Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
1. Summary of Significant Accounting Policies
The consolidated financial statements presented in this report include the accounts of HomeTrust Bancshares, Inc., a Maryland corporation ("HomeTrust"), and its wholly-owned subsidiary, HomeTrust Bank (the "Bank"). As used throughout this report, the term the "Company" refers to HomeTrust and the Bank, its consolidated subsidiary, unless the context otherwise requires.
The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the SEC. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. It is recommended that these unaudited interim consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended June 30, 2020 ("2020 Form 10-K") filed with the SEC on September 11, 2020. The results of operations for the three months ended December 31, 2020 are not necessarily indicative of results that may be expected for the entire fiscal year ending June 30, 2021.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Various elements of the Company's accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions, and other subjective assessments. In particular, management has identified several accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Company's financial statements. These policies relate to (i) the determination of the provision and the allowance for credit losses on loans and (ii) the valuation of goodwill and other intangible assets. These policies and judgments, estimates and assumptions are described in greater detail in notes to the Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations (Critical Accounting Policies) in the Company's 2020 Form 10-K. Management believes that the judgments, estimates and assumptions used in the preparation of the financial statements are appropriate based on the factual circumstances at the time. However, given the sensitivity of the financial statements to these critical accounting policies, the use of other judgments, estimates and assumptions could result in material differences in the Company's results of operations or financial condition. Further, subsequent changes in economic or market conditions could have a material impact on these estimates and the Company's financial condition and operating results in future periods.
Operating, Accounting and Reporting Considerations related to COVID-19
The COVID-19 pandemic has negatively impacted the global economy. In response to this crisis, the CARES Act was passed by Congress and signed into law on March 27, 2020. The CARES Act provides an estimated $2.2 trillion to fight the COVID-19 pandemic and stimulate the economy by supporting individuals and businesses through loans, grants, tax changes, and other types of relief. Some of the provisions applicable to the Company include, but are not limited to:
• Accounting for Loan Modifications - The CARES Act provides that a financial institution may elect to suspend (1) the requirements under GAAP for certain loan modifications that would otherwise be categorized as a TDR and (2) any determination that such loan modifications would be considered a TDR, including the related impairment for accounting purposes. The Bank has elected this as a policy change.
• PPP - The CARES Act established the PPP, an expansion of the SBA's 7(a) loan program and the Economic Injury Disaster Loan Program, administered directly by the SBA.
On December 27, 2020, the 2021 Consolidated Appropriations Act was signed into law combining $900 billion in stimulus relief for the COVID-19 pandemic. The legislation extends certain relief provisions from the March CARES Act that were set to expire at the end of 2020. This new legislation extends the relief to financial institutions to suspend TDR assessment and reporting requirements under GAAP for loan modifications to the earlier of 60 days after the national emergency termination date or January 1, 2022. The legislation includes additional funding for businesses that did not receive PPP funds under the CARES Act, especially minority- and women-owned businesses. In addition, it allows businesses another opportunity to borrow PPP funds if they can show losses of 25% or more in 2020 based on their 2019 revenue. The Company expects a smaller number of applications to be made by its customers for these additional PPP funds.
Also in response to the COVID-19 pandemic, the Board of Governors of the Federal Reserve System, the FDIC, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Consumer Financial Protection Bureau, in consultation with the state financial regulators (collectively, the “agencies”) issued a joint interagency statement (issued March 22, 2020; revised statement issued April 7, 2020). Some of the provisions applicable to the Company include, but are not limited to:
• Accounting for Loan Modifications - A loan modification that does not meet the conditions of the CARES Act may still qualify as a modification that does not need to be accounted for as a TDR. The agencies confirmed with FASB staff that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or insignificant delays in payment.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
• Past Due Reporting - With regard to loans not otherwise reportable as past due, financial institutions are not expected to designate loans with deferrals granted due to COVID-19 as past due because of the deferral. A loan’s payment date is governed by the due date stipulated in the legal agreement. If a financial institution agrees to a payment deferral, these loans would not be considered past due during the period of the deferral.
• Nonaccrual Status and Charge-offs - While short-term COVID-19 modifications are in effect, these loans generally should not be reported as nonaccrual or as classified.
See Note 6 Loans for more information on COVID-19 specific loans that have been modified or in deferral.
Adoption of CECL standard
On July 1, 2020, the Company adopted ASU No. 2016-13, "Financial Instruments-Credit Losses ("Topic 326"): Measurement of Credit Losses on Financial Instruments", sometimes referred to herein as ASU 2016-13. Topic 326 was subsequently amended by ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses; ASU No. 2019-05, Codification Improvements to Topic 326, Financial Instruments-Credit Losses; and ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. This standard applies to all financial assets measured at amortized cost and off balance sheet credit exposures, including loans, investment securities and unfunded commitments. The Company applied the standard’s provisions using the modified retrospective method as a cumulative effect adjustment to retained earnings as of July 1, 2020. With this transition method, the Company did not have to restate comparative prior periods presented in the financial statements related to Topic 326, but will present comparative prior period disclosures using the previous accounting guidance for the allowance for loan losses. This adoption method is considered a change in accounting principle requiring additional disclosure regarding the nature of and reason for the change, which is solely a result of the adoption of the required standard.
ACL – Investment Securities
Management uses a systematic methodology to determine its ACL for investment securities held to maturity. The ACL is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the held-to-maturity portfolio. Management considers the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of the portfolio. The Company’s estimate of its ACL involves a high degree of judgment; therefore, management’s process for determining expected credit losses may result in a range of expected credit losses. Management monitors the held-to-maturity portfolio to determine whether a valuation account would need to be recorded. The Company currently has no investment securities held to maturity.
Management excludes the accrued interest receivable balance from the amortized cost basis in measuring expected credit losses on investment securities and does not record an allowance for credit losses on accrued interest receivable. As of December 31, 2020, the accrued interest receivable for investment securities available for sale was $926.
The Company’s estimate of expected credit losses includes a measure of the expected risk of credit loss even if that risk is remote. However, the Company does not measure expected credit losses on an investment security in which historical credit loss information adjusted for current conditions and reasonable and supportable forecast results in an expectation that nonpayment of the amortized cost basis is zero. Management does not expect nonpayment of the amortized cost basis to be zero solely on the basis of the current value of collateral securing the security but, instead, also considers the nature of the collateral, potential future changes in collateral values, default rates, delinquency rates, third-party guarantees, credit ratings, interest rate changes since purchase, volatility of the security’s fair value and historical loss information for financial assets secured with similar collateral. The Company performed an analysis that determined that the following securities have a zero expected credit loss: U.S. government agencies, residential MBS of U.S. government agencies and GSEs, and municipal bonds. All of the U.S. government agencies and U.S. government agency backed securities have the full faith and credit backing of the United States Government or one of its agencies. Municipal bonds that do not have a zero expected credit loss will be evaluated quarterly to determine whether there is a credit loss associated with a decline in fair value.
Management no longer evaluates securities for OTTI, as ASC Subtopic 326-30, "Financial Instruments—Credit Losses—Available-for-Sale Debt Securities," changes the accounting for recognizing impairment on available-for-sale debt securities. Each quarter management evaluates impairment where there has been a decline in fair value below the amortized cost basis of a security to determine whether there is a credit loss associated with the decline in fair value. Management considers the nature of the collateral, potential future changes in collateral values, default rates, delinquency rates, third-party guarantees, credit ratings, interest rate changes since purchase, volatility of the security’s fair value and historical loss information for financial assets secured with similar collateral among other factors. Credit losses are calculated individually, rather than collectively, using a DCF method, whereby management compares the present value of expected cash flows with the amortized cost basis of the security. The credit loss component would be recognized through the provision for credit losses in the Consolidated Statements of Income.
ACL - Loans and leases
The ACL reflects management’s estimate of losses that will result from the inability of its borrowers to make required loan payments. The Company established the incremental increase in the ACL at adoption of the CECL standard through the cumulative effect adjustment to equity and subsequent adjustments will be made through a provision for credit losses charged against earnings. Management records loans charged off against the ACL and subsequent recoveries, if any, increase the ACL when they are recognized.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
Management uses a systematic methodology to determine its ACL for loans held for investment and certain off-balance-sheet credit exposures. The ACL is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the loan portfolio. Management considers the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of the loan portfolio. The Company’s estimate of its ACL involves a high degree of judgment; therefore, management’s process for determining expected credit losses may result in a range of expected credit losses. The Company’s ACL recorded in the balance sheet reflects management’s best estimate within the range of expected credit losses. The Company recognizes in net income the amount needed to adjust the ACL for management’s current estimate of expected credit losses. The Company’s ACL is calculated using collectively evaluated and individually evaluated loans.
The Company collectively evaluates loans that share similar risk characteristics. In general, management has segmented loans by regulatory call code category and collectively evaluates loans within the retail and commercial categories. Loans within the retail consumer category include: 1-4 family, HELOCs - originated, HELOCs - purchased, construction and land/lots, indirect auto finance, and consumer. Loans within the commercial category include: commercial real estate, construction and development, commercial and industrial, equipment finance, and municipal leases.
For collectively evaluated loans, the Company uses a DCF method for each loan in a pool, and the results are aggregated at the pool level. A periodic tendency to default and absolute loss given default are applied to a projective model of the loan’s cash flow while considering prepayment and principal curtailment effects. The analysis produces expected cash flows for each instrument in the pool by pairing loan-level term information (maturity date, payment amount, interest rate, etc.) with top-down pool assumptions (default rates, prepayment speeds). The Company has identified the following portfolio segments for the current calculation: 1-4 family construction, 1-4 family mortgage – jr. lien, 1-4 family mortgage – sr. lien, commercial and industrial, commercial leases, construction – multi-family, construction – non-owner occupied, construction – owner occupied, consumer – auto, consumer – other, consumer – revolving, farmland, land and lot, multifamily, municipal leases, non-owner occupied CRE, owner occupied CRE, and HELOCs. PPP loans are fully guaranteed by the SBA; therefore, management estimates a zero reserve for PPP loans within its allowance for credit losses.
Management has determined that the peer loss experience provides the best basis for its assessment of expected credit losses to determine the ACL. The Company utilized peer call report data to measure historical credit loss experience with similar risk characteristics within the segments over an economic cycle. Management reviewed the historical loss information to appropriately adjust for differences in current asset specific risk characteristics. Management also considered further adjustments to historical loss information for current conditions and reasonable and supportable forecasts that differ from the conditions that existed for the period over which historical information was evaluated. For all segment models for collectively evaluated loans (except for HELOCs), the Company incorporated one macroeconomic driver using a statistical regression modeling methodology. The HELOC segment incorporated two macroeconomic drivers. Due to the low loss rates of municipal leases and the expectation of them remaining low, management has elected to separately pool these loans. Management has elected to use readily available municipal default rates and loss given defaults in order to calculate expected credit losses.
Management considers forward-looking information in estimating expected credit losses. The Company uses the Fannie Mae quarterly economic forecast which is a baseline outlook for the United States economy. Management has evaluated the appropriateness of the reasonable and supportable forecast for the current period along with the inputs used in the estimation of expected credit losses. For the contractual term that extends beyond the reasonable and supportable forecast period, the Company reverts to historical loss information within four quarters using a straight-line approach. Management may apply different reversion techniques depending on the economic environment for the financial asset portfolio and as of the current period has utilized a linear reversion technique. Management has evaluated the appropriateness of a reversion period for the current period and noted that it was reasonable.
Included in its systematic methodology to determine its ACL for loans held for investment and certain off-balance-sheet credit exposures, management considers the need to qualitatively adjust expected credit losses for information not already captured in the loss estimation process. These qualitative adjustments can either increase or decrease the quantitative model estimation (i.e. formulaic model results). Each period the Company considers qualitative factors that are relevant within the qualitative framework that include the following: 1) lending policies and procedures, 2) credit review function, 3) experience and depth of management and staff, 4) external factors, and 5) actual and expected changes in economic and business conditions.
When a loan no longer shares similar risk characteristics with its segment, the asset is assessed to determine whether it should be included in another pool or should be individually evaluated. For these individually evaluated loans, the Company maintains specific book balance thresholds for retail or consumer loans, commercial loans, municipal and equipment leases, and unsecured commercial loans. Management would adjust these thresholds if future analysis suggests a change is needed based on the credit environment at that time. Generally, individually evaluated loans other than TDRs are on nonaccrual status. Based on the thresholds above, financial assets will generally remain in pools unless they meet the dollar threshold or foreclosure is probable. The expected credit losses on individually evaluated loans will be estimated based on DCF analysis unless the loan meets the criteria for use of the fair value of collateral, either by virtue of an expected foreclosure or through meeting the definition of collateral dependent. Financial assets that have been individually evaluated can be returned to a pool for purposes of estimating the expected credit loss insofar as their credit profile improves and that the repayment terms are not considered to be unique to the asset.
