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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2022
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission file number: 001-35593
HOMETRUST BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
| | | | | | | | |
Maryland | | 45-5055422 |
(State or other jurisdiction of incorporation of organization) | | (I.R.S. Employer Identification No.) |
10 Woodfin Street, Asheville, North Carolina 28801
(Address of principal executive offices; Zip Code)
(828) 259-3939
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $.01 per share
| HTBI | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 and 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ☐ | | | | Accelerated filer ☒ |
| |
Non-accelerated filer ☐ | Smaller reporting company ☐ |
| |
Emerging growth company ☐ | |
| | | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
There were 15,882,640 shares of common stock, par value of $.01 per share, issued and outstanding as of February 3, 2023.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARIES
10-Q
TABLE OF CONTENTS
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Item 1. | | |
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Item 2. | | |
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Item 3. | | |
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Item 4. | | |
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Item 1. | | |
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Item 1A. | | |
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Item 2. | | |
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Item 3. | | |
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Item 4. | | |
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Item 5 | | |
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Item 6. | | |
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Glossary of Defined Terms
The following terms may be used throughout this Form 10-Q, including the Notes to Consolidated Financial Statements in Item 1 and Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this Form 10-Q.
| | | | | | | | |
Term | | Definition |
ACL | | Allowance for Credit Losses |
AFS | | Available-For-Sale |
ASC | | Accounting Standards Codification |
ASU | | Accounting Standards Update |
| | |
BOLI | | Bank Owned Life Insurance |
CARES Act | | Coronavirus Aid, Relief, and Economic Security Act of 2020 |
CD | | Certificate of Deposit |
CDA | | Collateral Dependent Asset |
CECL | | Current Expected Credit Losses |
CET1 | | Common Equity Tier 1 |
COVID-19 | | Coronavirus Disease 2019 |
CPI | | Consumer Price Index |
DCF | | Discounted Cash Flow |
EPS | | Earnings Per Share |
ESOP | | Employee Stock Ownership Plan |
FASB | | Financial Accounting Standards Board |
FDIC | | Federal Deposit Insurance Corporation |
FHLB or FHLB of Atlanta | | Federal Home Loan Bank |
FRB | | Federal Reserve Bank of Richmond |
GSE | | Government-Sponsored Enterprises |
HELOC | | Home Equity Line of Credit |
IRLC | | Interest Rate Lock Commitments |
LIBOR | | London Interbank Offered Rate |
MBS | | Mortgage-Backed Securities |
NCCOB | | North Carolina Office of the Commissioner of Banks |
PCD | | Purchased Financial Assets with Credit Deterioration |
PPP | | Paycheck Protection Program |
REO | | Real Estate Owned |
ROA | | Return on Assets |
ROE | | Return on Equity |
ROU | | Right of Use |
RSU | | Restricted Stock Unit |
SBA | | U.S. Small Business Administration |
SBIC | | Small Business Investment Companies |
SEC | | Securities and Exchange Commission |
TBA | | To-be-announced |
TDR | | Troubled Debt Restructuring |
US GAAP | | Generally Accepted Accounting Principles in the United States |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
| | | | | | | | | | | |
| (Unaudited) | | |
| December 31, 2022 | | June 30, 2022 |
Assets | | | |
Cash | $ | 15,825 | | | $ | 20,910 | |
Interest-bearing deposits | 149,209 | | | 84,209 | |
Cash and cash equivalents | 165,034 | | | 105,119 | |
Commercial paper, net | — | | | 194,427 | |
Certificates of deposit in other banks | 29,371 | | | 23,551 | |
Debt securities available for sale, at fair value (amortized cost of $152,790 and $130,099 at December 31, 2022 and June 30, 2022, respectively) | 147,942 | | | 126,978 | |
FHLB and FRB stock | 13,661 | | | 9,326 | |
SBIC investments, at cost | 12,414 | | | 12,758 | |
Loans held for sale, at fair value | 518 | | | — | |
Loans held for sale, at the lower of cost or fair value | 72,777 | | | 79,307 | |
