HomeTrust Bancshares, Inc. Announces Financial Results for the Second Quarter of Fiscal 2022 and Quarterly Dividend

Rhea-AI Summary

HomeTrust Bancshares (HTBI) reported a significant increase in net income for Q2 FY2022, reaching $11.1 million, up from $9.5 million a year prior. Diluted EPS rose to $0.68 from $0.57. ROA improved to 1.24%, while ROE increased to 11.02%. Noninterest income grew 8.9% to $10.2 million, and net commercial loan growth, excluding PPP loans, was $41.9 million, marking an annualized increase of 8.6%. The company also declared a quarterly dividend of $0.09 per share, a 12.5% increase. Assets totaled $3.5 billion, reflecting a focus on maintaining credit quality and growth.

Positive

• Net income for Q2 FY2022: $11.1 million (up 16.8% YoY)
• Diluted EPS grew to $0.68 from $0.57 YoY
• ROA improved to 1.24% from 1.03% YoY
• ROE increased to 11.02% from 9.41% YoY
• Noninterest income rose to $10.2 million (up 8.9% YoY)
• Net commercial loan growth of $41.9 million (up 8.6% annualized)
• Quarterly dividend increased 12.5% to $0.09 per share

Negative

• Interest and dividend income decreased by $1.7 million (5.5% YoY)
• Average interest-earning assets decreased by $139.2 million (4.1% YoY)
• Loan interest income decreased by $1.4 million (5.0% YoY)
• Total loans decreased by $37.2 million (1.4% YoY)

ASHEVILLE, N.C., Jan. 27, 2022 (GLOBE NEWSWIRE) -- HomeTrust Bancshares, Inc. (NASDAQ: HTBI) ("Company"), the holding company of HomeTrust Bank ("Bank"), today announced preliminary net income for the second quarter of fiscal 2022 and approval of its quarterly dividend.

For the quarter ended December 31, 2021 compared to the corresponding quarter in the previous year:

• net income was $11.1 million, compared to $9.5 million;
• diluted earnings per share ("EPS") was $0.68, compared to $0.57;
• annualized return on assets ("ROA") was 1.24%, compared to 1.03%;
• annualized return on equity ("ROE") was 11.02%, compared to 9.41%;
• provision for credit losses was a net benefit of $2.5 million, compared to a net benefit of $3.0 million;
• noninterest income was $10.2 million compared to $9.3 million;
• 299,397 shares of Company common stock were repurchased during the quarter at an average price of $29.96 per share;
• net commercial loan growth, excluding U.S. Small Business Administration's ("SBA") Paycheck Protection Program ("PPP") loans, was $41.9 million, or 8.6% annualized compared to a decline of $44.6 million, or 9.8% annualized, in the prior year; and
• quarterly cash dividends increased $0.01 per share, or 12.5%, to $0.09 per share, totaling $1.4 million.
  

For the six months ended December 31, 2021 compared to the previous year:

• net income was $21.6 million, compared to $15.2 million;
• diluted earnings per share ("EPS") was $1.33, compared to $0.92;
• annualized return on assets ("ROA") was 1.21%, compared to 0.83%;
• annualized return on equity ("ROE") was 10.78%, compared to 7.58%;
• provision for credit losses was a net benefit of $4.0 million, compared to a net benefit of $2.1 million;
• noninterest income was $20.5 million compared to $18.0 million;
• 675,832 shares of Company common stock were repurchased during the six months at an average price of $28.71 per share; and
• net commercial loan growth, excluding PPP loans, was $78.9 million, or 8.2% annualized compared to a decline of $11.0 million, or 1.2% annualized in the prior year.

The Company also announced today that its Board of Directors declared a quarterly cash dividend of $0.09 per common share payable on March 3, 2022 to shareholders of record as of the close of business on February 17, 2022.

“We continue to be encouraged by the positive trends within our commercial loan portfolio, both in terms of the volume of originations and the performance of the portfolio,” said Dana Stonestreet, Chairman and Chief Executive Officer. “Our commercial portfolio continues to grow at an annual rate in the mid- to high-single digits which we've maintained for several years. While the main driver of this growth has been our equipment finance portfolio, all commercial lines of business have experienced growth over the past year. In addition, the levels of nonperforming and classified credits remain at historically low levels. As a reflection of both the strong credit quality of our loan portfolio and a continued improvement in forecasted economic conditions, we were again able to release reserves this quarter recording a $2.5 million benefit for credit losses. Going forward we will continue to focus on the asset origination capacity of all of our lines of business, while maintaining the credit culture that has supported our growth in recent years.”

Comparison of Results of Operations for the Three Months Ended December 31, 2021 and 2020

Net interest income increased by $1.1 million, or 4.0%, to $27.2 million for the quarter ended December 31, 2021, compared to $26.1 million for the comparative quarter in fiscal 2021. Interest and dividend income decreased by $1.7 million, or 5.5%, primarily driven by lower average balances on interest-earning assets combined with lower loan yields. This decrease was offset by a $2.7 million, or 67.3% decrease in interest expense. Average interest-earning assets decreased $139.2 million, or 4.1%, to $3.3 billion for the quarter ended December 31, 2021. The main drivers of the change were decreases of $103.5 million, or 24.8%, in the average balance of commercial paper and deposits in other banks and $11.9 million, or 8.9%, in debt securities available for sale as the Company continues to use excess liquidity to reduce borrowings, which declined by $417.8 million, or 88.0%, when compared to the prior period. Net interest margin (on a fully taxable-equivalent basis) for the three months ended December 31, 2021 increased to 3.33% from 3.07% for the same period a year ago as all higher rate long-term borrowings were repaid during the quarter ended June 30, 2021.

