UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-Q


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


For the quarterly period ended DecemberMarch 31, 20172022


[  ]☐            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)(IRSI.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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.01 per share
HTBIThe 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 [X]☒ No [  ]☐


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes [X]☒ 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 [  ]☐      (Do not check if a smaller reporting company)        Accelerated filer [X]☒
Non-accelerated filer   [  ]☐Smaller reporting company [  ]☐
Emerging growth company [X]☐
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 [X]☒
APPLICABLE ONLY TO CORPORATE ISSUERS
There were 18,985,175 15,720,503shares of common stock, par value of $.01 per share, issued and outstanding as of February 6, 2018.

May 4, 2022.



HOMETRUST BANCSHARES, INC. AND SUBSIDIARIES
10-Q
TABLE OF CONTENTS
Page

Number
Item 1. 
23
34
45
56
68
810
Item 2. 
34
Item 3. 
5147
Item 4. 
5147
Item 1. 
5147
Item 1A. 
5147
Item 2. 
5147
Item 3. 
5248
Item 4. 
5248
Item 5 
5248
Item 6. 
5248
5350
EXHIBIT INDEX
54



1

Glossary of Defined Terms
The following items 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.
TermDefinition
ACLAllowance for Credit Losses
AFSAvailable-For-Sale
ASCAccounting Standards Codification
ASUAccounting Standards Update
BOLIBank Owned Life Insurance
CARES ActCoronavirus Aid, Relief, and Economic Security Act of 2020
CDCertificate of Deposit
CDACollateral Dependent Asset
CECLCurrent Expected Credit Losses
CET1Common Equity Tier 1
COVID-19Coronavirus Disease 2019
CPIConsumer Price Index
DCFDiscounted Cash Flow
ECLExpected Credit Losses
EPSEarnings Per Share
ESOPEmployee Stock Ownership Plan
FASBFinancial Accounting Standards Board
FDICFederal Deposit Insurance Corporation
FHLBFederal Home Loan Bank
FRBFederal Reserve Bank of Richmond
GAAPGenerally Accepted Accounting Principles in the United States
GSEGovernment-Sponsored Enterprises
HELOCHome Equity Line of Credit
LIBORLondon Interbank Offered Rate
MBSMortgage-Backed Securities
NCCOBNorth Carolina Office of the Commissioner of Banks
OTTIOther Than Temporary Impairment
PCDPurchased Financial Assets with Credit Deterioration
PCIPurchase Credit Impaired
PPPPaycheck Protection Program
REOReal Estate Owned
ROURight of Use
RSURestricted Stock Unit
SECSecurities and Exchange Commission
SBAU.S. Small Business Administration
SBICSmall Business Investment Companies
TDRTroubled Debt Restructuring

2

PART I.  FINANCIAL INFORMATION
Item 1.    Financial Statements
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
(Unaudited)  (Unaudited)
December 31, 2017 June 30,
2017		March 31, 2022June 30, 2021
Assets   Assets
Cash$46,743
 $41,982
Cash$19,783 $22,312 
Interest-bearing deposits51,922
 45,003
Interest-bearing deposits32,267 28,678 
Cash and cash equivalents98,665
 86,985
Cash and cash equivalents52,050 50,990 
Commercial paper199,722
 149,863
Commercial paper312,918 189,596 
Certificates of deposit in other banks100,349
 132,274
Certificates of deposit in other banks28,125 40,122 
Securities available for sale, at fair value167,669
 199,667
Debt securities available for sale, at fair value (amortized cost of $108,130 and $154,493 at March 31, 2022 and June 30, 2021, respectively)Debt securities available for sale, at fair value (amortized cost of $108,130 and $154,493 at March 31, 2022 and June 30, 2021, respectively)106,315 156,459 
Other investments, at cost38,877
 39,355
Other investments, at cost23,040 23,710 
Loans held for sale7,072
 5,607
Loans held for sale85,263 93,539 
Total loans, net of deferred loan fees2,418,014
 2,351,470
Allowance for loan losses(21,090) (21,151)
Net loans2,396,924
 2,330,319
Total loans, net of deferred loan fees and costsTotal loans, net of deferred loan fees and costs2,699,538 2,733,267 
Allowance for credit losses on loansAllowance for credit losses on loans(31,034)(35,468)
Loans, netLoans, net2,668,504 2,697,799 
Premises and equipment, net62,435
 63,648
Premises and equipment, net69,629 70,909 
Accrued interest receivable9,371
 8,758
Accrued interest receivable7,980 7,933 
Real estate owned ("REO")4,818
 6,318
Deferred income taxes36,526
 57,387
Bank owned life insurance ("BOLI")86,984
 85,981
REOREO— 188 
Deferred income taxes, netDeferred income taxes, net12,494 16,901 
BOLIBOLI94,740 93,108 
Goodwill25,638
 25,638
Goodwill25,638 25,638 
Core deposit intangibles5,773
 7,173
Core deposit intangibles, netCore deposit intangibles, net135 343 
Other assets9,765
 7,560
Other assets54,954 57,488 
Total Assets$3,250,588
 $3,206,533
Total Assets$3,541,785 $3,524,723 
Liabilities and Stockholders' Equity 
  
Liabilities and stockholders' equityLiabilities and stockholders' equity  
Liabilities 
  
Liabilities  
Deposits$2,108,208
 $2,048,451
Deposits$3,059,157 $2,955,541 
Borrowings685,000
 696,500
Borrowings30,000 115,000 
Capital lease obligations1,925
 1,937
Other liabilities60,094
 61,998
Other liabilities57,497 57,663 
Total liabilities2,855,227
 2,808,886
Total liabilities3,146,654 3,128,204 
Stockholders' Equity 
  
Commitments and Contingencies - See Note 9Commitments and Contingencies - See Note 9
Stockholders' equityStockholders' equity  
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued or
outstanding		—
 —
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, 18,967,175 shares
issued and outstanding at December 31, 2017; 18,967,875 at June 30, 2017		190
 190
Common stock, $0.01 par value, 60,000,000 shares authorized, 15,978,262 shares
issued and outstanding at March 31, 2022; 16,636,483 at June 30, 2021
Common stock, $0.01 par value, 60,000,000 shares authorized, 15,978,262 shares
issued and outstanding at March 31, 2022; 16,636,483 at June 30, 2021
160 167 
Additional paid in capital215,928
 213,459
Additional paid in capital136,181 160,582 
Retained earnings187,241
 191,660
Retained earnings265,609 240,075 
Unearned Employee Stock Ownership Plan ("ESOP") shares(7,670) (7,935)
Unearned ESOP sharesUnearned ESOP shares(5,422)(5,819)
Accumulated other comprehensive income (loss)(328) 273
Accumulated other comprehensive income (loss)(1,397)1,514 
Total stockholders' equity395,361
 397,647
Total stockholders' equity395,131 396,519 
Total Liabilities and Stockholders' Equity$3,250,588
 $3,206,533
Total liabilities and stockholders' equityTotal liabilities and stockholders' equity$3,541,785 $3,524,723 
The accompanying notes are an integral part of these consolidated financial statements.

3


HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Income (Loss)
(Dollars in thousands, except per share data)
(Unaudited)
(Unaudited)Three Months EndedNine Months Ended
Three Months Ended Six Months EndedMarch 31,March 31,
December 31, December 31,2022202120222021
2017 2016 2017 2016
Interest and Dividend Income       
Interest and dividend incomeInterest and dividend income
Loans$26,140
 $19,871
 $51,390
 $40,352
Loans$26,616 $27,629 $81,440 $84,564 
Securities available for sale904
 862
 1,875
 1,742
Certificates of deposit and other interest-bearing deposits1,303
 939
 2,472
 1,982
Commercial paper and interest-bearing depositsCommercial paper and interest-bearing deposits563 611 1,362 2,106 
Debt securities available for saleDebt securities available for sale384 496 1,319 1,528 
Other investments501
 391
 1,007
 778
Other investments632 585 1,867 1,729 
Total interest and dividend income28,848
 22,063
 56,744
 44,854
Total interest and dividend income28,195 29,321 85,988 89,927 
Interest Expense 
  
  
  
Interest expenseInterest expense   
Deposits1,541
 1,041
 2,887
 2,140
Deposits1,151 1,996 4,028 7,596 
Borrowings2,077
 607
 4,046
 1,162
Borrowings4 1,632 45 5,007 
Total interest expense3,618
 1,648
 6,933
 3,302
Total interest expense1,155 3,628 4,073 12,603 
Net Interest Income25,230
 20,415
 49,811
 41,552
Provision for Loan Losses—
 —
 —
 —
Net Interest Income after Provision for Loan Losses25,230
 20,415
 49,811
 41,552
Noninterest Income 
  
  
  
Net interest incomeNet interest income27,040 25,693 81,915 77,324 
Provision (benefit) for credit lossesProvision (benefit) for credit losses(45)(4,100)(4,005)(6,180)
Net interest income after provision (benefit) for credit lossesNet interest income after provision (benefit) for credit losses27,085 29,793 85,920 83,504 
Noninterest incomeNoninterest income   
Service charges and fees on deposit accounts2,185
 1,886
 4,224
 3,800
Service charges and fees on deposit accounts2,216 2,194 7,101 6,707 
Loan income and fees1,361
 937
 2,463
 1,914
Loan income and fees752 636 2,536 1,679 
Gain on sale of loans held for saleGain on sale of loans held for sale2,969 4,881 10,927 11,929 
BOLI income518
 503
 1,080
 1,065
BOLI income492 508 1,500 1,551 
Gain from sale of premises and equipment—
 —
 164
 385
Other, net723
 615
 1,433
 1,019
Operating lease incomeOperating lease income1,661 1,432 4,920 4,107 
OtherOther857 1,027 2,496 2,688 
Total noninterest income4,787
 3,941
 9,364
 8,183
Total noninterest income8,947 10,678 29,480 28,661 
Noninterest Expense 
  
  
  
Noninterest expenseNoninterest expense   
Salaries and employee benefits11,973
 11,839
 24,325
 22,530
Salaries and employee benefits14,730 15,784 44,882 46,691 
Net occupancy expense2,473
 2,015
 4,822
 4,076
Occupancy expense, netOccupancy expense, net2,483 2,456 7,201 7,010 
Computer servicesComputer services2,455 2,581 7,148 7,108 
Telephone, postage, and suppliesTelephone, postage, and supplies686 812 2,133 2,345 
Marketing and advertising319
 459
 772
 889
Marketing and advertising573 319 2,110 971 
Telephone, postage, and supplies748
 574
 1,433
 1,187
Deposit insurance premiums419
 203
 833
 481
Deposit insurance premiums412 363 1,280 1,361 
Computer services1,595
 1,648
 3,140
 3,075
Loss (gain) on sale and impairment of REO104
 339
 (42) 469
REO expense205
 378
 446
 522
REO related expense, netREO related expense, net220 84 478 462 
Core deposit intangible amortization681
 618
 1,400
 1,268
Core deposit intangible amortization50 165 208 605 
Merger-related expenses—
 27
 —
 334
Prepayment penalties on borrowingsPrepayment penalties on borrowings— 3,656 — 3,656 
Other2,658
 2,380
 5,127
 4,780
Other4,190 4,286 12,285 12,740 
Total noninterest expense21,175
 20,480
 42,256
 39,611
Total noninterest expense25,799 30,506 77,725 82,949 
Income Before Income Taxes8,842
 3,876
 16,919
 10,124
Income Tax Expense19,508
 893
 22,018
 3,317
Net Income (Loss)$(10,666) $2,983
 $(5,099) $6,807
Per Share Data: 
  
  
  
Net income (loss) per common share: 
  
  
  
Net income before income taxesNet income before income taxes10,233 9,965 37,675 29,216 
Income tax expenseIncome tax expense2,210 2,096 8,047 6,133 
Net incomeNet income$8,023 $7,869 $29,628 $23,083 
Per share data:Per share data:   
Net income per common share:Net income per common share:    
Basic$(0.59) $0.17
 $(0.28) $0.39
Basic$0.51 $0.49 $1.87 $1.42 
Diluted$(0.59) $0.17
 $(0.28) $0.39
Diluted$0.51 $0.48 $1.84 $1.40 
Average shares outstanding: 
  
  
  
Average shares outstanding:    
Basic17,975,883
 16,900,387
 17,971,439
 16,893,775
Basic15,523,813 15,979,590 15,666,093 16,139,059 
Diluted17,975,883
 17,444,144
 17,971,439
 17,391,404
Diluted15,793,012 16,485,718 15,997,377 16,339,130 
The accompanying notes are an integral part of these consolidated financial statements.

