##### 



Exhibit 13.0
 
 2007 Annual Report
 to Shareholders




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TABLE OF CONTENTS
 PagePresidents Letter to Shareholders
    
    1Selected Consolidated Financial and Other Data
    
    2Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    3Report of Independent Registered Public Accounting Firm
    
    10Consolidated Balance Sheets
    
    11Consolidated Statements of Income
    
    12Consolidated Statements of Comprehensive Income (Loss)
    
    13Consolidated Statements of Changes in Stockholders Equity
    
    14Consolidated Statements of Cash Flows
    
    15Notes to Consolidated Financial Statements
    
    17Market Price of Home Federal Bancorp, Inc. Common Shares and Related
Shareholder Matters
    
    50Directors and Executive Officers
    
    51Banking Locations
    
    51




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PRESIDENTS LETTER TO SHAREHOLDERS
         
 1




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Home Federal Bancorp, Inc. of Louisiana
 SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
   At or For the Year Ended June 30,(Dollars in Thousands, except per share data)
    
    2007
    
    
    2006Selected Financial and Other Data:Total assets
    
    $
    118,785
    
    
    $
    114,000Cash and cash equivalents
    
    
    3,972
    
    
    
    4,930Securities available for sale
    
    
    83,752
    
    
    
    83,694Securities held to maturity
    
    
    1,408
    
    
    
    1,425Loans receivable, net
    
    
    26,689
    
    
    
    20,866Deposits
    
    
    77,710
    
    
    
    71,279FHLB advances
    
    
    12,368
    
    
    
    13,417Total Stockholders Equity
    
    
    27,812
    
    
    
    28,539Full service offices
    
    
    3
    
    
    
    3Selected Operating Data:Total interest income
    
    $
    6,590
    
    
    $
    5,664Total interest expense
    
    
    3,448
    
    
    
    2,433Net interest income
    
    
    3,142
    
    
    
    3,231Provision for loan losses
    
    
    1
    
    
    
    Net interest income after provision for loan losses
    
    
    3,141
    
    
    
    3,231Total non-interest income
    
    
    240
    
    
    
    144Total non-interest expense
    
    
    2,417
    
    
    
    2,414Income before income taxes
    
    
    964
    
    
    
    961Income taxes
    
    
    327
    
    
    
    327Net income
    
    $
    637
    
    
    $
    634Selected Operating Ratios(1):Average yield on interest-earning assets
    
    
    5.69
    %
    
    
    5.35
    %Average rate on interest-bearing liabilities
    
    
    3.84
    
    
    
    2.98Average interest rate spread(2)
    
    
    1.85
    
    
    
    2.37Net interest margin(2)
    
    
    2.71
    
    
    
    3.05Average interest-earning assets to average interest-bearing liabilities
    
    
    128.93
    
    
    
    129.49Net interest income after provision for loan losses to non-interest expense
    
    
    129.95
    
    
    
    133.82Total non-interest expense to average assets
    
    
    2.00
    
    
    
    2.14Efficiency ratio(3)
    
    
    71.49
    
    
    
    71.53Return on average assets
    
    
    .53
    
    
    
    .56Return on average equity
    
    
    2.13
    
    
    
    2.10Average equity to average assets
    
    
    24.82
    
    
    
    26.81Asset Quality Ratios(4):Non-performing loans as a percent of total loans receivable(5)
    
    
    .46
    %
    
    
    
    %Non-performing assets as a percent of total assets(5)
    
    
    .10
    
    
    
    Allowance for loan losses as a percent of total loans receivable
    
    
    .92
    
    
    
    1.11Net charge-offs to average loans receivable
    
    
    
    
    
    
    Association Capital Ratios(4):Tangible capital ratio
    
    
    22.79
    %
    
    
    23.48
    %Core capital ratio
    
    
    22.79
    
    
    
    23.48Total capital ratio
    
    
    80.63
    
    
    
    87.78
 
 (1)
    
    With the exception of end of period ratios, all ratios are based on average monthly balances
during the indicated periods.(2)
    
    Average interest rate spread represents the difference between the average yield on
interest-earning assets and the average rate paid on interest-bearing liabilities, and net
interest margin represents net interest income as a percentage of average interest-earning
assets.(3)
    
    The efficiency ratio represents the ratio of non-interest expense divided by the sum of net
interest income and non-interest income.(4)
    
    Asset quality ratios and capital ratios are end of period ratios, except for net charge-offs
to average loans receivable.(5)
    
    Non-performing assets consist of non-performing loans at June 30, 2007 and 2006.
Non-performing loans consist of non-accruing loans plus accruing loans 90 days or more past
due. Home Federal Savings and Loan did not have any real estate owned or troubled debt
restructurings at June 30, 2007 or 2006. 2




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Home Federal Bancorp, Inc. of Louisiana
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  General
    Forward-Looking Statements Are Subject to Change
    Allowance for Loan Losses
 3




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Home Federal Bancorp, Inc. of Louisiana
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
   Changes in Financial Condition
       4




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Home Federal Bancorp, Inc. of Louisiana
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Average Balances, Net Interest Income, and Yields Earned and Rates Paid.
 Year Ended June 30,2007
    
    
    2006Yield/Rate
    
    
    Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    Averageat June 30, 2007
    
    
    Balance
    
    
    Interest
    
    
    Yield/Rate
    
    
    Balance
    
    
    Interest
    
    
    Yield/Rate(Dollars in Thousands)Interest-earning assets:Investment securities
    
    
    5.08
    %
    
    $
    86,552
    
    
    $
    4,550
    
    
    
    5.26
    %
    
    $
    80,734
    
    
    $
    4,039
    
    
    
    5.00
    %Loans receivable
    
    
    6.83
    
    
    
    23,680
    
    
    
    1,739
    
    
    
    7.34
    
    
    
    20,141
    
    
    
    1,420
    
    
    
    7.05Interest-earning deposits
    
    
    5.24
    
    
    
    5,633
    
    
    
    301
    
    
    
    5.35
    
    
    
    4,936
    
    
    
    205
    
    
    
    4.15Total interest-earning assets
    
    
    5.49
    %
    
    
    115,865
    
    
    
    6,590
    
    
    
    5.69
    %
    
    
    105,811
    
    
    
    5,664
    
    
    
    5.35
    %Non-interest-earning assets
    
    
    
    
    
    
    4,875
    
    
    
    
    
    
    
    
    
    
    
    6,774Total assets
    
    
    
    
    
    $
    120,740
    
    
    
    
    
    
    
    
    
    
    $
    112,585Interest-bearing liabilities:Savings accounts
    
    
    .50
    %
    
    $
    4,630
    
    
    
    23
    
    
    
    .49
    %
    
    $
    5,009
    
    
    
    24
    
    
    
    .48
    %NOW accounts
    
    
    .15
    
    
    
    6,983
    
    
    
    15
    
    
    
    .21
    
    
    
    7,597
    
    
    
    16
    
    
    
    .21Money market accounts
    
    
    .40
    
    
    
    3,030
    
    
    
    12
    
    
    
    .40
    
    
    
    3,516
    
    
    
    14
    
    
    
    .40Certificate accounts
    
    
    4.74
    
    
    
    60,344
    
    
    
    2,710
    
    
    
    4.49
    
    
    
    56,269
    
    
    
    2,054
    
    
    
