HTB 10-Q Quarterly Report Sept. 30, 2024

HOMETRUST BANCSHARES, INC.

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htbi-20240930

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to ________

Commission file number: 001-35593

HOMETRUST BANCSHARES, INC.

(Exact name of registrant as specified in its charter)


Maryland						45-5055422
(State or other jurisdiction of incorporation of organization)						(I.R.S. Employer Identification No.)

10 Woodfin Street , Asheville , North Carolina 28801

(Address of principal executive offices; Zip Code)

( 828 ) 259-3939

(Registrant's telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	HTBI	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 and 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 17,529,922 shares of common stock, par value of $0.01 per share, issued and outstanding as of November 1, 2024.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS


			Page
PART I FINANCIAL INFORMATION

Item 1	Financial Statements

		Consolidated Balance Sheets at September 30, 2024 (Unaudited) and December 31, 2023	3

		Consolidated Statements of Income (Unaudited) for the Three and Nine Months Ended September 30, 2024 and 2023	4

		Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30, 2024 and 2023	5

		Consolidated Statements of Changes in Stockholders' Equity (Unaudited) for the Three and Nine Months Ended September 30, 2024 and 2023	6

		Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2024 and 2023	8

		Notes to Consolidated Financial Statements	10

Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations		34

Item 3	Quantitative and Qualitative Disclosures about Market Risk		45

Item 4	Controls and Procedures		45

PART II OTHER INFORMATION

Item 1	Legal Proceedings		46

Item 1A	Risk Factors		46

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		46

Item 3	Defaults Upon Senior Securities		46

Item 4	Mine Safety Disclosures		46

Item 5	Other Information		46

Item 6	Exhibits		46

SIGNATURES			49

Glossary of Defined Terms

The following terms may be used throughout this Form 10-Q, including the Notes to Consolidated Financial Statements in Item 1 and Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this Form 10-Q.


Term						Definition
ACL						Allowance for Credit Losses
AFS						Available-For-Sale
ASC						Accounting Standards Codification
ASU						Accounting Standards Update

BOLI						Bank Owned Life Insurance
CD						Certificate of Deposit
CDA						Collateral Dependent Asset
CECL						Current Expected Credit Losses
CET1						Common Equity Tier 1
COVID-19						Coronavirus Disease 2019

DCF						Discounted Cash Flows
Dodd-Frank Act						Dodd-Frank Wall Street Reform and Consumer Protection Act
ECL						Expected Credit Losses
EPS						Earnings Per Share
ESOP						Employee Stock Ownership Plan
FASB						Financial Accounting Standards Board
FDIC						Federal Deposit Insurance Corporation
Federal Reserve						Board of Governors of the Federal Reserve System
FHLB or FHLB of Atlanta						Federal Home Loan Bank
FRB						Federal Reserve Bank of Richmond
GSE						Government-Sponsored Enterprises
HELOC						Home Equity Line of Credit
IRLC						Interest Rate Lock Commitments
MBS						Mortgage-Backed Security
NCCOB						North Carolina Office of the Commissioner of Banks
OREO						Other Real Estate Owned
PCD						Purchased Financial Assets with Credit Deterioration
Quantum						Quantum Capital Corp. and its wholly owned subsidiary, Quantum National Bank
ROA						Return on Assets
ROE						Return on Equity
ROU						Right of Use
RSU						Restricted Stock Unit
SBA						U.S. Small Business Administration
SBIC						Small Business Investment Companies
SEC						Securities and Exchange Commission
SOFR						Secured Overnight Financing Rate
TBA						To-be-announced
US GAAP						Generally Accepted Accounting Principles in the United States

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Consolidated Balance Sheets

(Dollars in thousands, except per share data)


	(Unaudited)
	September 30, 2024		December 31, 2023
Assets
Cash	$	18,980	$	18,307
Interest-bearing deposits	274,497		328,833
Cash and cash equivalents	293,477		347,140

Certificates of deposit in other banks	29,290		34,722
Debt securities available for sale, at fair value (amortized cost of $ 140,486 and $ 128,964 at September 30, 2024 and December 31, 2023, respectively)	140,552		126,950
FHLB and FRB stock	18,384		18,393
SBIC investments, at cost	15,489		13,789
Loans held for sale, at fair value	2,968		3,359
Loans held for sale, at the lower of cost or fair value	189,722		198,433
Loans, net of deferred loan fees and costs	3,698,892		3,640,022
Allowance for credit losses – loans	( 48,131 )		( 48,641 )
Loans, net	3,650,761		3,591,381
Premises and equipment, net	69,603		70,937
Accrued interest receivable	17,523		16,902

Deferred income taxes, net	10,100		11,796
BOLI	90,021		88,257
Goodwill	34,111		34,111
Core deposit intangibles, net	7,162		9,059
Other assets	68,130		107,404
Total assets	$	4,637,293	$	4,672,633
Liabilities and stockholders' equity
Liabilities
Deposits	$	3,761,588	$	3,661,373
Junior subordinated debt	10,096		10,021
Borrowings	260,013		433,763

Other liabilities	65,592		67,583
Total liabilities	4,097,289		4,172,740
Commitments and contingencies – See Note 12
Stockholders' equity
Preferred stock, $ 0.01 par value, 10,000,000 shares authorized, none issued or outstanding	—		—
Common stock, $ 0.01 par value, 60,000,000 shares authorized, 17,514,922 shares issued and outstanding at September 30, 2024; 17,387,069 at December 31, 2023	175		174
Additional paid in capital	175,495		172,366
Retained earnings	368,383		333,401
Unearned ESOP shares	( 4,099 )		( 4,497 )
Accumulated other comprehensive income (loss)	50		( 1,551 )
Total stockholders' equity	540,004		499,893
Total liabilities and stockholders' equity	$	4,637,293	$	4,672,633

The accompanying notes are an integral part of these consolidated financial statements.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Income

(Dollars in thousands, except per share data)


	(Unaudited)				(Unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Interest and dividend income
Loans	$	63,305	$	58,496	$	185,418	$	162,526

Debt securities available for sale	1,616		1,259		4,424		3,780
Other investments and interest-bearing deposits	1,728		2,110		5,576		5,356
Total interest and dividend income	66,649		61,865		195,418		171,662
Interest expense
Deposits	23,692		16,429		65,693		36,955
Junior subordinated debt	235		236		705		563
Borrowings	648		3,040		3,550		6,634
Total interest expense	24,575		19,705		69,948		44,152
Net interest income	42,074		42,160		125,470		127,510
Provision for credit losses	2,975		2,570		8,400		11,735
Net interest income after provision for credit losses	39,099		39,590		117,070		115,775
Noninterest income
Service charges and fees on deposit accounts	2,336		2,318		6,839		6,967
Loan income and fees	684		559		2,009		1,913
Gain on sale of loans held for sale	1,900		1,293		5,185		4,213
BOLI income	828		1,749		3,470		2,844

Operating lease income	1,637		1,785		5,087		4,515
Gain (loss) on sale of premises and equipment	—		—		( 9 )		982
Other	897		923		2,625		2,391
Total noninterest income	8,282		8,627		25,206		23,825
Noninterest expense
Salaries and employee benefits	17,082		16,514		50,666		49,436
Occupancy expense, net	2,436		2,489		7,292		7,556
Computer services	3,192		3,173		9,396		9,386
Telephone, postage and supplies	547		652		1,712		1,942
Marketing and advertising	408		487		1,659		1,555
Deposit insurance premiums	589		717		1,674		1,878

Core deposit intangible amortization	567		859		1,896		2,324
Merger-related expenses	—		—		—		4,741

Other	5,764		4,673		16,364		14,490
Total noninterest expense	30,585		29,564		90,659		93,308
Income before income taxes	16,796		18,653		51,617		46,292
Income tax expense	3,684		3,820		11,020		9,712
Net income	$	13,112	$	14,833	$	40,597	$	36,580
Per share data
Net income per common share
Basic	$	0.77	$	0.88	$	2.38	$	2.19
Diluted	$	0.76	$	0.88	$	2.37	$	2.18

Average shares outstanding
Basic	16,931,793		16,792,177		16,891,619		16,532,335
Diluted	17,027,824		16,800,901		16,938,328		16,553,319

The accompanying notes are an integral part of these consolidated financial statements.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Comprehensive Income

(Dollars in thousands)


	(Unaudited)				(Unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income	$	13,112	$	14,833	$	40,597	$	36,580
Other comprehensive income (loss)
Unrealized holding gains (losses) on debt securities available for sale
Gains (losses) arising during the period	3,143		( 643 )		2,080		( 1,121 )
Deferred income tax (expense) benefit	( 724 )		147		( 479 )		258


Total other comprehensive income (loss)	2,419		( 496 )		1,601		( 863 )
Comprehensive income	$	15,531	$	14,337	$	42,198	$	35,717

The accompanying notes are an integral part of these consolidated financial statements.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Changes in Stockholders' Equity

(Dollars in thousands)


	(Unaudited)
	Three Months Ended September 30, 2024
	Common Stock			Additional Paid In Capital		Retained Earnings		Unearned ESOP Shares		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	Shares	Amount
Balance at June 30, 2024	17,437,326	$	175	$	172,907	$	357,147	$	( 4,232 )	$	( 2,369 )	$	523,628
Net income	—	—		—		13,112		—		—		13,112

Cash dividends declared on common stock, $ 0.11 /common share	—	—		—		( 1,876 )		—		—		( 1,876 )

Forfeited restricted stock	( 2,211 )	—		—		—		—		—		—
Retired stock	( 3,989 )	—		( 132 )		—		—		—		( 132 )
Granted restricted stock	1,000	—		—		—		—		—		—
Stock issued for RSUs	10,683	—		—		—		—		—		—

Exercised stock options	72,113	—		1,865		—		—		—		1,865
Share-based compensation expense	—	—		541		—		—		—		541
ESOP compensation expense	—	—		314		—		133		—		447
Other comprehensive income	—	—		—		—		—		2,419		2,419
Balance at September 30, 2024	17,514,922	$	175	$	175,495	$	368,383	$	( 4,099 )	$	50	$	540,004

	(Unaudited)
	Three Months Ended September 30, 2023
	Common Stock			Additional Paid In Capital		Retained Earnings		Unearned ESOP Shares		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Shares	Amount
Balance at June 30, 2023	17,366,673	$	174	$	171,222	$	308,651	$	( 4,761 )	$	( 4,100 )	$	471,186
Net income	—	—		—		14,833		—		—		14,833

Cash dividends declared on common stock, $ 0.10 /common share	—	—		—		( 1,685 )		—		—		( 1,685 )

Forfeited restricted stock	( 1,630 )	—		—		—		—		—		—
Retired stock	( 5,730 )	—		( 133 )		—		—		—		( 133 )
Granted restricted stock	1,000	—		—		—		—		—		—
Stock issued for RSUs	18,494	—		—		—		—		—		—

Exercised stock options	1,500	—		24		—		—		—		24
Share-based compensation expense	—	—		383		—		—		—		383
ESOP compensation expense	—	—		167		—		132		—		299
Other comprehensive loss	—	—		—		—		—		( 496 )		( 496 )
Balance at September 30, 2023	17,380,307	$	174	$	171,663	$	321,799	$	( 4,629 )	$	( 4,596 )	$	484,411

The accompanying notes are an integral part of these consolidated financial statements.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Changes in Stockholders' Equity

(Dollars in thousands)


	(Unaudited)
	Nine Months Ended September 30, 2024
	Common Stock			Additional Paid In Capital		Retained Earnings		Unearned ESOP Shares		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
	Shares	Amount
Balance at December 31, 2023	17,387,069	$	174	$	172,366	$	333,401	$	( 4,497 )	$	( 1,551 )	$	499,893
Net income	—	—		—		40,597		—		—		40,597

Cash dividends declared on common stock, $ 0.33 /common share	—	—		—		( 5,615 )		—		—		( 5,615 )
Common stock repurchased	( 23,483 )	—		( 645 )		—		—		—		( 645 )
Forfeited restricted stock	( 2,211 )	—		—		—		—		—		—
Retired stock	( 12,751 )	—		( 365 )		—		—		—		( 365 )
Granted restricted stock	73,502	—		—		—		—		—		—
Stock issued for RSUs	10,683	—		—		—		—		—		—

Exercised stock options	82,113	1		2,023		—		—		—		2,024
Share-based compensation expense	—	—		1,363		—		—		—		1,363
ESOP compensation expense	—	—		753		—		398		—		1,151
Other comprehensive income	—	—		—		—		—		1,601		1,601
Balance at September 30, 2024	17,514,922	$	175	$	175,495	$	368,383	$	( 4,099 )	$	50	$	540,004

	(Unaudited)
	Nine Months Ended September 30, 2023
	Common Stock			Additional Paid In Capital		Retained Earnings		Unearned ESOP Shares		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Shares	Amount
Balance at December 31, 2022	15,673,595	$	157	$	128,486	$	290,271	$	( 5,026 )	$	( 3,733 )	$	410,155
Net income	—	—		—		36,580		—		—		36,580

Cash dividends declared on common stock, $ 0.30 /common share	—	—		—		( 5,052 )		—		—		( 5,052 )

Forfeited restricted stock	( 5,520 )	—		—		—		—		—		—
Retired stock	( 14,796 )	—		( 382 )		—		—		—		( 382 )
Granted restricted stock	54,339	—		—		—		—		—		—
Stock issued for RSUs	18,494	—		—		—		—		—		—
Stock issued for Quantum merger	1,374,646	14		37,720		—		—		—		37,734
Exercised stock options	279,549	3		4,096		—		—		—		4,099
Share-based compensation expense	—	—		1,206		—		—		—		1,206
ESOP compensation expense	—	—		537		—		397		—		934
Other comprehensive loss	—	—		—		—		—		( 863 )		( 863 )
Balance at September 30, 2023	17,380,307	$	174	$	171,663	$	321,799	$	( 4,629 )	$	( 4,596 )	$	484,411

The accompanying notes are an integral part of these consolidated financial statements.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

(Dollars in thousands)


	(Unaudited)
	Nine Months Ended September 30,
	2024		2023
Operating activities
Net income	$	40,597	$	36,580
Adjustments to reconcile net income to net cash used in operating activities:
Provision for credit losses	8,400		11,735
Depreciation and amortization of premises and equipment and equipment for operating leases	8,558		7,104
Deferred income tax expense	1,217		492
Net accretion of purchase accounting adjustments on loans	( 2,033 )		( 1,703 )
Net amortization and accretion	5,037		4,572
SBIC investments income	( 895 )		( 1,415 )

Loss (gain) on sale of premises and equipment	9		( 982 )

Loss on sale or writedown of REO	—		89
Loss incurred at the end of operating leases - lessor	1,308		211
BOLI income	( 3,470 )		( 2,844 )
Gain on sale of loans held for sale	( 5,185 )		( 4,213 )
Origination of loans held for sale	( 201,485 )		( 302,355 )
Proceeds from sales of loans held for sale	198,199		163,179
New deferred loan origination costs, net	( 1,931 )		( 1,108 )
Increase in accrued interest receivable and other assets	( 8,241 )		( 11,480 )
Share-based compensation expense	1,363		1,206
ESOP compensation expense	1,151		934
Increase (decrease) in other liabilities	( 1,932 )		1,121
Net cash provided by (used in) operating activities	40,667		( 98,877 )
Investing activities
Purchase of debt securities available for sale	( 33,258 )		( 23,232 )
Proceeds from maturities, calls and paydowns of debt securities available for sale	22,598		47,055


Purchases of CDs in other banks	( 3,925 )		( 12,683 )
Proceeds from maturities of CDs in other banks	9,357		6,674
Net (purchases) redemptions of FHLB and FRB stock	9		( 4,826 )
Net capital contributions in SBIC investments, at cost	( 805 )		( 757 )

Net increase in loans	( 50,301 )		( 102,161 )
Purchase of BOLI	( 28 )		( 99 )
Collection of receivable representing proceeds from redemption of BOLI policies	44,334		2,285
Death benefit proceeds from BOLI policies	2,363		—
Purchase of equipment for operating leases	( 13,703 )		( 11,676 )
Proceeds from sale of equipment for operating leases - lessor	8,657		9,236
Purchase of premises and equipment	( 1,492 )		( 2,539 )
Proceeds from sale of premises and equipment and assets held for sale	—		2,332

Proceeds from sale of REO	—		108
Net cash received in merger	—		30,601

Net cash used in investing activities	( 16,194 )		( 59,682 )

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows (continued)

(Dollars in thousands)


	Unaudited
	Nine Months Ended September 30,
	2024		2023














































Financing activities
Net increase in deposits	100,215		22,339
Net increase (decrease) in revolving line of credit	( 12,750 )		20,263
Net increase (decrease) in short-term borrowings	( 161,000 )		302,000

Repayment of long-term borrowings	—		( 24,728 )
Common stock repurchased	( 645 )		—
Cash dividends paid	( 5,615 )		( 5,052 )
Retired stock	( 365 )		( 382 )
Exercised stock options	2,024		4,099
Net cash provided by (used in) financing activities	( 78,136 )		318,539
Net increase (decrease) in cash and cash equivalents	( 53,663 )		159,980
Cash and cash equivalents at beginning of period	347,140		165,034
Cash and cash equivalents at end of period	$	293,477	$	325,014





Supplemental disclosures
Cash paid during the period for
Interest	$	66,001	$	38,415
Income taxes	13,664		11,923
Noncash transactions
Unrealized gain (loss) in value of debt securities available for sale, net of income taxes	$	1,601	$	( 863 )

Transfer of loans held for sale to loans held for investment	17,040		17,798




Transfer of loans to repossessed assets	872		—
ROU asset and lease liabilities for operating lease accounting	—		3,917




Business combinations
Fair value of assets acquired	$	—	$	665,090
Fair value of liabilities assumed	—		610,188
Net assets acquired	$	—	$	54,902

The accompanying notes are an integral part of these consolidated financial statements.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

1. Summary of Significant Accounting Policies

The consolidated unaudited 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 its consolidated subsidiary, unless the context otherwise requires. HomeTrust is a bank holding company primarily engaged in the business of planning, directing and coordinating the business activities of the Bank. The Bank is a North Carolina state chartered bank and provides a wide range of retail and commercial banking products within its geographic footprint, which includes: North Carolina (the Asheville metropolitan area, the "Piedmont" region, Charlotte and Raleigh/Cary), South Carolina (Greenville and Charleston), East Tennessee (Kingsport/Johnson City, Knoxville and Morristown), Southwest Virginia (the Roanoke Valley) and Georgia (Greater Atlanta). The Bank operates under a single set of corporate policies and procedures and is recognized as a single banking segment for financial reporting purposes.

