HomeTrust Bancshares, Inc. (NASDAQ: HTBI) ("Company"), the holding
company of HomeTrust Bank ("Bank"), today announced preliminary net
income for the fourth quarter and fiscal year of 2020, approval of
its quarterly cash dividend, and its updated response to the
COVID-19 pandemic.
For the quarter ended June 30, 2020 compared to
the corresponding quarter in the previous year:
- net income was $3.6 million, compared to $8.0 million;
- diluted earnings per share ("EPS") was $0.22, compared to
$0.44;
- return on assets ("ROA") was 0.39%, compared to 0.92%;
- return on equity ("ROE") was 3.54%, compared to 7.87%;
- provision for loan losses was $2.7 million, compared to
$200,000;
- noninterest income increased $377,000, or 5.5% to $7.2 million
from $6.8 million;
- organic net loan growth, which excludes one-to-four family
loans transferred to held for sale, U.S. Small Business
Administration’s (“SBA”) Paycheck Protection Program (“PPP”) loans,
and purchases of home equity lines of credit, was $35.3 million, or
5.5% annualized compared to $56.0 million, or 8.9% annualized;
and
- quarterly cash dividends continued at $0.07 per share totaling
$1.1 million.
For the fiscal year ended June 30, 2020 compared
to the previous year:
- net income was $22.8 million, compared to $27.1 million;
- EPS was $1.30, compared to $1.46;
- ROA was 0.63%, compared to 0.80%;
- ROE was 5.54%, compared to 6.62%;
- provision for loan losses was $8.5 million, compared to $5.7
million;
- noninterest income increased $7.4 million, or 32.2% to $30.3
million from $22.9 million;
- organic net loan growth was $183.3 million, or 7.1%
compared to $228.6 million, or 9.7%; and
- total deposits increased $458.5 million, or 19.7% to $2.8
billion from $2.3 billion.
Earnings during the three months and year ended
June 30, 2020 were negatively impacted by a significant increase in
the provision for loan losses based on the Company's assessment of
COVID-19 on various macroeconomic factors. In addition, the
decrease in interest rates over the past year has negatively
affected the Company's net interest margin.
The Company also announced today that its Board
of Directors declared a quarterly cash dividend of $0.07 per common
share payable on September 3, 2020 to shareholders of record as of
the close of business on August 20, 2020.
“Fiscal 2020 has certainly been one for the
record books in two significant ways,” said Dana Stonestreet,
Chairman, President and Chief Executive Officer. “In the first half
of fiscal 2020 we achieved record results in earnings per share,
annualized return on assets and return on equity along with
annualized loan and deposit growth of 9% and 20%, respectively. Our
team members execution of our strategy to transform HomeTrust from
a historic rural thrift to a top quartile performing community
commercial bank was setting new milestones. We entered the second
half of the year with tremendous momentum and in February
successfully completed the conversion and upgrade of our core
technology systems after two years of arduous preparation.
“Then just two weeks later, the COVID-19
pandemic hit and we quickly pivoted around employee safety and
customer needs. We set new records in change management as more
than 375 employees or 70% of our workforce were set up with safe
and effective technology to work from home. Our courageous team
members continued taking good care of our customers by keeping
drive-thrus open at all branch locations and lobbies open by
appointment while implementing continuously changing safety
protocols. In addition, they began making personal phone
calls to customers to check in on them and their banking needs.
Over 40,000 conversations resulted in many customers getting the
debit cards and mobile banking services they needed while others
greatly appreciated a caring conversation during their quarantine
time. Our lending and credit teams were proactive in communicating
with customers and providing payment deferrals, originating PPP
loans and providing consultations and discussions on dealing with
the impacts of the pandemic.
“We are so proud of the entire HomeTrust team
for their dedication and personal sacrifices to find every way
possible to serve and care for our customers and to support each
other. Our people are truly the key to making HomeTrust always -
Ready For What's Next!
“We enter fiscal 2021 with energy, enthusiasm
and confidence that we will manage well through the impacts of the
pandemic and continue maturing all of our new lines of business to
achieve financial results that create shareholder value.”
Response to COVID-19
Loan Programs. In response to the current
global situation surrounding the COVID-19 pandemic, the Company
continues to offer a variety of relief options designed to support
our customers and communities, including participating in the SBA's
PPP loans. As of June 30, 2020, we had originated $80.7 million of
PPP loans for 285 customers. Net origination fees on these loans
were approximately $2.1 million which will be deferred and
amortized into interest income over the life of the loans. Due to
demand exceeding our capacity, we partnered with a third party to
process and fund an additional $30.4 million of PPP loans for
almost 900 customers. We are also continuing to work 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 July 22, 2020, we have processed and
approved payment deferrals on loans totaling $585.0 million, or
21.1% of total loans. The breakout by loan type is as follows:
Payment Deferrals
by Loan Types as of July 22, 2020 |
|
|
|
Percent ofTotalLoanPortfolio |
|
|
|
|
|
|
(dollars in
thousands) |
|
TotalCurrentDeferrals |
|
|
|
|
|
|
Percent ofTotalLoanPortfolio |
|
1stDeferral(1) |
|
2ndDeferral(2) |
|
|
|
Out ofDeferral(3) |
|
TotalDeferrals |
|
Commercial real estate, construction and development, and
commercial and industrial |
$ |
392,714 |
|
|
$ |
82,147 |
|
|
$ |
474,861 |
|
|
17.1 |
% |
|
$ |
— |
|
|
$ |
474,861 |
|
|
17.1 |
% |
Equipment finance |
20,428 |
|
|
1,488 |
|
|
21,916 |
|
|
0.8 |
|
|
21,925 |
|
|
43,841 |
|
|
1.6 |
|
One-to-four family |
19,401 |
|
|
8,871 |
|
|
28,272 |
|
|
1.0 |
|
|
25,015 |
|
|
53,287 |
|
|
1.9 |
|
Other consumer loans |
1,072 |
|
|
933 |
|
|
2,005 |
|
|
0.1 |
|
|
11,007 |
|
|
13,012 |
|
|
0.5 |
|
Total |
$ |
433,615 |
|
|
$ |
93,439 |
|
|
$ |
527,054 |
|
|
19.0 |
% |
|
$ |
57,947 |
|
|
$ |
585,001 |
|
|
21.1 |
% |
(1) Loans that have requested an initial payment
deferral.(2) Loans that have requested a second deferral after the
original deferral period ended.(3) Loans that have exited their
deferral period.
In addition, 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:
Payment Deferrals
In Higher Risk Loan Sub-Categories as of June 30, 2020 |
(dollars in thousands) |
|
|
|
|
Percent ofDollars inDeferral |
|
Percent ofTotalLoanPortfolio |
|
TotalDeferrals |
|
TotalBalance |
|
|
Lodging |
$ |
108,171 |
|
|
$ |
118,729 |
|
|
91.1 |
% |
|
3.9 |
% |
Restaurants |
28,044 |
|
|
45,560 |
|
|
61.6 |
|
|
1.0 |
|
Shopping centers |
53,337 |
|
|
89,285 |
|
|
59.7 |
|
|
1.9 |
|
Other retail businesses |
36,101 |
|
|
150,229 |
|
|
24.0 |
|
|
1.3 |
|
Equipment finance |
43,841 |
|
|
229,239 |
|
|
19.1 |
|
|
1.6 |
|
Total |
$ |
269,494 |
|
|
$ |
633,042 |
|
|
42.6 |
% |
|
9.7 |
% |
The Company does not have any exposure to
oil/gas or credit cards at June 30, 2020.
