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Section 1: 8-K (8-K)

Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 29, 2020

HOMETRUST BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
 
Maryland 001-35593 45-5055422
(State or other jurisdiction of incorporation)(Commission File No.)(IRS Employer Identification Number)

10 Woodfin Street, Asheville, North Carolina 28801
(Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code: (828) 259-3939

Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company[ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.[ ]
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, par value $0.01 per shareHTBIThe NASDAQ Stock Market LLC




Item 2.02.  Results of Operations and Financial Condition
 
On April 29, 2020, HomeTrust Bancshares, Inc., the holding company for HomeTrust Bank, issued a press release reporting third quarter 2020 financial results, approval of its quarterly cash dividend, and its response to the COVID-19 pandemic. A copy of the press release, including unaudited financial information released as a part thereof, is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.
 
Item 9.01  Financial Statements and Exhibits
 
(d)           Exhibits
 
Press release dated April 29, 2020


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

HOMETRUST BANCSHARES, INC.
Date: April 29, 2020 By:/s/ Tony J. VunCannon
Tony J. VunCannon
Executive Vice President, Chief Financial Officer, Corporate Secretary and Treasurer


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Section 2: EX-99.1 (EX-99.1)

Document

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HomeTrust Bancshares, Inc. Announces Financial Results For The Third Quarter of Fiscal 2020 and Quarterly Dividend

ASHEVILLE, N.C., April 29, 2020 – HomeTrust Bancshares, Inc. (NASDAQ: HTBI) ("Company"), the holding company of HomeTrust Bank ("Bank"), today announced preliminary net income for the third quarter of fiscal 2020, approval of its quarterly cash dividend, and its response to the COVID-19 pandemic.
For the quarter ended March 31, 2020 compared to the corresponding quarter in the previous year:
net income was $1.2 million, compared to $3.3 million;
diluted earnings per share ("EPS") was $0.07, compared to $0.18;
return on assets ("ROA") was 0.14%, compared to 0.39%;
return on equity ("ROE") was 1.15%, compared to 3.24%;
provision for loan losses was $5.4 million, compared to $5.5 million;
noninterest income increased $1.0 million, or 18.1% to $6.4 million from $5.4 million;
organic net loan growth, which excludes one-to-four family loans transferred to held for sale and purchases of home equity lines of credit, was $33.6 million, or 5.5% annualized compared to $38.5 million, or 6.2% annualized;
635,800 shares were repurchased during the quarter at an average price of $20.45 per share completing the most recent buyback program; and
quarterly cash dividends continued at $0.07 per share totaling $1.2 million.
For the nine months ended March 31, 2020 compared to the corresponding period in the previous year:
net income was $19.2 million, compared to $19.1 million;
EPS was $1.08, compared to $1.02;
ROA was 0.72%, compared to 0.76%;
ROE was 6.19%, compared to 6.21%;
provision for loan losses was $5.8 million, compared to $5.5 million;
noninterest income increased $7.0 million, or 43.6% to $23.1 million from $16.1 million;
total deposits increased $246.4 million, or 10.7% to $2.6 billion from $2.3 billion; and
1,032,221 shares of common stock were repurchased during the period at an average price of $22.50 per share.
Earnings during the three and nine months ended March 31, 2020 were negatively impacted by a significant increase in the provision for loan losses based on the Company's initial assessment of COVID-19 on various macroeconomic factors. In addition, earnings for the nine months ended March 31, 2020 included a $958,000 after-tax gain from the sale of $154.9 million in one-to-four family loans in December 2019.
The Company also announced today that its Board of Directors declared a quarterly cash dividend of $0.07 per common share payable on June 4, 2020 to shareholders of record as of the close of business on May 21, 2020.

"We could not be more proud of our team members for their courage, dedication and focus on taking care of our customers' needs during these unprecedented times. Their health and safety as well as the health and safety of our customers and communities is our primary concern," said Dana Stonestreet, Chairman, President, and Chief Executive Officer. "We understand that everyone is facing their own set of challenges relating to COVID-19 and we remain committed to helping our customers navigate through whatever financial challenges they may face. At the onset of the pandemic, we announced multiple relief programs for both individual and business customers, including payment deferrals, waiving late fees, suspension of foreclosures and repossessions, providing access to government sponsored lending programs as well as various other tailored
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solutions. Our retail banking team has proactively reached out to many of our customers by phone while continuing to service them through our branch office drive-thrus, in our lobbies by appointment, and online. All of these activities have taken place just a few short weeks after our very successful core systems technology conversion in late February."
Response to COVID-19

Loan Programs. In response to the current global situation surrounding the COVID-19 pandemic, the Company is offering a variety of relief options designed to support our customers and communities, including participating in the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”). As of April 24, 2020, we had received PPP applications totaling $89.0 million with confirmed allocation from the SBA for 243 applications totaling $76.9 million. Net origination fees on these loans are approximately $1.9 million which will be deferred and amortized into interest income as the loans are repaid or forgiven. Due to demand exceeding our capacity, on April 9, 2020 we partnered with a third party to process and fund additional PPP applications for our customers and communities. With the recent approval by Congress of additional funds for this program, applications will continue to be processed through our third party relationship. We are also working with our clients to assist them with accessing other borrowing options, including the Main Street Lending Program and other government sponsored lending programs, as appropriate.