As a result of its merger with Quantum on February 12, 2023, HomeTrust became the 100 % successor owner of the Quantum Capital Statutory Trust II Delaware trust. The sole assets of the trust represent the proceeds of offerings loaned in exchange for subordinated debentures with similar terms to the trust preferred securities.

The accompanying unaudited consolidated financial statements have been prepared in accordance with US 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 US 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 Transition Report on Form 10-KT for the six-month transition period ended December 31, 2023 ("2023 Form 10-KT") filed with the SEC on March 12, 2024. The results of operations for the nine months ended September 30, 2024 are not necessarily indicative of results that may be expected for the year ending December 31, 2024, the period which will be covered on a Report on Form 10-K.

The preparation of financial statements in conformity with US 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 the determination of the provision and the ACL on loans as an accounting policy that, due to the judgments, estimates and assumptions inherent in the policy, is critical to an understanding of the Company's financial statements. This policy and the related judgments, estimates and assumptions are described in greater detail in the notes to the Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations (Critical Accounting Policies and Estimates) in the 2023 Form 10-KT. 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 this critical accounting policy, 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.

Prior Period Disclosure Correction

Within "Note 6 – Loans and Allowance for Credit Losses on Loans", the tables disclosing our credit risk profile by origination year as of December 31, 2023, beginning on page 18 of this document, reflect the correction of an immaterial error in the prior period disclosure. The correction of the disclosure error redistributed $ 264,101 in loans from the "Revolving" columns to the "Term Loans By Origination Fiscal Year" columns. The error's only impact was to the identified disclosure and therefore had no effect on net income or stockholders' equity as previously reported.

2. Recent Accounting Pronouncements

Newly Issued but Not Yet Effective Accounting Standards

ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." In November 2023, the FASB issued ASU 2023-07 which will require public entities to disclose information about their reportable segments' significant expenses on an interim and annual basis. Public entities will be required to disclose other segment items for each reportable segment and provide a description of its composition. Significant expense categories are derived from expenses that are regularly reported to an entity's chief operating decision-makers and included in segment-reported measures of profit or loss. The ASU will also require a public entity to disclose the title and position of the chief operating decision-maker and explain how the chief operating decision-maker uses the reported measures of profit or loss to assess segment performance. Lastly, ASU 2023-07 also requires interim disclosures of certain segment-related disclosures that previously were required only on an annual basis and clarifies that entities with a single reportable segment are subject to both new and existing segment reporting requirements under Topic 280.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The ASU requires entities to adopt the changes to the segment reporting guidance on a retrospective basis and early adoption is permitted. The Company will update its segment-related disclosures upon adoption of the ASU.

ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." In December 2023, the FASB issued ASU 2023-09 which requires entities to disclose more detailed information in the reconciliation of their statutory tax rate to their effective tax rate. The ASU also requires entities to disclose more detailed information about income taxes paid, including by jurisdiction. This ASU is effective for public business entities for annual reporting periods beginning after December 15, 2024 and interim periods beginning after December 15, 2025. The Company will update its income tax disclosures upon adoption of the ASU.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

3. Merger with Quantum

On February 12, 2023, the Company merged with Quantum which operated two locations in the Atlanta metro area. The aggregate amount of consideration to be paid per the purchase agreement of approximately $ 70,771 , inclusive of consideration of common stock, other cash consideration, and cash in lieu of fractional shares, included $ 15,869 of cash consideration paid by Quantum to its stockholders in advance of the closing date as is further described below. These distributions reduced Quantum's stockholders' equity by an equal amount prior to the transaction closing date.

The following table provides a summary of the assets acquired, liabilities assumed, associated preliminary fair value adjustments and provisional period adjustments by the Company as of the merger date. As provided for under US GAAP, management had up to 12 months following the date of merger to finalize the fair value adjustments. Management has completed its evaluation and the values in the table below are considered final.


	Quantum		Fair Value Adjustments		Provisional Period Adjustments		As Recorded by HomeTrust
Assets acquired
Cash and cash equivalents	$	47,769	$	—	$	—	$	47,769
Debt securities available for sale	10,608		—		—		10,608
FHLB and FRB stock	1,125		—		—		1,125
Loans (1)	567,140		( 5,207 )		—		561,933
Premises and equipment	4,415		4,668		—		9,083
Accrued interest receivable	1,706		—		—		1,706

BOLI	9,066		—		—		9,066

Core deposit intangibles	—		12,210		—		12,210
Other assets	2,727		569		( 179 )		3,117
Total assets acquired	$	644,556	$	12,240	$	( 179 )	$	656,617
Liabilities assumed
Deposits	$	570,419	$	183	$	—	$	570,602
Junior subordinated debt	11,341		( 1,408 )		—		9,933
Other borrowings	24,728		—		—		24,728
Deferred income taxes	—		1,341		250		1,591
Other liabilities	3,334		—		—		3,334
Total liabilities assumed	$	609,822	$	116	$	250	$	610,188

Net assets acquired							$	46,429

Consideration paid
Common stock consideration
Shares of Quantum							574,157
Exchange ratio							2.3942
HomeTrust common stock issued							1,374,647
Price per share of HomeTrust common stock on February 10, 2023							$	27.45
HomeTrust common stock consideration							$	37,734
Cash consideration (2)							17,168
Total consideration							$	54,902

Goodwill							$	8,473

(1) Adjustments to Quantum's total loans include the elimination of Quantum's existing allowance for loan losses of $ 5,972 , the recognition of an ACL at close on PCD loans of $ 369 , and adjustments to reflect the estimated credit fair value mark on the non-PCD loan portfolio of $ 2,932 and the estimated interest rate fair value adjustment on the loan portfolio as a whole (non-PCD and PCD) of $ 7,878 .

(2) As indicated in the Current Report on Form 8-K/A filed with the SEC on March 30, 2023, the amount of cash consideration paid at closing differs from the $ 57.54 per share, or $ 33,037 , reported in the Current Report on Form 8-K filed on February 13, 2023, which announced the closing of the merger. Consistent with the merger agreement, between the execution of the merger agreement and the transaction closing date, Quantum's principal stockholders had the option to withdraw some or all of the amount of cash consideration to eventually be paid at closing in advance of the closing date. The amount of cash consideration paid at closing was reduced by the amount withdrawn during this time period.

Goodwill of $ 8,473 arising from the merger consisted largely of synergies and the cost saves resulting from the combining of operations of the companies, and is not expected to be deductible for income tax purposes.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

4. Debt Securities

Debt securities available for sale consist of the following at the dates indicated:


	September 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

MBS, residential	$	132,026	$	2,041	$	( 1,311 )	$	132,756
Municipal bonds	3,460		—		( 36 )		3,424
Corporate bonds	5,000		—		( 628 )		4,372

Total	$	140,486	$	2,041	$	( 1,975 )	$	140,552


	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

MBS, residential	$	105,477	$	1,194	$	( 2,172 )	$	104,499
Municipal bonds	3,487		—		( 78 )		3,409
Corporate bonds	20,000		—		( 958 )		19,042

Total	$	128,964	$	1,194	$	( 3,208 )	$	126,950

Debt securities available for sale by contractual maturity at September 30, 2024 and December 31, 2023 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.



	September 30, 2024
	Amortized Cost		Estimated Fair Value
Due within one year	$	1,525	$	1,522
Due after one year through five years	1,935		1,902
Due after five years through ten years	5,000		4,372
Due after ten years	—		—
MBS, residential	132,026		132,756
Total	$	140,486	$	140,552



	December 31, 2023
	Amortized Cost		Estimated Fair Value
Due within one year	$	15,000	$	14,848
Due after one year through five years	3,487		3,409
Due after five years through ten years	5,000		4,194
Due after ten years	—		—
MBS, residential	105,477		104,499
Total	$	128,964	$	126,950

The Company had no sales of debt securities available for sale and no gross realized gains or losses were recognized during the nine months ended September 30, 2024 and 2023.

Debt securities available for sale with amortized costs totaling $ 19,310 and $ 43,846 and market values of $ 19,139 and $ 42,329 at September 30, 2024 and December 31, 2023, respectively, were pledged as collateral to secure various public deposits and other borrowings.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

The gross unrealized losses and the fair value for debt securities available for sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2024 and December 31, 2023 were as follows:


	September 30, 2024
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

MBS, residential	$	19	$	—	$	68,509	$	( 1,311 )	$	68,528	$	( 1,311 )
Municipal bonds	—		—		3,424		( 36 )		3,424		( 36 )
Corporate bonds	—		—		3,622		( 628 )		3,622		( 628 )
Total	$	19	$	—	$	75,555	$	( 1,975 )	$	75,574	$	( 1,975 )


	December 31, 2023
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

MBS, residential	$	46,978	$	( 393 )	$	35,200	$	( 1,779 )	$	82,178	$	( 2,172 )
Municipal bonds	—		—		3,409		( 78 )		3,409		( 78 )
Corporate bonds	618		( 132 )		17,674		( 826 )		18,292		( 958 )
Total	$	47,596	$	( 525 )	$	56,283	$	( 2,683 )	$	103,879	$	( 3,208 )

The total number of securities with unrealized losses at September 30, 2024 and December 31, 2023 were 157 and 187 , 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 September 30, 2024 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 Accounting Policies" in our 2023 Form 10-KT 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.

Management excludes the accrued interest receivable balance from the amortized cost basis in measuring ECL on investment securities and does not record an ACL on accrued interest receivable. As of September 30, 2024 and December 31, 2023, accrued interest receivable for debt securities available for sale was $ 494 and $ 469 , respectively.

5. Loans Held For Sale

Loans held for sale, at the lower of cost or fair value, consist of the following as of the dates indicated:


	September 30, 2024		December 31, 2023
One-to-four family	$	788	$	—
SBA	23,267		30,650
HELOCs	165,667		167,783

Total loans held for sale, at the lower of cost or fair value	$	189,722	$	198,433

The carrying balance of loans held for sale, at fair value, was $ 2,968 and $ 3,359 at September 30, 2024 and December 31, 2023, respectively, while the amortized cost of these loans was $ 2,914 and $ 3,286 at the same dates.

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 (1) :


	September 30, 2024		December 31, 2023
Commercial real estate loans
Construction and land development	$	300,905	$	305,269
Commercial real estate – owner occupied	544,689		536,545
Commercial real estate – non-owner occupied	881,340		875,694
Multifamily	114,155		88,623
Total commercial real estate loans	1,841,089		1,806,131
Commercial loans
Commercial and industrial	286,809		237,255
Equipment finance	443,033		465,573
Municipal leases	158,560		150,292

Total commercial loans	888,402		853,120
Residential real estate loans
Construction and land development	63,016		96,646
One-to-four family	627,845		584,405
HELOCs	194,909		185,878
Total residential real estate loans	885,770		866,929
Consumer loans	83,631		113,842
Total loans, net of deferred loan fees and costs	3,698,892		3,640,022
ACL on loans	( 48,131 )		( 48,641 )
Loans, net	$	3,650,761	$	3,591,381

(1) At September 30, 2024 and December 31, 2023 accrued interest receivable of $ 16,679 and $ 16,218 , respectively, was accounted for separately from the amortized cost basis.

All qualifying one-to-four family loans, HELOCs, commercial real estate loans and FHLB of Atlanta stock are pledged as collateral by a blanket pledge to secure outstanding FHLB advances.

Loans are made to the Company's executive officers, directors and their associates during the ordinary course of business. The aggregate amount of loans to such related parties totaled approximately $ 253 and $ 209 at September 30, 2024 and December 31, 2023, respectively. In relation to these loans are unfunded commitments that totaled approximately $ 3 at both September 30, 2024 and December 31, 2023, respectively.

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 loan is not adversely classified because it does not display any of the characteristics for adverse classification.

Special Mention – A special mention loan 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 loans are not adversely classified and do not warrant adverse classification.

Substandard – A substandard loan is inadequately protected by the current net worth and paying capacity of the obligor, or of the collateral pledged, if any. Loans classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Doubtful – A loan classified as doubtful has all the weaknesses inherent in a loan 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 – Loans classified as loss are considered uncollectible and of such little value that their continuing to be carried as a loan 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 tables present the credit risk profile by risk grade for commercial real estate, commercial, residential real estate and consumer loans by origination year as of September 30, 2024. Also included in the tables detailing loan balances are gross charge-offs for the nine months ended September 30, 2024.


	Term Loans By Origination Fiscal Year
September 30, 2024	2024		2023-S (1)		2023		2022		2021		Prior		Revolving		Total
Construction and land development
Risk rating
Pass	$	99,027	$	57,217	$	62,655	$	59,756	$	9,950	$	7,439	$	4,097	$	300,141
Special mention	—		—		—		—		764		—		—		764
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total construction and land development	$	99,027	$	57,217	$	62,655	$	59,756	$	10,714	$	7,439	$	4,097	$	300,905

Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial real estate – owner occupied
Risk rating
Pass	$	44,445	$	35,877	$	65,978	$	99,150	$	83,016	$	201,112	$	4,414	$	533,992
Special mention	—		—		151		136		441		2,239		—		2,967
Substandard	—		274		254		284		1		6,588		—		7,401
Doubtful	—		—		—		305		—		24		—		329
Loss	—		—		—		—		—		—		—		—
Total commercial real estate – owner occupied	$	44,445	$	36,151	$	66,383	$	99,875	$	83,458	$	209,963	$	4,414	$	544,689

Current period gross charge-offs	$	—	$	—	$	77	$	—	$	—	$	208	$	—	$	285

Commercial real estate – non-owner occupied
Risk rating
Pass	$	57,539	$	22,168	$	98,035	$	147,252	$	176,222	$	335,226	$	9,360	$	845,802
Special mention	—		—		3,675		3,830		—		15,095		—		22,600
Substandard	—		—		3,046		—		—		9,892		—		12,938
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total commercial real estate – non-owner occupied	$	57,539	$	22,168	$	104,756	$	151,082	$	176,222	$	360,213	$	9,360	$	881,340

Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Multifamily
Risk rating
Pass	$	9,919	$	5,505	$	6,581	$	19,195	$	46,656	$	25,961	$	—	$	113,817
Special mention	—		—		—		—		—		87		—		87
Substandard	—		—		—		—		—		251		—		251
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total multifamily	$	9,919	$	5,505	$	6,581	$	19,195	$	46,656	$	26,299	$	—	$	114,155

Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	10	$	—	$	10

Total commercial real estate
Risk rating
Pass	$	210,930	$	120,767	$	233,249	$	325,353	$	315,844	$	569,738	$	17,871	$	1,793,752
Special mention	—		—		3,826		3,966		1,205		17,421		—		26,418
Substandard	—		274		3,300		284		1		16,731		—		20,590
Doubtful	—		—		—		305		—		24		—		329
Loss	—		—		—		—		—		—		—		—
Total commercial real estate	$	210,930	$	121,041	$	240,375	$	329,908	$	317,050	$	603,914	$	17,871	$	1,841,089

Total current period gross charge-offs	$	—	$	—	$	77	$	—	$	—	$	218	$	—	$	295

(1) As previously announced, on July 24, 2023, the Board of Directors approved a change in the Company's fiscal year end from June 30 to December 31. "2023-S" represents the six-month transition period ended December 31, 2023. All subsequent periods are based on a calendar year end.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)


