• HomeTrust Bancshares, Inc. Announces Financial Results for the Second Quarter of the Year Ending December 31, 2024 and Declaration of a Quarterly Dividend

    Source: Nasdaq GlobeNewswire / 24 Jul 2024 08:30:01   America/New_York

    ASHEVILLE, N.C., July 24, 2024 (GLOBE NEWSWIRE) -- HomeTrust Bancshares, Inc. (NASDAQ: HTBI) ("Company" or "HomeTrust"), the holding company of HomeTrust Bank ("Bank"), today announced preliminary net income for the second quarter of the year ending December 31, 2024 and approval of its quarterly cash dividend.

    For the quarter ended June 30, 2024 compared to the quarter ended March 31, 2024:

    • net income was $12.4 million compared to $15.1 million;
    • diluted earnings per share ("EPS") were $0.73 compared to $0.88;
    • annualized return on assets ("ROA") was 1.13% compared to 1.37%;
    • annualized return on equity ("ROE") was 9.58% compared to 11.91%;
    • net interest margin was 4.08% compared to 4.02%;
    • provision for credit losses was $4.3 million compared to $1.2 million;
    • tax-free death benefit proceeds from life insurance were $0 compared to $1.1 million;
    • The Company repurchased 23,483 shares of its outstanding common stock during the quarter at an average price of $27.48; and
    • quarterly cash dividends continued at $0.11 per share totaling $1.9 million for both periods.

    For the six months ended June 30, 2024 compared to the six months ended June 30, 2023:

    • net income was $27.5 million compared to $21.8 million;
    • diluted EPS were $1.61 compared to $1.30;
    • annualized ROA was 1.25% compared to 1.06%;
    • annualized ROE was 10.73% compared to 9.65%;
    • net interest margin was 4.05% compared to 4.43%;
    • provision for credit losses was $5.4 million compared to $9.2 million;
    • tax-free death benefit proceeds from life insurance were $1.1 million compared to $0; and
    • cash dividends of $0.22 per share totaling $3.7 million compared to $0.20 per share totaling $3.4 million.

    Results for the six months ended June 30, 2023 include the impact of the merger of Quantum Capital Corp. ("Quantum") into the Company effective February 12, 2023. The addition of Quantum contributed total assets of $656.7 million, including loans of $561.9 million, and $570.6 million of deposits, all reflecting the impact of purchase accounting adjustments. Merger-related expenses of $4.7 million were recognized during the six months ended June 30, 2023, while a $5.3 million provision for credit losses was recognized during the same period to establish allowances for credit losses on both Quantum's loan portfolio and off-balance-sheet credit exposure.

    The Company also announced today that its Board of Directors declared a quarterly cash dividend of $0.11 per common share payable on August 29, 2024 to shareholders of record as of the close of business on August 15, 2024.

    “Our financial results for the second quarter continue to reflect our goal of high performance combined with our strategy of being a best place to work,” said Hunter Westbrook, President and Chief Executive Officer. “Our performance remained strong, aided by the expansion of our top quartile net interest margin which remains was again above 4.00%, while noninterest income and expense were both in line with the prior quarter. The decrease in our net income this quarter is reflective of an allowance build for potential credit losses on individual equipment finance and SBA loans that are in the early stages of collateral and collectability evaluation.

    “As previously announced, HomeTrust was recently named a 2024 Best Place to Work in South Carolina by the Best Companies Group, supplementing our prior quarter Newsweek certification as a 2024 Most Loved Workplace. This is further validation of the culture we have developed at HomeTrust, which directly impacts our ability to continue as a high-performing, regional community bank.”