Management measures expected credit losses over the contractual term of the loans. When determining the contractual term, the Company considers expected prepayments but is precluded from considering expected extensions, renewals, or modifications, unless the Company reasonably expects it will execute a TDR with a borrower. In the event of a reasonably-expected TDR, the Company factors the reasonably-expected TDR into the current expected credit losses estimate. The effects of a TDR are recorded when an individual asset is specifically
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
identified as a reasonably-expected TDR. The Company identifies the point at which it offers the modification to the borrower as the point at which the TDR is reasonably expected for both commercial and consumer loans. The Company uses a DCF methodology to calculate the effect of the concession provided to the borrower in TDR within the ACL.
PCD assets are defined as acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by the Company’s assessment. The Company records acquired PCD loans by adding the expected credit losses (i.e., ACL) to the purchase price of the financial assets rather than recording through the provision for credit losses in the income statement. The expected credit loss, as of the acquisition day, of a PCD loan is added to the ACL. The non-credit discount or premium is the difference between the unpaid principal balance and the amortized cost basis as of the acquisition date. Subsequent to the acquisition date, the change in the ACL on PCD loans is recognized through the provision for credit losses. The non-credit discount or premium is accreted or amortized, respectively, into interest income over the remaining life of the PCD loan on a level-yield basis. In accordance with the transition requirements within the standard, the Company’s PCI loans were treated as PCD loans.
The Company follows its nonaccrual policy by reversing contractual interest income in the income statement when the Company places a loan on nonaccrual status. Therefore, management excludes the accrued interest receivable balance from the amortized cost basis in measuring expected credit losses on the portfolio and does not record an ACL on accrued interest receivable. As of December 31, 2020, the accrued interest receivable for loans was $8,612.
The Company has a variety of assets that have a component that qualifies as an off-balance sheet exposure. These primarily include undrawn portions of revolving lines of credit and standby letters of credit. The expected losses associated with these exposures within the unfunded portion of the expected credit loss will be recorded as a liability on the balance sheet with an offset to the provision for credit losses. Management has determined that a majority of the Company’s off-balance-sheet credit exposures are not unconditionally cancellable. See "Note 6 - Loans" for additional details related to the Company's off-balance-sheet credit exposure. The current adjustment to the ACL for unfunded commitments would be recognized through the provision for credit losses in the Statement of Income.
2. Recent Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The ASU significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model. The Company adopted this ASU on July 1, 2020, applying the modified-retrospective method. Related to the implementation of this ASU, the Company recorded additional ACL on financial instruments of $15,059, additional deferred tax assets of $3,989, additional reserve for unfunded commitments of $2,288, and a reduction to retained earnings of $13,358. The adoption of this ASU did not have an effect on AFS debt securities. See "Note 1 - Summary of Significant Accounting Policies" and "Note 6 - Loans" for additional details related to the adoption of this ASU.
See table below for impact of this ASU on the Company's consolidated balance sheet:
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|
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|
|
|
|
|
|
|
|
|
|
|
|
July 1, 2020
|
|
|
|
|
As Reported Under ASC 326
|
|
Pre-ASC 326 Adoption
|
|
Impact of ASC 326 Adoption
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
ACL on commercial paper
|
|
$
|
(250)
|
|
|
$
|
—
|
|
|
$
|
(250)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACL on loans:
|
|
|
|
|
|
|
|
|
Retail consumer loans
|
|
$
|
(17,692)
|
|
|
$
|
(6,956)
|
|
|
$
|
(10,736)
|
|
|
|
Commercial loans
|
|
(25,189)
|
|
|
(21,116)
|
|
|
(4,073)
|
|
|
|
Total ACL on loans
|
|
$
|
(42,881)
|
|
|
$
|
(28,072)
|
|
|
$
|
(14,809)
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income taxes
|
|
$
|
20,323
|
|
|
$
|
16,334
|
|
|
$
|
3,989
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Liability for credit losses on off-balance sheet credit exposures
|
|
$
|
2,288
|
|
|
$
|
—
|
|
|
$
|
2,288
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Retained earnings
|
|
$
|
229,418
|
|
|
$
|
242,776
|
|
|
$
|
(13,358)
|
|
|
In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement." The amendments in this ASU remove, modify, and add certain disclosure requirements related to fair value measurements in ASC 820. The Company adopted this ASU on July 1, 2020. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
In November 2018, the FASB issued ASU 2018-19, "Codification Improvements to Topic 326, Financial Instruments—Credit Losses." This update clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. The Company adopted this ASU on July 1, 2020. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In April 2019, the FASB issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments." The amendments in this update are part of the FASB's ongoing project to improve codification and correcting unintended application. The items within this ASU are not expected to have a significant effect on current accounting practice. The Company adopted the amendments to Financial Instruments (ASU 2016-01) on July 1, 2020. The Company adopted the amendments to Financial Instruments-Credit Losses (ASU 2016-13) on July 1, 2020. The Company adopted the amendments to Derivatives and Hedging (ASU 2017-12) on July 1, 2019. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In May 2019, the FASB issued ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief." The amendments in this update allow companies to irrevocably elect, upon the adoption of ASU 2016-13, the fair value option for financial instruments that i) were previously recorded at amortized cost and ii) are within the scope of the credit losses guidance in ASC 326-20, iii) are eligible for the fair value option under ASC 825-10, and iv) are not held-to-maturity debt securities. The Company adopted this ASU on July 1, 2020. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In November 2019, the FASB issued ASU 2019-11, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses." This ASU clarifies certain aspects of the amendments in ASU 2016-13 and is part of the FASB's ongoing project to improve codification and correcting unintended application. The items within this ASU are not expected to have a significant effect on current accounting practice. The Company adopted this ASU on July 1, 2020. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU is part of the FASB's simplification initiative to reduce complexity in accounting standards. The items within this ASU are not expected to have a significant effect on current accounting practice. The effective date and transition requirements for the first and second items of this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2020 and early adoption is permitted. The adoption of ASU No. 2019-12 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In January 2020, the FASB issued ASU 2020-01, "Investment—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815." This ASU clarified the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2021 and early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company's Consolidated Financial Statements.
In March 2020, the FASB issued ASU 2020-03, "Codification Improvements to Financial Instruments." This ASU makes certain narrow-scope amendments to the following: i) clarified that all entities are required to provide fair value option disclosures; ii) clarified the applicability of the portfolio exception in ASC 820 to nonfinancial items; iii) aligned disclosures for depository and lending institutions (Topic 942) with guidance in Topic 320; iv) added cross-references to guidance in ASC 470-50 on line-of-credit or revolving-debt arrangements; v) added cross-references to net asset value practical expedient in ASC 820-10; vi) clarified the interaction between ASC 842 and ASC 326; and vii) clarified the interaction between ASC 326 and ASC 860-20. The amendments for issues i, ii, iv, and v became effective upon issuance and did not have a material effect on the Company's Consolidated Financial Statements. The Company adopted the amendments related to issue iii, vi, and vii on July 1, 2020. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In September 2020, the FASB issued ASU 2020-06, "Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)." This ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. Specifically the ASU removes: i) major separation models required under GAAP and ii) certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contract to qualify for the exception. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2021 and early adoption is permitted.The adoption of this ASU is not expected to have a material impact on the Company's Consolidated Financial Statements.
In October 2020, the FASB issued ASU 2020-08, "Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs." This ASU clarified that entities should reevaluate whether a callable debt security is within the scope of paragraph 310-20-35-33 for each reporting period. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2020. The adoption of this ASU is not expected to have a material impact on the Company's Consolidated Financial Statements.
In October 2020, the FASB issued ASU 2020-09, "Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762." This ASU updates financial disclosure requirements for subsidiary issuers and guarantors of registered debt securities and
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
affinities whose securities are pledged as collateral for registered securities. The amendments in this ASU are effective January 4, 2021.The adoption did not have an effect on the Company's Consolidated Financial Statements.
In October 2020, the FASB issued ASU 2020-10, "Codification Improvements." The amendments in this update are part of the FASB's ongoing project to improve codification and correcting unintended application. This ASU, i) removes references to various FASB Concepts Statements, ii) situates all disclosure guidance in the appropriate disclosure section of the Codification, and iii) makes other improvements and technical corrections to the Codification. The items within this ASU are not expected to have a significant effect on current accounting practice. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2020 and early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company's Consolidated Financial Statements.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
3. Debt Securities
Securities available for sale consist of the following at the dates indicated:
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|
December 31, 2020
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
U.S. government agencies
|
$
|
18,966
|
|
|
$
|
176
|
|
|
$
|
(4)
|
|
|
$
|
19,138
|
|
|
Residential MBS of U.S. government agencies and GSEs
|
39,357
|
|
|
1,693
|
|
|
(37)
|
|
|
41,013
|
|
|
Municipal bonds
|
10,333
|
|
|
566
|
|
|
—
|
|
|
10,899
|
|
|
Corporate bonds
|
82,151
|
|
|
342
|
|
|
(3)
|
|
|
82,490
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
150,807
|
|
|
$
|
2,777
|
|
|
$
|
(44)
|
|
|
$
|
153,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
U.S. government agencies
|
$
|
3,957
|
|
|
$
|
216
|
|
|
$
|
—
|
|
|
$
|
4,173
|
|
|
Residential MBS of U.S. government agencies and GSEs
|
46,629
|
|
|
1,776
|
|
|
(50)
|
|
|
48,355
|
|
|
Municipal bonds
|
16,090
|
|
|
541
|
|
|
—
|
|
|
16,631
|
|
|
Corporate bonds
|
58,242
|
|
|
270
|
|
|
(134)
|
|
|
58,378
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
124,918
|
|
|
$
|
2,803
|
|
|
$
|
(184)
|
|
|
$
|
127,537
|
|
Debt securities available for sale by contractual maturity at December 31, 2020 are shown below. MBS are not included in the maturity categories because the borrowers in the underlying pools may prepay without penalty; therefore, it is unlikely that the securities will pay at their stated maturity schedule.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
|
Due within one year
|
$
|
29,178
|
|
|
$
|
29,250
|
|
|
Due after one year through five years
|
80,252
|
|
|
81,016
|
|
|
Due after five years through ten years
|
2,020
|
|
|
2,261
|
|
|
Due after ten years
|
—
|
|
|
—
|
|
|
Mortgage-backed securities
|
39,357
|
|
|
41,013
|
|
|
Total
|
$
|
150,807
|
|
|
$
|
153,540
|
|
The Company had no sales of securities available for sale during the three and six months ended December 31, 2020 and 2019. There were no gross realized gains or losses for the three and six months ended December 31, 2020 and 2019.
Securities available for sale with costs totaling $53,433 and $82,888 and market values of $54,780 and $84,456 at December 31, 2020 and June 30, 2020, respectively, were pledged as collateral to secure various public deposits and other borrowings.
The gross unrealized losses and the fair value for securities available for sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2020 and June 30, 2020 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
U.S. government agencies
|
$
|
14,996
|
|
|
$
|
(4)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,996
|
|
|
$
|
(4)
|
|
|
Residential MBS of U.S. government agencies and GSEs
|
115
|
|
|
(7)
|
|
|
1,922
|
|
|
(30)
|
|
|
2,037
|
|
|
(37)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
16,941
|
|
|
(3)
|
|
|
—
|
|
|
—
|
|
|
16,941
|
|
|
(3)
|
|
|
Total
|
$
|
32,052
|
|
|
$
|
(14)
|
|
|
$
|
1,922
|
|
|
$
|
(30)
|
|
|
$
|
33,974
|
|
|
$
|
(44)
|
|
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential MBS of U.S. government agencies and GSEs
|
$
|
227
|
|
|
$
|
(10)
|
|
|
$
|
2,435
|
|
|
$
|
(40)
|
|
|
$
|
2,662
|
|
|
$
|
(50)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
11,779
|
|
|
(134)
|
|
|
—
|
|
|
—
|
|
|
11,779
|
|
|
(134)
|
|
|
Total
|
$
|
12,006
|
|
|
$
|
(144)
|
|
|
$
|
2,435
|
|
|
$
|
(40)
|
|
|
$
|
14,441
|
|
|
$
|
(184)
|
|
The total number of securities with unrealized losses at December 31, 2020, and June 30, 2020 were 21 and 24, respectively.
Management evaluates securities for impairment where there has been a decline in fair value below the amortized cost basis of a security to determine whether there is a credit loss associated with the decline in fair value on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. All debt securities available for sale in an unrealized loss position as of December 31, 2020 continue to perform as scheduled and management does not believe that there is a credit loss or that a provision for credit losses is necessary. Also, as part of management's evaluation of its intent and ability to hold investments for a period of time sufficient to allow for any anticipated recovery in the market, management considers its investment strategy, cash flow needs, liquidity position, capital adequacy and interest rate risk position. Management does not currently intend to sell the securities within the portfolio and it is not more-likely-than-not that securities will be required to be sold. See Note 1 – Summary of Significant Account Policies for further discussion.
Management continues to monitor all of its securities with a high degree of scrutiny. There can be no assurance that management will not conclude in future periods that conditions existing at that time indicate some or all of its securities may be sold or would require a charge to earnings as a provision for credit losses in such periods.
