• HomeTrust Bancshares, Inc. Announces Financial Results for the First Quarter of the Year Ending December 31, 2024, Declaration of a Quarterly Dividend, and Re-Authorization of Stock Buyback Program

    Source: Nasdaq GlobeNewswire / 24 Apr 2024 07:10:01   America/Chicago

    ASHEVILLE, N.C., April 24, 2024 (GLOBE NEWSWIRE) -- HomeTrust Bancshares, Inc. (NASDAQ: HTBI) ("Company"), the holding company of HomeTrust Bank ("Bank"), today announced preliminary net income for the first quarter of the year ending December 31, 2024 and approval of its quarterly cash dividend. In addition, on April 22, 2024, the Company's Board of Directors re-authorized the repurchase the remaining 266,639 shares of the Company’s common stock under the repurchase plan originally authorized in February of 2022. The shares may be purchased in the open market or in privately negotiated transactions from time to time depending upon market conditions and other factors.

    For the quarter ended March 31, 2024 compared to the quarter ended December 31, 2023:

    • net income was $15.1 million compared to $13.5 million;
    • diluted earnings per share ("EPS") was $0.88 compared to $0.79;
    • annualized return on assets ("ROA") was 1.37% compared to 1.21%;
    • annualized return on equity ("ROE") was 11.91% compared to 10.81%;
    • net interest margin was 4.02% for both periods;
    • provision for credit losses was $1.2 million compared to $3.4 million;
    • tax-free death benefit proceeds from life insurance of $1.1 million compared to $1.6 million;
    • quarterly cash dividends continued at $0.11 per share totaling $1.9 million for both periods.

    The Company also announced today that its Board of Directors declared a quarterly cash dividend of $0.11 per common share payable on May 30, 2024 to shareholders of record as of the close of business on May 16, 2024.

    “Once again, I am pleased with the continuation of HomeTrust’s top quartile financial performance which has led to national recognition from both Forbes and S&P Global,” said Hunter Westbrook, President and Chief Executive Officer. “This quarter, we remained focused on further strengthening the balance sheet which resulted in the expansion of customer deposits by over $100 million, maintaining our net interest margin above 4.00% and continuing our strong credit quality. This is a direct reflection of HomeTrust’s philosophy of prudent, sound and profitable balance sheet management, its strong culture of engaged teammates and demonstrates the Company’s resilience through economic rate cycles.

    “As previously stated, our Board of Directors re-authorized the repurchase of shares of the Company’s stock. This action allows the Company to take advantage of its low stock price as compared to its tangible book value while also publicly exhibiting our optimism regarding the Company’s future financial performance.

    “Lastly, it has been over one year since the merger with, and integration of, Quantum National Bank, and I am extremely pleased that the legacy Quantum employees have embraced our culture and operating philosophies. The performance of these employees, combined with further hires in the Atlanta market, have validated this strategic opportunity.”

    WEBSITE: WWW.HTB.COM

    Comparison of Results of Operations for the Three Months Ended March 31, 2024 and December 31, 2023
    Net Income.  Net income totaled $15.1 million, or $0.88 per diluted share, for the three months ended March 31, 2024 compared to net income of $13.5 million, or $0.79 per diluted share, for the three months ended December 31, 2023, an increase of $1.6 million, or 11.9%. Results for the three months ended March 31, 2024 were positively impacted by a decrease of $2.2 million in the provision for credit losses and a $563,000 increase in noninterest income, partially offset by a decrease of $693,000 in net interest income. Details of the changes in the various components of net income are further discussed below.

    Net Interest Income.  The following table presents the distribution of average assets, liabilities and equity, as well as interest income earned on average interest-earning assets and interest expense paid on average interest-bearing liabilities. All average balances are daily average balances. Nonaccruing loans have been included in the table as loans carrying a zero yield.