    3.65Total deposits
    
    
    3.77
    
    
    
    74,987
    
    
    
    2,760
    
    
    
    3.68
    
    
    
    72,391
    
    
    
    2,108
    
    
    
    2.91FHLB advances
    
    
    4.68
    
    
    
    14,883
    
    
    
    688
    
    
    
    4.63
    
    
    
    9,320
    
    
    
    325
    
    
    
    3.49Total interest-bearing liabilities
    
    
    3.89
    %
    
    
    89,870
    
    
    $
    3,448
    
    
    
    3.84
    %
    
    
    81,711
    
    
    $
    2,433
    
    
    
    2.98
    %Non-interest-bearing liabilities
    
    
    
    
    
    
    899
    
    
    
    
    
    
    
    
    
    
    
    688Total liabilities
    
    
    
    
    
    
    90,769
    
    
    
    
    
    
    
    
    
    
    
    82,399Total Stockholders Equity(1)
    
    
    
    
    
    
    29,971
    
    
    
    
    
    
    
    
    
    
    
    30,186Total liabilities and equity
    
    
    
    
    
    $
    120,740
    
    
    
    
    
    
    
    
    
    
    $
    112,585Net interest-earning assets
    
    
    
    
    
    $
    25,995
    
    
    
    
    
    
    
    
    
    
    $
    24,100Net interest income; average interest
rate spread(2)
    
    
    
    
    
    
    
    
    
    $
    3,142
    
    
    
    1.85
    %
    
    
    
    
    
    $
    3,231
    
    
    
    2.37
    %Net interest margin(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.71
    %
    
    
    
    
    
    
    
    
    
    
    3.05
    %Average interest-earning assets to
average interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    128.93
    %
    
    
    
    
    
    
    
    
    
    
    129.49
    %
 
 (1)
    
    Includes retained earnings and accumulated other comprehensive loss.(2)
    
    Interest rate spread represents the difference between the weighted-average yield on
interest-earning assets and the weighted-average rate on interest-bearing liabilities.(3)
    
    Net interest margin is net interest income divided by net average interest-earning assets. 5




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Home Federal Bancorp, Inc. of Louisiana
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
 Rate/Volume Analysis.
 2007 vs. 2006
    
    
    2006 vs. 2005Increase (Decrease) Due to
    
    
    Total Increase
    
    
    Increase (Decrease) Due to
    
    
    Total IncreaseRate
    
    
    Volume
    
    
    (Decrease)
    
    
    Rate
    
    
    Volume
    
    
    (Decrease)(In Thousands)Interest income:Investment securities
    
    $
    220
    
    
    $
    291
    
    
    $
    511
    
    
    $
    225
    
    
    $
    455
    
    
    $
    680Loans receivable, net
    
    
    69
    
    
    
    250
    
    
    
    319
    
    
    
    44
    
    
    
    (192
    )
    
    
    (148
    )Interest-earning deposits
    
    
    67
    
    
    
    29
    
    
    
    96
    
    
    
    79
    
    
    
    (11
    )
    
    
    68Total interest-earning assets
    
    
    356
    
    
    
    570
    
    
    
    926
    
    
    
    348
    
    
    
    252
    
    
    
    600Interest expense:Savings accounts
    
    
    1
    
    
    
    (2
    )
    
    
    (1
    )
    
    
    (1
    )
    
    
    (2
    )
    
    
    (3
    )NOW accounts
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )
    
    
    
    
    
    
    3
    
    
    
    3Money market accounts
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )
    
    
    
    
    
    
    (3
    )
    
    
    (3
    )Certificate accounts
    
    
    507
    
    
    
    149
    
    
    
    656
    
    
    
    248
    
    
    
    95
    
    
    
    343Total deposits
    
    
    508
    
    
    
    144
    
    
    
    652
    
    
    
    247
    
    
    
    93
    
    
    
    340FHLB advances
    
    
    169
    
    
    
    194
    
    
    
    363
    
    
    
    37
    
    
    
    26
    
    
    
    63Total interest-bearing liabilities
    
    
    677
    
    
    
    338
    
    
    
    1,015
    
    
    
    284
    
    
    
    119
    
    
    
    403(Decrease) Increase in net interest
income
    
    $
    (321
    )
    
    $
    232
    
    
    $
    (89
    )
    
    $
    64
    
    
    $
    133
    
    
    $
    197
 Comparison of Operating Results for the Years Ended June 30, 2007 and 2006
 General.
 Net Interest Income.
   6




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Home Federal Bancorp, Inc. of Louisiana
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Provision for Loan Losses.
     Non-Interest Income.
 Non-Interest Expense.
 Provision For Income Tax Expense.
 Exposure to Changes in Interest Rates
  7




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Home Federal Bancorp, Inc. of Louisiana
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Quantitative Analysis.
 Net Portfolio Value.
 Change in
    
    
    
    
    
    
    
    
    
    
    
    
    
    NPV as % of PortfolioInterest Rates
    
    Net Portfolio Value
    
    Value of AssetsIn Basis Points (Rate Shock)
    
    Amount
    
    $ Change
    
    % Change
    
    NPV Ratio
    
    Change(Dollars in Thousands)300
    
    $
    16,477
    
    
    $
    (11,319
    )
    
    
    (40.72
    )%
    
    
    15.47
    %
    
    
    (7.47
    )%200
    
    
    20,345
    
    
    
    (7,451
    )
    
    
    (26.81
    )
    
    
    18.26
    
    
    
    (4.68
    )100
    
    
    24,147
    
    
    
    (3,650
    )
    
    
    (13.13
    )
    
    
    20.76
    
    
    
    (2.18
    )Static
    
    
    27,796
    
    
    
    
    
    
    
    
    
    
    
    22.94
    
    
    
    (100)
    
    
    30,959
    
    
    
    3,162
    
    
    
    11.38
    
    
    
    24.65
    
    
    
    1.71(200)
    
    
    33,018
    
    
    
    5,221
    
    
    
    18.78
    
    
    
    25.59
    
    
    
    2.65
 Qualitative Analysis.
 8




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Home Federal Bancorp, Inc. of Louisiana
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
 Liquidity and Capital Resources
      Off-Balance Sheet Arrangements
  Impact of Inflation and Changing Prices
  9




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Report of Independent Registered Public Accounting Firm
 
    
  
 10




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HOME
FEDERAL BANCORP, INC. OF LOUISIANA AND
SUBSIDIARY
Consolidated Balance Sheets
June 30, 2007 and 2006
 2007
    
    2006(In Thousands)AssetsCash and Cash Equivalents (Includes
Interest-Bearing
Deposits with Other Banks of $3,025 and
$4,184 for 2007 and 2006, respectively)
    
    $
    3,972
    
    
    $
    4,930Securities
Available-for-Sale
    
    
    83,752
    
    
    
    83,694Securities
Held-to-Maturity
    
    
    1,408
    
    
    
    1,425Loans Held-for-Sale
    
    
    1,478
    
    
    
    Loans Receivable,
Net
    
    
    25,211
    
    
    
    20,866Accrued Interest
Receivable
    
    
    499
    
    
    
    465Premises and
Equipment, Net
    
    
    923
    
    
    
    948Deferred Tax Asset
    
    
    1,476
    
    
    
    1,597Other Assets
    
    
    66
    
    
    