Total interest and dividend income decreased $1.7 million, or 5.5%, for the quarter ended December 31, 2021 as compared to the same quarter last year, which was primarily a result of a $1.4 million, or 5.0%, decrease in loan interest income, and a $146,000, or 23.8%, decrease in interest income from commercial paper and deposits in other banks. The lower interest income in each category was mainly driven by the overall decrease in average balances as discussed above, in addition to declines in the average yields on loans of 19 basis points, from 4.02% to 3.83%, and debt securities available for sale of 16 basis points, from 1.50% to 1.34%. Loan interest income for the quarter included the amortization of $286,000 of PPP loan origination fees, a decline of $202,000 when compared to the $488,000 recognized in the prior period. The overall average yield on interest-earning assets decreased 5 basis points to 3.49% for the current quarter compared to 3.54% in the same quarter last year primarily due to the change in mix of interest-earning assets, as excess liquidity was used to repay long-term borrowings and reduce short-term interest-earning assets with lower yields.

Total interest expense decreased $2.7 million, or 67.3%, for the quarter ended December 31, 2021 compared to the same period last year. The decrease was driven by a $1.7 million, or 99.1%, decrease in interest expense on borrowings as discussed above and a $1.0 million, or 44.4%, decrease in interest expense on deposits. The average balance of total deposits increased by $296.8 million, or 10.8%, with noninterest-bearing deposits and interest-bearing deposits increasing $212.8 million and $84.0 million, respectively. The increase in interest-bearing deposits was driven by a $149.5 million, or 17.6% increase in money market accounts, partially offset by a $132.5 million, or 23.0%, decrease in certificates of deposit. As stated above, average borrowings for the quarter ended December 31, 2021 decreased $417.8 million, or 88.0%, along with a 130 basis point decrease in the average cost of borrowings compared to the same period last year. The increase in average deposits (interest and noninterest-bearing) was due to successful deposit gathering campaigns and the effect of government stimulus. The decrease in the average cost of borrowings was primarily driven by the early retirement of long-term borrowings reducing the average balance and partially driven by a shift to short-term borrowings at lower rates. The overall average cost of funds decreased 37 basis points to 0.22% for the current quarter compared to 0.59% in the same quarter last year.

Noninterest income increased $0.9 million, or 8.9%, to $10.2 million for the quarter ended December 31, 2021 from $9.3 million for the same period in the previous year. This change was primarily due to a $369,000, or 27.3%, increase in operating lease income, a $236,000, or 41.5%, increase in loan income and fees, and a $197,000, or 5.3%, increase in gain on sale of loans. The increase in operating lease income was driven by increases in loan originations and higher outstanding lease balances during the period. The increase in loan income and fees was largely a result of transitioning SBA loan servicing processes in-house, which began July 1, 2021. During the quarter ended December 31, 2021, $86.9 million of residential mortgage loans originated for sale were sold with gains of $2.2 million compared to $108.9 million sold and gains of $2.8 million in the corresponding period in the prior year. There were $12.6 million of sales of the guaranteed portion of SBA commercial loans with gains of $1.3 million in the current quarter compared to $9.3 million sold and gains of $778,000 million for the same period last year. The Company sold $24.8 million of home equity lines of credit (HELOC) during the quarter for a gain of $159,000 compared to $23.2 million sold and gains of $158,000 in the corresponding period last year. Lastly, $11.5 million of indirect auto finance loans were sold in the current quarter out of the held for investment portfolio for a gain of $205,000. No such sales occurred in the same period in the prior year.

Noninterest expense decreased $534,000, or 2.0%, for the quarter ended December 31, 2021 as compared to the same period last year, which was primarily a result of a decrease of $828,000, or 5.3%, in salaries and benefits expense due to branch closures and lower mortgage banking incentive pay in the period partially offset by an increase of $505,000, or 154.4%, in marketing and advertising expense driven by reduced media advertising in the prior period as a result of the pandemic.

For the quarter ended December 31, 2021, the Company's income tax expense increased $269,000, or 10.4%, to $2.9 million from $2.6 million as a result of higher taxable income. The effective tax rates for the quarters ended December 31, 2021 and 2020 were 20.5% and 21.5%, respectively.

Comparison of Results of Operations for the Six Months Ended December 31, 2021 and 2020

Net interest income increased by $3.2 million, or 6.3%, to $54.9 million for the six months ended December 31, 2021, compared to the same period last year. Interest and dividend income decreased by $2.8 million, or 4.6%, primarily driven by lower average balances on interest-earning assets combined with lower loan yields. This decrease was offset by a $6.1 million, or 67.5%, decrease in interest expense. Average interest-earning assets decreased $163.4 million, or 4.8%, to $3.3 billion for the six months ended December 31, 2021. The biggest reason for the change was a decrease of $125.0 million, or 29.7%, in commercial paper and deposits in other banks, as the Company used excess liquidity to reduce borrowings, where the average balance declined from $475.0 million to $56.4 million. Net interest margin (on a fully taxable-equivalent basis) for the six months ended December 31, 2021 increased to 3.37% from 3.02% for the same period a year ago as all higher rate long-term borrowings were repaid during the quarter ended June 30, 2021.