    WEBSITE: WWW.HTB.COM


    Comparison of Results of Operations for the Three Months Ended June 30, 2024 and March 31, 2024
    Net Income.  Net income totaled $12.4 million, or $0.73 per diluted share, for the three months ended June 30, 2024 compared to net income of $15.1 million, or $0.88 per diluted share, for the three months ended March 31, 2024, a decrease of $2.7 million, or 17.6%. Results for the three months ended June 30, 2024 were negatively impacted by an increase of $3.1 million in the provision for credit losses. 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
     June 30, 2024 March 31, 2024
    (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)$3,885,222  $62,161 6.43% $3,864,258  $59,952 6.24%
    Debt securities available for sale 134,334   1,495 4.48   126,686   1,313 4.17 
    Other interest-earning assets(2) 140,376   1,758 5.04   131,495   2,090 6.39 
    Total interest-earning assets 4,159,932   65,414 6.32   4,122,439   63,355 6.18 
    Other assets 266,983       298,117     
    Total assets$4,426,915      $4,420,556     
    Liabilities and equity           
    Interest-bearing liabilities           
    Interest-bearing checking accounts$586,396  $1,445 0.99% $590,738  $1,426 0.97%
    Money market accounts 1,298,177   10,221 3.17   1,281,340   9,664 3.03 
    Savings accounts 188,028   41 0.09   191,747   43 0.09 
    Certificate accounts 902,864   9,976 4.44   887,618   9,185 4.16 
    Total interest-bearing deposits 2,975,465   21,683 2.93   2,951,443   20,318 2.77 
    Junior subordinated debt 10,054   234 9.36   10,029   236 9.46 
    Borrowings 87,315   1,331 6.13   103,155   1,571 6.13 
    Total interest-bearing liabilities 3,072,834   23,248 3.04   3,064,627   22,125 2.90 
    Noninterest-bearing deposits 769,016       810,114     
    Other liabilities 63,503       36,945     
    Total liabilities 3,905,353       3,911,686     
    Stockholders' equity 521,562       508,870     
    Total liabilities and stockholders' equity$4,426,915      $4,420,556     
    Net earning assets$1,087,098      $1,057,812     
    Average interest-earning assets to average interest-bearing liabilities 135.38%      134.52%    
    Non-tax-equivalent           
    Net interest income  $42,166     $41,230  
    Interest rate spread    3.28%     3.28%
    Net interest margin(3)    4.08%     4.02%
    Tax-equivalent(4)           
    Net interest income  $42,520     $41,579  
    Interest rate spread    3.32%     3.32%
    Net interest margin(3)    4.11%     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 $354 and $349 for the three months ended June 30, 2024 and March 31, 2024, respectively, calculated based on a combined federal and state tax rate of 24%.

    Total interest and dividend income for the three months ended June 30, 2024 increased $2.1 million, or 3.2%, compared to the three months ended March 31, 2024, which was driven by a $2.2 million, or 3.7%, increase in loan interest income primarily due to changes in interest rates. Accretion income on acquired loans of $678,000 and $715,000 was recognized during the same periods, respectively, and was included in interest income on loans.

    Total interest expense for the three months ended June 30, 2024 increased $1.1 million, or 5.1%, compared to the three months ended March 31, 2024. The increase was the result of both increases in the average cost of funds, due to increased market rates, 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$325  $1,884  $2,209 
    Debt securities available for sale 79   103   182 
    Other interest-earning assets 141   (473)  (332)
    Total interest-earning assets 545   1,514   2,059 
    Interest-bearing liabilities     
    Interest-bearing checking accounts (10)  29   19 
    Money market accounts 127   430   557 
    Savings accounts (1)  (1)  (2)
    Certificate accounts 158   633   791 
    Junior subordinated debt 1   (3)  (2)
    Borrowings (241)  1   (240)
    Total interest-bearing liabilities 34   1,089   1,123 
    Increase in net interest income    $936 


    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)June 30, 2024 March 31, 2024 $ Change % Change
    Provision for credit losses       
    Loans$4,300  $1,145 $3,155  276%
    Off-balance-sheet credit exposure (40)  20  (60) (300)
    Total provision for credit losses$4,260  $1,165 $3,095  266%


    For the quarter ended June 30, 2024, the "loans" portion of the provision for credit losses was the result of the following, in addition to net charge-offs of $2.6 million during the quarter:

    • $0.1 million provision driven by changes in the loan mix.
    • $0.4 million benefit due to changes in the projected economic forecast and changes in qualitative adjustments.
    • $2.0 million increase in specific reserves on individually evaluated loans which was proportional to the increase in the associated loan balances which increased from $8.3 million to $16.3 million quarter-over-quarter, concentrated in the equipment finance and SBA portfolios. Further information on the change in nonperforming loans may be found in the "Asset Quality" section.

    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 quarters ended June 30, 2024 and March 31, 2024, 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 June 30, 2024 decreased $698,000, or 7.9%, when compared to the quarter ended March 31, 2024. Changes in the components of noninterest income are discussed below:

     Three Months Ended  
    (Dollars in thousands)June 30, 2024 March 31, 2024 $ Change % Change
    Noninterest income       
    Service charges and fees on deposit accounts$2,354 $2,149  $205  10%
    Loan income and fees 647  678   (31) (5)
    Gain on sale of loans held for sale 1,828  1,457   371  25 
    Bank owned life insurance ("BOLI") income 807  1,835   (1,028) (56)
    Operating lease income 1,591  1,859   (268) (14)
    Loss on sale of premises and equipment —  (9)  9  100 
    Other 886  842   44  5 
    Total noninterest income$8,113 $8,811  $(698) (8)%
    • Service charges and fees on deposit accounts: The change was due to a $154,000 increase in debit card fees quarter-over-quarter.
    • Gain on sale of loans held for sale: The increase was primarily driven by HELOCs sold during the period. There were $32.9 million of HELOCs sold for a gain of $457,000 compared to $7.8 million sold with gains of $16,000 in the prior quarter. There were $21.3 million of residential mortgage loans originated for sale which were sold during the current quarter with gains of $351,000 compared to $15.3 million sold with gains of $316,000 in the prior quarter. There were $12.7 million in sales of the guaranteed portion of SBA commercial loans with gains of $1.1 million for the quarter compared to $12.9 million sold and gains of $1.1 million for the prior quarter. Our hedging of mandatory commitments on the residential mortgage loan pipeline resulted in a loss of $58,000 for the quarter ended June 30, 2024 versus a gain of $55,000 for the quarter ended March 31, 2024.
    • BOLI income: The decrease was due to $1.1 million in tax-free gains on death benefit proceeds in excess of the cash surrender value of the policies recognized during the prior quarter. No death benefit proceeds were recognized during the current quarter.
    • Operating lease income: The decrease was the result of an increase of $497,000 in losses incurred on previously leased equipment, partially offset by an increase of $228,000 in contractual earnings on a larger average outstanding balance.

    Noninterest Expense.  Noninterest expense for the three months ended June 30, 2024 decreased $346,000, or 1.2%, when compared to the three months ended March 31, 2024. Changes in the components of noninterest expense are discussed below:

     Three Months Ended  
    (Dollars in thousands)June 30, 2024 March 31, 2024 $ Change % Change
    Noninterest expense       
    Salaries and employee benefits$16,608 $16,976 $(368) (2)%
    Occupancy expense, net 2,419  2,437  (18) (1)
    Computer services 3,116  3,088  28  1 
    Telephone, postage and supplies 580  585  (5) (1)
    Marketing and advertising 606  645  (39) (6)
    Deposit insurance premiums 531  554  (23) (4)
    Core deposit intangible amortization 567  762  (195) (26)
    Other 5,783  4,817  966  20 
    Total noninterest expense$30,210 $29,864 $346  1%
    • Core deposit intangible amortization: The intangible recorded associated with the QNB merger is being amortized on an accelerated basis, so the rate of amortization slowed quarter-over-quarter.
    • Other: The increase quarter-over-quarter was primarily the result of $279,000 of additional depreciation expense on equipment subject to operating leases in addition to smaller increases across several other expense categories.

    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 June 30, 2024 and March 31, 2024 were 21.4% and 20.8%, respectively. The increase was primarily driven by $1.1 million of tax-free gains on BOLI death benefit proceeds in excess of the cash surrender value of the policies during the prior quarter.

    Comparison of Results of Operations for the Six Months Ended June 30, 2024 and June 30, 2023
    Net Income.  Net income totaled $27.5 million, or $1.61 per diluted share, for the six months ended June 30, 2024 compared to net income of $21.7 million, or $1.30 per diluted share, for the six months ended June 30, 2023, an increase of $5.7 million, or 26.4%. The results for the six months ended June 30, 2024 were positively impacted by a decrease of $3.7 million in the provision for credit losses and a $4.7 million decrease in merger-related expenses. 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.

     Six Months Ended
     June 30, 2024 June 30, 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)$3,874,740  $122,113 6.34% $3,592,527  $104,030 5.84%
    Debt securities available for sale 130,510   2,808 4.33   160,462   2,521 3.17 
    Other interest-earning assets(2) 135,936   3,848 5.69   131,310   3,246 4.98 
    Total interest-earning assets 4,141,186   128,769 6.25   3,884,299   109,797 5.70 
    Other assets 282,550       262,118     
    Total assets$4,423,736      $4,146,417     
    Liabilities and equity           
    Interest-bearing liabilities           
    Interest-bearing checking accounts$588,567  $2,870 0.98% $642,115  $2,124 0.67%
    Money market accounts 1,289,758   19,885 3.10   1,197,856   10,877 1.83 
    Savings accounts 189,887   84 0.09   224,373   97 0.09 
    Certificate accounts 895,242   19,162 4.30   578,639   7,428 2.59 
    Total interest-bearing deposits 2,963,454   42,001 2.85   2,642,983   20,526 1.57 
    Junior subordinated debt 10,042   470 9.41   7,640   327 8.63 
    Borrowings 95,235   2,902 6.13   133,962   3,594 5.41 
    Total interest-bearing liabilities 3,068,731   45,373 2.97   2,784,585   24,447 1.78 
    Noninterest-bearing deposits 789,565       855,041     
    Other liabilities 50,224       52,480     
    Total liabilities 3,908,520       3,692,106     
    Stockholders' equity 515,216       454,311     
    Total liabilities and stockholders' equity$4,423,736      $4,146,417     
    Net earning assets$1,072,455      $1,099,714     
    Average interest-earning assets to average interest-bearing liabilities 134.95%      139.49%    
    Non-tax-equivalent           
    Net interest income  $83,396     $85,350  
    Interest rate spread    3.28%     3.92%
    Net interest margin(3)    4.05%     4.43%
    Tax-equivalent(4)           
    Net interest income  $84,100     $85,938  
    Interest rate spread    3.32%     3.95%
    Net interest margin(3)    4.08%     4.46%