4


HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Comprehensive Income (Loss)
(Dollars in thousands)
 (Unaudited)
 Three Months Ended Six Months Ended
 December 31, December 31,
 2017 2016 2017 2016
Net Income (Loss)$(10,666) $2,983
 $(5,099) $6,807
Other Comprehensive Income (Loss) 
  
  
  
  Unrealized holding losses on securities available for sale 
  
  
  
Losses arising during the period(1,009) (2,955) (859) (3,540)
Deferred income tax benefit303
 1,005
 258
 1,203
Total other comprehensive loss$(706) $(1,950) $(601) $(2,337)
Comprehensive Income (Loss)$(11,372) $1,033
 $(5,700) $4,470
(Unaudited)
Three Months EndedNine Months Ended
March 31,March 31,
 2022202120222021
Net income$8,023 $7,869 $29,628 $23,083 
Other comprehensive loss   
  Unrealized holding losses on debt securities available for sale    
Losses arising during the period(2,595)(839)(3,781)(724)
Deferred income tax benefit598 193 870 166 
Total other comprehensive loss$(1,997)$(646)(2,911)(558)
Comprehensive income$6,026 $7,223 $26,717 $22,525 
The accompanying notes are an integral part of these consolidated financial statements.

5


HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity
(Dollars in thousands)

(Unaudited)
Three Months Ended March 31, 2022
Common StockAdditional
Paid In
Capital		Retained
Earnings		Unearned
ESOP
Shares		Accumulated
Other
Comprehensive
Income		Total
Stockholders'
Equity
SharesAmount
Balance at December 31, 202116,303,461 $163 $147,552 $258,986 $(5,555)$600 $401,746 
Net income— — — 8,023 — — 8,023 
Cash dividends declared on common stock, $0.09/ common share— — — (1,400)— — (1,400)
Common stock repurchased(419,931)(4)(12,911)— — — (12,915)
Forfeited restricted stock(2,600)— — — — — — 
Retired stock(8,627)— (270)— — — (270)
Granted restricted stock40,123 — — — — — — 
Exercised stock options65,836 1 1,038 — — — 1,039 
Share-based compensation expense— — 507 — — — 507 
ESOP compensation expense— — 265 — 133 — 398 
Other comprehensive loss— — — — — (1,997)(1,997)
Balance at March 31, 202215,978,262 $160 $136,181 $265,609 $(5,422)$(1,397)$395,131 
(Unaudited)
Nine Months Ended March 31, 2022
Common StockAdditional
Paid In
Capital		Retained
Earnings		Unearned
ESOP
Shares		Accumulated
Other
Comprehensive
Income		Total
Stockholders'
Equity
SharesAmount
Balance at June 30, 202116,636,483 $167 $160,582 $240,075 $(5,819)$1,514 $396,519 
Net income— — — 29,628 — — 29,628 
Cash dividends declared on common stock, $0.26/common share— — — (4,094)— — (4,094)
Common stock repurchased(1,095,763)(11)(32,307)— — — (32,318)
Forfeited restricted stock(12,000)— — — — — — 
Retired stock(11,335)— (345)— — — (345)
Granted restricted stock40,123 — — — — — — 
Stock issued for RSUs7,118 — — — — — — 
Exercised stock options413,636 4 6,077 — — — 6,081 
Share-based compensation expense— — 1,407 — — — 1,407 
ESOP compensation expense— — 767 — 397 — 1,164 
Other comprehensive loss— — — — — (2,911)(2,911)
Balance at March 31, 202215,978,262 $160 $136,181 $265,609 $(5,422)$(1,397)$395,131 





6

 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, 201617,998,750
 $180
 $186,104
 $179,813
 $(8,464) $2,343
 $359,976
Net income—
 —
 —
 6,807
 —
 —
 6,807
Granted restricted stock2,000
 —
 —
 —
 —
 —
 —
Stock option expense—
 —
 2,034
 —
 —
 —
 2,034
Restricted stock expense—
 —
 758
 —
 —
 —
 758
ESOP shares allocated—
 —
 273
 —
 265
 —
 538
Other comprehensive loss—
 —
 —
 —
 —
 (2,337) (2,337)
Balance at December 31, 201618,000,750
 $180
 $189,169
 $186,620
 $(8,199) $6
 $367,776
              
              
Balance at June 30, 201718,967,875
 $190
 $213,459
 $191,660
 $(7,935) $273
 $397,647
Net loss—
 —
 —
 (5,099) —
 —
 (5,099)
Cumulative-effect adjustment on the change in accounting for share-based payments—
 —
 —
 680
 —
 —
 680
Forfeited restricted stock(6,600) —
 —
 —
 —
 —
 —
Granted restricted stock2,000
 —
 —
 —
 —
 —
 —
Exercised stock options3,900
 —
 57
 —
 —
 —
 57
Stock option expense—
 —
 1,209
 —
 —
 —
 1,209
Restricted stock expense—
 —
 805
 —
 —
 —
 805
ESOP shares allocated—
 —
 398
 —
 265
 —
 663
Other comprehensive loss—
 —
 —
 —
 —
 (601) (601)
Balance at December 31, 201718,967,175
 $190
 $215,928
 $187,241
 $(7,670) $(328) $395,361

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity
(Dollars in thousands)
(Unaudited)
Three Months Ended March 31, 2021
Common StockAdditional
Paid In
Capital		Retained
Earnings		Unearned
ESOP
Shares		Accumulated
Other
Comprehensive
Income		Total
Stockholders'
Equity
SharesAmount
Balance at December 31, 202016,791,027 $168 $166,352 $242,182 $(6,083)$2,105 $404,724 
Net income— — — 7,869 — — 7,869 
Cash dividends declared on common stock, $0.08/common share— — — (1,284)— — (1,284)
Common stock repurchased(289,333)(3)(6,541)— — — (6,544)
Forfeited restricted stock— — — — — — 
Retired stock(8,473)— (195)— — — (195)
Granted restricted stock43,260 — — — — — — 
Exercised stock options118,866 2 1,712 — — — 1,714 
Share-based compensation expense— — 489 — — — 489 
ESOP compensation expense— — 193 — 132 — 325 
Other comprehensive loss— — — — — (646)(646)
Balance at March 31, 202116,655,347 $167 $162,010 $248,767 $(5,951)$1,459 $406,452 
(Unaudited)
Nine Months Ended March 31, 2021
Common StockAdditional
Paid In
Capital		Retained
Earnings		Unearned
ESOP
Shares		Accumulated
Other
Comprehensive
Income		Total
Stockholders'
Equity
SharesAmount
Balance at June 30, 202017,021,357 $170 $169,648 $242,776 $(6,348)$2,017 $408,263 
Net income— — — 23,083 — — 23,083 
Cumulative-effect adjustment due to the adoption of ASU 2016-13— — — (13,358)— — (13,358)
Cash dividends declared on common stock, $0.23/common share— — — (3,734)— — (3,734)
Stock repurchased(566,455)(6)(11,717)— — — (11,723)
Forfeited restricted stock(6,575)— — — — — — 
Retired stock(9,106)— (204)— — — (204)
Granted restricted stock43,260 — — — — — 
Exercised stock options172,866 3 2,487 — — — 2,490 
Share-based compensation expense— — 1,449 — — — 1,449 
ESOP compensation expense— — 347 — 397 — 744 
Other comprehensive income— — — — — (558)(558)
Balance at March 31, 202116,655,347 $167 $162,010 $248,767 $(5,951)$1,459 $406,452 
The accompanying notes are an integral part of these consolidated financial statements.



7

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Nine Months Ended March 31,
 20222021
Operating activities:
Net income$29,628 $23,083 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (benefit) for credit losses(4,005)(6,180)
Depreciation and amortization7,107 7,042 
Deferred income tax expense5,277 3,600 
Net accretion of purchase accounting adjustments on loans(1,283)(1,559)
Net amortization and accretion1,582 916 
Prepayment penalties paid on borrowings— 3,656 
Impairment on assets held for sale87 — 
Loss (gain) on sale of REO7 (49)
BOLI income(1,500)(1,551)
Gain on sale of loans held for sale(10,927)(11,929)
Origination of loans held for sale(387,252)(464,173)
Proceeds from sale of loans held for sale402,161 443,380 
New deferred loan origination fees, net(640)(541)
Decrease (increase) in accrued interest receivable and other assets(3,595)1,238 
ESOP compensation expense1,164 744 
Share-based compensation expense1,407 1,449 
Increase (decrease) in other liabilities(971)2,552 
Net cash provided by operating activities38,247 1,678 
Investing activities:  
Purchases of debt securities available for sale(9,762)(95,636)
Proceeds from maturities, calls and paydowns of debt securities available for sale55,600 59,021 
Purchases of commercial paper(463,446)(519,781)
Proceeds from maturities and calls of commercial paper340,999 586,862 
Purchases of CDs in other banks(996)(4,930)
Proceeds from maturities of CDs in other banks12,993 18,604 
Net redemptions of other investments, at cost670 10,047 
Net decrease in loans39,394 103,407 
Purchase of BOLI(132)(139)
Purchase of equipment for operating leases(2,888)(7,877)
Payoff of equipment for operating leases5,981 65 
Purchase of premises and equipment(6,043)(15,095)
Proceeds from sale of assets held for sale2,322 — 
Proceeds from sale of REO181 352 
Net cash provided by (used in) investing activities(25,127)134,900 
Financing activities:  
Net increase in deposits103,616 122,722 
Net decrease in short-term borrowings(115,000)— 
Proceeds from long-term borrowings60,000 — 
Repayment of long-term borrowings(30,000)(203,656)
Common stock repurchased(32,318)(11,723)
Cash dividends paid(4,094)(3,734)
Retired stock(345)(204)
Exercised stock options6,081 2,490 
Net cash used in financing activities(12,060)(94,105)
Net increase in cash and cash equivalents1,060 42,473 
Cash and cash equivalents at beginning of period50,990 121,622 
Cash and cash equivalents at end of period$52,050 $164,095 
8
 (Unaudited)
 Six Months Ended December 31,
 2017 2016
Operating Activities:   
Net income (loss)$(5,099) $6,807
Adjustments to reconcile net income (loss) to net cash provided by operating activities: 
  
Depreciation1,950
 1,745
Deferred income tax expense21,780
 3,097
Net amortization and accretion(2,567) (3,505)
Gain from sale of premises and equipment(164) (385)
Loss (gain) on sale and impairment of REO(42) 469
Gain on sale of loans held for sale(1,555) (1,444)
Origination of loans held for sale(61,981) (77,526)
Proceeds from sales of loans held for sale62,071
 79,755
Increase (decrease) in deferred loan fees, net297
 (397)
Increase in accrued interest receivable and other assets(2,818) (5,280)
Amortization of core deposit intangibles1,400
 1,268
BOLI income(1,080) (1,065)
ESOP compensation expense663
 538
Restricted stock and stock option expense2,014
 2,792
Decrease in other liabilities(1,904) (3,920)
Net cash provided by operating activities12,965
 2,949
Investing Activities: 
  
Purchase of securities available for sale—
 (15,091)
Proceeds from maturities of securities available for sale19,680
 17,795
Net maturities (purchases) of commercial paper(48,440) 50,928
Purchase of certificates of deposit in other banks(12,619) (24,708)
Maturities of certificates of deposit in other banks44,544
 36,073
Principal repayments of mortgage-backed securities10,941
 13,080
Net redemptions (purchases) of other investments478
 (2,855)
Net increase in loans(65,808) (121,236)
Purchase of BOLI(69) (110)
Proceeds from redemption of BOLI146
 —
Purchase of premises and equipment(1,496) (2,020)
Capital improvements to REO(18) —
Proceeds from sale of premises and equipment923
 395
Proceeds from sale of REO2,151
 1,169
Acquisition costs related to United Financial of North Carolina Inc.—
 (200)
Acquisition costs related to TriSummit Bancorp, Inc.—
 (16,074)
Net cash used in investing activities(49,587) (62,854)
Financing Activities: 
  
Net increase (decrease) in deposits59,757
 (16,531)
Net increase (decrease) in other borrowings(11,500) 69,000
Exercised stock options57
 —
Decrease in capital lease obligations(12) (11)
Net cash provided by financing activities48,302
 52,458
Net Increase (Decrease) in Cash and Cash Equivalents11,680
 (7,447)
Cash and Cash Equivalents at Beginning of Period86,985
 52,596
Cash and Cash Equivalents at End of Period$98,665
 $45,149



HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows (continued)
(Dollars in thousands)
 (Unaudited)
Supplemental Disclosures:Six Months Ended December 31,
 2017 2016
Cash paid during the period for:   
Interest$6,788
 $3,754
Income taxes266
 170
Noncash transactions: 
  
Unrealized loss in value of securities available for sale, net of income taxes(601) (2,337)
Transfers of loans to REO591
 1,330
Cumulative-effect adjustment on the change in accounting for share-based payments

680
 —
Payable related to the acquisition of United Financial Inc. of North Carolina—
 225
(Unaudited)
Nine Months Ended March 31,
 20222021
Supplemental disclosures:
Cash paid during the period for:
Interest$4,080 $13,302 
Income taxes269 472 
Noncash transactions:  
Unrealized loss in value of debt securities available for sale, net of income taxes(2,911)(558)
Transfer of loans to REO— 108 
Transfer of loans held for sale to loans held for investment19,032 14,702 
Transfer of loans held for investment to loans held for sale12,827 — 
ROU asset and lease liabilities for operating lease accounting1,186 599 
Transfer of premises and equipment to assets held for sale (included in other assets)3,229 — 
The accompanying notes are an integral part of these consolidated financial statements.