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. In addition, we
will continue to work with our customers to determine the best
option for repayment of accrued interest on the deferred
payments.
Allowance for Loan Losses. The Company recorded
a provision for loan losses of $2.7 million and $8.5 million for
the three months and year ended June 30, 2020, respectively,
compared to a $200,000 and $5.7 million provision in the
corresponding periods in fiscal 2019. Approximately $4.3 million of
the provision for the current year reflects probable credit losses
related to COVID-19 based upon the conditions that existed as of
June 30, 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 in unemployment with the remaining
provision being driven by increased charge-offs and impairments in
our commercial and equipment finance portfolios. The provision
during the previous year was primarily related to one commercial
customer relationship.
Branch Operations and Support Personnel.
We have taken various steps to ensure the safety of our customers
and our team members by continuing to limit 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 continuing to work 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 June 30, 2020, the Company’s
tangible equity to total tangible assets ratio was 10.33% 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.
Income Statement Review
Net interest income decreased to $24.7 million
for the quarter ended June 30, 2020, compared to $26.9 million for
the comparative quarter in fiscal 2019. The $2.2 million, or 8.2%
decrease was due to a $4.7 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 $2.5 million
decrease in interest expense. Average interest-earning assets
increased $198.4 million, or 6.2% to $3.4 billion for the quarter
ended June 30, 2020. The average balance of total loans
receivable increased by $82.0 million, or 3.0% compared to the same
quarter last year due to organic loan growth and PPP loan
originations partially offset by the sale of $154.9 million of
one-to-four family loans in December 2019. The average balance of
commercial paper and deposits in other banks increased $120.8
million, or 36.4% between the periods driven by increases in
commercial paper investments as a result of the Company's increased
liquidity. Our investments in commercial paper have short-term
maturities and limited exposure of $15.0 million or less per each
highly-rated company. These increases were partially funded by a
cumulative $128.3 million, or 4.3% increase in average
interest-bearing liabilities and noninterest-bearing deposits and a
$11.6 million, or 22.3% 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 June
30, 2020 decreased to 2.92% from 3.37% for the same period a year
ago due to lower market interest rates.
Total interest and dividend income decreased
$4.7 million, or 13.2% for the three months ended June 30, 2020 as
compared to the same period last year, which was primarily driven
by a $3.9 million, or 12.1% decrease in loan interest income, a
$432,000, or 19.9% decrease in interest income from commercial
paper and deposits in other banks, and a $386,000, or 41.7%
decrease in interest income on other interest-earning assets.
The lower interest income from loans and commercial paper and
deposits in other banks was primarily driven by the decrease in
yields caused by the significant reduction in current market rates.
Average loan yields decreased 69 basis points to 4.06% for the
quarter ended June 30, 2020 from 4.75% in the corresponding quarter
last year. For the quarters ended June 30, 2020 and 2019, average
loan yields included five and six 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 over time as the balance of the purchase
discount for acquired loans decreases. The total purchase discount
for acquired loans was $5.1 million at June 30, 2020, compared to
$6.7 million at June 30, 2019.
Total interest expense decreased $2.5 million,
or 28.5% for the quarter ended June 30, 2020 compared to the
same period last year. The decrease was driven by a $2.2 million,
or 57.0% decrease in interest expense on borrowings and, to a
lesser extent, a $304,000, or 6.1% decrease in interest expense on
deposits. Average borrowings for the quarter ended June 30, 2020
decreased $189.8 million, or 27.1% along with a 92 basis point
decrease in the average cost of borrowings compared to the same
period last year. The decrease in average borrowings was offset by
the $318.1 million, or 13.8% increase in average deposits (interest
and noninterest bearing) due to successful deposit gathering
campaigns and funds from PPP loans and other government stimulus.
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 37 basis
points to 0.95% for the current quarter compared to 1.32% in the
same quarter last year due primarily to the impact of the lower
amount of borrowings and rates.
Net interest income decreased to $104.1 million
for the year ended June 30, 2020, compared to $106.8 million for
fiscal 2019. The $2.7 million, or 2.6% decrease was due to a
$960,000 decrease in interest and dividend income primarily driven
by a decrease in yields and a $1.8 million increase in interest
expense. Average interest-earning assets increased $174.7 million,
or 5.5% to $3.3 billion for the year ended June 30, 2020
compared to $3.2 billion in the prior year. For the year ended June
30, 2020, the average balance of total loans receivable increased
$114.8 million, or 4.4% compared to last year primarily due to
organic loan growth. The average balance of commercial paper and
deposits in other banks increased $59.2 million, or 18.1% between
the years driven by increases in commercial paper investments.
These increases were primarily funded by the $165.5 million, or
5.7% increase in average interest-bearing liabilities and
noninterest-bearing deposits, as compared to last year. Net
interest margin (on a fully taxable-equivalent basis) for the year
ended June 30, 2020 decreased to 3.17% from 3.43% for the year
ended June 30, 2019.
Total interest and dividend income decreased
$960,000, or 0.7% for the year ended June 30, 2020 as compared to
last year, which was driven by a $896,000, or 25.0% decrease in
interest income on other interest-earning assets and a $579,000, or
7.0% decrease in interest income from commercial paper and
interest-bearing deposits in other banks. The reduced income was a
result of lower interest rates on commercial paper and other
investments as well as lower interest earned on FHLB stock as
borrowings were paid down during the year. The overall decreases
were partially offset by a $271,000, or 0.2% increase in loan
interest income and a $244,000, or 7.1% increase in interest income
from securities available for sale. The additional loan interest
income was driven by the increase in the average balance of loans
receivable offset by a decrease in loan interest yield compared to
the prior year. Average loan yields decreased by 18 basis points to
4.49% for the year ended June 30, 2020 from 4.67% last year. For
the year ended June 30, 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 $1.8 million,
or 5.8% for the year ended June 30, 2020 compared to last
year. The increase was driven by a $7.1 million, or 44.9% increase
in deposit interest expense partially offset by a $5.3 million, or
36.3% decrease in interest expense on borrowings. The additional
deposit interest expense was a result of a $211.1 million, or 10.9%
increase in the average balance of interest-bearing deposits along
with a 25 basis point increase in the average cost of those
deposits for the year ended June 30, 2020 as compared to last year.
Average borrowings for the year ended June 30, 2020 decreased
$103.8 million, or 15.4% along with a 54 basis point decrease in
the average cost of borrowings compared to last year. The overall
cost of funds increased two basis points to 1.18% for the year
ended June 30, 2020 compared to 1.16% last year.