    (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 $704 and $588 for the six months ended June 30, 2024 and June 30, 2023, respectively, calculated based on a combined federal and state tax rate of 24%.

    Total interest and dividend income for the six months ended June 30, 2024 increased $19.0 million, or 17.3%, compared to the six months ended June 30, 2023, which was driven by an $18.1 million, or 17.4%, increase in interest income on loans and an increase of $602,000, or 18.5%, in interest income on other interest-earning assets. The overall increase in average yield on interest-earning assets was the result of both higher average balances and rising interest rates.

    Total interest expense for the six months ended June 30, 2024 increased $20.9 million, or 85.6%, compared to the six months ended June 30, 2023. The increase was primarily the result of increases in the average balances and cost of funds across all funding sources driven by higher market interest rates, as well as the inclusion of Quantum's portfolio for the entire period, unlike last year.

    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$8,510  $9,573 $18,083 
    Debt securities available for sale (463)  750  287 
    Other interest-earning assets 125   477  602 
    Total interest-earning assets 8,172   10,800  18,972 
    Interest-bearing liabilities     
    Interest-bearing checking accounts (169)  915  746 
    Money market accounts 890   8,118  9,008 
    Savings accounts (15)  2  (13)
    Certificate accounts 4,117   7,617  11,734 
    Junior subordinated debt 104   39  143 
    Borrowings (1,031)  339  (692)
    Total interest-bearing liabilities 3,896   17,030  20,926 
    Decrease in net interest income    $(1,954)


    Provision for Credit Losses.      The following table presents a breakdown of the components of the provision for credit losses:

     Six Months Ended   
    (Dollars in thousands)June 30, 2024 June 30, 2023 $ Change % Change 
    Provision for credit losses        
    Loans$5,445  $9,270  $(3,825) (41)%
    Off-balance-sheet credit exposure (20)  (105)  85  81 
    Total provision for credit losses$5,425  $9,165  $(3,740) (41)%

    For the six months ended June 30, 2024, the "loans" portion of the provision for credit losses was the result of the following, in addition to net charge-offs of $4.9 million during the period:

    • $1.3 million benefit due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments.
    • $1.8 million increase in specific reserves on individually evaluated loans which was proportional to the increase in the associated loan balances which increased from $8.1 million to $16.3 million during the six month period, concentrated in the equipment finance and SBA portfolios. Further information on the change in nonperforming loans may be found in the "Asset Quality" section.

    For the six months ended June 30, 2023, the "loans" portion of the provision for credit losses was the result of the following, in addition to net charge-offs of $1.3 million during the period:

    • $4.9 million provision to establish an allowance on Quantum's loan portfolio.
    • $2.1 million provision driven by loan growth and 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.
    • $0.1 million increase in specific reserves on individually evaluated credits.

    For the six months ended June 30, 2024 and June 30, 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 six months ended June 30, 2024 increased $1.7 million, or 11.4%, when compared to the same period last year. Changes in the components of noninterest income are discussed below:

     Six Months Ended  
    (Dollars in thousands)June 30, 2024 June 30, 2023 $ Change % Change
    Noninterest income       
    Service charges and fees on deposit accounts$4,503  $4,649 $(146) (3)%
    Loan income and fees 1,325   1,354  (29) (2)
    Gain on sale of loans held for sale 3,285   2,920  365  13 
    BOLI income 2,642   1,095  1,547  141 
    Operating lease income 3,450   2,730  720  26 
    Gain (loss) on sale of premises and equipment (9)  982  (991) (101)
    Other 1,728   1,468  260  18 
    Total noninterest income$16,924  $15,198 $1,726  11%
    • Gain on sale of loans held for sale: The increase in the gain on sale of loans held for sale was primarily driven by HELOCs and SBA loans sold during the period. During the six months ended June 30, 2024, there were $40.7 million of HELOCs sold for a gain of $473,000 compared to $35.2 million sold and gains of $354,000 for the corresponding period in the prior year. There were $25.6 million of sales of the guaranteed portion of SBA commercial loans with gains of $2.1 million compared to $28.8 million sold and gains of $1.9 million for the corresponding period in the prior year. There were $36.6 million of residential mortgage loans originated for sale which were sold during the current period with gains of $667,000 compared to $28.4 million sold with gains of $382,000 for the corresponding period in the prior year. Our hedging of mandatory commitments on the residential mortgage loan pipeline resulted in a loss of $3,000 for the six months ended June 30, 2024 versus a gain of $268,000 for the six months ended June 30, 2023.
    • BOLI income: The increase was due to the combined effect of $1.1 million in tax-free gains on death benefit proceeds in excess of the cash surrender value of the policies recognized and higher yielding policies as a result of restructuring the portfolio at the end of the prior calendar year.
    • Operating lease income: The increase was the result of $1.2 million in additional contractual earnings on a higher average outstanding balance of the associated contracts, partially offset by losses incurred on previously leased equipment, where we recognized net losses of $787,000 and $262,000 in the six months ended June 30, 2024 and June 30, 2023, respectively.
    • Gain (loss) on sale of premises and equipment: During the six months ended June 30, 2023, two properties were sold for a combined gain of $982,000. No material disposal activity occurred during the six months ended June 30, 2024.
    • Other: The increase was driven by a $270,000 increase in investment services income recognized period-over-period.

    Noninterest Expense.  Noninterest expense for the six months ended June 30, 2024 decreased $3.7 million, or 5.8%, when compared to the same period last year. Changes in the components of noninterest expense are discussed below:

     Six Months Ended  
    (Dollars in thousands)June 30, 2024 June 30, 2023 $ Change % Change
    Noninterest expense       
    Salaries and employee benefits$33,584 $32,922 $662  2%
    Occupancy expense, net 4,856  5,067  (211) (4)
    Computer services 6,204  6,213  (9) — 
    Telephone, postage and supplies 1,165  1,290  (125) (10)
    Marketing and advertising 1,251  1,068  183  17 
    Deposit insurance premiums 1,085  1,161  (76) (7)
    Core deposit intangible amortization 1,329  1,465  (136) (9)
    Merger-related expenses —  4,741  (4,741) (100)
    Other 10,600  9,817  783  8 
    Total noninterest expense$60,074 $63,744 $(3,670) (6)%
    • Marketing and advertising: The increase was the result of differences in the timing of when expenses were incurred quarter-over-quarter.
    • Merger-related expenses: The prior period included expenses associated with the Company's merger with Quantum. No such expenses were incurred in the six months ended June 30, 2024.
    • Other: The increase period-over-period was primarily driven by $1.0 million of additional depreciation expense on equipment subject to operating leases, partially offset by a decrease of $314,000 in fraud losses.

    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 six months ended June 30, 2024 and June 30, 2023 were 21.1% and 21.3%, respectively.

    Balance Sheet Review
    Total assets decreased by $1.8 million to $4.7 billion and total liabilities decreased by $25.5 million to $4.1 billion, respectively, at June 30, 2024 as compared to December 31, 2023. The majority of these changes were the result of an increase in deposits, which, combined with the collection of BOLI redemption proceeds, were used to fund growth in loans and pay down borrowings.

    Stockholders' equity increased $23.7 million to $523.6 million at June 30, 2024 as compared to December 31, 2023. Activity within stockholders' equity included $27.5 million in net income, partially offset by $3.7 million in cash dividends declared. As of June 30, 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 $49.2 million, or 1.33% of total loans, at June 30, 2024 compared to $48.6 million, or 1.34% of total loans, at December 31, 2023. The drivers of the changes between periods are discussed in the "Comparison of Results of Operations for the Six Months Ended June 30, 2024 and June 30, 2023 – Provision for Credit Losses" section above.

    Net loan charge-offs totaled $4.9 million for the six months ended June 30, 2024 compared to $1.3 million for the same period last year. As discussed in previous quarters, the increase in net charge-offs has been concentrated in our equipment finance portfolio, primarily smaller over-the-road truck loans, with net charge-offs of $3.4 million during the identified period. In response, during the first quarter of calendar year 2024 the Company elected to cease further originations within the transportation sector of equipment finance loans. In spite of the increase, annualized net charge-offs as a percentage of average assets were 0.25% for the six months ended June 30, 2024, in line with the Company's historical experience, as compared to 0.07% for the six months ended June 30, 2023.