	Term Loans By Origination Fiscal Year
September 30, 2024	2024		2023-S (1)		2023		2022		2021		Prior		Revolving		Total
Commercial and industrial
Risk rating
Pass	$	63,013	$	26,895	$	43,555	$	38,078	$	11,407	$	23,761	$	71,858	$	278,567
Special mention	—		—		—		449		99		2,617		151		3,316
Substandard	—		279		1,340		1,498		524		860		169		4,670
Doubtful	—		—		—		—		—		256		—		256
Loss	—		—		—		—		—		—		—		—
Total commercial and industrial	$	63,013	$	27,174	$	44,895	$	40,025	$	12,030	$	27,494	$	72,178	$	286,809

Current period gross charge-offs	$	—	$	—	$	1,168	$	1,056	$	51	$	1,089	$	—	$	3,364

Equipment finance
Risk rating
Pass	$	98,055	$	69,198	$	138,203	$	77,660	$	35,051	$	14,040	$	—	$	432,207
Special mention	—		84		752		932		429		260		—		2,457
Substandard	—		—		—		3,218		—		114		—		3,332
Doubtful	—		328		1,953		2,221		485		50		—		5,037
Loss	—		—		—		—		—		—		—		—
Total equipment finance	$	98,055	$	69,610	$	140,908	$	84,031	$	35,965	$	14,464	$	—	$	443,033

Current period gross charge-offs	$	—	$	—	$	2,129	$	2,509	$	486	$	307	$	—	$	5,431

Municipal leases
Risk rating
Pass	$	17,098	$	18,901	$	25,129	$	23,173	$	24,869	$	49,390	$	—	$	158,560
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total municipal leases	$	17,098	$	18,901	$	25,129	$	23,173	$	24,869	$	49,390	$	—	$	158,560

Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total commercial
Risk rating
Pass	$	178,166	$	114,994	$	206,887	$	138,911	$	71,327	$	87,191	$	71,858	$	869,334
Special mention	—		84		752		1,381		528		2,877		151		5,773
Substandard	—		279		1,340		4,716		524		974		169		8,002
Doubtful	—		328		1,953		2,221		485		306		—		5,293
Loss	—		—		—		—		—		—		—		—
Total commercial	$	178,166	$	115,685	$	210,932	$	147,229	$	72,864	$	91,348	$	72,178	$	888,402

Total current period gross charge-offs	$	—	$	—	$	3,297	$	3,565	$	537	$	1,396	$	—	$	8,795

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)


	Term Loans By Origination Fiscal Year
September 30, 2024	2024		2023-S (1)		2023		2022		2021		Prior		Revolving		Total
Construction and land development
Risk rating
Pass	$	8,676	$	13,703	$	27,536	$	9,671	$	2,712	$	584	$	—	$	62,882
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		134		—		134
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total construction and land development	$	8,676	$	13,703	$	27,536	$	9,671	$	2,712	$	718	$	—	$	63,016

Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

One-to-four family
Risk rating
Pass	$	30,254	$	20,789	$	147,351	$	152,076	$	101,669	$	161,554	$	7,590	$	621,283
Special mention	—		—		—		—		—		493		45		538
Substandard	189		355		594		670		—		4,201		—		6,009
Doubtful	—		—		—		—		—		15		—		15
Loss	—		—		—		—		—		—		—		—
Total one-to-four family	$	30,443	$	21,144	$	147,945	$	152,746	$	101,669	$	166,263	$	7,635	$	627,845

Current period gross charge-offs	$	—	$	—	$	—	$	7	$	—	$	5	$	—	$	12

HELOCs
Risk rating
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	190,533	$	190,533
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		4,376		4,376
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total HELOCs	$	—	$	—	$	—	$	—	$	—	$	—	$	194,909	$	194,909

Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	48	$	48

Total residential real estate
Risk rating
Pass	$	38,930	$	34,492	$	174,887	$	161,747	$	104,381	$	162,138	$	198,123	$	874,698
Special mention	—		—		—		—		—		493		45		538
Substandard	189		355		594		670		—		4,335		4,376		10,519
Doubtful	—		—		—		—		—		15		—		15
Loss	—		—		—		—		—		—		—		—
Total residential real estate	$	39,119	$	34,847	$	175,481	$	162,417	$	104,381	$	166,981	$	202,544	$	885,770

Total current period gross charge-offs	$	—	$	—	$	—	$	7	$	—	$	5	$	48	$	60


	Term Loans By Origination Fiscal Year
September 30, 2024	2024		2023-S (1)		2023		2022		2021		Prior		Revolving		Total
Total consumer
Risk rating
Pass	$	5,013	$	20,200	$	37,074	$	9,780	$	6,192	$	4,075	$	250	$	82,584
Special mention	—		—		—		—		—		—		—		—
Substandard	54		52		479		123		169		147		16		1,040
Doubtful	—		—		5		—		2		—		—		7
Loss	—		—		—		—		—		—		—		—
Total consumer	$	5,067	$	20,252	$	37,558	$	9,903	$	6,363	$	4,222	$	266	$	83,631

Total current period gross charge-offs	$	35	$	165	$	459	$	227	$	86	$	47	$	2	$	1,021

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

The following tables present the credit risk profile by risk grade for commercial real estate, commercial, residential real estate and consumer loans by origination year as of December 31, 2023 (2). Also included in the tables detailing loan balances are gross charge-offs for the year ended December 31, 2023.


	Term Loans By Origination Fiscal Year
December 31, 2023	2023-S (1)		2023		2022		2021		2020		Prior		Revolving		Total
Construction and land development
Risk rating
Pass	$	61,716	$	105,170	$	88,320	$	37,197	$	201	$	7,581	$	4,805	$	304,990
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		279		—		—		—		—		279
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total construction and land development	$	61,716	$	105,170	$	88,599	$	37,197	$	201	$	7,581	$	4,805	$	305,269

Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial real estate – owner occupied
Risk rating
Pass	$	35,428	$	61,090	$	104,005	$	90,506	$	72,121	$	159,328	$	3,486	$	525,964
Special mention	—		149		148		447		2,033		3,699		—		6,476
Substandard	—		—		379		1		338		2,886		—		3,604
Doubtful	—		—		—		—		289		212		—		501
Loss	—		—		—		—		—		—		—		—
Total commercial real estate – owner occupied	$	35,428	$	61,239	$	104,532	$	90,954	$	74,781	$	166,125	$	3,486	$	536,545

Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	290	$	—	$	290

Commercial real estate – non-owner occupied
Risk rating
Pass	$	11,716	$	104,881	$	155,782	$	185,264	$	95,749	$	302,341	$	6,460	$	862,193
Special mention	—		—		—		—		—		294		—		294
Substandard	—		3,078		—		—		6,180		3,949		—		13,207
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total commercial real estate – non-owner occupied	$	11,716	$	107,959	$	155,782	$	185,264	$	101,929	$	306,584	$	6,460	$	875,694

Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Multifamily
Risk rating
Pass	$	5,515	$	4,184	$	18,597	$	21,411	$	10,921	$	25,400	$	644	$	86,672
Special mention	—		—		1,583		—		—		89		—		1,672
Substandard	—		—		—		—		—		279		—		279
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total multifamily	$	5,515	$	4,184	$	20,180	$	21,411	$	10,921	$	25,768	$	644	$	88,623

Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total commercial real estate
Risk rating
Pass	$	114,375	$	275,325	$	366,704	$	334,378	$	178,992	$	494,650	$	15,395	$	1,779,819
Special mention	—		149		1,731		447		2,033		4,082		—		8,442
Substandard	—		3,078		658		1		6,518		7,114		—		17,369
Doubtful	—		—		—		—		289		212		—		501
Loss	—		—		—		—		—		—		—		—
Total commercial real estate	$	114,375	$	278,552	$	369,093	$	334,826	$	187,832	$	506,058	$	15,395	$	1,806,131

Total current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	290	$	—	$	290

(2) This table reflects the correction of an immaterial error in the prior period disclosure. See "Note 1 – Summary of Significant Accounting Policies" for further information.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)


	Term Loans By Origination Fiscal Year
December 31, 2023	2023-S (1)		2023		2022		2021		2020		Prior		Revolving		Total
Commercial and industrial
Risk rating
Pass	$	19,180	$	51,742	$	60,487	$	14,146	$	11,071	$	22,352	$	49,663	$	228,641
Special mention	—		329		227		158		54		81		—		849
Substandard	—		671		341		29		1,380		307		3,707		6,435
Doubtful	—		713		—		—		222		—		264		1,199
Loss	—		—		—		—		—		131		—		131
Total commercial and industrial	$	19,180	$	53,455	$	61,055	$	14,333	$	12,727	$	22,871	$	53,634	$	237,255

Current period gross charge-offs	$	—	$	1,337	$	402	$	184	$	574	$	618	$	—	$	3,115

Equipment finance
Risk rating
Pass	$	83,332	$	172,704	$	113,363	$	57,295	$	25,552	$	4,854	$	—	$	457,100
Special mention	—		338		666		383		341		252		—		1,980
Substandard	—		206		—		—		—		134		—		340
Doubtful	—		2,645		2,498		626		384		—		—		6,153
Loss	—		—		—		—		—		—		—		—
Total equipment finance	$	83,332	$	175,893	$	116,527	$	58,304	$	26,277	$	5,240	$	—	$	465,573

Current period gross charge-offs	$	—	$	550	$	912	$	539	$	29	$	14	$	—	$	2,044

Municipal leases
Risk rating
Pass	$	17,372	$	34,203	$	28,241	$	15,742	$	7,358	$	47,376	$	—	$	150,292
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total municipal leases	$	17,372	$	34,203	$	28,241	$	15,742	$	7,358	$	47,376	$	—	$	150,292

Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total commercial
Risk rating
Pass	$	119,884	$	258,649	$	202,091	$	87,183	$	43,981	$	74,582	$	49,663	$	836,033
Special mention	—		667		893		541		395		333		—		2,829
Substandard	—		877		341		29		1,380		441		3,707		6,775
Doubtful	—		3,358		2,498		626		606		—		264		7,352
Loss	—		—		—		—		—		131		—		131
Total commercial	$	119,884	$	263,551	$	205,823	$	88,379	$	46,362	$	75,487	$	53,634	$	853,120

Total current period gross charge-offs	$	—	$	1,887	$	1,314	$	723	$	603	$	632	$	—	$	5,159

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)


	Term Loans By Origination Fiscal Year
December 31, 2023	2023-S (1)		2023		2022		2021		2020		Prior		Revolving		Total
Construction and land development
Risk rating
Pass	$	7,669	$	64,716	$	18,841	$	4,002	$	44	$	1,237	$	—	$	96,509
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		137		—		137
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total construction and land development	$	7,669	$	64,716	$	18,841	$	4,002	$	44	$	1,374	$	—	$	96,646

Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

One-to-four family
Risk rating
Pass	$	19,532	$	102,902	$	153,029	$	109,870	$	48,971	$	139,061	$	5,395	$	578,760
Special mention	—		—		—		—		—		511		—		511
Substandard	—		383		258		—		202		4,268		—		5,111
Doubtful	—		—		—		—		—		23		—		23
Loss	—		—		—		—		—		—		—		—
Total one-to-four family	$	19,532	$	103,285	$	153,287	$	109,870	$	49,173	$	143,863	$	5,395	$	584,405

Current period gross charge-offs	$	—	$	—	$	13	$	3	$	12	$	4	$	—	$	32

HELOCs
Risk rating
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	183,815	$	183,815
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		2,034		2,034
Doubtful	—		—		—		—		—		—		29		29
Loss	—		—		—		—		—		—		—		—
Total HELOCs	$	—	$	—	$	—	$	—	$	—	$	—	$	185,878	$	185,878

Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total residential real estate
Risk rating
Pass	$	27,201	$	167,618	$	171,870	$	113,872	$	49,015	$	140,298	$	189,210	$	859,084
Special mention	—		—		—		—		—		511		—		511
Substandard	—		383		258		—		202		4,405		2,034		7,282
Doubtful	—		—		—		—		—		23		29		52
Loss	—		—		—		—		—		—		—		—
Total residential real estate	$	27,201	$	168,001	$	172,128	$	113,872	$	49,217	$	145,237	$	191,273	$	866,929

Total current period gross charge-offs	$	—	$	—	$	13	$	3	$	12	$	4	$	—	$	32


	Term Loans By Origination Fiscal Year
December 31, 2023	2023-S (1)		2023		2022		2021		2020		Prior		Revolving		Total
Total consumer
Risk rating
Pass	$	26,569	$	51,351	$	14,408	$	9,672	$	6,313	$	4,068	$	309	$	112,690
Special mention	—		—		—		—		—		—		—		—
Substandard	—		329		265		210		172		141		24		1,141
Doubtful	—		7		—		3		—		—		—		10
Loss	—		—		—		—		—		1		—		1
Total consumer	$	26,569	$	51,687	$	14,673	$	9,885	$	6,485	$	4,210	$	333	$	113,842

Total current period gross charge-offs	$	6	$	401	$	118	$	34	$	11	$	9	$	—	$	579

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

The following tables present aging analyses of past due loans (including nonaccrual loans) by segment and class for the periods indicated:



	Past Due								Total Loans
	30-89 Days		90 Days+		Total		Current
September 30, 2024
Commercial real estate
Construction and land development	$	—	$	—	$	—	$	300,905	$	300,905
Commercial real estate – owner occupied	4,040		612		4,652		540,037		544,689
Commercial real estate – non-owner occupied	—		4,004		4,004		877,336		881,340
Multifamily	—		—		—		114,155		114,155
Total commercial real estate	4,040		4,616		8,656		1,832,433		1,841,089
Commercial
Commercial and industrial	227		3,283		3,510		283,299		286,809
Equipment finance	1,938		3,235		5,173		437,860		443,033
Municipal leases	—		—		—		158,560		158,560

Total commercial	2,165		6,518		8,683		879,719		888,402
Residential real estate
Construction and land development	—		132		132		62,884		63,016
One-to-four family	1,360		1,287		2,647		625,198		627,845
HELOCs	1,564		1,914		3,478		191,431		194,909
Total residential real estate	2,924		3,333		6,257		879,513		885,770
Consumer	463		211		674		82,957		83,631
Total loans	$	9,592	$	14,678	$	24,270	$	3,674,622	$	3,698,892


	Past Due								Total Loans
	30-89 Days		90 Days+		Total		Current
December 31, 2023
Commercial real estate
Construction and land development	$	—	$	—	$	—	$	305,269	$	305,269
Commercial real estate – owner occupied	657		501		1,158		535,387		536,545
Commercial real estate – non-owner occupied	4,032		—		4,032		871,662		875,694
Multifamily	—		—		—		88,623		88,623
Total commercial real estate	4,689		501		5,190		1,800,941		1,806,131
Commercial
Commercial and industrial	974		2,667		3,641		233,614		237,255
Equipment finance	5,411		4,019		9,430		456,143		465,573
Municipal leases	—		—		—		150,292		150,292

Total commercial	6,385		6,686		13,071		840,049		853,120
Residential real estate
Construction and land development	—		132		132		96,514		96,646
One-to-four family	958		1,068		2,026		582,379		584,405
HELOCs	1,240		1,622		2,862		183,016		185,878
Total residential real estate	2,198		2,822		5,020		861,909		866,929
Consumer	535		301		836		113,006		113,842
Total loans	$	13,807	$	10,310	$	24,117	$	3,615,905	$	3,640,022

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

The following table presents the 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 nine months ended September 30, 2024.


	September 30, 2024		December 31, 2023		90 Days+ & Still Accruing as of September 30, 2024		Nonaccrual with No ACL as of September 30, 2024		Interest Income Recognized
Commercial real estate

Commercial real estate – owner occupied	$	7,215	$	912	$	—	$	5,370	$	70
Commercial real estate – non-owner occupied	4,004		4,032		—		—		39
Multifamily	55		74		—		—		4
Total commercial real estate	11,274		5,018		—		5,370		113
Commercial
Commercial and industrial	3,978		2,774		—		643		56
Equipment finance	8,543		6,463		—		3,321		166


Total commercial	12,521		9,237		—		3,964		222
Residential real estate
Construction and land development	132		132		—		—		—
One-to-four family	2,102		2,205		—		—		70
HELOCs	2,477		2,173		—		—		34
Total residential real estate	4,711		4,510		—		—		104
Consumer	400		568		—		—		17
Total loans	$	28,906	$	19,333	$	—	$	9,334	$	456

The following tables present analyses of the ACL on loans by segment for the periods indicated. In addition to the provision for credit losses on loans presented below, benefits of $ 15 and $ 35 for off-balance sheet credit exposures were recorded during the three and nine months ended September 30, 2024, respectively. Benefits of $ 280 and $ 385 for off-balance sheet credit exposures were recorded during the three and nine months ended September 30, 2023, respectively. In addition, for the nine months ended September 30, 2023, $ 4,921 and $ 369 of the provision for credit losses was recognized to establish ACLs on Quantum's loan portfolio and off-balance-sheet credit exposure, respectively.