Loan Modifications. The Company is closely monitoring the effects of COVID-19 on our loan portfolio and will continue to monitor all the associated risks to minimize any potential losses. HomeTrust Bank is offering payment and financial relief programs for borrowers impacted by COVID-19. These programs include loan payment deferrals for up to 90 days, waived late fees, and suspension of foreclosure proceedings and repossessions. We have received numerous requests from borrowers for some type of payment relief. As of April 24, 2020, we have processed and approved payment deferrals on loans totaling $510.4 million, or 19.2% of total loans. The breakout by loan type is as follows:

Payment Deferrals by Loan Types
(dollars in thousands)
Outstanding Loan BalancePercent of Total Loan Portfolio
Commercial real estate, construction and development, and commercial and industrial$412,525  15.5 %
Equipment finance38,975  1.5 %
One-to-four family47,062  1.8 %
Other consumer loans11,876  0.4 %
     Total $510,438  19.2 %

We believe the steps we are taking are necessary to effectively manage our portfolio and assist our customers through the ongoing uncertainty surrounding the duration, impact and government response to the COVID-19 pandemic.

Allowance for Loan Losses. The Company recorded a provision for loan losses of $5.4 million for the third quarter of 2020, compared to a $400,000 provision in the preceding quarter and $5.5 million in the third quarter a year ago, which was related to one commercial customer relationship. The provision for the current quarter reflects expected credit losses based upon the conditions that existed as of March 31, 2020 including consideration for the recent downturn in certain leading economic indicators, such as the weaker stock market, lower manufacturing activity and retail sales, consumer confidence, and increases
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in unemployment. Specifically, the Company’s management has evaluated its loan portfolio and identified the following loan categories as potentially the most impacted by the COVID-19 pandemic:
Loan Segments (as of March 31, 2020)
(dollars in thousands)Loan Risk Grade
Pass(1)
Criticized(2)
Outstanding Loan BalancePercent of Total Loan Portfolio
Lodging$108,864  $2,069  $110,933  4.2 %
Restaurants47,780  71  47,851  1.8 %
Shopping centers76,723  1,441  78,164  2.9 %
Other retail businesses130,341  295  130,635  4.9 %
Equipment finance197,651  1,311  198,862  7.5 %
     Total$561,359  $5,187  $566,445  21.3 %
     Percent of total99.1 %0.9 %100.0 %

(1) A pass rated loan is not adversely classified because it does not display any of the characteristics for adverse classification.
(2) Includes loans that are graded special mention or substandard. These loans have weaknesses (or potential weaknesses) that may result in deterioration of the repayment prospects or collateral position at some future date.
The Company does not have any exposure to oil/gas or credit cards at March 31, 2020.
Branch Operations and Support Personnel. We have taken various steps to ensure the safety of our customers and our team members by limiting branch activities to appointment only and use of our drive-up facilities, and by encouraging the use of our digital and electronic banking channels, all the while adjusting for evolving State and Federal guidelines. Many of our employees are working remotely or have flexible work schedules, and we have established protective measures within our offices to help ensure the safety of those employees who must work on-site.
Capital. At March 31, 2020, the Company’s tangible equity to total tangible assets ratio was 10.76% and HomeTrust Bank’s capital was well in excess of all regulatory requirements. Our strong capital level positions us well in the face of the challenges of the COVID-19 pandemic. As part of the Company’s risk management process, we have maintained strong capital ratios in the latter part of the longest economic recovery in U.S. history.