    Nonperforming assets, made up entirely of nonaccrual loans for both periods, increased by $5.9 million, or 30.7%, to $25.3 million, or 0.54% of total assets, at June 30, 2024 compared to $19.3 million, or 0.41% of total assets, at December 31, 2023. Consistent with the change in net charge-offs, equipment finance loans made up the largest portion of nonperforming assets at $10.6 million and $6.5 million, respectively, at these same dates; however, the increase between these two dates was mainly the result of a $3.1 million medical equipment relationship where a loss is not currently anticipated. The ratio of nonperforming loans to total loans was 0.68% at June 30, 2024 compared to 0.53% at December 31, 2023.

    The ratio of classified assets to total assets increased to 0.91% at June 30, 2024 from 0.90% at December 31, 2023 as classified assets increased $696,000, or 1.7%, to $42.7 million at June 30, 2024 compared to $42.0 million at December 31, 2023. The largest portfolios of classified assets at June 30, 2024 included $11.8 million of non-owner occupied commercial real estate (NOO CRE) loans, $10.6 million of equipment finance loans, $8.1 million of SBA loans, and $5.2 million of 1-4 family residential real estate loans.

    About HomeTrust Bancshares, Inc.
    HomeTrust Bancshares, Inc. is the holding company for the Bank. As of June 30, 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)June 30, 2024 March 31, 2024 December 31, 2023(1) September 30, 2023 June 30, 2023(1)
    Assets         
    Cash$18,382  $16,134  $18,307  $18,090  $19,266 
    Interest-bearing deposits 275,808   364,359   328,833   306,924   284,231 
    Cash and cash equivalents 294,190   380,493   347,140   325,014   303,497 
    Certificates of deposit in other banks 32,131   33,625   34,722   35,380   33,152 
    Debt securities available for sale, at fair value 134,135   120,807   126,950   134,348   151,926 
    FHLB and FRB stock 19,637   13,691   18,393   19,612   20,208 
    SBIC investments, at cost 15,462   14,568   13,789   14,586   14,927 
    Loans held for sale, at fair value 1,614   2,764   3,359   4,616   6,947 
    Loans held for sale, at the lower of cost or fair value 224,976   220,699   198,433   200,834   161,703 
    Loans, net of deferred loan fees and costs 3,701,454   3,648,152   3,640,022   3,659,914   3,658,823 
    Allowance for credit losses – loans (49,223)  (47,502)  (48,641)  (47,417)  (47,193)
    Loans, net 3,652,231   3,600,650   3,591,381   3,612,497   3,611,630 
    Premises and equipment, net 69,880   70,588   70,937   72,463   73,171 
    Accrued interest receivable 18,412   16,944   16,902   16,513   14,829 
    Deferred income taxes, net 10,512   11,222   11,796   9,569   10,912 
    BOLI 89,176   88,369   88,257   106,059   106,572 
    Goodwill 34,111   34,111   34,111   34,111   34,111 
    Core deposit intangibles, net 7,730   8,297   9,059   9,918   10,778 
    Other assets 66,667   67,183   107,404   56,477   53,124 
    Total assets$4,670,864  $4,684,011  $4,672,633  $4,651,997  $4,607,487 
    Liabilities and stockholders' equity         
    Liabilities         
    Deposits$3,707,779  $3,799,807  $3,661,373  $3,640,961  $3,601,168 
    Junior subordinated debt 10,070   10,045   10,021   9,995   9,971 
    Borrowings 364,513   291,513   433,763   452,263   457,263 
    Other liabilities 64,874   69,473   67,583   64,367   67,899 
    Total liabilities 4,147,236   4,170,838   4,172,740   4,167,586   4,136,301 
    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   175   174   174   174 
    Additional paid in capital 172,907   172,919   172,366   171,663   171,222 
    Retained earnings 357,147   346,598   333,401   321,799   308,651 
    Unearned Employee Stock Ownership Plan ("ESOP") shares (4,232)  (4,364)  (4,497)  (4,629)  (4,761)
    Accumulated other comprehensive loss (2,369)  (2,155)  (1,551)  (4,596)  (4,100)
    Total stockholders' equity 523,628   513,173   499,893   484,411   471,186 
    Total liabilities and stockholders' equity$4,670,864  $4,684,011  $4,672,633  $4,651,997  $4,607,487 

    (1)  Derived from audited financial statements.
    (2)  Shares of common stock issued and outstanding were 17,437,326 at June 30, 2024; 17,444,787 at March 31, 2024; 17,387,069 at December 31, 2023; 17,380,307 at September 30, 2023; and 17,366,673 at June 30, 2023.

