hfbc-20150630.htm

Document and Entity Information
	6 Months Ended
	Jun. 30, 2015	Aug. 5, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Trading Symbol	HFBC
Entity Registrant Name	HOPFED BANCORP INC
Entity Central Index Key	0001041550
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		6,975,308

Consolidated Condensed Statements of Financial Condition (USD $)

In Thousands, unless otherwise specified	Jun. 30, 2015	Dec. 31, 2014
Assets
Cash and due from banks	$ 16,538	$ 34,389
Interest-earning deposits	3,145	6,050
Cash and cash equivalents	19,683	40,439
Federal Home Loan Bank stock, at cost	4,428	4,428
Securities available for sale	247,673	303,628
Loans held for sale	2,470	1,444
Loans receivable, net of allowance for loan losses of $5,534 at June 30, 2015, and $6,289 at December 31, 2014	554,806	539,264
Accrued interest receivable	3,873	4,576
Real estate and other assets owned	1,795	1,927
Bank owned life insurance	10,128	9,984
Premises and equipment, net	24,171	22,940
Deferred tax assets	1,668	2,261
Intangible asset		33
Other assets	6,918	4,861
Total assets	877,613	935,785
Deposits:
Non-interest-bearing accounts	112,396	115,051
Interest-bearing accounts
Interest bearing checking accounts	185,642	186,616
Savings and money market accounts	99,020	97,726
Other time deposits	320,461	331,915
Total deposits	717,519	731,308
Advances from Federal Home Loan Bank	9,000	34,000
Repurchase agreements	48,224	57,358
Subordinated debentures	10,310	10,310
Advances from borrowers for taxes and insurance	792	513
Dividends payable	296	301
Accrued expenses and other liabilities	3,216	3,593
Total liabilities	789,357	837,383
Stockholders' equity
Preferred stock, par value $0.01 per share; authorized - 500,000 shares; no shares issued and outstanding at June 30, 2015, and December 31, 2014.	0	0
Common stock, par value $.01 per share; authorized 15,000,000 shares; 7,950,436 issued and 6,977,245 outstanding at June 30, 2015, and 7,949,665 issued and 7,171,282 outstanding at December 31, 2014	79	79
Additional paid-in-capital	58,552	58,466
Retained earnings	46,455	45,729
Treasury stock	(12,159)	(9,429)
Unallocated ESOP shares (at cost, 570,830 shares at June 30, 2015, and no shares at December 31, 2014)	(7,525)
Accumulated other comprehensive income, net of taxes	2,854	3,557
Total stockholders' equity	88,256	98,402
Total liabilities and stockholders' equity	$ 877,613	$ 935,785

Consolidated Condensed Statements of Financial Condition (Parenthetical) (USD $)

In Thousands, except Share data, unless otherwise specified	Jun. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Loans receivable, allowance for loan losses	$ 5,534	$ 6,289
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	15,000,000	15,000,000
Common stock, shares issued	7,950,436	7,949,665
Common stock, shares outstanding	6,977,245	7,171,282
Treasury stock, shares	973,191	778,383
Unallocated ESOP shares	570,830	570,830

Consolidated Condensed Statements of Income (Loss) (USD $)
	3 Months Ended		6 Months Ended
In Thousands, except Share data, unless otherwise specified	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Interest income:
Loans receivable	$ 6,231	$ 6,503	$ 12,521	$ 12,830
Securities available for sale - taxable	1,268	1,694	3,716	3,473
Securities available for sale - nontaxable	416	531	869	1,075
Interest-earning deposits	4	6	8	14
Total interest income	7,919	8,734	17,114	17,392
Interest expense:
Deposits	1,245	1,488	2,505	2,959
Advances from Federal Home Loan Bank	66	428	135	862
Repurchase agreements	118	245	238	494
Subordinated debentures	183	193	367	377
Total interest expense	1,612	2,354	3,245	4,692
Net interest income	6,307	6,380	13,869	12,700
Provision for loan losses	270	(261)	485	119
Net interest income after provision for loan losses	6,037	6,641	13,384	12,581
Non-interest income:
Service charges	720	848	1,434	1,626
Merchant card income	286	276	556	535
Mortgage origination revenue	343	133	520	191
Gain on sale of securities	83	241	449	254
Income from bank owned life insurance	73	66	144	161
Financial services commission	194	168	353	374
Other operating income	169	213	325	402
Total non-interest income	1,868	1,945	3,781	3,543
Non-interest expenses:
Salaries and benefits	4,004	3,692	8,188	7,487
Occupancy	752	808	1,490	1,717
Data processing	701	736	1,393	1,464
Bank franchise tax	251	398	499	644
Intangible amortization	16	33	32	65
Professional services	468	341	797	628
Deposit insurance and examination	151	183	268	380
Advertising	340	341	646	655
Postage and communications	134	140	266	283
Supplies	111	158	257	303
Loss on real estate owned	741	102	734	125
Real estate owned	67	92	204	222
Other operating	498	423	930	798
Total non-interest expense	8,234	7,447	15,704	14,771
Income (loss) before income tax	(329)	1,139	1,461	1,353
Income tax expense (benefit)	(212)	214	223	74
Net income (loss)	$ (117)	$ 925	$ 1,238	$ 1,279
Net income (loss) per share:
Basic	$ (0.02)	$ 0.13	$ 0.19	$ 0.17
Diluted	$ (0.02)	$ 0.13	$ 0.19	$ 0.17
Dividend per share	$ 0.04	$ 0.04	$ 0.08	$ 0.08
Weighted average shares outstanding - basic	6,425,687	7,376,726	6,588,845	7,396,627
Weighted average shares outstanding - diluted	6,425,687	7,376,726	6,588,845	7,396,627

Consolidated Condensed Statements of Comprehensive Income (Loss) (USD $)
	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (117)	$ 925	$ 1,238	$ 1,279
Unrealized gains on securities for which a portion of an other than temporary impairment has been recorded in earnings:
Unrealized holding gains arising during the period			306
Income tax expense			(104)
Other comprehensive income on available for sale for sale securities with other than temporary impairment			202
Unrealized gain (loss) on investment securities available for sale, net of tax effect of $907 and ($1,340) for the three month periods ended June 30, 2015, and June 30, 2014, respectively; and $379 and ($2,260) for the six month periods ended June 30, 2015, and June 30, 2014, respectively;	(1,761)	2,601	(736)	4,387
Unrealized gain on derivatives, net of tax effect of ($32) and ($31) for the three month periods ended June 30, 2015, and June 30, 2014, respectively; and of ($65) and ($56) for the six month periods ending June 30, 2015, and June 30, 2014, respectively;	63	60	127	109
Reclassification adjustment for gains included in net income, net of tax effect of $28 and $82 for the three month periods ended June 30, 2015, and June 30, 2014, respectively; and $153 and $86 the six month periods ended June 30, 2015, and June 30, 2014, respectively;	(54)	(159)	(296)	(168)
Other comprehensive income (loss) on available for sale without other than temporary impairment	(1,752)	2,502	(905)	4,328
Total other comprehensive income (loss)	(1,752)	2,502	(703)	4,328
Comprehensive income (loss)	$ (1,869)	$ 3,427	$ 535	$ 5,607

Consolidated Condensed Statements of Comprehensive Income (Loss) (Parenthetical) (USD $)
	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statement of Comprehensive Income [Abstract]
Unrealized gain (loss) on investment securities available for sale, tax effect	$ 907	$ (1,340)	$ 379	$ (2,260)
Unrealized gain on derivatives, tax effect	(32)	(31)	(65)	(56)
Reclassification adjustment for other than temporary impairment included in net income, tax effect	$ 28	$ 82	$ 153	$ 86

Consolidated Condensed Statement of Stockholders' Equity (USD $)

In Thousands, except Share data	Total	Common Stock [Member]	Preferred Stock [Member]	Additional Capital Surplus [Member]	Retained Earnings [Member]	Treasury Stock Common [Member]	Accumulated Other Comprehensive Income [Member]	Additional Common Stock [Member]	Capital Surplus [Member]	Unearned Esop Shares [Member]
Beginning balance at Dec. 31, 2013	$ 95,717	$ 79		$ 58,302	$ 44,694	$ (5,929)	$ (1,429)
Beginning balance, shares at Dec. 31, 2013		7,447,903
Consolidated net income	1,279				1,279
Restricted stock awards/issued	0	0	0	0	0	0	0
Restricted stock awards/issued, shares		20,238
Repurchase of treasury stock	(838)					(838)
Repurchase of treasury stock, shares		(72,856)
Compensation expense, restricted stock awards	65			65
Net change in unrealized gain on securities available for sale, net of income taxes	4,219						4,219
Net change in unrealized loss on derivatives, net of income tax benefit	109						109
Cash dividend to common stockholders	(591)				(591)
Ending balance at Jun. 30, 2014	99,960	79		58,367	45,382	(6,767)	2,899
Ending balance, shares at Jun. 30, 2014		7,395,285
Beginning balance at Dec. 31, 2014	98,402	(9,429)			45,729		3,557	79	58,466
Beginning balance, shares at Dec. 31, 2014		7,171,282
Consolidated net income	1,238				1,238
Treasury stock reissued		7,884								(7,884)
Treasury stock reissued, shares		600,000
Restricted stock awards/issued	0	0			0		0	0	0	0
Restricted stock awards/issued, shares		771
Repurchase of treasury stock	(10,614)	(10,614)
Repurchase of treasury stock, shares		(794,808)
ESOP shares committed to release	359									359
Change in price of ESOP shares	(12)								(12)
Compensation expense, restricted stock awards	98								98
Net change in unrealized gain on securities available for sale, net of income taxes	(830)						(830)
Net change in unrealized loss on derivatives, net of income tax benefit	127						127
Cash dividend to common stockholders	(512)				(512)
Ending balance at Jun. 30, 2015	$ 88,256	$ (12,159)			$ 46,455		$ 2,854	$ 79	$ 58,552	$ (7,525)
Ending balance, shares at Jun. 30, 2015		6,977,245