Income Statement Review
Net interest income decreased to $25.3 million for the quarter ended March 31, 2020, compared to $26.6 million for the comparative quarter in fiscal 2019. The $1.3 million, or 4.7% decrease was due to a $1.7 million decrease in interest and dividend income primarily driven by lower rates on loans and commercial paper as a result of lower federal funds and other market interest rates, which was partially offset by a $417,000 decrease in interest expense. Average interest-earning assets increased $65.7 million, or 2.1% to $3.2 billion for the quarter ended March 31, 2020. The average balance of total loans receivable increased by $19.6 million, or 0.7% compared to the same quarter last year due to organic loan growth offset by the previously disclosed one-to-four family loans sold in December 2019. The average balance of commercial paper and deposits in other banks increased $40.8 million, or 12.1% between the periods driven by increases in commercial paper investments. Our investments in commercial paper have short-term maturities and limited exposure of $15.0 million or less per each highly-rated company. The average balance in securities available for sale increased $14.2 million, or 10.2%, which was primarily driven by the purchase of shorter-term corporate bonds. These increases were partially funded by a cumulative $52.9 million, or 1.8% increase in average interest-bearing liabilities and noninterest bearing deposits and the $8.9 million, or 19.0% decrease in other interest earning assets as compared to the same quarter last year. Net interest margin (on a fully taxable-equivalent basis) for the three months ended March 31, 2020 decreased to 3.16% from 3.39% for the same period a year ago.
Total interest and dividend income decreased $1.7 million, or 4.8% for the three months ended March 31, 2020 as compared to the same period last year, which was primarily driven by a $1.0 million, or 3.2% decrease in loan interest income, a $489,000, or 21.4% decrease in interest income from commercial paper and deposits in other banks, and a $261,000, or 32.2% decrease in other investment income which was partially offset by a $62,000, or 7.3% increase in interest income from securities available for sale. The lower interest income from loans and commercial paper and deposits in other banks was primarily driven by the decrease in yields. Average loan yields decreased 18 basis points to 4.51% for the quarter ended March 31, 2020 from 4.69% in the corresponding quarter last year. For the quarters ended March 31, 2020 and 2019, average loan yields included six and seven basis points, respectively, from the accretion of purchase discounts on acquired loans. The incremental accretion and the impact to the yield on loans may change during any period based on the volume of prepayments, but it is expected to decrease
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over time as the balance of the purchase discount for acquired loans decreases. The total purchase discount for acquired loans was $5.5 million at March 31, 2020, compared to $6.7 million at June 30, 2019, and $7.1 million at March 31, 2019.
Total interest expense decreased $417,000, or 5.1% for the quarter ended March 31, 2020 compared to the same period last year. The decrease was driven by a $2.0 million, or 53.0% decrease in interest expense on borrowings partially offset by a $1.6 million, or 35.6% increase in interest expense on deposits. The additional deposit interest expense was a result of our continued focus on increasing deposits as the average balance of interest-bearing deposits increased $205.3 million, or 10.4% along with a 20 basis point increase in the average cost of interest-bearing deposits for the quarter ended March 31, 2020 compared to the same quarter last year. Average borrowings for the quarter ended March 31, 2020 decreased $196.8 million, or 29.4% along with a 75 basis point decrease in the average cost of borrowings compared to the same period last year. The decrease in the average cost of borrowing was driven by the lower federal funds rate during the current quarter compared to the prior year. The overall average cost of funds decreased seven basis points to 1.16% for the current quarter compared to 1.23% in the same quarter last year due primarily to the impact of the lower amount of borrowings and rates.
Net interest income decreased slightly to $79.4 million for the nine months ended March 31, 2020, compared to $79.9 million for the comparative period in fiscal 2019. The $526,000, or 0.7% decrease was due to a $3.8 million increase in interest and dividend income primarily driven by an increase in average interest-earning assets, which was offset by a $4.3 million increase in interest expense. Average interest-earning assets increased $166.8 million, or 5.3% to $3.3 billion for the nine months ended March 31, 2020 compared to $3.1 billion for the corresponding period in fiscal 2019. For the nine months ended March 31, 2020, the average balance of total loans receivable increased $125.8 million, or 4.8% compared to the same period last year primarily due to organic loan growth. The average balance of commercial paper and deposits in other banks increased $38.6 million, or 11.9% between the periods driven by increases in commercial paper investments. These increases were primarily funded by the $151.5 million, or 5.9% increase in average interest-bearing liabilities, as compared to the same nine month period last year. Net interest margin (on a fully taxable-equivalent basis) for the nine months ended March 31, 2020 decreased to 3.25% from 3.45% for the same period a year ago.
Total interest and dividend income increased $3.8 million, or 3.7% for the nine months ended March 31, 2020 as compared to the same period last year, which was primarily driven by a $4.1 million, or 4.6% increase in loan interest income, and a $319,000, or 12.4% increase in interest income from securities available for sale, which was partially offset by a $147,000, or 2.4% decrease in interest income from commercial paper and interest-bearing deposits and a $510,000, or 19.1% decrease in other investment income. The additional loan interest income was driven by the increase in the average balance of loans receivable compared to the prior year. Average loan yields decreased slightly by two basis points to 4.63% for the nine months ended March 31, 2020 from 4.65% in the corresponding period last year. For the nine months ended March 31, 2020 and 2019, average loan yields included six and eight basis points, respectively, from the accretion of purchase discounts on acquired loans.
Total interest expense increased $4.3 million, or 20.1% for the nine months ended March 31, 2020 compared to the same period last year. The increase was driven by a $7.4 million, or 68.6% increase in deposit interest expense partially offset by a $3.1 million, or 28.7% decrease in interest expense on borrowings. The additional deposit interest expense was a result of a $226.9 million, or 11.8% increase in the average balance of interest-bearing deposits along with a 37 basis point increase in the average cost of those deposits for the nine months ended March 31, 2020 as compared to the same period last year. Average borrowings for the nine months ended March 31, 2020 decreased $75.3 million, or 11.4% along with a 42 basis point decrease in the average cost of borrowings compared to the same period last year. The overall cost of funds increased 14 basis points to 1.25% for the nine months ended March 31, 2020 compared to 1.11% in the corresponding period last year.
Noninterest income increased $1.0 million, or 18.1% to $6.4 million for the three months ended March 31, 2020 from $5.4 million for the same period in the previous year primarily due a $160,000, 119.4% increase in loan income and fees and a $749,000, or 74.4% increase in other noninterest income. The $160,000 increase for the quarter in loan income and fees is primarily a result of our adjustable rate conversion program and prepayment fees on equipment finance loans. The $749,000 increase in other noninterest income primarily related to operating lease income from the new equipment finance line of business. There were $32.2 million of residential mortgage loans originated for sale which were sold with gains of $852,000 compared to $24.7 million sold and gains of $628,000 in the corresponding quarter in the prior year. During the quarter ended March 31, 2020, $6.8 million of the guaranteed portion of SBA commercial loans were sold with gains of $469,000 compared to $11.5 million sold and gains of $843,000 in the corresponding quarter in the prior year. In addition, $18.0 million of home equity loans were sold during the quarter for a gain of $183,000.
Noninterest income increased $7.0 million, or 43.6% to $23.1 million for the nine months ended March 31, 2020 from $16.1 million for the same period in the previous year primarily due to a $3.5 million, or 85.4% increase in the gain on sale of loans held for sale, a $1.3 million, or 170.4% increase in loan income and fees, and a $2.0 million, or 81.1% increase in other noninterest income. The increase in the gain on sale of loans held for sale was a result of the previously discussed one-to-four
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family loans sold during the period which resulted in a non-recurring $1.3 million gain. In addition to this non-recurring gain, $135.4 million of residential mortgage loans sold with gains of $3.6 million for the nine months ended March 31, 2020, compared to $81.3 million sold and gains of $2.0 million in the corresponding period in the prior year. During the nine months ended March 31, 2020, $36.0 million of SBA commercial loans were sold with recorded gains of $2.5 million compared to $28.7 million sold and gains of $2.0 million in the corresponding period in the prior year. The increase in loan income and fees is primarily a result of our adjustable rate conversion program and prepayment fees on equipment finance loans. The $2.0 million increase in other noninterest income primarily related to operating lease income from the equipment finance line of business.
