HomeTrust Bancshares, Inc. Announces Financial Results for the Third Quarter of the Year Ending December 31, 2024 and an Increase in the Quarterly Dividend
ASHEVILLE, N.C., Oct. 24, 2024 (GLOBE NEWSWIRE) -- HomeTrust Bancshares, Inc. (NASDAQ:HTBI) ("Company"), the holding company of HomeTrust Bank ("Bank"), today announced preliminary net income for the third quarter of the year ending December 31, 2024 and an increase in its quarterly cash dividend.
For the quarter ended September 30, 2024 compared to the quarter ended June 30, 2024:
net income was $13.1 million compared to $12.4 million;
diluted earnings per share ("EPS") were $0.76 compared to $0.73;
annualized return on assets ("ROA") was 1.17% compared to 1.13%;
annualized return on equity ("ROE") was 9.76% compared to 9.58%;
net interest margin was 4.00% compared to 4.08%;
provision for credit losses was $3.0 million compared to $4.3 million; and
quarterly cash dividends continued at $0.11 per share totaling $1.9 million for both periods.
For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023:
net income was $40.6 million compared to $36.6 million;
diluted EPS were $2.37 compared to $2.18;
annualized ROA was 1.22% compared to 1.15%;
annualized ROE was 10.39% compared to 10.56%;
net interest margin was 4.03% compared to 4.29%;
provision for credit losses was $8.4 million compared to $11.7 million;
tax-free death benefit proceeds from life insurance were $1.1 million for both periods; and
cash dividends of $0.33 per share totaling $5.6 million compared to $0.30 per share totaling $5.1 million.
Results for the nine months ended September 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 nine months ended September 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 $0.12 per common share, reflecting a $0.01, or 9.0%, increase over the previous quarter's dividend. This is the sixth increase of the quarterly dividend since the Company initiated cash dividends in November 2018. The dividend is payable on November 27, 2024 to shareholders of record as of the close of business on November 14, 2024.
"We are pleased to report another quarter of strong financial results," said Hunter Westbrook, President and Chief Executive Officer. "We maintained our top quartile net interest margin, our ninth straight quarter at 4.00% or more. In addition, noninterest income and expense were both in line with prior quarters. Our provision for credit losses of $3.0 million included an additional $2.2 million as a reserve build for the potential impact of Hurricane Helene upon our loan portfolio. We have begun working with our loan customers on payment deferrals of up to six months, and although we aren't currently aware of any collectability issues, we will continue assessing the impact of the storm upon our customer base.
"As you know, many of the communities we serve were affected by this storm, impacting both our employees and customers. I'd first like to thank our employees who have assisted in maintaining bank operations while also tending to their personal and familial responsibilities. It has been amazing to watch the teamwork, collaboration and personal sacrifice across all areas of the Bank as we remained functionally operational throughout the storm, including our electronic banking services and online operations. Currently, all of our banking locations are open with most of the affected areas in our markets recovering well and operating close to normal. As for our customers in the affected areas, it will take time to assess, react and recover from Hurricane Helene. We are committed to working with them to provide the banking support needed for their businesses and homes.
"Lastly, I am thankful for the Company's financial strength and geographic diversification which we have built over the last decade, with respect to both our employees and customer base, which provides the foundation to overcome unforeseen events such as this storm. We remain optimistic as we work together to continue the recovery."