Total interest and dividend income decreased $2.8 million, or 4.6%, for the six months ended December 31, 2021 as compared to the same period last year, which was primarily a result of a $2.1 million, or 3.7%, decrease in loan interest income and a $696,000, or 46.6%, decrease in interest income from commercial paper and deposits in other banks. The lower interest income in each category was mainly driven by the decrease in average balances as discussed above. In addition, average loan yields decreased 10 basis points to 3.90% for the quarter ended December 31, 2021 from 4.00% in the corresponding quarter last year, average yields on debt securities available for sale decreased 28 basis points to 1.43% from 1.71%, and average yields on commercial paper and deposits in other banks decreased 16 basis points to 0.54% from 0.70%. Loan interest income for the six months included the amortization of $710,000 of PPP loan origination fees, a decline of $32,000 when compared to the $742,000 recognized in the prior period. The overall average yield on interest-earning assets increased one basis point to 3.55% for the six months compared to 3.54% in the same period last year primarily due to the use of excess liquidity to repay long-term borrowings.

Total interest expense decreased $6.1 million, or 67.5%, for the six months ended December 31, 2021 compared to the same period last year. The decrease was driven by a $3.3 million, or 98.8%, decrease in interest expense on borrowings as discussed above and a $2.7 million, or 48.6%, decrease in interest expense on deposits. The average balance of total deposits increased by $272.2 million, or 9.9%, with noninterest-bearing deposits and interest-bearing deposits increasing $215.4 million and $56.8 million, respectively. The increase in interest-bearing deposits was driven by a $62.9 million, or 11.0%, increase in interest-bearing checking accounts and $156.5 million, or 18.7%, increase in money market accounts, partially offset by a $182.2 million, or 28.8%, decrease in certificates of deposit. As stated above average borrowings for the six months ended December 31, 2021 decreased $418.6 million, or 88.1%, along with a 126 basis point decrease in the average cost of borrowings compared to the same period last year. The increase in average deposits (interest and noninterest-bearing) was due to successful deposit gathering campaigns and the effect of government stimulus. The decrease in the average cost of borrowings was primarily driven by the early retirement of long-term borrowings reducing the average balance and partially driven by a shift to short-term borrowings at lower rates. The overall average cost of funds decreased 40 basis points to 0.25% for the six months compared to 0.65% in the same period last year.

Noninterest income increased $2.5 million, or 14.2%, to $20.5 million for the six months ended December 31, 2021 from $18.0 million for the same period in the previous year. This change was due to a $910,000, or 12.9%, increase in the gain on sale of loans, a $741,000, or 71.0%, increase in loan income and fees, a $583,000, or 21.8%, increase in operating lease income, and a $372,000, or 8.2%, increase in service charges and fees on deposit accounts. During the six months ended December 31, 2021, $150.7 million of residential mortgage loans originated for sale were sold with gains of $4.3 million compared to $190.7 million sold and gains of $5.0 million in the corresponding period in the prior year. There were $27.0 million of sales of the guaranteed portion of SBA commercial loans with gains of $3.1 million in the six months compared to $24.5 million sold and gains of $1.8 million for the same period last year. The Company sold $72.2 million of HELOCs during the six months ended December 31, 2021 for a gain of $426,000 compared to $42.1 million sold and gains of $258,000 in the corresponding period last year. Lastly, $11.5 million of indirect auto finance loans were sold out of the held for investment portfolio during the current period for a gain of $205,000. No such sales occurred in the same period in the prior year. The $741,000, or 71.0%, increase in loan income and fees was primarily a result of $536,000 in additional loan servicing fees as a result of bringing the Company's SBA loan servicing process in-house, which began July 1, 2021, and $279,000 in additional prepayment fee income from our equipment finance line of business. The increase in operating lease income was primarily driven by increases in loan originations and higher outstanding lease balances during the period. Lastly, the increase in service charges on deposit accounts was the result of a $290,000 increase in interchange income driven by higher debit card usage.

Noninterest expense decreased $518,000, or 1.0%, for the six months ended December 31, 2021 as compared to the same period last year, which was primarily a result of a decrease of $755,000, or 2.4%, in salaries and benefits expense due to branch closures and lower mortgage banking incentive pay in the period and a reduction of core deposit amortization expense of $282,000, or 64.1%, partially offset by an increase of $885,000, or 135.7%, in marketing and advertising expense driven by reduced media advertising in the prior period as a result of the pandemic.

For the six months ended December 31, 2021, the Company's income tax expense increased $1.8 million, or 44.6%, to $5.8 million from $4.0 million as a result of higher taxable income. The effective tax rates for the six months ended December 31, 2021 and 2020 were 21.3% and 21.0%, respectively.