Consolidated Condensed Statement of Stockholders' Equity (Parenthetical) (USD $)
	6 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2015	Jun. 30, 2014
Net change in unrealized gain on securities available for sale, income taxes	$ 428	$ 2,173
Net change in unrealized loss on derivatives, income tax benefit	(65)	56
Accumulated Other Comprehensive Income [Member]
Net change in unrealized gain on securities available for sale, income taxes	428	2,173
Net change in unrealized loss on derivatives, income tax benefit	$ (65)	$ 56

Consolidated Condensed Statements of Cash Flows (USD $)
	6 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net cash provided by operating activities	$ 2,306	$ 4,477
Cash flows from investing activities
Proceeds from sales, calls and maturities of securities available for sale	80,197	52,414
Purchase of securities available for sale	(25,989)	(59,556)
Net (increase) decrease in loans	(16,874)	5,560
Proceeds from sale of foreclosed assets	240	249
Purchase of premises and equipment	(1,842)	(508)
Net cash provided by (used in) investing activities	35,732	(1,841)
Cash flows from financing activities:
Net decrease in demand deposits	(2,655)	(1,702)
Net decrease in time and other deposits	(11,134)	(18,026)
Increase in advances from borrowers for taxes and insurance	279	202
Advances from Federal Home Loan Bank	15,000	15,000
Repayment of advances from Federal Home Loan Bank	(40,000)	(21,004)
Net decrease in repurchase agreements	(9,134)	(1,634)
Cash used to repurchase treasury stock	(10,614)	(838)
Dividends paid on common stock	(536)	(591)
Net cash used in financing activities	(58,794)	(28,593)
Decrease in cash and cash equivalents	(20,756)	(25,957)
Cash and cash equivalents, beginning of period	40,439	55,848
Cash and cash equivalents, end of period	19,683	29,891
Supplemental disclosures of cash flow information:
Interest paid	3,279	4,752
Income taxes paid	55
Supplemental disclosures of non-cash investing and financing activities:
Loans charged off	1,357	588
Foreclosures and in substance foreclosures of loans during period	842	190
Net unrealized gains (losses) on investment securities classified as available for sale	(1,258)	6,392
Increase (decrease) in deferred tax asset related to unrealized gains on investments	428	(2,173)
Dividends declared and payable	296	308
Issue of treasury stock to ESOP	$ 7,884

Basis of Presentation
	6 Months Ended
	Jun. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Text Block

(1)	BASIS OF PRESENTATION

HopFed Bancorp, Inc. (the “Company”) was formed at the direction of Heritage Bank USA Inc., formerly Hopkinsville Federal Savings Bank (the “Bank”), to become the holding company of the Bank upon the conversion of the Bank from a federally chartered mutual savings bank to a federally chartered stock savings bank. The conversion was consummated on February 6, 1998. The Company’s primary assets are the outstanding capital stock of the converted Bank, and its sole business is that of the converted Bank.

On June 5, 2013, the Bank’s legal name became Heritage Bank USA Inc. and the Bank was granted a commercial bank charter by the Kentucky Department of Financial Institutions (“KDFI”). On June 5, 2013, the Bank became subject to regulation by the KDFI and the Federal Deposit Insurance Corporation (“FDIC”). On the same day, HopFed Bancorp was granted a bank holding company charter by the Federal Reserve Bank of Saint Louis (“FED”) and as such regulated by the FED.

The Bank operates a mortgage division, Heritage Mortgage Services, in Clarksville, Tennessee with agents located in several of its markets. The Bank has a financial services division, Heritage Solutions, with offices in Murray, Kentucky, Kingston Springs, Tennessee, and Pleasant View, Tennessee. Heritage Wealth Management agents travel throughout western Kentucky and middle Tennessee offering fixed and variable annuities, mutual funds and brokerage services. In October of 2014, the Bank opened a loan production office in Nashville, Tennessee.

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) necessary for fair representation have been included. The results of operations and other data for the three month period ended June 30, 2015, are not necessarily indicative of results that may be expected for the entire fiscal year ending December 31, 2015.

The accompanying unaudited financial statements should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The accounting policies followed by the Company are set forth in the Summary of Significant Accounting Policies in the Company’s December 31, 2014, Consolidated Financial Statements.

Income (Loss) Per Share
	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
Income (Loss) Per Share	Text Block

(2)	INCOME (LOSS) PER SHARE

The following schedule reconciles the numerators and denominators of the basic and diluted income (loss) per share (“IPS”) computations for the three and six month periods ended June 30, 2015, and June 30, 2014. For the three and six month periods ended June 30, 2015, the Company’s financial statements reflect a liability adequate to release of 29,170 shares from the HopFed Bancorp, Inc. 2015 Employee Stock Ownership Plan (the “ESOP”). Therefore, the Company has included 29,170 shares held by the ESOP in the IPS calculation. The Company has excluded 570,830 unearned shares purchased and owned by the ESOP from our IPS computations. Diluted common shares arise from the potentially dilutive effect of the Company’s stock options and warrants outstanding.


	Three Month Period Ended June 30,
	2015			2014

Basic IPS:
Net income (loss)	($	117,000	)	$	925,000
Average common shares outstanding		6,425,687			7,376,726

Net income (loss) per share	($	0.02	)	$	0.13


Diluted IPS
Net income (loss)	($	117,000	)	$	925,000
Average common shares outstanding		6,425,687			7,376,726
Dilutive effect of stock options		—			—

Average diluted shares outstanding		6,425,687			7,376,726

Net income (loss) per share, diluted	($	0.02	)	$	0.13


	Six Month Period Ended June 30,
	2015			2014

Basic IPS:
Net income	$	1,238,000		$	1,279,000
Average common shares outstanding		6,588,845			7,396,627

Net income per share	$	0.19		$	0.17


Diluted IPS
Net income	$	1,238,000		$	1,279,000
Average common shares outstanding		6,588,845			7,396,627
Dilutive effect of stock options		—			—

Average diluted shares outstanding		6,588,845			7,396,627

Net income per share, diluted	$	0.19		$	0.17

Stock Compensation
	6 Months Ended
	Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Compensation	Text Block

(3)	STOCK COMPENSATION

The Company incurred compensation cost related to the HopFed Bancorp, Inc. 2004 Long Term Incentive Plan of $49,000 and $98,000 for the three and six month periods ended June 30, 2015, and $35,000 and $65,000 for the three and six month periods ended June 30, 2014, respectively. The Company issued 771 shares during the three and six month periods ended June 30, 2015. The Company issued 20,238 shares of restricted stock during the three and six month periods ended June 30, 2014. The table below provides a detail of the Company’s future compensation expense related to restricted stock vesting at June 30, 2015:


Year Ending December 31,	Future Expense

2015	$	89,875
2016		135,283
2017		48,459
2018		5,630
2019		725


Total	$	279,972

The compensation committee may make additional awards of restricted stock, thereby increasing the future expense related to this plan. In addition, award vesting may be accelerated due to certain events as outlined in the restricted stock award agreement. Any acceleration of vesting will change the timing of, but not the aggregate amount of, compensation expense incurred.

Securities
	6 Months Ended
	Jun. 30, 2015
Cash and Cash Equivalents [Abstract]
Securities	Text Block

(4)	SECURITIES

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluations. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At June 30, 2015, the Company has 61 securities with unrealized losses. The carrying amount of securities and their estimated fair values at June 30, 2015, were as follows:


	June 30, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(Dollars in Thousands)
Restricted:
FHLB stock	$	4,428		—		—			4,428


Available for sale
U.S. Treasury securities	$	2,001		10		—			2,011
Agency debt securities		92,585		1,971		(539	)		94,017
Taxable municipal bonds		8,428		150		(78	)		8,500
Tax free municipal bonds		49,143		2,511		(202	)		51,452
Trust preferred securities		1,608		195		—			1,803
Mortgage-backed securities:
GNMA		21,874		252		(124	)		22,002
FNMA		32,733		423		(112	)		33,044
FHLMC		5,657		30		(34	)		5,653
SLMA CMO		3,806		—		(23	)		3,783
AGENCY CMO		25,316		186		(94	)		25,408

	$	243,151		5,728		(1,206	)		247,673

The carrying amount of securities and their estimated fair values at December 31, 2014, was as follows:


	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(Dollars in Thousands)
Restricted:
FHLB stock	$	4,428		—		—			4,428


Available for sale
U.S. Treasury securities	$	3,977		3		—			3,980
Agency debt securities		101,654		2,125		(527	)		103,252
Tax free municipal bonds		57,399		3,814		(166	)		61,047
Taxable municipal bonds		11,871		235		(63	)		12,043
Trust preferred securities		1,600		—		(111	)		1,489
Commercial bonds		2,000		7		—			2,007
Mortgage-backed securities:
GNMA		27,535		670		(122	)		28,083
FNMA		50,617		694		(536	)		50,775
FHLMC		3,276		38		—			3,314
SLMA CMO		9,895		—		(252	)		9,643
AGENCY CMO		28,024		176		(205	)		27,995