    75Total Assets
    
    $
    118,785
    
    
    $
    114,000Liabilities and Stockholders EquityLiabilitiesDeposits
    
    $
    77,710
    
    
    $
    71,279Advances from Borrowers for Taxes and Insurance
    
    
    196
    
    
    
    219Advances from Federal Home Loan Bank of Dallas
    
    
    12,368
    
    
    
    13,417Other Accrued Expenses and Liabilities
    
    
    699
    
    
    
    546Total
Liabilities
    
    
    90,973
    
    
    
    85,461EquityPreferred Stock  No Par Value; 2,000,000 Shares
Authorized;
None Issued and
Outstanding
    
    
    
    
    
    
    Common Stock  $.01 Par Value; 8,000,000 Shares
Authorized;
3,558,958 Shares Issued; 3,387,202 Shares
Outstanding at
June 30, 2007 and 3,538,258 Shares
Outstanding at June 30, 2006
    
    
    14
    
    
    
    14Additional Paid-In
Capital
    
    
    13,509
    
    
    
    13,445Treasury
Stock, at Cost  171,756 Shares at June
30, 2007;
20,700 Shares at June 30, 2006
    
    
    (1,771
    )
    
    
    (211
    )Unearned ESOP Stock
    
    
    (997
    )
    
    
    (1,054
    )Unearned RRP Trust
Stock
    
    
    (551
    )
    
    
    (688
    )Retained Earnings
    
    
    20,449
    
    
    
    20,149Accumulated Other Comprehensive Loss
    
    
    (2,841
    )
    
    
    (3,116
    )Total
Stockholders
Equity
    
    
    27,812
    
    
    
    28,539Total Liabilities and Stockholders Equity
    
    $
    118,785
    
    
    $
    114,000
 11




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HOME FEDERAL BANCORP, INC. OF LOUISIANA AND
SUBSIDIARY
Consolidated Statements of Income
Years Ended June 30, 2007 and 2006
 2007
    
    2006(In Thousands, Except Per Share Data)Interest
IncomeLoans, Including Fees
    
    $
    1,739
    
    
    $
    1,420Investment Securities
    
    
    285
    
    
    
    338Mortgage-Backed Securities
    
    
    4,265
    
    
    
    3,701Other Interest-Earning Assets
    
    
    301
    
    
    
    205Total Interest Income
    
    
    6,590
    
    
    
    5,664Interest ExpenseDeposits
    
    
    2,760
    
    
    
    2,108Federal Home Loan Bank Borrowings
    
    
    688
    
    
    
    325Total Interest Expense
    
    
    3,448
    
    
    
    2,433Net Interest Income
    
    
    3,142
    
    
    
    3,231Provision for Loan Losses
    
    
    1
    
    
    
    Net Interest Income after
Provision for Loan Losses
    
    
    3,141
    
    
    
    3,231Non-Interest IncomeGain on Sale of Loans
    
    
    3
    
    
    
    24Gain on Sale of Securities
    
    
    168
    
    
    
    52Other Income
    
    
    69
    
    
    
    69Total Non-Interest Income
    
    
    240
    
    
    
    145Non-Interest ExpenseCompensation and Benefits
    
    
    1,487
    
    
    
    1,486Occupancy and Equipment
    
    
    178
    
    
    
    178Data Processing
    
    
    73
    
    
    
    80Audit and Examination Fees
    
    
    142
    
    
    
    140Advertising
    
    
    36
    
    
    
    51Deposit Insurance Premiums
    
    
    9
    
    
    
    9Legal Fees
    
    
    66
    
    
    
    94Franchise and Bank Shares Tax
    
    
    158
    
    
    
    89Other Expense
    
    
    268
    
    
    
    288Total Non-Interest Expense
    
    
    2,417
    
    
    
    2,415Income Before Income Taxes
    
    
    964
    
    
    
    961Provision for Income Tax Expense
    
    
    327
    
    
    
    327Net Income
    
    $
    637
    
    
    $
    634Earnings Per ShareBasic
    
    $
    0.19
    
    
    $
    0.19Diluted
    
    $
    0.19
    
    
    $
    0.19
 12




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA
AND SUBSIDIARY
Consolidated Statements of Comprehensive Income (Loss)
Years Ended June 30, 2007 and 2006
 2007
    
    2006(In Thousands)Net Income
    
    $
    637
    
    
    $
    634Other Comprehensive Income (Loss), Net of TaxUnrealized Holding Gains (Losses) Arising During the Period
    
    
    496
    
    
    
    (3,328
    )Reclassification Adjustment for Gains included in Net Income
    
    
    (221
    )
    
    
    (97
    )Total Other Comprehensive Income (Loss)
    
    
    275
    
    
    
    (3,425
    )Total Comprehensive Income (Loss)
    
    $
    912
    
    
    $
    (2,791
    )
 13




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HOME FEDERAL BANCORP, INC. OF LOUISIANA AND
SUBSIDIARY
Consolidated Statements of Changes in Stockholders Equity
Years Ended June 30, 2007 and 2006
 AccumulatedAdditional
    
    Unearned
    
    
    
    
    
    Other
    
    Unearned
    
    
    
    
    
    TotalCommon
    
    Paid-in
    
    ESOP
    
    Retained
    
    Comprehensive
    
    RRP Trust
    
    Treasury
    
    StockholdersStock
    
    Capital
    
    Stock
    
    Earnings
    
    Loss
    
    Stock
    
    Stock
    
    Equity(In Thousands)Balance  July 1, 2005
    
    $
    14
    
    
    $
    13,391
    
    
    $
    (1,111
    )
    
    $
    19,828
    
    
    $
    309
    
    
    $
    
    
    
    $
    
    
    
    $
    32,431ESOP Compensation Earned
    
    
    
    
    
    
    
    
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57Acquisition of RRP Trust Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (688
    )
    
    
    
    
    
    
    (688
    )Dividends Paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (313
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (313
    )Stock Options Vested
    
    
    
    
    
    
    54
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54Acquisition of Treasury Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (211
    )
    
    
    (211
    )Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    634
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    634Other Comprehensive Loss, Net
of Applicable Deferred Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,425
    )
    
    
    
    
    
    
    
    
    
    
    (3,425
    )Balance  June 30, 2006
    
    
    14
    
    
    
    13,445
    
    
    
    (1,054
    )
    
    
    20,149
    
    
    
    (3,116
    )
    
    
    (688
    )
    
    
    (211
    )
    
    
    28,539ESOP Compensation Earned
    
    
    
    
    
    
    2
    
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59Distribution of RRP Trust Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    137
    
    
    
    
    
    
    
    137Dividends Paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (337
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (337
    )Stock Options Vested
    
    
    
    
    
    
    62
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62Acquisition of Treasury Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,560
    )
    
    
    (1,560
    )Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    637
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    637Other Comprehensive Income, Net
of Applicable Deferred Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    275
    
    
    
    
    
    
    
    
    
    
    
    275Balance  June 30, 2007
    
    $
    14
    
    
    $
    13,509
    
    
    $
    (997
    )
    
    $
    20,449
    
    
    $
    (2,841
    )
    
    $
    (551
    )
    
    $
    (1,771
    )
    
    $
    27,812
  14




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA
AND SUBSIDIARY
Consolidated Statements of Cash Flows Years
Ended June 30, 2007 and 2006
 2007
    