4. Other Investments
Other investments, at cost consist of the following at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
June 30, 2020
|
|
FHLB of Atlanta stock
|
$
|
23,309
|
|
|
$
|
23,309
|
|
|
FRB stock
|
7,374
|
|
|
7,368
|
|
|
SBIC investments
|
8,889
|
|
|
8,269
|
|
|
|
|
|
|
|
Total
|
$
|
39,572
|
|
|
$
|
38,946
|
|
As a requirement for membership, the Bank invests in the stock of both the FHLB of Atlanta and the FRB. No ready market exists for these securities so carrying value approximates their fair value based on the redemption provisions of the FHLB of Atlanta and the FRB, respectively. SBIC investments are equity securities without a readily determinable fair value.
5. Loans Held For Sale
Loans held for sale as of the dates indicated consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
June 30, 2020
|
|
One-to-four family
|
$
|
45,998
|
|
|
$
|
28,152
|
|
|
SBA
|
8,319
|
|
|
1,240
|
|
|
HELOCs
|
64,122
|
|
|
47,785
|
|
|
|
|
|
|
|
Total
|
$
|
118,439
|
|
|
$
|
77,177
|
|
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
6. Loans and Allowance for Credit Losses on Loans
Loans consist of the following at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
June 30,
2020 (1)
|
|
Commercial loans:
|
|
|
|
|
Commercial real estate
|
$
|
1,056,971
|
|
|
$
|
1,052,906
|
|
|
Construction and development
|
172,892
|
|
|
215,934
|
|
|
Commercial and industrial
|
138,761
|
|
|
154,825
|
|
|
Equipment finance
|
272,761
|
|
|
229,239
|
|
|
Municipal finance
|
128,549
|
|
|
127,987
|
|
|
PPP
|
64,845
|
|
|
80,697
|
|
|
Total commercial loans
|
1,834,779
|
|
|
1,861,588
|
|
|
Retail consumer loans:
|
|
|
|
|
One-to-four family
|
452,421
|
|
|
473,693
|
|
|
HELOCs - originated
|
125,397
|
|
|
137,447
|
|
|
HELOCs - purchased
|
58,640
|
|
|
71,781
|
|
|
Construction and land/lots
|
75,108
|
|
|
81,859
|
|
|
Indirect auto finance
|
122,947
|
|
|
132,303
|
|
|
Consumer
|
9,332
|
|
|
10,259
|
|
|
Total retail consumer loans
|
843,845
|
|
|
907,342
|
|
|
Total loans
|
2,678,624
|
|
|
2,768,930
|
|
|
Deferred loan costs, net (2)
|
—
|
|
|
189
|
|
|
Total loans, net of deferred loan costs
|
2,678,624
|
|
|
2,769,119
|
|
|
Allowance for credit losses
|
(39,844)
|
|
|
(28,072)
|
|
|
Loans, net
|
$
|
2,638,780
|
|
|
$
|
2,741,047
|
|
___________
(1) The June 30, 2020 information in the above table reflects the loan portfolio prior to the adoption of ASU 2016-13. This information was reported as shown in the below tables under "Loans and Allowance for Loan Losses - Pre ASU 2016-13", with the acquired loans being net of earned income and related discounts, which includes the credit discount on the acquired credit impaired loans.
(2) In accordance with the adoption of ASU 2016-13, the loan portfolio is shown at the amortized cost basis as of December 31, 2020, to include net deferred cost of $1,941 and unamortized discount total related to loans acquired of $5,126. Accrued interest receivable at December 31, 2020 of $8,612 is accounted for separately from the amortized cost basis. The ACL at June 30, 2020 includes the valuation allowance on PCI loans of $182.
All qualifying one-to-four family first mortgage loans, HELOCs, commercial real estate loans, and FHLB of Atlanta stock are pledged as collateral by a blanket pledge to secure any outstanding FHLB advances.
Loans are monitored for credit quality on a recurring basis and the composition of the loans outstanding by credit quality indicator is provided below. Loan credit quality indicators are developed through review of individual borrowers on an ongoing basis. Generally, loans are monitored for performance on a quarterly basis with the credit quality indicators adjusted as needed. The indicators represent the rating for loans as of the date presented based on the most recent assessment performed. These credit quality indicators are defined as follows:
Pass—A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.
Special Mention—A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.
Substandard—A substandard asset is inadequately protected by the current net worth and paying capacity of the obligor, or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.
Doubtful—An asset classified doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions, and values.
Loss—Assets classified loss are considered uncollectible and of such little value that their continuing to be carried as an asset is not warranted. This classification is not necessarily equivalent to no potential for recovery or salvage value, but rather that it is not appropriate to defer a full write-off even though partial recovery may be effected in the future.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following table presents the credit risk profile by risk grade for commercial loans by origination year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term Loans By Origination Year
|
|
|
|
|
|
December 31, 2020
|
2021
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
Prior
|
|
Revolving
|
|
Total
|
|
Commercial real estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
84,992
|
|
|
$
|
180,257
|
|
|
$
|
146,108
|
|
|
$
|
175,521
|
|
|
$
|
166,606
|
|
|
$
|
241,865
|
|
|
$
|
32,112
|
|
|
$
|
1,027,461
|
|
|
Special mention
|
—
|
|
|
—
|
|
|
—
|
|
|
14,407
|
|
|
1,281
|
|
|
3,245
|
|
|
295
|
|
|
19,228
|
|
|
Substandard
|
—
|
|
|
—
|
|
|
—
|
|
|
653
|
|
|
5,412
|
|
|
4,206
|
|
|
—
|
|
|
10,271
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
Total commercial real estate
|
$
|
84,992
|
|
|
$
|
180,268
|
|
|
$
|
146,108
|
|
|
$
|
190,581
|
|
|
$
|
173,299
|
|
|
$
|
249,316
|
|
|
$
|
32,407
|
|
|
$
|
1,056,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
8,366
|
|
|
$
|
17,695
|
|
|
$
|
10,527
|
|
|
$
|
8,345
|
|
|
$
|
1,621
|
|
|
$
|
8,164
|
|
|
$
|
114,970
|
|
|
$
|
169,688
|
|
|
Special mention
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
534
|
|
|
2,133
|
|
|
2,667
|
|
|
Substandard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
537
|
|
|
—
|
|
|
537
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total construction and development
|
$
|
8,366
|
|
|
$
|
17,695
|
|
|
$
|
10,527
|
|
|
$
|
8,345
|
|
|
$
|
1,621
|
|
|
$
|
9,235
|
|
|
$
|
117,103
|
|
|
$
|
172,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
12,949
|
|
|
$
|
14,603
|
|
|
$
|
22,120
|
|
|
$
|
17,797
|
|
|
$
|
17,448
|
|
|
$
|
12,347
|
|
|
$
|
33,356
|
|
|
$
|
130,620
|
|
|
Special mention
|
—
|
|
|
—
|
|
|
794
|
|
|
—
|
|
|
952
|
|
|
171
|
|
|
5,656
|
|
|
7,573
|
|
|
Substandard
|
—
|
|
|
—
|
|
|
299
|
|
|
117
|
|
|
64
|
|
|
86
|
|
|
—
|
|
|
566
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
Total commercial and industrial
|
$
|
12,949
|
|
|
$
|
14,604
|
|
|
$
|
23,213
|
|
|
$
|
17,914
|
|
|
$
|
18,464
|
|
|
$
|
12,605
|
|
|
$
|
39,012
|
|
|
$
|
138,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment finance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
73,835
|
|
|
$
|
121,829
|
|
|
$
|
69,830
|
|
|
$
|
6,407
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
271,901
|
|
|
Special mention
|
—
|
|
|
440
|
|
|
78
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
518
|
|
|
Substandard
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
296
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
296
|
|
|
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total equipment finance
|
$
|
73,835
|
|
|
$
|
122,269
|
|
|
$
|
70,250
|
|
|
$
|
6,407
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
272,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
1,178
|
|
|
$
|
21,158
|
|
|
$
|
14,812
|
|
|
$
|
19,662
|
|
|
$
|
10,411
|
|
|
$
|
54,947
|
|
|
$
|
5,762
|
|
|
$
|
127,930
|
|
|
Special mention
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
271
|
|
|
—
|
|
|
271
|
|
|
Substandard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
348
|
|
|
—
|
|
|
348
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total municipal leases
|
$
|
1,178
|
|
|
$
|
21,158
|
|
|
$
|
14,812
|
|
|
$
|
19,662
|
|
|
$
|
10,411
|
|
|
$
|
55,566
|
|
|
$
|
5,762
|
|
|
$
|
128,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PPP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
—
|
|
|
$
|
64,845
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
64,845
|
|
|
Special mention
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Substandard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total PPP
|
$
|
—
|
|
|
$
|
64,845
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
64,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
181,320
|
|
|
$
|
420,387
|
|
|
$
|
263,397
|
|
|
$
|
227,732
|
|
|
$
|
196,086
|
|
|
$
|
317,323
|
|
|
$
|
186,200
|
|
|
$
|
1,792,445
|
|
|
Special mention
|
—
|
|
|
440
|
|
|
872
|
|
|
14,407
|
|
|
2,233
|
|
|
4,221
|
|
|
8,084
|
|
|
30,257
|
|
|
Substandard
|
—
|
|
|
—
|
|
|
345
|
|
|
770
|
|
|
5,476
|
|
|
5,177
|
|
|
—
|
|
|
11,768
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
296
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
296
|
|
|
Loss
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
13
|
|
|
Total commercial loans
|
$
|
181,320
|
|
|
$
|
420,839
|
|
|
$
|
264,910
|
|
|
$
|
242,909
|
|
|
$
|
203,795
|
|
|
$
|
326,722
|
|
|
$
|
194,284
|
|
|
$
|
1,834,779
|
|
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following table presents the credit risk profile by risk grade for consumer loans by origination year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term Loans By Origination Year
|
|
|
|
|
|
December 31, 2020
|
2021
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
Prior
|
|
Revolving
|
|
Total
|
|
One-to-four family
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
43,718
|
|
|
$
|
55,592
|
|
|
$
|
61,576
|
|
|
$
|
55,305
|
|
|
$
|
46,841
|
|
|
$
|
175,540
|
|
|
$
|
2,464
|
|
|
$
|
441,036
|
|
|
Special mention
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
1,523
|
|
|
—
|
|
|
1,552
|
|
|
Substandard
|
—
|
|
|
999
|
|
|
—
|
|
|
218
|
|
|
201
|
|
|
8,217
|
|
|
—
|
|
|
9,635
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
197
|
|
|
—
|
|
|
197
|
|
|
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
Total one-to-four family
|
$
|
43,718
|
|
|
$
|
56,591
|
|
|
$
|
61,576
|
|
|
$
|
55,524
|
|
|
$
|
47,071
|
|
|
$
|
185,477
|
|
|
$
|
2,464
|
|
|
$
|
452,421
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HELOCs - originated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
1,654
|
|
|
$
|
1,066
|
|
|
$
|
1,495
|
|
|
$
|
455
|
|
|
$
|
671
|
|
|
$
|
8,619
|
|
|
$
|
108,828
|
|
|
$
|
122,788
|
|
|
Special mention
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
769
|
|
|
—
|
|
|
769
|
|
|
Substandard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
1,603
|
|
|
199
|
|
|
1,840
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total HELOCs - originated
|
$
|
1,654
|
|
|
$
|
1,066
|
|
|
$
|
1,495
|
|
|
$
|
455
|
|
|
$
|
709
|
