ASHEVILLE, N.C., July 26, 2023 (GLOBE NEWSWIRE) -- HomeTrust Bancshares, Inc. ( HTBI) ("Company"), the holding company of HomeTrust Bank ("Bank"), today announced preliminary net income for the fourth quarter and fiscal year 2023 and approval of its quarterly cash dividend.
For the quarter ended June 30, 2023 compared to the quarter ended March 31, 2023:
- net income was $15.0 million compared to $6.7 million;
- diluted earnings per share ("EPS") was $0.90 compared to $0.40;
- annualized return on assets ("ROA") was 1.39% compared to 0.69%;
- annualized return on equity ("ROE") was 12.85% compared to 6.21%;
- net interest income was $43.9 million compared to $41.5 million;
- net interest margin was 4.32% compared to 4.55%;
- provision for credit losses was $405,000 compared to $8.8 million;
- noninterest income was $6.9 million compared to $8.3 million;
- net organic loan growth was $13.2 million, or 1.5% annualized, compared to $104.1 million, or 14.2% annualized; and
- cash dividends of $0.10 per share totaling $1.7 million for both periods.
Results for the year ended June 30, 2023 include the impact of the merger of Quantum Capital Corp. ("Quantum") into the Company effective February 12, 2023. The addition of Quantum contributed total assets of $656.7 million, including loans of $561.9 million, and $570.6 million of deposits, all reflecting the impact of purchase accounting adjustments. Merger-related expenses of $5.5 million were recognized during the year ended June 30, 2023, while a $5.3 million provision for credit losses was recognized during the fiscal year to establish allowances for credit losses on both Quantum's loan portfolio and off-balance-sheet credit exposure.
For the fiscal year ended June 30, 2023 compared to the previous year:
- net income was $44.6 million compared to $35.7 million;
- diluted EPS was $2.80 compared to $2.23;
- ROA was 1.16% compared to 1.01%;
- ROE was 10.43% compared to 9.00%;
- net interest income was $157.4 million compared to $110.8 million;
- net interest margin was 4.38% compared to 3.38%;
- provision for credit losses was $15.4 million compared to a net benefit of $592,000;
- noninterest income was $31.1 million compared to $39.1 million;
- net organic loan growth was $321.1 million, or 11.8%, compared to $91.2 million, or 3.4%; and
- cash dividends of $0.39 per share totaling $6.2 million compared to $0.35 per share totaling $5.5 million.
The unrealized loss on our available for sale investment portfolio was $5.3 million, or 3.4% of book value as of June 30, 2023, compared to $3.1 million, or 2.4% of book value as of June 30, 2022. No held to maturity securities were held as of either date.
The Company also announced today that its Board of Directors declared a quarterly cash dividend of $0.10 per common share payable on August 31, 2023 to shareholders of record as of the close of business on August 17, 2023.
“The continuation of our strong quarterly financial results is the collective impact of our teammates believing in our vision and executing daily for our customers and each other,” said Hunter Westbrook, President and Chief Executive Officer. Our focus in recent quarters has been prudent growth in our loan portfolio while continuing to manage changes in liquidity. Overall, total loans were up slightly from last quarter, driven by an intentional shift to commercial and industrial lending while reducing commercial real estate lending. Consistent with many other institutions, in response to a downward trend in deposit balances in recent quarters, we have increased our wholesale borrowings while strengthening our contingent liquidity position.
“Our 4.32% net interest margin for the quarter continues to be strong relative to the industry, decreasing for the first time after two years of expansion. In addition, this was the first full quarter where the positive impact of our merger with Quantum was reflected in our financial results, contributing to the improvement in our annualized return on assets to 1.39%. Consistent with prior periods, credit quality remains strong with nonperforming classified credits at historically low levels.
“Lastly, our Board of Directors recently approved moving our fiscal year end from June 30th to December 31st. Although additional cost to execute the change will be incurred, we believe the benefits of aligning our year end with other high-performing commercial banks outweigh these one-time expenses.”
WEBSITE: WWW.HTB.COM
Comparison of Results of Operations for the Three Months Ended June 30, 2023 and March 31, 2023
Net Income. Net income totaled $15.0 million, or $0.90 per diluted share, for the three months ended June 30, 2023 compared to $6.7 million, or $0.40 per diluted share, for the three months ended March 31, 2023, an increase of $8.3 million, or 122.9%. The results for the three months ended June 30, 2023 compared to the quarter ended March 31, 2023 were positively impacted by a $2.4 million increase in net interest income, an $8.4 million decrease in the provision for credit losses and a $4.7 million decrease in merger-related expenses. Details of the changes in the various components of net income are further discussed below.
Net Interest Income. The following table presents the Company's distribution of average assets, liabilities and equity, as well as interest income on average interest-earning assets and interest expense paid on average interest-bearing liabilities. All average balances are daily average balances. Nonaccruing loans have been included in the table as loans carrying a zero yield.