	Three Months Ended September 30, 2024
	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Total
Balance at beginning of period	$	20,539	$	18,115	$	9,103	$	1,466	$	49,223

Provision for credit losses	134		2,061		714		81		2,990


Charge-offs	( 87 )		( 3,987 )		—		( 370 )		( 4,444 )
Recoveries	24		255		9		74		362
Net (charge-offs) recoveries	( 63 )		( 3,732 )		9		( 296 )		( 4,082 )
Balance at end of period	$	20,610	$	16,444	$	9,826	$	1,251	$	48,131


	Three Months Ended September 30, 2023
	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Total
Balance at beginning of period	$	20,690	$	15,216	$	9,284	$	2,003	$	47,193
Provision for credit losses	( 30 )		2,383		260		237		2,850
Charge-offs	( 290 )		( 2,167 )		( 27 )		( 320 )		( 2,804 )
Recoveries	1		94		31		52		178
Net (charge-offs) recoveries	( 289 )		( 2,073 )		4		( 268 )		( 2,626 )
Balance at end of period	$	20,371	$	15,526	$	9,548	$	1,972	$	47,417


	Nine Months Ended September 30, 2024
	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Total
Balance at beginning of period	$	20,323	$	17,025	$	9,285	$	2,008	$	48,641

Provision for credit losses	558		7,381		442		54		8,435


Charge-offs	( 295 )		( 8,795 )		( 60 )		( 1,021 )		( 10,171 )
Recoveries	24		833		159		210		1,226
Net (charge-offs) recoveries	( 271 )		( 7,962 )		99		( 811 )		( 8,945 )
Balance at end of period	$	20,610	$	16,444	$	9,826	$	1,251	$	48,131

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)


	Nine Months Ended September 30, 2023
	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Total
Balance at beginning of period	$	15,059	$	12,382	$	9,048	$	2,370	$	38,859
Provision for credit losses	5,309		6,484		286		41		12,120
Initial ACL on PCD loans	292		72		5		—		369
Charge-offs	( 290 )		( 3,830 )		( 96 )		( 667 )		( 4,883 )
Recoveries	1		418		305		228		952
Net (charge-offs) recoveries	( 289 )		( 3,412 )		209		( 439 )		( 3,931 )
Balance at end of period	$	20,371	$	15,526	$	9,548	$	1,972	$	47,417

A loan is considered to be collateral dependent when the borrower is experiencing financial difficulty and the repayment is expected to be provided substantially through the operation or sale of collateral. The following tables provide a breakdown between loans identified as CDAs and non-CDAs, by segment and class, as well as collateral coverage for those loans for the periods indicated below:


	Type and Extent of Collateral Securing CDAs								Non-CDAs
September 30, 2024	Residential Property		Investment Property		Commercial Property		Business Assets					Total
Commercial real estate
Construction and land development	$	—	$	—	$	—	$	—		$	300,905	$	300,905
Commercial real estate – owner occupied	—		—		6,495		—			538,194		544,689
Commercial real estate – non-owner occupied	—		—		4,276		—			877,064		881,340
Multifamily	—		—		—		—			114,155		114,155
Total commercial real estate	—		—		10,771		—			1,830,318		1,841,089
Commercial
Commercial and industrial	—		—		—		829			285,980		286,809
Equipment finance	—		—		—		4,536			438,497		443,033
Municipal leases	—		—		—		—			158,560		158,560

Total commercial	—		—		—		5,365			883,037		888,402
Residential real estate
Construction and land development	—		—		—		—			63,016		63,016
One-to-four family	—		—		—		—			627,845		627,845
HELOCs	—		—		—		—			194,909		194,909
Total residential real estate	—		—		—		—			885,770		885,770
Consumer	—		—		—		—			83,631		83,631
Total	$	—	$	—	$	10,771	$	5,365		$	3,682,756	$	3,698,892
Total collateral value	$	—	$	—	$	15,743	$	4,879

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)


	Type and Extent of Collateral Securing CDAs								Non-CDAs
December 31, 2023	Residential Property		Investment Property		Commercial Property		Business Assets					Total
Commercial real estate
Construction and land development	$	—	$	—	$	—	$	—		$	305,269	$	305,269
Commercial real estate – owner occupied	—		—		1,821		—			534,724		536,545
Commercial real estate – non-owner occupied	—		—		4,310		—			871,384		875,694
Multifamily	—		—		—		—			88,623		88,623
Total commercial real estate	—		—		6,131		—			1,800,000		1,806,131
Commercial
Commercial and industrial	—		—		—		1,322			235,933		237,255
Equipment finance	—		—		—		1,304			464,269		465,573
Municipal leases	—		—		—		—			150,292		150,292

Total commercial	—		—		—		2,626			850,494		853,120
Residential real estate
Construction and land development	—		—		—		—			96,646		96,646
One-to-four family	—		—		—		—			584,405		584,405
HELOCs	510		—		—		—			185,368		185,878
Total residential real estate	510		—		—		—			866,419		866,929
Consumer	—		—		—		—			113,842		113,842
Total	$	510	$	—	$	6,131	$	2,626		$	3,630,755	$	3,640,022
Total collateral value	$	733	$	—	$	5,627	$	686

Modifications to Borrowers Experiencing Financial Difficulty

The Company modifies loans to borrowers experiencing financial difficulty by providing principal forgiveness, a term extension, an other-than-insignificant payment delay or interest rate adjustments. In some cases, the Company provides multiple types of modifications on one loan. Typically, one type of modification, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another modification, such as principal forgiveness, may be granted. For loans included in the combination columns in the table below, multiple types of modifications have been made on the same loan within the current reporting period.

The following table presents the amortized cost basis of loans at September 30, 2024, that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2024, by class and type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial difficulty as compared to the amortized cost basis of each class of financing receivable is also presented.


	Three Months Ended September 30, 2024
	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Adjustment		Combination Term Extension & Principal Forgiveness		Combination Term Extension & Interest Rate Reduction		% of Total Class of Financing Receivable
Commercial real estate

Commercial real estate – owner-occupied	$	—	$	675	$	—	$	161	$	—	$	—	0.15	%


	Nine Months Ended September 30, 2024
	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Adjustment		Combination Term Extension & Principal Forgiveness		Combination Term Extension & Interest Rate Reduction		% of Total Class of Financing Receivable
Commercial real estate

Commercial real estate – owner-occupied	$	—	$	675	$	—	$	161	$	—	$	—	0.15	%
Commercial real estate – non-owner-occupied	—		956		—		—		—		—		0.11	%

Commercial loans
Commercial and industrial	—		2,137		630		147		—		—		1.02	%







Total	$	—	$	3,768	$	630	$	308	$	—	$	—	0.10	%

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

The following table presents loans that had a payment default during the periods indicated that had previously been modified within the prior twelve months. For purposes of this table, a loan is considered to be in default when it becomes 30 days contractually past due under the modified terms.


	Three Months Ended September 30, 2024
	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Adjustment
Commercial real estate


Commercial real estate – non-owner-occupied	$	—	$	305	$	—	$	—

Commercial loans
Commercial and industrial	—		637		—		—







Total	$	—	$	942	$	—	$	—


	Nine Months Ended September 30, 2024
	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Adjustment
Commercial real estate


Commercial real estate – non-owner-occupied	$	—	$	1,261	$	—	$	—

Commercial loans
Commercial and industrial	—		637		—		—







Total	$	—	$	1,898	$	—	$	—

Off-Balance Sheet Credit Exposure

The Company maintains a separate reserve for credit losses on off-balance sheet credit exposures, including unfunded loan commitments, which is included in other liabilities on the consolidated balance sheet. The reserve for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit losses in the consolidated statement 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 September 30, 2024 and December 31, 2023 , the ACL on off-balance sheet credit exposures included in other liabilities was $ 2,552 and $ 2,587 , respectively.

7. Deposit Accounts

Deposit accounts at the dates indicated consist of the following:


	September 30, 2024		December 31, 2023
Noninterest-bearing accounts	$	684,501	$	784,950
NOW accounts	534,517		591,270
Money market accounts	1,345,289		1,246,807
Savings accounts	179,762		194,486
Certificates of deposit	1,017,519		843,860
Total	$	3,761,588	$	3,661,373

Deposits from executive officers and directors and their associates totaled approximately $ 522 and $ 1,555 at September 30, 2024 and December 31, 2023 , respectively.

As of September 30, 2024, scheduled maturities of certificates of deposit were as follows:


Remainder of 2024	$	323,770
2025	675,894
2026	11,266
2027	4,586
2028	1,329
Thereafter	674
Total	$	1,017,519

Certificates of deposit with balances of $250 or greater totaled $ 158,523 and $ 118,035 at September 30, 2024 and December 31, 2023 , respectively. Generally, deposit amounts in excess of $250 are not federally insured.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

8. Borrowings

Junior Subordinated Debentures

On February 21, 2007, Quantum formed a Connecticut statutory trust, Quantum Capital Statutory Trust II (the "Trust"), which issued $ 11,000 of trust preferred securities that were designed to qualify as Tier I capital under Federal Reserve Board guidelines. All of the common securities of the Trust were owned by Quantum. The proceeds from the issuance of the common securities and the trust preferred securities were used by the Trust to purchase $ 11,341 of junior subordinated debentures of Quantum. As a result of its merger with Quantum on February 12, 2023, HomeTrust became the 100 % successor owner of the Trust.

The trust preferred securities accrue and pay quarterly distributions at a floating rate of 3-month Term SOFR plus 2.20 %, which was 6.79 % at September 30, 2024. The Company has guaranteed distributions and other payments due on the trust preferred securities to the extent the Trust has insufficient funds with which to make the distributions and other payments. The net combined effect of all documents entered into in connection with the trust preferred securities is that the Company is liable to make the distributions and other payments required on the trust preferred securities.

The trust preferred securities are mandatorily redeemable upon maturity of the debentures on March 15, 2037, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the debentures purchased by the Trust, in whole or in part, on or after March 15, 2012. As specified in the indenture, if the debentures are redeemed prior to maturity, the redemption price will be the principal amount and any accrued but unpaid interest.

Other Borrowings

Borrowings, outside of junior subordinated debt, consist of the following at the dates indicated:


	September 30, 2024				December 31, 2023
	Balance		Weighted Average Rate		Balance		Weighted Average Rate
FHLB advances (short-term)	$	100,000	5.07	%	$	105,000	5.44	%
FRB advances (short-term)	154,000		5.00		310,000		5.50
Revolving lines of credit	6,013		8.50		18,763		9.00
Total other borrowings	$	260,013	5.11	%	$	433,763	5.64	%

All qualifying one-to-four family loans, HELOCs, commercial real estate loans, multifamily loans and FHLB of Atlanta stock are pledged as collateral to secure outstanding FHLB advances while commercial construction, indirect auto, and equipment and municipal leases are pledged as collateral to secure outstanding FRB advances. At September 30, 2024 and December 31, 2023 , the Company had the ability to borrow $ 162,189 and $ 72,766 , respectively, through additional FHLB advances and $ 170,507 and $ 55,254 , respectively, through the unused portion of a line of credit with the FRB.

At September 30, 2024 and December 31 , 2023 , the Company maintai ned revolving lines of credit with three unaffiliated banks, the unused portions of which totaled $ 158,987 and $ 146,237 , respectively. At September 30, 2024 and December 31 , 2023, HomeTrust had drawn $ 6,013 and $ 18,763 , respectively, on a $ 40,000 revolving line of credit which bears interest at The Wall Street Journal prime rate plus 50 basis points, maturing on January 28, 2025, although the term may be extended for an additional year if no events of default have occurred.

9. 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 our option to renew or extend the lease term, that option is included in estimating the value of the ROU and 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 Sheet. The Company recognizes lease expenses for these leases over the lease term.

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.



	September 30, 2024			December 31, 2023
Supplemental balance sheet information
ROU assets	$	8,373		$	9,259

Lease liabilities	$	9,917		$	10,975

Weighted-average remaining lease terms (years)	8.4			8.8
Weighted-average discount rate	3.46		%	3.41		%

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

The following schedule summarizes aggregate future minimum lease payments under these operating leases at September 30, 2024:



Remainder of 2024	$	460
2025	1,716
2026	1,707
2027	1,729
2028	1,539
Thereafter	4,413
Total undiscounted minimum lease payments	11,564
Less: amount representing interest	( 1,647 )
Total lease liability	$	9,917

The following table presents components of operating lease expense for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating lease cost (included in occupancy expense, net)	$	407	$	430	$	1,221	$	1,240
Variable lease cost (included in occupancy expense, net)	1		1		4		3
Sublease income (included in other noninterest income)	( 43 )		( 42 )		( 128 )		( 126 )
Total operating lease expense, net	$	365	$	389	$	1,097	$	1,117

As Lessee - Finance Lease

During the quarter ended March 31, 2023, the Company purchased the property associated with the finance lease reported historically. The Company purchased the property for $ 1,249 , terminating the existing land lease. Prior to the purchase, interest expense on the lease liability totaled $ 15 for the three months ended March 31, 2023.

The following table presents s upplemental lease cash flow information for the periods indicated:


	Nine Months Ended September 30,
	2024		2023
ROU assets - noncash additions (operating leases)	$	—	$	3,956

Cash paid for amounts included in the measurement of lease liabilities (operating leases)	1,140		1,019
Cash paid for amounts included in the measurement of lease liabilities (finance leases)	—		22

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 construction, transportation, healthcare and manufacturing equipment. Many of its operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a fixed purchase option, and most of the leases that do not have a 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 one to seven 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 $ 33,865 and $ 30,121 with a residual value of $ 14,140 and $ 14,958 as of September 30, 2024 and December 31 , 2023 , respectively.

The following table presents total equipment finance operating lease income and depreciation expense for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating lease income	$	1,637	$	1,785	$	5,087	$	4,515
Depreciation expense	2,102		1,393		5,666		3,924

The following schedule summarizes aggregate future minimum lease payments to be received at September 30, 2024:



Remainder of 2024	$	2,170
2025	7,924
2026	6,001
2027	3,410
2028	3,134
Thereafter	4,045
Total of future minimum payments	$	26,684

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

As Lessor - Financing 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 of the loan portfolio. For the three months ended September 30, 2024 and 2023, interest income on equipment finance leases totaled $ 1,181 and $ 995 , respectively. For the nine months ended September 30, 2024 and 2023, interest income on equipment finance leases totaled $ 3,348 and $ 2,810 , respectively.

The lease receivable component of finance lease net investment included within the equipment finance class of financing receivables was $ 72,125 and $ 70,150 at September 30, 2024 and December 31 , 2023 , respectively.

The following schedule summarizes, as of September 30, 2024, aggregate future minimum finance lease payments to be received:



Remainder of 2024	$	7,891
2025	24,024
2026	20,199
2027	15,546
2028	9,013
Thereafter	6,627
Total undiscounted minimum lease payments	83,300
Less: amount representing interest	( 11,175 )
Total lease receivable	$	72,125

10. Equity Incentive Plan

The Company historically provided stock-based awards through the 2013 Omnibus Incentive Plan, which provided 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. On November 14, 2022, at the Company's annual meeting, stockholders approved the 2022 Omnibus Incentive Plan which provides for the same types of awards as described under the 2013 Omnibus Incentive Plan. Going forward, any future grants will be made under this plan.

The cost of equity-based awards under the 2022 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 1,000,000 . Shares of common stock issued under the plan will be issued out of authorized but unissued shares, some or all of which 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 dates indicated below:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Share-based compensation expense	$	541	$	383	$	1,363	$	1,206
Tax benefit	128		90		323		283

The table below presents stock option activity and related information for the nine months ended September 30, 2024 and 2023:


	Options	Weighted-Average Exercise Price		Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Options outstanding at December 31, 2022	849,623	$	22.06	3.9	$	2,958


Exercised	( 279,549 )	14.66
Forfeited	( 27,724 )	25.39

Options outstanding at September 30, 2023	542,350	$	25.70	4.8	$	157
Exercisable at September 30, 2023	467,390	$	25.40	4.4	$	157
Non-vested at September 30, 2023	74,960	$	27.58	7.7	$	—

Options outstanding at December 31, 2023	534,350	$	25.85	4.6	$	776

Exercised	( 82,113 )	24.65
Forfeited	( 23,600 )	25.94

Options outstanding at September 30, 2024	428,637	$	26.07	4.0	$	3,433
Exercisable at September 30, 2024	379,667	$	25.85	3.7	$	3,124
Non-vested at September 30, 2024	48,970	$	27.77	6.9	$	309

There were no options granted during the nine months ended September 30, 2024 and 2023.

At September 30, 2024, the Company had $ 261 of unrecognized compensation expense related to 48,970 stock options originally scheduled to vest over a five-year period. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.1 years at September 30, 2024. At September 30, 2023, the Company had $ 428 of unrecognized compensation expense

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

related to 74,960 stock options originally scheduled to vest over a five-year period. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.4 years at September 30, 2023.