Noninterest expense for the three months ended March 31, 2020 increased $1.9 million, or 8.4% to $24.9 million compared to $23.0 million for the three months ended March 31, 2019. The increase was primarily due to a $1.0 million, or 7.4% increase in salaries and employee benefits as a result of new positions and annual salary increases; a $1.0 million, or 34.6% increase in other expenses, mainly driven by depreciation from our equipment finance line of business and expenses related to our recent core system conversion; a $164,000, or 23.5% increase in telephone, postage, and supplies as a result of our core conversion; and a $142,000, or 44.4% increase in deposit insurance premiums as a result of our growth and changing loan portfolio mix. Partially offsetting these increases was a cumulative decrease of $365,000, or 39.1% in real estate owned ("REO") related expenses and core deposit intangible amortization for the three months ended March 31, 2020 compared to the same period last year.
Noninterest expense for the nine months ended March 31, 2020 increased $5.8 million, or 8.6% to $72.5 million compared to $66.7 million for the nine months ended March 31, 2019. The increase was primarily due to a $3.5 million, or 9.1% increase in salaries and employee benefits; a $2.4 million, or 30.3% increase in other expenses, mainly driven by depreciation from our equipment finance line of business and expenses related to our core conversion; a $497,000, or 40.8% increase in marketing and advertising expense; a $308,000, or 5.4% increase in computer services; and a $252,000, or 11.4% increase in telephone, postage, and supplies. Partially offsetting these increases was a decrease of $485,000, or 50.6% in deposit insurance premiums related to credit from the Federal Deposit Insurance Corporation in the first and second quarter; a $462,000, or 29.2% decrease in core deposit intangible amortization; and a $214,000, or 20.4% decrease in REO related expenses for the nine months ended March 31, 2020 compared to the same period last year.
For the three months ended March 31, 2020, the Company's income tax expense increased $3,000, or 1.6% to $188,000 from $185,000. The effective tax rate for the three months ended March 31, 2020 and 2019 was 13.6% and 5.3%, respectively. These lower rates were due to the effects of $1.0 million in each quarter of tax-free income from municipal leases in the Company's loan portfolio.
For the nine months ended March 31, 2020, the Company's income tax expense increased $376,000, or 8.0% to $5.1 million from $4.7 million for the corresponding period in the previous year as a result of higher taxable income. The effective tax rate for the nine months ended March 31, 2020 and 2019 was 20.9% and 19.7%, respectively.
Balance Sheet Review
Total assets and liabilities remained relatively level at $3.5 billion and $3.1 billion, respectively, at March 31, 2020 compared to June 30, 2019. The funds received from the $154.9 million in one-to-four family loans sold and deposit growth of $227.5 million, or 9.8% were used to pay down $145.0 million, or 21.3% of borrowings, fund the $114.4 million, or 22.7% net increase in cash and cash equivalents, commercial paper, certificates of deposit in other banks, securities available for sale, and loans held for sale for the first nine months of fiscal 2020. Approximately $85.6 million one-to-four family loans being marketed for sale at December 31, 2019 were moved from loans held for sale and back into the loan portfolio during the current quarter as market conditions changed management's intent to sell these loans. The increase in loans held for sale relates to home equity loans originated for sale during the period. Deferred income taxes decreased $4.8 million, or 18.0% to $21.8 million at March 31, 2020 from $26.5 million at June 30, 2019 due to the use of net operating loss carryforwards.
As of July 1, 2019, the Company adopted the new lease accounting standard, which drove several changes on the balance sheet. Land totaling $2.1 million related to the Company's one finance lease (f/k/a capital lease) was reclassed from premises and equipment, net to other assets as a right of use ("ROU") asset and the corresponding liability was reclassed from a separate line on the balance sheet to other liabilities as a lease liability. As of March 31, 2020, the Company has $4.6 million in ROU assets and corresponding lease liabilities, which are maintained in other assets and other liabilities, respectively.
Stockholders' equity at March 31, 2020 decreased $3.5 million, or 0.8% to $405.4 million compared to $408.9 million at June 30, 2019. Changes within stockholders' equity included $19.2 million in net income and $2.3 million in stock-based compensation, offset by 1,032,221 shares of common stock repurchased at an average cost of $22.50, or approximately $23.2 million in total, and $3.4 million related to cash dividends declared. As of March 31, 2020, HomeTrust Bank and the Company
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were considered "well capitalized" in accordance with their regulatory capital guidelines and exceeded all regulatory capital requirements.
Asset Quality
The allowance for loan losses was $26.9 million, or 1.01% of total loans, at March 31, 2020 compared to $21.4 million, or 0.79% of total loans, at June 30, 2019. The allowance for loan losses to total gross loans excluding acquired loans was 1.07% at March 31, 2020, compared to 0.85% at June 30, 2019. The overall increase was primarily driven by additional allowance stemming from the initial assessment of COVID-19 on the loan portfolio.
There was a $5.8 million provision for loan losses for the nine months ended March 31, 2020, compared to $5.5 million for the corresponding period in fiscal year 2019. The current year provision included significant adjustments relating to COVID-19 as a result of changes in qualitative factors based on our perceived increase in at risk loan sub-categories, which include: lodging, restaurants, shopping centers, other retail, and equipment finance. The provision in the corresponding period in the prior year related to one commercial loan relationship. Net loan charge offs totaled $379,000 for the nine months ended March 31, 2020, compared to $2.1 million for the same period in fiscal year 2019. Net charge offs as a percentage of average loans were 0.02% and 0.11% for the nine months ended March 31, 2020 and 2019, respectively.
Nonperforming assets increased by $3.4 million, or 20.6% to $16.7 million, or 0.47% of total assets, at March 31, 2020 compared to $13.3 million, or 0.38% of total assets at June 30, 2019. Nonperforming assets included $15.6 million in nonaccruing loans and $1.1 million in REO at March 31, 2020, compared to $10.4 million and $2.9 million, in nonaccruing loans and REO, respectively, at June 30, 2019. The increase in nonaccruing loans primarily relates to one commercial real estate loan relationship that was moved to nonaccrual during the second quarter. Included in nonperforming loans are $7.2 million of loans restructured from their original terms of which $5.8 million were current at March 31, 2020, with respect to their modified payment terms. Purchased impaired loans aggregating $1.0 million obtained through prior acquisitions are excluded from nonaccruing loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations. Nonperforming loans to total loans was 0.59% at March 31, 2020 and 0.38% at June 30, 2019.
The ratio of classified assets to total assets decreased to 0.86% at March 31, 2020 from 0.89% at June 30, 2019. Classified assets decreased to $30.7 million at March 31, 2020 compared to $30.9 million at June 30, 2019. Our overall asset quality metrics continue to demonstrate our commitment to growing and maintaining a loan portfolio with a moderate risk profile, however we will remain diligent in our review of the portfolio and overall economy as we continue to maneuver through the uncertainty surrounding COVID-19.
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About HomeTrust Bancshares, Inc.
HomeTrust Bancshares, Inc. is the holding company for HomeTrust Bank. As of March 31, 2020, 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 40 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/Bristol, Knoxville, and Morristown) and Southwest Virginia (including the Roanoke Valley). The Bank is the 2nd largest community bank headquartered in North Carolina.
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 our control. Actual results may differ, possibly materially, from those currently expected or projected in these forward-looking statements. Factors that could cause our actual results to differ materially from those described in the forward-looking statements include: the effect of the COVID-19 pandemic, including on our 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 our website at www.htb.com and on the SEC's website at www.sec.gov. Any of the forward-looking statements that we make in this press release or the documents we 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 we might make, because of the factors described above or because of other factors that we cannot foresee. We do 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. These risks could cause our actual results for fiscal 2020 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us and could negatively affect our operating and stock performance.