Noninterest income increased $377,000, or 5.5%
to $7.2 million for the three months ended June 30, 2020 from $6.8
million for the same period in the previous year primarily due a
$702,000, or 60.9% increase in other noninterest income and
$237,000, or 11.1% increase in gains on the sale of loans,
partially offset by a $338,000, or 14.3% decrease in service
charges and fees on deposit accounts and fees and a $218,000, or
32.8% decrease in loan income and fees. The increase in other
noninterest income primarily related to operating lease income from
the new equipment finance line of business. The increase in gain on
the sale of loans was driven by an increase in mortgage loan sales
that was partially offset by lower SBA loan sales. There were $68.6
million of residential mortgage loans originated for sale which
were sold with gains of $1.9 million compared to $39.4 million sold
and gains of $792,000 in the corresponding quarter in the prior
year. During the quarter ended June 30, 2020, $4.0 million of the
guaranteed portion of SBA commercial loans were sold with gains of
$286,000 compared to $18.8 million sold and gains of $1.3 million
in the corresponding quarter in the prior year as COVID-19
dramatically affected our SBA line of business. In addition, $53.1
million of home equity loans were sold during the quarter for a
gain of $232,000. The decrease in service charges on deposit
accounts was a result of fewer transactions as customers have
decreased spending during the pandemic. The decrease in loan income
and fees is primarily a result of lower fees from our adjustable
rate conversion program.
Noninterest income increased $7.4 million, or
32.2% to $30.3 million for the year ended June 30, 2020 from $22.9
million in the previous year primarily due to a $3.7 million, or
60.0% increase in the gain on sale of loans held for sale, a $2.7
million, or 74.7% increase in other noninterest income, and a $1.1
million, or 75.4% increase in loan income and fees. The increase in
the gain on sale of loans held for sale was a result of the
previously discussed one-to-four family loans sold during the
period which resulted in a non-recurring $1.3 million gain. In
addition to this non-recurring gain, $203.9 million of residential
mortgage loans were sold with gains of $5.4 million for the year
ended June 30, 2020, compared to $120.6 million sold with gains of
$2.8 million in the corresponding period in the prior year. During
the year ended June 30, 2020, $38.1 million of SBA commercial loans
were sold with recorded gains of $2.8 million compared to $47.4
million sold and gains of $3.4 million in the prior year. In
addition, $71.1 million of home equity loans were sold during the
year for a gain of $415,000. The increase in other noninterest
income primarily related to operating lease income from the
equipment finance line of business. The increase in loan income and
fees is primarily a result of our adjustable rate conversion
program and prepayment fees on equipment finance loans.
Noninterest expense for the three months ended
June 30, 2020 increased $1.2 million, or 5.3% to $24.7 million
compared to $23.4 million for the three months ended June 30, 2019.
The increase was primarily due to a $886,000, or 6.7% increase in
salaries and employee benefits as a result of new positions and
annual salary increases; a $628,000, or 20.0% increase in other
expenses, mainly driven by depreciation from our equipment finance
line of business; a $181,000, or 9.3% increase in computer
services; and a $376,000, or 141.9% increase in real estate owned
("REO") related expenses as a result of losses in the current year
versus a gain in the prior year. Partially offsetting these
increases was a cumulative decrease of $834,000, or 17.4% in net
occupancy expense; marketing and advertising expense; telephone,
postage, and supplies expense; deposit insurance premiums; and core
deposit intangible amortization for the three months ended June 30,
2020 compared to the same period last year.
Noninterest expense for the year ended June 30,
2020 increased $7.0 million, or 7.8% to $97.1 million compared to
$90.1 million for the year ended June 30, 2019. The increase was
primarily due to a $4.4 million, or 8.4% increase in salaries and
employee benefits; a $3.0 million, or 27.4% increase in other
expenses, mainly driven by depreciation from our equipment finance
line of business and expenses related to our core conversion; a
$489,000, or 6.4% increase in computer services; a $235,000, or
7.7% increase in telephone, postage, and supplies; and a $162,000,
or 12.3% increase in REO-related expenses. Partially offsetting
these increases was a $608,000, or 30.0% decrease in core deposit
intangible amortization; a decrease of $526,000, or 36.9% in
deposit insurance premiums related to credit from the Federal
Deposit Insurance Corporation in the first and second fiscal
quarter; and a $226,000, or 2.4% decrease in net occupancy expenses
for the year ended June 30, 2020 compared to the last year.
For the three months ended June 30, 2020, the
Company's income tax expense decreased $1.1 million, or 54.2% to
$964,000 from $2.1 million as a result of lower taxable income. The
effective tax rate for the three months ended June 30, 2020 and
2019 was 21.1% and 20.8%, respectively.
For the year ended June 30, 2020, the Company's
income tax expense decreased $767,000, or 11.3% to $6.0 million
from $6.8 million in the previous year as a result of lower taxable
income. The effective tax rate for the year ended June 30, 2020 and
2019 was 20.9% and 20.0%, respectively.
Balance Sheet Review
Total assets increased $246.7 million, or 7.1%
to $3.7 billion at June 30, 2020 compared $3.5 billion at June 30,
2019. Total liabilities increased $247.3 million, or 8.1% to $3.3
billion at June 30, 2020 compared $3.1 billion at June 30, 2019.
Deposit growth of $458.5 million, or 19.7% was used to pay down
$205.0 million, or 30.1% of borrowings and fund the increase in
total assets for fiscal 2020. The increase in loans held for sale
primarily relates to home equity loans originated for sale during
the period. Deferred income taxes decreased $5.6 million, or 21.0%
to $20.9 million at June 30, 2020 from $26.5 million at June 30,
2019 due to the use of net operating loss carryforwards and
increases in deferred tax liabilities from bonus depreciation
during the year.
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 June 30, 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 June 30, 2020 decreased
$633,000, or 0.2% to $408.3 million compared to $408.9 million at
June 30, 2019. Changes within stockholders' equity included $22.8
million in net income and $2.5 million in stock-based compensation,
offset by 1,114,094 shares of common stock repurchased at an
average cost of $21.98, or approximately $24.5 million in total,
and $4.6 million related to cash dividends declared. The Company
has not repurchased any stock since April 1, 2020. As of June 30,
2020, HomeTrust Bank and the Company 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 $28.1 million,
or 1.01% of total loans, at June 30, 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 PPP loans and
acquired loans was 1.11% at June 30, 2020, compared to 0.85% at
June 30, 2019. The overall increase was primarily driven by
additional allowance stemming from the Company's assessment of
COVID-19 on the loan portfolio.
There was a $8.5 million provision for loan
losses for the year ended June 30, 2020, compared to $5.7
million for the corresponding period in fiscal year 2019. The
increase in the current year provision included significant
adjustments relating to COVID-19 as a result of changes in
qualitative factors based on increased risk in loan sub-categories,
which include: lodging, restaurants, shopping centers, other retail
businesses, and equipment finance. The provision in the prior year
primarily related to one commercial loan relationship. Net loan
charge offs totaled $1.9 million for the year ended June 30, 2020,
compared to $5.3 million for fiscal year 2019. Net charge-offs as a
percentage of average loans were 0.07% and 0.20% for the year ended
June 30, 2020 and 2019, respectively.