    2006(In Thousands)Cash Flows from Operating ActivitiesNet Income
    
    $
    637
    
    
    $
    634Adjustments to Reconcile Net Income to Net
Cash (Used in) Provided by Operating ActivitiesNet Amortization and Accretion on Securities
    
    
    (168
    )
    
    
    (96
    )Amortization of Deferred Loan Fees
    
    
    (17
    )
    
    
    (45
    )Provision for Loan Losses
    
    
    1
    
    
    
    Depreciation of Premises and Equipment
    
    
    61
    
    
    
    68Gain on Sale of Securities
    
    
    (168
    )
    
    
    (52
    )ESOP Compensation Expense
    
    
    59
    
    
    
    57Deferred Income Tax (Benefit)
    
    
    (21
    )
    
    
    (18
    )Stock Option Expense
    
    
    62
    
    
    
    54Recognition and Retention Plan Expense
    
    
    134
    
    
    
    122Changes in Assets and LiabilitiesOrigination and Purchase of Loans Held-for-Sale
    
    
    (13,835
    )
    
    
    (2,896
    )Sale and Principal Repayments of Loans Held-for-Sale
    
    
    12,356
    
    
    
    2,966Accrued Interest Receivable
    
    
    (34
    )
    
    
    (29
    )Other Operating Assets
    
    
    11
    
    
    
    (16
    )Other Operating Liabilities
    
    
    156
    
    
    
    100Net Cash (Used in) Provided by Operating Activities
    
    
    (766
    )
    
    
    849Cash Flows from Investing ActivitiesLoan Originations and Principal Collections, Net
    
    
    1,459
    
    
    
    2,688Purchases of Loans
    
    
    (5,797
    )
    
    
    Deferred Loan Fees Collected
    
    
    10
    
    
    
    65Acquisition of Premises and Equipment
    
    
    (37
    )
    
    
    (491
    )Activity in Available-for-Sale SecuritiesProceeds from Sales of Securities
    
    
    19,086
    
    
    
    3,378Proceeds from Maturity of Securities
    
    
    2,000
    
    
    
    Principal Payments on Mortgage-Backed Securities
    
    
    10,977
    
    
    
    11,998Purchases
    
    
    (31,378
    )
    
    
    (28,353
    )Activity in Held-to-Maturity SecuritiesPrincipal Payments on Mortgage-Backed Securities
    
    
    155
    
    
    
    207Purchases
    
    
    (130
    )
    
    
    (17
    )Net Cash Used in Investing Activities
    
    
    (3,655
    )
    
    
    (10,525
    )
  15




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA
AND SUBSIDIARY
Consolidated Statements of Cash Flows (Continued) Years
Ended June 30, 2007 and 2006
 2007
    
    
    2006(In Thousands)Cash Flows from Financing ActivitiesNet Increase in Deposits
    
    
    6,431
    
    
    
    1,284Proceeds from Advances from Federal Home Loan Bank
    
    
    7,250
    
    
    
    8,025Repayment of Advances from Federal Home Loan Bank
    
    
    (8,299
    )
    
    
    (2,833
    )Dividends Paid
    
    
    (337
    )
    
    
    (313
    )Acquisition of Recognition and Retention Plan Stock
    
    
    
    
    
    
    (688
    )Acquisition of Treasury Stock
    
    
    (1,560
    )
    
    
    (211
    )Net (Decrease) Increase in Mortgage-Escrow Funds
    
    
    (22
    )
    
    
    49Net Cash Provided by Financing Activities
    
    
    3,463
    
    
    
    5,313Net Decrease in Cash and Cash Equivalents
    
    
    (958
    )
    
    
    (4,363
    )Cash and Cash Equivalents, Beginning of Year
    
    
    4,930
    
    
    
    9,292Cash and Cash Equivalents, End of Year
    
    $
    3,972
    
    
    $
    4,930Supplementary Cash Flow InformationInterest Paid on Deposits and Borrowed Funds
    
    $
    3,439
    
    
    $
    2,373Income Taxes Paid
    
    
    352
    
    
    
    361Market Value Adjustment for Gain (Loss) on Securities
Available-for-Sale
    
    
    417
    
    
    
    (5,190
    )
  16




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 1. Summary of Accounting Policies
 Nature of Operations
    Basis of Presentation and Consolidation
  Use of Estimates
  Significant Group Concentrations of Credit Risk
  17




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 
 Note 1. Summary of Accounting Policies (Continued)
 Cash and Cash Equivalents
   2007
    
    2006(In Thousands)Cash on Hand
    
    $
    198
    
    
    $
    229Demand on Deposits at Other Institutions
    
    
    770
    
    
    
    1,935Federal Funds Sold
    
    
    3,004
    
    
    
    2,766$
    3,972
    
    
    $
    4,930
 Securities
    Loans Held for Sale
  18




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 
 Note 1. Summary of Accounting Policies (Continued)
 Loans
  Allowance for Loan Losses
     Off-Balance Sheet Credit Related Financial Instruments
  19




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 
 Note 1. Summary of Accounting Policies (Continued)
 Foreclosed Assets
  Premises and Equipment
  Income Taxes
    Earnings per Share
  Non-Direct Response Advertising
  20




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 
 Note 1. Summary of Accounting Policies (Continued)
 Comprehensive Income
   2007
    
    2006(In Thousands)Unrealized Holding Gains (Losses) on
Available-for-Sale Securities
    
    $
    751
    
    
    $
    (5,042
    )Reclassification Adjustment for Gains
Realized in Income
    
    
    (334
    )
    
    
    (148
    )Net Unrealized Gains (Losses)
    
    
    417
    
    
    
    (5,190
    )Tax Effect
    
    
    (142
    )
    
    
    1,765Net-of-Tax Amount
    
    $
    275
    
    
    $
    (3,425
    )
  2007
    
    2006(In Thousands)Net Unrealized Loss on Securities
Available-for-Sale
    
    $
    (4,305
    )
    
    $
    (4,722
    )Tax Effect
    
    
    1,464
    
    
    
    1,606Net-of-Tax Amount
    
    $
    (2,841
    )
    
    $
    (3,116
    )
 21




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 
 Note 1. Summary of Accounting Policies (Continued)
 Recent Accounting Pronouncements
 Accounting for Certain Hybrid Financial
Instruments Accounting for Derivative Instruments and
Hedging Activities Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities
 Accounting for Servicing of Financial Assets Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities
 Accounting for Uncertainty in
Income Taxes (as amended) Accounting for Income Taxes
 22




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 
 Note 1. Summary of Accounting Policies (Continued)
 Recent Accounting Pronouncements (Continued)
 Fair Value Measurements
 Postretirement Plans
 The Fair Value Option for Financial Assets
and Financial Liabilities
 23




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 2. Securities
  June 30, 2007Gross
    
    GrossAmortized
    
    Unrealized
    
    Unrealized
    
    FairSecurities Available-for-Sale
    
    Cost
    
    Gains
    
    Losses
    
    Value(In Thousands)Debt SecuritiesFHLMC Mortgage-Backed
Certificates
    
    $
    8,114
    
    
    $
    
    
    
    $
    499
    
    
    $
    7,615FNMA Mortgage-Backed
Certificates
    
    
    77,379
    
    
    
    1
    
    
    
    3,740
    
    
    
    73,640GNMA Mortgage-Backed
Certificates
    
    
    274
    
    
    
    1
    
    
    
    5
    
    
    
    270Total Debt Securities
    
    
    85,767
    
    
    
    2
    
    
    
    4,244
    
    
    
    81,525Equity Securities231,234 Shares, AMF ARM Fund
    
    
    2,290
    
    
    
    
    
    
    
    63
    
    
    
    2,227Total Securities Available-for-
Sale
    
    $
    88,057
    
    
    $
    2
    
    
    $
    4,307
    
    
    $
    83,752Securities Held-to-Maturity(In Thousands)Debt SecuritiesGNMA Mortgage-Backed
Certificates
    
    $
    445
    
    
    $
    11
    
    
    $
    
    
    
    $
    456FNMA Mortgage-Backed
Certificates
    
    
    142
    
    
    
    2
    
    
    
    
    
    
    
    144FHLMC Mortgage-Backed
Certificates
    
    
    42
    
    
    
    1
    
    
    
    
    
    
    
    43Total Debt Securities
    
    
    629
    
    
    
    14
    
    
    
    
    
    
    
    643Equity Securities (Non-marketable)7,795 Shares  Federal Home
Loan Bank
    
    
    779
    
    
    
    
    
    
    
    
    
    
    
    779Total Securities Held-to-Maturity
    
    $
    1,408
    
    
    $
    14
    
    
    $
    
    
    
    $
    1,422
 24




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 2. Securities (Continued)
 June 30, 2006Gross
    
    GrossAmortized
    
    Unrealized
    
    Unrealized
    
    FairSecurities Available-for-Sale
    
    Cost
    
    Gains
    
    Losses
    
    Value(In Thousands)Debt SecuritiesFHLB Note
    
    $
    996
    
    
    $
    
    
    
    $
    6
    
    
    $
    990FNMA Note
    
    
    996
    
    
    
    
    
    
    
    11
    
    
    
    985FHLMC Mortgage-Backed
Certificates
    
    
    8,930
    
    
    
    1
    
    
    
    550
    
    
    
    8,381FNMA Mortgage-Backed
Certificates
    
    
    74,825
    
    
    
    
    
    
    
    4,087
    
    
    
    70,738GNMA Mortgage-Backed
Certificates
    
    
    489
    
    
    
    
    
    
    
    10
    
    
    
    479Total Debt Securities
    
    
    86,236
    
    
    
    1
    
    
    
    4,664
    
    
    
    81,573Equity Securities219,780 Shares, AMF ARM Fund
    
    
    2,180
    
    
    
    
    
    
    
    59
    
    
    
    2,121Total Securities Available-for-
Sale
    
    $
    88,416
    
    
    $
    1
    
    
    $
    4,723
    
    
    $
    83,694Securities Held-to-Maturity(In Thousands)Debt SecuritiesGNMA Mortgage-Backed
Certificates
    
    $
    535
    
    
    $
    14
    
    
    $
    
    
    
    $
    549FNMA Mortgage-Backed
Certificates
    
    
    184
    
    
    
    3
    
    
    
    
    
    
    
    187FHLMC Mortgage-Backed
Certificates
    
    
    57
    
    
    
    1
    
    
    
    1
    
    
    
    57Total Debt Securities
    
    
    776
    
    
    
    18
    
    
    
    1
    
    
    
    793Equity Securities (Non-marketable)6,492 Shares  Federal Home
Loan Bank
    
    
    649
    
    
    
    
    
    
    
    
    
    
    
    649Total Securities Held-to-Maturity
    
    $
    1,425
    
    
    $
    18
    
    
    $
    1
    
    
    $
    1,442
 25




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 2. Securities (Continued)
  Available-for-Sale
    
    Held-to-MaturityAmortized
    
    Fair
    
    Amortized
    
    FairCost
    
    Value
    
    Cost
    
    Value(In Thousands)Mortgage-Backed
Securities
    
    $
    85,767
    
    
    $
    81,525
    
    
    $
    629
    
    
    $
    643
   Less Than Twelve Months
    
    Over Twelve MonthsGross
    
    
    
    
    
    GrossUnrealized
    
    Fair
    
    Unrealized
    
    FairSecurities Available-for-Sale
    
    Losses
    
    Value
    
    Losses
    
    Value(In Thousands)Debt Securities:Mortgage-Backed Securities
    
    $
    539
    
    
    $
    19,418
    
    
    $
    3,705
    
    
    $
    61,459Marketable Equity
Securities
    
    
    
    
    
    
    
    
    
    
    63
    
    
    
    2,227Total Securities
Available-for-Sale
    
    $
    539
    
    
    $
    19,418
    
    
    $
    3,768
    
    
    $
    63,686
 26




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 2. Securities (Continued)
    27




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 3. Loans Receivable
  2007
    
    2006(In Thousands)Mortgage Loans (Principally Conventional)Principal BalancesSecured by One-to-Four Family Residences
    
    $
    16,669
    
    
    $
    13,721Secured by Other Properties
    
    
    3,650
    
    
    
    3,164Total Mortgage Loans
    
    
    20,319
    
    
    
    16,885Consumer and Other LoansPrincipal BalancesEquity and Second Mortgage
    
    
    4,454
    
    
    
    3,287Loans on Savings Accounts
    
    
    283
    
    
    
    612Equity Lines of Credit
    
    
    427
    
    
    
    374Automobile Loans
    
    
    57
    
    
    
    44Total Consumer and Other Loans
    
    
    5,221
    
    
    
    4,317Total Loans
    
    
    25,540
    
    
    
    21,202Less: Allowance for Loan Losses
    
    
    (235
    )
    
    
    (235
    )Unamortized Loan Fees
    
    
    (94
    )
    
    
    (101
    )Net Loans Receivable
    
    $
    25,211
    
    
    $
    20,866
  2007
    
    2006(In Thousands)Balance  Beginning of Year
    
    $
    235
    
    
    $
    235Provision for Loan Losses
    
    
    1
    
    
    
    Loan Charge-offs
    
    
    (1
    )
    
    
    Balance  End of Year
    
    $
    235
    
    
    $
    235
 28




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 3. Loans Receivable (Continued)
  Under
    
    One
    
    Six
    
    OverOne
    
    to Five
    
    to Ten
    
    TenYear
    
    Years
    
    Years
    
    Years
    
    Total(In Thousands)Loans Secured by One-to-Four
Family ResidentialFixed Rate
    
    $
    15
    
    
    $
    391
    
    
    $
    763
    
    
    $
    7,573
    
    
    $
    8,742Adjustable Rate
    
    
    7,949
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,949Other Loans Secured by
Real EstateFixed Rate
    
    
    
    
    
    
    94
    
    
    
    20
    
    
    
    3,536
    
    
    
    3,650All Other Loans
    
    
    1,127
    
    
    
    663
    
    
    
    1,151
    
    
    
    2,258
    
    
    
    5,199$
    9,091
    
    
    $
    1,148
    
    
    $
    1,934
    
    
    $
    13,367
    
    
    $
    25,540
  Note 4. Accrued Interest Receivable
  2007
    
    2006(In Thousands)Accrued Interest on:Mortgage Loans
    
    $
    105
    
    
    $
    82Other Loans
    
    
    25
    
    
    
    18Investments
    
    
    10
    
    
    
    23Mortgage-Backed Securities
    
    
    359
    
    
    
    342$
    499
    
    
    $
    465
 29




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 5. Premises and Equipment
  2007
    
    2006(In Thousands)Land
    
    $
    727
    
    
    $
    727Buildings
    
    
    1,132
    
    
    
    1,124Equipment
    
    
    601
    
    
    
    6002,460
    
    
    
    2,451Accumulated Depreciation
    
    
    (1,537
    )
    
    
    (1,503
    )$
    923
    
    
    $
    948
  th
 2008
    
    $
    20,1602009
    
    
    8,400Total
    
    $
    28,560
  30




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 6. Deposits
  WeightedAverageRate at
    
    2007
    
    20066/30/2007
    
    Amount
    
    Percent
    
    Amount
    
    Percent(Dollars in Thousdands)Non-Interest Bearing
    
    
    0.00
    %
    
    $
    1,372
    
    
    
    1.77
    %
    
    $
    828
    
    
    
    1.16
    %NOW Accounts
    
    
    0.15
    %
    
    
    5,921
    
    
    
    7.61
    
    
    
    5,412
    
    
    
    7.59Money Market
    
    
    0.40
    %
    
    
    2,941
    
    
    
    3.79
    
    
    
    3,302
    
    
    
    4.63Passbook Savings
    
    
    0.50
    %
    
    
    4,473
    
    
    
    5.76
    
    
    
    4,756
    
    
    
    6.6714,707
    
    
    
    18.93
    
    
    
    14,298
    
    
    
    20.05Certificates of Deposit
    
    
    4.74
    %
    
    
    63,003
    
    
    
    81.07
    
    
    
    56,981
    
    
    
    79.95Total Deposits
    
    
    
    
    
    $
    77,710
    
    
    
    100.00
    %
    
    $
    71,279
    
    
    
    100.00
    %
  2007
    
    2006Amount
    
    Percent
    
    Amount
    
    Percent(Dollars in Thousands)0.00% to 0.99%
    
    $
    9
    
    
    
    0.01
    %
    
    $
    245
    
    
    
    0.43
    %1.00% to 1.99%
    
    
    194
    
    
    
    0.31
    
    
    
    411
    
    
    
    0.722.00% to 2.99%
    
    
    1,543
    
    
    
    2.45
    
    
    
    9,911
    
    
    
    17.403.00% to 3.99%
    
    
    12,164
    
    
    
    19.31
    
    
    
    14,902
    
    
    
    26.154.00% to 4.99%
    
    
    18,388
    
    
    
    29.19
    
    
    
    28,230
    
    
    
    49.545.00% to 5.99%
    
    
    30,705
    
    
    
    48.74
    
    
    
    3,282
    
    
    
    5.76Total Deposits
    
    $
    63,003
    
    
    
    100.00
    %
    
    $
    56,981
    
    
    
    100.00
    %
 31




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 6. Deposits (Continued)
  WeightedYear Ending
    
    
    
    
    
    
    
    
    
    AverageJune 30,
    
    Amount
    
    Percent
    
    Rate(Dollars in Thousands)2008
    
    $
    38,092
    
    
    
    60.46
    %
    
    
    4.8
    %2009
    
    
    9,689
    
    
    
    15.38
    
    
    
    4.6
    %2010
    
    
    7,863
    
    
    
    12.48
    
    
    
    4.7
    %2011
    
    
    3,863
    
    
    
    6.13
    
    
    
    4.9
    %2012
    
    
    3,456
    
    
    
    5.48
    
    
    
    5.1
    %Thereafter
    
    
    40
    
    
    
    0.07
    
    
    
    3.0
    %$
    63,003
    
    
    
    100.00
    %
  2007
    
    2006(In Thousands)NOW and Money Market
    
    $
    27
    
    
    $
    30Passbook Savings
    
    
    23
    
    
    
    24Certificates of Deposit
    
    
    2,710
    
    
    
    2,054$
    2,760
    
    
    $
    2,108
  Note 7. Advances from Federal Home Loan Bank of Dallas
  32




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 7. Advances from Federal Home Loan Bank of Dallas (Continued)
  Advance Total2007
    
    2006(In Thousands)2.00% to 2.99%
    
    $
    916
    
    
    $
    2,1593.00% to 3.99%
    
    
    1,016
    
    
    
    2,0284.00% to 4.99%
    
    
    3,459
    
    
    
    4,2305.00% to 5.99%
    
    
    6,977
    
    
    
    5,000$
    12,368
    
    
    $
    13,417
 th (In Thousands):
 2008
    
    $
    3,3812009
    
    
    2,2172010
    
    
    1,9782011
    
    
    1,8752012
    
    
    944Thereafter
    
    
    1,973$
    12,368
 Note 8. Commitments
 th (In Thousands):
 2008
    
    $
    482009
    
    
    482010
    
    
    28Total
    
    $
    124
 33




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HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 9. Federal Income Taxes
  2007
    
    2006(In Thousands)FederalCurrent
    
    $
    348
    
    
    $
    344Deferred (Benefit)
    
    
    (21
    )
    
    
    (18
    )StateCurrent
    
    
    
    
    
    
    1$
    327
    
    
    $
    327
  2007
    
    2006(In Thousands)Expected Tax Provision at a 34% Rate
    
    $
    328
    
    
    $
    327Expected State Corporate Tax
    
    
    
    
    
    
    1Effect of Non-Taxable Income
    
    
    (1
    )
    
    
    (1
    )Provision for Income Tax
    
    $
    327
    
    
    $
    327
  34




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 9. Federal Income Taxes (Continued)
 2007
    
    2006(In Thousands)Deferred Tax Asset or LiabilityStock Option Compensation
    
    $
    39
    
    
    $
    18Loans Receivable  Bad Debt Loss Allowances
    
    
    (27
    )
    
    
    (27
    )Securities Available-for-Sale Unrealized
Loss
    
    
    1,464
    
    
    
    1,606Total Deferred Tax Asset
    
    $
    1,476
    
    
    $
    1,597
  Note 10. Other Non-Interest Income and Expense
  2007
    
    2006(In Thousands)Other Non-Interest IncomeService Fees on NOW Accounts
    
    $
    19
    
    
    $
    19Late Charges
    
    
    5
    
    
    
    4Commissions and Other
    
    
    45
    
    
    
    46$
    69
    
    
    $
    69Other Non-Interest ExpenseNOW Account Expense
    
    $
    45
    
    
    $
    38Loan Expenses
    
    
    4
    
    
    
    5Office Supplies
    
    
    29
    
    
    
    34Telephone
    
    
    32
    
    
    
    34Postage
    
    
    17
    
    
    
    18Business Insurance and Bonds
    
    
    34
    
    
    
    35Organization Dues and Publications
    
    
    9
    
    
    
    5Charitable Contributions
    
    
    3
    
    
    
    4Miscellaneous
    
    
    38
    
    
    
    46Automobile Expense, Including Depreciation
    
    
    21
    
    
    
    21Consulting Fees
    
    
    28
    
    
    
    30Registration Fees
    
    
    8
    
    
    
    18$
    268
    
    
    $
    288
 35




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 11. Retirement Plans
  Note 12. Employee Stock Ownership Plan
     36




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 12. Employee Stock Ownership Plan (Continued)
  Allocated Shares
    
    
    11,389Shares Released for Allocation
    
    
    2,847Unreleased Shares
    
    
    99,651Total ESOP Shares
    
    
    113,887Fair Value of Unreleased Shares (In Thousands)
    