9

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
1.Summary of Significant Accounting Policies
1.    Summary of Significant Accounting Policies
The consolidated financial statements presented in this report include the accounts of HomeTrust Bancshares, Inc., a Maryland corporation ("HomeTrust"), and its wholly-owned subsidiary, HomeTrust Bank (the "Bank"). As used throughout this report, the term the "Company" refers to HomeTrust and the Bank, its consolidated subsidiary, unless the context otherwise requires.
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP")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 Securities and Exchange Commission ("SEC").SEC. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. It is recommended that these unaudited interim consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended June 30, 20172021 ("20172021 Form 10-K") filed with the SEC on September 12, 2017.10, 2021. The results of operations for the three and sixnine months ended DecemberMarch 31, 20172022 are not necessarily indicative of results that may be expected for the entire fiscal year ending June 30, 2018.2022.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Various elements of the Company's accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions, and other subjective assessments. In particular, management has identified severalthe determination of the provision and the allowance for credit losses on loans as an accounting policiespolicy that, due to the judgments, estimates and assumptions inherent in those policies, arethis policy, is critical to an understanding of the Company's financial statements. These policies relate to (i) the determination of the provisionThis policy and the allowance for loan losses, (ii) business combinations and acquired loans, (iii) the valuation of REO, (iv) the valuation of goodwill and other intangible assets, and (v) the valuation of or recognition of deferred tax assets and liabilities. These policies andrelated judgments, estimates and assumptions areis described in greater detail in subsequentthe notes to the Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations (Critical Accounting Policies) in our 2017the 2021 Form 10-K. Management believes that the judgments, estimates and assumptions used in the preparation of the financial statements are appropriate based on the factual circumstances at the time. However, given the sensitivity of the financial statements to thesethis critical accounting policies,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 estimatesthis estimate and the Company's financial condition and operating results in future periods.
CertainThe COVID-19 pandemic has caused significant, unprecedented disruption around the world that has affected daily living and negatively impacted the global economy. The effects of the COVID-19 pandemic may meaningfully impact significant estimates such as the allowance for credit losses or certain loan concentrations in the hospitality and healthcare industries. See "Note 6 - Loans and Allowance for Credit Losses on Loans" for more information on loans that have been modified or are in deferral due to COVID-19.

Reclassifications and corrections. To maintain consistency and comparability, certain amounts reported infrom prior periods' consolidated financial statementsperiods have been reclassified to conform to the current presentation. Such reclassifications hadperiod presentation with no effect on net income or stockholders’ equity as previously reported cash flows, stockholders' equity or net income.reported.

2.Recent Accounting Pronouncements
In August 2015, the Financial
2.    Recent Accounting Pronouncements
Newly Issued but Not Yet Effective Accounting Standards Board ("FASB") issued
ASU No. 2015-14, “Revenue from Contracts2021-05, "Leases (Topic 842): Lessors—Certain Leases with Customers (Topic 606)”, which defersVariable Lease Payments." This ASU amends the effective date of Accounting Standard Update ("ASU") No. 2014-09 one year. ASU No. 2014-09 created Topic 606 and supersedes Topic 605, Revenue Recognition. The core principle of Topic 606 islease classification requirements for lessors to classify as an operating lease any lease that an entity recognizes revenue to depict the transfer of promised goodswould otherwise be classified as a sales-type or services to customers in an amountdirect financing lease that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In general, the new guidance requires companies to use more judgment and make more estimates than under current guidance, including identifying performance obligationswould result in the contract, estimatingrecognition of a day-one loss at lease commencement, provided that the amount oflease includes variable consideration to includelease payments that do not depend on an index or rate. When a lease is classified as operating, the lessor does not recognize a net investment in the transaction price and allocating the transaction price to each separate performance obligation. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which provides clarifying guidance in certain narrow areas and adds some practical expedients, butlease, does not changederecognize the core revenue recognition principleunderlying asset and therefore, does not recognize a selling profit or loss. The amendments in Topic 606.this ASU No. 2015-14 isare effective for annual periods,fiscal years beginning after December 15, 2021, and interim periods within those annual periods,fiscal years and early adoption is permitted. The Company is currently evaluating the impact of adopting the new guidance on the consolidated financial statements.
ASU 2022-02, "Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures." This ASU eliminates the TDR recognition and measurement guidance and requires that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan. The amendment also adjusts the disclosures related to modifications and requires entities to disclose current-period gross write-offs by year of origination within the existing vintage disclosures. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017. Early adoption is permitted for annual periods beginning after December 15, 2016,2022, and interim periods within those annual periods. For financial reporting purposes, the standard allows for either full retrospectivefiscal years and early adoption meaning the standard is applied to all of the periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period presented in the financial statements with the cumulative effect of initially applying the standard recognized at the date of initial application. A significant amount of the Company’s revenues are derived from net interest income on financial assets and liabilities, which are excluded from the scope of the amended guidance. With respect to noninterest income, the Company is in its preliminary stages of identifying and evaluating the revenue streams and underlying revenue contracts within the scope of the guidance.permitted. The Company is expecting to begin developing processes and procedures during fiscal 2018 to ensure it is fully compliant with these amendments atcurrently evaluating the adoption date. To date,impact of adopting the Company has not yet identified any significant changes in the timing of revenue recognition when considering the amended accounting guidance; however, the Company’s implementation efforts are ongoing and such assessments may change prior to the July 1, 2018 implementation date.
In January 2016, the FASB issued ASU 2016-01, "Financial Instruments (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities." The ASU amends thenew guidance in GAAP on the classification and measurement ofconsolidated financial instruments. The ASU includes the following changes: i) equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (ii) requires the use of exit price notion when measuring the fair value of financial instruments for disclosure purposes; (iii) require separate presentation of financial assets and

statements.
8
10
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

3.    Debt Securities
financial liabilities by measurement category and form of financial asset (i.e.Debt securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; (iv) allows an equity investment that does not have readily determinable fair values, to be measured at cost minus impairment (if any), plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer; (v) eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, and requires a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e. securities or loans and receivables) on the balance sheet or in the accompanying notes to the financial statements; and (vii) clarifies that a valuation allowance on a deferred tax asset related to available-for-sale securities should be evaluated in combination with the organization’s other deferred tax assets. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The adoption of ASU No. 2016-01 is not expected to have a material impact on the Company's Consolidated Financial Statements. Management is in the planning stages of developing processes and procedures to comply with the disclosures requirements of this ASU, which could impact the disclosures the Company makes related to fair value of its financial instruments.
In February 2016, the FASB issued ASU 2016-02, "Leases (ASC 842)." The guidance in this ASU requires most leases to be recognized on the balance sheet as a right-of-use asset and a lease liability. It will be critical to identify leases embedded in a contract to avoid misstating the lessee’s balance sheet. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. We are currently evaluating the impact of this guidance on our Consolidated Financial Statements and the timing of adoption. The Company will compile an inventory of all leased assets to determine the impact of ASU 2016-02 on its financial condition and results of operations. Once adopted, we expect to report higher assets and liabilities on our Consolidated Balance Sheets as a result of including right-of-use assets and lease liabilities related to certain banking offices and certain equipment under noncancelable operating lease agreements, which currently are not reflected in our Consolidated Balance Sheets. We do not expect the guidance to have a material impact on the Consolidated Statements of Income or the Consolidated Statements of Changes in Stockholders' Equity.
In March 2016, the FASB issued ASU 2016-09, "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." The ASU changes the accounting for certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. We have elected to account for forfeitures of stock-based awards as they occur. The Company has adopted the amendments in this ASU and appropriate disclosures have been included in this Note. At the adoption of this ASU, we had a cumulative adjustment to retained earnings of $680,000. In accordance with the transition guidance outlined in this ASU, the adoption had no effect on net income or shareholder's equity in any previously issued periods. Going forward, we expect this ASU to create some volatility in our reported income tax expense related to the excess tax benefits for employee stock-based transactions, however, the actual amounts recognized will be dependent on the amount of employee stock-based transactions and the stock price at the time of exercise or vesting.
In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The ASU significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted for all entities beginning after December 15, 2018, including interim periods within those fiscal years. The Company is in the process of identifying required changes to the loan loss estimation models and processes and evaluating the impact of this new guidance. Once adopted, we expect our allowance for loan losses to increase, however, until our evaluation is complete the magnitude of the increase will be unknown.
In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." The ASU amends the guidance on the classification of certain cash receipts and payments in the statement of cash flows and is intended to reduce the diversity in practice. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted for all entities beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of the pending adoption of the ASU on its Consolidated Financial Statements.
In December 2016, FASB issued ASU No. 2016-19, "Technical Corrections and Improvements" and ASU 2016-20, "Technical Corrections and Improvements to Topic 606: Revenue from Contracts with Customers." On November 10, 2010 FASB added a standing project that will facilitate the FASB Accounting Standards Codification ("Codification”) updates for technical corrections, clarifications, and improvements. These amendments are referred to as Technical Corrections and Improvements. Maintenance updates include non-substantive corrections to the Codification, such as editorial corrections, various link-related changes, and changes to source fragment information. These updates contain amendments that will affect a wide variety of Topics in the Codification. The amendments in these ASUs will apply to all reporting entities within the scope of the affected accounting guidance and generally fall into one of four categories: amendments related to differences between original guidance and the Codification, guidance clarification and reference corrections, simplification, and minor improvements. In summary, the amendments represent changes to clarify the Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice. Transition guidance varies based on the amendments

9
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

in the ASUs. The amendments that require transition guidance are effective for fiscal years and interim reporting periods after December 15, 2016. Early adoption is permitted including adoption in an interim period. All other amendments are effective upon the issuance of these ASUs. Neither ASU 2016-19 nor ASU 2016-20 had a material impact on the Company's Consolidated Financial Statements.
In January 2017, FASB issued ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." The ASU removes the requirement to compare the implied fair value of goodwill with its carrying value as required in Step 2 of the goodwill impairment test. Under the ASU, registrants would perform their goodwill impairment test and recognize an impairment charge for any amount the carrying value exceeds the reporting unit's fair value, but limited by the amount of goodwill allocated to that reporting unit. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted for all entities after January 1, 2017. The Company did early adopt this ASU and adoption did not have a material effect on the Company's Consolidated Financial Statements.
In March 2017, FASB issued ASU 2017-08, "Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities." The ASU requires entities to amortize the premium on certain purchased callable debt securities to the earliest call date, which more closely aligns the amortization period of premiums and discounts to expectations incorporated in the market prices. Entities will no longer recognize a loss in earnings upon the debtor's exercise of a call on a purchased debt security held at a premium. The ASU does not require any accounting change for debt securities held at a discount, therefore the discount will continue to be amortized as an adjustment of yield over the contractual life of the investment. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted for all entities. The adoption of ASU No. 2017-08 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In May 2017, the FASB issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting." This ASU provides clarity on the guidance related to stock compensation when there have been changes to the terms or conditions of a share-based payment award to which an entity would be required to apply modification accounting under ASC 718. The ASU provides the three following criteria must be met in order to not account for the effect of the modification of terms or conditions: the fair value, the vesting conditions and the classification as an equity or liability instrument of the modified award is the same as the original award immediately before the original award is modified. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. The adoption of ASU No. 2017-09 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In August 2017, FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." This ASU improves the transparency and understandability of disclosures in the financial statements regarding the entities risk management activities and reduces the complexity of hedge accounting. The amendments in this ASU permit hedge accounting for hedging relationships involving nonfinancial risk and interest rate risk by removing certain limitations in cash flow and fair value hedging relationships. In addition, the ASU requires an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and early adoption is permitted. The adoption of ASU No. 2017-12 is not expected to have a material impact on the Company's Consolidated Financial Statements.
3.Business Combinations
All business combinations are accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed and consideration exchanged are recorded at acquisition date fair values. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding the closing date fair values becomes available.
United Financial of North Carolina, Inc.

On December 31, 2016, the Bank acquired United Financial of North Carolina, Inc. ("United Financial"), a municipal lease company headquartered in Fletcher, North Carolina that specializes in providing financing for fire departments and municipalities to purchase fire trucks and related equipment as well as to construct fire stations and other municipal buildings across the Carolinas and other southeastern states. United Financial underwrites and originates municipal leases and then sells them to HomeTrust and other financial institutions. Since January 1, 2017, United Financial has conducted business under the name United Financial, a division of HomeTrust Bank.

The total consideration paid by the Bank in the United Financial acquisition approximates $425. Per the merger agreement, a cash payment of $200 was paid on the acquisition date with an additional $225 due in the third quarter of fiscal 2018; all of which was allocated to goodwill.

TriSummit Bancorp. Inc.

On January 1, 2017, HomeTrust completed its acquisition of TriSummit Bancorp, Inc., (“TriSummit”) pursuant to an Agreement and Plan of Merger, dated as of September 20, 2016, under which TriSummit merged with and into HomeTrust (the “Merger”) with HomeTrust as the surviving corporation in the Merger. Immediately following the Merger, TriSummit's wholly owned subsidiary bank, TriSummit Bank, merged with and into the Bank (together with the Merger, the “TriSummit Merger”).