The table below presents restricted stock award activity and related information:


	Restricted Stock Awards (1)	Performance-Based Restricted Stock Units (2)	Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value
Non-vested at December 31, 2022	100,992	22,843	$	27.28	$	2,033
Granted	54,339	23,684	27.39
Vested	( 41,590 )	( 18,494 )	26.07
Forfeited	( 5,520 )	( 3,032 )	27.14
Non-vested at September 30, 2023	108,221	25,001	$	27.69	$	2,887

Non-vested at December 31, 2023	106,143	25,001	$	27.70	$	3,530
Granted	73,502	17,690	26.96
Vested	( 36,639 )	( 10,683 )	28.26
Forfeited	( 2,211 )	( 501 )	27.36
Non-vested at September 30, 2024	140,795	31,507	$	27.16	$	5,872

(1) Restricted stock awards are scheduled to vest over 1.0 year for director awards and 5.0 years for employee awards.

(2) Performance-based restricted stock units are scheduled to vest over 3.0 years assuming the applicable financial goals are met.

At September 30, 2024, unrecognized compensation expense was $ 3,523 related to 172,302 shares of restricted stock and restricted stock units. The weighted average period over which compensation cost related to non-vested awards was expected to be recognized was 1.7 years at September 30, 2024. At September 30, 2023, unrecognized compensation expense was $ 2,751 related to 133,222 shares of restricted stock and restricted stock units. The weighted average period over which compensation cost related to non-vested awards was expected to be recognized was 1.7 years at September 30, 2023.

11. Net Income per Share

The following is a reconciliation of the numerator and denominator of basic and diluted net income per common share as of the dates indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator
Net income	$	13,112	$	14,833	$	40,597	$	36,580
Allocation of earnings to participating securities	( 132 )		( 117 )		( 410 )		( 292 )
Numerator for basic and diluted EPS - net income available to common stockholders	$	12,980	$	14,716	$	40,187	$	36,288



Denominator
Weighted-average common shares outstanding - basic	16,931,793		16,792,177		16,891,619		16,532,335
Dilutive effect of assumed exercise of stock options	96,031		8,724		46,709		20,984
Weighted-average common shares outstanding - diluted	17,027,824		16,800,901		16,938,328		16,553,319
Net income per share - basic	$	0.77	$	0.88	$	2.38	$	2.19
Net income per share - diluted	$	0.76	$	0.88	$	2.37	$	2.18

Potential dilutive shares are excluded from the computation of earnings per share if their effect is anti-dilutive. There were 45,450 and 512,150 stock options that were anti-dilutive as of September 30, 2024 and 2023, respectively.

12. 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.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

The table below presents details of loan commitments outstanding as of the dates indicated:


	September 30, 2024		December 31, 2023
Variable rate commitments	$	62,261	$	42,826
Fixed rate commitments (1)	32,157		27,682
Total loan commitments	$	94,418	$	70,508
Range of fixed interest rates	2.00 % - 16.40 %		2.11 % - 11.25 %

Undisbursed portions of construction loans	$	152,434	$	170,425
Pre-approved but unused lines of credit (2)	$	689,013	$	690,566

(1) Fixed rate commitments had terms ranging from three to 30 years as of each date presented.

(2) Principally second mortgage home equity loans and overdraft protection loans.

The commitments presented in the above table 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 such as TBAs, mandatory delivery commitments with investors, or best efforts forward sale commitments with investors. The fair value of these interest rate lock commitments was not material at September 30, 2024 or December 31, 2023.

SBIC Commitments – As of September 30, 2024, the Company had committed $ 28,000 across nine SBIC investments with $ 8,598 remaining to be drawn, while as of December 31, 2023, the Company had committed $ 24,000 across eight SBIC investments with $ 7,984 remaining to be drawn. Although the remaining capital commitments may or may not be called in the future, under the terms of the associated limited partnership agreements, the Company's exposure will not extend beyond the amount of the original commitments.

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 September 30, 2024 and December 31, 2023 were $ 52,686 and $ 50,897 , respectively. There was no liability recorded for these letters of credit at September 30, 2024 or December 31, 2023.

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 .

13. Fair Value of Financial Instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following is a description of valuation methodologies used for assets recorded at fair value. As of both September 30, 2024 and December 31, 2023, the Company did not have any liabilities recorded at fair value.

The methods of determining the fair value of assets and liabilities presented in this note are consistent with the methodologies disclosed in Note 20 of the 2023 Form 10-KT.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

Financial Assets Recorded at Fair Value

The following table presents financial assets measured at fair value on a recurring basis at the dates indicated:


	September 30, 2024
	Total		Level 1		Level 2		Level 3
Debt securities available for sale

MBS, residential	$	132,756	$	—	$	132,756	$	—
Municipal bonds	3,424		—		3,424		—
Corporate bonds	4,372		—		4,372		—
Total debt securities available for sale	$	140,552	$	—	$	140,552	$	—

Loans held for sale	$	2,968	$	—	$	2,968	$	—


	December 31, 2023
	Total		Level 1		Level 2		Level 3
Debt securities available for sale

MBS, residential	$	104,499	$	—	$	104,499	$	—
Municipal bonds	3,409		—		3,409		—
Corporate bonds	19,042		—		19,042		—
Total debt securities available for sale	$	126,950	$	—	$	126,950	$	—

Loans held for sale	$	3,359	$	—	$	3,359	$	—

Debt 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 MBS and debentures issued by GSEs, municipal bonds and corporate debt securities. The Company has no Level 3 securities.

Loans held for sale carried at fair value are valued at the individual loan level using quoted secondary market prices.

There were no transfers between levels during the nine months ended September 30, 2024 or 2023.

The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated:


	September 30, 2024
	Total		Level 1		Level 2		Level 3
Collateral dependent loans
Commercial real estate loans
Commercial real estate – owner occupied	$	593	$	—	$	—	$	593
Commercial real estate – non-owner occupied	3,186		—		—		3,186
Commercial loans
Commercial and industrial	240		—		—		240
Equipment finance	768		—		—		768



Total	$	4,787	$	—	$	—	$	4,787


	December 31, 2023
	Total		Level 1		Level 2		Level 3
Collateral dependent loans
Commercial real estate loans
Commercial real estate – owner occupied	$	438	$	—	$	—	$	438
Commercial loans
Commercial and industrial	108		—		—		108
Equipment finance	578		—		—		578


Total	$	1,124	$	—	$	—	$	1,124

A loan is considered to be collateral dependent when, based on current information and events, the Company expects repayment of the financial assets to be provided substantially through the operation or sale of the collateral and the Company has determined that the borrower is experiencing financial difficulty as of the measurement date. For real estate loans, the fair value of the loan's collateral is determined by a third-party appraisal, which is then adjusted for the estimated selling and closing costs related to liquidation of the collateral (typically ranging from 8 % to 12 % of the appraised value). For this asset class, the actual valuation methods (income, sales comparable or cost) vary based on the status of the project or property. Additional discounts of 5 % to 15 % may be applied depending on the age of the appraisals. The unobservable inputs may vary depending on the age of the appraisals. The unobservable inputs may vary depending on the individual asset

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

with no one of the three methods being the predominant approach. For non-real estate loans, the fair value of the loan's collateral may be determined using an appraisal, net book value per the borrower's financial statements or aging reports, adjusted or discounted based on management's historical knowledge, changes in market conditions from the time of the valuation and management's expertise and knowledge of the customer and customer's business.

The stated carrying value and estimated fair value amounts of financial instruments as of September 30, 2024 and December 31, 2023, are summarized below:


	September 30, 2024
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	293,477	$	293,477	$	293,477	$	—	$	—

Certificates of deposit in other banks	29,290		29,290		—		29,290		—
Debt securities available for sale, at fair value	140,552		140,552		—		140,552		—
FHLB and FRB stock	18,384		N/A		N/A		N/A		N/A
SBIC investments, at cost	15,489		15,489		—		—		15,489
Loans held for sale, at fair value	2,968		2,968		2,968		—		—
Loans held for sale, at the lower of cost or fair value	189,722		191,792		—		—		191,792
Loans, net	3,650,761		3,568,832		—		—		3,568,832
Accrued interest receivable	17,523		17,523		229		615		16,679
Liabilities
Noninterest-bearing and NOW deposits	1,219,018		1,219,018		—		1,219,018		—
Money market accounts	1,345,289		1,345,289		—		1,345,289		—
Savings accounts	179,762		179,762		—		179,762		—
Certificates of deposit	1,017,519		1,018,102		—		1,018,102		—
Junior subordinated debt	10,096		9,802		—		9,802		—
Borrowings	260,013		260,185		—		260,185		—
Accrued interest payable	10,796		10,796		—		10,796		—


	December 31, 2023
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	347,140	$	347,140	$	347,140	$	—	$	—

Certificates of deposit in other banks	34,722		34,722		—		34,722		—
Debt securities available for sale, at fair value	126,950		126,950		—		126,950		—
FHLB and FRB stock	18,393		N/A		N/A		N/A		N/A
SBIC investments, at cost	13,789		13,789		—		—		13,789
Loans held for sale, at fair value	3,359		3,359		3,359		—		—
Loans held for sale, at the lower of cost or fair value	198,433		200,869		—		—		200,869
Loans, net	3,591,381		3,472,491		—		—		3,472,491
Accrued interest receivable	16,902		16,902		107		656		16,139
Liabilities
Noninterest-bearing and NOW deposits	1,376,220		1,376,220		—		1,376,220		—
Money market accounts	1,246,807		1,246,807		—		1,246,807		—
Savings accounts	194,486		194,486		—		194,486		—
Certificates of deposit	843,860		839,501		—		839,501		—
Junior subordinated debt	10,021		9,767		—		9,767		—
Borrowings	433,763		433,747		—		433,747		—
Accrued interest payable	6,849		6,849		—		6,849		—

The Company had off-balance sheet financial commitments, which included approximately $ 988,551 and $ 982,397 of commitments to originate loans, undisbursed portions of construction loans, unused lines of credit and standby letters of credit at September 30, 2024 and December 31, 2023, respectively (see "Note 12 – Commitments and Contingencies"). Since these commitments are based on current rates, the carrying amount approximates the fair value.

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

Dollars in thousands, except per share data)

14. Subsequent Event

Hurricane Helene made landfall on September 26, 2024, causing significant property damage across certain parts of our market areas, particularly in Western North Carolina. This resulted in widespread disruptions in power, water, internet and cellular service. The Bank remained functionally operational throughout the storm and, as of November 8, 2024, all of our banking locations were open and most of the affected areas in our markets were recovering well. We do, however, expect to experience increased loan delinquencies and loan restructurings as a result of the storm, particularly in the short-term, as customers undertake recovery and clean-up efforts, including the submission of insurance claims. In order to assist our customers, we continue to offer payment deferrals of up to six months . Through November 8, 2024, customers with loan balances totaling approximately $ 120.0 million have accepted such a deferment.

Based on our initial assessments of the potential credit impact and damage, during the quarter ended September 30, 2024, we recorded a qualitative allocation of $ 2.2 million in our allowance for credit losses for the potential impact of the storm upon our loan portfolio. Although the total impact of the storm will not be known for some time, through November 8, 2024, no concerns have been raised regarding the adequacy of the reserve established at September 30, 2024.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain matters in this Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. Forward-looking statements are not statements of historical fact, but instead are based on certain assumptions and are generally identified by use of the words "believes," "expects," "anticipates," "estimates," "forecasts," "intends," "plans," "targets," "potentially," "probably," "projects," "outlook" or similar expressions or future or conditional verbs such as "may," "will," "should," "would," and "could." Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions, and statements about future economic performance and projections of financial items. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated or implied by our forward-looking statements.

The factors that could result in material differentiation include, but are not limited to:

• the impact of bank failures or adverse developments involving other banks and related negative press about the banking industry in general on investor and depositor sentiment;

• the remaining effects of the COVID-19 pandemic on general economic and financial market conditions and on public health, both nationally and in our market areas;

• natural disasters, including the effects of Hurricane Helene;

• expected revenues, cost savings, synergies and other benefits from our merger and acquisition activities might not be realized to the extent anticipated, within the anticipated time frames, or at all, costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected, and goodwill impairment charges might be incurred;

• the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write offs and changes in our ACL and provision for credit losses that may be impacted by deterioration in the housing and commercial real estate markets;

• changes in general economic conditions, both nationally and in our market areas;

• changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, our net interest margin and funding sources and the effects of inflation or a potential recession;

• fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas;

• decreases in the secondary market for the sale of loans that we originate;

• results of examinations of us by the Federal Reserve, the NCCOB, or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our ACL, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings;

• legislative or regulatory changes that adversely affect our business including the effects of the Dodd-Frank Act, changes in laws or regulations, changes in regulatory policies and principles or the application or interpretation of laws and regulations by regulatory agencies and tax authorities, including changes in deferred tax asset and liability activity, and the interpretation of regulatory capital or other rules, including as a result of Basel III;

• our ability to attract and retain deposits;

• our ability to access cost-effective funding and maintain sufficient liquidity;

• management's assumptions in determining the adequacy of the ACL;

• our ability to control operating costs and expenses, especially costs associated with our operation as a public company;

• the use of estimates in determining the fair value of certain assets, which estimates may prove to be incorrect and result in significant declines in valuation;

• difficulties in reducing risks associated with the loans on our balance sheet;

• staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges;

• disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions;

• our ability to retain key members of our senior management team;

• costs and effects of litigation, including settlements and judgments;

• increased competitive pressures among financial services companies;

• changes in consumer spending, borrowing and savings habits;

• the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions;

• adverse changes in the securities markets;

• inability of key third-party providers to perform their obligations to us;

• changes in accounting principles, policies or guidelines and practices, as may be adopted by the financial institution regulatory agencies, the Public Company Accounting Oversight Board or the FASB;

• other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and

• other risks detailed from time to time in documents we file with or furnish to the SEC, including this Form 10-Q.

Any forward-looking statements are based upon management’s beliefs and assumptions at the time they are made. We undertake no obligation to publicly update or revise any forward-looking statements included in this report or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this report might not occur and you should not put undue reliance on any forward-looking statements.

As used throughout this report, the terms “we,” “our,” “us,” “HomeTrust Bancshares” or the “Company” refer to HomeTrust Bancshares, Inc. and its consolidated subsidiaries, including HomeTrust Bank (“HomeTrust” or "Bank") unless the context indicates otherwise.

Overview

HomeTrust Bancshares, Inc., a Maryland corporation, was formed for the purpose of becoming the holding company for HomeTrust Bank in connection with the Bank’s conversion from mutual to stock form, which was completed on July 10, 2012. As a bank holding company and financial holding company, we are regulated by the Federal Reserve. At September 30, 2024, the Company had consolidated total assets of $4.6 billion, total deposits of $3.8 billion and stockholders' equity of $540.0 million. The Company has not engaged in any significant activity other than holding the stock of the Bank. Accordingly, the information set forth in this Form 10-Q, including the consolidated unaudited financial statements and related data, relates primarily to the Bank and its subsidiary. As a North Carolina state-chartered bank, and member of the FRB, the Bank's primary regulators are the NCCOB and the Federal Reserve. The Bank's deposits are federally insured up to applicable limits by the FDIC. The Bank is a member of the FHLB of Atlanta, which is one of the 11 regional banks in the FHLB System. Our headquarters is located in Asheville, North Carolina.

The Bank has more than 30 locations across Georgia, North Carolina, South Carolina, Tennessee and Virginia, many of which are located in markets experiencing growth rates above the national average. Historically, our branches and facilities have primarily been located in small- to medium-sized communities, but in recent years we have implemented a strategy of expanding into larger, higher growth markets via business banking centers rather than retail-focused branches.

Our principal business consists of attracting deposits from the general public and investing those funds, along with borrowed funds, in commercial real estate loans, construction and development loans, commercial and industrial loans, equipment finance leases, municipal leases, loans secured by first and second mortgages on one-to-four family residences including home equity and other consumer loans. We also originate one-to-four family loans, SBA loans and HELOCs to sell to third-parties. In addition, we invest in debt securities issued by United States Government agencies and GSEs, municipal bonds, corporate bonds, commercial paper and certificates of deposit insured by the FDIC. We offer a variety of deposit accounts for individuals, businesses and nonprofit organizations.

Our primary source of pre-tax income is net interest income. Net interest income is the difference between interest income, which is the income that we earn on our loans and investments, and interest expense, which is the interest that we pay on our deposits and borrowings. Changes in levels of interest rates affect our net interest income. A secondary source of income is noninterest income, which includes revenue we receive from providing products and services including service charges and fees on deposit accounts, loan income and fees, gains on sale of loans held for sale, BOLI income and operating lease income.

An offset to net interest income is the provision for credit losses to establish the ACL at a level that provides for ECLs inherent in our loan portfolio, off balance sheet commitments and available for sale debt securities. See "Note 1 – Summary of Significant Accounting Policies" in Item 1 of our 2023 Form 10-KT for further discussion.