	$	297,848		7,762		(1,982	)		303,628

The scheduled maturities of debt securities available for sale at June 30, 2015, were as follows:


June 30, 2015	Amortized Cost		Estimated Fair Value

Due within one year	$	4,830	$	4,927
Due in one to five years		16,675		16,972
Due in five to ten years		40,668		41,210
Due after ten years		26,089		27,452

		88,262		90,561
Amortizing agency bonds		65,503		67,222
Mortgage-backed securities		89,386		89,890

Total unrestricted securities available for sale	$	243,151	$	247,673

The scheduled maturities of debt securities available for sale at December 31, 2014, were as follows:


December 31, 2014	Amortized Cost		Estimated Fair Value

Due within one year	$	4,830	$	4,927
Due in one to five years		21,564		21,818
Due in five to ten years		41,683		42,613
Due after ten years		33,119		35,380

		101,196		104,738
Amortizing agency bonds		77,305		79,080
Mortgage-backed securities		119,347		119,810

Total unrestricted securities available for sale	$	297,848	$	303,628

The estimated fair value and unrealized loss amounts of temporarily impaired investments as of June 30, 2015, are as follows:


	Less than 12 months					12 months or longer					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
	(Dollars in Thousands)
Available for sale

U.S. Agency debt securities	$	20,573		(172	)		14,473		(367	)		35,046		(539	)
Taxable municipals		2,043		(15	)		2,994		(63	)		5,037		(78	)
Tax free municipals		1,475		(3	)		6,209		(199	)		7,684		(202	)
Mortgage-backed securities:
GNMA		4,954		(38	)		11,177		(86	)		16,131		(124	)
FNMA		7,338		(62	)		3,068		(50	)		10,406		(112	)
FHLMC		2,663		(34	)		—		—			2,663		(34	)
SLMA CMOs		183		(2	)		3,600		(21	)		3,783		(23	)
AGENCY CMOs		8,245		(29	)		1,970		(65	)		10,215		(94	)

Total available for sale	$	47,474		(355	)		43,491		(851	)		90,965		(1,206	)

The estimated fair value and unrealized loss amounts of temporarily impaired investments as of December 31, 2014, were as follows:


	Less than 12 months					12 months or longer					Total
December 31, 2014	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses

Available for sale

U.S. Agency debt securities	$	14,021		(20	)		29,156		(507	)		43,177		(527	)
Taxable municipals		—		—			4,785		(63	)		4,785		(63	)
Tax free municipals		—		—			6,647		(166	)		6,647		(166	)
Trust preferred securities		—		—			1,489		(111	)		1,489		(111	)
Mortgage-backed securities:
GNMA		12,568		(108	)		2,895		(14	)		15,463		(122	)
FNMA		—		—			18,927		(536	)		18,927		(536	)
SLMA CMOs		1,923		(14	)		7,720		(238	)		9,643		(252	)
AGENCY CMOs		9,545		(91	)		7,685		(114	)		17,230		(205	)

Total available for sale	$	38,057		(233	)		79,304		(1,749	)		117,361		(1,982	)

At June 30, 2015, securities with a book value of approximately $162.8 million and a market value of approximately $168.2 million were pledged to various municipalities for deposits in excess of FDIC limits as required by law.

At June 30, 2015, securities with a book and market value of $42.2 million were sold under agreements to repurchase from various customers. Furthermore, the Company has a wholesale repurchase agreement with third party secured by investments with a combined book value of $6.9 million and a market value of $7.1 million. The repurchase agreement is in the amount of $6.0 million and has a maturity of September 18, 2016, and is currently callable on a quarterly basis and has a fixed rate of interest of 4.36%.

Loans
	6 Months Ended
	Jun. 30, 2015
Receivables [Abstract]
Loans	Text Block

(5)

LOANS

The components of loans receivable in the consolidated balance sheets as of June 30, 2015, and December 31, 2014, were as follows:


	June 30, 2015			June 30, 2015			December 31, 2014			December 31, 2014
	Amount			Percent			Amount			Percent
	(Dollars in thousands, except percentages)
Real estate loans
One-to-four family (closed end) first mortgages	$	146,285			26.1	%	$	150,551			27.6	%
Second mortgages (closed end)		2,046			0.4	%		2,102			0.4	%
Home equity lines of credit		33,803			6.0	%		34,238			6.3	%
Multi-family		22,580			4.0	%		25,991			4.8	%
Construction		27,072			4.8	%		24,241			4.4	%
Land		24,521			4.4	%		26,654			4.9	%
Farmland		41,224			7.4	%		42,874			7.8	%
Non-residential real estate		160,039			28.5	%		150,596			27.6	%

Total mortgage loans		457,570			81.6	%		457,247			83.8	%

Consumer loans		16,011			2.9	%		14,438			2.6	%
Commercial loans		87,148			15.5	%		74,154			13.6	%

Total other loans		103,159			18.4	%		88,592			16.2	%

Total loans, gross		560,729			100.0	%		545,839			100.0	%


Deferred loan cost, net of income		(389	)					(286	)
Less allowance for loan losses		(5,534	)					(6,289	)


Total loans	$	554,806					$	539,264

The allowance for loan losses totaled $5.5 million at June 30, 2015, $6.3 million at December 31, 2014, and $8.4 million at June 30, 2014, respectively. The ratio of the allowance for loan losses to total loans was 0.99% at June 30, 2015, 1.15% at December 31, 2014, and 1.53% at June 30, 2014. The following table indicates the type and level of non-accrual loans at the periods indicated below:


	June 30, 2015		December 31, 2014		June 30, 2014
	(Dollars in Thousands)
One-to-four family mortgages	$	1,456		1,501		524
Home equity line of credit		48		—		29
Multi-family		1,827		95		—
Land		1,982		215		1,217
Non-residential real estate		520		1,159		6,520
Farmland		209		115		13
Consumer loans		—		—		1
Commercial loans		1,014		90		431

Total non-accrual loans	$	7,056		3,175		8,735

The following table provides a detail of the Company’s activity in the allowance for loan loss account by loan type for the six month period ended June 30, 2015:


Six month period ended June 30, 2015	Balance 12/31/2014		Charge off 2015			Recovery 2015		General Provision 2015			Specific Provision 2015			Ending Balance 6/30/2015

One-to-four family mortgages	$	1,198		(88	)		21		61			(194	)		998
Home equity line of credit		181		(92	)		3		89			15			196
Junior liens		14		—			2		(2	)		(4	)		10
Multi-family		85		—			—		—			(12	)		73
Construction		146		—			—		—			20			166
Land		1,123		(631	)		—		84			597			1,173
Non-residential real estate		2,083		(222	)		2		(73	)		(150	)		1,640
Farmland		461		—			—		—			(94	)		367
Consumer loans		494		(177	)		73		91			(134	)		347
Commercial loans		504		(147	)		16		222			(31	)		564


	$	6,289		(1,357	)		117		472			13			5,534

The following table provides a detail of the Company’s activity in the allowance for loan loss account by loan type for the year ended December 31, 2014:


Year ended December 31, 2014	Balance 12/31/2013		Charge off 2014			Recovery 2014		General Provision 2014			Specific Provision 2014			Ending Balance 12/31/2014

One-to-four family mortgages	$	2,048		(233	)		24		(304	)		(337	)		1,198
Home equity line of credit		218		(83	)		3		(37	)		80			181
Junior liens		39		—			9		(25	)		(9	)		14
Multi-family		466		—			—		(381	)		—			85
Construction		88		(139	)		9		58			130			146
Land		1,305		—			—		(74	)		(108	)		1,123
Non-residential real estate		2,719		(66	)		864		(1,368	)		(66	)		2,083
Farmland		510		—			—		542			(591	)		461
Consumer loans		541		(415	)		109		(13	)		272			494
Commercial loans		748		(296	)		94		(244	)		202			504


	$	8,682		(1,232	)		1,112		(1,846	)		(427	)		6,289

The table below presents loan balances at June 30, 2015, by loan classification allocated between past due, performing and non-performing:


			30 – 89						Impaired Loans
	Currently		Days		Non-accrual		Special		Currently Performing
June 30, 2015	Performing		Past Due		Loans		Mention		Substandard		Doubtful		Total
	(Dollars in Thousands)

One-to-four family mortgages	$	142,987		398		1,456		42		1,402		—		146,285
Home equity line of credit		33,113		69		48		—		573		—		33,803
Junior liens		1,992		—		—		38		16		—		2,046
Multi-family		17,818		140		1,827		1,655		1,140		—		22,580
Construction		26,972		100		—		—		—		—		27,072
Land		14,425		—		1,982		44		8,070		—		24,521
Non-residential real estate		149,565		162		520		640		9,152		—		160,039
Farmland		40,143		168		209		681		23		—		41,224
Consumer loans		15,790		13		—		14		194		—		16,011
Commercial loans		84,772		126		1,014		169		1,067		—		87,148

Total	$	527,577		1,176		7,056		3,283		21,637		—		560,729

The table below presents loan balances at December 31, 2014, by loan classification allocated between past due, performing and non-performing:


			30 - 89						Impaired Loans
	Currently		Days		Non-accrual		Special		Currently Performing
	Performing		Past Due		Loans		Mention		Substandard		Doubtful		Total

One-to-four family mortgages	$	145,372		757		1,501		203		2,718		—		150,551
Home equity line of credit		33,338		143		—		—		757		—		34,238
Junior liens		2,025		—		—		40		37		—		2,102
Multi-family		20,066		—		95		2,904		2,926		—		25,991
Construction		24,241		—		—		—		—		—		24,241
Land		14,674		654		215		362		10,749		—		26,654
Non-residential real estate		131,854		—		1,159		5,492		12,091		—		150,596
Farmland		40,057		64		115		516		2,122		—		42,874
Consumer loans		14,104		14		—		21		299		—		14,438
Commercial loans		71,191		55		90		325		2,493		—		74,154


Total	$	496,922		1,687		3,175		9,863		34,192		—		545,839

The following table presents the balance in the allowance for loan losses and the recorded investment in loans as of June 30, 2015, and December 31, 2014, by portfolio segment and based on the impairment method as of June 30, 2015, and December 31, 2014.