Total loans, net of deferred loan fees and costs | 2,985,623 | | | 2,769,295 | |
Allowance for credit losses – loans | (38,859) | | | (34,690) | |
Loans, net | 2,946,764 | | | 2,734,605 | |
Premises and equipment, net | 65,216 | | | 69,094 | |
Accrued interest receivable | 11,076 | | | 8,573 | |
| | | |
Deferred income taxes, net | 11,319 | | | 11,487 | |
BOLI | 96,335 | | | 95,281 | |
Goodwill | 25,638 | | | 25,638 | |
Core deposit intangibles, net | 32 | | | 93 | |
Other assets | 48,918 | | | 52,967 | |
Total assets | $ | 3,647,015 | | | $ | 3,549,204 | |
Liabilities and stockholders' equity | | | |
Liabilities | | | |
Deposits | $ | 3,048,020 | | | $ | 3,099,761 | |
Borrowings | 130,000 | | | — | |
| | | |
Other liabilities | 58,840 | | | 60,598 | |
Total liabilities | 3,236,860 | | | 3,160,359 | |
Commitments and contingencies – See Note 9 | | | |
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, 15,673,595 shares issued and outstanding at December 31, 2022; 15,591,466 at June 30, 2022 | 157 | | | 156 | |
Additional paid in capital | 128,486 | | | 126,106 | |
Retained earnings | 290,271 | | | 270,276 | |
Unearned ESOP shares | (5,026) | | | (5,290) | |
Accumulated other comprehensive loss | (3,733) | | | (2,403) | |
Total stockholders' equity | 410,155 | | | 388,845 | |
Total liabilities and stockholders' equity | $ | 3,647,015 | | | $ | 3,549,204 | |
The accompanying notes are an integral part of these consolidated financial statements.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Income
(Dollars in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) |
| Three Months Ended | | Six Months Ended |
| December 31, | | December 31, |
| 2022 | | 2021 | | 2022 | | 2021 |
Interest and dividend income | | | | | | | |
Loans | $ | 38,995 | | | $ | 26,929 | | | $ | 72,240 | | | $ | 54,824 | |
Commercial paper | 184 | | | 303 | | | 1,300 | | | 458 | |
Debt securities available for sale | 1,151 | | | 411 | | | 1,829 | | | 935 | |
Other investments and interest-bearing deposits | 1,072 | | | 845 | | | 1,960 | | | 1,576 | |
Total interest and dividend income | 41,402 | | | 28,488 | | | 77,329 | | | 57,793 | |
Interest expense | | | | | | | |
Deposits | 3,603 | | | 1,305 | | | 4,998 | | | 2,877 | |
Borrowings | 254 | | | 15 | | | 266 | | | 41 | |
Total interest expense | 3,857 | | | 1,320 | | | 5,264 | | | 2,918 | |
Net interest income | 37,545 | | | 27,168 | | | 72,065 | | | 54,875 | |
Provision (benefit) for credit losses | 2,240 | | | (2,500) | | | 6,227 | | | (3,960) | |
Net interest income after provision (benefit) for credit losses | 35,305 | | | 29,668 | | | 65,838 | | | 58,835 | |
Noninterest income | | | | | | | |
Service charges and fees on deposit accounts | 2,523 | | | 2,513 | | | 4,861 | | | 4,885 | |
Loan income and fees | 647 | | | 805 | | | 1,217 | | | 1,784 | |
Gain on sale of loans held for sale | 1,102 | | | 3,901 | | | 2,688 | | | 7,958 | |
BOLI income | 494 | | | 490 | | | 1,021 | | | 1,008 | |
| | | | | | | |
| | | | | | | |
Operating lease income | 1,156 | | | 1,718 | | | 2,741 | | | 3,258 | |
Gain (loss) on sale of premises and equipment | 1,127 | | | (87) | | | 1,115 | | | (87) | |
Other | 1,405 | | | 753 | | | 2,209 | | | 1,639 | |
Total noninterest income | 8,454 | | | 10,093 | | | 15,852 | | | 20,445 | |
Noninterest expense | | | | | | | |
Salaries and employee benefits | 14,484 | | | 14,872 | | | 29,299 | | | 30,152 | |
Occupancy expense, net | 2,428 | | | 2,401 | | | 4,824 | | | 4,718 | |
Computer services | 2,796 | | | 2,609 | | | 5,559 | | | 5,130 | |
Telephone, postage, and supplies | 575 | | | 672 | | | 1,178 | | | 1,322 | |
Marketing and advertising | 481 | | | 832 | | | 1,071 | | | 1,537 | |
Deposit insurance premiums | 546 | | | 302 | | | 1,088 | | | 868 | |
| | | | | | | |
Core deposit intangible amortization | 26 | | | 65 | | | 60 | | | 158 | |
Merger-related expenses | 250 | | | — | | | 724 | | | — | |
| | | | | | | |
Other | 4,490 | | | 4,069 | | | 8,362 | | | 7,953 | |
Total noninterest expense | 26,076 | | | 25,822 | | | 52,165 | | | 51,838 | |
Net income before income taxes | 17,683 | | | 13,939 | | | 29,525 | | | 27,442 | |
Income tax expense | 4,025 | | | 2,861 | | | 6,668 | | | 5,837 | |
Net income | $ | 13,658 | | | $ | 11,078 | | | $ | 22,857 | | | $ | 21,605 | |
Per share data | | | | | | | |
Net income per common share | | | | | | | |
Basic | $ | 0.90 | | | $ | 0.70 | | | $ | 1.51 | | | $ | 1.36 | |