Pursuant to the Merger Agreement, each share of the common stock of TriSummit and each share of Series A Preferred Stock of TriSummit issued and outstanding immediately prior to the Merger (on an as converted basis to a share of TriSummit common stock) was converted into

10
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

the right to receive $4.40 in cash and .2099 shares of HomeTrust common stock, with cash paid in lieu of fractional share interests. At the Merger date, 50% of outstanding options granted by TriSummit were canceled. The remaining options were assumed by HomeTrust and converted into options to purchase 86,185 shares of HomeTrust Common Stock. In addition, TriSummit’s $7,222 Series B, Series C and Series D TARP preferred stock (all held by private shareholders) was redeemed in connection with the closing of the merger.
The total consideration paid by HomeTrust in the TriSummit Merger approximates $36,126. The total number of HomeTrust shares issued was 765,277 shares. HomeTrust paid aggregate cash consideration of approximately $16,083.

11
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The following table presents the consideration paid by the Company in the acquisition of TriSummit and the assets acquired and liabilities assumed as of January 1, 2017:
 As Recorded by TriSummit Fair Value and Other Merger Related Adjustments As Recorded by the Company
Consideration Paid:     
Cash paid including cash in lieu of fractional shares    $16,083
Fair value of HomeTrust common stock at $25.90 per share    20,043
Total consideration    $36,126
Assets:     
Cash and cash equivalents$5,498
 $—
 $5,498
Certificates of deposit in other banks250
 —
 250
Investment securities58,728
 (203) 58,525
Other investments, at cost2,614
 —
 2,614
Loans, net261,926
 (3,867) 258,059
Premises and equipment, net12,841
 (2,419) 10,422
REO1,633
 (122) 1,511
Deferred income tax2,653
 4,462
 7,115
Bank owned life insurance3,762
 —
 3,762
Core deposit intangibles1,285
 1,575
 2,860
Other assets1,453
 (105) 1,348
Total assets acquired$352,643
 $(679) $351,964
      
Liabilities:     
Deposits$279,647
 $587
 280,234
Borrowings47,453
 16
 47,469
Other liabilities675
 —
 675
Total liabilities assumed$327,775
 $603
 $328,378
Net identifiable assets acquired over liabilities assumed$24,868
 $(1,282) $23,586
Goodwill
   $12,540
The carrying amount of acquired loans from TriSummit as of January1, 2017 consisted of purchased performing loans and Purchase Credit Impaired ("PCI") loans as detailed in the following table:
 
Purchased
Performing
 PCI 
Total
Loans
Retail Consumer Loans:     
One-to-four family$75,179
 $3,753
 $78,932
HELOCs6,479
 2
 6,481
Construction and land/lots15,591
 —
 15,591
Consumer1,686
 17
 1,703
Commercial:   
 

Commercial real estate107,880
 3,494
 111,374
Construction and development15,253
 142
 15,395
Commercial and industrial28,295
 288
 28,583
Total$250,363
 $7,696
 $258,059


12
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The following table presents the performing loans receivable purchased from TriSummit at January 1, 2017, the acquisition date:
Contractually required principal payments receivable$255,852
Adjustment for credit, interest rate, and liquidity5,489
Balance of purchased loans receivable$250,363
The following table presents the PCI loans acquired from TriSummit at January 1, 2017, the acquisition date:
Contractually required principal and interest payments receivable$11,474
Amounts not expected to be collected - nonaccretable difference2,490
Estimated payments expected to be received8,984
Accretable yield1,288
Fair value of PCI loans$7,696
4.Securities Available for Sale
Securities available for sale consist of the following at the dates indicated:
March 31, 2022
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value
U.S. government agencies$18,988 $34 $(446)$18,576 
MBS, residential34,641 86 (664)34,063 
Municipal bonds5,558 109 — 5,667 
Corporate bonds48,943 22 (956)48,009 
Total$108,130 $251 $(2,066)$106,315 
 December 31, 2017
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
U.S. Government Agencies$47,986
 $84
 $(377) $47,693
Residential Mortgage-backed Securities of U.S. Government 
  
  
  
Agencies and Government-Sponsored Enterprises81,675
 244
 (641) 81,278
Municipal Bonds32,154
 351
 (82) 32,423
Corporate Bonds6,216
 83
 (87) 6,212
Equity Securities63
 —
 —
 63
Total$168,094
 $762
 $(1,187) $167,669
 June 30, 2017
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
U.S. Government Agencies$65,947
 $184
 $(301) $65,830
Residential Mortgage-backed Securities of U.S. Government 
  
  
  
Agencies and Government-Sponsored Enterprises92,841
 411
 (281) 92,971
Municipal Bonds34,135
 403
 (28) 34,510
Corporate Bonds6,267
 114
 (88) 6,293
Equity Securities63
 —
 —
 63
Total$199,253
 $1,112
 $(698) $199,667
June 30, 2021
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value
U.S. government agencies$18,975 $135 $(37)$19,073 
MBS, residential42,119 1,339 (54)43,404 
Municipal bonds9,098 453 — 9,551 
Corporate bonds84,301 257 (127)84,431 
Total$154,493 $2,184 $(218)$156,459 
Debt securities available for sale by contractual maturity at the dates indicatedMarch 31, 2022 and June 30, 2021 are shown below. Mortgage-backed securitiesMBS 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.
 March 31, 2022
Amortized
Cost		Estimated
Fair Value
Due within one year$33,546 $33,497 
Due after one year through five years33,384 32,322 
Due after five years through ten years6,559 6,433 
Due after ten years— — 
MBS, residential34,641 34,063 
Total$108,130 $106,315 
December 31, 2017 June 30, 2021
Amortized
Cost
 
Estimated
Fair Value
Amortized
Cost		Estimated
Fair Value
Due within one year$12,260
 $12,187
Due within one year$34,615 $34,684 
Due after one year through five years54,404
 54,153
Due after one year through five years73,249 73,633 
Due after five years through ten years10,243
 10,483
Due after five years through ten years4,510 4,738 
Due after ten years9,449
 9,505
Due after ten years— — 
Mortgage-backed securities81,675
 81,278
MBS, residentialMBS, residential42,119 43,404 
Total$168,031
 $167,606
Total$154,493 $156,459 

The Company had no sales of debt securities available for sale during the three and nine months ended March 31, 2022 and 2021. There were no gross realized gains or losses for the three and nine months ended March 31, 2022 and 2021.

Debt securities available for sale with amortized costs totaling $53,266 and $52,603 and market values of $52,350 and $53,897 at March 31, 2022 and June 30, 2021, respectively, were pledged as collateral to secure various public deposits and other borrowings.
13
11
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The Company had no sales of securities available for sale during the three and six months ended December 31, 2017 and 2016. There were no gross realized gains or losses for the three and six months ended December 31, 2017 and 2016, respectively.

Securities available for sale with costs totaling $131,784 and $156,592 and market values of $131,337 and $154,264 at December 31, 2017 and June 30, 2017, respectively, were pledged as collateral to secure various public deposits and other borrowings.
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 DecemberMarch 31, 20172022 and June 30, 20172021 were as follows:
March 31, 2022
Less than 12 Months12 Months or MoreTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
U.S. government agencies$14,554 $(446)$— $— $14,554 $(446)
MBS, residential21,093 (546)2,290 (118)23,383 (664)
Corporate bonds23,888 (265)14,309 (691)38,197 (956)
Total$59,535 $(1,257)$16,599 $(809)$76,134 $(2,066)
 December 31, 2017
 Less than 12 Months 12 Months or More Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
U.S. Government Agencies$13,885
 $(80) $25,696
 $(297) $39,581
 $(377)
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises31,210
 (285) 20,058
 (356) 51,268
 (641)
Municipal Bonds11,616
 (72) 1,068
 (10) 12,684
 (82)
Corporate Bonds—
 —
 3,691
 (87) 3,691
 (87)
Total$56,711
 $(437) $50,513
 $(750) $107,224
 $(1,187)
 June 30, 2017
 Less than 12 Months 12 Months or More Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
U.S. Government Agencies$46,767
 $(222) $6,921
 $(79) $53,688
 $(301)
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises42,921
 (240) 3,970
 (41) 46,891
 (281)
Municipal Bonds9,153
 (28) —
 —
 9,153
 (28)
Corporate Bonds3,734
 (88) —
 —
 3,734
 (88)
Total$102,575
 $(578) $10,891
 $(120) $113,466
 $(698)
June 30, 2021
Less than 12 Months12 Months or MoreTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
U.S. government agencies$14,963 $(37)$— $— $14,963 $(37)
MBS, residential5,212 (28)1,205 (26)6,417 (54)
Corporate bonds19,873 (127)— — 19,873 (127)
Total$40,048 $(192)$1,205 $(26)$41,253 $(218)
The total number of securities with unrealized losses at DecemberMarch 31, 2017,2022 and June 30, 20172021 were 164124 and 136,28, respectively. Unrealized
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 March 31, 2022 continue to perform as scheduled and management does not believe that there is a credit loss or that a provision for credit losses on securities have not been recognized in income because management has theis 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 forwithin the foreseeable future,portfolio and has determined that it is not more likely than notmore-likely-than-not that the Companysecurities will be required to sellbe sold. See "Note 1 – Summary of Significant Account Policies" in our 2021 Form 10-K 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 expected credit losses on investment securities prior to a recovery in value. The decline in fair valueand does not record an allowance for credit losses on accrued interest receivable. As of March 31, 2022, the accrued interest receivable for debt securities available for sale was largely due to increases in market interest rates. The Company had no other-than-temporary impairment losses during$353.
4.    Other Investments
Other investments, at cost, consist of the six months ended December 31, 2017 orfollowing at the year ended June 30, 2017.dates indicated:
March 31, 2022June 30, 2021
FHLB of Atlanta stock$3,038 $6,153 
FRB stock7,413 7,386 
SBIC investments12,589 10,171 
Total$23,040 $23,710 
As a requirement for membership, the Bank invests in the stock of both the FHLB of Atlanta and the Federal Reserve Bank of Richmond ("FRB").FRB. No ready market exists for these securities so carrying value, or cost, approximates their fair value based on the redemption provisions of the FHLB of Atlanta and the FRB, respectively.


SBIC investments are equity securities without a readily determinable fair value and are recorded at cost.
14
12
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

5.    Loans Held For Sale
5.Loans
Loans held for sale as of the dates indicated consist of the following:
March 31, 2022June 30, 2021
One-to-four family$14,647 $31,873 
SBA8,105 4,160 
HELOCs - originated62,511 57,506 
Total$85,263 $93,539 
6.    Loans and Allowance for Credit Losses on Loans
Loans consist of the following at the dates indicated:
March 31, 2022June 30, 2021
Commercial loans:
Commercial real estate$1,102,184 $1,142,276 
Construction and development251,668 179,427 
Commercial and industrial167,342 141,341 
Equipment finance378,629 317,920 
Municipal finance130,260 140,421 
PPP loans2,756 46,650 
Total commercial loans2,032,839 1,968,035 
Retail consumer loans:
One-to-four family347,945 406,549 
HELOCs - originated128,445 130,225 
HELOCs - purchased26,911 38,976 
Construction and land/lots72,735 66,027 
Indirect auto finance83,903 115,093 
Consumer6,760 8,362 
Total retail consumer loans666,699 765,232 
Total loans, net of deferred loan fees and costs2,699,538 2,733,267 
Allowance for credit losses on loans(31,034)(35,468)
Loans, net$2,668,504 $2,697,799 
_________________________________________________________________
 December 31, 2017 June 30, 2017
Retail consumer loans:   
One-to-four family$686,229
 $684,089
HELOCs - originated150,084
 157,068
HELOCs - purchased162,181
 162,407
Construction and land/lots60,805
 50,136
Indirect auto finance150,042
 140,879
Consumer9,699
 7,900
Total retail consumer loans1,219,040
 1,202,479
Commercial loans: 
  
Commercial real estate786,381
 730,408
Construction and development185,921
 197,966
Commercial and industrial127,709
 120,387
Municipal leases100,205
 101,175
Total commercial loans1,200,216
 1,149,936
Total loans2,419,256
 2,352,415
Deferred loan fees, net(1,242) (945)
Total loans, net of deferred loan fees2,418,014
 2,351,470
Allowance for loan losses(21,090) (21,151)
Loans, net$2,396,924
 $2,330,319
(1) At March 31, 2022 and June 30, 2021 accrued interest receivable of $7,427 and $7,339 was accounted for separately from the amortized cost basis.
All qualifying one-to-four family first mortgage loans, HELOCs, commercial real estate loans, and FHLB Stockof Atlanta stock are pledged as collateral by a blanket pledge to secure any outstanding FHLB advances.
The Company's total non-purchased and purchased performing loans by segment, class, and risk grade at the dates indicated follow:
13
 Pass 
Special
Mention
 Substandard Doubtful Loss Total
December 31, 2017           
Retail consumer loans:           
One-to-four family$658,436
 $4,783
 $14,298
 $1,132
 $132
 $678,781
HELOCs - originated146,733
 756
 2,318
 —
 21
 149,828
HELOCs - purchased161,991
 —
 190
 —
 —
 162,181
Construction and land/lots59,496
 389
 409
 —
 —
 60,294
Indirect auto finance149,660
 —
 382
 —
 —
 150,042
Consumer9,656
 10
 20
 1
 9
 9,696
Commercial loans: 
  