	Commercial		Land Development / Construction		Commercial Real Estate		Residential Real Estate		Consumer		Total
June 30, 2015:
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	91		116		445		46		48	$	746
Collectively evaluated for impairment		473		1,223		1,635		1,158		299		4,788

Total ending allowance balance	$	564		1,339		2,080		1,204		347	$	5,534


Loans:
Loans individually evaluated for impairment	$	2,081		10,052		12,871		3,495		194	$	28,693
Loans collectively evaluated for impairment		85,067		41,541		210,972		178,639		15,817		532,036

Total ending loans balance	$	87,148		51,593		223,843		182,134		16,011	$	560,729


	Commercial		Land Development / Construction		Commercial Real Estate		Residential Real Estate		Consumer		Total
December 31, 2014:
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—		663		738		51		62	$	1,514
Collectively evaluated for impairment		504		606		1,891		1,342		432		4,775

Total ending allowance balance	$	504		1,269		2,629		1,393		494	$	6,289


Loans:
Loans individually evaluated for impairment	$	2,583		10,964		18,508		5,013		299	$	37,367
Loans collectively evaluated for impairment		71,571		39,931		200,953		181,878		14,139		508,472

Total ending loans balance	$	74,154		50,895		219,461		186,891		14,438	$	545,839

All loans listed as 30-89 days past due and non-accrual are not performing as agreed. Loans listed as special mentioned, substandard and doubtful are paying as agreed. However, the customer’s financial statements may indicate weaknesses in their current cash flow, the customer’s industry may be in decline due to current economic conditions, collateral values used to secure the loan may be declining, or the Company may be concerned about the customer’s future business prospects.

The Company does not originate loans it considers sub-prime and is not aware of any exposure to the additional credit concerns associated with sub-prime lending in either the Company’s loan or investment portfolios. The Company does have a significant amount of construction and land development loans. Management reports to the Company’s Board of Directors on the status of the Company’s specific construction and development loans as well as the market trends in those markets in which the Company actively participates.

The Company’s annualized net charge off ratios for six month periods ended June 30, 2015, June 30, 2014, and the year ended December 31, 2014, was 0.45%, 0.16% and 0.02%, respectively. The ratios of allowance for loan losses to non-accrual loans at June 30, 2015, June 30, 2014, and December 31, 2014, were 78.4%, 95.6%, and 198.08%, respectively.

The determination of the allowance for loan losses is based on management’s analysis, performed on a quarterly basis. Various factors are considered, including the market value of the underlying collateral, growth and composition of the loan portfolio, the relationship of the allowance for loan losses to outstanding loans, historical loss experience, delinquency trends and prevailing economic conditions. Although management believes its allowance for loan losses is adequate, there can be no assurance that additional allowances will not be required or that losses on loans will not be incurred.

The Company conducts annual reviews on all loan relationships above one million to ascertain the borrowers continued ability to service their debt as agreed. In addition to the credit relationships mentioned above, management may classify any credit relationship once it becomes aware of adverse credit trends for that customer. Typically, the annual review consists of updated financial statements for borrowers and any guarantors, a review of the borrower’s credit history with the Company and other creditors, and current income tax information.

As a result of this review, management will classify loans based on their credit risk. Additionally, the Company provides a risk grade for all loans past due more than sixty days. The Company uses the following risk definitions for risk grades:

Satisfactory loans of average strength having some deficiency or vulnerability to changing economic or industry conditions. These customers should have reasonable amount of capital and operating ratios. Secured loans may lack in margin or liquidity. Loans to individuals, perhaps supported in dollars of net worth, but with supporting assets may be difficult to liquidate.

Watch loans are acceptable credits: (1) that need continual monitoring, such as out-of territory or asset-based loans (since the Bank does not have an asset-based lending department), or (2) with a marginal risk level to business concerns and individuals that; (a) have exhibited favorable performance in the past, though currently experiencing negative trends; (b) are in an industry that is experiencing volatility or is declining, and their performance is less than industry norms; and (c) are experiencing unfavorable trends in their financial position, such as one-time net losses or declines in asset values. These marginal borrowers may have early warning signs of problems such as occasional overdrafts and minor delinquency. If considered marginal, a loan would be a “watch” until financial data demonstrated improved performance or further deterioration to a “substandard” grade usually within a 12-month period. In the table on page 23, Watch loans are included with satisfactory loans and classified as Pass.

Special Mention loans are currently protected but are potentially weak. These loans constitute an undue and unwarranted credit risk but not to the point of justifying a substandard classification. The credit risk may be relatively minor yet constitutes an unwarranted risk in light of the circumstances surrounding a specific loan. These credit weaknesses, if not checked or corrected, will weaken the loan or inadequately protect the Bank’s credit position at some future date.

A Substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. The loans are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. This does not imply ultimate loss of the principal, but may involve burdensome administrative expenses and the accompanying cost to carry the credit. Examples of substandard loans include those to borrowers with insufficient or negative cash flow, negative net worth coupled with inadequate guarantor support, inadequate working capital, and/or significantly past-due loans and overdrafts.

A loan classified Doubtful has all the weaknesses inherent in a substandard credit except that the weaknesses make collection or liquidation in full (on the basis of currently existing facts, conditions, and values) highly questionable and improbable. The possibility of loss is extremely high, but because of certain pending factors charge-off is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans. The doubtful classification is applied to that portion of the credit in which the full collection of principal and interest is questionable.

A loan is considered to be impaired when management determines that it is possible that the Company will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement. The value of individually impaired loans is measured based on the present value of expected payments or using the fair value of the collateral less cost to sell if the loan is collateral dependent. Currently, it is management’s practice to classify all substandard or doubtful loans as impaired. At June 30, 2015, December 31, 2014, and June 30, 2014, the Company’s impaired loans totaled $28.7 million, $37.4 million and $37.7 million, respectively.

At June 30, 2015, December 31, 2014 and June 30, 2014, the Company’s specific reserve for impaired loans totaled $746,000, $1.5 million and $1.5 million respectively. Loans by classification type and the related allowance amounts at June 30, 2015, are as follows:


											Specific		Reserve
											Reserve		for
			Special		Impaired Loans						for		Performing
June 30, 2015	Pass		Mention		Substandard		Doubful		Total		Impairment		Loans
	(Dollars in Thousands)
One-to-four family mortgages	$	143,385		42		2,858		—		146,285		46		952
Home equity line of credit		33,182		—		621		—		33,803		—		196
Junior liens		1,992		38		16		—		2,046		—		10
Multi-family		17,958		1,655		2,967		—		22,580		—		73
Construction		27,072		—		—		—		27,072		—		166
Land		14,425		44		10,052		—		24,521		116		1,057
Non-residential real estate		149,727		640		9,672		—		160,039		445		1,195
Farmland		40,311		681		232		—		41,224		—		367
Consumer loans		15,803		14		194		—		16,011		48		299
Commercial loans		84,898		169		2,081		—		87,148		91		473


Total	$	528,753		3,283		28,693		—		560,729		746		4,788


Loans by classification type and the related valuation allowance amounts at December 31, 2014, are as follows:

			Special		Impaired Loans						Specific Allowance for		Allowance For Loans
	Pass		Mention		Substandard		Doubtful		Total		Impairment		Not Impaired
December 31, 2014

One-to-four family mortgages	$	146,129		203		4,219		—		150,551		51		1,147
Home equity line of credit		33,481		—		757		—		34,238		—		181
Junior lien		2,025		40		37		—		2,102		—		14
Multi-family		20,066		2,904		3,021		—		25,991		—		85
Construction		24,241		—		—		—		24,241		—		146
Land		15,328		362		10,964		—		26,654		663		460
Non-residential real estate		131,854		5,492		13,250		—		150,596		738		1,345
Farmland		40,121		516		2,237		—		42,874		—		461
Consumer loans		14,118		21		299		—		14,438		62		432
Commercial loans		71,246		325		2,583		—		74,154		—		504


Total	$	498,609		9,863		37,367		—		545,839		1,514		4,775

Impaired loans by classification type and the related valuation allowance amounts at June 30, 2015, were as follows:


							For the three month period ended
	At June 30, 2015						June 30, 2015
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
Impaired loans with no recorded reserve
One-to-four family mortgages	$	2,148		2,175		—		2,408		11
Home equity line of credit		621		621		—		693		—
Junior liens		16		16		—		18		—
Multi-family		2,967		2,967		—		2,982		34
Construction		—		—		—		—		—
Land		9,456		10,087		—		8,376		20
Farmland		232		232		—		237		—
Non-residential real estate		8,949		8,949		—		9,580		18
Consumer loans		3		3		—		5		—
Commercial loans		1,727		1,727		—		1,607		21

