Key Highlights

  • Diluted EPS of USD 1.11 topped the USD 0.90 estimate, up from USD 0.94.
  • Revenue of USD 55.53 million edged past the USD 54.74 million estimate.
  • Net interest margin rose to 4.46% from 4.41% in the prior quarter.
  • Nonperforming assets rose to 1.59% of total assets from 1.23% last quarter.

HomeTrust Bancshares (NYSE:HTB) reported third-quarter results on Wednesday, Oct. 21, with diluted earnings of USD 1.11 per share, above the USD 0.90 estimate. Revenue, measured as net interest income plus noninterest income, was USD 55.53 million against an estimate of USD 54.74 million. Net income was USD 18.0 million, up from USD 15.6 million in the second quarter.

HomeTrust Bancshares is the Asheville, North Carolina, holding company for HomeTrust Bank, a community bank with more than 30 locations across five Southeastern states and USD 4.4 billion in assets. Shares were down 0.21% at USD 47.03 in Wednesday trading.

Margin Widens, Tax Bill Shrinks

Net interest income rose USD 1.2 million from the second quarter to USD 46.5 million, and the net interest margin widened to 4.46% from 4.41%. Interest and dividend income grew 2.8%, helped by USD 1.0 million more in loan accretion income and one extra day in the quarter.

A USD 1.9 million federal tax benefit from purchased renewable energy credits pulled the effective tax rate down to 12.7% from 20.4%. Noninterest income slipped 1.9% to USD 9.1 million, while noninterest expense edged up 0.5% to USD 34.1 million and included USD 904,000 of merger-related costs.

Return on assets was 1.65% and return on equity 12.06%, compared with 1.46% and 10.44% in the second quarter.

Credit Metrics Moved the Other Way

Nonperforming assets rose to USD 70.4 million, or 1.59% of total assets, from USD 54.7 million, or 1.23%, at June 30. Nonaccruing loans climbed to USD 65.8 million from USD 50.6 million. Loans backed by the Small Business Administration made up 41.3% of nonperforming assets.

One USD 18.0 million commercial relationship was newly classified as nonperforming, and the company said it does not see a loss on it. Classified assets increased 30.2% to USD 92.1 million, or 2.08% of assets.

The allowance for credit losses was 1.09% of total loans and covered 60.02% of nonperforming loans, versus 78.63% a quarter earlier. Net charge-offs ran at an annualized 0.11% of average loans, down from 0.19%. The provision for credit losses was USD 805,000, compared with USD 920,000.

Buybacks, Dividend and the Blue Ridge Deal

The bank bought back 923,897 shares at an average USD 48.03 during the quarter, versus 153,606 shares in the second quarter. Shares outstanding fell to 15.8 million from 16.7 million, and stockholders' equity declined to USD 570.1 million from USD 600.6 million. Chief Executive Officer Hunter Westbrook said the company sped up repurchases as part of its capital management, finished the program started in August and authorized another 5% of outstanding shares. The board declared a USD 0.15 quarterly dividend, payable Nov. 25.

HomeTrust agreed on Aug. 16 to acquire Blue Ridge Bankshares in a stock deal at 0.086 of a HomeTrust share for each Blue Ridge share. Blue Ridge holders would own about 35% of the combined company, and closing is targeted for early in the first quarter of 2027, subject to regulatory and shareholder approvals. Westbrook said the deal extends the footprint into Virginia and creates a commercial bank with more than USD 7 billion in assets.

Credit and Merger Markers to Follow

The next filings show whether nonperforming and classified asset ratios keep rising, how much of them is guaranteed by the Small Business Administration, and how the USD 18.0 million relationship develops. Net interest margin against the 4.46% mark, deposit costs, merger-related expense, regulatory approvals for Blue Ridge and the pace of repurchases under the new authorization are the other items to track.