| Three Months Ended | |||||||||||||||||||||
| June 30, 2023 | March 31, 2023 | ||||||||||||||||||||
| (Dollars in thousands) | Average Balance Outstanding | Interest Earned/ Paid | Yield/ Rate | Average Balance Outstanding | Interest Earned/ Paid | Yield/ Rate | |||||||||||||||
| Assets | |||||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||||
| Loans receivable(1) | $ | 3,769,449 | $ | 56,122 | 5.97 | % | $ | 3,413,641 | $ | 47,908 | 5.69 | % | |||||||||
| Debt securities available for sale | 164,105 | 1,338 | 3.27 | 156,778 | 1,183 | 3.06 | |||||||||||||||
| Other interest-earning assets(2) | 138,420 | 1,671 | 4.84 | 124,120 | 1,575 | 5.15 | |||||||||||||||
| Total interest-earning assets | 4,071,974 | 59,131 | 5.82 | 3,694,539 | 50,666 | 5.56 | |||||||||||||||
| Other assets | 270,410 | 253,746 | |||||||||||||||||||
| Total assets | $ | 4,342,384 | $ | 3,948,285 | |||||||||||||||||
| Liabilities and equity | |||||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||
| Interest-bearing checking accounts | $ | 639,250 | $ | 1,148 | 0.72 | % | $ | 645,011 | $ | 976 | 0.61 | % | |||||||||
| Money market accounts | 1,261,590 | 6,539 | 2.08 | 1,133,415 | 4,338 | 1.55 | |||||||||||||||
| Savings accounts | 217,997 | 49 | 0.09 | 230,820 | 48 | 0.08 | |||||||||||||||
| Certificate accounts | 641,256 | 4,926 | 3.08 | 515,326 | 2,502 | 1.97 | |||||||||||||||
| Total interest-bearing deposits | 2,760,093 | 12,662 | 1.84 | 2,524,572 | 7,864 | 1.26 | |||||||||||||||
| Junior subordinated debt | 9,954 | 218 | 8.78 | 5,299 | 109 | 8.34 | |||||||||||||||
| Borrowings | 169,134 | 2,355 | 5.58 | 98,400 | 1,239 | 5.11 | |||||||||||||||
| Total interest-bearing liabilities | 2,939,181 | 15,235 | 2.08 | 2,628,271 | 9,212 | 1.42 | |||||||||||||||
| Noninterest-bearing deposits | 879,303 | 830,510 | |||||||||||||||||||
| Other liabilities | 55,268 | 49,674 | |||||||||||||||||||
| Total liabilities | 3,873,752 | 3,508,455 | |||||||||||||||||||
| Stockholders' equity | 468,632 | 439,830 | |||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 4,342,384 | $ | 3,948,285 | |||||||||||||||||
| Net earning assets | $ | 1,132,793 | $ | 1,066,268 | |||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 138.54 | % | 140.57 | % | |||||||||||||||||
| Non-tax-equivalent | |||||||||||||||||||||
| Net interest income | $ | 43,896 | $ | 41,454 | |||||||||||||||||
| Interest rate spread | 3.74 | % | 4.14 | % | |||||||||||||||||
| Net interest margin(3) | 4.32 | % | 4.55 | % | |||||||||||||||||
| Tax-equivalent(4) | |||||||||||||||||||||
| Net interest income | $ | 44,194 | $ | 41,744 | |||||||||||||||||
| Interest rate spread | 3.77 | % | 4.17 | % | |||||||||||||||||
| Net interest margin(3) | 4.35 | % | 4.58 | % | |||||||||||||||||
(1) Average loans receivable balances include loans held for sale and nonaccruing loans.
(2) Average other interest-earning assets consist of FRB stock, FHLB stock, SBIC investments, and deposits in other banks.
(3) Net interest income divided by average interest-earning assets.
(4) Tax-equivalent results include adjustments to interest income of $298 and $290 for the three months ended June 30, 2023 and March 31, 2023, respectively, calculated based on a combined federal and state tax rate of 24%.
Total interest and dividend income for the three months ended June 30, 2023 increased $8.5 million, or 16.7%, compared to the three months ended March 31, 2023, which was driven by an $8.2 million, or 17.1%, increase in interest income on loans. The overall increase in average yield and balances was the result of a continual rise in interest rates and inclusion of Quantum's loan portfolio for a full quarter compared to roughly half a quarter in the prior period. Accretion income on acquired loans of $973,000 and $353,000 was recognized during the same periods, respectively, and was included in interest income on loans.
Total interest expense for the three months ended June 30, 2023 increased $6.0 million, or 65.4%, compared to the three months ended March 31, 2023, the result of a $4.8 million, or 61.0%, increase in interest expense on deposits and a $1.1 million, or 90.1%, increase on interest expense on borrowings. The increase can be traced to increases in the average cost of funds, primarily the result of a continual rise in market interest rates, and outstanding balances across funding sources, most significantly a result of the Quantum merger.
The following table shows, for the three months ended June 30, 2023 as compared to the three months ended March 31, 2023, the effects that changes in average balances (volume), including differences in the number of days in the periods compared, and average interest rates (rate) had on the interest earned on interest-earning assets and interest paid on interest-bearing liabilities:
| Increase / (Decrease) | Total | ||||||||||
| Due to | Increase/ | ||||||||||
| (Dollars in thousands) | Volume | Rate | (Decrease) | ||||||||
| Interest-earning assets | |||||||||||
| Loans receivable | $ | 5,610 | $ | 2,604 | $ | 8,214 | |||||
| Debt securities available for sale | 70 | 85 | 155 | ||||||||
| Other interest-earning assets | 200 | (104 | ) | 96 | |||||||
| Total interest-earning assets | 5,880 | 2,585 | 8,465 | ||||||||
| Interest-bearing liabilities | |||||||||||
| Interest-bearing checking accounts | 4 | 168 | 172 | ||||||||
| Money market accounts | 562 | 1,639 | 2,201 | ||||||||
| Savings accounts | (2 | ) | 3 | 1 | |||||||
| Certificate accounts | |||||||||||