Nonperforming assets increased by $3.0 million,
or 22.4% to $16.3 million, or 0.44% of total assets, at June 30,
2020 compared to $13.3 million, or 0.38% of total assets at June
30, 2019. Nonperforming assets included $15.9 million in
nonaccruing loans and $337,000 in REO at June 30, 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 loan relationship that
was moved to nonaccrual during the second quarter. Included in
nonperforming loans are $6.3 million of loans restructured from
their original terms of which $293,000 were current at June 30,
2020, with respect to their modified payment terms. Purchased
impaired loans aggregating $965,000 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 0.58% at June 30, 2020 and
0.38% at June 30, 2019.
The ratio of classified assets to total assets
decreased to 0.84% at June 30, 2020 from 0.89% at June 30, 2019 due
to the increase in total assets during fiscal 2020. Classified
assets increased slightly to $31.1 million at June 30, 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.
About HomeTrust Bancshares,
Inc.
HomeTrust Bancshares, Inc. is the holding
company for HomeTrust Bank. As of June 30, 2020, the Company had
assets of $3.7 billion. The Bank, founded in 1926, is a North
Carolina state chartered, community-focused financial institution
committed to providing value added relationship banking with over
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 OfficerTony J. VunCannon -
Executive Vice President, Chief Financial Officer, Corporate
Secretary and Treasurer828-259-3939
|
Consolidated Balance Sheets (Unaudited) |
|
(Dollars in thousands) |
June 30,2020 |
|
March 31,2020 |
|
December 31,2019 |
|
September 30,2019 |
|
June 30,2019 (2) |
Assets |
|
|
|
|
|
|
|
|
|
Cash |
$ |
31,908 |
|
|
$ |
41,206 |
|
|
$ |
47,213 |
|
|
$ |
52,082 |
|
|
$ |
40,909 |
|
Interest-bearing deposits |
89,714 |
|
|
40,855 |
|
|
41,705 |
|
|
65,011 |
|
|
30,134 |
|
Cash and cash equivalents |
121,622 |
|
|
82,061 |
|
|
88,918 |
|
|
117,093 |
|
|
71,043 |
|
Commercial paper |
304,967 |
|
|
281,955 |
|
|
253,794 |
|
|
254,302 |
|
|
241,446 |
|
Certificates of deposit in
other banks |
55,689 |
|
|
57,544 |
|
|
47,628 |
|
|
50,117 |
|
|
52,005 |
|
Securities available for sale,
at fair value |
127,537 |
|
|
158,621 |
|
|
146,022 |
|
|
165,714 |
|
|
121,786 |
|
Other investments, at
cost |
38,946 |
|
|
41,201 |
|
|
36,898 |
|
|
45,900 |
|
|
45,378 |
|
Loans held for sale |
77,177 |
|
|
38,682 |
|
|
118,055 |
|
|
289,319 |
|
|
18,175 |
|
Total loans, net of deferred
loan fees |
2,769,119 |
|
|
2,663,524 |
|
|
2,554,541 |
|
|
2,508,730 |
|
|
2,705,190 |
|
Allowance for loan losses |
(28,072 |
) |
|
(26,850 |
) |
|
(22,031 |
) |
|
(21,314 |
) |
|
(21,429 |
) |
Net loans |
2,741,047 |
|
|
2,636,674 |
|
|
2,532,510 |
|
|
2,487,416 |
|
|
2,683,761 |
|
Premises and equipment,
net |
58,462 |
|
|
58,738 |
|
|
58,020 |
|
|
58,509 |
|
|
61,051 |
|
Accrued interest
receivable |
12,312 |
|
|
9,501 |
|
|
9,714 |
|
|
10,434 |
|
|
10,533 |
|
Real estate owned ("REO") |
337 |
|
|
1,075 |
|
|
1,451 |
|
|
2,582 |
|
|
2,929 |
|
Deferred income taxes |
20,944 |
|
|
21,750 |
|
|
22,066 |
|
|
24,257 |
|
|
26,523 |
|
Bank owned life insurance
("BOLI") |
92,187 |
|
|
91,612 |
|
|
91,048 |
|
|
90,499 |
|
|
90,254 |
|
Goodwill |
25,638 |
|
|
25,638 |
|
|
25,638 |
|
|
25,638 |
|
|
25,638 |
|
Core deposit intangibles |
1,078 |
|
|
1,381 |
|
|
1,715 |
|
|
2,088 |
|
|
2,499 |
|
Other assets |
44,909 |
|
|
41,600 |
|
|
36,755 |
|
|
31,441 |
|
|
23,157 |
|
Total Assets |
$ |
3,722,852 |
|
|
$ |
3,548,033 |
|
|
$ |
3,470,232 |
|
|
$ |
3,655,309 |
|
|
$ |
3,476,178 |
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Deposits |
$ |
2,785,756 |
|
|
$ |
2,554,787 |
|
|
$ |
2,557,769 |
|
|
$ |
2,494,194 |
|
|
$ |
2,327,257 |
|
Borrowings |
475,000 |
|
|
535,000 |
|
|
435,000 |
|
|
685,000 |
|
|
680,000 |
|
Other liabilities |
53,833 |
|
|
52,806 |
|
|
60,468 |
|
|
63,047 |
|
|
60,025 |
|
Total liabilities |
3,314,589 |
|
|
3,142,593 |
|
|
3,053,237 |
|
|
3,242,241 |
|
|
3,067,282 |
|
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 (1) |
170 |
|
|
171 |
|
|
177 |
|
|
178 |
|
|
180 |
|
Additional paid in
capital |
169,648 |
|
|
170,368 |
|
|
182,366 |
|
|
186,359 |
|
|
190,315 |
|
Retained earnings |
242,776 |
|
|
240,325 |
|
|
240,312 |
|
|
232,315 |
|
|
224,545 |
|
Unearned Employee Stock
Ownership Plan ("ESOP") shares |
(6,348 |
) |
|
(6,480 |
) |
|
(6,612 |
) |
|
(6,744 |
) |
|
(6,877 |
) |
Accumulated other
comprehensive income |
2,017 |
|
|
1,056 |
|
|
752 |
|
|
960 |
|
|
733 |
|
Total stockholders' equity |
408,263 |
|
|
405,440 |
|
|
416,995 |
|
|
413,068 |
|
|
408,896 |
|
Total Liabilities and Stockholders' Equity |
$ |
3,722,852 |
|
|
$ |
3,548,033 |
|
|
$ |
3,470,232 |
|
|
$ |
3,655,309 |
|
|
$ |
3,476,178 |
|
_________________________________(1) Shares of common stock
issued and outstanding were 17,016,372 at June 30, 2020; 17,101,954
at March 31, 2020; 17,664,384 at December 31, 2019; 17,818,145 at
September 30, 2019; and 17,984,105 at June 30, 2019.(2) Derived
from audited financial statements.