  
  
  
  
Commercial real estate760,262
 7,584
 5,809
 —
 —
 773,655
Construction and development179,946
 714
 2,829
 —
 —
 183,489
Commercial and industrial122,282
 906
 2,099
 —
 2
 125,289
Municipal leases99,798
 309
 98
 —
 —
 100,205
Total loans$2,348,260
 $15,451
 $28,452
 $1,133
 $164
 $2,393,460

15
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

Loans are monitored for credit quality on a recurring basis and the composition of the loans outstanding by credit quality indicator is provided below. Loan credit quality indicators are developed through review of individual borrowers on an ongoing basis. Generally, loans are monitored for performance on a quarterly basis with the credit quality indicators adjusted as needed. The indicators represent the rating for loans as of the date presented based on the most recent assessment performed. These credit quality indicators are defined as follows:
Pass—A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.
Special Mention—A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.
Substandard—A substandard asset is inadequately protected by the current net worth and paying capacity of the obligor, or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.
Doubtful—An asset classified doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions, and values.
Loss—Assets classified loss are considered uncollectible and of such little value that their continuing to be carried as an asset is not warranted. This classification is not necessarily equivalent to no potential for recovery or salvage value, but rather that it is not appropriate to defer a full write-off even though partial recovery may be effected in the future.
14
 Pass 
Special
Mention
 Substandard Doubtful Loss Total
June 30, 2017           
Retail consumer loans:           
One-to-four family$655,424
 $4,715
 $14,769
 $1,101
 $11
 $676,020
HELOCs - originated153,676
 809
 2,100
 188
 7
 156,780
HELOCs - purchased162,215
 —
 192
 —
 —
 162,407
Construction and land/lots48,728
 479
 341
 60
 —
 49,608
Indirect auto finance140,780
 —
 97
 1
 1
 140,879
Consumer7,828
 12
 34
 —
 8
 7,882
Commercial loans: 
  
  
  
  
  
Commercial real estate700,060
 5,847
 7,118
 —
 —
 713,025
Construction and development192,025
 992
 2,320
 —
 —
 195,337
Commercial and industrial113,923
 883
 2,954
 —
 1
 117,761
Municipal leases99,811
 1,258
 106
 —
 —
 101,175
Total loans$2,274,470
 $14,995
 $30,031
 $1,350
 $28
 $2,320,874
The Company's total PCI loans by segment, class, and risk grade at the dates indicated follow:
 Pass 
Special
Mention
 Substandard Doubtful Loss Total
December 31, 2017           
Retail consumer loans:           
One-to-four family$2,827
 $1,193
 $3,427
 $—
 $1
 $7,448
HELOCs - originated256
 —
 —
 —
 —
 256
Construction and land/lots469
 —
 42
 —
 —
 511
Consumer3
 —
 —
 —
 —
 3
Commercial loans: 
  
  
  
  
  
Commercial real estate6,627
 1,579
 4,520
 —
 —
 12,726
Construction and development326
 —
 2,106
 —
 —
 2,432
Commercial and industrial2,267
 23
 130
 —
 —
 2,420
Total loans$12,775
 $2,795
 $10,225
 $—
 $1
 $25,796
 Pass 
Special
Mention
 Substandard Doubtful Loss Total
June 30, 2017           
Retail consumer loans:           
One-to-four family$3,115
 $1,129
 $3,615
 $210
 $—
 $8,069
HELOCs - originated258
 —
 30
 —
 —
 288
Construction and land/lots487
 —
 41
 —
 —
 528
Consumer4
 14
 —
 —
 —
 18
Commercial loans: 
  
  
  
  
  
Commercial real estate8,909
 2,299
 6,175
 —
 —
 17,383
Construction and development338
 —
 2,291
 —
 —
 2,629
Commercial and industrial2,460
 44
 122
 —
 —
 2,626
Total loans$15,571
 $3,486
 $12,274
 $210
 $—
 $31,541

16
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)


The Company's totalfollowing table presents the credit risk profile by risk grade for commercial loans by segment, class, and delinquency status at the dates indicated follows:origination year:
Term Loans By Origination Fiscal Year
March 31, 202220222021202020192018PriorRevolvingTotal
Commercial real estate
Risk rating:
Pass$135,883 $218,034 $162,102 $115,537 $119,739 $293,512 $23,238 $1,068,045 
Special mention730 — 401 432 15,377 13,410 — 30,350 
Substandard— — — — 592 2,800 397 3,789 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate$136,613 $218,034 $162,503 $115,969 $135,708 $309,722 $23,635 $1,102,184 
Construction and development
Risk rating:
Pass$26,859 $15,907 $2,241 $2,687 $4,530 $5,932 $187,373 $245,529 
Special mention— — — — — 186 4,715 4,901 
Substandard906 — — — — 332 — 1,238 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and development$27,765 $15,907 $2,241 $2,687 $4,530 $6,450 $192,088 $251,668 
Commercial and industrial
Risk rating:
Pass$43,193 $21,537 $11,960 $11,645 $7,136 $22,202 $43,889 $161,562 
Special mention— 104 — — — 94 97 295 
Substandard— 670 347 860 — 53 3,555 5,485 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial and industrial$43,193 $22,311 $12,307 $12,505 $7,136 $22,349 $47,541 $167,342 
Equipment finance
Risk rating:
Pass$142,026 $125,396 $75,126 $32,142 $2,278 $— $— $376,968 
Special mention366 74 572 294 — — — 1,306 
Substandard— — 49 156 — — — 205 
Doubtful— — — 150 — — — 150 
Loss— — — — — — — — 
Total equipment finance$142,392 $125,470 $75,747 $32,742 $2,278 $— $— $378,629 
Municipal leases
Risk rating:
Pass$16,684 $24,550 $9,262 $11,768 $14,370 $42,005 $11,584 $130,223 
Special mention— 37 — — — — — 37 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total municipal leases$16,684 $24,587 $9,262 $11,768 $14,370 $42,005 $11,584 $130,260 
PPP loans
Risk rating:
Pass$— $2,255 $501 $— $— $— $— $2,756 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total PPP loans$— $2,255 $501 $— $— $— $— $2,756 
Total commercial loans
Risk rating:
Pass$364,645 $407,679 $261,192 $173,779 $148,053 $363,651 $266,084 $1,985,083 
Special mention1,096 215 973 726 15,377 13,690 4,812 36,889 
Substandard906 670 396 1,016 592 3,185 3,952 10,717 
Doubtful— — — 150 — — — 150 
Loss— — — — — — — — 
Total commercial loans$366,647 $408,564 $262,561 $175,671 $164,022 $380,526 $274,848 $2,032,839 
15
 Past Due   Total
 30-89 Days 90 Days+ Total Current Loans
December 31, 2017         
Retail consumer loans:         
One-to-four family$4,730
 $3,601
 $8,331
 $677,898
 $686,229
HELOCs - originated531
 740
 1,271
 148,813
 150,084
HELOCs - purchased—
 —
 —
 162,181
 162,181
Construction and land/lots164
 133
 297
 60,508
 60,805
Indirect auto finance441
 67
 508
 149,534
 150,042
Consumer7
 4
 11
 9,688
 9,699
Commercial loans:         
Commercial real estate341
 2,854
 3,195
 783,186
 786,381
Construction and development831
 2,062
 2,893
 183,028
 185,921
Commercial and industrial267
 538
 805
 126,904
 127,709
Municipal leases—
 —
 —
 100,205
 100,205
Total loans$7,312
 $9,999
 $17,311
 $2,401,945
 $2,419,256
The table above includes PCI loans of $797 30-89 days past due and $2,023 90 days or more past due as of December 31, 2017.
 Past Due   Total
 30-89 Days 90 Days+ Total Current Loans
June 30, 2017         
Retail consumer loans:         
One-to-four family$3,496
 $3,990
 $7,486
 $676,603
 $684,089
HELOCs - originated1,037
 274
 1,311
 155,757
 157,068
HELOCs - purchased—
 —
 —
 162,407
 162,407
Construction and land/lots132
 129
 261
 49,875
 50,136
Indirect auto finance96
 —
 96
 140,783
 140,879
Consumer5
 14
 19
 7,881
 7,900
Commercial loans: 
  
  
  
  
Commercial real estate809
 3,100
 3,909
 726,499
 730,408
Construction and development385
 887
 1,272
 196,694
 197,966
Commercial and industrial37
 831
 868
 119,519
 120,387
Municipal leases—
 —
 —
 101,175
 101,175
Total loans$5,997
 $9,225
 $15,222
 $2,337,193
 $2,352,415
The table above includes PCI loans of $854 30-89 days past due and $4,211 90 days or more past due as of June 30, 2017.