WEBSITE: WWW.HTB.COM
Comparison of Results of Operations for the Three Months Ended September 30, 2024 and June 30, 2024Net Income. Net income totaled $13.1 million, or $0.76 per diluted share, for the three months ended September 30, 2024 compared to $12.4 million, or $0.73 per diluted share, for the three months ended June 30, 2024, an increase of $694,000, or 5.6%. Results for the three months ended September 30, 2024 were positively impacted by a decrease of $1.3 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
September 30, 2024
June 30, 2024
(Dollars in thousands)
AverageBalanceOutstanding
InterestEarned /Paid
Yield /Rate
AverageBalanceOutstanding
InterestEarned /Paid
Yield /Rate
Assets
Interest-earning assets
Loans receivable(1)
$
3,899,460
$
63,305
6.46
%
$
3,885,222
$
62,161
6.43
%
Debt securities available for sale
140,246
1,616
4.58
134,334
1,495
4.48
Other interest-earning assets(2)
144,931
1,728
4.74
140,376
1,758
5.04
Total interest-earning assets
4,184,637
66,649
6.34
4,159,932
65,414
6.32
Other assets
264,579
266,983
Total assets
$
4,449,216
$
4,426,915
Liabilities and equity
Interest-bearing liabilities
Interest-bearing checking accounts
$
548,024
$
1,278
0.93
%
$
586,396
$
1,445
0.99
%
Money market accounts
1,335,798
10,757
3.20
1,298,177
10,221
3.17
Savings accounts
182,618
40
0.09
188,028
41
0.09
Certificate accounts
1,012,765
11,617
4.56
902,864
9,976
4.44
Total interest-bearing deposits
3,079,205
23,692
3.06
2,975,465
21,683
2.93
Junior subordinated debt
10,079
235
9.28
10,054
234
9.36
Borrowings
40,399
648
6.38
87,315
1,331
6.13
Total interest-bearing liabilities
3,129,683
24,575
3.12
3,072,834
23,248
3.04
Noninterest-bearing deposits
719,710
769,016
Other liabilities
65,097
63,503
Total liabilities
3,914,490
3,905,353
Stockholders' equity
534,726
521,562
Total liabilities and stockholders' equity
$
4,449,216
$
4,426,915
Net earning assets
$
1,054,954
$
1,087,098
Average interest-earning assets to average interest-bearing liabilities
133.71
%
135.38
%
Non-tax-equivalent
Net interest income
$
42,074
$
42,166
Interest rate spread
3.22
%
3.28
%
Net interest margin(3)
4.00
%
4.08
%
Tax-equivalent(4)
Net interest income
$
42,442
$
42,520
Interest rate spread
3.25
%
3.32
%
Net interest margin(3)
4.03
%
4.11
%
(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 $368 and $354 for the three months ended September 30, 2024 and June 30, 2024, respectively, calculated based on a combined federal and state tax rate of 24%.
Total interest and dividend income for the three months ended September 30, 2024 increased $1.2 million, or 1.9%, compared to the three months ended June 30, 2024, which was driven by a $1.1 million, or 1.8%, increase in loan interest income primarily due to the difference in the number of days in each quarter. Accretion income on acquired loans of $640,000 and $678,000 was recognized during the same periods, respectively, and was included in interest income on loans.
Total interest expense for the three months ended September 30, 2024 increased $1.3 million, or 5.7%, compared to the three months ended June 30, 2024. The increase was primarily the result of increases in the average balances of money market and certificate accounts, partially offset by a decline in average borrowings outstanding.
The following table shows the effects that changes in average balances (volume), including the difference 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
TotalIncrease /(Decrease)
(Dollars in thousands)
Volume
Rate
Interest-earning assets
Loans receivable
$
916
$
228
$
1,144
Debt securities available for sale
83
38
121
Other interest-earning assets
76
(106
)
(30
)
Total interest-earning assets
1,075
160
1,235
Interest-bearing liabilities
Interest-bearing checking accounts
(81
)
(86
)
(167
)
Money market accounts
413
123
536
Savings accounts
(1
)
—
(1
)
Certificate accounts
1,341
300
1,641
Junior subordinated debt
3
(2
)
1
Borrowings
(708
)
25
(683
)
Total interest-bearing liabilities
967
360
1,327
Decrease in net interest income
$
(92
)
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)
September 30, 2024
June 30, 2024
$ Change
% Change
Provision for credit losses
Loans
$
2,990
$
4,300
$
(1,310
)
(30
)%
Off-balance-sheet credit exposure
(15
)
(40
)
25
63
Total provision for credit losses
$
2,975
$
4,260
$
(1,285
)
(30
)%
For the quarter ended September 30, 2024, the "loans" portion of the provision for credit losses was the result of the following, offset by net charge-offs of $4.1 million during the quarter:
$0.4 million benefit driven by changes in the loan mix.
$1.2 million provision due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments. Included in this change was the addition of a $2.2 million qualitative allocation for the potential impact of Hurricane Helene upon our loan portfolio.
$1.9 million decrease in specific reserves on individually evaluated loans as we charged-off specific reserves which had previously been established.
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.