     Three Months Ended
     March 31, 2024 December 31, 2023
    (Dollars in thousands)Average
    Balance
    Outstanding    		 Interest
    Earned /
    Paid    		 Yield /
    Rate    		 Average
    Balance
    Outstanding    		 Interest
    Earned /
    Paid    		 Yield /
    Rate
    Assets           
    Interest-earning assets           
    Loans receivable(1)$3,864,258  $59,952   6.24% $3,876,051  $60,069   6.15%
    Debt securities available for sale 126,686   1,313   4.17   136,945   1,257   3.64 
    Other interest-earning assets(2) 131,495   2,090   6.39   121,366   1,493   4.88 
    Total interest-earning assets 4,122,439   63,355   6.18   4,134,362   62,819   6.03 
    Other assets 298,117       271,767     
    Total assets$4,420,556      $4,406,129     
    Liabilities and equity           
    Interest-bearing liabilities           
    Interest-bearing checking accounts$590,738  $1,426   0.97% $594,805  $1,209   0.81%
    Money market accounts 1,281,340   9,664   3.03   1,251,170   8,930   2.83 
    Savings accounts 191,747   43   0.09   198,522   45   0.09 
    Certificate accounts 887,618   9,185   4.16   818,698   8,105   3.93 
    Total interest-bearing deposits 2,951,443   20,318   2.77   2,863,195   18,289   2.53 
    Junior subordinated debt 10,029   236   9.46   10,005   239   9.48 
    Borrowings 103,155   1,571   6.13   156,619   2,368   6.00 
    Total interest-bearing liabilities 3,064,627   22,125   2.90   3,029,819   20,896   2.74 
    Noninterest-bearing deposits 810,114       837,048     
    Other liabilities 36,945       45,156     
    Total liabilities 3,911,686       3,912,023     
    Stockholders' equity 508,870       494,106     
    Total liabilities and stockholders' equity$4,420,556      $4,406,129     
    Net earning assets$1,057,812      $1,104,543     
    Average interest-earning assets to average interest-bearing liabilities 134.52%      136.46%    
    Non-tax-equivalent           
    Net interest income  $41,230      $41,923   
    Interest rate spread     3.28%      3.29%
    Net interest margin(3)     4.02%      4.02%
    Tax-equivalent(4)           
    Net interest income  $41,579      $42,264   
    Interest rate spread     3.32%      3.32%
    Net interest margin(3)     4.06%      4.06%
                    

    (1) Average loans receivable balances include loans held for sale and nonaccruing loans.
    (2) Average other interest-earning assets consist of FRB stock, FHLB stock, SBIC investments and deposits in other banks.
    (3) Net interest income divided by average interest-earning assets.
    (4) Tax-equivalent results include adjustments to interest income of $349 and $341 for the three months ended March 31, 2024 and December 31, 2023, respectively, calculated based on a combined federal and state tax rate of 24%.

    Total interest and dividend income for the three months ended March 31, 2024 increased $536,000, or 0.9%, compared to the three months ended December 31, 2023, which was driven by a $597,000, or 40.0%, increase in income on other investments and interest-bearing deposits due to the allocation of liquid funds in higher-yielding deposit accounts. Accretion income on acquired loans of $715,000 and $405,000 was recognized during the same periods, respectively, and was included in interest income on loans.

    Total interest expense for the three months ended March 31, 2024 increased $1.2 million, or 5.9%, compared to the three months ended December 31, 2023. The increase was the result of both increases in the average cost of funds and average balances across interest-bearing deposit types, partially offset by a decline in average borrowings outstanding.

    The following table shows the effects that changes in average balances (volume), including differences in the number of days in the periods compared, and average interest rates (rate) had on the interest earned on interest-earning assets and interest paid on interest-bearing liabilities:

     Increase / (Decrease)
    Due to    		 Total
    Increase /
    (Decrease)
    (Dollars in thousands)Volume Rate 
    Interest-earning assets     
    Loans receivable$(1,008) $891  $(117)
    Debt securities available for sale (112)  168   56 
    Other interest-earning assets 96   501   597 
    Total interest-earning assets (1,024)  1,560   536 
    Interest-bearing liabilities     
    Interest-bearing checking accounts (28)  245   217 
    Money market accounts 82   652   734 
    Savings accounts (2)  —   (2)
    Certificate accounts 556   524   1,080 
    Junior subordinated debt (3)  —   (3)
    Borrowings (830)  33   (797)
    Total interest-bearing liabilities (225)  1,454   1,229 
    Decrease in net interest income    $(693)
            

    Provision for Credit Losses.  The provision for credit losses is the amount of expense that, based on our judgment, is required to maintain the allowance for credit losses ("ACL") at an appropriate level under the current expected credit losses model.