Balance Sheet Review

Total assets and liabilities decreased by $21.9 million and $27.1 million to $3.5 billion and $3.1 billion, respectively, at December 31, 2021 as compared to June 30, 2021. The decrease in assets was primarily driven by a combined decrease of $56.9 million, or 23.0%, in cash and cash equivalents, certificates of deposit in other banks, and debt securities available for sale, and a $37.2 million, or 1.4%, decrease in loans receivable as the Company redirected its excess liquidity to continue paying down borrowings during the period. These decreases were partially offset by a $64.6 million, or 34.1%, increase in commercial paper and a $8.5 million, or 9.1%, increase in loans held for sale.

Total loans decreased $37.2 million, or 1.4%, to $2.7 billion at December 31, 2021 from the balance at June 30, 2021. The decrease was driven by PPP forgiveness of $27.6 million and an $88.5 million, or 11.6%, decrease in retail consumer loans primarily resulting from a reduction in one-to-four family loans and indirect auto finance loans, partially as a result of the sale of $11.5 million of these loans in November 2021. This decrease was partially offset by a $78.9 million, or 4.1%, increase in commercial loans (excluding PPP loans) as the Company continues its focus on the growth of this loan segment.

Stockholders' equity increased $5.2 million, or 1.3%, to $401.7 million at December 31, 2021 as compared to June 30, 2021. Activity within stockholders' equity included $21.6 million in net income, $4.8 million in stock-based compensation expense, stock repurchases of $19.4 million, and $2.7 million in cash dividends declared. As of December 31, 2021, the Bank was considered "well capitalized" in accordance with its regulatory capital guidelines and exceeded all regulatory capital requirements.

Asset Quality

The allowance for credit losses on loans was $30.9 million, or 1.15%, of total loans at December 31, 2021 compared to $35.5 million, or 1.30%, of total loans at June 30, 2021. The overall decrease was driven by lower expected credit losses estimated by management based on an improving economic outlook.

The provision for credit losses was a net benefit of $4.0 million for the six months ended December 31, 2021, compared to a net benefit of $2.1 million for the corresponding period in fiscal year 2021. Net loan charge-offs totaled $760,000 for the six months ended December 31, 2021, compared to $637,000 for the same period last year. Net charge-offs as a percentage of average loans were 0.05% for the six months ended December 31, 2021 compared to 0.04% for the corresponding period last year.

Nonperforming assets decreased by $6.6 million, or 51.4%, to $6.2 million, or 0.18%, of total assets at December 31, 2021 compared to $12.8 million, or 0.36% of total assets at June 30, 2021. The significant decrease from June 30, 2021 was primarily a result of the payoff of two commercial real estate loan relationships totaling $5.1 million in the prior quarter. Nonperforming assets included $6.2 million in nonaccruing loans and $45,000 in REO at December 31, 2021, compared to $12.6 million and $188,000 in nonaccruing loans and REO, respectively, at June 30, 2021. Nonperforming loans to total loans was 0.23% at December 31, 2021 and 0.46% at June 30, 2021.

As of December 31, 2021, the Company had $652,000 in loans with full principal and interest payment deferrals related to COVID-19 compared to $107,000 at June 30, 2021. Substantially all loans placed on full payment deferral during the pandemic have come out of deferral and borrowers are either making regular loan payments or interest-only payments. As of December 31, 2021, the Company had $15.6 million in commercial loan deferrals on interest-only payments compared to $78.9 million at June 30, 2021.

The ratio of classified assets to total assets decreased to 0.65% at December 31, 2021 from 0.76% at June 30, 2021. Classified assets decreased $3.8 million, or 14.2%, to $22.9 million at December 31, 2021 compared to $26.7 million at June 30, 2021 primarily due to the payoff of two commercial real estate loan relationships discussed above. The Company's overall asset quality metrics continue to demonstrate its commitment to growing and maintaining a loan portfolio with a moderate risk profile; however, the Company will remain diligent in its monitoring of the portfolio during these uncertain times.

About HomeTrust Bancshares, Inc.

HomeTrust Bancshares, Inc. is the holding company for the Bank. As of December 31, 2021, the Company had assets of $3.5 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 (including the Asheville metropolitan area, the "Piedmont" region, Charlotte, and Raleigh/Cary), Upstate South Carolina (Greenville), East Tennessee (including Kingsport/Johnson City, Knoxville, and Morristown) and Southwest Virginia (including the Roanoke Valley).

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements often include words such as "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of the Company's control. Actual results may differ, possibly materially, from those currently expected or projected in these forward-looking statements. Factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements include: the effect of the COVID-19 pandemic, including on the Company's credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; increased competitive pressures; changes in the interest rate environment; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and other factors described in HomeTrust'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 their website at www.htb.com and on the SEC's website at www.sec.gov. These risks could cause the Company's actual results for fiscal 2022 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, the Company and could negatively affect its operating and stock performance. Any of the forward-looking statements that the Company makes in this press release or the documents they file with or furnish 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 they might make, because of the factors described above or because of other factors that they cannot foresee. The Company does not undertake and specifically disclaim 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.