|
|
$
|
10,991
|
|
|
$
|
109,027
|
|
|
$
|
125,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HELOCs - purchased
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57,799
|
|
|
$
|
57,799
|
|
|
Special mention
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Substandard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
841
|
|
|
841
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total HELOCs - purchased
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
58,640
|
|
|
$
|
58,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and land/lots
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
428
|
|
|
$
|
23,130
|
|
|
$
|
8,311
|
|
|
$
|
1,270
|
|
|
$
|
—
|
|
|
$
|
4,948
|
|
|
$
|
36,414
|
|
|
$
|
74,501
|
|
|
Special mention
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Substandard
|
—
|
|
|
—
|
|
|
—
|
|
|
102
|
|
|
—
|
|
|
505
|
|
|
—
|
|
|
607
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total construction and land/lots
|
$
|
428
|
|
|
$
|
23,130
|
|
|
$
|
8,311
|
|
|
$
|
1,372
|
|
|
$
|
—
|
|
|
$
|
5,453
|
|
|
$
|
36,414
|
|
|
$
|
75,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indirect auto finance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
22,171
|
|
|
$
|
34,993
|
|
|
$
|
21,944
|
|
|
$
|
26,196
|
|
|
$
|
11,684
|
|
|
$
|
4,554
|
|
|
$
|
—
|
|
|
$
|
121,542
|
|
|
Special mention
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Substandard
|
8
|
|
|
208
|
|
|
386
|
|
|
436
|
|
|
217
|
|
|
147
|
|
|
—
|
|
|
1,402
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss
|
—
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
Total indirect auto finance
|
$
|
22,179
|
|
|
$
|
35,203
|
|
|
$
|
22,331
|
|
|
$
|
26,632
|
|
|
$
|
11,901
|
|
|
$
|
4,701
|
|
|
$
|
—
|
|
|
$
|
122,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
740
|
|
|
$
|
1,213
|
|
|
$
|
5,952
|
|
|
$
|
363
|
|
|
$
|
157
|
|
|
$
|
159
|
|
|
$
|
429
|
|
|
$
|
9,013
|
|
|
Special mention
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
Substandard
|
243
|
|
|
16
|
|
|
11
|
|
|
7
|
|
|
—
|
|
|
18
|
|
|
20
|
|
|
315
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total consumer loans
|
$
|
983
|
|
|
$
|
1,229
|
|
|
$
|
5,963
|
|
|
$
|
374
|
|
|
$
|
157
|
|
|
$
|
177
|
|
|
$
|
449
|
|
|
$
|
9,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total retail consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
$
|
68,711
|
|
|
$
|
115,994
|
|
|
$
|
99,278
|
|
|
$
|
83,589
|
|
|
$
|
59,353
|
|
|
$
|
193,820
|
|
|
$
|
205,934
|
|
|
$
|
826,679
|
|
|
Special mention
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
29
|
|
|
2,292
|
|
|
—
|
|
|
2,325
|
|
|
Substandard
|
251
|
|
|
1,223
|
|
|
397
|
|
|
763
|
|
|
456
|
|
|
10,490
|
|
|
1,060
|
|
|
14,640
|
|
|
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
197
|
|
|
—
|
|
|
197
|
|
|
Loss
|
—
|
|
|
2
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
Total retail consumer loans
|
$
|
68,962
|
|
|
$
|
117,219
|
|
|
$
|
99,676
|
|
|
$
|
84,357
|
|
|
$
|
59,838
|
|
|
$
|
206,799
|
|
|
$
|
206,994
|
|
|
$
|
843,845
|
|
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following table presents the credit risk profile by risk grade for total non-purchased and purchased performing consumer and commercial loans, prior to the adoption of ASU 2016-13:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
|
Special
Mention
|
|
Substandard
|
|
Doubtful
|
|
Loss
|
|
Total
|
|
June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
$
|
1,028,709
|
|
|
$
|
7,580
|
|
|
$
|
10,779
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
1,047,084
|
|
|
Construction and development
|
212,370
|
|
|
2,723
|
|
|
250
|
|
|
1
|
|
|
—
|
|
|
215,344
|
|
|
Commercial and industrial
|
130,202
|
|
|
20,439
|
|
|
2,622
|
|
|
—
|
|
|
—
|
|
|
153,263
|
|
|
Equipment finance
|
228,288
|
|
|
150
|
|
|
801
|
|
|
—
|
|
|
—
|
|
|
229,239
|
|
|
Municipal finance
|
127,706
|
|
|
281
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127,987
|
|
|
PPP
|
80,697
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80,697
|
|
|
Retail consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
|
458,248
|
|
|
1,724
|
|
|
9,042
|
|
|
206
|
|
|
—
|
|
|
469,220
|
|
|
HELOCs - originated
|
134,697
|
|
|
902
|
|
|
1,848
|
|
|
—
|
|
|
—
|
|
|
137,447
|
|
|
HELOCs - purchased
|
71,119
|
|
|
—
|
|
|
662
|
|
|
—
|
|
|
—
|
|
|
71,781
|
|
|
Construction and land/lots
|
81,112
|
|
|
—
|
|
|
402
|
|
|
—
|
|
|
—
|
|
|
81,514
|
|
|
Indirect auto finance
|
130,975
|
|
|
—
|
|
|
1,328
|
|
|
—
|
|
|
—
|
|
|
132,303
|
|
|
Consumer
|
9,894
|
|
|
4
|
|
|
361
|
|
|
—
|
|
|
—
|
|
|
10,259
|
|
|
Total loans
|
$
|
2,694,017
|
|
|
$
|
33,803
|
|
|
$
|
28,095
|
|
|
$
|
207
|
|
|
$
|
16
|
|
|
$
|
2,756,138
|
|
The following table presents the credit risk profile by risk grade for PCI consumer and commercial loans, prior to the adoption of ASU 2016-13:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass
|
|
Special
Mention
|
|
Substandard
|
|
Doubtful
|
|
Loss
|
|
Total
|
|
June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
$
|
3,181
|
|
|
$
|
1,742
|
|
|
$
|
899
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,822
|
|
|
Construction and development
|
271
|
|
|
—
|
|
|
319
|
|
|
—
|
|
|
—
|
|
|
590
|
|
|
Commercial and industrial
|
1,556
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
1,562
|
|
|
Retail consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
|
2,994
|
|
|
465
|
|
|
1,014
|
|
|
—
|
|
|
—
|
|
|
4,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and land/lots
|
108
|
|
|
—
|
|
|
237
|
|
|
—
|
|
|
—
|
|
|
345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans
|
$
|
8,110
|
|
|
$
|
2,207
|
|
|
$
|
2,472
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
12,792
|
|
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following table presents an aging analysis of past due loans (includes nonaccrual loans) by segment and class:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Past Due
|
|
|
|
Total
|
|
|
|
|
30-89 Days
|
|
90 Days+
|
|
Total
|
|
Current
|
|
Loans
|
|
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
$
|
45
|
|
|
$
|
2,060
|
|
|
$
|
2,105
|
|
|
$
|
1,054,866
|
|
|
$
|
1,056,971
|
|
|
|
|
Construction and development
|
—
|
|
|
361
|
|
|
361
|
|
|
172,531
|
|
|
172,892
|
|
|
|
|
Commercial and industrial
|
—
|
|
|
91
|
|
|
91
|
|
|
138,670
|
|
|
138,761
|
|
|
|
|
Equipment finance
|
286
|
|
|
68
|
|
|
354
|
|
|
272,407
|
|
|
272,761
|
|
|
|
|
Municipal finance
|
—
|
|
|
352
|
|
|
352
|
|
|
128,197
|
|
|
128,549
|
|
|
|
|
PPP
|
—
|
|
|
—
|
|
|
—
|
|
|
64,845
|
|
|
64,845
|
|
|
|
|
Retail consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
|
1,431
|
|
|
2,874
|
|
|
4,305
|
|
|
448,116
|
|
|
452,421
|
|
|
|
|
HELOCs - originated
|
98
|
|
|
248
|
|
|
346
|
|
|
125,051
|
|
|
125,397
|
|
|
|
|
HELOCs - purchased
|
147
|
|
|
145
|
|
|
292
|
|
|
58,348
|
|
|
58,640
|
|
|
|
|
Construction and land/lots
|
—
|
|
|
22
|
|
|
22
|
|
|
75,086
|
|
|
75,108
|
|
|
|
|
Indirect auto finance
|
395
|
|
|
405
|
|
|
800
|
|
|
122,147
|
|
|
122,947
|
|
|
|
|
Consumer
|
256
|
|
|
17
|
|
|
273
|
|
|
9,059
|
|
|
9,332
|
|
|
|
|
Total loans
|
$
|
2,658
|
|
|
$
|
6,643
|
|
|
$
|
9,301
|
|
|
$
|
2,669,323
|
|
|
$
|
2,678,624
|
|
|
|
The following table presents an aging analysis of past due loans by segment and class, prior to the adoption of ASU 2016-13:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Past Due
|
|
|
|
Total
|
|
|
30-89 Days
|
|
90 Days+
|
|
Total
|
|
Current
|
|
Loans
|
|
June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
$
|
4,528
|
|
|
$
|
2,892
|
|
|
$
|
7,420
|
|
|
$
|
1,045,486
|
|
|
$
|
1,052,906
|
|
|
Construction and development
|
293
|
|
|
341
|
|
|
634
|
|
|
215,300
|
|
|
215,934
|
|
|
Commercial and industrial
|
—
|
|
|
91
|
|
|
91
|
|
|
154,734
|
|
|
154,825
|
|
|
Equipment finance
|
303
|
|
|
498
|
|
|
801
|
|
|
228,438
|
|
|
229,239
|
|
|
Municipal finance
|
—
|
|
|
—
|
|
|
—
|
|
|
127,987
|
|
|
127,987
|
|
|
PPP
|
—
|
|
|
—
|
|
|
—
|
|
|
80,697
|
|
|
80,697
|
|
|
Retail consumer loans:
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
|
1,679
|
|
|
3,147
|
|
|
4,826
|
|
|
468,867
|
|
|
473,693
|
|
|
HELOCs - originated
|
442
|
|
|
310
|
|
|
752
|
|
|
136,695
|
|
|
137,447
|
|
|
HELOCs - purchased
|
214
|
|
|
47
|
|
|
261
|
|
|
71,520
|
|
|
71,781
|
|
|
Construction and land/lots
|
—
|
|
|
252
|
|
|
252
|
|
|
81,607
|
|
|
81,859
|
|
|
Indirect auto finance
|
756
|
|
|
285
|
|
|
1,041
|
|
|
131,262
|
|
|
132,303
|
|
|
Consumer
|
30
|
|
|
25
|
|
|
55
|
|
|
10,204
|
|
|
10,259
|
|
|
Total loans
|
$
|
8,245
|
|
|
$
|
7,888
|
|
|
$
|
16,133
|
|
|
$
|
2,752,797
|
|
|
$
|
2,768,930
|
|
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following table presents recorded investment in loans on nonaccrual status, by segment and class, including restructured loans. It also includes interest income recognized on nonaccrual loans for the six months ended December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
June 30, 2020
|
|
|
|
90 Days + &
still accruing as of December 31, 2020
|
|
Nonaccrual with no allowance as of December 31, 2020
|
|
Interest income recognized
|
|
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
|
$
|
7,751
|
|
|
$
|
8,869
|
|
|
|
|
$
|
—
|
|
|
$
|
4,576
|
|
|
$
|
290
|
|
|
|
|
Construction and development
|
|
537
|
|
|
465
|
|
|
|
|
—
|
|
|
80
|
|
|
39
|
|
|
|
|
Commercial and industrial
|
|
234
|
|
|
259
|
|
|
|
|
—
|
|
|
92
|
|
|
62
|
|
|
|
|
Equipment finance
|
|
354
|
|
|
801
|
|
|
|
|
—
|
|
|
293
|
|
|
14
|
|
|
|
|
Municipal finance
|
|
352
|
|
|
—
|
|
|
|
|
|
|
352
|
|
|
—
|
|
|
|
|
Retail consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
|
|
3,425
|
|
|
3,582
|
|
|
|
|
—
|
|
|
1,085
|
|
|
129
|
|
|
|
|
HELOCs - originated
|
|
344
|
|
|
531
|
|
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
|
|
HELOCs - purchased
|
|
841
|
|
|
662
|
|
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
|
|
Construction and land/lots
|
|
22
|
|
|
37
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
Indirect auto finance
|
|
661
|
|
|
668
|
|
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|
|
|
Consumer
|
|
18
|
|
|
49
|
|
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans
|
|
$
|
14,539
|
|
|
$
|
15,923
|
|
|
|
|
$
|
—
|
|
|
$
|
6,478
|
|
|
$
|
642
|
|
|
|
The decrease in the nonaccrual balance in the above schedule, compared to June 30, 2020, is mainly due to one large commercial nonaccrual loan paying off partially offset by the addition to nonaccrual loans of $486 of PCI loans, formerly accounted for as credit impaired loans, prior to the adoption of ASU 2016-13. These loans were previously excluded from nonaccrual loans. The adoption of CECL resulted in the discontinuation of the pool-level accounting for acquired credit impaired loans which was replaced with a loan-level evaluation for nonaccrual status.