WEBSITE: WWW.HOMETRUSTBANCSHARES.COM
Contact:
Dana L. Stonestreet – Chairman, President and Chief Executive Officer
Tony J. VunCannon – Executive Vice President, Chief Financial Officer, Corporate Secretary and Treasurer
828-259-3939
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Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
March 31, 2020December 31, 2019September 30, 2019
June 30, 2019(1)
March 31, 2019
Assets
Cash$41,206  $47,213  $52,082  $40,909  $40,633  
Interest-bearing deposits40,855  41,705  65,011  30,134  37,678  
Cash and cash equivalents82,061  88,918  117,093  71,043  78,311  
Commercial paper281,955  253,794  254,302  241,446  246,903  
Certificates of deposit in other banks57,544  47,628  50,117  52,005  56,209  
Securities available for sale, at fair value158,621  146,022  165,714  121,786  139,112  
Other investments, at cost41,201  36,898  45,900  45,378  51,122  
Loans held for sale38,682  118,055  289,319  18,175  14,745  
Total loans, net of deferred loan fees2,663,524  2,554,541  2,508,730  2,705,190  2,660,647  
Allowance for loan losses(26,850) (22,031) (21,314) (21,429) (24,416) 
Net loans2,636,674  2,532,510  2,487,416  2,683,761  2,636,231  
Premises and equipment, net58,738  58,020  58,509  61,051  60,559  
Accrued interest receivable9,501  9,714  10,434  10,533  10,885  
Real estate owned ("REO")1,075  1,451  2,582  2,929  3,003  
Deferred income taxes21,750  22,066  24,257  26,523  28,832  
Bank owned life insurance ("BOLI")91,612  91,048  90,499  90,254  89,663  
Goodwill25,638  25,638  25,638  25,638  25,638  
Core deposit intangibles1,381  1,715  2,088  2,499  2,948  
Other assets41,600  36,755  31,441  23,157  13,576  
Total Assets$3,548,033  $3,470,232  $3,655,309  $3,476,178  $3,457,737  
Liabilities and Stockholders' Equity 
Liabilities 
Deposits$2,554,787  $2,557,769  $2,494,194  $2,327,257  $2,308,395  
Borrowings535,000  435,000  685,000  680,000  680,000  
Other liabilities52,806  60,468  63,047  60,025  62,112  
Total liabilities3,142,593  3,053,237  3,242,241  3,067,282  3,050,507  
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)
171  177  178  180  183  
Additional paid in capital170,368  182,366  186,359  190,315  196,824  
Retained earnings240,325  240,312  232,315  224,545  217,490  
Unearned Employee Stock Ownership Plan ("ESOP") shares
(6,480) (6,612) (6,744) (6,877) (7,009) 
Accumulated other comprehensive income (loss)1,056  752  960  733  (258) 
Total stockholders' equity405,440  416,995  413,068  408,896  407,230  
Total Liabilities and Stockholders' Equity$3,548,033  $3,470,232  $3,655,309  $3,476,178  $3,457,737  
_________________________________
(1)Derived from audited financial statements.
(2)Shares of common stock issued and outstanding were 17,101,954 at March 31, 2020; 17,664,384 at December 31, 2019; 17,818,145 at September 30, 2019; 17,984,105 at June 30, 2019; and 18,265,535 at March 31, 2019.
8