WEBSITE: WWW.HTB.COM

Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)	December 31, 2021				September 30, 2021				June 30, 2021(1)				March 31, 2021				December 31, 2020
Assets
Cash	$	20,586			$	22,431			$	22,312			$	24,621			$	27,365
Interest-bearing deposits		14,240				20,142				28,678				139,474				198,979
Cash and cash equivalents		34,826				42,573				50,990				164,095				226,344
Commercial paper		254,157				196,652				189,596				238,445				183,778
Certificates of deposit in other banks		34,002				35,495				40,122				42,015				48,637
Debt securities available for sale, at fair value		121,851				124,576				156,459				162,417				153,540
Other investments, at cost		22,117				20,891				23,710				28,899				39,572
Loans held for sale		102,070				105,161				93,539				86,708				118,439
Total loans, net of deferred loan fees and costs		2,696,072				2,719,642				2,733,267				2,690,153				2,678,624
Allowance for credit losses - loans		(30,933	)			(34,406	)			(35,468	)			(36,059	)			(39,844	)
Loans, net		2,665,139				2,685,236				2,697,799				2,654,094				2,638,780
Premises and equipment, net		69,461				68,568				70,909				70,886				70,104
Accrued interest receivable		8,200				8,429				7,933				8,271				9,796
Real estate owned ("REO")		45				45				188				143				252
Deferred income taxes, net		12,019				15,722				16,901				16,889				18,626
Bank owned life insurance ("BOLI")		94,209				93,679				93,108				93,877				93,326
Goodwill		25,638				25,638				25,638				25,638				25,638
Core deposit intangibles, net		185				250				343				473				638
Other assets		58,900				58,445				57,488				55,763				52,501
Total assets	$	3,502,819			$	3,481,360			$	3,524,723			$	3,648,613			$	3,679,971
Liabilities and stockholders' equity
Liabilities
Deposits	$	2,998,691			$	2,987,284			$	2,955,541			$	2,908,478			$	2,743,269
Borrowings		48,000				40,000				115,000				275,000				475,000
Other liabilities		54,382				57,565				57,663				58,683				56,978
Total liabilities		3,101,073				3,084,849				3,128,204				3,242,161				3,275,247
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)		163				163				167				167				168
Additional paid in capital		147,552				151,425				160,582				162,010				166,352
Retained earnings		258,986				249,331				240,075				248,767				242,182
Unearned Employee Stock Ownership Plan ("ESOP") shares		(5,555	)			(5,687	)			(5,819	)			(5,951	)			(6,083	)
Accumulated other comprehensive income		600				1,279				1,514				1,459				2,105
Total stockholders' equity		401,746				396,511				396,519				406,452				404,724
Total liabilities and stockholders' equity	$	3,502,819			$	3,481,360			$	3,524,723			$	3,648,613			$	3,679,971

(1)	Derived from audited financial statements.
(2)	Shares of common stock issued and outstanding were 16,303,461 at December 31, 2021; 16,307,658 at September 30, 2021; 16,636,483 at June 30, 2021; 16,655,347 at March 31, 2021; and 16,791,027 at December 31, 2020.

Consolidated Statements of Income (Unaudited)

	Three Months Ended												Six Months Ended
(Dollars in thousands)	December 31, 2021				September 30, 2021				December 31, 2020				December 31, 2021				December 31, 2020
Interest and dividend income
Loans	$	26,929			$	27,895			$	28,343			$	54,824			$	56,935
Commercial paper and interest-bearing deposits		468				331				614			$	799				1,495
Debt securities available for sale		411				524				504				935				1,032
Other investments		680				555				696				1,235				1,144
Total interest and dividend income		28,488				29,305				30,157				57,793				60,606
Interest expense
Deposits		1,305				1,572				2,347				2,877				5,600
Borrowings		15				26				1,688				41				3,375
Total interest expense		1,320				1,598				4,035				2,918				8,975
Net interest income		27,168				27,707				26,122				54,875				51,631
Provision (benefit) for credit losses		(2,500	)			(1,460	)			(3,030	)			(3,960	)			(2,080	)
Net interest income after provision (benefit) for credit losses		29,668				29,167				29,152				58,835				53,711
Noninterest income
Service charges and fees on deposit accounts		2,513				2,372				2,416				4,885				4,513
Loan income and fees		805				979				569				1,784				1,043
Gain on sale of loans held for sale		3,901				4,057				3,704				7,958				7,048
BOLI income		490				518				511				1,008				1,043
Operating lease income		1,718				1,540				1,349				3,258				2,675
Other		753				886				795				1,639				1,661
Total noninterest income		10,180				10,352				9,344				20,532				17,983
Noninterest expense
Salaries and employee benefits		14,872				15,280				15,700				30,152				30,907
Occupancy expense, net		2,401				2,317				2,261				4,718				4,554
Computer services		2,369				2,324				2,220				4,693				4,527
Telephone, postage, and supplies		735				712				871				1,447				1,533
Marketing and advertising		832				705				327				1,537				652
Deposit insurance premiums		302				566				487				868				998
Gain on sale of REO		—				(3	)			—				(3	)			(35	)
REO related expense		116				145				165				261				413
Core deposit intangible amortization		65				93				202				158				440
Other		4,217				3,877				4,210				8,094				8,454
Total noninterest expense		25,909				26,016				26,443				51,925				52,443
Net income before income taxes		13,939				13,503				12,053				27,442				19,251
Income tax expense		2,861				2,976				2,592				5,837				4,037
Net income	$	11,078			$	10,527			$	9,461			$	21,605			$	15,214