|
Consolidated Statement of Income (Unaudited) |
|
|
Three Months Ended |
|
Year Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
(Dollars in thousands) |
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 (1) |
Interest and Dividend
Income |
|
|
|
|
|
|
|
|
|
Loans |
$ |
28,008 |
|
|
29,781 |
|
|
$ |
31,861 |
|
|
$ |
122,174 |
|
|
$ |
121,903 |
|
Commercial paper and interest-bearing deposits in other banks |
1,740 |
|
|
1,794 |
|
|
2,172 |
|
|
7,699 |
|
|
8,278 |
|
Securities available for sale |
786 |
|
|
912 |
|
|
861 |
|
|
3,687 |
|
|
3,443 |
|
Other investments |
540 |
|
|
550 |
|
|
926 |
|
|
2,694 |
|
|
3,590 |
|
Total interest and dividend income |
31,074 |
|
|
33,037 |
|
|
35,820 |
|
|
136,254 |
|
|
137,214 |
|
Interest
Expense |
|
|
|
|
|
|
|
|
|
Deposits |
4,692 |
|
|
5,971 |
|
|
4,996 |
|
|
22,837 |
|
|
15,757 |
|
Borrowings |
1,694 |
|
|
1,757 |
|
|
3,935 |
|
|
9,313 |
|
|
14,626 |
|
Total interest expense |
6,386 |
|
|
7,728 |
|
|
8,931 |
|
|
32,150 |
|
|
30,383 |
|
Net Interest
Income |
24,688 |
|
|
25,309 |
|
|
26,889 |
|
|
104,104 |
|
|
106,831 |
|
Provision for Loan
Losses |
2,700 |
|
|
5,400 |
|
|
200 |
|
|
8,500 |
|
|
5,700 |
|
Net Interest Income
after Provision for Loan Losses |
21,988 |
|
|
19,909 |
|
|
26,689 |
|
|
95,604 |
|
|
101,131 |
|
Noninterest
Income |
|
|
|
|
|
|
|
|
|
Service charges and fees on deposit accounts |
2,030 |
|
|
2,304 |
|
|
2,368 |
|
|
9,382 |
|
|
9,611 |
|
Loan income and fees |
447 |
|
|
294 |
|
|
665 |
|
|
2,494 |
|
|
1,422 |
|
Gain on sale of loans held for sale |
2,369 |
|
|
1,503 |
|
|
2,132 |
|
|
9,946 |
|
|
6,218 |
|
BOLI income |
522 |
|
|
518 |
|
|
529 |
|
|
2,246 |
|
|
2,103 |
|
Other, net |
1,855 |
|
|
1,756 |
|
|
1,152 |
|
|
6,264 |
|
|
3,586 |
|
Total noninterest income |
7,223 |
|
|
6,375 |
|
|
6,846 |
|
|
30,332 |
|
|
22,940 |
|
Noninterest
Expense |
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
14,172 |
|
|
14,455 |
|
|
13,286 |
|
|
56,709 |
|
|
52,291 |
|
Net occupancy expense |
2,256 |
|
|
2,246 |
|
|
2,408 |
|
|
9,228 |
|
|
9,454 |
|
Computer services |
2,121 |
|
|
2,023 |
|
|
1,940 |
|
|
8,153 |
|
|
7,664 |
|
Telephone, postage, and supplies |
813 |
|
|
862 |
|
|
830 |
|
|
3,275 |
|
|
3,040 |
|
Marketing and advertising |
156 |
|
|
396 |
|
|
634 |
|
|
1,872 |
|
|
1,853 |
|
Deposit insurance premiums |
426 |
|
|
462 |
|
|
467 |
|
|
900 |
|
|
1,426 |
|
Loss (gain) on sale and impairment of REO |
448 |
|
|
(15 |
) |
|
(61 |
) |
|
536 |
|
|
439 |
|
REO expense |
193 |
|
|
250 |
|
|
326 |
|
|
939 |
|
|
874 |
|
Core deposit intangible amortization |
303 |
|
|
334 |
|
|
449 |
|
|
1,421 |
|
|
2,029 |
|
Other |
3,764 |
|
|
3,890 |
|
|
3,136 |
|
|
14,096 |
|
|
11,064 |
|
Total noninterest expense |
24,652 |
|
|
24,903 |
|
|
23,415 |
|
|
97,129 |
|
|
90,134 |
|
Income Before Income
Taxes |
4,559 |
|
|
1,381 |
|
|
10,120 |
|
|
28,807 |
|
|
33,937 |
|
Income Tax
Expense |
964 |
|
|
188 |
|
|
2,107 |
|
|
6,024 |
|
|
6,791 |
|
Net
Income |
$ |
3,595 |
|
|
1,193 |
|
|
$ |
8,013 |
|
|
$ |
22,783 |
|
|
$ |
27,146 |
|
_________________________________(1) Derived from audited
financial statements.
|
Per Share
Data |
|
|
Three Months Ended |
|
Year Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net income per common
share:(1) |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.22 |
|
|
$ |
0.07 |
|
|
$ |
0.45 |
|
|
$ |
1.34 |
|
|
$ |
1.52 |
|
Diluted |
$ |
0.22 |
|
|
$ |
0.07 |
|
|
$ |
0.44 |
|
|
$ |
1.30 |
|
|
$ |
1.46 |
|
Average shares
outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
16,217,185 |
|
|
16,688,646 |
|
|
17,332,700 |
|
|
16,729,056 |
|
|
17,692,493 |
|
Diluted |
16,489,125 |
|
|
17,258,428 |
|
|
17,984,958 |
|
|
17,292,239 |
|
|
18,393,184 |
|
Book value per share at end of
period |
$ |
23.99 |
|
|
$ |
23.71 |
|
|
$ |
22.74 |
|
|
$ |
23.99 |
|
|
$ |
22.74 |
|
Tangible book value per share
at end of period (2) |
$ |
22.44 |
|
|
$ |
22.15 |
|
|
$ |
21.20 |
|
|
$ |
22.44 |
|
|
$ |
21.20 |
|
Cash dividends declared per
common share |
$ |
0.07 |
|
|
$ |
0.07 |
|
|
$ |
0.06 |
|
|
$ |
0.25 |
|
|
$ |
0.18 |
|
Total shares outstanding at
end of period |
17,016,372 |
|
|
17,101,954 |
|
|
17,984,105 |
|
|
17,016,372 |
|
|
17,984,105 |
|
_________________________________(1) Basic and diluted net
income per common share have been prepared in accordance with the
two-class method.(2) See Non-GAAP reconciliations below for
adjustments.
|
Selected
Financial Ratios and Other Data |
|
|
Three Months Ended |
|
Year Ended |
|
June 30,2020 |
|
March 31,2020 |
|
June 30,2019 |
|
June 30,2020 |
|
June 30,2019 |
Performance
ratios:(1) |
|
|
|
|
|
Return on assets (ratio of net income to average total assets) |
0.39 |
% |
|
0.14 |
% |
|
0.92 |
% |
|
0.63 |
% |
|
0.80 |
% |
Return on equity (ratio of net
income to average equity) |
3.54 |
|
|
1.15 |
|
|
7.87 |
|
|
5.54 |
|
|
6.62 |
|
Tax equivalent yield on earning
assets(2) |
3.66 |
|
|
4.12 |
|
|
4.48 |
|
|
4.13 |
|
|
4.39 |
|
Rate paid on interest-bearing
liabilities |
0.96 |
|
|
1.16 |
|
|
1.32 |
|
|
1.18 |
|
|
1.16 |
|
Tax equivalent average
interest rate spread(2) |
2.71 |
|
|
2.96 |
|
|
3.16 |
|
|
2.95 |
|
|
3.23 |
|
Tax equivalent net interest
margin(2) (3) |
2.92 |
|
|
3.16 |
|
|
3.37 |
|
|
3.17 |
|
|
3.43 |
|
Average interest-earning assets
to average interest-bearing liabilities |
127.89 |
|
|
121.79 |
|
|
119.33 |
|
|
122.10 |
|
|
120.39 |
|
Operating expense to average
total assets |
2.67 |
|
|
2.84 |
|
|
2.70 |
|
|
2.71 |
|
|
2.65 |
|
Efficiency ratio |
77.25 |
|
|
78.60 |
|
|
69.41 |
|
|
72.25 |
|
|
69.46 |
|
Efficiency ratio -
adjusted(4) |
76.51 |
|
|
77.85 |
|
|
68.81 |
|
|
71.62 |
|
|
68.83 |
|
_________________________________(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
reconciliations below for adjustments.