Consolidated Statement of Income (Unaudited)
Three Months EndedNine Months Ended
March 31,December 31,March 31,March 31,March 31,
(Dollars in thousands)
20202019201920202019
Interest and Dividend Income
Loans$29,781  $32,119  $30,770  $94,166  $90,042  
Commercial paper and interest-bearing deposits1,794  1,912  2,283  5,959  6,106  
Securities available for sale912  1,093  850  2,901  2,582  
Other investments550  772  811  2,154  2,664  
Total interest and dividend income33,037  35,896  34,714  105,180  101,394  
Interest Expense  
Deposits5,971  6,321  4,404  18,145  10,761  
Borrowings1,757  2,541  3,741  7,619  10,691  
Total interest expense7,728  8,862  8,145  25,764  21,452  
Net Interest Income25,309  27,034  26,569  79,416  79,942  
Provision for Loan Losses5,400  400  5,500  5,800  5,500  
Net Interest Income after Provision for Loan Losses
19,909  26,634  21,069  73,616  74,442  
Noninterest Income  
Service charges and fees on deposit accounts2,304  2,605  2,265  7,352  7,243  
Loan income and fees294  871  134  2,047  757  
Gain on sale of loans held for sale1,503  3,775  1,472  7,577  4,086  
BOLI income518  509  518  1,724  1,574  
Other, net1,756  1,314  1,007  4,409  2,434  
Total noninterest income6,375  9,074  5,396  23,109  16,094  
Noninterest Expense  
Salaries and employee benefits14,455  14,170  13,463  42,537  39,005  
Net occupancy expense2,246  2,384  2,294  6,972  7,046  
Computer services2,023  1,985  1,980  6,032  5,724  
Telephone, postage, and supplies862  798  698  2,462  2,210  
Marketing and advertising396  641  400  1,716  1,219  
Deposit insurance premiums462  12  320  474  959  
Loss (gain) on sale and impairment of REO
(15) 122  246  88  500  
REO expense250  238  200  746  548  
Core deposit intangible amortization334  373  488  1,118  1,580  
Other3,890  3,318  2,889  10,332  7,928  
Total noninterest expense24,903  24,041  22,978  72,477  66,719  
Income Before Income Taxes1,381  11,667  3,487  24,248  23,817  
Income Tax Expense188  2,476  185  5,060  4,684  
Net Income$1,193  $9,191  $3,302  $19,188  $19,133  