Total		26,119		26,777		—		25,906		104


Impaired loans with a specific allowance:

One-to-four family mortgages		710		710		46		712		—
Home equity line of credit		—		—		—		—		—
Junior liens		—		—		—		—		—
Multi-family		—		—		—		—		—
Construction		—		—		—		—		—
Land		596		596		116		2,009		—
Farmland		—		—		—		—		—
Non-residential real estate		723		723		445		952		—
Consumer loans		191		191		48		185		—
Commercial loans		354		354		91		529		16

Total		2,574		2,574		746		4,387		16


Total impaired loans	$	28,693		29,351		746		30,293		120

Impaired loans by classification type and the related valuation allowance amounts at December 31, 2014, were as follows:


							For the year ended
	At December 31, 2014						December 31, 2014
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
Impaired loans with no specific allowance
One-to-four family mortgages	$	3,501		3,501		—		2,972		176
Home equity line of credit		757		757		—		690		35
Junior liens		37		37		—		39		2
Multi-family		3,021		3,021		—		1,342		190
Construction		—		—		—		29		—
Land		7,740		7,740		—		8,978		339
Non-residential real estate		12,057		12,057		—		8,672		669
Farmland		2,237		2,237				3,968		125
Consumer loans		51		51		—		36		3
Commercial loans		2,583		2,583		—		2,246		154

Total		31,984		31,984		—		28,972		1,693


Impaired loans with a specific allowance

One-to-four family mortgages	$	718		718		51		1,434		44
Home equity line of credit		—		—		—		—		—
Junior liens		—		—		—		—		—
Multi-family		—		—		—		—		—
Construction		—		—		—		—		—
Land		3,224		4,737		663		3,418		160
Non-residential real estate		1,193		1,258		738		3,617		69
Farmland		—		—		—		619		—
Consumer loans		248		248		62		355		—
Commercial loans		—		—		—		100		—

Total		5,383		6,961		1,514		9,543		273


Total impaired loans	$	37,367		38,945		1,514		38,515		1,966

On a periodic basis, the Bank may modify the terms of certain loans. In evaluating whether a restructuring constitutes a troubled debt restructuring (TDR), Financial Accounting Standards Board has issued Accounting Standards Update 310 (ASU 310), A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring. In evaluating whether a restructuring constitutes a TDR, the Bank must separately conclude that both of the following exist:

•

The restructuring constitutes a concession

•

The debtor is experiencing financial difficulties

ASU 310 provides the following guidance for the Bank’s evaluation of whether it has granted a concession as follows:

•

If a debtor does not otherwise have access to funds at a market interest rate for debt with similar risk characteristics as the restructured debt, the restructured debt would be considered a below market rate, which may indicate that the Bank may have granted a concession. In that circumstance, the Bank should consider all aspects of the restructuring in determining whether it has granted a concession, the creditor must make a separate assessment about whether the debtor is experiencing financial difficulties to determine whether the restructuring constitutes a TDR.

•

A temporary or permanent increase in the interest rate on a loan as a result of a restructuring does not eliminate the possibility of the restructuring from being considered a concession if the new interest rate on the loan is below the market interest rate for loans of similar risk characteristics.

•

A restructuring that results in a delay in payment that is insignificant is not a concession. However, the Bank must consider a variety of factors in assessing whether a restructuring resulting in a delay in payment is insignificant.

At December 31, 2014, and June 30, 2015, the Company had two loans classified as performing TDRs. At June 30, 2015, the terms of both loans are interest only and are paying as agreed. There was no activity in loans classified as TDRs for the six month ended June 30, 2015. A summary of the activity in loans classified as TDRs for the six month period ended June 30, 2015, is as follows:


	Balance at 12/31/14		New TDR		Loss or Foreclosure		Transferred to Held For Sale		Removed from (Taken to) Non-accrual		Balance at 6/30/15
	(Dollars in Thousands)

Non-residential real estate	$	3,284		—		—		—		—		3,284


Total performing TDR	$	3,284		—		—		—		—		3,284

A summary of the activity in loans classified as TDRs for the twelve month period ended December 31, 2014, is as follows:


	Balance at 12/31/13		New TDR		Loss or Foreclosure		Transferred to Held For Sale			Removed from (Taken to) Non-accrual		Balance at 12/31/14
	(Dollars in Thousands)
One-to-four family mortgages	$	—		—		—		—			—	$	—
Non-residential real estate		—		10,271		—		(6,987	)		—		3,284
Commercial loans		—		—		—		—			—		—


Total performing TDR	$	—		10,271		—		(6,987	)		—	$	3,284

Real Estate and Other Assets Owned
	6 Months Ended
	Jun. 30, 2015
Text Block [Abstract]
Real Estate and Other Assets Owned	Text Block

(6)	REAL ESTATE AND OTHER ASSETS OWNED

The Company’s real estate and other assets owned represent properties and personal collateral acquired through customer loan defaults. The property is recorded at the lower of cost or fair value less estimated cost to sell and carrying cost at the date acquired. Any difference between the book value and estimated market value is recognized as a charge off through the allowance for loan loss account. Additional real estate owned and other asset losses may be determined on individual properties at specific intervals or at the time of disposal. In general, the Company will obtain a new appraisal on all real estate owned with a book balance in excess of $250,000 on an annual basis. Additional losses are recognized as a non-interest expense.

At June 30, 2015, December 31, 2014, and June 30, 2014, the composition of the Company’s balances in both real estate and assets owned and non-accrual loans are as follows:


	June 30, 2015			December 31, 2014			June 30, 2014
	(Dollars in Thousands)

One-to-four family mortgages	$	115			159			356
Land		943			1,768			934
Non-residential real estate		737			—			200

Total other assets owned	$	1,795			1,927			1,490


Total non-accrual loans	$	7,056			3,175			8,735


Total non-performing assets	$	8,851			5,102			10,225


Non-performing assets / Total assets		1.01	%		0.55	%		1.08	%

The following is a summary of the activity in the Company’s real estate and other assets owned for the six month period ending June 30, 2015:


	Balance		Activity During 2015					Reduction		Gain (Loss)			Balance
	12/31/2014		Foreclosures		Proceeds			in Values		on Sale			6/30/2015
	(Dollars in Thousands)

One-to-four family mortgages	$	159		105		(116	)		—		(33	)		115
Land		1,768		—		(124	)		—		(701	)		943
Non-residential real estate		—		737		—			—		—			737


Total	$	1,927		842		(240	)		—		(734	)		1,795

The following is a summary of the activity in the Company’s real estate and other assets owned for the year ended December 31, 2014:


	Activity During 2014
	Balance 12/31/2013		Foreclosures		Sales			Reduction in Values			Gain (Loss) on Sale			Balance 12/31/2014
	(Dollars in Thousands)
One-to-four family mortgages	$	350		461		(667	)		(5	)		20			159
Land		1,124		943		(123	)		(157	)		(19	)		1,768
Non-residential real estate		200		175		(328	)		—			(47	)		—


Total	$	1,674		1,579		(1,118	)		(162	)		(46	)		1,927

Investments in Affiliated Companies
	6 Months Ended
	Jun. 30, 2015
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]
Investments in Affiliated Companies	Text Block

(7)	INVESTMENTS IN AFFILIATED COMPANIES

Investments in affiliated companies accounted for under the equity method consist of 100% of the common stock of HopFed Capital Trust 1 (“Trust”), a wholly-owned statutory business trust. The Trust was formed on September 25, 2003. Summary financial information for the Trust follows (dollars in thousands):

Summary Statements of Financial Condition


	At June 30, 2015		At December 31, 2014

Assets - investment in subordinated debentures issued by HopFed Bancorp, Inc.	$	10,310		10,310


Liabilities		—		—

Stockholder’s equity – trust preferred securities		10,000		10,000
Common stock (100% Owned by HopFed Bancorp, Inc.)		310		310

Total stockholders’ equity	$	10,310		10,310

Summary Statement of Income


	Three Month Periods Ended June 30,				Six Month Period Ended June 30,
	2015		2014		2015		2014

Income – interest income from subordinated debentures issued by HopFed Bancorp, Inc.	$	89		87	$	174		173

Net income	$	89		87	$	174		173

Summary Statement of Stockholders’ Equity

(For the six month period ended June 30, 2015)


	Trust Preferred Securities		Common Stock		Retained Earnings			Total Stockholders’ Equity

Beginning balances, December 31, 2014	$	10,000		310		—			10,310
Net income		—		—		174			174
Dividends:
Trust preferred securities		—		—		(169	)		(169	)
Common paid to HopFed Bancorp, Inc.		—		—		(5	)		(5	)

Ending balances, June 30, 2015	$	10,000		310		—			10,310

Fair Value of Assets and Liabilities
	6 Months Ended
	Jun. 30, 2015
Fair Value Disclosures [Abstract]
Fair Value of Assets and Liabilities	Text Block

(8)	FAIR VALUE OF ASSETS AND LIABILITIES

In September 2006, the FASB issued ASC 820-10, Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value. The statement establishes a fair value hierarchy which requires an entity to maximize the use of observable input and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value.

•

Level 1 is for assets and liabilities that management has obtained quoted prices (unadjusted for transaction cost) or identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date.

•

Level 2 is for assets and liabilities in which significant unobservable inputs other than Level 1 prices such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•

Level 3 is for assets and liabilities in which significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company’s $1.8 million trust preferred is the only investment instrument classified as a Level 3 asset. The Company determines the value of the instrument by using the present value of scheduled future cash flows and discount accretion to determine an estimated market value for the security.