|
At or For the Three Months Ended |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
Asset quality
ratios: |
|
|
|
|
|
|
|
|
|
Nonperforming assets to total assets(1) |
0.44 |
% |
|
0.47 |
% |
|
0.45 |
% |
|
0.37 |
% |
|
0.38 |
% |
Nonperforming loans to total
loans(1) |
0.58 |
|
|
0.59 |
|
|
0.56 |
|
|
0.43 |
|
|
0.38 |
|
Total classified assets to
total assets |
0.84 |
|
|
0.86 |
|
|
0.90 |
|
|
0.84 |
|
|
0.89 |
|
Allowance for loan losses to
nonperforming loans(1) |
176.30 |
|
|
171.40 |
|
|
154.48 |
|
|
195.88 |
|
|
206.90 |
|
Allowance for loan losses to
total loans |
1.01 |
|
|
1.01 |
|
|
0.86 |
|
|
0.85 |
|
|
0.79 |
|
Allowance for loan losses to
total gross loans excluding PPP loans and acquired loans(2) |
1.11 |
|
|
1.07 |
|
|
0.92 |
|
|
0.92 |
|
|
0.85 |
|
Net charge-offs (recoveries) to
average loans (annualized) |
0.21 |
|
|
0.09 |
|
|
(0.05 |
) |
|
0.02 |
|
|
0.47 |
|
Capital
ratios: |
|
|
|
|
|
|
|
|
|
Equity to total assets at end
of period |
10.97 |
% |
|
11.43 |
% |
|
12.02 |
% |
|
11.30 |
% |
|
11.76 |
% |
Tangible equity to total
tangible assets(2) |
10.33 |
|
|
10.76 |
|
|
11.33 |
|
|
10.63 |
|
|
11.06 |
|
Average equity to average
assets |
11.02 |
|
|
11.80 |
|
|
11.52 |
|
|
11.54 |
|
|
11.72 |
|
_________________________________(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 June 30, 2020, there
were $6.3 million of restructured loans included in nonaccruing
loans and $2.8 million, or 17.6%, of nonaccruing loans were current
on their loan payments as of that date. Purchased impaired
loans acquired through 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 reconciliations below for adjustments.
|
Average
Balance Sheet Data |
|
|
Three Months Ended June 30, |
|
2020 |
|
2019 |
(Dollars in thousands) |
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) |
$ |
2,789,751 |
|
|
$ |
28,319 |
|
|
4.06 |
% |
|
$ |
2,707,738 |
|
|
$ |
32,156 |
|
|
4.75 |
% |
Commercial paper and deposits
in other banks |
453,038 |
|
|
1,740 |
|
|
1.54 |
% |
|
332,246 |
|
|
2,172 |
|
|
2.62 |
% |
Securities available for
sale |
142,601 |
|
|
786 |
|
|
2.21 |
% |
|
135,438 |
|
|
861 |
|
|
2.54 |
% |
Other interest-earning
assets(3) |
40,490 |
|
|
540 |
|
|
5.34 |
% |
|
52,080 |
|
|
926 |
|
|
7.11 |
% |
Total interest-earning assets |
3,425,880 |
|
|
31,385 |
|
|
3.66 |
% |
|
3,227,502 |
|
|
36,115 |
|
|
4.48 |
% |
Other assets |
263,212 |
|
|
|
|
|
|
247,356 |
|
|
|
|
|
Total Assets |
3,689,092 |
|
|
|
|
|
|
3,474,858 |
|
|
|
|
|
Liabilities and
equity: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking
accounts |
481,314 |
|
|
522 |
|
|
0.43 |
% |
|
462,626 |
|
|
348 |
|
|
0.30 |
% |
Money market accounts |
772,823 |
|
|
1,150 |
|
|
0.60 |
% |
|
691,701 |
|
|
1,472 |
|
|
0.85 |
% |
Savings accounts |
166,216 |
|
|
42 |
|
|
0.10 |
% |
|
184,719 |
|
|
56 |
|
|
0.12 |
% |
Certificate accounts |
748,722 |
|
|
2,978 |
|
|
1.59 |
% |
|
666,219 |
|
|
3,120 |
|
|
1.87 |
% |
Total interest-bearing deposits |
2,169,075 |
|
|
4,692 |
|
|
0.87 |
% |
|
2,005,265 |
|
|
4,996 |
|
|
1.00 |
% |
Borrowings |
509,617 |
|
|
1,694 |
|
|
1.33 |
% |
|
699,374 |
|
|
3,935 |
|
|
2.25 |
% |
Total interest-bearing liabilities |
2,678,692 |
|
|
6,386 |
|
|
0.95 |
% |
|
2,704,639 |
|
|
8,931 |
|
|
1.32 |
% |
Noninterest-bearing
deposits |
453,048 |
|
|
|
|
|
|
298,769 |
|
|
|
|
|
Other liabilities |
150,788 |
|
|
|
|
|
|
64,102 |
|
|
|
|
|
Total liabilities |
3,282,528 |
|
|
|
|
|
|
3,067,510 |
|
|
|
|
|
Stockholders' equity |
406,564 |
|
|
|
|
|
|
407,348 |
|
|
|
|
|
Total liabilities and stockholders' equity |
3,689,092 |
|
|
|
|
|
|
3,474,858 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earning assets |
$ |
747,188 |
|
|
|
|
|
|
$ |
522,863 |
|
|
|
|
|
Average interest-earning
assets to average interest-bearing liabilities |
127.89 |
% |
|
|
|
|
|
119.33 |
% |
|
|
|
|
Tax-equivalent: |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
24,999 |
|
|
|
|
|
|
$ |
27,184 |
|
|
|
Interest rate spread |
|
|
|
|
2.71 |
% |
|
|
|
|
|
3.16 |
% |
Net interest margin(4) |
|
|
|
|
2.92 |
% |
|
|
|
|
|
3.37 |
% |
Non-tax-equivalent: |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
24,688 |
|
|
|
|
|
|
$ |
26,889 |
|
|
|
Interest rate spread |
|
|
|
|
2.68 |
% |
|
|
|
|
|
3.12 |
% |
Net interest margin(4) |
|
|
|
|
2.88 |
% |
|
|
|
|
|
3.33 |
% |
_________________________________(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 $311 and $295 for the three months ended
June 30, 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 asset.