For the quarters ended September 30, 2024 and June 30, 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 September 30, 2024 increased $169,000, or 2.1%, when compared to the quarter ended June 30, 2024. Changes in the components of noninterest income are discussed below:
Three Months Ended
(Dollars in thousands)
September 30, 2024
June 30, 2024
$ Change
% Change
Noninterest income
Service charges and fees on deposit accounts
$
2,336
$
2,354
$
(18
)
(1
)%
Loan income and fees
684
647
37
6
Gain on sale of loans held for sale
1,900
1,828
72
4
Bank owned life insurance ("BOLI") income
828
807
21
3
Operating lease income
1,637
1,591
46
3
Other
897
886
11
1
Total noninterest income
$
8,282
$
8,113
$
169
2
%
Gain on sale of loans held for sale: The increase was primarily driven by residential mortgage loans sold during the period. There were $21.7 million of residential mortgage loans originated for sale which were sold during the current quarter with gains of $479,000 compared to $21.3 million sold with gains of $351,000 in the prior quarter, with the improvement in profitability due to movement in interest rates. There were $54.6 million of HELOCs sold for a gain of $414,000 compared to $32.9 million sold with gains of $457,000 in the prior quarter. There were $12.9 million in sales of the guaranteed portion of SBA commercial loans with gains of $1.0 million for the quarter compared to $12.7 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 gain of $18,000 for the quarter ended September 30, 2024 versus a loss of $58,000 for the quarter ended June 30, 2024.
Noninterest Expense. Noninterest expense for the three months ended September 30, 2024 increased $375,000, or 1.2%, when compared to the three months ended June 30, 2024. Changes in the components of noninterest expense are discussed below:
Three Months Ended
(Dollars in thousands)
September 30, 2024
June 30, 2024
$ Change
% Change
Noninterest expense
Salaries and employee benefits
$
17,082
$
16,608
$
474
3
%
Occupancy expense, net
2,436
2,419
17
1
Computer services
3,192
3,116
76
2
Telephone, postage and supplies
547
580
(33
)
(6
)
Marketing and advertising
408
606
(198
)
(33
)
Deposit insurance premiums
589
531
58
11
Core deposit intangible amortization
567
567
—
—
Other
5,764
5,783
(19
)
—
Total noninterest expense
$
30,585
$
30,210
$
375
1
%
Salaries and employee benefits: The quarter-over-quarter increase was primarily the result of executive pay increases effective this quarter and additional stock incentive expense associated with the vesting of performance-based equity awards.
Marketing and advertising: The decrease in expense was the result of both differences in the timing of when expenses were incurred quarter-over-quarter as well as a reduction in traditional media advertising (print, billboards, etc.) in favor of digital platforms at lower costs.
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 September 30, 2024 and June 30, 2024 were 21.9% and 21.4%, respectively.
Comparison of Results of Operations for the Nine Months Ended September 30, 2024 and September 30, 2023Net Income. Net income totaled $40.6 million, or $2.37 per diluted share, for the nine months ended September 30, 2024 compared to $36.6 million, or $2.18 per diluted share, for the nine months ended September 30, 2023, an increase of $4.0 million, or 11.0%. The results for the nine months ended September 30, 2024 were positively impacted by a decrease of $3.3 million in the provision for credit losses, a $1.4 million increase in noninterest income, and a $2.6 million decrease in noninterest expense, partially offset by a $2.0 million decrease in net interest income and a $1.3 million increase in income tax expense. 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.
Nine Months Ended
September 30, 2024
September 30, 2023
(Dollars in thousands)
AverageBalanceOutstanding
InterestEarned /Paid
Yield /Rate
AverageBalanceOutstanding
InterestEarned /Paid
Yield /Rate
Assets
Interest-earning assets
Loans receivable(1)
$
3,883,040
$
185,418
6.38
%
$
3,684,518
$
162,526
5.90
%
Debt securities available for sale
133,779
4,424
4.42
155,884
3,780
3.24
Other interest-earning assets(2)
138,956
5,576
5.36
137,065
5,356
5.22
Total interest-earning assets
4,155,775
195,418
6.28
3,977,467
171,662
5.77
Other assets
276,516
266,867
Total assets
$
4,432,291
$
4,244,334
Liabilities and equity
Interest-bearing liabilities
Interest-bearing checking accounts
$
574,954
$
4,149
0.96
%
$
627,200
$
3,241
0.69
%
Money market accounts
1,305,217
30,642
3.14
1,206,119
18,604
2.06
Savings accounts
187,447
124
0.09
218,683
143
0.09
Certificate accounts
934,702
30,778
4.40
649,755
14,967
3.08
Total interest-bearing deposits
3,002,320
65,693
2.92
2,701,757
36,955
1.83
Junior subordinated debt
10,054
705
9.37
8,428
563
8.93
Borrowings
76,823
3,550
6.17
158,965
6,634
5.58
Total interest-bearing liabilities
3,089,197
69,948
3.02
2,869,150
44,152
2.06
Noninterest-bearing deposits
766,110
857,315
Other liabilities
55,217
54,513
Total liabilities
3,910,524
3,780,978
Stockholders' equity
521,767
463,356
Total liabilities and stockholders' equity
$
4,432,291