9


Per Share Data
Three Months EndedNine Months Ended
March 31,December 31,March 31,March 31,March 31,
20202019201920202019
Net income per common share:(1)
Basic$0.07  $0.54  $0.19  $1.12  $1.07  
Diluted$0.07  $0.52  $0.18  $1.08  $1.02  
Average shares outstanding:
Basic16,688,646  16,906,457  17,506,018  16,898,391  17,811,962  
Diluted17,258,428  17,567,680  18,197,429  17,524,252  18,528,161  
Book value per share at end of period$23.71  $23.61  $22.29  $23.71  $22.29  
Tangible book value per share at end of period (2)
$22.15  $22.08  $20.77  $22.15  $20.77  
Cash dividends declared per common share$0.07  $0.07  $0.06  $0.20  $0.12  
Total shares outstanding at end of period17,101,954  17,664,384  18,265,535  17,101,954  18,265,535  
__________________________________________________
(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 EndedNine Months Ended
March 31,December 31,March 31,March 31,March 31,
20202019201920202019
Performance ratios: (1)
Return on assets (ratio of net income to average total assets)
0.14 %1.02 %0.39 %0.72 %0.76 %
Return on equity (ratio of net income to average equity)
1.15  8.87  3.24  6.19  6.21  
Tax equivalent yield on earning assets(2)
4.12  4.34  4.42  4.30  4.36  
Rate paid on interest-bearing liabilities1.16  1.27  1.23  1.25  1.11  
Tax equivalent average interest rate spread (2)
2.96  3.07  3.19  3.05  3.25  
Tax equivalent net interest margin(2) (3)
3.16  3.27  3.39  3.25  3.45  
Average interest-earning assets to average interest-bearing liabilities
121.79  119.53  119.70  120.22  120.81  
Operating expense to average total assets2.84  2.66  2.69  2.72  2.64  
Efficiency ratio78.60  66.58  71.88  70.69  69.47  
Efficiency ratio - adjusted (4)
77.85  66.05  71.19  70.09  68.84  
_____________________________
(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.
10



At or For the Three Months Ended
March 31,December 31,September 30,June 30,March 31,
20202019201920192019
Asset quality ratios:
Nonperforming assets to total assets(1)
0.47 %0.45 %0.37 %0.38 %0.41 %
Nonperforming loans to total loans(1)
0.59  0.56  0.43  0.38  0.43  
Total classified assets to total assets0.86  0.90  0.84  0.89  1.00  
Allowance for loan losses to nonperforming loans(1)
171.40  154.48  195.88  206.90  215.46  
Allowance for loan losses to total loans1.01  0.86  0.85  0.79  0.92  
Allowance for loan losses to total gross loans excluding acquired loans(2)
1.07  0.92  0.92  0.85  0.99  
Net charge-offs (recoveries) to average loans (annualized)
0.09  (0.05) 0.02  0.47  0.38  
Capital ratios:
Equity to total assets at end of period11.43 %12.02 %11.30 %11.76 %11.78 %
Tangible equity to total tangible assets(2)
10.76  11.33  10.63  11.06  11.06  
Average equity to average assets11.80  11.52  11.54  11.72  11.93  
__________________________________________

(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 March 31, 2020, there were $7.2 million of restructured loans included in nonaccruing loans and $7.7 million, or 49.3% of nonaccruing loans were current on their loan payments. Purchased impaired loans acquired through bank acquisitions are excluded from nonaccruing loans due to the accretion of discounts in accordance with the acquisition method of accounting for business combinations.
(2)See Non-GAAP reconciliation tables below for adjustments.