17
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The following table presents the credit risk profile by risk grade for retail consumer loans by origination year:
Term Loans By Origination Fiscal Year
March 31, 202220222021202020192018PriorRevolvingTotal
One-to-four family
Risk rating:
Pass$40,621 $68,486 $48,195 $31,537 $25,273 $123,383 $2,770 $340,265 
Special mention— — — — — 858 — 858 
Substandard128 — 1,013 540 434 4,243 — 6,358 
Doubtful— — — — — 157 — 157 
Loss— — — — — 307 — 307 
Total one-to-four family$40,749 $68,486 $49,208 $32,077 $25,707 $128,948 $2,770 $347,945 
HELOCs - originated
Risk rating:
Pass$627 $997 $286 $1,229 $227 $7,901 $116,176 $127,443 
Special mention— — — — — 9 — 9 
Substandard— 16 — — — 927 50 993 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total HELOCs - originated$627 $1,013 $286 $1,229 $227 $8,837 $116,226 $128,445 
HELOCs - purchased
Risk rating:
Pass$— $— $— $— $— $— $26,278 $26,278 
Special mention— — — — — — — — 
Substandard— — — — — — 633 633 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total HELOCs - purchased$— $— $— $— $— $— $26,911 $26,911 
Construction and land/lots
Risk rating:
Pass$1,373 $13,510 $1,691 $53 $— $1,967 $53,757 $72,351 
Special mention— — — — — — — — 
Substandard— — — — — 384 — 384 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and land/lots$1,373 $13,510 $1,691 $53 $— $2,351 $53,757 $72,735 
Indirect auto finance
Risk rating:
Pass$19,476 $22,276 $17,783 $9,522 $10,238 $3,529 $— $82,824 
Special mention— 0— — — — — — — 
Substandard62 195 321 136 250 115 — 1,079 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total indirect auto finance$19,538 $22,471 $18,104 $9,658 $10,488 $3,644 $— $83,903 
Consumer
Risk rating:
Pass$572 $954 $653 $4,036 $118 $101 $257 $6,691 
Special mention— — — — — — — — 
Substandard— 8 — 19 10 18 14 69 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total consumer$572 $962 $653 $4,055 $128 $119 $271 $6,760 
Total retail consumer loans
Risk rating:
Pass$62,669 $106,223 $68,608 $46,377 $35,856 $136,881 $199,238 $655,852 
Special mention— — — — — 867 — 867 
Substandard190 219 1,334 695 694 5,687 697 9,516 
Doubtful— — — — — 157 — 157 
Loss— — — — — 307 — 307 
Total retail consumer loans$62,859 $106,442 $69,942 $47,072 $36,550 $143,899 $199,935 $666,699 
16
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following table presents the credit risk profile by risk grade for commercial loans by origination year:
Term Loans By Origination Fiscal Year
June 30, 202120212020201920182017PriorRevolvingTotal
Commercial real estate
Risk rating:
Pass$227,850 $177,691 $142,407 $158,147 $158,525 $220,834 $25,860 $1,111,314 
Special mention— — — 16,951 1,256 3,092 — 21,299 
Substandard— — — 630 4,993 3,642 398 9,663 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate$227,850 $177,691 $142,407 $175,728 $164,774 $227,568 $26,258 $1,142,276 
Construction and development
Risk rating:
Pass18,262 6,523 10,349 6,008 2,693 7,153 123,843 $174,831 
Special mention— — — — — 286 3,827 4,113 
Substandard— — — — — 482 — 482 
Doubtful— — — — — — — — 
Loss— — — — — 1 — 1 
Total construction and development$18,262 $6,523 $10,349 $6,008 $2,693 $7,922 $127,670 $179,427 
Commercial and industrial
Risk rating:
Pass29,606 14,010 18,826 10,759 15,346 10,589 36,165 $135,301 
Special mention— 21 438 110 32 125 37 763 
Substandard31 33 300 — — 83 4,829 5,276 
Doubtful— — — — — — — — 
Loss— — — — — 1 — 1 
Total commercial and industrial$29,637 $14,064 $19,564 $10,869 $15,378 $10,798 $41,031 $141,341 
Equipment finance
Risk rating:
Pass154,685 104,681 53,178 4,773 — — — $317,317 
Special mention— — — — — — — — 
Substandard— — 323 — — — — 323 
Doubtful— — 280 — — — — 280 
Loss— — — — — — — — 
Total equipment finance$154,685 $104,681 $53,781 $4,773 $— $— $— $317,920 
Municipal leases
Risk rating:
Pass23,358 19,240 14,005 17,979 9,738 47,144 8,700 $140,164 
Special mention— — — — — 257 — 257 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total municipal leases$23,358 $19,240 $14,005 $17,979 $9,738 $47,401 $8,700 $140,421 
PPP loans
Risk rating:
Pass29,667 16,983 — — — — — $46,650 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total PPP loans$29,667 $16,983 $— $— $— $— $— $46,650 
Total commercial loans
Risk rating:
Pass$483,428 $339,128 $238,765 $197,666 $186,302 $285,720 $194,568 $1,925,577 
Special mention— 21 438 17,061 1,288 3,760 3,864 26,432 
Substandard31 33 623 630 4,993 4,207 5,227 15,744 
Doubtful— — 280 — — — — 280 
Loss— — — — — 2 — 2 
Total commercial loans$483,459 $339,182 $240,106 $215,357 $192,583 $293,689 $203,659 $1,968,035 
17
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following table presents the credit risk profile by risk grade for retail consumer loans by origination year:
Term Loans By Origination Fiscal Year
June 30, 202120212020201920182017PriorRevolvingTotal
One-to-four family
Risk rating:
Pass$72,723 $52,987 $46,958 $40,461 $37,361 $143,531 $4,345 $398,366 
Special mention— — — — 27 1,084 — 1,111 
Substandard246 981 — 216 86 5,037 — 6,566 
Doubtful— — — — — 191 — 191 
Loss— — — — — 315 — 315 
Total one-to-four family$72,969 $53,968 $46,958 $40,677 $37,474 $150,158 $4,345 $406,549 
HELOCs - originated
Risk rating:
Pass2,767 465 1,294 217 716 9,469 114,048 $128,976 
Special mention— — — — — 12 — 12 
Substandard— — 159 — 38 935 105 1,237 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total HELOCs - originated$2,767 $465 $1,453 $217 $754 $10,416 $114,153 $130,225 
HELOCs - purchased
Risk rating:
Pass— — — — — — 38,523 $38,523 
Special mention— — — — — — — — 
Substandard— — — — — — 453 453 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total HELOCs - purchased$— $— $— $— $— $— $38,976 $38,976 
Construction and land/lots
Risk rating:
Pass4,244 12,133 2,357 956 — 3,558 42,267 $65,515 
Special mention— — — — — — — — 
Substandard— — — 96 — 416 — 512 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and land/lots$4,244 $12,133 $2,357 $1,052 $— $3,974 $42,267 $66,027 
Indirect auto finance
Risk rating:
Pass42,128 27,134 16,224 18,853 7,561 2,061 — $113,961 
Special mention— — — — — — — — 
Substandard29 415 195 273 143 75 — 1,130 
Doubtful— — — — — — — — 
Loss2 — — — — — — 2 
Total indirect auto finance$42,159 $27,549 $16,419 $19,126 $7,704 $2,136 $— $115,093 
Consumer
Risk rating:
Pass1,344 1,019 5,204 252 90 91 288 $8,288 
Special mention— — — 14 — — — 14 
Substandard— 3 19 11 4 10 11 58 
Doubtful— — — — — — — — 
Loss— 1 1 — — — — 2 
Total consumer$1,344 $1,023 $5,224 $277 $94 $101 $299 $8,362 
Total retail consumer loans
Risk rating:
Pass$123,206 $93,738 $72,037 $60,739 $45,728 $158,710 $199,471 $753,629 
Special mention— — — 14 27 1,096 — 1,137 
Substandard275 1,399 373 596 271 6,473 569 9,956 
Doubtful— — — — — 191 — 191 
Loss2 1 1 — — 315 — 319 
Total retail consumer loans$123,483 $95,138 $72,411 $61,349 $46,026 $166,785 $200,040 $765,232 
18
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following tables present aging analysis of past due loans (includes nonaccrual loans) by segment and class for the periods indicated below:
Past DueTotal
30-89 Days90 Days+TotalCurrentLoans
March 31, 2022
Commercial loans:
Commercial real estate$— $247 $247 $1,101,937 $1,102,184 
Construction and development— 246 246 251,422 251,668 
Commercial and industrial— 67 67 167,275 167,342 
Equipment finance65 33 98 378,531 378,629 
Municipal finance— — — 130,260 130,260 
PPP loans— — — 2,756 2,756 
Retail consumer loans:
One-to-four family347 1,329 1,676 346,269 347,945 
HELOCs - originated28 178 206 128,239 128,445 
HELOCs - purchased142 — 142 26,769 26,911 
Construction and land/lots— 140 140 72,595 72,735 
Indirect auto finance307 156 463 83,440 83,903 
Consumer24 38 62 6,698 6,760 
Total loans$913 $2,434 $3,347 $2,696,191 $2,699,538 
Past DueTotal
30-89 Days90 Days+TotalCurrentLoans
June 30, 2021
Commercial loans:
Commercial real estate$396 $1,680 $2,076 $1,140,200 $1,142,276 
Construction and development— 37 37 179,390 179,427 
Commercial and industrial634 19 653 140,688 141,341 
Equipment finance— 347 347 317,573 317,920 
Municipal finance— — — 140,421 140,421 
PPP loans— — — 46,650 46,650 
Retail consumer loans:
One-to-four family1,112 1,124 2,236 404,313 406,549 
HELOCs - originated290 186 476 129,749 130,225 
HELOCs - purchased198 79 277 38,699 38,976 
Construction and land/lots6 35 41 65,986 66,027 
Indirect auto finance299 259 558 114,535 115,093 
Consumer378 36 414 7,948 8,362 
Total loans$3,313 $3,802 $7,115 $2,726,152 $2,733,267 

19
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The Company'sfollowing table presents recorded investment in loans on nonaccrual status, by segment and class, that are not accruingincluding restructured loans. It also includes interest or are 90 days or more past due and still accruing interest atincome recognized on nonaccrual loans for the dates indicated follow:nine months ended March 31, 2022.
March 31, 2022
 June 30, 2021
90 Days + &
Still Accruing as of March 31, 2022
Nonaccrual With No Allowance as of March 31, 2022Interest Income Recognized
Commercial loans:
Commercial real estate$1,033 $7,015 $— $284 $28 
Construction and development332 482 — — 6 
Commercial and industrial919 49 — — 17 
Equipment finance289 630 — — 9 
Retail consumer loans:
One-to-four family1,687 2,625 — 540 37 
HELOCs - originated207 476 — — 2 
HELOCs - purchased633 453 — — 19 
Construction and land/lots140 22 — — 2 
Indirect auto finance505 438 — — 17 
Consumer66 416 — — 2 
Total loans$5,811 $12,606 $— $824 $139 
 December 31, 2017 June 30, 2017
 Nonaccruing 
90 Days + &
still accruing
 Nonaccruing 
90 Days + &
still accruing
Retail consumer loans:       
One-to-four family$6,281
 $—
 $6,453
 $—
HELOCs - originated1,275
 —
 1,291
 —
HELOCs - purchased190
 —
 192
 —
Construction and land/lots315
 —
 245
 —
Indirect auto finance285
 —
 1
 —
Consumer21
 —
 29
 —
Commercial loans: 
  
  
  
Commercial real estate2,808
 —
 2,756
 —
Construction and development2,569
 —
 1,766
 —
Commercial and industrial525
 —
 827
 —
Municipal leases98
 —
 106
 —
Total loans$14,367
 $—
 $13,666
 $—
PCI loans totaling $4,596 at December 31, 2017 and $6,664 at The decrease in the nonaccrual balance in the above schedule, compared to June 30, 2017 are excluded from nonaccruing loans2021, is mainly due to the accretionpayoff of discounts established in accordance with2 commercial real estate loan relationships totaling $5.1 million during the acquisition method of accounting for business combinations.nine month period.
Troubled debt restructurings ("TDRs")TDRs are loans which have renegotiated loan terms to assist borrowers who are unable to meet the original terms of their loans. Such modifications to loan terms may include a lower interest rate, a reduction in principal, and/or a longer term to maturity. Additionally, allThe above table excludes $10,691 and $11,088 of TDRs are considered impaired. The Company had no commitments to lend additional funds on these TDR loans at December 31, 2017.
The Company's loans that were performing under thetheir restructured payment terms as of TDRs that were excluded from nonaccruing loans above at the dates indicated follow:March 31, 2022 and June 30, 2021, respectively.
 December 31, 2017 June 30, 2017
Performing TDRs included in impaired loans$25,181
 $27,043
An analysisThe following table presents a breakdown of the allowanceprovision (benefit) for loancredit losses included in our Consolidated Statements of Income:
Three Months EndedNine Months Ended
March 31,March 31,
2022202120222021
Provision (benefit) for credit losses:
Loans$(640)$(3,970)$(4,415)$(6,370)
Off-balance-sheet credit exposure650 (130)415 10 
Commercial paper(55)— (5)180 
Total provision (benefit) for credit losses$(45)$(4,100)$(4,005)$(6,180)
The following tables present analyses of the ACL on loans by segment for the periods shown is as follows:
 Three Months Ended December 31, 2017 Three Months Ended December 31, 2016
 PCI 
Retail
Consumer
 Commercial Total PCI 
Retail
Consumer
 Commercial Total
Balance at beginning of period$1,197
 $8,310
 $12,490
 $21,997
 $356
 $10,446
 $10,149
 $20,951
Provision for (recovery of) loan losses(286) 162
 124
 —
 (20) (609) 629
 —
Charge-offs(345) (378) (349) (1,072) —
 (155) (67) (222)
Recoveries—
 97
 68
 165
 —
 131
 126
 257
Balance at end of period$566
 $8,191
 $12,333
 $21,090
 $336
 $9,813
 $10,837
 $20,986
indicated below:
 Six Months Ended December 31, 2017 Six Months Ended December 31, 2016
 PCI 
Retail
Consumer
 Commercial Total PCI 
Retail
Consumer
 Commercial Total
Balance at beginning of period$727
 $8,585
 $11,839
 $21,151
 $361
 $11,549
 $9,382
 $21,292
Provision for (recovery of) loan losses184
 (250) 66
 —
 (25) (1,505) 1,530
 —
Charge-offs(345) (528) (363) (1,236) —
 (574) (675) (1,249)
Recoveries—
 384
 791
 1,175
 —
 343
 600
 943
Balance at end of period$566
 $8,191
 $12,333
 $21,090
 $336
 $9,813
 $10,837
 $20,986

Three Months EndedNine Months Ended
March 31, 2022March 31, 2022
CommercialRetail
Consumer		TotalCommercialRetail
Consumer		Total
Balance at beginning of period$22,968 $7,965 $30,933 $24,746 $10,722 $35,468 
Provision (benefit) for credit losses(1,295)655 (640)(2,058)(2,357)(4,415)
Charge-offs(261)(73)(334)(2,011)(179)(2,190)
Recoveries910 165 1,075 1,645 526 2,171 
Net (charge-offs) recoveries649 92 741 (366)347 (19)
Balance at end of period$22,322 $8,712 $31,034 $22,322 $8,712 $31,034 
18
20
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

Three Months EndedNine Months Ended
March 31, 2021March 31, 2021
CommercialRetail
Consumer		TotalCommercialRetail
Consumer		Total
Balance at beginning of period$24,899 $14,945 $39,844 $21,116 $6,956 $28,072 
Impact of adoption ASU 2016-13— — — 4,073 10,736 14,809 
Provision (benefit) for credit losses(1,750)(2,220)(3,970)(1,750)(4,620)(6,370)
Charge-offs(107)(318)(425)(1,510)(1,253)(2,763)
Recoveries356 254 610 1,469 842 2,311 
Net (charge-offs) recoveries249 (64)185 (41)(411)(452)
Balance at end of period$23,398 $12,661 36,059 $23,398 $12,661 $36,059 
The Company'sfollowing tables present ending balances of loans and the related allowance,ACL, by segment and class atfor the datesperiods indicated follows:below:
Allowance for Credit LossesTotal Loans Receivable
Loans
Individually
Evaluated		Loans
Collectively
Evaluated		TotalLoans
Individually
Evaluated		Loans
Collectively
Evaluated		Total
March 31, 2022
Commercial loans:
Commercial real estate$— $9,157 $9,157 $284 $1,101,900 $1,102,184 
Construction and development— 3,680 3,680 — 251,668 251,668 
Commercial and industrial1,311 1,593 2,904 2,150 165,192 167,342 
Equipment finance— 6,284 6,284 — 378,629 378,629 
Municipal finance— 297 297 — 130,260 130,260 
PPP loans— — — — 2,756 2,756 
Retail consumer loans:
One-to-four family— 4,400 4,400 2,493 345,452 347,945 
HELOCs - originated— 1,409 1,409 — 128,445 128,445 
HELOCs - purchased— 295 295 — 26,911 26,911 
Construction and land/lots— 903 903 — 72,735 72,735 
Indirect auto finance— 1,586 1,586 — 83,903 83,903 
Consumer— 119 119 — 6,760 6,760 
Total$1,311 $29,723 $31,034 $4,927 $2,694,611 $2,699,538 
21
 Allowance for Loan Losses Total Loans Receivable
 PCI 
Loans
individually
evaluated for
impairment
 