The following table presents a breakdown of the provision (benefit) for credit losses included in our Consolidated Statements of Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
December 31,
|
December 31,
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Provision (benefit) for credit losses:
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
(3,350)
|
|
|
$
|
400
|
|
|
$
|
(2,400)
|
|
|
$
|
400
|
|
|
Off-balance-sheet credit exposure
|
|
140
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
Commercial paper
|
|
180
|
|
|
—
|
|
|
180
|
|
|
—
|
|
|
Total provision (benefit) for credit losses
|
|
$
|
(3,030)
|
|
|
$
|
400
|
|
|
$
|
(2,080)
|
|
|
$
|
400
|
|
The following table presents an analysis of the ACL on loans by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
December 31, 2020
|
|
|
|
December 31, 2020
|
|
|
|
|
Commercial
|
|
Retail
Consumer
|
|
Total
|
|
|
|
Commercial
|
|
Retail
Consumer
|
|
Total
|
|
Balance at beginning of period
|
|
|
$
|
25,199
|
|
|
$
|
17,933
|
|
|
$
|
43,132
|
|
|
|
|
$
|
21,116
|
|
|
$
|
6,956
|
|
|
$
|
28,072
|
|
|
Impact of adoption ASU 2016-13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
4,073
|
|
|
10,736
|
|
|
14,809
|
|
|
Provision (benefit) for credit losses
|
|
|
(292)
|
|
|
(3,058)
|
|
|
(3,350)
|
|
|
|
|
—
|
|
|
(2,400)
|
|
|
(2,400)
|
|
|
Charge-offs
|
|
|
(308)
|
|
|
(253)
|
|
|
(561)
|
|
|
|
|
(1,403)
|
|
|
(935)
|
|
|
(2,338)
|
|
|
Recoveries
|
|
|
300
|
|
|
323
|
|
|
623
|
|
|
|
|
1,113
|
|
|
588
|
|
|
1,701
|
|
|
Net charge-offs
|
|
|
(8)
|
|
|
70
|
|
|
62
|
|
|
|
|
(290)
|
|
|
(347)
|
|
|
(637)
|
|
|
Balance at end of period
|
|
|
$
|
24,899
|
|
|
$
|
14,945
|
|
|
$
|
39,844
|
|
|
|
|
$
|
24,899
|
|
|
$
|
14,945
|
|
|
$
|
39,844
|
|
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following table presents an analysis of the allowance for loan losses by segment, prior to the adoption of ASU 2016-13:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
December 31, 2019
|
|
December 31, 2019
|
|
|
PCI
|
|
Commercial
|
|
Retail
Consumer
|
|
Total
|
|
PCI
|
|
Commercial
|
|
Retail
Consumer
|
|
Total
|
|
Balance at beginning of period
|
$
|
194
|
|
|
$
|
15,392
|
|
|
$
|
5,728
|
|
|
$
|
21,314
|
|
|
$
|
201
|
|
|
$
|
14,809
|
|
|
$
|
6,419
|
|
|
$
|
21,429
|
|
|
Provision for (recovery of) loan losses
|
(42)
|
|
|
1,485
|
|
|
(1,043)
|
|
|
400
|
|
|
(49)
|
|
|
2,048
|
|
|
(1,599)
|
|
|
400
|
|
|
Charge-offs
|
—
|
|
|
(599)
|
|
|
(96)
|
|
|
(695)
|
|
|
—
|
|
|
(742)
|
|
|
(383)
|
|
|
(1,125)
|
|
|
Recoveries
|
—
|
|
|
201
|
|
|
811
|
|
|
1,012
|
|
|
—
|
|
|
364
|
|
|
963
|
|
|
1,327
|
|
|
Balance at end of period
|
$
|
152
|
|
|
$
|
16,479
|
|
|
$
|
5,400
|
|
|
$
|
22,031
|
|
|
$
|
152
|
|
|
$
|
16,479
|
|
|
$
|
5,400
|
|
|
$
|
22,031
|
|
The following table presents ending balances of loans and the related ACL, by segment and class:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Credit Losses
|
|
|
|
Total Loans Receivable
|
|
|
Loans
individually
evaluated
|
|
Loans
collectively
evaluated
|
|
Total
|
|
|
|
Loans
individually
evaluated
|
|
Loans
collectively
evaluated
|
|
Total
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
$
|
86
|
|
|
$
|
12,841
|
|
|
$
|
12,927
|
|
|
|
|
$
|
6,463
|
|
|
$
|
1,050,508
|
|
|
$
|
1,056,971
|
|
|
Construction and development
|
—
|
|
|
2,385
|
|
|
2,385
|
|
|
|
|
80
|
|
|
172,812
|
|
|
172,892
|
|
|
Commercial and industrial
|
16
|
|
|
2,874
|
|
|
2,890
|
|
|
|
|
887
|
|
|
137,874
|
|
|
138,761
|
|
|
Equipment finance
|
76
|
|
|
6,179
|
|
|
6,255
|
|
|
|
|
373
|
|
|
272,388
|
|
|
272,761
|
|
|
Municipal finance
|
—
|
|
|
442
|
|
|
442
|
|
|
|
|
352
|
|
|
128,197
|
|
|
128,549
|
|
|
PPP
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
64,845
|
|
|
64,845
|
|
|
Retail consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
|
11
|
|
|
7,800
|
|
|
7,811
|
|
|
|
|
3,266
|
|
|
449,155
|
|
|
452,421
|
|
|
HELOCs - originated
|
—
|
|
|
1,680
|
|
|
1,680
|
|
|
|
|
—
|
|
|
125,397
|
|
|
125,397
|
|
|
HELOCs - purchased
|
—
|
|
|
784
|
|
|
784
|
|
|
|
|
—
|
|
|
58,640
|
|
|
58,640
|
|
|
Construction and land/lots
|
—
|
|
|
1,456
|
|
|
1,456
|
|
|
|
|
—
|
|
|
75,108
|
|
|
75,108
|
|
|
Indirect auto finance
|
—
|
|
|
2,978
|
|
|
2,978
|
|
|
|
|
—
|
|
|
122,947
|
|
|
122,947
|
|
|
Consumer
|
—
|
|
|
236
|
|
|
236
|
|
|
|
|
—
|
|
|
9,332
|
|
|
9,332
|
|
|
Total
|
$
|
189
|
|
|
$
|
39,655
|
|
|
$
|
39,844
|
|
|
|
|
$
|
11,421
|
|
|
$
|
2,667,203
|
|
|
$
|
2,678,624
|
|
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following table presents ending balances of loans and the related allowance, by segment and class, prior to the adoption of ASU 2016-13:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan Losses
|
|
Total Loans Receivable
|
|
|
PCI
|
|
Loans
individually
evaluated for
impairment
|
|
Loans
collectively
evaluated
|
|
Total
|
|
PCI
|
|
Loans
individually
evaluated for
impairment
|
|
Loans
collectively
evaluated
|
|
Total
|
|
June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
$
|
113
|
|
|
$
|
961
|
|
|
$
|
10,731
|
|
|
$
|
11,805
|
|
|
$
|
5,822
|
|
|
$
|
7,924
|
|
|
$
|
1,039,160
|
|
|
$
|
1,052,906
|
|
|
Construction and development
|
4
|
|
|
5
|
|
|
3,599
|
|
|
3,608
|
|
|
590
|
|
|
299
|
|
|
215,045
|
|
|
215,934
|
|
|
Commercial and industrial
|
15
|
|
|
31
|
|
|
2,153
|
|
|
2,199
|
|
|
1,562
|
|
|
852
|
|
|
152,411
|
|
|
154,825
|
|
|
Equipment finance
|
—
|
|
|
209
|
|
|
2,598
|
|
|
2,807
|
|
|
—
|
|
|
801
|
|
|
228,438
|
|
|
229,239
|
|
|
Municipal finance
|
—
|
|
|
—
|
|
|
697
|
|
|
697
|
|
|
—
|
|
|
—
|
|
|
127,987
|
|
|
127,987
|
|
|
PPP
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80,697
|
|
|
80,697
|
|
|
Retail consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
|
17
|
|
|
52
|
|
|
2,400
|
|
|
2,469
|
|
|
4,473
|
|
|
4,304
|
|
|
464,916
|
|
|
473,693
|
|
|
HELOCs - originated
|
—
|
|
|
—
|
|
|
1,344
|
|
|
1,344
|
|
|
—
|
|
|
—
|
|
|
137,447
|
|
|
137,447
|
|
|
HELOCs - purchased
|
—
|
|
|
—
|
|
|
430
|
|
|
430
|
|
|
—
|
|
|
—
|
|
|
71,781
|
|
|
71,781
|
|
|
Construction and land/lots
|
33
|
|
|
—
|
|
|
1,409
|
|
|
1,442
|
|
|
345
|
|
|
296
|
|
|
81,218
|
|
|
81,859
|
|
|
Indirect auto finance
|
—
|
|
|
—
|
|
|
1,136
|
|
|
1,136
|
|
|
—
|
|
|
10
|
|
|
132,293
|
|
|
132,303
|
|
|
Consumer
|
—
|
|
|
—
|
|
|
135
|
|
|
135
|
|
|
—
|
|
|
—
|
|
|
10,259
|
|
|
10,259
|
|
|
Total
|
$
|
182
|
|
|
$
|
1,258
|
|
|
$
|
26,632
|
|
|
$
|
28,072
|
|
|
$
|
12,792
|
|
|
$
|
14,486
|
|
|
$
|
2,741,652
|
|
|
$
|
2,768,930
|
|
Prior to the adoption of ASU 2016-13, loans acquired through acquisitions were initially excluded from the allowance for loan losses in accordance with the acquisition method of accounting for business combinations. The Company recorded these loans at fair value, which includes a credit discount; therefore, no allowance for loan losses was established for these acquired loans at acquisition. A provision for loan losses was recorded for any further deterioration in these acquired loans subsequent to the acquisition.
The following table presents impaired loans and the related allowance, by segment and class, excluding PCI loans, prior to the adoption of ASU 2016-13:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Impaired Loans
|
|
|
Unpaid
Principal
Balance
|
|
Recorded
Investment
With a
Recorded
Allowance
|
|
Recorded
Investment
With No
Recorded
Allowance
|
|
Total
|
|
Related
Recorded
Allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
$
|
10,401
|
|
|
$
|
8,062
|
|
|
$
|
1,068
|
|
|
$
|
9,130
|
|
|
$
|
976
|
|
|
Construction and development
|
1,785
|
|
|
818
|
|
|
80
|
|
|
898
|
|
|
11
|
|
|
Commercial and industrial
|
9,782
|
|
|
1,058
|
|
|
26
|
|
|
1,084
|
|
|
34
|
|
|
Equipment finance
|
2,631
|
|
|
303
|
|
|
498
|
|
|
801
|
|
|
209
|
|
|
Retail consumer loans:
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
|
16,560
|
|
|
10,805
|
|
|
3,374
|
|
|
14,179
|
|
|
412
|
|
|
HELOCs - originated
|
2,087
|
|
|
1,585
|
|
|
53
|
|
|
1,638
|
|
|
43
|
|
|
HELOCs - purchased
|
662
|
|
|
662
|
|
|
—
|
|
|
662
|
|
|
3
|
|
|
Construction and land/lots
|
1,585
|
|
|
749
|
|
|
296
|
|
|
1,045
|
|
|
13
|
|
|
Indirect auto finance
|
1,075
|
|
|
486
|
|
|
241
|
|
|
727
|
|
|
5
|
|
|
Consumer
|
297
|
|
|
38
|
|
|
27
|
|
|
65
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total impaired loans
|
$
|
46,865
|
|
|
$
|
24,566
|
|
|
$
|
5,663
|
|
|
$
|
30,229
|
|
|
$
|
1,708
|
|
The table above includes $15,743, of impaired loans that were not individually evaluated because these loans did not meet the Company's threshold for individual impairment evaluation. The recorded allowance above includes $450 related to these loans that were not individually evaluated.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following table presents average recorded investments in impaired loans and interest income recognized on impaired loans, prior to the adoption of ASU 2016-13:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
December 31, 2019
|
|
December 31, 2019
|
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
Commercial real estate
|
$
|
8,665
|
|
|
$
|
76
|
|
|
$
|
8,419
|
|
|
$
|
144
|
|
|
Construction and development
|
1,181
|
|
|
11
|
|
|
1,527
|
|
|
26
|
|
|
Commercial and industrial
|
742
|
|
|
14
|
|
|
710
|
|
|
90
|
|
|
Equipment finance
|
1,032
|
|
|
—
|
|
|
643
|
|
|
3
|
|
|
Retail consumer loans:
|
|
|
|
|
|
|
|
|
One-to-four family
|
14,276
|
|
|
192
|
|
|
15,085
|
|
|
378
|
|
|
HELOCs - originated
|
1,862
|
|
|
26
|
|
|
1,700
|
|
|
53
|
|
|
HELOCs - purchased
|
476
|
|
|
3
|
|
|
540
|
|
|
6
|
|
|
Construction and land/lots
|
1,117
|
|
|
20
|
|
|
1,201
|
|
|
44
|
|
|
Indirect auto finance
|
483
|
|
|
6
|
|
|
467
|
|
|
15
|
|
|
Consumer
|
53
|
|
|
3
|
|
|
288
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
Total loans
|
$
|
29,887
|
|
|
$
|
351
|
|
|
$
|
30,580
|
|
|
$
|
765
|
|
The following table presents a summary of changes in the accretable yield for PCI loans, prior to the adoption of ASU 2016-13:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
December 31, 2019
|
|
December 31, 2019
|
|
Accretable yield, beginning of period
|
$
|
4,916
|
|
|
$
|
5,259
|
|
|
Reclass from nonaccretable yield (1)
|
135
|
|
|
250
|
|
|
Other changes, net (2)
|
(295)
|
|
|
(309)
|
|
|
Interest income
|
(401)
|
|
|
(845)
|
|
|
Accretable yield, end of period
|
$
|
4,355
|
|
|
$
|
4,355
|
|
______________________________________
(1) Represents changes attributable to expected loss assumptions.