The fair values of securities available for sale are determined by a matrix pricing, which is a mathematical technique that is widely used in the industry to value debt securities without exclusively using quoted prices for the individual securities in the Company’s portfolio but rather by relying on the securities relationship to other benchmark quoted securities. Impaired loans are valued at the net present value of expected payments using the fair value of any assigned collateral. The liability associated with the Company’s derivative is obtained from a quoted value supplied by our correspondent banker. The value of real estate owned is obtained from appraisals completed on properties at the time of acquisition and annually thereafter.

Assets and Liabilities Measured on a Recurring Basis

The assets and liabilities measured at fair value on a recurring basis at June 30, 2015, are summarized below:


June 30, 2015 Description	Total carrying value in the consolidated balance sheet at June 30, 2015		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets

Available for sale securities	$	247,673		2,010		243,860		1,803

Liabilities
Interest rate swap	$	198		—		198		—

The assets and liabilities measured at fair value on a recurring basis at December 31, 2014, are summarized below


December 31, 2014 Description	Total carrying value in the consolidated balance sheet at December 31, 2014		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets

Available for sale securities	$	303,628		—		302,139		1,489

Liabilities
Interest rate swap	$	390		—		390		—

The assets and liabilities measured at fair value on a non-recurring basis are summarized below for June 30, 2015:


June 30, 2015 Description	Total carrying value in the consolidated balance sheet at 6/ 30/ 2015		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in Thousands)
Assets

Other real estate and other assets owned	$	1,795		—		—	$	1,795

Impaired loans, net of reserve of $746	$	1,828		—		—	$	1,828

The assets and liabilities measured at fair value on a non-recurring basis are summarized below for December 31, 2014:


December 31, 2014 Description	Total carrying value in the consolidated balance sheet at 12/31/2014		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets

Other real estate and other assets owned	$	1,927		—		—	$	1,927

Impaired loans, net of reserve of $1,514	$	3,869		—		—	$	3,869

The table below includes a roll-forward of the consolidated condensed statement of financial condition items for the six month periods ended June 30, 2015, and June 30, 2014, (including the change in fair value) for assets and liabilities classified by HopFed Bancorp, Inc. within level 3 of the valuation hierarchy for assets and liabilities measured at fair value on a recurring basis. When a determination is made to classify an asset or liability within level 3 of the valuation hierarchy, the determination is based upon the significance of the unobservable factors to the overall fair value measurement. However, since level 3 assets and liabilities typically include, in addition to the unobservable or level 3 components, observable components (that is components that are actively quoted and can be validated to external sources), the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology.


	2015				2014
Six month period ended June 30,	Other Assets		Other Liabilities		Other Assets		Other Liabilities
	(Dollars in Thousands)
Fair value, January 1,	$	1,489		—		1,489		—
Change in unrealized losses included in other comprehensive income for assets and liabilities still held at June 30,		306		—		—		—
Accretion of previous discounted amounts		8
Purchases, issuances and settlements, net		—		—		—		—
Transfers in and/or out of Level 3		—		—		—		—


Fair value, June 30,	$	1,803		—		1,489		—

The estimated fair values of financial instruments were as follows at June 30, 2015:


	Carrying Amount		Estimated Fair Value		Quoted Prices In Active Markets for Identical Assets Level 1		Using Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Financial Assets:
Cash and due from banks	$	16,538		16,538		16,538		—		—
Interest-earning deposits		3,145		3,145		3,145		—		—
Securities available for sale		247,673		247,673		2,010		243,860		1,803
Federal Home Loan Bank stock		4,428		4,428		—		4,428		—
Loans held for sale		2,470		2,470		—		2,470		—
Loans receivable		554,806		554,193		—		—		554,193
Accrued interest receivable		3,873		3,873		—		3,873		—
Financial liabilities:
Deposits		717,519		700,283		—		700,283		—
Advances from borrowers for taxes and insurance		792		792		—		792		—
Advances from Federal Home Loan Bank		9,000		9,136		—		9,136		—
Repurchase agreements		48,224		48,485		—		48,485		—
Subordinated debentures		10,310		10,099		—		—		10,099
Off-balance-sheet liabilities:
Market value of interest rate swap		198		198		—		198		—

The estimated fair values of financial instruments were as follows at December 31, 2014:


	Carrying Amount		Estimated Fair Value		Quoted Prices In Active Markets for Identical Assets Level 1		Using Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Financial Assets:
Cash and due from banks	$	34,389		34,389		34,389		—		—
Interest-earning deposits		6,050		6,050		6,050		—		—
Securities available for sale		303,628		303,628		—		302,139		1,489
Federal Home Loan Bank stock		4,428		4,428		—		4,428		—
Loans held for sale		1,444		1,444		—		1,444		—
Loans receivable		539,264		537,493		—		—		537,493
Accrued interest receivable		4,576		4,576		—		4,576		—
Financial liabilities:
Deposits		731,308		714,750		—		714,750		—
Advances from borrowers for taxes and insurance		513		513		—		513		—
Advances from Federal Home Loan Bank		34,000		34,217		—		34,217		—
Repurchase agreements		57,358		57,688		—		57,688		—
Subordinated debentures		10,310		10,099		—		—		10,099
Off-balance-sheet liabilities:
Market value of interest rate swap		390		390		—		390		—

Derivative Instruments
	6 Months Ended
	Jun. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments	Text Block

(9)	DERIVATIVE INSTRUMENTS

Under guidelines of Financial Accounting Standards Board (“FASB”) ASC 815, Derivative Instruments and Hedging Activities, as amended, all derivative instruments are required to be carried at fair value on the consolidated statement of financial position. ASC 815 provides special hedge accounting provisions, which permit the change in fair value of the hedge item related to the risk being hedged to be recognized in earnings in the same period and in the same income statement line as the change in the fair value of the derivative.

A derivative instrument designated in a hedge relationship to mitigate exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges under ASC 815. Derivative instruments designated in a hedge relationship to mitigate exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Cash value hedges are accounted for by recording the fair value of the derivative instrument and the fair value related to the risk being hedged of the hedged asset or liability on the consolidated statement of financial position with corresponding offsets recorded in the consolidated statement of financial position.

The adjustment to the hedged asset or liability is included in the basis of the hedged item, while the fair value of the derivative is recorded as a freestanding asset or liability. Actual cash receipts or payments and related amounts accrued during the period on derivatives included in a fair value hedge relationship are recorded as adjustments to the income or expense recorded on the hedged asset or liability.

Under both the fair value and cash flow hedge methods, derivative gains and losses not effective in hedging the change in fair value or expected cash flows of the hedged item are recognized immediately in the income statement. At the hedge’s inception and at least quarterly thereafter, a formal assessment is performed to determine whether changes in the fair values or cash flows of the derivative instrument has been highly effective in offsetting changes in the fair values or cash flows of the hedged items and whether they are expected to be highly effective in the future. If it is determined a derivative instrument has not been, or will not continue to be highly effective as a hedge, hedged accounting is discontinued. ASC 815 basis adjustments recorded on hedged assets and liabilities are amortized over the remaining life of the hedged item beginning no later than when hedge accounting ceases. There were no fair value hedging gains or losses, as a result of hedge ineffectiveness, recognized for the six month period ended June 30, 2015, or the year ended December 31, 2014.

In October of 2008, the Bank entered into an interest rate swap agreement for a term of seven years and an amount of $10.0 million. The Bank will pay a fixed rate of 7.27% for seven years and receive an amount equal to the three-month London Interbank Lending Rate (LIBOR) plus 3.10%. The interest rate swap is classified as a cash flow hedge by the Bank and will be tested quarterly for effectiveness. At June 30, 2015, and December 31, 2014, the cost of the Bank to terminate the cash flow hedge was approximately $198,000 and $390,000, respectively. The interest rate swap agreement expires October 8, 2015.

Effect of New Accounting Pronouncements
	6 Months Ended
	Jun. 30, 2015
Accounting Changes and Error Corrections [Abstract]
Effect of New Accounting Pronouncements	Text Block

(10)	EFFECT OF NEW ACCOUNTING PRONOUNCEMENTS

In January 2014, the FASB issued ASU No. 2014-04, Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. These amendments are intended to clarify when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan should be derecognized and the real estate recognized. The amendments clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either: (1) the creditor obtaining legal title to the residential real estate property upon completion of residential foreclosure, or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additional disclosures about such activities are required by these amendments. The amendments in this ASU become effective for public companies for annual periods and interim periods within those annual periods beginning after December 15, 2014, and early adoption is permitted. The adoption of ASU 2014-04 did not have a material impact on the Company’s financial position or results of operations.

On June 12, 2014, the FASB issued ASU 2014-11, which makes limited amendments to the guidance in ASC 860 on accounting for certain repurchase agreements (“repos”). ASU 2014-11 requires entities to account for repurchase-to-maturity transactions as secured borrowings (rather than as sales with forward repurchase agreements), (2) eliminates accounting guidance on linked repurchase financing transactions, and (3) expands disclosure requirements related to certain transfers of financial assets that are accounted for as sales and certain transfers (specifically, repos, securities lending transactions, and repurchase-to-maturity transactions) accounted for as secured borrowings. ASU 2014-11 also amends ASC 860 to clarify that repos and securities lending transactions that do not meet all of the de-recognition criteria in ASC 860-10-40-5 should be accounted for as secured borrowings. In addition, the ASU provides examples of repurchase and securities lending arrangements that illustrate whether a transferor has maintained effective control over the transferred financial assets. For public business entities, the accounting changes are effective for the first interim or annual period beginning after December 15, 2014. The adoption of ASU 2014-11 did not have a material impact on the Company’s financial position or results of operations.