    The following table presents a breakdown of the components of the provision for credit losses:

     Three Months Ended  
    (Dollars in thousands)March 31,
    2024    		 December 31,
    2023    		 $ Change  % Change 
    Provision for credit losses         
    Loans$1,145  $4,050  $(2,905)  (72)%
    Off-balance-sheet credit exposure 20   (690)  710   103 
    Total provision for credit losses$1,165  $3,360  $(2,195)  (65)%
                    

    For the quarter ended March 31, 2024, the "loans" portion of the provision for credit losses was the result of the following, offset by net charge-offs of $2.3 million during the quarter:

    • $0.1 million benefit driven by changes in the loan mix.
    • $0.9 million benefit due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments.
    • $0.2 million decrease in specific reserves on individually evaluated credits.

    For the quarter ended December 31, 2023, the "loans" portion of the provision for credit losses was primarily the result of the following, offset by net charge-offs of $2.8 million during the quarter:

    • $0.5 million benefit driven by changes in the loan mix.
    • $0.9 million provision due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments.
    • $0.8 million increase in specific reserves on individually evaluated credits.

    For the quarters ended March 31, 2024 and December 31, 2023, the amounts recorded for off-balance-sheet credit exposure were the result of changes in the balance of loan commitments, loan mix and projected economic forecast as outlined above.

    Noninterest Income.  Noninterest income for the three months ended March 31, 2024 increased $572,000, or 6.9%, when compared to the quarter ended December 31, 2023. Changes in the components of noninterest income are discussed below:

     Three Months Ended  
    (Dollars in thousands)March 31,
    2024    		 December 31,
    2023    		 $ Change % Change
    Noninterest income       
    Service charges and fees on deposit accounts$2,149  $2,368  $(219)  (9)%
    Loan income and fees 678   423   255   60 
    Gain on sale of loans held for sale 1,457   1,037   420   41 
    Bank owned life insurance ("BOLI") income 1,835   2,152   (317)  (15)
    Operating lease income 1,859   1,592   267   17 
    Loss on sale of premises and equipment (9)  (248)  239   96 
    Other 842   924   (82)  (9)
    Total noninterest income$8,811  $8,248  $563   7%
    • Loan income and fees: The increase was the result of loan servicing fee income returning to normal levels in the current quarter. The prior quarter included $150,000 of expense associated with the early payoff and/or charge-off of loans being serviced.
    • Gain on sale of loans held for sale: The increase was primarily driven by SBA loans sold during the period. There were $12.9 million in sales of the guaranteed portion of SBA commercial loans with gains of $1.1 million for the quarter compared to $5.6 million sold and gains of $439,000 for the prior quarter. There were $15.3 million of residential mortgage loans originated for sale which were sold during the current quarter with gains of $316,000 compared to $20.5 million sold with gains of $417,000 in the prior quarter. Our hedging of mandatory commitments on the residential mortgage loan pipeline resulted in a gain of $55,000 for the quarter ended March 31, 2024 versus a loss of $142,000 for the quarter ended December 31, 2023. There were $7.8 million of HELOCs sold for a gain of $16,000 compared to $37.5 million sold with gains of $322,000 in the prior quarter. The decrease in the gain on sale of HELOCs was due to only one sale in the current quarter versus three sales in the prior quarter as well as a combined $78,000 in expense recorded in the current quarter to refund premiums previously received under sold loan recourse provisions and to establish a liability for potential future requests. No such expense was recorded in the prior quarter.
    • BOLI income: The decrease was due to only $1.1 million in tax-free gains on death benefit proceeds in excess of the cash surrender value of the policies in the current quarter compared to $1.6 million in the prior quarter, partially offset by an increase in policy earnings as a result of the partial restructuring of the Company's BOLI policies, which was executed at the end of the prior quarter.
    • Operating lease income: The increase was the result of an increase in the average outstanding balance as well as gains/losses incurred on previously leased equipment, where we recognized net losses of $145,000 and $192,000 in the quarters ended March 31, 2024 and December 31, 2023, respectively.
    • Loss on sale of premises and equipment: During the quarter ended December 31, 2023, the Company recognized $625,000 of expense due to the impairment of the remaining right of use asset associated with a previously closed branch, partially offset by a $380,000 gain on the sale of a parcel of land.

    Noninterest Expense.  Noninterest expense for the three months ended March 31, 2024 increased $92,000, or 0.3%, when compared to the three months ended December 31, 2023. Changes in the components of noninterest expense are discussed below:

     Three Months Ended  
    (Dollars in thousands)March 31,
    2024    		 December 31,
    2023    		 $ Change % Change
    Noninterest expense       
    Salaries and employee benefits$16,976  $16,256  $720   4%
    Occupancy expense, net 2,437   2,443   (6)  — 
    Computer services 3,088   3,002   86   3 
    Telephone, postage and supplies 585   603   (18)  (3)
    Marketing and advertising 645   625   20   3 
    Deposit insurance premiums 554   702   (148)  (21)
    Core deposit intangible amortization 762   860   (98)  (11)
    Other 4,817   5,290   (473)  (9)
    Total noninterest expense$29,864  $29,781  $83   —%
    • Salaries and employee benefits: The quarter-over-quarter increase was primarily the result of $389,000 in additional FICA taxes.
    • Deposit insurance premiums: The decrease was due to a drop in the assessment rate the Company is charged for deposit insurance.
    • Other: The decrease was primarily the result of a $173,000 decrease in fraud losses and $115,000 of severance expense included in the prior quarter related to staff reductions.

    Income Taxes. The amount of income tax expense is influenced by the amount of pre-tax income, tax-exempt income, changes in the statutory rate and the effect of changes in valuation allowances maintained against deferred tax benefits. The effective tax rates for the three months ended March 31, 2024 and December 31, 2023 were 20.8% and 20.9%, respectively. In both periods, the effective tax rate was positively impacted by tax-free gains on BOLI death benefit proceeds of $1.1 million and $1.6 million, respectively.

    Balance Sheet Review
    Total assets increased by $11.4 million to $4.7 billion and total liabilities decreased by $1.9 million to $4.2 billion, respectively, at March 31, 2024 as compared to December 31, 2023. The majority of these changes were the result of an increase in deposits, which, combined with amounts received from maturing investments, were used to fund growth in loans held for sale, pay down borrowings, and provide additional liquidity.

    Stockholders' equity increased $13.3 million to $513.2 million at March 31, 2024 as compared to December 31, 2023. Activity within stockholders' equity included $15.1 million in net income, partially offset by $1.9 million in cash dividends declared. As of March 31, 2024, the Bank was considered "well capitalized" in accordance with its regulatory capital guidelines and exceeded all regulatory capital requirements.

    Asset Quality
    The ACL on loans was $47.5 million, or 1.30% of total loans, at March 31, 2024 compared to $48.6 million, or 1.34% of total loans, at December 31, 2023. The drivers of this change are discussed in the "Comparison of Results of Operations for the Three Months Ended March 31, 2024 and December 31, 2023 – Provision for Credit Losses" section above.

    Net loan charge-offs totaled $2.3 million for the three months ended March 31, 2024 compared to $2.8 million for the three months ended December 31, 2023. Annualized net charge-offs as a percentage of average assets were 0.24% for the three months ended March 31, 2024 compared to 0.29% for the three months ended December 31, 2023. The net charge-offs recognized the past two quarters have been concentrated in our equipment finance and SBA portfolios, with net charge-offs in these portfolios totaling $2.8 million and $0.9 million, respectively.

    Nonperforming assets, made up entirely of nonaccrual loans for both periods, increased by $865,000, or 4.5%, to $20.2 million, or 0.43% of total assets, at March 31, 2024 compared to $19.3 million, or 0.41% of total assets, at December 31, 2023. Consistent with last quarter, equipment finance loans, specifically smaller over-the-road truck loans, made up the largest portion of nonperforming assets at $6.6 million and $6.5 million, respectively, at these same dates. During the quarter, the Company elected to cease further originations within the transportation sector of equipment finance loans. The ratio of nonperforming loans to total loans was 0.55% at March 31, 2024 compared to 0.53% at December 31, 2023.

    The ratio of classified assets to total assets decreased to 0.80% at March 31, 2024 from 0.90% at December 31, 2023 as classified assets decreased $4.6 million, or 11.0%, to $37.4 million at March 31, 2024 compared to $42.0 million at December 31, 2023. The decrease was primarily due to the upgrade of a $3.7 million commercial and industrial relationship and a $1.3 million owner-occupied commercial real estate relationship during the period.

    About HomeTrust Bancshares, Inc.
    HomeTrust Bancshares, Inc. is the holding company for the Bank. As of March 31, 2024, the Company had assets of $4.7 billion. The Bank, founded in 1926, is a North Carolina state chartered, community-focused financial institution committed to providing value added relationship banking with over 30 locations as well as online/mobile channels. Locations include: North Carolina (the Asheville metropolitan area, the "Piedmont" region, Charlotte and Raleigh/Cary), South Carolina (Greenville and Charleston), East Tennessee (Kingsport/Johnson City, Knoxville and Morristown), Southwest Virginia (the Roanoke Valley) and Georgia (Greater Atlanta).

    Forward-Looking Statements
    This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, but instead are based on certain assumptions including statements with respect to the Company's beliefs, plans, objectives, goals, expectations, assumptions and statements about future economic performance and projections of financial items. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated or implied by forward-looking statements. The factors that could result in material differentiation include, but are not limited to the impact of bank failures or adverse developments involving other banks and related negative press about the banking industry in general on investor and depositor sentiment; the remaining effects of the COVID-19 pandemic on general economic and financial market conditions and on public health, both nationally and in the Company's market areas; expected revenues, cost savings, synergies and other benefits from merger and acquisition activities might not be realized to the extent anticipated, within the anticipated time frames, or at all, costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected, and goodwill impairment charges might be incurred; increased competitive pressures among financial services companies; changes in the interest rate environment; changes in general economic conditions, both nationally and in our market areas; legislative and regulatory changes; and the effects of inflation, a potential recession, and other factors described in the Company's latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other documents filed with or furnished to the Securities and Exchange Commission - which are available on the Company's website at www.htb.com and on the SEC's website at www.sec.gov. Any of the forward-looking statements that the Company makes in this press release or in the documents the Company files with or furnishes to the SEC are based upon management's beliefs and assumptions at the time they are made and may turn out to be wrong because of inaccurate assumptions, the factors described above or other factors that management cannot foresee. The Company does not undertake, and specifically disclaims any obligation, to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

    Consolidated Balance Sheets (Unaudited)

    (Dollars in thousands)March 31,
    2024    		 December 31,
    2023    (1)    		 September 30,
    2023    		 June 30,
    2023    (1)    		 March 31,
    2023
    Assets         
    Cash$16,134  $18,307  $18,090  $19,266  $18,262 
    Interest-bearing deposits 364,359   328,833   306,924   284,231   296,151 
    Cash and cash equivalents 380,493   347,140   325,014   303,497   314,413 
    Certificates of deposit in other banks 33,625   34,722   35,380   33,152   33,102 
    Debt securities available for sale, at fair value 120,807   126,950   134,348   151,926   157,718 
    FHLB and FRB stock 13,691   18,393   19,612   20,208   19,125 
    SBIC investments, at cost 14,568   13,789   14,586   14,927   13,620 
    Loans held for sale, at fair value 2,764   3,359   4,616   6,947   1,209 
    Loans held for sale, at the lower of cost or fair value 220,699   198,433   200,834   161,703   89,172 
    Total loans, net of deferred loan fees and costs 3,648,152   3,640,022   3,659,914   3,658,823   3,649,333 
    Allowance for credit losses – loans (47,502)  (48,641)  (47,417)  (47,193)  (47,503)
    Loans, net 3,600,650   3,591,381   3,612,497   3,611,630   3,601,830 
    Premises and equipment, net 70,588   70,937   72,463   73,171   74,107 
    Accrued interest receivable 16,944   16,902   16,513   14,829   13,813 
    Deferred income taxes, net 11,222   11,796   9,569   10,912   10,894 
    BOLI 88,369   88,257   106,059   106,572   105,952 
    Goodwill 34,111   34,111   34,111   34,111   33,682 
    Core deposit intangibles, net 8,297   9,059   9,918   10,778   11,637 
    Other assets 67,183   107,404   56,477   53,124   49,596 
    Total assets$4,684,011  $4,672,633  $4,651,997  $4,607,487  $4,529,870 
    Liabilities and stockholders' equity         
    Liabilities         
    Deposits$3,799,807  $3,661,373  $3,640,961  $3,601,168  $3,675,599 
    Junior subordinated debt 10,045   10,021   9,995   9,971   9,945 
    Borrowings 291,513   433,763   452,263   457,263   320,263 
    Other liabilities 69,473   67,583   64,367   67,899   62,821 
    Total liabilities 4,170,838   4,172,740   4,167,586   4,136,301   4,068,628 
    Stockholders' equity         
    Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued or outstanding —   —   —   —   — 
    Common stock, $0.01 par value, 60,000,000 shares authorized(2) 175   174   174   174   174 
    Additional paid in capital 172,919   172,366   171,663   171,222   170,670 
    Retained earnings 346,598   333,401   321,799   308,651   295,325 
    Unearned Employee Stock Ownership Plan ("ESOP") shares (4,364)  (4,497)  (4,629)  (4,761)  (4,893)
    Accumulated other comprehensive loss (2,155)  (1,551)  (4,596)  (4,100)  (3,034)
    Total stockholders' equity 513,173   499,893   484,411   471,186   458,242 
    Total liabilities and stockholders' equity$4,684,011  $4,672,633  $4,651,997  $4,607,487  $4,526,870 

    (1) Derived from audited financial statements.
    (2) Shares of common stock issued and outstanding were 17,444,787 at March 31, 2024; 17,387,069 at December 31, 2023; 17,380,307 at September 30, 2023; 17,366,673 at June 30, 2023; and 17,370,063 at March 31, 2023.

    Consolidated Statements of Income (Unaudited)

     Three Months Ended
    (Dollars in thousands)March 31,
    2024    		 December 31,
    2023
    Interest and dividend income   
    Loans$59,952  $60,069 
    Debt securities available for sale 1,313   1,257 
    Other investments and interest-bearing deposits 2,090   1,493 
    Total interest and dividend income 63,355   62,819 
    Interest expense   
    Deposits 20,318   18,289 
    Junior subordinated debt 236   239 
    Borrowings 1,571   2,368 
    Total interest expense 22,125   20,896 
    Net interest income 41,230   41,923 
    Provision for credit losses  1,165   3,360 
    Net interest income after provision for credit losses 40,065   38,563 
    Noninterest income   
    Service charges and fees on deposit accounts 2,149   2,368 
    Loan income and fees 678   423 
    Gain on sale of loans held for sale 1,457   1,037 
    BOLI income 1,835   2,152 
    Operating lease income 1,859   1,592 
    Loss on sale of premises and equipment (9)  (248)
    Other 842   924 
    Total noninterest income 8,811   8,248 
    Noninterest expense   
    Salaries and employee benefits 16,976   16,256 
    Occupancy expense, net 2,437   2,443 
    Computer services 3,088   3,002 
    Telephone, postage and supplies 585   603 
    Marketing and advertising 645   625 
    Deposit insurance premiums 554   702 
    Core deposit intangible amortization 762   860 
    Other 4,817   5,290 
    Total noninterest expense 29,864   29,781 
    Income before income taxes 19,012   17,030 
    Income tax expense 3,945   3,566 
    Net income$15,067  $13,464 
            

    Per Share Data

     Three Months Ended 
     March 31,
    2024    		 December 31,
    2023
    Net income per common share(1)   
    Basic$0.88  $0.79 
    Diluted$0.88  $0.79 
    Average shares outstanding   
    Basic 16,859,738   16,820,369 
    Diluted 16,872,840   16,827,460 
    Book value per share at end of period$29.42  $28.75 
    Tangible book value per share at end of period(2)$27.10  $26.39 
    Cash dividends declared per common share$0.11  $0.11 
    Total shares outstanding at end of period 17,444,787   17,387,069 

    (1) Basic and diluted net income per common share have been prepared in accordance with the two-class method.
    (2) See Non-GAAP reconciliations below for adjustments.

    Selected Financial Ratios and Other Data

     Three Months Ended
     March 31,
    2024    		 December 31,
    2023
    Performance ratios(1) 
    Return on assets (ratio of net income to average total assets) 1.37%  1.21%
    Return on equity (ratio of net income to average equity) 11.91   10.81 
    Yield on earning assets 6.18   6.03 
    Rate paid on interest-bearing liabilities 2.90   2.74 
    Average interest rate spread 3.28   3.29 
    Net interest margin(2) 4.02   4.02 
    Average interest-earning assets to average interest-bearing liabilities 134.52   136.46 
    Noninterest expense to average total assets 2.72   2.68 
    Efficiency ratio 59.69   59.36 
    Efficiency ratio – adjusted(3) 60.64   60.52 

    (1) Ratios are annualized where appropriate.
    (2) Net interest income divided by average interest-earning assets.
    (3) See Non-GAAP reconciliations below for adjustments.

     At or For the Three Months Ended
     March 31,
    2024    		 December 31,
    2023    		 September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023
    Asset quality ratios         
    Nonperforming assets to total assets(1) 0.43%  0.41%  0.25%  0.18%  0.18%
    Nonperforming loans to total loans(1) 0.55   0.53   0.32   0.23   0.22 
    Total classified assets to total assets 0.80   0.90   0.76   0.53   0.49 
    Allowance for credit losses to nonperforming loans(1) 235.18   251.60   400.41   567.56   600.47 
    Allowance for credit losses to total loans 1.30   1.34   1.30   1.29   1.30 
    Net charge-offs to average loans (annualized) 0.24   0.29   0.27   0.13   0.01 
    Capital ratios         
    Equity to total assets at end of period 10.96%  10.70%  10.41%  10.23%  10.12%
    Tangible equity to total tangible assets(2) 10.18   9.91   9.60   9.39   9.27 
    Average equity to average assets 11.51   11.03   10.84   10.79   11.14 

    (1) Nonperforming assets include nonaccruing loans and REO. There were no accruing loans more than 90 days past due at the dates indicated. At March 31, 2024, $7.7 million, or 38.2%, of nonaccruing loans were current on their loan payments as of that date.
    (2) See Non-GAAP reconciliations below for adjustments.

    Loans

    (Dollars in thousands)March 31,
    2024    		 December 31,
    2023    		 September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023
    Commercial real estate loans         
    Construction and land development$304,727  $305,269  $352,143  $356,674  $368,756 
    Commercial real estate – owner occupied 532,547   536,545   526,534   529,721   524,247 
    Commercial real estate – non-owner occupied 881,143   875,694   880,348   901,685   926,991 
    Multifamily 89,692   88,623   83,430   81,827   85,285 
    Total commercial real estate loans 1,808,109   1,806,131   1,842,455   1,869,907   1,905,279 
    Commercial loans         
    Commercial and industrial 243,732   237,255   237,366   245,428   229,840 
    Equipment finance 462,649   465,573   470,387   462,211   440,345 
    Municipal leases 151,894   150,292   147,821   142,212   138,436 
    Total commercial loans 858,275   853,120   855,574   849,851   808,621 
    Residential real estate loans         
    Construction and land development 85,840   96,646   103,381   110,074   105,617 
    One-to-four family 605,570   584,405   560,399   529,703   518,274 
    HELOCs 184,274   185,878   185,289   187,193   193,037 
    Total residential real estate loans 875,684   866,929   849,069   826,970   816,928 
    Consumer loans 106,084   113,842   112,816   112,095   118,505 
    Total loans, net of deferred loan fees and costs 3,648,152   3,640,022   3,659,914   3,658,823   3,649,333 
    Allowance for credit losses – loans (47,502)  (48,641)  (47,417)  (47,193)  (47,503)
    Loans, net$3,600,650  $3,591,381  $3,612,497  $3,611,630  $3,601,830 
                        

    Deposits

    (Dollars in thousands)March 31,
    2024    		 December 31,
    2023    		 September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023
    Core deposits         
    Noninterest-bearing accounts$773,901  $784,950  $827,362  $825,481  $872,492 
    NOW accounts 600,561   591,270   602,804   611,105   678,178 
    Money market accounts 1,308,467   1,246,807   1,195,482   1,241,840   1,299,503 
    Savings accounts 191,302   194,486   202,971   212,220   228,390 
    Total core deposits 2,874,231   2,817,513   2,828,619   2,890,646   3,078,563 
    Certificates of deposit 925,576   843,860   812,342   710,522   597,036 
    Total$3,799,807  $3,661,373  $3,640,961  $3,601,168  $3,675,599 
                        

    Non-GAAP Reconciliations
    In addition to results presented in accordance with generally accepted accounting principles utilized in the United States ("GAAP"), this earnings release contains certain non-GAAP financial measures, which include: the efficiency ratio, tangible book value, tangible book value per share and the tangible equity to tangible assets ratio. The Company believes these non-GAAP financial measures and ratios as presented are useful for both investors and management to understand the effects of certain items and provide an alternative view of its performance over time and in comparison to its competitors. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for total stockholders' equity or operating results determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

    Set forth below is a reconciliation to GAAP of the Company's efficiency ratio:

     Three Months Ended
    (Dollars in thousands)March 31,
    2024    		 December 31,
    2023
    Noninterest expense$29,864  $29,781 
        
    Net interest income$41,230  $41,923 
    Plus: tax-equivalent adjustment 349   341 
    Plus: noninterest income 8,811   8,248 
    Less: BOLI death benefit proceeds in excess of cash surrender value 1,143   1,554 
    Less: loss on sale of premises and equipment (9)  (248)
    Net interest income plus noninterest income – adjusted$49,256  $49,206 
            
    Efficiency ratio 59.69%  59.36%
    Efficiency ratio – adjusted 60.64%  60.52%
            

    Set forth below is a reconciliation to GAAP of tangible book value and tangible book value per share:

     As of
    (Dollars in thousands, except per share data)March 31,
    2024    		 December 31,
    2023    		 September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023
    Total stockholders' equity$513,173  $499,893  $484,411  $471,186  $458,242 
    Less: goodwill, core deposit intangibles, net of taxes 40,500   41,086   41,748   42,410   42,642 
    Tangible book value$472,673  $458,807  $442,663  $428,776  $415,600 
    Common shares outstanding 17,444,787   17,387,069   17,380,307   17,366,673   17,370,063 
    Book value per share$29.42  $28.75  $27.87  $27.13  $26.38 
    Tangible book value per share$27.10  $26.39  $25.47  $24.69  $23.93 
                        

    Set forth below is a reconciliation to GAAP of tangible equity to tangible assets:

     As of
    (Dollars in thousands)March 31,
    2024    		 December 31,
    2023    		 September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023
    Tangible equity(1)$472,673  $458,807  $442,663  $428,776  $415,600 
    Total assets 4,684,011   4,672,633   4,651,997   4,607,487   4,526,870 
    Less: goodwill, core deposit intangibles, net of taxes 40,500   41,086   41,748   42,410   42,642 
    Total tangible assets$4,643,511  $4,631,547  $4,610,249  $4,565,077  $4,484,228 
                        
    Tangible equity to tangible assets 10.18%  9.91%  9.60%  9.39%  9.27%

    (1) Tangible equity (or tangible book value) is equal to total stockholders' equity less goodwill and core deposit intangibles, net of related deferred tax liabilities.


    Contact:
C. Hunter Westbrook – President and Chief Executive Officer
Tony J. VunCannon – Executive Vice President, Chief Financial Officer, Corporate Secretary and Treasurer
828-259-3939

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