(2) Represents changes in cash flows expected to be collected due to the impact of modifications, changes in prepayment assumptions, and changes in interest rates.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
In estimating ECL, ASC 326 prescribes that if foreclosure is probable, a CDA is required to be measured at the fair value of collateral, but as a practical expedient, if foreclosure is not probable, fair value measurement is optional. For those CDA loans measured at the fair value of collateral, a credit loss expense is recorded for loan amounts in excess of fair value. The following table provides a breakdown between loans identified as CDAs and non-CDAs, by segment and class, and securing collateral, as well as collateral coverage for those loans at December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of Collateral and Extent to Which Collateral Secures Financial Assets
|
|
|
|
|
|
|
Residential Property
|
|
Investment Property
|
|
Commercial Property
|
|
Business Assets
|
|
|
|
Financial Assets Not Considered Collateral Dependent
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
$
|
—
|
|
|
$
|
3,800
|
|
|
$
|
2,460
|
|
|
$
|
—
|
|
|
|
|
$
|
1,050,711
|
|
|
$
|
1,056,971
|
|
|
Construction and development
|
—
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
|
|
172,812
|
|
|
172,892
|
|
|
Commercial and industrial
|
—
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
|
|
138,671
|
|
|
138,761
|
|
|
Equipment finance
|
—
|
|
|
—
|
|
|
—
|
|
|
87
|
|
|
|
|
272,674
|
|
|
272,761
|
|
|
Municipal finance
|
—
|
|
|
—
|
|
|
—
|
|
|
352
|
|
|
|
|
128,197
|
|
|
128,549
|
|
|
PPP
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
64,845
|
|
|
64,845
|
|
|
Retail consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
|
1,085
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
451,336
|
|
|
452,421
|
|
|
HELOCs - originated
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
125,397
|
|
|
125,397
|
|
|
HELOCs - purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
58,640
|
|
|
58,640
|
|
|
Construction and land/lots
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
75,108
|
|
|
75,108
|
|
|
Indirect auto finance
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
122,947
|
|
|
122,947
|
|
|
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
9,332
|
|
|
9,332
|
|
|
Total
|
$
|
1,085
|
|
|
$
|
3,880
|
|
|
$
|
2,460
|
|
|
$
|
529
|
|
|
|
|
$
|
2,670,670
|
|
|
$
|
2,678,624
|
|
|
Total Collateral Value
|
$
|
1,257
|
|
|
$
|
3,924
|
|
|
$
|
2,732
|
|
|
$
|
2,506
|
|
|
|
|
|
|
|
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
For the three and six months ended December 31, 2020 and 2019, the following table presents a breakdown of the types of concessions made on TDRs by loan class:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2020
|
|
Three Months Ended December 31, 2019
|
|
|
Number
of
Loans
|
|
Pre
Modification
Outstanding
Recorded
Investment
|
|
Post
Modification
Outstanding
Recorded
Investment
|
|
Number
of
Loans
|
|
Pre
Modification
Outstanding
Recorded
Investment
|
|
Post
Modification
Outstanding
Recorded
Investment
|
|
Below market interest rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
1
|
|
|
$
|
88
|
|
|
$
|
88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Extended payment terms:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
826
|
|
|
826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
56
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other TDRs:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
182
|
|
|
79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
|
1
|
|
|
19
|
|
|
16
|
|
|
2
|
|
|
11
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and land/lots
|
1
|
|
|
225
|
|
|
223
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Indirect auto finance
|
3
|
|
|
45
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
5
|
|
|
$
|
289
|
|
|
$
|
282
|
|
|
6
|
|
|
$
|
1,163
|
|
|
$
|
1,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended December 31, 2020
|
|
Six Months Ended December 31, 2019
|
|
|
Number
of
Loans
|
|
Pre
Modification
Outstanding
Recorded
Investment
|
|
Post
Modification
Outstanding
Recorded
Investment
|
|
Number
of
Loans
|
|
Pre
Modification Outstanding Recorded
Investment
|
|
Post
Modification
Outstanding
Recorded
Investment
|
|
Below market interest rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
1
|
|
|
$
|
88
|
|
|
$
|
88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Extended payment terms:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
826
|
|
|
826
|
|
|
Retail consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
70
|
|
|
67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other TDRs:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
1
|
|
|
4,408
|
|
|
3,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Construction and development
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
182
|
|
|
79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
|
1
|
|
|
19
|
|
|
16
|
|
|
3
|
|
|
45
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and land/lots
|
1
|
|
|
225
|
|
|
223
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Indirect auto finance
|
9
|
|
|
141
|
|
|
109
|
|
|
4
|
|
|
68
|
|
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
12
|
|
|
$
|
4,793
|
|
|
$
|
4,148
|
|
|
12
|
|
|
$
|
1,279
|
|
|
$
|
1,164
|
|
Other TDRs include TDRs that have a below market interest rate and extended payment terms. The Company does not typically forgive principal when restructuring troubled debt.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following table presents loans that were modified as TDRs within the previous 12 months and for which there was a payment default during the three and six months ended December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2020
|
|
Three Months Ended December 31, 2019
|
|
|
Number of
Loans
|
|
Recorded
Investment
|
|
Number of
Loans
|
|
Recorded
Investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other TDRs:
|
|
|
|
|
|
|
|
|
Retail consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indirect auto finance
|
1
|
|
|
$
|
1
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
1
|
|
|
$
|
1
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended December 31, 2020
|
|
Six Months Ended December 31, 2019
|
|
|
Number of
Loans
|
|
Recorded
Investment
|
|
Number of
Loans
|
|
Recorded
Investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other TDRs:
|
|
|
|
|
|
|
|
|
Retail consumer:
|
|
|
|
|
|
|
|
|
One-to-four family
|
—
|
|
|
$
|
—
|
|
|
2
|
|
|
$
|
50
|
|
|
|
|
|
|
|
|
|
|
|
Indirect auto finance
|
2
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
2
|
|
|
$
|
12
|
|
|
2
|
|
|
$
|
50
|
|
In the determination of the ACL, management considers TDRs for all loan classes, and the subsequent nonperformance in accordance with their modified terms, by measuring a reserve on a loan-by-loan basis based on either the value of the loan's expected future cash flows discounted at the loan's original effective interest rate or on the collateral value, net of the estimated costs of disposal, if the loan is collateral dependent.
Off-Balance-Sheet Credit Exposure
The Company maintains a separate reserve for credit losses from off-balance-sheet credit exposures, including unfunded loan commitments, which is included in other liabilities on the consolidated balance sheets. The reserve for credit losses on off-balance-sheet credit exposures is adjusted as a provision for credit losses in the consolidated statements of income. The estimate includes consideration of the likelihood that funding will occur and an estimate of ECLs on commitments expected to be funded over its estimated life, utilizing the same models and approaches for the Company's other loan portfolio segments described above, as these unfunded commitments share similar risk characteristics as its loan portfolio segments. The Company has identified the unfunded portion of certain lines of credit as unconditionally cancellable credit exposures, meaning the Company can cancel the unfunded commitment at any time. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company or for undrawn amounts under such arrangements that may be drawn prior to the cancellation of the arrangement. At December 31, 2020, the liability for credit losses on off-balance-sheet credit exposures included in other liabilities was $2,428.
Modifications in Response to COVID-19
Beginning in March 2020, the Company began offering short-term loan modifications to assist borrowers during the COVID-19 pandemic. The CARES Act along with a joint agency statement issued by banking agencies and confirmed by FASB staff that short-term modifications made in response to COVID-19 are not TDRs. Accordingly, the Company does not account for such loan modifications as TDRs. As of December 31, 2020, modifications totaling $1,654 and $82,035 had been granted in retail consumer loans and commercial loans, respectively.
The 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 (which can be renewed for another 90 days under certain circumstances) waived late fees, and suspension of foreclosure proceedings and repossessions. Since March, the Company has received numerous requests from borrowers for some type of payment relief; however, the majority of these payment deferrals have ended and borrowers are again making regular loan payments. The breakout of loans deferred by loan type as of the dates indicated is as follows:
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal and Interest Payment Deferrals by Loan Types (1) (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
|
June 30, 2020
|
|
|
|
|
|
Deferral
|
|
Percent of Total Loan Portfolio
|
|
|
|
|
|
Deferral
|
|
Percent of Total Loan Portfolio
|
|
|
|
|
|
Lodging
|
|
$
|
—
|
|
|
—
|
%
|
|
|
|
|
|
$
|
108,171
|
|
|
4.0
|
%
|
|
|
|
|
|
Other commercial real estate, construction and development, and commercial and industrial
|
|
4,018
|
|
|
0.2
|
|
|
|
|
|
|
367,443
|
|
|
13.7
|
|
|
|
|
|
|
Equipment finance
|
|
2,196
|
|
|
0.1
|
|
|
|
|
|
|
33,693
|
|
|
1.3
|
|
|
|
|
|
|
One-to-four family
|
|
822
|
|
|
—
|
|
|
|
|
|
|
36,821
|
|
|
1.4
|
|
|
|
|
|
|
Other consumer loans
|
|
832
|
|
|
—
|
|
|
|
|
|
|
5,203
|
|
|
0.2
|
|
|
|
|
|
|
Total
|
|
$
|
7,868
|
|
|
0.3
|
%
|
|
|
|
|
|
$
|
551,331
|
|
|
20.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________
(1) Modified loans are not included in classified assets or nonperforming assets.
(2) Principal and interest is being deferred
A majority of loans placed on principal and interest payment deferral during the pandemic came out of deferral as of December 31, 2020. However, the Company has allowed for continued relief to borrowers in the form of interest-only payments for certain loans recently coming out of full deferral. At December 31, 2020, the Company had $75,821 in commercial loans on interest-only payments for a period of time no greater than 12 months before being required to return to their original contractual payments.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
7. Real Estate Owned
The activity within REO for the periods shown is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Balance at beginning of period
|
$
|
144
|
|
|
$
|
2,582
|
|
|
$
|
337
|
|
|
$
|
2,929
|
|
|
Transfers from loans
|
108
|
|
|
—
|
|
|
108
|
|
|
46
|
|
|
|
|
|
|
|
|
|
|
|
Sales, net of gain or loss
|
—
|
|
|
(965)
|
|
|
(193)
|
|
|
(1,346)
|
|
|
Writedowns
|
—
|
|
|
(166)
|
|
|
—
|
|
|
(178)
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of period
|
$
|
252
|
|
|
$
|
1,451
|
|
|
$
|
252
|
|
|
$
|
1,451
|
|
At December 31, 2020 and June 30, 2020, the Bank had $0 and $97, respectively, of foreclosed residential real estate property in REO. The recorded investment in consumer mortgage loans collateralized by residential real estate in the process of foreclosure totaled $447 and $1,318 at December 31, 2020 and June 30, 2020, respectively.
8. Net Income per Share
The following is a reconciliation of the numerator and denominator of basic and diluted net income per share of common stock as of the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net income
|
$
|
9,461
|
|
|
$
|
9,191
|
|
|
$
|
15,214
|
|
|
$
|
17,995
|
|
|
Allocation of earnings to participating securities
|
(77)
|
|
|
(72)
|
|
|
(124)
|
|
|
(140)
|
|
|
Numerator for basic EPS - Net income available to common stockholders
|
$
|
9,384
|
|
|
$
|
9,119
|
|
|
$
|
15,090
|
|
|
$
|
17,855
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
Dilutive effect to participating securities
|
1
|
|
|
8
|
|
|
2
|
|
|
5
|
|
|
Numerator for diluted EPS
|
$
|
9,385
|
|
|
$
|
9,127
|
|
|
$
|
15,092
|
|
|
$
|
17,860
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding - basic
|
16,202,844
|
|
|
16,906,457
|
|
|
16,216,917
|
|
|
17,002,052
|
|
|
Effect of dilutive shares
|
360,515
|
|
|
661,223
|
|
|
297,914
|
|
|
658,635
|
|
|
Weighted-average common shares outstanding - diluted
|
16,563,359
|
|
|
17,567,680
|
|
|
16,514,831
|
|
|
17,660,687
|
|
|
Net income per share - basic
|
$
|
0.58
|
|
|
$
|
0.54
|
|
|
$
|
0.93
|
|
|
$
|
1.05
|
|
|
Net income per share - diluted
|
$
|
0.57
|
|
|
$
|
0.52
|
|
|
$
|
0.92
|
|
|
$
|
1.01
|
|
|
|
|
|
|
|
|
|
|
Potential dilutive shares are excluded from the computation of earnings per share if their effect is anti-dilutive. There were 512,200 and 547,200 stock options that were anti-dilutive for the three and six months ended December 31, 2020, respectively. There were 459,400 and 470,800 stock options that were anti-dilutive for the three and six months ended December 31, 2019, respectively.