ASU 2014-1, which amends FASB ASC Topic 323, Investments – Equity Method and Joint Ventures. The ASU impacts the Company’s accounting for investments in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments in the update permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received. The entity recognizes the net investment performance in the income statement as a component of income tax expense. The Company has chosen to continue to utilize the equity method for reporting under this topic. For public business entities, the accounting changes are effective for annual periods and interim reporting periods beginning after December 15, 2014. The adoption of ASU 2014-01 did not have a material impact on the Company’s financial position or results of operations.

ASU No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” The amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation - Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. However, compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest.

The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The Company adopted ASU No. 2014-12 effective January 1, 2015. Entities may apply the amendments in this ASU either: (1) prospectively to all awards granted or modified after the effective date; or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. As of March 31, 2015, the Company did not have any share-based payment awards that included performance targets that could be achieved after the requisite service period. As such, the adoption of ASU No. 2014-12 did not have a material impact on the Company’s Consolidated Financial Statements.

ASU 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20) – Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” ASU 2015-01 eliminates from U.S. GAAP the concept of extraordinary items, which, among other things, required an entity to segregate extraordinary items considered to be unusual and infrequent from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. ASU 2015-01 is effective for the Corporation beginning January 1, 2016, though early adoption is permitted. ASU 2015-01 is not expected to have a significant impact on the Company’s consolidated financial position or results of operations.

ASU No. 2015-02, “Amendments to the Consolidation Analysis.” This ASU affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the amendments: (1) Modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities; (2) Eliminate the presumption that a general partner should consolidate a limited partnership; (3) Affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; and (4) Provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. ASU No. 2015-02 is effective for interim and annual reporting periods beginning after December 15, 2015. The Company is currently evaluating the provisions of ASU No. 2015-02 to determine the potential impact the new standard will have on the Company’s Consolidated Financial Statements. In May 2014, the FASB issued new guidance related to Revenue from Contracts with Customers. This guidance supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Accounting Standards Codification. The guidance requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016; however, the FASB has proposed a one year deferral of the effective date. The Company is currently evaluating this guidance to determine the impact on its consolidated financial statements.

Effective January 1, 2015, the Company adopted new guidance related to Receivables. The new guidance requires that a government guaranteed mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if certain conditions are met. The adoption of this guidance was not material to the consolidated financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Income Taxes
	6 Months Ended
	Jun. 30, 2015
Income Tax Disclosure [Abstract]
Income Taxes	Text Block

(11)

INCOME TAXES

The Company and its subsidiaries file consolidated federal income tax returns and Tennessee excise tax returns. The Company and its non-bank subsidiaries filed consolidated Kentucky income tax returns. The Bank is exempt from Kentucky corporate income tax. The Company has no unrecognized tax benefits and has accrued any interest or penalties for uncertain tax positions. The effective tax rate differs from the statutory federal rate of 34% and Tennessee excise rate of 6.50% due to investments in qualified municipal securities; bank owned life insurance, income apportioned to Kentucky and certain non-deductible expenses.

Other Assets
	6 Months Ended
	Jun. 30, 2015
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Other Assets	Text Block

(12)

OTHER ASSETS

The Company has invested in two flow-through limited liability entities that manage and invest in affordable housing projects that qualify for historic, low-income and elderly housing tax credits. At June 30, 2015, the Company’s total investment in each entity was $422,000 and $1.0 million, respectively. The Company has no future capital commitments to either entity. The amounts recognized in net income for these investments for the three and six month periods below include:


	For the three months ended				For the six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Investment loss included in pre-tax income	$	55		51	$	110		102
Tax credits recognized in provision for income taxes	$	24		20	$	48		40

Esop Plan
	6 Months Ended
	Jun. 30, 2015
Text Block [Abstract]
Esop Plan	Text Block

(13)

ESOP PLAN

All Company employees participate in the 2015 HopFed Bancorp, Inc. Employee Stock Ownership Plan (ESOP). The ESOP purchased 600,000 shares of the Company’s common stock from the Company on March 2, 2015, at $13.14 per share. The ESOP borrowed $7.9 million from the Company for the purchase of the stock, using the 600,000 shares of common stock as collateral. The Company makes discretionary contributions to the ESOP. The ESOP utilizes these contributions along with the dividends on the 600,000 held by the ESOP to repay the loan from the Company. When loan payments are made, ESOP shares are released based on reduction in the principal balance of the loan.

The shares are allocated to participants based on relative compensation. Employees who are not employed at the December 31^st of each year are not eligible for participation in the ESOP. The Company anticipates that loan payments will be made at the end of each year. Participants receive shares at the end of employment. The Company has the option to repurchase the shares or to provide the shares directly to the employee.

At June 30, 2015, the ESOP has not made a loan payment to the Company. At June 30, 2015, the Company has an accrued ESOP contribution liability of approximately $437,000. At June 30, 2015, the Company has calculated that our current accrual would be sufficient to release 29,170 shares of ESOP shares to participants. At June 30, 2015, shares held by the ESOP were as follows:


Accrued to allocate to Participants		29,170
Unearned ESOP shares		570,830

Total ESOP shares		600,000

Fair value of unearned shares	$	6,450,375

Loans (Policies)
	6 Months Ended
	Jun. 30, 2015
Accounting Changes and Error Corrections [Abstract]
Troubled Debt Restructuring	Text Block
Fair Value Measurement	Text Block
Derivative Instruments and Hedging Activities	Text Block
Receivables-Troubled Debt Restructurings by Creditors	Text Block
Repurchase Agreements	Text Block
Investments - Equity Method and Joint Ventures	Text Block
Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period	Text Block
Income Statement - Extraordinary and Unusual Items	Text Block
Amendments to the Consolidation Analysis	Text Block

Troubled Debt Restructuring

On a periodic basis, the Bank may modify the terms of certain loans. In evaluating whether a restructuring constitutes a troubled debt restructuring (TDR), Financial Accounting Standards Board has issued Accounting Standards Update 310 (ASU 310), A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring. In evaluating whether a restructuring constitutes a TDR, the Bank must separately conclude that both of the following exist:

•

The restructuring constitutes a concession

•

The debtor is experiencing financial difficulties

ASU 310 provides the following guidance for the Bank’s evaluation of whether it has granted a concession as follows:

•

If a debtor does not otherwise have access to funds at a market interest rate for debt with similar risk characteristics as the restructured debt, the restructured debt would be considered a below market rate, which may indicate that the Bank may have granted a concession. In that circumstance, the Bank should consider all aspects of the restructuring in determining whether it has granted a concession, the creditor must make a separate assessment about whether the debtor is experiencing financial difficulties to determine whether the restructuring constitutes a TDR.

•

A temporary or permanent increase in the interest rate on a loan as a result of a restructuring does not eliminate the possibility of the restructuring from being considered a concession if the new interest rate on the loan is below the market interest rate for loans of similar risk characteristics.

•

A restructuring that results in a delay in payment that is insignificant is not a concession. However, the Bank must consider a variety of factors in assessing whether a restructuring resulting in a delay in payment is insignificant.

Fair Value Measurement

In September 2006, the FASB issued ASC 820-10, Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value. The statement establishes a fair value hierarchy which requires an entity to maximize the use of observable input and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value.

•

Level 1 is for assets and liabilities that management has obtained quoted prices (unadjusted for transaction cost) or identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date.

•

Level 2 is for assets and liabilities in which significant unobservable inputs other than Level 1 prices such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•

Level 3 is for assets and liabilities in which significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company’s $1.8 million trust preferred is the only investment instrument classified as a Level 3 asset. The Company determines the value of the instrument by using the present value of scheduled future cash flows and discount accretion to determine an estimated market value for the security.

The fair values of securities available for sale are determined by a matrix pricing, which is a mathematical technique that is widely used in the industry to value debt securities without exclusively using quoted prices for the individual securities in the Company’s portfolio but rather by relying on the securities relationship to other benchmark quoted securities. Impaired loans are valued at the net present value of expected payments using the fair value of any assigned collateral. The liability associated with the Company’s derivative is obtained from a quoted value supplied by our correspondent banker. The value of real estate owned is obtained from appraisals completed on properties at the time of acquisition and annually thereafter.

Derivative Instruments and Hedging Activities

Under guidelines of Financial Accounting Standards Board (“FASB”) ASC 815, Derivative Instruments and Hedging Activities, as amended, all derivative instruments are required to be carried at fair value on the consolidated statement of financial position. ASC 815 provides special hedge accounting provisions, which permit the change in fair value of the hedge item related to the risk being hedged to be recognized in earnings in the same period and in the same income statement line as the change in the fair value of the derivative.

A derivative instrument designated in a hedge relationship to mitigate exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges under ASC 815. Derivative instruments designated in a hedge relationship to mitigate exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Cash value hedges are accounted for by recording the fair value of the derivative instrument and the fair value related to the risk being hedged of the hedged asset or liability on the consolidated statement of financial position with corresponding offsets recorded in the consolidated statement of financial position.

The adjustment to the hedged asset or liability is included in the basis of the hedged item, while the fair value of the derivative is recorded as a freestanding asset or liability. Actual cash receipts or payments and related amounts accrued during the period on derivatives included in a fair value hedge relationship are recorded as adjustments to the income or expense recorded on the hedged asset or liability.