Our noninterest expenses consist primarily of salaries and employee benefits, occupancy expenses, marketing and computer services and FDIC deposit insurance premiums. Salaries and benefits consist primarily of the salaries and wages paid to our employees, payroll taxes, expenses for retirement and other employee benefits. Occupancy expenses, which are the fixed and variable costs of buildings and equipment, consist primarily of lease payments, property taxes, depreciation charges, maintenance and costs of utilities.

Critical Accounting Policies and Estimates

Certain of our accounting policies are important to the portrayal of our financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Estimates associated with these policies are susceptible to material changes as a result of changes in facts and circumstances which could include, but are not limited to, changes in interest rates, changes in the performance of the economy and changes in the financial condition of borrowers. The following represents our critical accounting policy:

Allowance for Credit Losses, or ACL, on Loans. The ACL on loans held for investment reflects our estimate of credit losses that will result from the inability of our borrowers to make required loan payments. We charge off loans against the ACL and subsequent recoveries, if any, increase the ACL when they are recognized. We use a systematic methodology to determine our ACL for loans held for investment and certain off-balance-sheet credit exposures. The ACL on loans held for investment 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. The estimate of our ACL on loans held for investment involves a high degree of judgment including consideration of the effects of past events, current conditions and reasonable and supportable forecasts on the collectability of the loan portfolio. We recognize in net income the amount needed to adjust the ACL on loans held for investment and certain off-balance-sheet credit exposures for management’s current estimate of ECLs. Our ACL on loans held for investment is calculated using collectively evaluated and individually evaluated loans.

Financial Highlights

For the quarter ended September 30, 2024 compared to the quarter ended June 30, 2024:

• net income was $13.1 million compared to $12.4 million;

• diluted EPS was $0.76 compared to $0.73;

• annualized ROA was 1.17% compared to 1.13%;

• annualized ROE was 9.76% compared to 9.58%;

• net interest margin was 4.00% compared to 4.08%;

• provision for credit losses was $3.0 million compared to $4.3 million; and

• quarterly cash dividends continued at $0.11 per share totaling $1.9 million for both periods.

For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023:

• net income was $40.6 million compared to $36.6 million;

• diluted EPS were $2.37 compared to $2.18;

• annualized ROA was 1.22% compared to 1.15%;

• annualized ROE was 10.39% compared to 10.56%;

• net interest margin was 4.03% compared to 4.29%;

• provision for credit losses was $8.4 million compared to $11.7 million;

• tax-free death benefit proceeds from life insurance were $1.1 million for both periods; and

• cash dividends of $0.33 per share totaling $5.6 million compared to $0.30 per share totaling $5.1 million.


	Three Months Ended				Nine Months Ended
(Dollars in thousands)	September 30, 2024		June 30, 2024			September 30, 2024		September 30, 2023
Interest and dividend income	$	66,649	$	65,414		$	195,418	$	171,662
Interest expense	24,575		23,248			69,948		44,152
Net interest income	42,074		42,166			125,470		127,510
Provision for credit losses	2,975		4,260			8,400		11,735
Net interest income after provision for credit losses	39,099		37,906			117,070		115,775
Noninterest income	8,282		8,113			25,206		23,825
Noninterest expense	30,585		30,210			90,659		93,308
Income before income taxes	16,796		15,809			51,617		46,292
Income tax expense	3,684		3,391			11,020		9,712
Net income	$	13,112	$	12,418		$	40,597	$	36,580

Net income per common share (1)
Basic	$	0.77	$	0.73		$	2.38	$	2.19
Diluted	0.76		0.73			2.37		2.18
Cash dividends declared per common share	0.11		0.11			0.33		0.30
Book value per share at end of period	30.83		30.03			30.83		27.87
Tangible book value per share at end of period (2)	28.57		27.73			28.57		25.47
Market price per share at end of period	34.08		30.03			34.08		21.67

(1) Basic and diluted net income per common share have been prepared in accordance with the two-class method.

(2) See Non-GAAP reconciliations below for adjustments.

GAAP Reconciliation of Non-GAAP Financial Measures

We believe the non-GAAP financial measures included within this report provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with US GAAP; however, we acknowledge that our non-GAAP financial measures have a number of limitations. The following reconciliation tables provide detailed analyses of these non-GAAP financial measures.

Set forth below is a reconciliation to US GAAP of tangible book value and tangible book value per share:


	As of
(Dollars in thousands, except per share data)	September 30, 2024		June 30, 2024		September 30, 2023
Total stockholders' equity	$	540,004	$	523,628	$	484,411
Less: goodwill, core deposit intangibles, net of taxes	39,626		40,063		41,748
Tangible book value	$	500,378	$	483,565	$	442,663
Common shares outstanding	17,514,922		17,437,326		17,380,307
Book value per share	$	30.83	$	30.03	$	27.87
Tangible book value per share	$	28.57	$	27.73	$	25.47

Set forth below is a reconciliation to US GAAP of tangible equity to tangible assets:


	As of
(Dollars in thousands)	September 30, 2024		June 30, 2024		September 30, 2023
Tangible equity (1)	$	500,378	$	483,565	$	442,663
Total assets	4,637,293		4,670,864		4,651,997
Less: goodwill, core deposit intangibles, net of taxes	39,626		40,063		41,748
Total tangible assets	$	4,597,667	$	4,630,801	$	4,610,249


Tangible equity to tangible assets			10.88		%				10.44		%				9.60		%

(1) Tangible equity (or tangible book value) is equal to total stockholders' equity less goodwill and core deposit intangibles, net of related deferred tax liabilities.

Comparison of Results of Operations for the Three Months Ended September 30, 2024 and June 30, 2024

Net Income. Net income totaled $13.1 million, or $0.76 per diluted share, for the three months ended September 30, 2024 compared to $12.4 million, or $0.73 per diluted share, for the three months ended June 30, 2024, an increase of $694,000, or 5.6%. Results for the three months ended September 30, 2024 were positively impacted by a decrease of $1.3 million in the provision for credit losses. Details of the changes in the various components of net income are further discussed below.

Net Interest Income. The following table presents the distribution of average assets, liabilities and equity, as well as interest income earned on average interest-earning assets and interest expense paid on average interest-bearing liabilities. All average balances are daily average balances. Nonaccruing loans have been included in the table as loans carrying a zero yield.


	Three Months Ended
	September 30, 2024							June 30, 2024
(Dollars in thousands)	Average Balance Outstanding			Interest Earned / Paid		Yield / Rate		Average Balance Outstanding			Interest Earned / Paid		Yield / Rate

Assets
Interest-earning assets
Loans receivable (1)	$	3,899,460		$	63,305	6.46	%	$	3,885,222		$	62,161	6.43	%

Debt securities available for sale	140,246			1,616		4.58		134,334			1,495		4.48
Other interest-earning assets (2)	144,931			1,728		4.74		140,376			1,758		5.04
Total interest-earning assets	4,184,637			66,649		6.34		4,159,932			65,414		6.32
Other assets	264,579							266,983
Total assets	$	4,449,216						$	4,426,915
Liabilities and equity
Interest-bearing liabilities
Interest-bearing checking accounts	$	548,024		$	1,278	0.93	%	$	586,396		$	1,445	0.99	%
Money market accounts	1,335,798			10,757		3.20		1,298,177			10,221		3.17
Savings accounts	182,618			40		0.09		188,028			41		0.09
Certificate accounts	1,012,765			11,617		4.56		902,864			9,976		4.44
Total interest-bearing deposits	3,079,205			23,692		3.06		2,975,465			21,683		2.93
Junior subordinated debt	10,079			235		9.28		10,054			234		9.36
Borrowings	40,399			648		6.38		87,315			1,331		6.13
Total interest-bearing liabilities	3,129,683			24,575		3.12		3,072,834			23,248		3.04
Noninterest-bearing deposits	719,710							769,016
Other liabilities	65,097							63,503
Total liabilities	3,914,490							3,905,353
Stockholders' equity	534,726							521,562
Total liabilities and stockholders' equity	$	4,449,216						$	4,426,915

Net earning assets	$	1,054,954						$	1,087,098
Average interest-earning assets to average interest-bearing liabilities	133.71		%					135.38		%
Non-tax-equivalent
Net interest income				$	42,074						$	42,166
Interest rate spread						3.22	%						3.28	%
Net interest margin (3)						4.00	%						4.08	%
Tax-equivalent (4)
Net interest income				$	42,442						$	42,520
Interest rate spread						3.25	%						3.32	%
Net interest margin (3)						4.03	%						4.11	%

(1) Average loans receivable balances include loans held for sale and nonaccruing loans.

(2) Average other interest-earning assets consist of FRB stock, FHLB stock, SBIC investments and deposits in other banks.

(3) Net interest income divided by average interest-earning assets.

(4) Tax-equivalent results include adjustments to interest income of $368 and $354 for the three months ended September 30, 2024 and June 30, 2024, respectively, calculated based on a combined federal and state tax rate of 24%.

Total interest and dividend income for the three months ended September 30, 2024 increased $1.2 million, or 1.9%, compared to the three months ended June 30, 2024, which was driven by a $1.1 million, or 1.8%, increase in loan interest income primarily due to the difference in the number of days in each quarter. Accretion income on acquired loans of $640,000 and $678,000 was recognized during the same periods, respectively, and was included in interest income on loans.

Total interest expense for the three months ended September 30, 2024 increased $1.3 million, or 5.7%, compared to the three months ended June 30, 2024. The increase was primarily the result of increases in the average balances of money market and certificate accounts, partially offset by a decline in average borrowings outstanding.

The following table shows the effects that changes in average balances (volume), including the difference in the number of days in the periods compared, and average interest rates (rate) had on the interest earned on interest-earning assets and interest paid on interest-bearing liabilities:


	Increase / (Decrease) Due to				Total Increase / (Decrease)
(Dollars in thousands)	Volume		Rate
Interest-earning assets
Loans receivable	$	916	$	228	$	1,144

Debt securities available for sale	83		38		121
Other interest-earning assets	76		(106)		(30)
Total interest-earning assets	1,075		160		1,235
Interest-bearing liabilities
Interest-bearing checking accounts	(81)		(86)		(167)
Money market accounts	413		123		536
Savings accounts	(1)		—		(1)
Certificate accounts	1,341		300		1,641
Junior subordinated debt	3		(2)		1
Borrowings	(708)		25		(683)
Total interest-bearing liabilities	967		360		1,327
Decrease in net interest income					$	(92)

Provision for Credit Losses. The provision for credit losses is the amount of expense that, based on our judgment, is required to maintain the ACL at an appropriate level under the current expected credit losses model.

The following table presents a breakdown of the components of the provision for credit losses:


	Three Months Ended
(Dollars in thousands)	September 30, 2024		June 30, 2024		$ Change		% Change
Provision for credit losses
Loans	$	2,990	$	4,300	$	(1,310)	(30)	%
Off-balance-sheet credit exposure	(15)		(40)		25		63

Total provision for credit losses	$	2,975	$	4,260	$	(1,285)	(30)	%

For the quarter ended September 30, 2024 , the "loans" portion of the provision for credit losses was the result of the following, offset by net charge-offs of $4.1 million during the quarter:

• $0.4 million benefit driven by changes in the loan mix.

• $1.2 million provision due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments. Included in this change was the addition of a $2.2 million qualitative allocation for the potential impact of Hurricane Helene upon our loan portfolio.

• $1.9 million decrease in specific reserves on individually evaluated loans as we charged-off specific reserves which had previously been established.

For the quarter ended June 30, 2024 , the "loans" portion of the provision for credit losses was the result of the following, in addition to net charge-offs of $2.6 million during the quarter:

• $0.1 million provision driven by changes in the loan mix.

• $0.4 million benefit due to changes in the projected economic forecast and changes in qualitative adjustments.

• $2.0 million increase in specific reserves on individually evaluated loans which was proportional to the increase in the associated loan balances which increased from $8.3 million to $16.3 million quarter-over-quarter, concentrated in the equipment finance and SBA portfolios.

For the quarters ended September 30, 2024 and June 30, 2024 , the amounts recorded for off-balance-sheet credit exposure were the result of changes in the balance of loan commitments, loan mix and projected economic forecast as outlined above.

Noninterest Income. Noninterest income for the three months ended September 30, 2024 increased $169,000, or 2.1%, when compared to the quarter ended June 30, 2024. Changes in the components of noninterest income are discussed below:


	Three Months Ended
(Dollars in thousands)	September 30, 2024		June 30, 2024		$ Change		% Change
Noninterest income
Service charges and fees on deposit accounts	$	2,336	$	2,354	$	(18)	(1)	%
Loan income and fees	684		647		37		6
Gain on sale of loans held for sale	1,900		1,828		72		4
BOLI income	828		807		21		3
Operating lease income	1,637		1,591		46		3


Other	897		886		11		1
Total noninterest income	$	8,282	$	8,113	$	169	2	%

• Gain on sale of loans held for sale: The increase was primarily driven by residential mortgage loans sold during the period. There were $21.7 million of residential mortgage loans originated for sale which were sold during the current quarter with gains of $479,000 compared to $21.3 million sold with gains of $351,000 in the prior quarter , with the improvement in profitability due to movement in interest rates . There were $54.6 million of HELOCs sold for a gain of $414,000 compared to $32.9 million sold with gains of $457,000 in the prior quarter. There were $12.9 million in sales of the guaranteed portion of SBA commercial loans with gains of $1.0 million for the quarter compared to $12.7 million sold and gains of $1.1 million for the prior quarter. Our hedging of mandatory commitments on the residential mortgage loan pipeline resulted in a gain of $18,000 for the quarter ended September 30, 2024 versus a loss of $58,000 for the quarter ended June 30, 2024.

Noninterest Expense. Noninterest expense for the three months ended September 30, 2024 increased $375,000, or 1.2%, when compared to the three months ended June 30, 2024. Changes in the components of noninterest expense are discussed below:


	Three Months Ended
(Dollars in thousands)	September 30, 2024		June 30, 2024		$ Change		% Change
Noninterest expense
Salaries and employee benefits	$	17,082	$	16,608	$	474	3	%
Occupancy expense, net	2,436		2,419		17		1
Computer services	3,192		3,116		76		2
Telephone, postage and supplies	547		580		(33)		(6)
Marketing and advertising	408		606		(198)		(33)
Deposit insurance premiums	589		531		58		11

Core deposit intangible amortization	567		567		—		—


Other	5,764		5,783		(19)		—
Total noninterest expense	$	30,585	$	30,210	$	375	1	%

• Salaries and employee benefits: The quarter-over-quarter increase was primarily the result of executive pay increases effective this quarter and additional stock incentive expense associated with the vesting of performance-based equity awards.

• Marketing and advertising: The decrease in expense was the result of both differences in the timing of when expenses were incurred quarter-over-quarter as well as a reduction in traditional media advertising (print, billboards, etc.) in favor of digital platforms at lower costs.

Income Taxes. The amount of income tax expense is influenced by the amount of pre-tax income, tax-exempt income, changes in the statutory rate and the effect of changes in valuation allowances maintained against deferred tax benefits. The effective tax rates for the three months ended September 30, 2024 and June 30, 2024 were 21.9% and 21.4%, respectively.

Comparison of Results of Operations for the Nine Months Ended September 30, 2024 and September 30, 2023

Net Income. Net income totaled $40.6 million, or $2.37 per diluted share, for the nine months ended September 30, 2024 compared to $36.6 million, or $2.18 per diluted share, for the nine months ended September 30, 2023, an increase of $4.0 million, or 11.0%. The results for the nine months ended September 30, 2024 were positively impacted by a decrease of $3.3 million in the provision for credit losses, a $1.4 million increase in noninterest income, and a $2.6 million decrease in noninterest expense, partially offset by a $2.0 million decrease in net interest income and a $1.3 million increase in income tax expense. Details of the changes in the various components of net income are further discussed below.