Loans
collectively
evaluated
 Total PCI 
Loans
individually
evaluated for
impairment
 
Loans
collectively
evaluated
 Total
December 31, 2017               
Retail consumer loans:               
One-to-four family$135
 $391
 $3,587
 $4,113
 $7,448
 $9,302
 $669,479
 $686,229
HELOCs - originated—
 21
 1,311
 1,332
 256
 462
 149,366
 150,084
HELOCs - purchased—
 —
 791
 791
 —
 —
 162,181
 162,181
Construction and land/lots—
 22
 1,063
 1,085
 511
 611
 59,683
 60,805
Indirect auto finance—
 —
 940
 940
 —
 —
 150,042
 150,042
Consumer—
 9
 56
 65
 3
 9
 9,687
 9,699
Commercial loans: 
  
  
  
  
  
  
  
Commercial real estate248
 190
 7,463
 7,901
 12,726
 5,806
 767,849
 786,381
Construction and development168
 51
 2,876
 3,095
 2,432
 2,583
 180,906
 185,921
Commercial and industrial15
 91
 1,197
 1,303
 2,420
 1,060
 124,229
 127,709
Municipal leases—
 —
 465
 465
 —
 —
 100,205
 100,205
Total$566
 $775
 $19,749
 $21,090
 $25,796
 $19,833
 $2,373,627
 $2,419,256
June 30, 2017 
  
  
  
  
  
  
  
Retail consumer loans: 
  
  
  
  
  
  
  
One-to-four family$28
 $863
 $3,585
 $4,476
 $8,069
 $10,305
 $665,715
 $684,089
HELOCs - originated—
 44
 1,340
 1,384
 288
 12
 156,768
 157,068
HELOCs - purchased—
 —
 838
 838
 —
 —
 162,407
 162,407
Construction and land/lots—
 88
 889
 977
 528
 634
 48,974
 50,136
Indirect auto finance—
 1
 880
 881
 —
 1
 140,878
 140,879
Consumer—
 8
 49
 57
 18
 8
 7,874
 7,900
Commercial loans: 
  
  
  
  
  
  
  
Commercial real estate512
 239
 6,600
 7,351
 17,383
 6,284
 706,741
 730,408
Construction and development171
 13
 2,982
 3,166
 2,629
 2,184
 193,153
 197,966
Commercial and industrial16
 287
 1,221
 1,524
 2,626
 1,514
 116,247
 120,387
Municipal leases—
 —
 497
 497
 —
 —
 101,175
 101,175
Total$727
 $1,543
 $18,881
 $21,151
 $31,541
 $20,942
 $2,299,932
 $2,352,415
Loans acquired from acquisitions are initially excluded from the allowance for loan losses in accordance with the acquisition method of accounting for business combinations. The Company records these loans at fair value, which includes a credit discount, therefore, no allowance for loan losses are established for these acquired loans at acquisition. A provision for loan losses is recorded for any further deterioration in these acquired loans subsequent to the acquisition.

19
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

Allowance for Loan LossesTotal Loans Receivable
Loans
Individually
Evaluated		Loans
Collectively
Evaluated		TotalLoans
Individually
Evaluated		Loans
Collectively
Evaluated		Total
June 30, 2021
Commercial loans:
Commercial real estate$456 $12,826 $13,282 $5,729 $1,136,547 $1,142,276 
Construction and development— 1,801 1,801 80 179,347 179,427 
Commercial and industrial9 2,583 2,592 760 140,581 141,341 
Equipment finance— 6,537 6,537 275 317,645 317,920 
Municipal finance— 534 534 — 140,421 140,421 
PPP loans— — — — 46,650 46,650 
Retail consumer loans:
One-to-four family2 5,407 5,409 1,977 404,572 406,549 
HELOCs - originated— 1,512 1,512 — 130,225 130,225 
HELOCs - purchased— 452 452 — 38,976 38,976 
Construction and land/lots— 812 812 — 66,027 66,027 
Indirect auto finance— 2,367 2,367 — 115,093 115,093 
Consumer— 170 170 — 8,362 8,362 
Total$467 $35,001 $35,468 $8,821 $2,724,446 $2,733,267 
In estimating ECL, ASC 326 prescribes that if foreclosure is probable, a CDA is required to be measured at the fair value of collateral, but as a practical expedient, if foreclosure is not probable, fair value measurement is optional. For those CDA loans measured at the fair value of collateral, a credit loss expense is recorded for loan amounts in excess of fair value. The Company's impairedfollowing tables provide a breakdown between loans identified as CDAs and the related allowance,non-CDAs, by segment and class, atand securing collateral, as well as collateral coverage for those loans for the datesperiods indicated follows:below:
Type of Collateral and Extent to Which Collateral Secures Financial Assets
March 31, 2022Residential PropertyInvestment PropertyCommercial PropertyBusiness AssetsFinancial Assets Not Considered Collateral DependentTotal
Commercial loans:
Commercial real estate$— $— $282 $— $1,101,902 $1,102,184 
Construction and development— — — — 251,668 251,668 
Commercial and industrial— — — 1,311 166,031 167,342 
Equipment finance— — — — 378,629 378,629 
Municipal finance— — — — 130,260 130,260 
PPP loans— — — — 2,756 2,756 
Retail consumer loans:
One-to-four family1,347 — — — 346,598 347,945 
HELOCs - originated— — — — 128,445 128,445 
HELOCs - purchased— — — — 26,911 26,911 
Construction and land/lots— — — — 72,735 72,735 
Indirect auto finance— — — — 83,903 83,903 
Consumer— — — — 6,760 6,760 
Total$1,347 $— $282 $1,311 $2,696,598 $2,699,538 
Total Collateral Value$2,285 $— $288 $— 
22
 Total Impaired Loans
 
Unpaid
Principal
Balance
 
Recorded
Investment
With a
Recorded
Allowance
 
Recorded
Investment
With No
Recorded
Allowance
 Total 
Related
Recorded
Allowance
December 31, 2017         
Retail consumer loans:         
One-to-four family$27,510
 $18,013
 $6,147
 $24,160
 $935
HELOCs - originated3,826
 2,046
 554
 2,600
 63
HELOCs - purchased190
 190
 —
 190
 1
Construction and land/lots2,538
 1,277
 332
 1,609
 60
Indirect auto finance354
 257
 28
 285
 1
Consumer512
 2
 29
 31
 9
Commercial loans: 
  
  
  
  
Commercial real estate7,483
 4,737
 2,390
 7,127
 204
Construction and development4,433
 1,272
 2,006
 3,278
 62
Commercial and industrial6,280
 1,339
 50
 1,389
 93
Municipal leases98
 98
 —
 98
 —
Total impaired loans$53,224
 $29,231
 $11,536
 $40,767
 $1,428
June 30, 2017 
  
  
  
  
Retail consumer loans: 
  
  
  
  
One-to-four family$28,469
 $17,353
 $7,773
 $25,126
 $881
HELOCs - originated4,070
 2,270
 532
 2,802
 49
HELOCs - purchased192
 —
 192
 192
 —
Construction and land/lots2,817
 1,310
 468
 1,778
 88
Indirect auto finance22
 —
 1
 1
 1
Consumer552
 15
 27
 42
 8
Commercial loans: 
  
  
  
  
Commercial real estate8,307
 4,721
 3,186
 7,907
 253
Construction and development3,768
 1,024
 1,617
 2,641
 16
Commercial and industrial7,757
 845
 1,231
 2,076
 288
Municipal leases400
 106
 294
 400
 —
Total impaired loans$56,354
 $27,644
 $15,321
 $42,965
 $1,584
Impaired loans above excludes $4,596 at December 31, 2017 and $6,677 at June 30, 2017 in PCI loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations. The June 30, 2017 balance in the preceding sentence was previously disclosed as $13,425. Based on further review, this amount was determined to be an error and was corrected during the quarter ended September 30, 2017. The error had no effect on the Company’s audited financial statements or other disclosures.
The table above includes $20,934 and $22,023, of impaired loans that were not individually evaluated at December 31, 2017 and June 30, 2017, respectively, because these loans did not meet the Company's threshold for individual impairment evaluation. The recorded allowance above includes $653 and $41 related to these loans that were not individually evaluated at December 31, 2017 and June 30, 2017, respectively.

20
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The Company's average recorded investment in impaired loans and interest income recognized on impaired loans for the three and six months ended December 31, 2017 and 2016 was as follows:
 Three Months Ended
 December 31, 2017 December 31, 2016
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Retail consumer loans:       
One-to-four family$24,519
 $287
 $26,673
 $283
HELOCs - originated2,750
 31
 2,544
 33
HELOC - purchased191
 3
 —
 —
Construction and land/lots1,588
 27
 1,594
 38
Indirect auto finance232
 3
 134
 1
Consumer33
 4
 32
 5
Commercial loans: 
  
  
  
Commercial real estate7,184
 77
 7,673
 63
Construction and development2,973
 31
 2,530
 31
Commercial and industrial1,723
 23
 3,372
 22
Municipal leases102
 6
 408
 —
Total loans$41,295
 $492
 $44,960
 $476
 Six Months Ended
 December 31, 2017 December 31, 2016
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Retail consumer loans:       
One-to-four family$24,721
 $585
 $26,356
 $585
HELOCs - originated2,767
 61
 2,755
 65
HELOCs - purchased191
 7
 —
 —
Construction and land/lots1,651
 56
 1,548
 75
Indirect auto finance155
 9
 96
 3
Consumer36
 8
 29
 10
Commercial loans: 
  
  
  
Commercial real estate7,425
 152
 7,326
 130
Construction and development2,862
 52
 2,530
 49
Commercial and industrial1,841
 42
 3,624
 58
Municipal leases201
 6
 412
 12
Total loans$41,850
 $978
 $44,676
 $987
A summary of changes in the accretable yield for PCI loans for the three and six months ended December 31, 2017 and 2016 was as follows:
Type of Collateral and Extent to Which Collateral Secures Financial Assets
June 30, 2021Residential PropertyInvestment PropertyCommercial PropertyBusiness AssetsFinancial Assets Not Considered Collateral DependentTotal
Commercial loans:
Commercial real estate$— $3,421 $2,308 $— $1,136,547 $1,142,276 
Construction and development— 80 — — 179,347 179,427 
Commercial and industrial— — — 25 141,316 141,341 
Equipment finance— — — — 317,920 317,920 
Municipal finance— — — — 140,421 140,421 
PPP loans— — — — 46,650 46,650 
Retail consumer loans:
One-to-four family807 — — — 405,742 406,549 
HELOCs - originated— — — — 130,225 130,225 
HELOCs - purchased— — — — 38,976 38,976 
Construction and land/lots— — — — 66,027 66,027 
Indirect auto finance— — — — 115,093 115,093 
Consumer— — — — 8,362 8,362 
Total$807 $3,501 $2,308 $25 $2,726,626 $2,733,267 
Total Collateral Value$1,160 $3,602 $2,723 $26 
23
 Three Months Ended
 December 31, 2017 December 31, 2016
Accretable yield, beginning of period$6,698
 $8,339
Reclass from nonaccretable yield (1)
77
 185
Other changes, net (2)
80
 (282)
Interest income(634) (723)
Accretable yield, end of period$6,221
 $7,519

21
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)


The following table presents a breakdown of the types of concessions made on TDRs by loan class for the period indicated below:
Three Months Ended March 31,
20222021
Number
of
Loans		Pre
Modification
Outstanding
Recorded
Investment		Post
Modification
Outstanding
Recorded
Investment		Number
of
Loans		Pre
Modification
Outstanding
Recorded
Investment		Post
Modification
Outstanding
Recorded
Investment
Other TDRs:      
Commercial:
Commercial and industrial2 $841 $835 — $— $— 
Retail consumer:      
One-to-four family1 37 37 2 212 212 
HELOCs - originated— — — 2 53 74 
Indirect auto finance1 5 5 3 28 32 
Total4 $883 $877 7 $293 $318 
Nine Months Ended March 31,
20222021
Number
of
Loans		Pre
Modification
Outstanding
Recorded
Investment		Post
Modification
Outstanding
Recorded
Investment		Number
of
Loans		Pre
Modification Outstanding Recorded
Investment		Post
Modification
Outstanding
Recorded
Investment
Below market interest rate:
Retail consumer:
One-to-four family1 $124 $121 — $— $— 
Total below market interest rate1 124 121 — — — 
Extended payment terms:      
Retail consumer:      
One-to-four family1 35 35 — — — 
HELOCs - originated1 50 50 — — — 
Total extended payment terms2 85 85 — — — 
Other TDRs:      
Commercial:
Commercial real estate— — — 1 4,408 4,407 
Commercial and industrial2 841 835 — — — 
Retail consumer:      
One-to-four family2 93 92 4 269 261 
HELOCs - originated1 18 18 2 53 74 
Construction and land/lots— — — 1 225 219 
Indirect auto finance6 89 82 11 150 110 
Total other TDRs11 1,041 1,027 19 5,105 5,071 
Total11 $1,250 $1,233 19 $5,105 $5,071 










 Six Months Ended
 December 31, 2017 December 31, 2016
Accretable yield, beginning of period$7,080
 $9,532
Reclass from nonaccretable yield (1)
278
 1,072
Other changes, net (2)
107
 (741)
Interest income(1,244) (2,344)
Accretable yield, end of period$6,221
 $7,519
24

(1)Represents changes attributable to expected losses assumptions.
(2)Represents changes in cash flows expected to be collected due to the impact of modifications, changes in prepayment assumptions, and changes in interest rates.