9. Equity Incentive Plan
The Company provides stock-based awards through the 2013 Omnibus Incentive Plan, which provides for awards of restricted stock, restricted stock units, stock options, stock appreciation rights and cash awards to directors, directors emeritus, officers, employees and advisory directors. The cost of equity-based awards under the 2013 Omnibus Incentive Plan generally is based on the fair value of the awards on their grant date. The maximum number of shares that may be utilized for awards under the plan is 2,962,400, including 2,116,000 for stock options and stock appreciation rights and 846,400 for awards of restricted stock and restricted stock units. Shares of common stock issued under the plan may be authorized but unissued shares or may be repurchased shares.
The table below presents share-based compensation expense and the estimated related tax benefit for stock options and restricted stock for the three and six months ended December 31, 2020 and 2019, respectively:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Share-based compensation expense
|
$
|
454
|
|
|
$
|
440
|
|
|
$
|
960
|
|
|
$
|
883
|
|
|
Tax benefit
|
$
|
107
|
|
|
$
|
103
|
|
|
$
|
226
|
|
|
$
|
208
|
|
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The table below presents stock option activity for the six months ended December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
Weighted-
average
exercise
price
|
|
Remaining
contractual
life
(years)
|
|
Aggregate
Intrinsic
Value
|
|
Options outstanding at June 30, 2019
|
1,657,214
|
|
|
$
|
17.59
|
|
|
5.0
|
|
$
|
12,909
|
|
|
Granted
|
25,000
|
|
|
25.37
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
66,900
|
|
|
14.40
|
|
|
—
|
|
|
—
|
|
|
Forfeited
|
800
|
|
|
17.35
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding at December 31, 2019
|
1,614,514
|
|
|
$
|
17.84
|
|
|
4.7
|
|
$
|
14,538
|
|
|
Exercisable at December 31, 2019
|
1,212,714
|
|
|
$
|
15.45
|
|
|
3.5
|
|
$
|
13,805
|
|
|
Non-vested at December 31, 2019
|
401,800
|
|
|
$
|
25.07
|
|
|
7.9
|
|
$
|
733
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding at June 30, 2020
|
1,615,500
|
|
|
$
|
18.12
|
|
|
4.4
|
|
$
|
1,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
54,000
|
|
|
14.37
|
|
|
—
|
|
|
—
|
|
|
Forfeited
|
26,900
|
|
|
25.77
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding at December 31, 2020
|
1,534,600
|
|
|
$
|
18.12
|
|
|
3.8
|
|
$
|
5,070
|
|
|
Exercisable at December 31, 2020
|
1,243,700
|
|
|
$
|
16.35
|
|
|
3.0
|
|
$
|
5,027
|
|
|
Non-vested at December 31, 2020
|
290,900
|
|
|
$
|
25.67
|
|
|
7.3
|
|
$
|
42
|
|
There were no options granted during the six months ended December 31, 2020. Assumptions used in estimating the fair value of options granted during the six months ended December 31, 2019 are presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
|
|
|
|
|
Weighted-average volatility
|
|
|
17.84
|
%
|
|
|
|
|
|
|
|
Expected dividend yield
|
|
|
0.95
|
%
|
|
|
|
|
|
|
|
Risk-free interest rate
|
|
|
1.55
|
%
|
|
|
|
|
|
|
|
Expected life (years)
|
|
|
6.5
|
|
|
|
|
|
|
|
Weighted-average fair value of options granted
|
|
|
$
|
4.67
|
|
|
|
|
|
|
|
At December 31, 2020, the Company had $1,297 of unrecognized compensation expense related to 290,900 stock options scheduled to vest over a five-year vesting period. The weighted average period over which compensation cost related to non-vested awards expected to be recognized was 1.3 years at December 31, 2020. At December 31, 2019, the Company had $1,854 of unrecognized compensation expense related to 401,800 stock options originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards expected to be recognized was 1.4 years at December 31, 2019.
The table below presents restricted stock award activity for the six months ended December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
stock awards
|
|
Weighted-
average grant
date fair value
|
|
Aggregate
Intrinsic
Value
|
|
Non-vested at June 30, 2019
|
123,800
|
|
|
$
|
24.65
|
|
|
$
|
2,258
|
|
|
Granted
|
13,000
|
|
|
25.37
|
|
|
—
|
|
|
Vested
|
400
|
|
|
19.02
|
|
|
—
|
|
|
Forfeited
|
3,200
|
|
|
20.62
|
|
|
—
|
|
|
Non-vested at December 31, 2019
|
133,200
|
|
|
$
|
24.83
|
|
|
$
|
3,574
|
|
|
|
|
|
|
|
|
|
Non-vested at June 30, 2020
|
144,046
|
|
|
$
|
25.89
|
|
|
$
|
2,305
|
|
|
|
|
|
|
|
|
|
Vested
|
2,600
|
|
|
25.37
|
|
|
—
|
|
|
Forfeited
|
7,650
|
|
|
25.65
|
|
|
—
|
|
|
Non-vested at December 31, 2020
|
133,796
|
|
|
$
|
25.91
|
|
|
$
|
2,584
|
|
The table above includes non-vested performance-based restrictive stock units totaling 15,565 and 10,375 at December 31, 2020 and 2019, respectively. Each issuance of these stock units is scheduled to vest over 3.0 years assuming certain performance metrics are met.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
At December 31, 2020, unrecognized compensation expense was $2,250 related to 133,796 shares of restricted stock scheduled to vest over three- and five-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.4 years at December 31, 2020. At December 31, 2019, unrecognized compensation expense was $2,325 related to 133,200 shares of restricted stock originally scheduled to vest over three-, five-, and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.5 years at December 31, 2019.
10. Commitments and Contingencies
Loan Commitments – Legally binding commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. In the normal course of business, there are various outstanding commitments to extend credit that are not reflected in the consolidated financial statements. At December 31, 2020 and June 30, 2020, respectively, loan commitments (excluding $146,181 and $141,557 of undisbursed portions of construction loans) totaled $86,648 and $57,798 of which $17,468 and $10,678 were variable rate commitments and $69,180 and $47,120 were fixed rate commitments. The fixed rate loans had interest rates ranging from 1.09% to 8.28% at December 31, 2020 and 1.74% to 8.54% at June 30, 2020, and terms ranging from three to 30 years. Pre-approved but unused lines of credit (principally second mortgage home equity loans and overdraft protection loans) totaled $465,200 and $398,781 at December 31, 2020 and June 30, 2020, respectively. These amounts represent the Company's exposure to credit risk, and in the opinion of management have no more than the normal lending risk that the Company commits to its borrowers. The Company has two types of commitments related to certain one-to-four family loans held for sale: rate lock commitments and forward loan commitments. Rate lock commitments are commitments to extend credit to a customer that has an interest rate lock and are considered derivative instruments. The rate lock commitments do not qualify for hedge accounting. In order to mitigate the risk from interest rate fluctuations, the Company enters into forward loan sale commitments on a “best efforts” basis, which do not meet the definition of a derivative instrument. The fair value of these interest rate lock commitments was not material at December 31, 2020 or June 30, 2020.
The Company grants construction and permanent loans collateralized primarily by residential and commercial real estate to customers throughout its primary market areas. In addition, the Company grants equipment financing throughout the United States and municipal financing to customers throughout North and South Carolina. The Company’s loan portfolio can be affected by the general economic conditions within these market areas. Management believes that the Company has no significant concentration of credit in the loan portfolio.
Restrictions on Cash – In response to COVID-19, the FRB reduced the reserve requirements to zero on March 15, 2020. Prior to this change the Bank was required by regulation to maintain a varying cash reserve balance with the FRB.
Guarantees – Standby letters of credit obligate the Company to meet certain financial obligations of its customers, if, under the contractual terms of the agreement, the customers are unable to do so. The financial standby letters of credit issued by the Company are irrevocable and payment is only guaranteed upon the borrower's failure to perform its obligations to the beneficiary. Total commitments under standby letters of credit as of December 31, 2020 and June 30, 2020 were $7,936 and $7,766, respectively. There was no liability recorded for these letters of credit at December 31, 2020 or June 30, 2020, respectively.
Litigation – From time to time, the Company is involved in litigation matters in the ordinary course of business. These proceedings and the associated legal claims are often contested, and the outcome of individual matters is not always predictable. These claims and counter claims typically arise during the course of collection efforts on problem loans or with respect to actions to enforce liens on properties in which the Company holds a security interest. The Company is not a party to any pending legal proceedings that management believes would have a material adverse effect on the Company’s financial condition or results of operations.
11. Fair Value of Financial Instruments
The Company utilizes fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. The fair value of financial instruments presented in this note are based on the same methodology as presented in Note 21 of the Notes to Consolidated Financial Statements contained in the Company’s 2020 Form 10-K.
Fair Value Hierarchy
The Company groups assets at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:
Level 1: Valuation is based upon quoted prices for identical instruments traded in active markets.
Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
Level 3: Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.
Following is a description of valuation methodologies used for assets recorded at fair value. The Company does not have any liabilities recorded at fair value.
Investment Securities Available for Sale
Securities available for sale are valued on a recurring basis at quoted market prices where available. If quoted market prices are not available, fair values are based on quoted prices of comparable securities. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange or U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities and debentures issued by government sponsored enterprises, municipal bonds, and corporate debt securities. The Company has no Level 3 securities.
Loans Held for Sale
Loans held for sale are adjusted to lower of cost or fair value. Fair value is based on commitments on hand from investors or, if commitments have not yet been obtained, what investors are currently offering for loans with similar characteristics. The Company considers all loans held for sale carried at fair value as nonrecurring Level 3.
Individually Evaluated Loans
The Company does not record loans at fair value on a recurring basis. From time to time, however, a loan is individually evaluated and an allowance for credit loss is established. Loans for which it is probable that payment of principal and interest will not be made in accordance with the contractual terms of the loan agreement are individually evaluated. Once a loan is identified, the fair value is estimated using one of two ways, which include collateral value and discounted cash flows. The Company reviews all individually evaluated loans each quarter to determine if an allowance is necessary. Those individually evaluated loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans.
Loans are considered collateral dependent if repayment is expected solely from the collateral. For these collateral dependent loans, the Company obtains updated appraisals at least annually. These appraisals are reviewed for appropriateness and then discounted for estimated closing costs to determine if an allowance is necessary. As part of the quarterly review of individually evaluated loans, the Company reviews these appraisals to determine if any additional discounts to the fair value are necessary. If a current appraisal is not obtained, the Company determines whether a discount is needed to the value from the original appraisal based on the decline in value of similar properties with recent appraisals. For loans that are not collateral dependent, estimated fair value is based on the present value of expected future cash flows using the interest rate implicit in the original agreement. Individually evaluated loans where a charge-off has occurred or an allowance is established during the period being reported require classification in the fair value hierarchy. The Company records such loans as a nonrecurring Level 3 in the fair value hierarchy.
Real Estate Owned
REO is considered held for sale and is adjusted to fair value less estimated selling costs upon transfer of the loan to foreclosed assets. Fair value is based upon independent market prices, appraised value of the collateral or management's estimation of the value of the collateral. The Company considers all REO that has been charged off or received an allowance during the period as nonrecurring Level 3.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
Financial Assets Recorded at Fair Value on a Recurring Basis
The following table presents financial assets measured at fair value on a recurring basis at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
Description
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
U.S government agencies
|
$
|
19,138
|
|
|
$
|
—
|
|
|
$
|
19,138
|
|
|
$
|
—
|
|
|
Residential MBS of U.S. government agencies and GSEs
|
41,013
|
|
|
—
|
|
|
41,013
|
|
|
—
|
|
|
Municipal bonds
|
10,899
|
|
|
—
|
|
|
10,899
|
|
|
—
|
|
|
Corporate bonds
|
82,490
|
|
|
—
|
|
|
82,490
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
153,540
|
|
|
$
|
—
|
|
|
$
|
153,540
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
Description
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
U.S government agencies
|
$
|
4,173
|
|
|
$
|
—
|
|
|
$
|
4,173
|
|
|
$
|
—
|
|
|
Residential MBS of U.S. government agencies and GSEs
|
48,355
|
|
|
—
|
|
|
48,355
|
|
|
—
|
|
|
Municipal bonds
|
16,631
|
|
|
—
|
|
|
16,631
|
|
|
—
|
|
|
Corporate bonds
|
58,378
|
|
|
—
|
|
|
58,378
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
127,537
|
|
|
$
|
—
|
|
|
$
|
127,537
|
|
|
$
|
—
|
|
There were no transfers between levels during the six months ended December 31, 2020.