Under both the fair value and cash flow hedge methods, derivative gains and losses not effective in hedging the change in fair value or expected cash flows of the hedged item are recognized immediately in the income statement. At the hedge’s inception and at least quarterly thereafter, a formal assessment is performed to determine whether changes in the fair values or cash flows of the derivative instrument has been highly effective in offsetting changes in the fair values or cash flows of the hedged items and whether they are expected to be highly effective in the future. If it is determined a derivative instrument has not been, or will not continue to be highly effective as a hedge, hedged accounting is discontinued. ASC 815 basis adjustments recorded on hedged assets and liabilities are amortized over the remaining life of the hedged item beginning no later than when hedge accounting ceases. There were no fair value hedging gains or losses, as a result of hedge ineffectiveness, recognized for the six month period ended June 30, 2015, or the year ended December 31, 2014.

In October of 2008, the Bank entered into an interest rate swap agreement for a term of seven years and an amount of $10.0 million. The Bank will pay a fixed rate of 7.27% for seven years and receive an amount equal to the three-month London Interbank Lending Rate (LIBOR) plus 3.10%. The interest rate swap is classified as a cash flow hedge by the Bank and will be tested quarterly for effectiveness. At June 30, 2015, and December 31, 2014, the cost of the Bank to terminate the cash flow hedge was approximately $198,000 and $390,000, respectively. The interest rate swap agreement expires October 8, 2015.

Receivables-Troubled Debt Restructurings by Creditors

In January 2014, the FASB issued ASU No. 2014-04, Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. These amendments are intended to clarify when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan should be derecognized and the real estate recognized. The amendments clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either: (1) the creditor obtaining legal title to the residential real estate property upon completion of residential foreclosure, or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additional disclosures about such activities are required by these amendments. The amendments in this ASU become effective for public companies for annual periods and interim periods within those annual periods beginning after December 15, 2014, and early adoption is permitted. The adoption of ASU 2014-04 did not have a material impact on the Company’s financial position or results of operations.

Repurchase Agreements

On June 12, 2014, the FASB issued ASU 2014-11, which makes limited amendments to the guidance in ASC 860 on accounting for certain repurchase agreements (“repos”). ASU 2014-11 requires entities to account for repurchase-to-maturity transactions as secured borrowings (rather than as sales with forward repurchase agreements), (2) eliminates accounting guidance on linked repurchase financing transactions, and (3) expands disclosure requirements related to certain transfers of financial assets that are accounted for as sales and certain transfers (specifically, repos, securities lending transactions, and repurchase-to-maturity transactions) accounted for as secured borrowings. ASU 2014-11 also amends ASC 860 to clarify that repos and securities lending transactions that do not meet all of the de-recognition criteria in ASC 860-10-40-5 should be accounted for as secured borrowings. In addition, the ASU provides examples of repurchase and securities lending arrangements that illustrate whether a transferor has maintained effective control over the transferred financial assets. For public business entities, the accounting changes are effective for the first interim or annual period beginning after December 15, 2014. The adoption of ASU 2014-11 did not have a material impact on the Company’s financial position or results of operations.

Investments - Equity Method and Joint Ventures

ASU 2014-1, which amends FASB ASC Topic 323, Investments – Equity Method and Joint Ventures. The ASU impacts the Company’s accounting for investments in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments in the update permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received. The entity recognizes the net investment performance in the income statement as a component of income tax expense. The Company has chosen to continue to utilize the equity method for reporting under this topic. For public business entities, the accounting changes are effective for annual periods and interim reporting periods beginning after December 15, 2014. The adoption of ASU 2014-01 did not have a material impact on the Company’s financial position or results of operations.

Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period

ASU No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” The amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation - Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. However, compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest.

The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The Company adopted ASU No. 2014-12 effective January 1, 2015. Entities may apply the amendments in this ASU either: (1) prospectively to all awards granted or modified after the effective date; or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. As of March 31, 2015, the Company did not have any share-based payment awards that included performance targets that could be achieved after the requisite service period. As such, the adoption of ASU No. 2014-12 did not have a material impact on the Company’s Consolidated Financial Statements.

Income Statement - Extraordinary and Unusual Items

ASU 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20) – Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” ASU 2015-01 eliminates from U.S. GAAP the concept of extraordinary items, which, among other things, required an entity to segregate extraordinary items considered to be unusual and infrequent from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. ASU 2015-01 is effective for the Corporation beginning January 1, 2016, though early adoption is permitted. ASU 2015-01 is not expected to have a significant impact on the Company’s consolidated financial position or results of operations.

Amendments to the Consolidation Analysis

ASU No. 2015-02, “Amendments to the Consolidation Analysis.” This ASU affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the amendments: (1) Modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities; (2) Eliminate the presumption that a general partner should consolidate a limited partnership; (3) Affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; and (4) Provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. ASU No. 2015-02 is effective for interim and annual reporting periods beginning after December 15, 2015. The Company is currently evaluating the provisions of ASU No. 2015-02 to determine the potential impact the new standard will have on the Company’s Consolidated Financial Statements. In May 2014, the FASB issued new guidance related to Revenue from Contracts with Customers. This guidance supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Accounting Standards Codification. The guidance requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016; however, the FASB has proposed a one year deferral of the effective date. The Company is currently evaluating this guidance to determine the impact on its consolidated financial statements.

Effective January 1, 2015, the Company adopted new guidance related to Receivables. The new guidance requires that a government guaranteed mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if certain conditions are met. The adoption of this guidance was not material to the consolidated financial statements.

Income (Loss) Per Share (Tables)
	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
Reconciliation of Basic and Diluted Income (Loss) Per Share	Text Block

Reconciliation of Basic and Diluted Income (Loss) Per Share

The following schedule reconciles the numerators and denominators of the basic and diluted income (loss) per share (“IPS”) computations for the three and six month periods ended June 30, 2015, and June 30, 2014. For the three and six month periods ended June 30, 2015, the Company’s financial statements reflect a liability adequate to release of 29,170 shares from the HopFed Bancorp, Inc. 2015 Employee Stock Ownership Plan (the “ESOP”). Therefore, the Company has included 29,170 shares held by the ESOP in the IPS calculation. The Company has excluded 570,830 unearned shares purchased and owned by the ESOP from our IPS computations. Diluted common shares arise from the potentially dilutive effect of the Company’s stock options and warrants outstanding.


	Three Month Period Ended June 30,
	2015			2014

Basic IPS:
Net income (loss)	($	117,000	)	$	925,000
Average common shares outstanding		6,425,687			7,376,726

Net income (loss) per share	($	0.02	)	$	0.13


Diluted IPS
Net income (loss)	($	117,000	)	$	925,000
Average common shares outstanding		6,425,687			7,376,726
Dilutive effect of stock options		—			—

Average diluted shares outstanding		6,425,687			7,376,726

Net income (loss) per share, diluted	($	0.02	)	$	0.13


	Six Month Period Ended June 30,
	2015			2014

Basic IPS:
Net income	$	1,238,000		$	1,279,000
Average common shares outstanding		6,588,845			7,396,627

Net income per share	$	0.19		$	0.17


Diluted IPS
Net income	$	1,238,000		$	1,279,000
Average common shares outstanding		6,588,845			7,396,627
Dilutive effect of stock options		—			—

Average diluted shares outstanding		6,588,845			7,396,627

Net income per share, diluted	$	0.19		$	0.17

Stock Compensation (Tables)
	6 Months Ended
	Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Company's Future Compensation Expense Related to Restricted Stock Vesting	Text Block

Company's Future Compensation Expense Related to Restricted Stock Vesting

The table below provides a detail of the Company’s future compensation expense related to restricted stock vesting at June 30, 2015:


Year Ending December 31,	Future Expense

2015	$	89,875
2016		135,283
2017		48,459
2018		5,630
2019		725


Total	$	279,972

Securities (Tables)
	6 Months Ended
	Jun. 30, 2015
Cash and Cash Equivalents [Abstract]
Amortized Cost of Securities and their Estimated Fair Values	Text Block
Maturities of Debt Securities Available for Sale	Text Block
Estimated Fair Value and Unrealized Loss Amounts of Impaired Investments	Text Block

Amortized Cost of Securities and their Estimated Fair Values

The carrying amount of securities and their estimated fair values at June 30, 2015, were as follows:


	June 30, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(Dollars in Thousands)
Restricted:
FHLB stock	$	4,428		—		—			4,428


Available for sale
U.S. Treasury securities	$	2,001		10		—			2,011
Agency debt securities		92,585		1,971		(539	)		94,017
Taxable municipal bonds		8,428		150		(78	)		8,500
Tax free municipal bonds		49,143		2,511		(202	)		51,452
Trust preferred securities		1,608		195		—			1,803
Mortgage-backed securities:
GNMA		21,874		252		(124	)		22,002
FNMA		32,733		423		(112	)		33,044
FHLMC		5,657		30		(34	)		5,653
SLMA CMO		3,806		—		(23	)		3,783
AGENCY CMO		25,316		186		(94	)		25,408

	$	243,151		5,728		(1,206	)		247,673

The carrying amount of securities and their estimated fair values at December 31, 2014, was as follows:


	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(Dollars in Thousands)
Restricted:
FHLB stock	$	4,428		—		—		4,428


Available for sale
U.S. Treasury securities	$	3,977		3