	Nine Months Ended
	September 30, 2024							September 30, 2023
(Dollars in thousands)	Average Balance Outstanding			Interest Earned / Paid		Yield / Rate		Average Balance Outstanding			Interest Earned / Paid		Yield / Rate

Assets
Interest-earning assets
Loans receivable (1)	$	3,883,040		$	185,418	6.38	%	$	3,684,518		$	162,526	5.90	%

Debt securities available for sale	133,779			4,424		4.42		155,884			3,780		3.24
Other interest-earning assets (2)	138,956			5,576		5.36		137,065			5,356		5.22
Total interest-earning assets	4,155,775			195,418		6.28		3,977,467			171,662		5.77
Other assets	276,516							266,867
Total assets	$	4,432,291						$	4,244,334
Liabilities and equity
Interest-bearing liabilities
Interest-bearing checking accounts	$	574,954		$	4,149	0.96	%	$	627,200		$	3,241	0.69	%
Money market accounts	1,305,217			30,642		3.14		1,206,119			18,604		2.06
Savings accounts	187,447			124		0.09		218,683			143		0.09
Certificate accounts	934,702			30,778		4.40		649,755			14,967		3.08
Total interest-bearing deposits	3,002,320			65,693		2.92		2,701,757			36,955		1.83
Junior subordinated debt	10,054			705		9.37		8,428			563		8.93
Borrowings	76,823			3,550		6.17		158,965			6,634		5.58
Total interest-bearing liabilities	3,089,197			69,948		3.02		2,869,150			44,152		2.06
Noninterest-bearing deposits	766,110							857,315
Other liabilities	55,217							54,513
Total liabilities	3,910,524							3,780,978
Stockholders' equity	521,767							463,356
Total liabilities and stockholders' equity	$	4,432,291						$	4,244,334

Net earning assets	$	1,066,578						$	1,108,317
Average interest-earning assets to average interest-bearing liabilities	134.53		%					138.63		%
Non-tax-equivalent
Net interest income				$	125,470						$	127,510
Interest rate spread						3.26	%						3.71	%
Net interest margin (3)						4.03	%						4.29	%
Tax-equivalent
Net interest income				$	126,542						$	128,413
Interest rate spread						3.30	%						3.74	%
Net interest margin (3)						4.07	%						4.32	%

(1) Average loans receivable balances include loans held for sale and nonaccruing loans.

(2) Average other interest-earning assets consist of FRB stock, FHLB stock, SBIC investments and deposits in other banks.

(3) Net interest income divided by average interest-earning assets.

(4) Tax-equivalent results include adjustments to interest income of $1,072 and $903 for the nine months ended September 30, 2024 and September 30, 2023, respectively, calculated based on a combined federal and state tax rate of 24%.

Total interest and dividend income for the nine months ended September 30, 2024 increased $23.8 million, or 13.8%, compared to the nine months ended September 30, 2023, which was driven by a $22.9 million, or 14.1%, increase in interest income on loans. Accretion income on acquired loans of $2.0 million and $1.7 million was recognized during the same periods, respectively, and was included in interest income on loans. The overall increase in average yield on interest-earning assets was the result of both higher average balances and rising interest rates.

Total interest expense for the nine months ended September 30, 2024 increased $25.8 million, or 58.4%, compared to the nine months ended September 30, 2023. The change was primarily the result of increases in the cost of funds across all funding sources driven by higher market interest rates and increases in the average balances of money market and certificate accounts, partially offset by a decline in average borrowings outstanding.


	Increase / (Decrease) Due to				Total Increase / (Decrease)
(Dollars in thousands)	Volume		Rate
Interest-earning assets
Loans receivable	$	8,927	$	13,965	$	22,892

Debt securities available for sale	(532)		1,176		644
Other interest-earning assets	79		141		220
Total interest-earning assets	8,474		15,282		23,756
Interest-bearing liabilities
Interest-bearing checking accounts	(266)		1,174		908
Money market accounts	1,557		10,481		12,038
Savings accounts	(20)		1		(19)
Certificate accounts	6,592		9,219		15,811
Junior subordinated debt	109		33		142
Borrowings	(3,425)		341		(3,084)
Total interest-bearing liabilities	4,547		21,249		25,796
Decrease in net interest income					$	(2,040)

Provision for Credit Losses. The following table presents a breakdown of the components of the provision for credit losses:


	Nine Months Ended
(Dollars in thousands)	September 30, 2024		September 30, 2023		$ Change		% Change
Provision for credit losses
Loans	$	8,435	$	12,120	$	(3,685)	(30)	%
Off-balance-sheet credit exposure	(35)		(385)		350		91

Total provision for credit losses	$	8,400	$	11,735	$	(3,335)	(28)	%

For the nine months ended September 30, 2024 , the "loans" portion of the provision for credit losses was the result of net charge-offs of $8.9 million during the period, partially offset by a $0.4 million benefit due to changes in the loan mix.

For the nine months ended September 30, 2023, the "loans" portion of the provision for credit losses was the result of the following, in addition to net charge-offs of $3.9 million during the period:

• $4.9 million provision to establish an allowance on Quantum's loan portfolio.

• $3.0 million provision due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments.

• $0.3 million increase in specific reserves on individually evaluated credits.

For the nine months ended September 30, 2024 and September 30, 2023, the amounts recorded for off-balance-sheet credit exposure were the result of changes in the balance of loan commitments, loan mix and projected economic forecast as outlined above.

Noninterest Income. Noninterest income for the nine months ended September 30, 2024 increased $1.4 million, or 5.8%, when compared to the same period last year. Changes in the components of noninterest income are discussed below:


	Nine Months Ended
(Dollars in thousands)	September 30, 2024		September 30, 2023		$ Change		% Change
Noninterest income
Service charges and fees on deposit accounts	$	6,839	$	6,967	$	(128)	(2)	%
Loan income and fees	2,009		1,913		96		5
Gain on sale of loans held for sale	5,185		4,213		972		23
BOLI income	3,470		2,844		626		22
Operating lease income	5,087		4,515		572		13

Gain (loss) on sale of premises and equipment	(9)		982		(991)		(101)
Other	2,625		2,391		234		10
Total noninterest income	$	25,206	$	23,825	$	1,381	6	%

• Gain on sale of loans held for sale: The increase in the gain on sale of loans held for sale was primarily driven by residential mortgage and SBA loans sold during the period. During the nine months ended September 30, 2024, there were $58.3 million of residential mortgage loans originated for sale which were sold with gains of $1.1 million compared to $48.7 million sold with gains of $633,000 for the corresponding period in the prior year, with the improvement in profitability due to movement in interest rates. There were $38.5 million of sales of the guaranteed portion of SBA commercial loans with gains of $3.1 million compared to $41.1 million sold and gains of $2.6 million for the corresponding period in the prior year. There were $95.4 million of HELOCs sold during the current period for a gain of $887,000 compared to $66.4 million sold and gains of $552,000 for the corresponding period in the prior year. Our hedging of mandatory commitments on the residential mortgage loan pipeline resulted in a gain of $15,000 for the nine months ended September 30, 2024 versus a gain of $426,000 for the nine months ended September 30, 2023.

• BOLI income: The increase was due to higher yielding policies as a result of restructuring the portfolio at the end of the prior calendar year.

• Operating lease income: The increase in operating lease income was the result of $1.7 million in additional contractual earnings on a higher average outstanding balance of the associated contracts, partially offset by losses incurred on previously leased equipment, where we recognized a net loss of $1.3 million for the nine months ended September 30, 2024 versus a net loss of $210,000 in the same period last year.

• Gain (loss) on sale of premises and equipment: During the nine months ended September 30, 2023, two properties were sold for a combined gain of $982,000. No material disposal activity occurred during the nine months ended September 30, 2024.

Noninterest Expense. Noninterest expense for the nine months ended September 30, 2024 decreased $2.6 million, or 2.8%, when compared to the same period last year. Changes in the components of noninterest expense are discussed below:


	Nine Months Ended
(Dollars in thousands)	September 30, 2024		September 30, 2023		$ Change		% Change
Noninterest expense
Salaries and employee benefits	$	50,666	$	49,436	$	1,230	2	%
Occupancy expense, net	7,292		7,556		(264)		(3)
Computer services	9,396		9,386		10		—
Telephone, postage and supplies	1,712		1,942		(230)		(12)
Marketing and advertising	1,659		1,555		104		7
Deposit insurance premiums	1,674		1,878		(204)		(11)

Core deposit intangible amortization	1,896		2,324		(428)		(18)
Merger-related expenses	—		4,741		(4,741)		(100)

Other	16,364		14,490		1,874		13
Total noninterest expense	$	90,659	$	93,308	$	(2,649)	(3)	%

• Salaries and employee benefits : The increase was primarily the result of pay increases, partially offset by reductions in incentive pay.

• Core deposit intangible amortization: The intangible recorded associated with the Quantum merger is being amortized on an accelerated basis, so the rate of amortization slowed year-over-year.

• Merger-related expenses: The prior period included expenses associated with the Company's merger with Quantum. No such expenses were incurred in the nine months ended September 30, 2024.

• Other: The increase period-over-period was primarily driven by $1.7 million of additional depreciation expense on equipment subject to operating leases.

Income Taxes. The amount of income tax expense is influenced by the amount of pre-tax income, tax-exempt income, changes in the statutory rate and the effect of changes in valuation allowances maintained against deferred tax benefits. The effective tax rates for the nine months ended September 30, 2024 and September 30, 2023 were 21.3% and 21.0%, respectively.

Comparison of Financial Condition at September 30, 2024 and December 31, 2023

General. Total assets decreased by $35.3 million to $4.6 billion and total liabilities decreased by $75.5 million to $4.1 billion, respectively, at September 30, 2024 as compared to December 31, 2023. The majority of these changes were the result of an increase in deposits, which, combined with the collection of BOLI redemption proceeds and cash and cash equivalents, were used to fund growth in loans and pay down borrowings.

Cash and Cash Equivalents. Total cash and cash equivalents decreased $53.7 million, or 15.5%, to $293.5 million at September 30, 2024 from $347.1 million at December 31, 2023.

Debt Securities Available for Sale. Debt securities available for sale increased $13.6 million, or 10.7%, to $140.6 million at September 30, 2024 from $127.0 million at December 31, 2023. Outside of changes in value, the changes between periods were the result of $33.3 million in purchases, partially offset by $22.6 million in proceeds from the maturity, call and paydown of securities.

Loans Held for Sale. Loans held for sale decreased $9.1 million, or 4.5%, to $192.7 million at September 30, 2024 from $201.8 million at December 31, 2023. This was driven by decreases in all loans held for sale categories.

Loans, Net of Deferred Loan Fees and Costs. Total loans increased $58.9 million, or 1.6%, to $3.7 billion at September 30, 2024. The following table illustrates the changes within the portfolio:


	As of				Change				Percent of Total
	September 30, 2024		December 31, 2023						September 30, 2024		December 31, 2023
(Dollars in thousands)					$		%
Commercial real estate loans
Construction and land development	$	300,905	$	305,269	$	(4,364)	(1)	%	8	%	8	%
Commercial real estate – owner occupied	544,689		536,545		8,144		2		15		15
Commercial real estate – non-owner occupied	881,340		875,694		5,646		1		24		24
Multifamily	114,155		88,623		25,532		29		3		2
Total commercial real estate loans	1,841,089		1,806,131		34,958		2		50		49
Commercial loans
Commercial and industrial	286,809		237,255		49,554		21		8		7
Equipment finance	443,033		465,573		(22,540)		(5)		12		13
Municipal leases	158,560		150,292		8,268		6		4		4

Total commercial loans	888,402		853,120		35,282		4		24		24
Residential real estate loans
Construction and land development	63,016		96,646		(33,630)		(35)		2		3
One-to-four family	627,845		584,405		43,440		7		17		16
HELOCs	194,909		185,878		9,031		5		5		5
Total residential real estate loans	885,770		866,929		18,841		2		24		24
Consumer loans	83,631		113,842		(30,211)		(27)		2		3
Total loans, net of deferred loan fees and costs	$	3,698,892	$	3,640,022	$	58,870	2	%	100	%	100	%

Asset Quality. Nonperforming assets, made up of nonaccrual loans and repossessed assets, increased by $10.4 million, or 54.0%, to $29.8 million, or 0.64% of total assets, at September 30, 2024 compared to $19.3 million, or 0.41% of total assets, at December 31, 2023. Consistent with the change in net charge-offs discussed below, equipment finance loans made up the largest portion of nonperforming assets at $8.5 million and $6.5 million, respectively, at these same dates. In addition, owner occupied commercial real estate totaled $7.2 million and $912,000, respectively, at these same dates. These increases were mainly the result of a $3.1 million medical equipment relationship and a $5.1 million owner occupied commercial real estate (OO CRE) relationship; however, in both cases losses are not currently anticipated. The ratio of nonperforming loans to total loans was 0.78% at September 30, 2024 compared to 0.53% at December 31, 2023.

The ratio of classified assets to total assets increased to 0.99% at September 30, 2024 from 0.90% at December 31, 2023 as classified assets increased $4.1 million, or 9.8%, to $46.1 million at September 30, 2024 compared to $42.0 million at December 31, 2023. The largest portfolios of classified assets at September 30, 2024 included $11.7 million of non-owner occupied commercial real estate loans, $8.4 million of equipment finance loans, $7.1 million of SBA loans, $6.0 million of 1-4 family residential real estate loans, and $6.0 million of OO CRE loans.

Allowance for Credit Losses on Loans. The ACL on loans was $48.1 million, or 1.30% of total loans, at September 30, 2024 compared to $48.6 million, or 1.34% of total loans, as of December 31, 2023. The drivers of this change are discussed in the "Comparison of Results of Operations for the Nine Months Ended September 30, 2024 and September 30, 2023 – Provision for Credit Losses" section above.

Net loan charge-offs totaled $8.9 million for the nine months ended September 30, 2024 compared to $3.9 million for the same period last year. As discussed in previous quarters, the increase in net charge-offs has been concentrated in our equipment finance portfolio, primarily smaller over-the-road truck loans, with net charge-offs of $5.1 million during the nine months ended September 30, 2024. In response, during the first quarter of calendar year 2024 the Company elected to cease further originations within the transportation sector of equipment finance loans. In spite of the increase, annualized net charge-offs as a percentage of average assets for the loan portfolio as a whole were 0.31% for the nine months ended September 30, 2024, in line with the Company's historical experience, as compared to 0.14% for the nine months ended September 30, 2023.

Other Assets. Other assets decreased by $39.3 million, or 36.6%, to $68.1 million at September 30, 2024 from $107.4 million at December 31, 2023. During the quarter ended December 31, 2023, we had established a $47.9 million receivable for proceeds from the redemption of BOLI policies. The decrease between periods was due to the collection of $44.3 million of this receivable.

Deposits. The following table summarizes the composition of our deposit portfolio as of the dates indicated:


(Dollars in thousands)	September 30, 2024		December 31, 2023		$ Change		% Change
Core deposits
Noninterest-bearing accounts	$	684,501	$	784,950	$	(100,449)	(13)	%
NOW accounts	534,517		591,270		(56,753)		(10)
Money market accounts	1,345,289		1,246,807		98,482		8
Savings accounts	179,762		194,486		(14,724)		(8)
Total core deposits	2,744,069		2,817,513		(73,444)		(3)
Certificates of deposit	1,017,519		843,860		173,659		21
Total	$	3,761,588	$	3,661,373	$	100,215	3	%

Liquidity Management

Management maintains a liquidity position that it believes will adequately provide for funding of loan demand and deposit run-off that may occur in the normal course of business. We rely on a number of different sources in order to meet our potential liquidity demands. The primary sources are increases in deposit accounts, wholesale borrowings and cash flows from loan payments and the securities portfolio.

In addition to these primary sources of funds, management has several secondary sources available to meet potential funding requirements. All qualifying one-to-four family loans, HELOCs, commercial real estate loans, multifamily loans and FHLB of Atlanta stock are pledged as collateral to secure outstanding FHLB advances while commercial construction, indirect auto, and equipment and municipal leases are pledged as collateral to secure outstanding FRB advances. At September 30, 2024, the Company had the ability to borrow $162.2 million through FHLB advances and $170.5 million through the unused portion of a line of credit with the FRB. At this same date, the Company maintained revolving lines of credit with three unaffiliated banks, the unused portion of which totaled $159.0 million. HomeTrust had drawn $6.0 million on a $40.0 million revolving line of credit which bears interest at The Wall Street Journal prime rate plus 50 basis points, maturing on January 28, 2025, although the term may be extended for an additional year if no events of default have occurred.

Additionally, we classify our securities portfolio as available for sale, providing an additional source of liquidity. Management believes that our securities portfolio is of high quality, of short duration, and the securities would therefore be readily marketable. In addition, we have historically sold fixed-rate mortgage loans in the secondary market to reduce interest rate risk and to create still another source of liquidity. From time to time we also utilize brokered time deposits to supplement our other sources of funds. Brokered time deposits are obtained by utilizing an outside broker that is paid a fee. This funding requires advance notification to structure the type of deposit desired by us. Brokered deposits can vary in term from one month to several years and have the benefit of being a source of longer-term funding. We also utilize brokered deposits to help manage interest rate risk by extending the term to repricing of our liabilities, enhance our liquidity and fund asset growth. Brokered deposits are typically from outside our primary market areas, and our brokered deposit levels may vary from time to time depending on competitive interest rate conditions and other factors. At September 30, 2024, brokered deposits totaled $422.2 million, or 11.2% of total deposits.

Liquidity management is both a daily and long-term function of business management. Excess liquidity is generally invested in short-term investments, such as overnight deposits and federal funds. On a longer term basis, we maintain a strategy of investing in various lending products and debt securities, including MBS. On a stand-alone level we are a separate legal entity from the Bank and must provide for our own liquidity and pay our own operating expenses. Our primary source of funds consists of dividends or capital distributions from the Bank, although there are regulatory restrictions on the ability of the Bank to pay dividends. At September 30, 2024, we (on an unconsolidated basis) had liquid assets of $1.1 million.

At the Bank level, we use our sources of funds primarily to meet our ongoing commitments, pay maturing deposits and fund withdrawals and to fund loan commitments. At September 30, 2024, the total approved loan commitments and unused lines of credit outstanding amounted to $246.9 million and $689.0 million, respectively, as compared to $240.9 million and $690.6 million as of December 31, 2023. Certificates of deposit scheduled to mature in one year or less at September 30, 2024 totaled $963.5 million. It is management's policy to manage deposit rates that are competitive with other local financial institutions. Based on this strategy, we believe that a majority of maturing deposits will be retained.

Off-Balance Sheet Activities

In the normal course of operations, we engage in a variety of financial transactions that are not recorded in our financial statements, mainly to manage customers' requests for funding. These transactions primarily take the form of loan commitments and lines of credit and involve varying degrees of off-balance sheet credit, interest rate and liquidity risks. For further information, see "Note 12 – Commitments and Contingencies" in this Quarterly Report on Form 10-Q.

Capital Resources

HomeTrust Bancshares, Inc. is a bank holding company subject to regulation by the Federal Reserve. As a bank holding company, we are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended and the regulations of the Federal Reserve. The Company's subsidiary, the Bank, an FDIC-insured, North Carolina state-chartered bank and a member of the Federal Reserve System, is supervised and regulated by the Federal Reserve and the NCCOB and is subject to minimum capital requirements applicable to state member banks established by the Federal Reserve that are calculated in a manner similar to those applicable to bank holding companies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly discretionary actions by bank regulators that, if undertaken, could have a direct material effect on the Company's financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

At September 30, 2024, HomeTrust Bancshares, Inc. and the Bank each exceeded all regulatory capital requirements. Consistent with the Company's goals to operate a sound and profitable organization, its policy is for the Bank to maintain a “well-capitalized” status under the regulatory capital categories of the Federal Reserve. The Bank was categorized as "well-capitalized" at September 30, 2024 under applicable regulatory requirements.

HomeTrust Bancshares, Inc.'s and the Bank's actual and required minimum capital amounts and ratios are as follows:


					Regulatory Requirements
	Actual				Minimum for Capital Adequacy Purposes				Minimum to Be Well Capitalized
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
HomeTrust Bancshares, Inc.
September 30, 2024
CET1 Capital (to risk-weighted assets)	$	501,529	12.22	%	$	184,724	4.50	%	$	266,824	6.50	%
Tier I Capital (to total adjusted assets)	511,624		11.60		176,486		4.00		220,607		5.00
Tier I Capital (to risk-weighted assets)	511,624		12.46		246,299		6.00		328,399		8.00
Total Risk-based Capital (to risk-weighted assets)	558,894		13.62		328,399		8.00		410,499		10.00

December 31, 2023
CET1 Capital (to risk-weighted assets)	$	463,946	11.33	%	$	184,256	4.50	%	$	266,148	6.50	%
Tier I Capital (to total adjusted assets)	473,966		10.84		174,910		4.00		218,638		5.00
Tier I Capital (to risk-weighted assets)	473,966		11.58		245,675		6.00		327,567		8.00
Total Risk-based Capital (to risk-weighted assets)	517,942		12.65		327,567		8.00		409,458		10.00

HomeTrust Bank
September 30, 2024
CET1 Capital (to risk-weighted assets)	$	508,756	12.39	%	$	184,724	4.50	%	$	266,824	6.50	%
Tier I Capital (to total adjusted assets)	508,756		11.54		176,372		4.00		220,465		5.00
Tier I Capital (to risk-weighted assets)	508,756		12.39		246,299		6.00		328,399		8.00
Total Risk-based Capital (to risk-weighted assets)	556,026		13.55		328,399		8.00		410,499		10.00

December 31, 2023
CET1 Capital (to risk-weighted assets)	$	484,238	11.83	%	$	184,249	4.50	%	$	266,137	6.50	%
Tier I Capital (to total adjusted assets)	484,238		11.08		174,849		4.00		218,562		5.00
Tier I Capital (to risk-weighted assets)	484,238		11.83		245,665		6.00		327,553		8.00
Total Risk-based Capital (to risk-weighted assets)	528,214		12.90		327,553		8.00		409,442		10.00

As permitted by the interim final rule issued on March 27, 2020 by the federal banking regulatory agencies, the Company elected the option to delay the estimated impact on regulatory capital of ASU 2016-13, which was adopted on July 1, 2020. The initial adoption of ASU 2016-13 as well as 25% of the quarterly increases in the ACL subsequent to adoption (collectively the “transition adjustments”) was delayed for two years. Starting July 1, 2022, the cumulative amount of the transition adjustments became fixed and will be phased out of the regulatory capital calculations evenly over a three-year period, with 75% recognized in year three, 50% recognized in year four, and 25% recognized in year five. After five years, the temporary regulatory capital benefits will be fully reversed.

In addition to the minimum CET1, Tier 1 and total risk-based capital ratios, both HomeTrust Bancshares, Inc. and the Bank have to maintain a capital conservation buffer consisting of additional CET1 capital of more than 2.50% above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. As of September 30, 2024, the Company's and Bank's risk-based capital exceeded the required capital contribution buffer.

Dividends paid by HomeTrust Bank are limited, without regulatory approval, to current year earnings and earnings less dividends paid during the preceding two years.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has not been any material change in the market risk disclosures contained in our 2023 Form 10-KT.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures : An evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the "Act")) as of September 30, 2024, was carried out under the supervision and with the participation of the Company's Chief Executive Officer, Chief Financial Officer and several other members of the Company's senior management. The Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures in effect as of September 30, 2024, were effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Act is: (i) accumulated and communicated to the Company's management (including the Chief Executive Officer and Chief

Financial Officer) in a timely manner and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

The Company does not expect that its disclosure controls and procedures and internal control over financial reporting will prevent all errors and all fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls may be circumvented by the individual acts of some persons, by collusion of two or more people, or by override of the control. The design of any control procedure also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Controls : There have been no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The "Litigation" section of "Note 12 – Commitments and Contingencies" to the Consolidated Financial Statements included in Part I, Item 1 is incorporated herein by reference.

Item 1A. Risk Factors

There have been no material changes in the Risk Factors previously disclosed in Item 1A of the 2023 Form 10-KT.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable

(b) Not applicable

(c) The following table provides information about repurchases of common stock by the Company during the quarter ended September 30, 2024:


Period	Total # of Shares Purchased	Average Price Paid per Share		Total # of Shares Purchased as Part of Publicly Announced Plans	Maximum # of Shares that May Yet Be Purchased Under Publicly Announced Plans
July 1 - July 31, 2024	—	$	—	—	243,156
August 1 - August 31, 2024	—	—		—	243,156
September 1 - September 30, 2024	—	—		—	243,156
Total	—	$	—	—	243,156

Over the years as a public company, the Company's Board of Directors has, from time to time, authorized the repurchase of its common stock. The most recent time this was done, on February 28, 2022, 806,000 shares of common stock were authorized for repurchase representing approximately 5% of the Company's outstanding shares at the time of the announcement. As of September 30, 2024, 562,844 of these shares had been purchased at an average price of $28.83 per share, 23,483 of which were repurchased during the nine months ended September 30, 2024. The shares may be purchased in the open market or in privately negotiated transactions, from time to time depending upon market conditions and other factors.

Item 3. Defaults Upon Senior Securities

Nothing to report.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Trading Plans : During the quarter ended September 30, 2024, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

Regulation
S-K Exhibit #

Document

Reference to Prior Filing or Exhibit # Attached Hereto

3.1

Charter of HomeTrust Bancshares, Inc.

(d)

3.2

Amended and Restated Bylaws of HomeTrust Bancshares, Inc.

(p)

10.1

HomeTrust Bancshares, Inc. Senior Leadership Incentive Plan (formerly known as Operating Committee Incentive Program)

(f)

Regulation
S-K Exhibit #

Document

Reference to Prior Filing or Exhibit # Attached Hereto

10.2

Amended and Restated Employment and Transition Agreement between HomeTrust Bancshares, Inc. and Dana L. Stonestreet

(a)

10.3

Amended and Restated Employment Agreement between HomeTrust Bancshares, Inc. and C. Hunter Westbrook

(g)

10.3A

Amendment No. 1 to Amended and Restated Employment Agreement between HomeTrust Bancshares, Inc. and C. Hunter Westbrook

(b)

10.3B

Amendment No. 2 to Amended and Restated Employment Agreement between HomeTrust Bancshares, Inc. and C. Hunter Westbrook

(h)

10.3C

Amendment No. 3 to Amended and Restated Employment Agreement between HomeTrust Bancshares, Inc. and C. Hunter Westbrook

(o)

10.3D

Amendment No. 4 to Amended and Restated Employment Agreement between HomeTrust Bancshares, Inc. and C. Hunter Westbrook

(e)

10.4

Amended and Restated Employment Agreement between HomeTrust Bancshares, Inc. and Tony J. VunCannon

(g)

10.4A

Amendment No. 1 to Amended and Restated Employment Agreement between HomeTrust Bancshares, Inc. and Tony VunCannon

(a)

10.5

HomeTrust Bank Executive Supplemental Retirement Income Master Agreement (“SERP”)

(d)

10.6

Amendment No. 1 to SERP

(m)

10.7

Amendment No. 2 to SERP

(l)

10.7A

SERP Joinder Agreement for F. Edward Broadwell, Jr.

(d)

10.7B

SERP Joinder Agreement for Dana L. Stonestreet

(d)

10.7C

SERP Joinder Agreement for Tony J. VunCannon

(d)

10.7D

SERP Joinder Agreement for Howard L. Sellinger

(d)

10.7E

SERP Joinder Agreement for Stan Allen

(d)

10.7F

SERP Joinder Agreement for Sidney A. Biesecker

(d)

10.7G

SERP Joinder Agreement for Peggy C. Melville

(d)

10.7H

SERP Joinder Agreement for William T. Flynt

(d)

10.7I

Amended and Restated Supplemental Income Agreement between HomeTrust Bank, as successor to Industrial Federal Savings Bank, and Sidney Biesecker

(i)

10.8

HomeTrust Bank Director Emeritus Plan (“Director Emeritus Plan”)

(d)

10.8A

Director Emeritus Plan Joinder Agreement for William T. Flynt

(d)

10.8B

Director Emeritus Plan Joinder Agreement for J. Steven Goforth

(d)

10.8C

Director Emeritus Plan Joinder Agreement for Craig C. Koontz

(d)

10.8D

Director Emeritus Plan Joinder Agreement for Larry S. McDevitt

(d)

10.8E

Director Emeritus Plan Joinder Agreement for F.K. McFarland, III

(d)

10.8F

Director Emeritus Plan Joinder Agreement for Peggy C. Melville

(d)

10.8G

Director Emeritus Plan Joinder Agreement for Robert E. Shepherd, Sr.

(d)

10.9

HomeTrust Bank Defined Contribution Executive Medical Care Plan

(d)

10.9A

Amendment No. 1 to HomeTrust Bank Defined Contribution Executive Medical Care Plan

(m)

10.9B

Form of Joinder Agreement Under the HomeTrust Bank Defined Contribution Executive Medical Care Plan

(m)

10.9C

Amendment No. 2 to HomeTrust Bank Defined Contribution Executive Medical Care Plan

(r)

10.9D

Amendment No. 3 to HomeTrust Bank Defined Contribution Executive Medical Care Plan

(t)

10.10

HomeTrust Bank 2005 Deferred Compensation Plan

(d)

10.10A

Amendment No. 1 to HomeTrust Bank 2005 Deferred Compensation Plan

(m)

10.11

HomeTrust Bank Pre-2005 Deferred Compensation Plan

(d)

10.11A

Amendment No. 1 to HomeTrust Bank Pre-2005 Deferred Compensation Plan

(m)

10.12

HomeTrust Bancshares, Inc. 2013 Omnibus Incentive Plan (“2013 Omnibus Incentive Plan”)

(j)

10.12A

Form of Incentive Stock Option Award Agreement under 2013 Omnibus Incentive Plan

(k)

10.12B

Form of Non-Qualified Stock Option Award Agreement under 2013 Omnibus Incentive Plan

(k)

10.12C

Form of Stock Appreciation Right Award Agreement under 2013 Omnibus Incentive Plan

(k)

10.12D

Form of Restricted Stock Award Agreement under 2013 Omnibus Incentive Plan

(k)

10.12E

Form of Restricted Stock Unit Award Agreement under 2013 Omnibus Incentive Plan

(k)

10.13

HomeTrust Bancshares, Inc. 2022 Omnibus Incentive Plan (“2022 Omnibus Incentive Plan”)

(q)

Regulation
S-K Exhibit #

Document

Reference to Prior Filing or Exhibit # Attached Hereto

10.13A

Form of Non-Qualified Stock Option Award Agreement under the Registrant’s 2022 Omnibus Incentive Plan

(u)

10.13B

Form of Restricted Stock Award Agreement for Employees under the Registrant’s 2022 Omnibus Incentive Plan

(u)

10.13C

Form of Restricted Stock Award Agreement for Directors under the Registrant’s 2022 Omnibus Incentive Plan

(u)

10.14

Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and Marty Caywood

(c)

10.14A

Amendment No. 1 to Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and Marty Caywood

(a)

10.15

Amended and Restated Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and John Sprink

(s)

10.16

Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and Kristin Powell

(r)

10.16A

Amendment No. 1 to Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and Kristin Powell

(a)

10.17

Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and Megan Pelletier

(a)

10.18

Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and Lora Jex

(p)

10.19

Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and Chuck Sivley

(v)

10.20

Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and Kevin Nunley

10.20

31.1

Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.1

31.2

Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

32.0

Certificate of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.0

Policy Relating to Recovery of Erroneously Awarded Compensation

101

The following materials from HomeTrust Bancshares’ Transition Report on Form 10-KT for the six-month transition period ended December 31, 2023, formatted in Extensible Business Reporting Language (XBRL): (a) Consolidated Balance Sheets; (b) Consolidated Statements of Income; (c) Consolidated Statements of Comprehensive Income; (d) Consolidated Statements of Changes in Stockholders' Equity; (e) Consolidated Statements of Cash Flows; and (f) Notes to Consolidated Financial Statements.

101

(a) Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2022 (File No. 001-35593).

(b) Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on September 25, 2018 (File No. 001-35593).

(c) Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 (File No. 001-35593).

(d) Filed as an exhibit to HomeTrust Bancshares’s Registration Statement on Form S-1 (File No. 333-178817) filed on December 29, 2011.

(e) Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on May 24, 2022 (File No. 001-35593).

(f) Filed as an exhibit to HomeTrust Bancshares's Transition Report on Form 10-KT for the-six month transition period ended December 31, 2023 (File No. 001-35593).

(g) Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on September 11, 2018 (File No. 001-35593).

(h) Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on October 28, 2020 (File No. 001-35593).

(i) Filed as an exhibit to Amendment No. 1 to HomeTrust Bancshares’s Registration Statement on Form S-1 (File No. 333-178817) filed on March 9, 2012.

(j) Attached as Appendix A to HomeTrust Bancshares’s definitive proxy statement filed on December 5, 2012 (File No. 001-35593).

(k) Filed as an exhibit to HomeTrust Bancshares’s Registration Statement on Form S-8 (File No. 333-186666) filed on February 13, 2013.

(l) Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on February 15, 2022 (File No. 001-35593).

(m) Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (File No. 001-35593).

(n) Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2014 (File No. 001-35593).

(o) Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on July 28, 2021 (File No. 001-35593).

(p) Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 (File No. 001-35593).

(q) Attached as Appendix A to HomeTrust Bancshares’s definitive proxy statement filed on October 3, 2022 (File No. 001-35593).

(r) Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 (File No. 001-35593).

(s) Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2023 (File No. 001-35593).

(t) Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on August 28, 2023 (File No. 001-35593).

(u) Filed as an exhibit to HomeTrust Bancshares's Registration Statement on Form S-8 (File No. 333-186666) filed on February 6, 2023.

(v) Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (File No. 001-35593).

SIGNATURES

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


	HOMETRUST BANCSHARES, INC.

Date: November 8, 2024	By:	/s/ C. Hunter Westbrook
		C. Hunter Westbrook
		President and Chief Executive Officer
		(Duly Authorized Officer)

Date: November 8, 2024	By:	/s/ Tony J. VunCannon
		Tony J. VunCannon
		Executive Vice President, CFO, Corporate Secretary and Treasurer
		(Principal Financial and Accounting Officer)

TABLE OF CONTENTS

Part I. Financial Information Item 1. Financial Statements Item 2. Management's Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II. Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3. Defaults Upon Senior Securities Item 4. Mine Safety Disclosures Item 5. Other Information Item 6. Exhibits

Exhibits

HTB 10-Q Quarter ended Sept. 30, 2024

Exhibits