11


Average Balance Sheet Data
For the Three Months Ended March 31,
20202019
Average
Balance
Outstanding
Interest
Earned/
Paid(2)
Yield/
Rate(2)
Average
Balance
Outstanding
Interest
Earned/
Paid(2)
Yield/
Rate(2)
(Dollars in thousands)
Assets:
Interest-earning assets:
Loans receivable(1)
$2,669,796  $30,086  4.51 %$2,650,155  $31,083  4.69 %
Commercial paper and deposits in other banks378,296  1,794  1.90 %337,522  2,283  2.71 %
Securities available for sale154,108  912  2.37 %139,898  850  2.43 %
Other interest-earning assets(3)
37,877  550  5.81 %46,756  811  6.94 %
Total interest-earning assets3,240,077  33,342  4.12 %3,174,331  35,027  4.42 %
Other assets265,139  246,858  
Total assets$3,505,216  $3,421,189  
Liabilities and equity:
Interest-bearing deposits:
Interest-bearing checking accounts451,335  412  0.36 %463,807  332  0.29 %
Money market accounts792,313  1,916  0.97 %701,692  1,408  0.80 %
Savings accounts159,641  50  0.12 %188,848  58  0.12 %
Certificate accounts783,758  3,593  1.83 %627,444  2,606  1.66 %
Total interest-bearing deposits2,187,047  5,971  1.09 %1,981,791  4,404  0.89 %
Borrowings473,319  1,757  1.48 %670,142  3,741  2.23 %
  Total interest-bearing liabilities2,660,366  7,728  1.16 %2,651,933  8,145  1.23 %
Noninterest-bearing deposits342,581  298,118  
Other liabilities88,725  63,015  
Total liabilities3,091,672  3,013,066  
Stockholders' equity413,544  408,123  
Total liabilities and stockholders' equity$3,505,216  $3,421,189  
Net earning assets$579,711   $522,398  
Average interest-earning assets to
average interest-bearing liabilities121.79 %119.70 %
Tax-equivalent:
Net interest income$25,614  $26,882  
Interest rate spread2.96 %3.19 %
Net interest margin(4)
3.16 %3.39 %
Non-tax-equivalent:
Net interest income$25,309  $26,569  
Interest rate spread2.92 %3.14 %
Net interest margin(4)
3.12 %3.35 %
__________________
(1) The average loans receivable, net 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 $305 and $313 for the three months ended March 31, 2020 and 2019, 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.

12


For the Nine Months Ended March 31,
20202019
Average
Balance
Outstanding
Interest
Earned/
Paid(2)
Yield/
Rate(2)
Average
Balance
Outstanding
Interest
Earned/
Paid(2)
Yield/
Rate(2)
(Dollars in thousands)
Assets:
Interest-earning assets:
Loans receivable(1)
$2,734,249  $95,045  4.63 %$2,608,485  $90,918  4.65 %
Commercial paper and deposits in other banks
362,598  5,959  2.19 %323,966  6,106  2.51 %
Securities available for sale152,798  2,901  2.53 %148,645  2,582  2.32 %
Other interest-earning assets(3)
42,662  2,154  6.73 %44,453  2,664  8.02 %
Total interest-earning assets3,292,307  106,059  4.30 %3,125,549  102,270  4.36 %
Other assets266,097  245,360  
Total assets$3,558,404  $3,370,909  
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing checking accounts449,560  1,105  0.33 %463,035  903  0.26 %
Money market accounts765,492  5,760  1.00 %689,363  3,630  0.70 %
Savings accounts166,711  153  0.12 %197,929  189  0.13 %
Certificate accounts769,073  11,127  1.93 %573,647  6,039  1.40 %
Total interest-bearing deposits2,150,836  18,145  1.12 %1,923,974  10,761  0.75 %
Borrowings587,822  7,619  1.73 %663,157  10,691  2.15 %
  Total interest-bearing liabilities
2,738,658  25,764  1.25 %2,587,131  21,452  1.11 %
Noninterest-bearing deposits336,496  310,304  
Other liabilities70,175  62,830  
Total liabilities3,145,329  2,960,265  
Stockholders' equity413,075  410,645  
Total liabilities and stockholders' equity$3,558,404  $3,370,910  
Net earning assets$553,649  $538,418  
Average interest-earning assets to
average interest-bearing liabilities120.22 %120.81 %
Tax-equivalent:
Net interest income$80,295  $80,818  
Interest rate spread3.05 %3.25 %
Net interest margin(4)
3.25 %3.45 %
Non-tax-equivalent:
Net interest income$79,416  $79,942  
Interest rate spread 3.01 %3.22 %
Net interest margin(4)
3.22 %3.41 %
__________________
(1) The average loans receivable, net 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 $879 and $876 for the nine months ended March 31, 2020 and 2019, 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.

13


Loans
(Dollars in thousands)
March 31, 2020December 31, 2019September 30, 2019June 30, 2019March 31, 2019
Retail consumer loans:
     One-to-four family$487,777  $417,255  $396,649  $660,591  $658,723  
     HELOCs - originated144,804  142,989  141,129  139.435  133,203  
     HELOCs - purchased82,232  92,423  104,324  116,972  128,832  
     Construction and land/lots80,765  71,901  85,319  80,602  76,153  
     Indirect auto finance135,449  142,533  147,808  153,448  162,127  
     Consumer11,576  11,102  11,400  11.416  19,374  
Total retail consumer loans942,603  878,203  886,629  1,162,464  1,178,412  
Commercial loans: