To Our Shareholders
EVERY DAY IS A NEW HORIZON.
It’s an old cliché, yes, but it is also accepted knowledge that every day begins with a new opportunity. Every morning we open our doors at Heritage Bank to the possibilities that our customers seek. Every new customer brings with him/her the chance to rethink the way we do business. Our job is to be prepared to accept the challenges and to implement the next generation of banking.
Our excellent results in 2017 highlights our progress in achieving and exceeding our strategic growth targets for the year. We demonstrated our ability to achieve the sound and steady growth that is a hallmark for HopFed Bancorp, Inc. We know that our responsibility is to develop and implement a growth strategy based on delivering strong, consistent, high-quality results. Our purpose is to help make ﬁnancial lives better, through the power of every connection we make every day at Heritage Bank.
In an ever-changing ﬁnancial environment—both locally, state-wide and nationally—we strive to remain nimble and able to adapt to change in the near term, while adhering to our long-term goals and strategies. With this in mind, we work to support our customers and clients while delivering results for our shareholders.
In 2017, we made progress in growing our revenues, managing risk, and investing in our workforce and our capa-bilities. We drove these results in part through operational excellence, a focus on customer responsiveness, and a continued commitment to contemporary and timely product delivery. We are optimistic and encouraged that 2018 holds the potential to nurture this growth into the coming year.
We are very proud of our strong ﬁnancial results in 2017 that were generated organically through our existing markets. We have made signiﬁcant progress over the past few years in strengthening our earnings base, building deposits, and expanding our loans. Our net income rose 13.7% to $3.3 million, deposits increased 2.9% to $754.0 million, and loans were up 5.2% to $641.9 million. Our solid growth in 2017 allowed our Board of Directors to authorize a 25%increase in our cash dividend to $0.05 per share. We believe the increased dividend highlights HopFed’s significant improvement in proﬁtability since last year and our Board’s positive outlook about the future of our Company and Heritage Bank.
Our focus remains on serving the ﬁnancial needs of our customers. We believe we have the products and services we need to serve our customers, so we can focus on building stronger relationships with them and build long-term value.
Responsible growth means remaining steadfast in delivering on our purpose to help our customers and clients live their ﬁnancial lives by connecting them to all of our many capabilities. This strategy is focused on winning in the markets we serve, building on a customer-focused strategy, growing within our risk framework, and growing in a sustainable manner.
ENSURING SUSTAINABLE GROWTH.
We believe that a responsible growth strategy includes grow-ing within a clear risk framework so that we can maintain our balanced, stable, and ﬁnancially strong platform. This means understanding the risk and reward in everything we do and empowering our staff to share their viewpoints and observations of the market so we make better decisions. This conscientious approach to our development means we must adhere to rigorous standards of corporate governance; we must invest in our communities; and we must strive to be the best place to work by helping our more than 233 ﬁnancial professionals achieve their goals and aspirations. We ﬁrmly believe in investing in our workforce and creating an environment where they can thrive.
FORGING INTO THE FUTURE.
To continue our strong and long-standing performance into the years ahead, we remain committed to executing our responsible growth strategy. There will certainly be external impacts from market changes, driven by political and economic factors that we cannot predict. But as always, we will strive to be agile and adaptive, yet dedicated to the sound principles on which we have built this company since 1879. We thank you for your investment in the future of HopFed Bancorp, Inc. We will continue to invest in our business, our people, and our communities
because we understand that when our customers, employees,
and communities succeed, we all succeed.
John E. Peck,
President and CEO