                     
  Average     8      610,296   554,414   454,584   2,861   484,001   65,524 
  Median     7      627,246   560,592   486,120   854   495,437   64,950 
  High     14      1,115,161   966,071   737,061   13,513   782,988   126,216 
  Low     3      137,085   123,868   113,316   0   112,943   20,849 

 

 122 

 

 

EXHIBIT 39

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

BALANCE SHEET

ASSET COMPOSITION - MOST RECENT QUARTER

 

       As a Percent of Total Assets 
                                    
                   Repo-        Interest  Interest  Capitalized 
    Total  Cash &     Net  Loan Loss  sessed  Goodwill  Non-Perf.  Earning  Bearing  Loan 
    Assets  Invest.  MBS  Loans  Reserves  Assets  & Intang.  Assets  Assets  Liabilities  Servicing 
    ($000)  (%)  (%)  (%)  (%)  (%)  (%)  (%)  (%)  (%)  (%) 
                                    
SUBJECT                                   
EUREKA HOMESTEAD BANCORP, INC. 98,070   5.86   3.95   83.21   0.87   0.00   0.00   0.00   93.67   83.83   0.00 
                                               
                                               
COMPARABLE GROUP                                          
EFBI EAGLE FIN BANCORP  137,775   9.93   0.00   82.89   0.86   0.16   0.00   0.43   92.49   62.67   0.00 
EQFN EQUITABLE FINANCIAL CORP  289,827   2.68   0.07   94.00   1.39   0.08   1.04   1.34   95.01   75.84   0.31 
FSBC FSB COMMUNITY BANKSHARES  325,268   8.53   0.05   87.69   0.46   0.00   0.26   0.03   95.71   86.86   0.26 
HFBL HOME FED BANCORP OF LOUISIANA  428,684   15.41   6.75   78.18   0.82   0.43   0.00   0.22   93.66   73.89   0.00 
ESBK ELMIRA SAVINGS BANK  570,992   8.30   0.03   82.26   0.77   0.01   2.38   0.77   89.10   74.87   0.22 
IROQ IF BANCORP  655,454   20.61   6.87   74.86   0.94   0.76   0.14   0.06   94.84   83.62   0.14 
HMNF HMN FINANCIAL  737,224   17.37   0.03   80.97   1.20   0.06   0.40   0.75   97.88   65.83   0.25 
WEBK WELLESLEY BANCORP  835,964   11.00   1.04   87.01   0.78   0.00   0.01   0.14   97.36   75.21   0.01 
SVBI SEVERN BANCORP  885,696   17.52   2.95   78.75   0.91   0.03   0.09   0.65   96.03   76.88   0.05 
PBIP PRUDENTIAL BANCORP  1,080,407   38.49   16.31   56.28   0.48   0.09   0.62   1.24   94.54   86.34   0.00 
                                               
  Average  594,729   14.98   3.41   80.29   0.86   0.16   0.49   0.56   94.66   76.20   0.12 
  Median  613,223   13.21   0.56   81.62   0.84   0.07   0.20   0.54   94.93   75.53   0.10 
  High  1,080,407   38.49   16.31   94.00   1.39   0.76   2.38   1.34   97.88   86.86   0.31 
  Low  137,775   2.68   0.00   56.28   0.46   0.00   0.00   0.03   89.10   62.67   0.00 
                                               
ALL THRIFTS (105)                                           
  Average  2,399,825   18.52   4.49   75.29   0.72   0.12   0.83   0.49   93.81   76.39   0.13 
                                               
SOUTHWEST THRIFTS (7)                                           
  Average  1,034,908   14.55   2.59   78.83   0.79   0.07   0.84   0.52   92.59   72.34   0.05 
                                               
LOUISIANA THRIFTS (4)                                           
  Average  308,282   17.81   2.89   76.45   0.87   0.11   0.08   0.26   93.32   73.75   0.08 

 

 123 

 

 

EXHIBIT 40

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

BALANCE SHEET COMPARISON

LIABILITIES AND EQUITY - MOST RECENT QUARTER

 

          As a Percent of  Assets 
                         Acc. Other           Total 
    Total  Total  Total  Total  Other  Preferred  Common  Compr.  Retained  Total  Tier 1  Risk-Based