Per Share Data

		Three Months Ended									Six Months Ended
		December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Net income per common share:(1)
Basic		$	0.70		$	0.66		$	0.58		$	1.36		$	0.93
Diluted		$	0.68		$	0.65		$	0.57		$	1.33		$	0.92
Average shares outstanding:
Basic			15,632,283			15,761,247			16,202,844			15,696,765			16,216,917
Diluted			15,989,606			16,146,611			16,563,359			16,057,607			16,514,831
Book value per share at end of period		$	24.64		$	24.31		$	24.10		$	24.64		$	24.10
Tangible book value per share at end of period (2)		$	23.06		$	22.73		$	22.55		$	23.06		$	22.55
Cash dividends declared per common share		$	0.09		$	0.08		$	0.08		$	0.17		$	0.15
Total shares outstanding at end of period			16,303,461			16,307,658			16,791,027			16,303,461			16,791,027

(1)	Basic and diluted net income per common share have been prepared in accordance with the two-class method.
(2)	See Non-GAAP reconciliation tables below for adjustments.

Selected Financial Ratios and Other Data

		Three Months Ended									Six Months Ended
		December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Performance ratios: (1)
Return on assets (ratio of net income to average total assets)		1.24	%		1.20	%		1.03	%		1.21	%		0.83	%
Return on equity (ratio of net income to average equity)		11.02			10.62			9.41			10.78			7.58
Tax equivalent yield on earning assets(2)		3.49			3.61			3.54			3.55			3.54
Rate paid on interest-bearing liabilities		0.22			0.27			0.59			0.25			0.65
Tax equivalent average interest rate spread (2)		3.27			3.34			2.95			3.30			2.89
Tax equivalent net interest margin(2) (3)		3.33			3.41			3.07			3.37			3.02
Average interest-earning assets to average interest-bearing liabilities		139.06			137.94			126.99			138.50			126.09
Operating expense to average total assets		2.91			2.96			2.88			2.92			2.85
Efficiency ratio		69.37			68.36			74.56			68.86			75.33
Efficiency ratio - adjusted (4)		68.81			67.80			73.92			68.30			74.67

(1)	Ratios are annualized where appropriate.
(2)	The weighted average rate for municipal leases is adjusted for a 24% combined federal and state tax rate since the interest from these leases is tax exempt.
(3)	Net interest income divided by average interest-earning assets.
(4)	See Non-GAAP reconciliation tables below for adjustments.

	Three Months Ended
	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Asset quality ratios:
Nonperforming assets to total assets(1)	0.18	%		0.19	%		0.36	%		0.37	%		0.40	%
Nonperforming loans to total loans(1)	0.23			0.25			0.46			0.49			0.54
Total classified assets to total assets	0.65			0.65			0.76			0.76			0.74
Allowance for credit losses to nonperforming loans(1)	500.70			510.63			281.38			272.64			274.05
Allowance for credit losses to total loans	1.15			1.27			1.30			1.34			1.49
Allowance for credit losses to total gross loans excluding PPP loans(2)	1.16			1.28			1.32			1.38			1.52
Net charge-offs (recoveries) to average loans (annualized)	0.15			(0.04	)		(0.04	)		(0.03	)		(0.01	)
Capital ratios:
Equity to total assets at end of period	11.47	%		11.39	%		11.25	%		11.14	%		11.00	%
Tangible equity to total tangible assets(2)	10.81			10.73			10.59			10.50			10.36
Average equity to average assets	11.28			11.27			11.06			10.79			10.95

(1)	Nonperforming assets include nonaccruing loans, consisting of certain restructured loans, and REO. There were no accruing loans more than 90 days past due at the dates indicated. At December 31, 2021, there were $919,000 of restructured loans included in nonaccruing loans and $2.4 million, or 39.4% of nonaccruing loans were current on their loan payments.
(2)	See Non-GAAP reconciliation tables below for adjustments.