The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
Description
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Individually evaluated loans
|
$
|
5,230
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
Description
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Individually evaluated loans
|
$
|
9,168
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,168
|
|
|
REO
|
97
|
|
|
—
|
|
|
—
|
|
|
97
|
|
|
Total
|
$
|
9,265
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,265
|
|
Quantitative information about Level 3 fair value measurements during the period ended December 31, 2020 is shown in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonrecurring measurements:
|
Fair Value at December 31, 2020
|
|
Valuation
Techniques
|
|
Unobservable
Input
|
|
Range
|
|
Weighted
Average
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated loans
|
$
|
5,230
|
|
|
Discounted appraisals and discounted cash flows
|
|
Collateral discounts
and discount spread
|
|
0% - 53%
2% - 3%
|
|
13%
|
|
|
|
|
|
|
|
|
|
|
|
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The stated carrying value and estimated fair value amounts of financial instruments as of December 31, 2020 and June 30, 2020, are summarized below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
Carrying
Value
|
|
Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and interest-bearing deposits
|
$
|
226,344
|
|
|
$
|
226,344
|
|
|
$
|
226,344
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Commercial paper
|
183,778
|
|
|
183,778
|
|
|
183,778
|
|
|
—
|
|
|
—
|
|
|
Certificates of deposit in other banks
|
48,637
|
|
|
48,637
|
|
|
—
|
|
|
48,637
|
|
|
—
|
|
|
Securities available for sale
|
153,540
|
|
|
153,540
|
|
|
—
|
|
|
153,540
|
|
|
—
|
|
|
Loans, net
|
2,638,780
|
|
|
2,608,848
|
|
|
—
|
|
|
—
|
|
|
2,608,848
|
|
|
Loans held for sale
|
118,439
|
|
|
120,254
|
|
|
—
|
|
|
—
|
|
|
120,254
|
|
|
FHLB stock
|
23,309
|
|
|
23,309
|
|
|
23,309
|
|
|
—
|
|
|
—
|
|
|
FRB stock
|
7,374
|
|
|
7,374
|
|
|
7,374
|
|
|
—
|
|
|
—
|
|
|
SBIC investments
|
8,889
|
|
|
8,889
|
|
|
—
|
|
|
—
|
|
|
8,889
|
|
|
Accrued interest receivable
|
9,796
|
|
|
9,796
|
|
|
—
|
|
|
1,184
|
|
|
8,612
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing and NOW deposits
|
1,124,958
|
|
|
1,124,958
|
|
|
—
|
|
|
1,124,958
|
|
|
—
|
|
|
Money market accounts
|
882,366
|
|
|
882,366
|
|
|
—
|
|
|
882,366
|
|
|
—
|
|
|
Savings accounts
|
209,699
|
|
|
209,699
|
|
|
—
|
|
|
209,699
|
|
|
—
|
|
|
Certificates of deposit
|
526,246
|
|
|
529,661
|
|
|
—
|
|
|
529,661
|
|
|
—
|
|
|
Borrowings
|
475,000
|
|
|
504,734
|
|
|
—
|
|
|
504,734
|
|
|
—
|
|
|
Accrued interest payable
|
623
|
|
|
623
|
|
|
—
|
|
|
623
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
|
Carrying
Value
|
|
Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and interest-bearing deposits
|
$
|
121,622
|
|
|
$
|
121,622
|
|
|
$
|
121,622
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Commercial paper
|
304,967
|
|
|
304,967
|
|
|
304,967
|
|
|
—
|
|
|
—
|
|
|
Certificates of deposit in other banks
|
55,689
|
|
|
55,689
|
|
|
—
|
|
|
55,689
|
|
|
—
|
|
|
Securities available for sale
|
127,537
|
|
|
127,537
|
|
|
—
|
|
|
127,537
|
|
|
—
|
|
|
Loans, net
|
2,741,047
|
|
|
2,692,265
|
|
|
—
|
|
|
—
|
|
|
2,692,265
|
|
|
Loans held for sale
|
77,177
|
|
|
78,129
|
|
|
—
|
|
|
—
|
|
|
78,129
|
|
|
FHLB stock
|
23,309
|
|
|
23,309
|
|
|
23,309
|
|
|
—
|
|
|
—
|
|
|
FRB stock
|
7,368
|
|
|
7,368
|
|
|
7,368
|
|
|
—
|
|
|
—
|
|
|
SBIC investments
|
8,269
|
|
|
8,269
|
|
|
—
|
|
|
—
|
|
|
8,269
|
|
|
Accrued interest receivable
|
12,312
|
|
|
12,312
|
|
|
208
|
|
|
744
|
|
|
11,360
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing and NOW deposits
|
1,012,200
|
|
|
1,012,200
|
|
|
—
|
|
|
1,012,200
|
|
|
—
|
|
|
Money market accounts
|
836,738
|
|
|
836,738
|
|
|
—
|
|
|
836,738
|
|
|
—
|
|
|
Savings accounts
|
197,676
|
|
|
197,676
|
|
|
—
|
|
|
197,676
|
|
|
—
|
|
|
Certificates of deposit
|
739,142
|
|
|
745,078
|
|
|
—
|
|
|
745,078
|
|
|
—
|
|
|
Borrowings
|
475,000
|
|
|
511,529
|
|
|
—
|
|
|
511,529
|
|
|
—
|
|
|
Accrued interest payable
|
1,087
|
|
|
1,087
|
|
|
—
|
|
|
1,087
|
|
|
—
|
|
The Company had off-balance sheet financial commitments, which included approximately $698,029 and $598,136 of commitments to originate loans, undisbursed portions of interim construction loans, and unused lines of credit at December 31, 2020 and June 30, 2020, respectively (see Note 10). Since these commitments are based on current rates, the carrying amount approximates the fair value.
Estimated fair values were determined using the following methods and assumptions:
Cash and interest-bearing deposits – The stated amounts approximate fair values as maturities are less than 90 days.
Commercial paper – The stated amounts approximate fair value due to the short-term nature of these investments.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
Certificates of deposit in other banks – The stated amounts approximate fair values.
Securities available for sale – Fair values are based on quoted market prices where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.
Loans held for sale – The fair value of mortgage loans held for sale is determined by outstanding commitments from investors on a "best efforts" basis or current investor yield requirements, calculated on the aggregate loan basis. The fair value of SBA loans and HELOCs held for sale is based on what investors are currently offering for loans with similar characteristics.
Loans, net – Fair values for loans are estimated by segregating the portfolio by type of loan and discounting scheduled cash flows using current market interest rates for loans with similar terms and credit quality. A prepayment assumption is used as an estimate of the portion of loans that will be repaid prior to their scheduled maturity. A liquidity premium assumption is used as an estimate for the additional return required by an investor of assets that are potentially considered illiquid.
FHLB and FRB stock – No ready market exists for these stocks and they have no quoted market value. However, redemptions of these securities have historically been at par value. Accordingly, cost is deemed to be a reasonable estimate of fair value.
SBIC investments – No ready market exists for these investments and they have no quoted market value. SBIC investments are valued at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions of identical or similar investments. Accordingly, cost is deemed to be a reasonable estimate of fair value.
Deposits – Fair values for demand deposits, money market accounts, and savings accounts are the amounts payable on demand. The fair value of certificates of deposit is estimated by discounting the contractual cash flows using current market interest rates for accounts with similar maturities.
Borrowings – The fair value of advances from the FHLB is estimated based on current rates for borrowings with similar terms.
Accrued interest receivable and payable – The stated amounts of accrued interest receivable and payable approximate the fair value.
Limitations – Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Fair value estimates are based on existing on-and-off balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, a significant asset not considered a financial asset is premises and equipment. In addition, tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.
12. Leases
As Lessee - Operating Leases
The Company's operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at management's sole discretion. When it is reasonably certain that the Company will exercise its option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. At December 31, 2020, the Company did not have any leases that had not yet commenced for which it had created a ROU asset and a lease liability. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of the Company's lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on the Company's Consolidated Balance Sheets. The Company recognizes lease expenses for these leases over the lease term.
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following table presents supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Balance Sheet Information:
|
December 31, 2020
|
|
June 30, 2020
|
|
ROU assets
|
$
|
4,546
|
|
$
|
4,601
|
|
|
|
|
|
|
Lease liabilities
|
4,561
|
|
4,590
|
|
|
|
|
|
|
Weighted-average remaining lease terms
|
4.56
|
|
5.02
|
|
Weighted-average discount rate
|
2.81
|
%
|
|
2.97
|
%
|
The following schedule summarizes aggregate future minimum lease payments under these operating leases at December 31, 2020:
|
|
|
|
|
|
|
|
Fiscal year ending June 30:
|
|
|
Remaining 2021
|
$
|
663
|
|
|
2022
|
1,248
|
|
|
2023
|
1,200
|
|
|
2024
|
735
|
|
|
2025
|
349
|
|
|
Thereafter
|
676
|
|
|
Total of future minimum payments
|
$
|
4,871
|
|
The following table presents components of operating lease expense for the three and six months ended December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Operating lease cost (included in occupancy expense)
|
$
|
452
|
|
|
$
|
459
|
|
|
$
|
891
|
|
|
$
|
932
|
|
|
Sublease income (included in other, net noninterest income)
|
(61)
|
|
|
(56)
|
|
|
(122)
|
|
|
(120)
|
|
|
Total operating lease expense, net
|
$
|
391
|
|
|
$
|
403
|
|
|
$
|
769
|
|
|
$
|
812
|
|
As Lessee - Finance Lease
The Company currently leases land for one of its branch office locations under a finance lease. The ROU asset for the finance lease totaled $2,052 at December 31, 2020 and June 30, 2020 and is included in other assets. The corresponding lease liability totaled $1,823 and $1,843 at December 31, 2020 and June 30, 2020, respectively, and is included in other liabilities. For the three and six months ended December 31, 2020, interest expense on the lease liability totaled $24 and $48, respectively. For the three and six months ended December 31, 2019, interest expense on the lease liability totaled $24 and $48, respectively.The finance lease has a maturity date of July 2028 and a discount rate of 5.18%.
The following schedule summarizes aggregate future minimum lease payments under this finance lease obligation at December 31, 2020:
|
|
|
|
|
|
|
|
Fiscal year ending June 30:
|
|
|
Remaining 2021
|
$
|
66
|
|
|
2022
|
134
|
|
|
2023
|
134
|
|
|
2024
|
145
|
|
|
2025
|
146
|
|
|
Thereafter
|
1,848
|
|
|
Total minimum lease payments
|
2,473
|
|
|
Less: amount representing interest
|
(650)
|
|
|
Present value of net minimum lease payments
|
$
|
1,823
|
|
Supplemental lease cash flow information for the six months ended December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
ROU assets - noncash additions (operating leases)
|
$
|
597
|
|
|
$
|
5,296
|
|
|
ROU assets - noncash addition (finance lease)
|
—
|
|
|
2,052
|
|
|
Cash paid for amounts included in the measurement of lease liabilities (operating leases)
|
1,055
|
|
|
1,091
|
|
|
Cash paid for amounts included in the measurement of lease liabilities (finance leases)
|
67
|
|
|
67
|
|
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
As Lessor - General
The Company leases equipment to commercial end users under operating and finance lease arrangements. The Company's equipment finance leases consist mainly of transportation, medical, and agricultural equipment. Many of its operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a nominal fixed purchase option; and most of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. The Company's leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease.
As Lessor - Operating Leases
Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from 1 to 5 years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. The net book value of leased assets totaled $25,293 and $21,595 with a residual value of $15,364 and $12,370 as of December 31, 2020 and June 30, 2020, respectively.
The following table presents total equipment finance operating lease income and depreciation expense for the three and six months ended December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Operating lease income
|
$
|
1,349
|
|
|
$
|
658
|
|
|
$
|
2,675
|
|
|
$
|
1,226
|
|
|
Depreciation expense
|
1,413
|
|
|
459
|
|
|
2,954
|
|
|
808
|
|
The following schedule summarizes aggregate future minimum operating lease payments to be received at December 31, 2020:
|
|
|
|
|
|
|
|
Fiscal year ending June 30:
|
|
|
Remaining 2021
|
$
|
2,902
|
|
|
2022
|
5,038
|
|
|
2023
|
3,192
|
|
|
2024
|
1,123
|
|
|
2025
|
320
|
|
|
Thereafter
|
48
|
|
|
Total of future minimum payments
|
$
|
12,623
|
|
As Lessor - Finance Leases
Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment. For the three months ended December 31, 2020 and 2019, total interest income on equipment finance leases totaled $570 and $459, respectively. For the six months ended December 31, 2020 and 2019, total interest income on equipment finance leases totaled $1,099 and $808, respectively.
The following table presents components of finance lease net investment included within equipment finance class of financing receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
June 30, 2020
|
|
Lease receivables
|
$
|
54,024
|
|
|
$
|
44,927
|
|
|
|
|
|
|
|
|
|
|
|
The following schedule summarizes aggregate future minimum finance lease payments to be received at December 31, 2020:
|
|
|
|
|
|
|
|
Fiscal year ending June 30:
|
|
|
Remaining 2021
|
$
|
6,452
|
|
|
2022
|
14,628
|
|
|
2023
|
14,205
|
|
|
2024
|
12,073
|
|
|
2025
|
8,358
|
|
|
Thereafter
|
3,813
|
|
|
Total minimum payments
|
59,529
|
|
|
Less: amount representing interest
|
(5,505)
|
|
|
Total
|
$
|
54,024
|
|