|
Years Ended June 30, |
|
2020 |
|
2019 |
(Dollars in thousands) |
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) |
$ |
2,748,124 |
|
|
$ |
123,364 |
|
|
4.49 |
% |
|
$ |
2,633,298 |
|
|
$ |
123,076 |
|
|
4.67 |
% |
Commercial paper and deposits
in other banks |
385,208 |
|
|
7,699 |
|
|
2.00 |
% |
|
326,035 |
|
|
8,278 |
|
|
2.54 |
% |
Securities available for
sale |
150,249 |
|
|
3,687 |
|
|
2.45 |
% |
|
145,344 |
|
|
3,443 |
|
|
2.37 |
% |
Other interest-earning
assets(3) |
42,119 |
|
|
2,694 |
|
|
6.40 |
% |
|
46,360 |
|
|
3,590 |
|
|
7.74 |
% |
Total interest-earning assets |
3,325,700 |
|
|
137,444 |
|
|
4.13 |
% |
|
3,151,037 |
|
|
138,387 |
|
|
4.39 |
% |
Other assets |
265,376 |
|
|
|
|
|
|
245,859 |
|
|
|
|
|
Total Assets |
3,591,076 |
|
|
|
|
|
|
3,396,896 |
|
|
|
|
|
Liabilities and
equity: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking
accounts |
457,455 |
|
|
1,627 |
|
|
0.36 |
% |
|
462,933 |
|
|
1,251 |
|
|
0.27 |
% |
Money market accounts |
767,315 |
|
|
6,910 |
|
|
0.90 |
% |
|
689,946 |
|
|
5,102 |
|
|
0.74 |
% |
Savings accounts |
166,588 |
|
|
195 |
|
|
0.12 |
% |
|
194,635 |
|
|
245 |
|
|
0.13 |
% |
Certificate accounts |
764,013 |
|
|
14,105 |
|
|
1.85 |
% |
|
596,727 |
|
|
9,159 |
|
|
1.53 |
% |
Total interest-bearing deposits |
2,155,371 |
|
|
22,837 |
|
|
1.06 |
% |
|
1,944,241 |
|
|
15,757 |
|
|
0.81 |
% |
Borrowings |
568,377 |
|
|
9,313 |
|
|
1.64 |
% |
|
672,186 |
|
|
14,626 |
|
|
2.18 |
% |
Total interest-bearing liabilities |
2,723,748 |
|
|
32,150 |
|
|
1.18 |
% |
|
2,616,427 |
|
|
30,383 |
|
|
1.16 |
% |
Noninterest-bearing
deposits |
365,634 |
|
|
|
|
|
|
307,420 |
|
|
|
|
|
Other liabilities |
90,247 |
|
|
|
|
|
|
63,229 |
|
|
|
|
|
Total liabilities |
3,179,629 |
|
|
|
|
|
|
2,987,076 |
|
|
|
|
|
Stockholders' equity |
411,447 |
|
|
|
|
|
|
409,820 |
|
|
|
|
|
Total liabilities and stockholders' equity |
3,591,076 |
|
|
|
|
|
|
3,396,896 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earning assets |
$ |
601,952 |
|
|
|
|
|
|
$ |
534,610 |
|
|
|
|
|
Average interest-earning
assets to average interest-bearing liabilities |
122.10 |
% |
|
|
|
|
|
120.43 |
% |
|
|
|
|
Tax-equivalent: |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
105,294 |
|
|
|
|
|
|
$ |
108,004 |
|
|
|
Interest rate spread |
|
|
|
|
2.95 |
% |
|
|
|
|
|
3.23 |
% |
Net interest margin(4) |
|
|
|
|
3.17 |
% |
|
|
|
|
|
3.43 |
% |
Non-tax-equivalent: |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
104,104 |
|
|
|
|
|
|
$ |
106,831 |
|
|
|
Interest rate spread |
|
|
|
|
2.92 |
% |
|
|
|
|
|
3.19 |
% |
Net interest margin(4) |
|
|
|
|
3.13 |
% |
|
|
|
|
|
3.39 |
% |
_________________________________(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 $1,190 and $1,173 for the year ended June 30,
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.
|
Loans |
|
(Dollars in thousands) |
June 30,2020 |
|
March 31,2020 |
|
December 31,2019 |
|
September 30,2019 |
|
June 30,2019 |
Retail consumer loans: |
|
|
|
|
|
|
|
|
|
One-to-four family |
$ |
473,693 |
|
|
$ |
487,777 |
|
|
$ |
417,255 |
|
|
$ |
396,649 |
|
|
$ |
660,591 |
|
HELOCs - originated |
137,447 |
|
|
144,804 |
|
|
142,989 |
|
|
141,129 |
|
|
139.435 |
|
HELOCs - purchased |
71,781 |
|
|
82,232 |
|
|
92,423 |
|
|
104,324 |
|
|
116,972 |
|
Construction and land/lots |
81,859 |
|
|
80,765 |
|
|
71,901 |
|
|
85,319 |
|
|
80,602 |
|
Indirect auto finance |
132,303 |
|
|
135,449 |
|
|
142,533 |
|
|
147,808 |
|
|
153,448 |
|
Consumer |
10,259 |
|
|
11,576 |
|
|
11,102 |
|
|
11,400 |
|
|
11,416 |
|
Total retail consumer
loans |
907,342 |
|
|
942,603 |
|
|
878,203 |
|
|
886,629 |
|
|
1,162,464 |
|
Commercial loans: |
|
|
|
|
|
|
|
|
|
Commercial real estate |
1,052,906 |
|
|
990,693 |
|
|
998,019 |
|
|
990,787 |
|
|
927,261 |
|
Construction and development |
215,934 |
|
|
249,714 |
|
|
223,839 |
|
|
203,494 |
|
|
210,916 |
|
Commercial and industrial |
154,825 |
|
|
164,539 |
|
|
152,727 |
|
|
158,706 |
|
|
160,471 |
|
Equipment finance |
229,239 |
|
|
198,962 |
|
|
185,427 |
|
|
154,479 |
|
|
132,058 |
|
Municipal leases |
127,987 |
|
|
115,992 |
|
|
115,240 |
|
|
114,382 |
|
|
112,016 |
|
PPP loans |
80,697 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total commercial loans |
1,861,588 |
|
|
1,719,900 |
|
|
1,675,252 |
|
|
1,621,848 |
|
|
1,542,722 |
|
Total loans |
2,768,930 |
|
|
2,662,503 |
|
|
2,553,455 |
|
|
2,508,477 |
|
|
2,705,186 |
|
Deferred loan costs, net |
189 |
|
|
1,021 |
|
|
1,086 |
|
|
253 |
|
|
4 |
|
Total loans, net of deferred
loan fees |
2,769,119 |
|
|
2,663,524 |
|
|
2,554,541 |
|
|
2,508,730 |
|
|
2,705,190 |
|
Allowance for loan losses |
(28,072 |
) |
|
(26,850 |
) |
|
(22,031 |
) |
|
(21,314 |
) |
|
(21,429 |
) |
Loans, net |
$ |
2,741,047 |
|
|
$ |
2,636,674 |
|
|
$ |
2,532,510 |
|
|
$ |
2,487,416 |
|
|
$ |
2,683,761 |
|
|
Deposits |
|
(Dollars in thousands) |
June 30,2020 |
|
March 31,2020 |
|
December 31,2019 |
|
September 30,2019 |
|
June 30,2019 |
Core deposits: |
|
|
|
|
|
|
|
|
|
Noninterest-bearing accounts |
$ |
429,901 |
|
|
$ |
322,812 |
|
|
$ |
327,320 |
|
|
$ |