    Consolidated Statements of Income (Unaudited)

     Three Months Ended Six Months Ended
    (Dollars in thousands)June 30, 2024 March 31, 2024 June 30, 2024 June 30, 2023
    Interest and dividend income       
    Loans$62,161 $59,952  $122,113  $104,030
    Debt securities available for sale 1,495  1,313   2,808   2,521
    Other investments and interest-bearing deposits 1,758  2,090   3,848   3,246
    Total interest and dividend income 65,414  63,355   128,769   109,797
    Interest expense       
    Deposits 21,683  20,318   42,001   20,526
    Junior subordinated debt 234  236   470   327
    Borrowings 1,331  1,571   2,902   3,594
    Total interest expense 23,248  22,125   45,373   24,447
    Net interest income 42,166  41,230   83,396   85,350
    Provision for credit losses  4,260  1,165   5,425   9,165
    Net interest income after provision for credit losses 37,906  40,065   77,971   76,185
    Noninterest income       
    Service charges and fees on deposit accounts 2,354  2,149   4,503   4,649
    Loan income and fees 647  678   1,325   1,354
    Gain on sale of loans held for sale 1,828  1,457   3,285   2,920
    BOLI income 807  1,835   2,642   1,095
    Operating lease income 1,591  1,859   3,450   2,730
    Gain (loss) on sale of premises and equipment —  (9)  (9)  982
    Other 886  842   1,728   1,468
    Total noninterest income 8,113  8,811   16,924   15,198
    Noninterest expense       
    Salaries and employee benefits 16,608  16,976   33,584   32,922
    Occupancy expense, net 2,419  2,437   4,856   5,067
    Computer services 3,116  3,088   6,204   6,213
    Telephone, postage and supplies 580  585   1,165   1,290
    Marketing and advertising 606  645   1,251   1,068
    Deposit insurance premiums 531  554   1,085   1,161
    Core deposit intangible amortization 567  762   1,329   1,465
    Merger-related expenses —  —   —   4,741
    Other 5,783  4,817   10,600   9,817
    Total noninterest expense 30,210  29,864   60,074   63,744
    Income before income taxes 15,809  19,012   34,821   27,639
    Income tax expense 3,391  3,945   7,336   5,892
    Net income$12,418 $15,067  $27,485  $21,747


    Per Share Data

      Three Months Ended  Six Months Ended
      June 30, 2024 March 31, 2024 June 30, 2024 June 30, 2023
    Net income per common share(1)        
    Basic $0.73 $0.88 $1.61 $1.31
    Diluted $0.73 $0.88 $1.61 $1.30
    Average shares outstanding        
    Basic  16,883,028  16,859,738  16,871,383  16,400,370
    Diluted  16,904,098  16,872,840  16,888,550  16,427,587
    Book value per share at end of period $30.03 $29.42 $30.03 $27.13
    Tangible book value per share at end of period(2) $27.73 $27.10 $27.73 $24.69
    Cash dividends declared per common share $0.11 $0.11 $0.22 $0.20
    Total shares outstanding at end of period  17,437,326  17,444,787  17,437,326  17,366,673

    (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 Six Months Ended
     June 30, 2024 March 31, 2024 June 30, 2024 June 30, 2023
    Performance ratios(1)     
    Return on assets (ratio of net income to average total assets)1.13% 1.37% 1.25% 1.06%
    Return on equity (ratio of net income to average equity)9.58  11.91  10.73  9.65 
    Yield on earning assets6.32  6.18  6.25  5.70 
    Rate paid on interest-bearing liabilities3.04  2.90  2.97  1.78 
    Average interest rate spread3.28  3.28  3.28  3.92 
    Net interest margin(2)4.08  4.02  4.05  4.43 
    Average interest-earning assets to average interest-bearing liabilities135.38  134.52  134.95  139.88 
    Noninterest expense to average total assets2.74  2.72  2.73  3.10 
    Efficiency ratio60.08  59.69  59.88  63.40 
    Efficiency ratio – adjusted(3)59.66  60.64  60.14  58.91 

    (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
     June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023
    Asset quality ratios         
    Nonperforming assets to total assets(1)0.54% 0.43% 0.41% 0.25% 0.18%
    Nonperforming loans to total loans(1)0.68  0.55  0.53  0.32  0.23 
    Total classified assets to total assets0.91  0.80  0.90  0.76  0.53 
    Allowance for credit losses to nonperforming loans(1)194.80  235.18  251.60  400.41  567.56 
    Allowance for credit losses to total loans1.33  1.30  1.34  1.30  1.29 
    Net charge-offs to average loans (annualized)0.27  0.24  0.29  0.27  0.13 
    Capital ratios         
    Equity to total assets at end of period11.21% 10.96% 10.70% 10.41% 10.23%
    Tangible equity to total tangible assets(2)10.44  10.18  9.91  9.60  9.39 
    Average equity to average assets11.78  11.51  11.03  10.84  10.79 

