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 assets | 6.32 | 6.18 | 6.25 | 5.70 | |||||||
| Rate paid on interest-bearing liabilities | 3.04 | 2.90 | 2.97 | 1.78 | |||||||
| Average interest rate spread | 3.28 | 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 liabilities | 135.38 | 134.52 | 134.95 | 139.88 | |||||||
| Noninterest expense to average total assets | 2.74 | 2.72 | 2.73 | 3.10 | |||||||
| Efficiency ratio | 60.08 | 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 assets | 0.91 | 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 loans | 1.33 | 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 period | 11.21 | % | 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 assets | 11.78 | 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.