Average Balance Sheet Data

	Three Months Ended
(Dollars in thousands)	December 31, 2021										December 31, 2020
	Average Balance Outstanding				Interest Earned/ Paid(2)			Yield/ Rate(2)			Average Balance Outstanding				Interest Earned/ Paid(2)			Yield/ Rate(2)
Assets:
Interest-earning assets:
Loans receivable(1)	$	2,819,262			$	27,236		3.83	%		$	2,826,133			$	28,648		4.02	%
Commercial paper and deposits in other banks		313,882				468		0.59	%			417,401				614		0.58	%
Debt securities available for sale		121,987				411		1.34	%			133,856				504		1.50	%
Other interest-earning assets(3)		22,327				680		12.09	%			39,290				696		7.03	%
Total interest-earning assets		3,277,458				28,795		3.49	%			3,416,680				30,462		3.54	%
Other assets		259,591										257,572
Total assets	$	3,537,049									$	3,674,252
Liabilities and equity:
Interest-bearing deposits:
Interest-bearing checking accounts		635,268				331		0.21	%			584,530				353		0.24	%
Money market accounts		998,297				349		0.14	%			848,760				414		0.19	%
Savings accounts		222,464				40		0.07	%			206,205				38		0.07	%
Certificate accounts		443,546				585		0.52	%			576,078				1,542		1.06	%
Total interest-bearing deposits		2,299,575				1,305		0.23	%			2,215,573				2,347		0.42	%
Borrowings		57,248				15		0.11	%			475,000				1,688		1.41	%
Total interest-bearing liabilities		2,356,823				1,320		0.22	%			2,690,573				4,035		0.59	%
Noninterest-bearing deposits		736,271										523,488
Other liabilities		44,974										57,813
Total liabilities		3,138,068										3,271,874
Stockholders' equity		398,981										402,378
Total liabilities and stockholders' equity	$	3,537,049									$	3,674,252
Net earning assets	$	920,635									$	726,107
Average interest-earning assets to average interest-bearing liabilities		139.06	%									126.99	%
Tax-equivalent:
Net interest income					$	27,475									$	26,427
Interest rate spread								3.27	%									2.95	%
Net interest margin(4)								3.33	%									3.07	%
Non-tax-equivalent:
Net interest income					$	27,168									$	26,122
Interest rate spread								3.23	%									2.91	%
Net interest margin(4)								3.29	%									3.03	%

(1)	The average loans receivable balances include loans held for sale and nonaccruing loans.
(2)	Interest income used in the average interest earned and yield calculation includes the tax equivalent adjustment of $307 and $305 for the three months ended December 31, 2021 and 2020, respectively, calculated based on a combined federal and state tax rate of 24%.
(3)	The average other interest-earning assets consist of FRB stock, FHLB stock, and SBIC investments.
(4)	Net interest income divided by average interest-earning assets.

	Six Months Ended
(Dollars in thousands)	December 31, 2021										December 31, 2020
	Average Balance Outstanding				Interest Earned/ Paid(2)			Yield/ Rate(2)			Average Balance Outstanding				Interest Earned/ Paid(2)			Yield/ Rate(2)
Assets:
Interest-earning assets:
Loans receivable(1)	$	2,819,482			$	55,441		3.90	%		$	2,850,783			$	57,550		4.00	%
Commercial paper and deposits in other banks		295,746				799		0.54	%			420,785				1,495		0.70	%
Debt securities available for sale		130,143				935		1.43	%			120,062				1,032		1.71	%
Other interest-earning assets(3)		22,020				1,235		11.13	%			39,118				1,144		5.80	%
Total interest-earning assets		3,267,391				58,410		3.55	%			3,430,748				61,221		3.54	%
Other assets		260,288										254,610
Total assets	$	3,527,679									$	3,685,358
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing checking accounts		635,362				728		0.23	%			572,505				750		0.26	%
Money market accounts		993,643				716		0.14	%			837,153				964		0.23	%
Savings accounts		223,061				81		0.07	%			203,374				75		0.07	%
Certificate accounts		450,706				1,352		0.60	%			632,894				3,811		1.19	%
Total interest-bearing deposits		2,302,772				2,877		0.25	%			2,245,926				5,600		0.49	%
Borrowings		56,356				41		0.15	%			475,000				3,375		1.41	%
Total interest-bearing liabilities		2,359,128				2,918		0.25	%			2,720,926				8,975		0.65	%
Noninterest-bearing deposits		722,432										507,087
Other liabilities		48,393										55,699
Total liabilities		3,129,953										3,283,712
Stockholders' equity		397,726										401,646
Total liabilities and stockholders' equity	$	3,527,679									$	3,685,358
Net earning assets	$	908,263									$	709,822
Average interest-earning assets to average interest-bearing liabilities		138.50	%									126.09	%
Tax-equivalent:
Net interest income					$	55,492									$	52,246
Interest rate spread								3.30	%									2.89	%
Net interest margin(4)								3.37	%									3.02	%
Non-tax-equivalent:
Net interest income					$	54,875									$	51,631
Interest rate spread								3.26	%									2.85	%
Net interest margin(4)								3.33	%									2.99	%

(1)	The average loans receivable balances include loans held for sale and nonaccruing loans.
(2)	Interest income used in the average interest earned and yield calculation includes the tax equivalent adjustment of $617 and $615 for the six months ended December 31, 2021 and 2020, respectively, calculated based on a combined federal and state tax rate of 24%.
(3)	The average other interest-earning assets consist of FRB stock, FHLB stock, and SBIC investments.
(4)	Net interest income divided by average interest-earning assets.

