HomeTrust Bancshares(HTBI) - 2022 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Financial Statements This section presents HomeTrust Bancshares' unaudited consolidated financial statements for September 30, 2021, and the three months then ended Consolidated Balance Sheets Total assets decreased slightly to $3.48 billion as of September 30, 2021, driven by reduced cash and debt securities and lower borrowings Consolidated Balance Sheet Highlights (Unaudited) | (In thousands) | Sep 30, 2021 | Jun 30, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $42,573 | $50,990 | | Net loans | $2,685,236 | $2,697,799 | | Total Assets | $3,481,360 | $3,524,723 | | Liabilities & Equity | | | | Deposits | $2,987,284 | $2,955,541 | | Borrowings | $40,000 | $115,000 | | Total Liabilities | $3,084,849 | $3,128,204 | | Total Stockholders' Equity | $396,511 | $396,519 | Consolidated Statements of Income Net income for the three months ended September 30, 2021, increased 83% to $10.5 million, driven by higher net interest income and noninterest income Consolidated Income Statement Highlights (Unaudited, Three Months Ended Sep 30) | (In thousands, except per share data) | 2021 | 2020 | | :--- | :--- | :--- | | Net interest income | $27,707 | $25,509 | | Provision (benefit) for credit losses | $(1,460) | $950 | | Net interest income after provision | $29,167 | $24,559 | | Total noninterest income | $10,352 | $8,639 | | Total noninterest expense | $26,016 | $26,000 | | Net income | $10,527 | $5,753 | | Diluted EPS | $0.65 | $0.35 | Consolidated Statements of Cash Flows Net cash used in operating activities was $3.5 million for the three months ended September 30, 2021, resulting in an $8.4 million net decrease in cash Cash Flow Summary (Unaudited, Three Months Ended Sep 30) | (In thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,521) | $(55,783) | | Net cash provided by investing activities | $49,440 | $150,172 | | Net cash used in financing activities | $(54,336) | $(44,867) | | Net (decrease) increase in cash | $(8,417) | $49,522 | Notes to Consolidated Financial Statements The notes detail significant accounting policies, including COVID-19 impacts, debt securities, loans, and the allowance for credit losses (ACL) - The company highlights two critical accounting policies: the determination of the provision and allowance for credit losses (ACL) and the valuation of goodwill and other intangible assets[30] - The company has offered loan modifications, including payment deferrals, in response to the COVID-19 pandemic under the provisions of the CARES Act, which allows for suspension of Troubled Debt Restructuring (TDR) accounting for eligible modifications[31][32][87] - As of September 30, 2021, the company had $67.8 million in commercial loans on interest-only payment deferrals and $1.0 million in full principal and interest payment deferrals related to COVID-19[89][173] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition and results for the quarter ended September 30, 2021, focusing on improved net income and a stable balance sheet Comparison of Financial Condition Total assets decreased slightly by $43.4 million to $3.5 billion as of September 30, 2021, while asset quality improved significantly - Total assets decreased by $43.4 million to $3.5 billion, primarily due to a decrease in cash and securities as the company paid down borrowings[176] - Nonperforming assets decreased by $6.0 million (47.0%) to $6.8 million, or 0.19% of total assets, mainly due to the payoff of two commercial real estate loan relationships totaling $5.1 million[182] - Deposits increased by $31.7 million (1.1%), driven by growth in core deposits, while borrowings decreased by $75.0 million (65.2%)[192][194] Allowance for Credit Losses (ACL) to Loan Ratios | Ratio | Sep 30, 2021 | Jun 30, 2021 | | :--- | :--- | :--- | | ACL / Total Loans | 1.27% | 1.30% | | ACL / Total Loans (ex-PPP) | 1.28% | 1.32% | Comparison of Results of Operations Net income increased 83.0% to $10.5 million for the quarter ended September 30, 2021, driven by higher net interest income and a credit loss benefit - Net income increased by $4.8 million (83.0%) to $10.5 million for Q1 FY2022 compared to Q1 FY2021[201] - Net interest income increased by $2.2 million (8.6%), driven by a $3.3 million decrease in interest expense, primarily from lower borrowing costs[202] - A net benefit for credit losses of $1.5 million was recorded, compared to a provision of $950,000 in the prior-year quarter, reflecting an improving economic outlook[207] - Noninterest income increased by $1.7 million (19.8%), mainly from higher gains on sale of loans and increased loan income and fees[209] Liquidity and Capital Resources The company maintains a strong liquidity position and was 'well-capitalized' as of September 30, 2021, with stable stockholders' equity - As of September 30, 2021, the Bank had available borrowing capacity of $278.7 million with the FHLB of Atlanta and $100.0 million in lines of credit with three other banks[213] - During the quarter, the company repurchased 376,435 shares of common stock for approximately $10.4 million and paid $1.3 million in cash dividends[195] Regulatory Capital Ratios (HomeTrust Bancshares, Inc.) - Sep 30, 2021 | Ratio | Actual | Minimum to Be Well Capitalized | | :--- | :--- | :--- | | CET1 Capital Ratio | 11.25% | 6.50% | | Tier I Capital Ratio | 11.25% | 8.00% | | Total Risk-based Capital Ratio | 11.92% | 10.00% | | Tier I Leverage Ratio | 10.75% | 5.00% | Quantitative and Qualitative Disclosures about Market Risk There have been no material changes in the company's market risk disclosures from its Annual Report on Form 10-K for June 30, 2021 - There has not been any material change in the market risk disclosures contained in the Company's 2021 Form 10-K[226] Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of September 30, 2021, with no other material changes to internal control - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of September 30, 2021[227] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[227] PART II OTHER INFORMATION Legal Proceedings The company is not a party to any pending legal proceedings that management believes would materially affect its financial condition or operations - The company is not party to any pending legal proceedings that management believes would have a material adverse effect on its financial condition or operations[105][229] Risk Factors There have been no material changes in the risk factors previously disclosed in the company's 2021 Form 10-K - There have been no material changes in the Risk Factors previously disclosed in the Company's 2021 Form 10-K[230] Unregistered Sales of Equity Securities and Use of Proceeds During the quarter ended September 30, 2021, the company repurchased 376,435 shares of common stock at an average price of $27.71 per share Share Repurchase Activity (July 1 - Sep 30, 2021) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2021 | 117,657 | $27.81 | | August 2021 | 70,737 | $27.67 | | September 2021 | 188,041 | $27.67 | | Total | 376,435 | $27.71 | - On July 28, 2021, a new stock repurchase plan was authorized for 825,941 shares. As of September 30, 2021, 567,163 shares were still available for repurchase under this plan[232] Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL financial data - Exhibits filed include CEO and CFO certifications (Exhibits 31.1, 31.2, 32) and XBRL data (Exhibit 101)[239]