327,371 |
|
|
$ |
294,322 |
NOW accounts |
582,299 |
|
|
496,561 |
|
|
457,428 |
|
|
449,623 |
|
|
452,295 |
Money market accounts |
836,738 |
|
|
801,424 |
|
|
815,949 |
|
|
769,000 |
|
|
691,172 |
Savings accounts |
197,676 |
|
|
169,792 |
|
|
167,520 |
|
|
169,872 |
|
|
177,278 |
Total core deposits |
2,046,614 |
|
|
1,790,589 |
|
|
1,768,217 |
|
|
1,715,866 |
|
|
1,615,067 |
Certificates of deposit |
739,142 |
|
|
764,198 |
|
|
789,552 |
|
|
778,328 |
|
|
712,190 |
Total |
$ |
2,785,756 |
|
|
$ |
2,554,787 |
|
|
$ |
2,557,769 |
|
|
$ |
2,494,194 |
|
|
$ |
2,327,257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 loan
losses to total loans excluding PPP loans and acquired 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 provides an alternative
view of the Company's performance over time and in comparison to
the Company's 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 our efficiency
ratio:
|
|
Three Months Ended |
|
Year Ended |
(Dollars in thousands) |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Noninterest expense |
$ |
24,652 |
|
|
$ |
24,903 |
|
|
$ |
23,415 |
|
|
$ |
97,129 |
|
|
$ |
90,134 |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
24,688 |
|
|
$ |
25,309 |
|
|
$ |
26,889 |
|
|
$ |
104,104 |
|
|
$ |
106,831 |
|
Plus noninterest income |
7,223 |
|
|
6,375 |
|
|
6,846 |
|
|
30,332 |
|
|
22,940 |
|
Plus tax equivalent
adjustment |
311 |
|
|
305 |
|
|
295 |
|
|
1,190 |
|
|
1,173 |
|
Net interest income plus
noninterest income – as adjusted |
$ |
32,222 |
|
|
$ |
31,989 |
|
|
$ |
34,030 |
|
|
$ |
135,626 |
|
|
$ |
130,944 |
|
Efficiency ratio - adjusted |
76.51 |
% |
|
77.85 |
% |
|
68.81 |
% |
|
71.62 |
% |
|
68.83 |
% |
Efficiency ratio (without
adjustments) |
77.25 |
% |
|
78.60 |
% |
|
69.41 |
% |
|
72.25 |
% |
|
69.46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Set forth below is a reconciliation to GAAP of tangible book
value and tangible book value per share:
|
|
|
As of |
(Dollars in thousands, except per
share data) |
June 30,2020 |
|
March 31,2020 |
|
December 31,2019 |
|
September 30,2019 |
|
June 30,2019 |
Total stockholders' equity |
$ |
408,263 |
|
|
$ |
405,440 |
|
|
$ |
416,995 |
|
|
$ |
413,068 |
|
|
$ |
408,896 |
Less: goodwill, core deposits
intangibles, net of taxes |
26,468 |
|
|
26,701 |
|
|
26,959 |
|
|
27,246 |
|
|
27,562 |
Tangible book value (1) |
$ |
381,795 |
|
|
$ |
378,739 |
|
|
$ |
390,036 |
|
|
$ |
385,822 |
|
|
$ |
381,334 |
Common shares outstanding |
17,016,372 |
|
|
17,101,954 |
|
|
17,664,384 |
|
|
17,818,145 |
|
|
17,984,105 |
Tangible book value per
share |
$ |
22.44 |
|
|
$ |
22.15 |
|
|
$ |
22.08 |
|
|
$ |
21.65 |
|
|
$ |
21.20 |
Book value per share |
$ |
23.99 |
|
|
$ |
23.71 |
|
|
$ |
23.61 |
|
|
$ |
23.18 |
|
|
$ |
22.74 |
_________________________________(1) 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 tangible equity
to tangible assets:
|
As of |
|
June 30,2020 |
|
March 31,2020 |
|
December 31,2019 |
|
September 30,2019 |
|
June 30,2019 |
(Dollars in thousands) |
|
Tangible equity(1) |
$ |
381,795 |
|
|
$ |
378,739 |
|
|
$ |
390,036 |
|
|
$ |
385,822 |
|
|
$ |
381,334 |
|
Total assets |
$ |
3,722,852 |
|
|
$ |
3,548,033 |
|
|
$ |
3,470,232 |
|
|
$ |
3,655,309 |
|
|
$ |
3,476,178 |
|
Less: goodwill and core deposit
intangibles, net of taxes |
26,468 |
|
|
26,701 |
|
|
26,959 |
|
|
27,246 |
|
|
27,562 |
|
Total tangible assets(2) |
$ |
3,696,384 |
|
|
$ |
3,521,332 |
|
|
$ |
3,443,273 |
|
|
$ |
3,628,063 |
|
|
$ |
3,448,616 |
|
Tangible equity to tangible
assets |
10.33 |
% |
|
10.76 |
% |
|
11.33 |
% |
|
10.63 |
% |
|
11.06 |
% |
_________________________________(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.(2) Total tangible assets is equal to total assets less
goodwill and core deposit intangibles, net of related deferred tax
liabilities.
Set forth below is a reconciliation to GAAP of
the allowance for loan losses to total loans and the allowance for
loan losses as adjusted to exclude PPP loans and acquired
loans:
|
As of |
(Dollars in thousands) |
June 30,2020 |
|
March 31,2020 |
|
December 31,2019 |
|
September 30,2019 |
|
June 30,2019 |
Total gross loans receivable (GAAP) |
$ |
2,768,930 |
|
|
$ |
2,662,503 |
|
|
$ |
2,553,455 |
|
|
$ |
2,508,477 |
|
|
$ |
2,705,186 |
|
Less: acquired loans |
168,266 |
|
|
176,971 |
|
|
186,970 |
|
|
206,937 |
|
|
214,046 |
|
Less: PPP loans |
80,697 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted loans (non-GAAP) |
$ |
2,519,967 |
|
|
$ |
2,485,532 |
|
|
$ |
2,366,485 |
|
|
$ |
2,301,540 |
|
|
$ |
2,491,140 |
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses
(GAAP) |
$ |
28,072 |
|
|
$ |
26,850 |
|
|
$ |
22,031 |
|
|
$ |
21,314 |
|
|
$ |
21,429 |
|
Less: allowance for loan losses
on acquired loans |
182 |
|
|
182 |
|
|
152 |
|
|
194 |
|
|
201 |
|
Adjusted allowance for loan
losses |
$ |
27,890 |
|
|
$ |
26,668 |
|
|
$ |
21,879 |
|
|
$ |
21,120 |
|
|
$ |
21,228 |
|
Allowance for loan losses /
Adjusted loans (non-GAAP) |
1.11 |
% |
|
1.07 |
% |
|
0.92 |
% |
|
0.92 |
% |
|
0.85 |
% |
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