    (1)  Nonperforming assets include nonaccruing loans and REO. There were no accruing loans more than 90 days past due at the dates indicated. At June 30, 2024, $8.3 million, or 32.9%, 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)June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023
    Commercial real estate loans         
    Construction and land development$316,050  $304,727  $305,269  $352,143  $356,674 
    Commercial real estate – owner occupied 545,631   532,547   536,545   526,534   529,721 
    Commercial real estate – non-owner occupied 892,653   881,143   875,694   880,348   901,685 
    Multifamily 92,292   89,692   88,623   83,430   81,827 
    Total commercial real estate loans 1,846,626   1,808,109   1,806,131   1,842,455   1,869,907 
    Commercial loans         
    Commercial and industrial 266,136   243,732   237,255   237,366   245,428 
    Equipment finance 461,010   462,649   465,573   470,387   462,211 
    Municipal leases 152,509   151,894   150,292   147,821   142,212 
    Total commercial loans 879,655   858,275   853,120   855,574   849,851 
    Residential real estate loans         
    Construction and land development 70,679   85,840   96,646   103,381   110,074 
    One-to-four family 621,196   605,570   584,405   560,399   529,703 
    HELOCs 188,465   184,274   185,878   185,289   187,193 
    Total residential real estate loans 880,340   875,684   866,929   849,069   826,970 
    Consumer loans 94,833   106,084   113,842   112,816   112,095 
    Total loans, net of deferred loan fees and costs 3,701,454   3,648,152   3,640,022   3,659,914   3,658,823 
    Allowance for credit losses – loans (49,223)  (47,502)  (48,641)  (47,417)  (47,193)
    Loans, net$3,652,231  $3,600,650  $3,591,381  $3,612,497  $3,611,630 


    Deposits

    (Dollars in thousands)June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023
    Core deposits         
    Noninterest-bearing accounts$683,346 $773,901 $784,950 $827,362 $825,481
    NOW accounts 561,789  600,561  591,270  602,804  611,105
    Money market accounts 1,311,940  1,308,467  1,246,807  1,195,482  1,241,840
    Savings accounts 185,499  191,302  194,486  202,971  212,220
    Total core deposits 2,742,574  2,874,231  2,817,513  2,828,619  2,890,646
    Certificates of deposit 965,205  925,576  843,860  812,342  710,522
    Total$3,707,779 $3,799,807 $3,661,373 $3,640,961 $3,601,168


    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 Six Months Ended
    (Dollars in thousands) June 30, 2024 March 31, 2024 June 30, 2024 June 30, 2023
    Noninterest expense $30,210  $29,864  $60,074  $63,744 
    Less: merger expense  —   —   —   4,741 
    Noninterest expense – adjusted $30,210  $29,864  $60,074  $59,003 
             
    Net interest income $42,166  $41,230  $83,396  $85,350 
    Plus: tax-equivalent adjustment  354   349   704   588 
    Plus: noninterest income  8,113   8,811   16,924   15,198 
    Less: BOLI death benefit proceeds in excess of cash surrender value  —   1,143   1,143   — 
    Less: gain (loss) on sale of premises and equipment  —   (9)  (9)  982 
    Net interest income plus noninterest income – adjusted $50,633  $49,256  $99,890  $100,154 
    Efficiency ratio  60.08%  59.69%  59.88%  63.40%
    Efficiency ratio – adjusted  59.66%  60.64%  60.14%  58.91%


    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) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023
    Total stockholders' equity $523,628 $513,173 $499,893 $484,411 $471,186
    Less: goodwill, core deposit intangibles, net of taxes  40,063  40,500  41,086  41,748  42,410
    Tangible book value $483,565 $472,673 $458,807 $442,663 $428,776
    Common shares outstanding  17,437,326  17,444,787  17,387,069  17,380,307  17,366,673
    Book value per share $30.03 $29.42 $28.75 $27.87 $27.13
    Tangible book value per share $27.73 $27.10 $26.39 $25.47 $24.69


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

      As of
    (Dollars in thousands) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023
    Tangible equity(1) $483,565  $472,673  $458,807  $442,663  $428,776 
    Total assets  4,670,864   4,684,011   4,672,633   4,651,997   4,607,487 
    Less: goodwill, core deposit intangibles, net of taxes  40,063   40,500   41,086   41,748   42,410 
    Total tangible assets $4,630,801  $4,643,511  $4,631,547  $4,610,249  $4,565,077 
    Tangible equity to tangible assets  10.44%  10.18%  9.91%  9.60%  9.39%

    (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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