    $
    1,006Stock Price at June 30, 2007
    
    $
    10.10
 Note
13. Recognition and Retention Plan
    37




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 13. Recognition and Retention Plan (Continued)
  Unawarded Shares
    
    Awarded Shares2007
    
    2006
    
    2007
    
    2006Balance  Beginning of Year
    
    
    
    
    
    
    
    
    
    
    69,756
    
    
    
    Purchased by Plan
    
    
    
    
    
    
    69,756
    
    
    
    
    
    
    
    Granted
    
    
    
    
    
    
    (69,756
    )
    
    
    
    
    
    
    69,756Forfeited
    
    
    1,490
    
    
    
    
    
    
    
    (1,490
    )
    
    
    Earned and Issued
    
    
    
    
    
    
    
    
    
    
    (13,661
    )
    
    
    Balance  End of Year
    
    
    1,490
    
    
    
    
    
    
    
    54,605
    
    
    
    69,756
 Note
14. Stock Option Plan
   38




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 14. Stock Option Plan (Continued)
  WeightedAverageNumber of
    
    
    ExerciseShares
    
    
    PriceOutstanding at July 1, 2006
    
    
    174,389
    
    
    $
    9.85Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (3,532
    )
    
    
    9.85Outstanding at June 30, 2007
    
    
    170,857
    
    
    $
    9.85Options Exercisable at June 30, 2007
    
    
    34,179
    
    
    $
    9.85Outstanding at July 1, 2005
    
    
    
    
    
    $
    Granted
    
    
    174,389
    
    
    
    9.85Exercised
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Outstanding at June 30, 2006
    
    
    174,389
    
    
    $
    9.85Options Exercisable at June 30, 2006
    
    
    
    
    
    $
    Weighted Average Fair Value of Options Granted
During the Year
    
    $
    1.80
  Dividend Yield
    
    
    2.0
    %Expected Term
    
    10 YearsRisk-free Interest Rate
    
    
    4.13
    %Expected Life
    
    10 YearsExpected Volatility
    
    
    8.59
    %
  39




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 14. Stock Option Plan (Continued)
  Options Outstanding
    
    Options ExercisableWeightedAverage
    
    Weighted
    
    
    
    
    
    WeightedExercise
    
    
    
    
    
    Remaining
    
    Average
    
    
    
    
    
    AveragePrice
    
    
    
    
    
    Contractual
    
    Exercise
    
    
    
    
    
    ExerciseRange
    
    Number
    
    Life
    
    Price
    
    Number
    
    Price$9.85
    
    
    170,857
    
    
    8.13 Years
    
    $
    9.85
    
    
    
    34,179
    
    
    $
    9.85
 Note
15. Off-Balance Sheet Activities
 Credit Related Financial Instruments
     Contract Amount2007
    
    2006(In Thousands)Commitments to Grant Loans
    
    $
    2,132
    
    
    $
    Unfunded Commitments Under Lines of Credit
    
    
    1,325
    
    
    
    285
  40




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 15. Off-Balance Sheet Activities (Continued)
 Cash Deposits
  Regional Credit Concentration
  Other Credit Concentrations
  Interest Rate Floors and Caps
  Note 16. Related Party Events
  41




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 16. Related Party Events (Continued)
 th
 2007
    
    2006(In Thousands)Balance  Beginning of Year
    
    $
    300
    
    
    $
    159Additions
    
    
    
    
    
    
    175Principal Payments
    
    
    (34
    )
    
    
    (34
    )Balance  End of Year
    
    $
    266
    
    
    $
    300
  Note 17. Regulatory Matters
    42




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HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 17. Regulatory Matters
  Required for CapitalActual
    
    Adequacy PurposesAmount
    
    Ratio
    
    Amount
    
    Ratio(In Thousands)June 30, 2007Core Capital
    
    
    (1
    )
    
    $
    27,724
    
    
    
    22.79
    %
    
    $
    3,649
    
    
    
    3.00
    %Tangible Capital
    
    
    (1
    )
    
    
    27,724
    
    
    
    22.79
    %
    
    
    1,825
    
    
    
    1.50
    %Total Risk-Based Capital
    
    
    (2
    )
    
    
    27,959
    
    
    
    80.63
    %
    
    
    2,774
    
    
    
    8.00
    %June 30, 2006Core Capital
    
    
    (1
    )
    
    $
    27,029
    
    
    
    23.48
    %
    
    $
    3,453
    
    
    
    3.00
    %Tangible Capital
    
    
    (1
    )
    
    
    27,029
    
    
    
    23.48
    %
    
    
    1,726
    
    
    
    1.50
    %Total Risk-Based Capital
    
    
    (2
    )
    
    
    27,264
    
    
    
    87.78
    %
    
    
    2,486
    
    
    
    8.00
    %
  Required to beActual
    
    Well CapitalizedAmount
    
    Ratio
    
    Amount
    
    Ratio(In Thousands)June 30, 2007Tier 1 Leverage Capital
    
    
    (1
    )
    
    $
    27,724
    
    
    
    22.79
    %
    
    $
    6,082
    
    
    
    5.00
    %Tier 1 Risk-Based Capital
    
    
    (2
    )
    
    
    27,724
    
    
    
    79.95
    %
    
    
    2,081
    
    
    
    6.00
    %Total Risk-Based Capital
    
    
    (2
    )
    
    
    27,959
    
    
    
    80.63
    %
    
    
    3,468
    
    
    
    10.00
    %June 30, 2006Tier 1 Leverage Capital
    
    
    (1
    )
    
    $
    27,029
    
    
    
    23.48
    %
    
    $
    5,755
    
    
    
    5.00
    %Tier 1 Risk-Based Capital
    
    
    (2
    )
    
    
    27,029
    
    
    
    87.00
    %
    
    
    1,864
    
    
    
    6.00
    %Total Risk-Based Capital
    
    
    (2
    )
    
    
    27,264
    
    
    
    87.78
    %
    
    
    3,107
    
    
    
    10.00
    %
 
 (1)
    
    Amounts and Ratios to Adjusted Total Assets(2)
    
    Amounts and Ratios to Total Risk-Weighted Assets 43




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HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 18. Restrictions on Dividends
  Note 19. Fair Value of Financial Instruments
   Cash and Cash Equivalents
  Securities to be Held-to-Maturity and Available-for-Sale
  Mortgage Loans Held-for-Sale
  Loans Receivable
  Deposit Liabilities
  Advances from Federal Home Loan Bank
  44




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 19. Fair Value of Financial Instruments (Continued)
 Accrued Interest Payable
  Off-Balance Sheet Credit-Related Instruments
   2007
    
    2006Carrying
    
    Estimated
    
    Carrying
    
    EstimatedValue
    
    Fair Value
    
    Value
    
    Fair Value(In Thousands)
    
    (In Thousands)Financial AssetsCash and Cash Equivalents
    
    $
    3,972
    
    
    $
    3,972
    
    
    $
    4,930
    
    
    $
    4,930Securities Available-for-Sale
    
    
    83,752
    
    
    
    83,752
    
    
    
    83,694
    
    
    
    83,694Securities to be Held-to-Maturity
    
    
    1,408
    
    
    
    1,422
    
    
    
    1,425
    
    
    
    1,442Loans Held-for-Sale
    
    
    1,478
    
    
    