Diluted | $ | 0.90 | | | $ | 0.68 | | | $ | 1.50 | | | $ | 1.33 | |
| | | | | | | |
Average shares outstanding | | | | | | | |
Basic | 15,028,179 | | | 15,632,283 | | | 15,008,092 | | | 15,696,765 | |
Diluted | 15,161,153 | | | 15,989,606 | | | 15,145,701 | | | 16,057,607 | |
The accompanying notes are an integral part of these consolidated financial statements.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Comprehensive Income
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) |
| Three Months Ended | | Six Months Ended |
| December 31, | | December 31, |
| 2022 | | 2021 | | 2022 | | 2021 |
Net income | $ | 13,658 | | | $ | 11,078 | | | $ | 22,857 | | | $ | 21,605 | |
Other comprehensive income (loss) | | | | | | | |
Unrealized holding gains (losses) on debt securities available for sale | | | | | | | |
Gains (losses) arising during the period | 411 | | | (882) | | | (1,727) | | | (1,187) | |
Deferred income tax benefit (expense) | (95) | | | 203 | | | 397 | | | 273 | |
| | | | | | | |
| | | | | | | |
Total other comprehensive income (loss) | 316 | | | (679) | | | (1,330) | | | (914) | |
Comprehensive income | $ | 13,974 | | | $ | 10,399 | | | $ | 21,527 | | | $ | 20,691 | |
The accompanying notes are an integral part of these consolidated financial statements.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) |
| Three Months Ended December 31, 2022 |
| Common Stock | | Additional Paid In Capital | | Retained Earnings | | Unearned ESOP Shares | | Accumulated Other Comprehensive Loss | | Total Stockholders' Equity |
| Shares | | Amount |
Balance at September 30, 2022 | 15,632,348 | | | $ | 156 | | | $ | 127,153 | | | $ | 278,120 | | | $ | (5,158) | | | $ | (4,049) | | | $ | 396,222 | |
Net income | — | | | — | | | — | | | 13,658 | | | — | | | — | | | 13,658 | |
| | | | | | | | | | | | | |
Cash dividends declared on common stock, $0.10/ common share | — | | | — | | | — | | | (1,507) | | | — | | | — | | | (1,507) | |
| | | | | | | | | | | | | |
Forfeited restricted stock | (5,800) | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Exercised stock options | 47,047 | | | 1 | | | 676 | | | — | | | — | | | — | | | 677 | |
Share-based compensation expense | — | | | — | | | 464 | | | — | | | — | | | — | | | 464 | |
ESOP compensation expense | — | | | — | | | 193 | | | — | | | 132 | | | — | | | 325 | |
Other comprehensive income | — | | | — | | | — | | | — | | | — | | | 316 | | | 316 | |
Balance at December 31, 2022 | 15,673,595 | | | $ | 157 | | | $ | 128,486 | | | $ | 290,271 | | | $ | (5,026) | | | $ | (3,733) | | | $ | 410,155 | |
| | | | | | | | | | | | | |
| (Unaudited) |
| Three Months Ended December 31, 2021 |
| Common Stock | | Additional Paid In Capital | | Retained Earnings | | Unearned ESOP Shares | | Accumulated Other Comprehensive Income | | Total Stockholders' Equity |
| Shares | | Amount |
Balance at September 30, 2021 | 16,307,658 | | | $ | 163 | | | $ | 151,425 | | | $ | 249,331 | | | $ | (5,687) | | | $ | 1,279 | | | $ | 396,511 | |
Net income | — | | | — | | | — | | | 11,078 | | | — | | | — | | | 11,078 | |
| | | | | | | | | | | | | |
Cash dividends declared on common stock, $0.09/common share | — | | | — | | | — | | | (1,423) | | | — | | | — | | | (1,423) | |
Common stock repurchased | (299,397) | | | (3) | | | (8,967) | | | — | | | — | | | — | | | (8,970) | |
Forfeited restricted stock | (6,400) | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Exercised stock options | 301,600 | | | 3 | | | 4,339 | | | — | | | — | | | — | | | 4,342 | |
Share-based compensation expense | — | | | — | | | 485 | | | — | | | — | | | — | | | 485 | |
ESOP compensation expense | — | | | — | | | 270 | | | — | | | 132 | | | — | | | 402 | |
Other comprehensive loss | — | | | — | | | — | | | — | | | — | | | (679) | | | (679) | |
Balance at December 31, 2021 | 16,303,461 | | | $ | 163 | | | $ | 147,552 | | | $ | 258,986 | | | $ | (5,555) | | | $ | 600 | | | $ | 401,746 | |
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity (Continued)
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) |
| Six Months Ended December 31, 2022 |
| Common Stock | | Additional Paid In Capital | | Retained Earnings | | Unearned ESOP Shares | | Accumulated Other Comprehensive Income | | Total Stockholders' Equity |
| Shares | | Amount |
Balance at June 30, 2022 | 15,591,466 | | | $ | 156 | | | $ | 126,106 | | | $ | 270,276 | | | $ | (5,290) | | | $ | (2,403) | | | $ | 388,845 | |
Net income | — | | | — | | | — | | | 22,857 | | | — | | | |