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			Total Increase / (Decrease)
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.

	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.

	Increase / (Decrease) Due to					Total Increase / (Decrease)
(Dollars in thousands)	Volume			Rate		Total Increase / (Decrease)
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.

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.

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

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