    1,478
    
    
    
    
    
    
    
    Loans Receivable
    
    
    25,211
    
    
    
    27,035
    
    
    
    20,866
    
    
    
    21,420Accrued Interest Receivable
    
    
    499
    
    
    
    499
    
    
    
    465
    
    
    
    465Financial LiabilitiesDeposits
    
    
    77,710
    
    
    
    77,562
    
    
    
    71,279
    
    
    
    70,475Accrued Interest Payable
    
    
    119
    
    
    
    119
    
    
    
    110
    
    
    
    110Advances from Borrowers
    
    
    196
    
    
    
    196
    
    
    
    219
    
    
    
    219Advances from FHLB
    
    
    12,368
    
    
    
    11,945
    
    
    
    13,417
    
    
    
    12,744Off-Balance Sheet LiabilitiesMortgage Loan Commitments
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    
  45




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 20. Plan of Reorganization and Stock Issuance
   Note 21. Earnings Per Common Share
  2007
    
    2006Average Common Shares Issued
    
    
    3,558,958
    
    
    
    3,558,958Average Treasury Shares Held
    
    
    (57,721
    )
    
    
    (1,715
    )Average Unearned ESOP Shares
    
    
    (103,217
    )
    
    
    (109,245
    )Average Unearned RRP Trust Shares
    
    
    (57,892
    )
    
    
    (49,868
    )Weighted Average Number of Common
Shares Used in Basic EPS
    
    
    3,340,128
    
    
    
    3,398,130Effect of Dilutive Securities
Stock Options
    
    
    7,378
    
    
    
    3,379Weighted Average Number of Common
Shares and Dilutive Potential Common
Shares Used in Dilutive EPS
    
    
    3,347,506
    
    
    
    3,401,509
 46




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 22. Parent Company Financial Statements
  HOME FEDERAL BANCORP, INC. OF LOUISIANA  Condensed Balance Sheet  June 30, 2007 and 2006
 2007
    
    2006(In Thousands)AssetsCash and Cash Equivalents
    
    $
    2,470
    
    
    $
    2,294Investments  Available-for-Sale, at Fair Value
    
    
    
    
    
    
    1,975Investment in Subsidiary
    
    
    25,155
    
    
    
    24,196Other Assets
    
    
    187
    
    
    
    74Total Assets
    
    $
    27,812
    
    
    $
    28,539Liabilities and Stockholders EquityOther Liabilities
    
    $
    
    
    
    $
    Stockholders Equity
    
    
    27,812
    
    
    
    28,539Total Liabilities and Stockholders Equity
    
    $
    27,812
    
    
    $
    28,539
 47




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 22. Parent Company Financial Statements (Continued)
 HOME FEDERAL BANCORP, INC. OF LOUISIANA
Condensed Statement of Income
Years Ended June 30, 2007 and 2006
 2007
    
    2006(In Thousands)Equity in Undistributed Earnings of Subsidiary
    
    $
    695
    
    
    $
    698Interest Income
    
    
    94
    
    
    
    133Total Income
    
    
    789
    
    
    
    831Total Expenses
    
    
    182
    
    
    
    230Income Before Income Taxes
    
    
    607
    
    
    
    601Income Tax (Benefit)
    
    
    (30
    )
    
    
    (33
    )Net Income
    
    $
    637
    
    
    $
    634
 48




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##### 



HOME FEDERAL BANCORP, INC. OF LOUISIANA AND SUBSIDIARY
 Notes to the Financial Statements
 Note 22. Parent Company Financial Statements (Continued)
 HOME FEDERAL BANCORP, INC. OF LOUISIANA  Condensed Statement of Cash Flows  Years Ended June 30, 2007 and 2006
 2007
    
    2006(In Thousands)Operating ActivitiesNet Income
    
    $
    637
    
    
    $
    634Adjustments to Reconcile Net Income to Net
Cash Used in Operating ActivitiesEquity in Undistributed Earnings of Subsidiary
    
    
    (695
    )
    
    
    (698
    )(Increase) Decrease in Other Assets
    
    
    (135
    )
    
    
    14Decrease in Other Liabilities
    
    
    
    
    
    
    (44
    )Net Amortization and Accretion on Investments
    
    
    8
    
    
    
    (16
    )Net Cash Used in Operating Activities
    
    
    (185
    )
    
    
    (110
    )Investing ActivitiesProceeds from Investment Maturities
    
    
    2,000
    
    
    
    Net Cash Provided by Investing Activities
    
    
    2,000
    
    
    
    Financing ActivitiesPaid-In Capital
    
    
    258
    
    
    
    111Purchase of Treasury Stock and Recognition and
Retention Plan Stock
    
    
    (1,560
    )
    
    
    (899
    )Dividends Paid
    
    
    (337
    )
    
    
    (313
    )Net Cash Used in Financing Activities
    
    
    (1,639
    )
    
    
    (1,101
    )Increase (Decrease) in Cash and Cash Equivalents
    
    
    176
    
    
    
    (1,211
    )Cash and Cash Equivalents, Beginning of Year
    
    
    2,294
    
    
    
    3,505Cash and Cash Equivalents, End of Year
    
    $
    2,470
    
    
    $
    2,294
 49




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MARKET PRICE OF HOME FEDERAL BANCORP, INC. COMMON SHARES
AND RELATED SHAREHOLDER MATTERS
  Cash dividendsQuarter ended:
    
    High
    
    Low
    
    per shareFiscal 2007June 30, 2007
    
    $
    10.60
    
    
    $
    10.10
    
    
    $
    0.06March 31, 2007
    
    
    10.35
    
    
    
    10.25
    
    
    
    0.06December 31, 2006
    
    
    10.48
    
    
    
    10.00
    
    
    
    0.06September 30, 2006
    
    
    10.50
    
    
    
    10.10
    
    
    
    0.06Fiscal 2006June 30, 2006
    
    $
    10.45
    
    
    $
    10.05
    
    
    $
    0.06March 31, 2006
    
    
    10.25
    
    
    
    9.80
    
    
    
    0.06December 31, 2005
    
    
    9.90
    
    
    
    9.45
    
    
    
    0.05September 30, 2005
    
    
    9.85
    
    
    
    9.35
    
    
    
    0.05
   Transfer Agent/Registrar
 
 50




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##### 



DIRECTORS AND EXECUTIVE OFFICERS
 Directors
 Daniel R. Herndon
    
    Scott D. LawrenceChairman of the Board, President and
Chief Executive Officer
    
    Director. President of Southwestern Wholesale,
Shreveport, LouisianaClyde D. Patterson
    
    Amos L. Wedgeworth Jr.Director. Executive Vice President
    
    Director. Currently retiredDavid A. Herndon III
    
    Sidney D. YorkDirector. Currently retired
    
    Director. Currently retiredWoodus K. Humphrey
    
    Henry M. HearneDirector. Insurance executive, Woodus Humphrey
Insurance, Inc., Shreveport, Louisiana
    
    Director. Self employed in
the fields of investments and farmingWalter T. Colquitt IIIDirector. Dentist, Shreveport, Louisiana
 Executive Officer
 Vice President and Senior Lending Officer
 BANKING LOCATIONS
 Main Office
 
 Branch Offices
 6363 Youree Drive 
Shreveport, Louisiana
    
    8990 Mansfield Road
Shreveport, Louisiana