Loans

(Dollars in thousands)	December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
Commercial loans:
Commercial real estate	$	1,113,330			$	1,132,764			$	1,142,276			$	1,088,178			$	1,056,971
Construction and development		226,439				187,900				179,427				162,820				172,892
Commercial and industrial		162,396				153,612				141,341				140,579				138,761
Equipment finance		367,008				341,995				317,920				291,950				272,761
Municipal leases		131,078				142,100				140,421				129,141				128,549
PPP loans		19,044				28,762				46,650				73,090				64,845
Total commercial loans		2,019,295				1,987,133				1,968,035				1,885,758				1,834,779
Retail consumer loans
One-to-four family		356,850				384,901				406,549				430,001				452,421
HELOCs - originated		128,189				129,791				130,225				131,867				125,397
HELOCs - purchased		30,795				33,943				38,976				46,086				58,640
Construction and land/lots		69,253				69,835				66,027				68,118				75,108
Indirect auto finance		84,581				106,184				115,093				119,656				122,947
Consumer		7,109				7,855				8,362				8,667				9,332
Total retail consumer loans		676,777				732,509				765,232				804,395				843,845
Total loans, net of deferred loan fees and costs		2,696,072				2,719,642				2,733,267				2,690,153				2,678,624
Allowance for credit losses - loans		(30,933	)			(34,406	)			(35,468	)			(36,059	)			(39,844	)
Loans, net	$	2,665,139			$	2,685,236			$	2,697,799			$	2,654,094			$	2,638,780

Deposits

(Dollars in thousands)	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Core deposits:
Noninterest-bearing accounts	$	677,159		$	711,764		$	636,414		$	528,711		$	469,998
NOW accounts		644,343			621,675			644,958			727,240			654,960
Money market accounts		1,010,901			987,650			975,001			927,519			882,366
Savings accounts		224,474			220,614			226,391			221,537			209,699
Total core deposits		2,556,877			2,541,703			2,482,764			2,405,007			2,217,023
Certificates of deposit		441,814			445,581			472,777			503,471			526,246
Total deposits	$	2,998,691		$	2,987,284		$	2,955,541		$	2,908,478		$	2,743,269

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; tangible equity to tangible assets ratio; and the ratio of the allowance for credit losses to total loans excluding PPP loans. 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)		December 31, 2021				September 30, 2021				December 31, 2020				December 31, 2021				December 31, 2020
Noninterest expense		$	25,909			$	26,016			$	26,443			$	51,925			$	52,443
Net interest income		$	27,168			$	27,707			$	26,122			$	54,875			$	51,631
Plus: noninterest income			10,180				10,352				9,344				20,532				17,983
Plus: tax equivalent adjustment			307				310				305				617				615
Net interest income plus noninterest income – adjusted		$	37,655			$	38,369			$	35,771			$	76,024			$	70,229
Efficiency ratio			69.37	%			68.36	%			74.56	%			68.86	%			75.33	%
Efficiency ratio - adjusted			68.81	%			67.80	%			73.92	%			68.30	%			74.67	%

Set forth below is a reconciliation to GAAP of tangible book value and tangible book value per share:

(Dollars in thousands, except per share data)		December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Total stockholders' equity		$	401,746		$	396,511		$	396,519		$	406,452		$	404,724
Less: goodwill, core deposit intangibles, net of taxes			25,780			25,830			25,902			26,002			26,130
Tangible book value		$	375,966		$	370,681		$	370,617		$	380,450		$	378,594
Common shares outstanding			16,303,461			16,307,658			16,636,483			16,655,347			16,791,027
Tangible book value per share		$	23.06		$	22.73		$	22.28		$	22.84		$	22.55
Book value per share		$	24.64		$	24.31		$	23.83		$	24.40		$	24.10

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

(Dollars in thousands)		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
Tangible equity(1)		$	375,966			$	370,681			$	370,617			$	380,450			$	378,594
Total assets			3,502,819				3,481,360				3,524,723				3,648,613				3,679,971
Less: goodwill, core deposit intangibles, net of taxes			25,780				25,830				25,902				26,002				26,130
Total tangible assets		$	3,477,039			$	3,455,530			$	3,498,821			$	3,622,611			$	3,653,841
Tangible equity to tangible assets			10.81	%			10.73	%			10.59	%			10.50	%			10.36	%

_________________________________

(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.

Set forth below is a reconciliation to GAAP of the allowance for credit losses to total loans and the allowance for credit losses as adjusted to exclude PPP loans:

(Dollars in thousands)		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
Total gross loans receivable		$	2,696,072			$	2,719,642			$	2,733,267			$	2,690,153			$	2,678,624
Less: PPP loans			19,044				28,762				46,650				73,090				64,845
Adjusted loans		$	2,677,028			$	2,690,880			$	2,686,617			$	2,617,063			$	2,613,779
Allowance for credit losses		$	30,933			$	34,406			$	35,468			$	36,059			$	39,844
Allowance for credit losses / Adjusted loans			1.16	%			1.28	%			1.32	%			1.38	%			1.52	%

FAQ

What is HomeTrust Bancshares' net income for Q2 FY2022?

HomeTrust Bancshares reported a net income of $11.1 million for Q2 FY2022.

How much did HomeTrust Bancshares increase its quarterly dividend?

HomeTrust Bancshares increased its quarterly dividend by 12.5% to $0.09 per share.

What was HomeTrust Bancshares' diluted EPS for the second quarter of fiscal 2022?

The diluted EPS for HomeTrust Bancshares for Q2 FY2022 was $0.68.

What is the net commercial loan growth for HomeTrust Bancshares in Q2 FY2022?

The net commercial loan growth for HomeTrust Bancshares was $41.9 million, an 8.6% annualized increase.

What was the annualized return on equity (ROE) for HomeTrust Bancshares in Q2 FY2022?

The annualized ROE for HomeTrust Bancshares in Q2 FY2022 was 11.02%.