22
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The following table presents loans that were modified as TDRs within the previous 12 months and for which there was a payment default during the periods indicated below:
Three Months Ended March 31,
20222021
Number of
Loans		Recorded
Investment		Number of
Loans		Recorded
Investment
Other TDRs:    
Retail consumer:    
Indirect auto finance— $— 1 $1 
Total— $— 1 $1 
Nine Months Ended March 31,
20222021
Number of
Loans		Recorded
Investment		Number of
Loans		Recorded
Investment
Other TDRs:    
Retail consumer:    
Indirect auto finance2 $44 2 $26 
Total2 $44 2 $26 
Other TDRs include TDRs that have a below market interest rate and extended payment terms. The Company does not typically forgive principal when restructuring troubled debt.
ForIn determining the three and six months ended December 31, 2017 and 2016, the following table presents a breakdown of the types of concessions made on TDRs by loan class:
 Three Months Ended December 31, 2017 Three Months Ended December 31, 2016
 
Number
of
Loans
 
Pre
Modification
Outstanding
Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
 
Number
of
Loans
 
Pre
Modification
Outstanding
Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
Extended payment terms: 
  
  
  
  
  
Retail consumer: 
  
  
  
  
  
One-to-four family3
 $398
 $395
 1
 $20
 $20
HELOCs - originated1
 64
 59
 —
 —
 —
Construction and land/lots1
 36
 36
 1
 280
 280
Total5
 $498
 $490
 2
 $300
 $300
Other TDRs: 
  
  
  
  
  
Retail consumer: 
  
  
  
  
  
One-to-four family6
 $177
 $176
 5
 $168
 $171
Construction and land/lots—
 —
 —
 2
 254
 251
Indirect auto finance1
 19
 6
 —
 —
 —
Commercial:           
Commercial & Industrial—
 —
 —
 1
 24
 24
Total7
 $196
 $182
 8
 $446
 $446
Total12
 $694
 $672
 10
 $746
 $746
 Six Months Ended December 31, 2017 Six Months Ended December 31, 2016
 
Number
of
Loans
 
Pre
Modification
Outstanding
Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
 
Number
of
Loans
 
Pre
Modification Outstanding Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
Extended payment terms: 
  
  
  
  
  
Retail consumer: 
  
  
  
  
  
One-to-four family3
 $398
 $395
 3
 $139
 $137
HELOCs - originated1
 64
 59
 —
 —
 —
Construction and land/lots1
 36
 36
 1
 280
 280
Total5
 $498
 $490
 4
 $419
 $417
Other TDRs: 
  
  
  
  
  
Retail consumer: 
  
  
  
  
  
One-to-four family15
 $1,493
 $1,481
 8
 $273
 $275
HELOCs - originated—
 —
 —
 1
 3
 3
Construction and land/lots—
 —
 —
 2
 254
 251
Indirect auto finance1
 19
 6
 —
 —
 —
Commercial:           
Commercial and industrial—
 —
 —
 1
 24
 24
Total16
 $1,512
 $1,487
 12
 $554
 $553
Total21
 $2,010
 $1,977
 16
 $973
 $970

23
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The following table presents loans that were modified as TDRs within the previous 12 months and for which there was a payment default during the three and six months ended December 31, 2017 and 2016:
 Three Months Ended December 31, 2017 Three Months Ended December 31, 2016
 
Number of
Loans
 
Recorded
Investment
 
Number of
Loans
 
Recorded
Investment
Extended payment terms:       
Retail consumer:       
One-to-four family1
 $37
 —
 $—
Total1
 $37
 —
 $—
Other TDRs: 
  
  
  
Retail consumer: 
  
  
  
One-to-four family3
 $493
 —
 $—
Indirect auto finance1
 6
 —
 —
Commercial:       
Commercial and industrial—
 —
 4
 1,277
Total4
 $499
 4
 $1,277
Total5
 $536
 4
 $1,277
 Six Months Ended December 31, 2017 Six Months Ended December 31, 2016
 
Number of
Loans
 
Recorded
Investment
 
Number of
Loans
 
Recorded
Investment
Extended payment terms:

 

 

 

Retail consumer:       
One-to-four family1
 $37
 —
 $—
Total1
 $37
 —
 $—
Other TDRs: 
  
  
  
Retail consumer: 
  
  
  
One-to-four family3
 $493
 —
 $—
Indirect auto finance1
 6
 —
 —
Commercial:       
Commercial real estate—
 —
 —
 —
Commercial and industrial—
 —
 4
 1,277
Total4
 $499
 4
 $1,277
Total5
 $536
 4
 $1,277
In the determination of the allowance for loan losses,ACL, management considers TDRs for all loan classes, and the subsequent nonperformance in accordance with their modified terms, by measuring impairmenta reserve on a loan-by-loan basis based on either the value of the loan's expected future cash flows discounted at the loan's original effective interest rate or on the collateral value, net of the estimated costs of disposal, if the loan is collateral dependent.


24
Off-Balance-Sheet Credit Exposure
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
NotesThe 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 Consolidated Financial Statements
(Dollars in thousands, except per share data)

6.Real Estate Owned
The activity within REObe funded over its estimated life, utilizing the same models and approaches for the periods shownCompany'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 as follows:
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 March 31, 2022, the allowance for credit losses on off-balance-sheet credit exposures included in other liabilities was $2,738.
 Three Months Ended December 31, Six Months Ended December 31,
 2017 2016 2017 2016
Balance at beginning of period$5,941
 $5,715
 $6,318
 $5,956
Transfers from loans339
 1,025
 591
 1,330
Sales, net of gain or loss(1,111) (1,005) (1,758) (1,551)
Writedowns(351) (87) (351) (87)
Capital improvements—
 —
 18
 —
Balance at end of period$4,818
 $5,648
 $4,818
 $5,648
Modifications in Response to COVID-19
At December 31, 2017Beginning in March 2020, the Company began offering short-term loan modifications to assist borrowers during the COVID-19 pandemic. The CARES Act along with a joint agency statement issued by banking agencies and June 30, 2017,confirmed by FASB staff that short-term modifications made in response to COVID-19 were not considered TDRs; however, the Bank had $1,081 and $1,015 respectively, of foreclosed residential real estate property in REO. The recorded investment in consumer mortgage loans collateralizedrelief offered by residential real estate in the process of foreclosure totaled $2,268 and $2,230 at December 31, 2017 and June 30, 2017, respectively.
7. Income Taxes
Income tax expense consists of:
 Three Months Ended December 31, Six Months Ended December 31,
 2017 2016 2017 2016
Current:       
Federal$92
 $40
 $230
 $191
State(3) 22
 8
 29
Total current expense89
 62
 238
 220
Deferred:       
Federal1,611
 751
 3,681
 2,356
State115
 80
 406
 741
Adjustment due to the Tax Cuts and Jobs Act17,693
 —
 17,693
 —
Total deferred expense19,419
 831
 21,780
 3,097
Total income tax expense$19,508
 $893
 $22,018
 $3,317
Income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 28% and 34% for the periodsCARES Act ended December 31, 20172021.
The Bank offered payment and 2016, respectively,financial relief programs for borrowers impacted by COVID-19. These programs included loan payment deferrals for up to pretax income90 days (which could be renewed for another 90 days under certain circumstances), waived late fees, and suspension of foreclosure proceedings and repossessions. Since March 2020, the Company received numerous requests from continuing operations before income taxes as a resultborrowers for some type of payment relief; however, the following:majority of these payment deferrals have ended and borrowers are again making regular loan payments.
As of March 31, 2022, the Company had no loans with full principal and interest payment deferrals related to COVID-19 which had been granted prior to January 1, 2022, compared to $107 at June 30, 2021. All loans placed on full payment deferral during the pandemic have come out of deferral and borrowers are either making regular loan payments or interest-only payments. As of March 31, 2022, the Company had $9,605 in commercial loan deferrals on interest-only payments compared to $78,850 at June 30, 2021.
 Three Months Ended December 31, Six Months Ended December 31,
 2017 2016 2017 2016
 $ Rate $ Rate $ Rate $ Rate
Tax at federal income tax rate$2,432
 28 % $1,318
 34 % $4,653
 28 % $3,442
 34 %
Increase (decrease) resulting from:               
Tax exempt income(264) (3)% (340) (9)% (541) (3)% (712) (7)%
Nondeductible merger expenses1
 — % 1
 — % 1
 — % 28
 — %
Change in valuation allowance for deferred tax assets, allocated to income tax expense(49) (1)% (65) (2)% (184) (1)% (264) (3)%
State tax, net of federal benefit81
 1 % 67
 2 % 204
 1 % 185
 2 %
Change in deferred tax assets due to North Carolina corporate tax rate decrease—
 — % —
 — % 133
 1 % 490
 5 %
Change in deferred tax assets due to the Tax Cuts and Jobs Act17,693
 200 % —
 — % 17,693
 105 % —
 — %
Adjustment for prior quarter expense due to accrual at higher rate(418) (5)% —
 — % —
 — % —
 — %
Other32
 — % (88) (2)% 59
 — % 148
 1 %
Total$19,508
 220 % $893
 23 % $22,018
 131 % $3,317
 32 %

25
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

7.    Net Income per Share
The sources and tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at December 31, 2017 and June 30, 2017 are presented below:
 December 31, 2017 June 30, 2017
Deferred tax assets:   
Alternative minimum tax credit$4,637
 $4,418
Allowance for loan losses4,646
 7,452
Deferred compensation and post-retirement benefits9,672
 16,055
Accrued vacation and sick leave18
 29
Impairments on real estate owned877
 1,337
Other than temporary impairment on investments2,262
 3,617
Net operating loss carryforward11,109
 21,443
Discount from business combination3,056
 3,645
Unrealized loss on securities held for sale98
 —
Stock compensation plans2,154
 2,884
Other1,904
 2,687
Total gross deferred tax assets40,433
 63,567
Less valuation allowance(54) (238)
Deferred tax assets40,379
 63,329
Deferred tax (liabilities): 
  
Depreciable basis of fixed assets(589) (670)
Deferred loan fees(406) (493)
FHLB stock, book basis in excess of tax(89) (143)
Unrealized gain on securities available for sale—
 (152)
Other(2,769) (4,484)
Total gross deferred tax liabilities(3,853) (5,942)
Net deferred tax assets$36,526
 $57,387
We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion of the deferred tax asset will not be realized. We exercise significant judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets. These judgments require us to make projections of future taxable income. The judgments and estimates we make in determining our deferred tax assets, which are inherently subjective, are reviewed on a continual basis as regulatory and business factors change. Any reduction in estimated future taxable income may require us to record a valuation allowance against our deferred tax assets.
The decrease in net deferred tax assets was driven by the enactment of the Tax Cuts and Jobs Act (the "Tax Act"), which among other things reduced the federal corporate tax rate to 21% effective January 1, 2018 requiring the Company to revalue net deferred tax assets. The resulting estimated $17.7 million deferred tax revaluation was reflected as an increase to the Company's income tax expense. In addition, our June 30 fiscal year end required the use of a blended rate as prescribed by the Internal Revenue Code. The blended federal rate of 27.5% was retroactively effective July 1, 2017 and will be used for the entire fiscal year ending June 30, 2018. As a result of this blended rate, income tax expense for the quarter ended December 31, 2017 includes approximately $418,000 in tax benefit from adjusting the federal income tax rate to 27.5% from 34% for the first quarter of the fiscal year. The estimated $17.7 million deferred tax revaluation includes provisional amounts where a reasonable estimate was made to comply with the Tax Act, which can be adjusted throughout the measurement period or up to one year. These provisional amounts include estimates related to the timing of potential reversals of various deferred tax assets and liabilities during fiscal year 2018 using the blended tax rate as described above. The Company will continue to update the provisional amounts as additional information becomes available and expects all adjustments to be finalized by the end of fiscal 2018.
The Company had federal net operating loss ("NOL") carry forwards of $52,655 and $62,041 as of December 31, 2017 and June 30, 2017, respectively, with a recorded tax benefit of $11,109 and $21,443 included in deferred tax assets. The majority of these NOLs will expire for federal tax purposes from 2024 through 2036.
The Company also adjusted its net deferred tax asset as a result of additional reductions in the North Carolina corporate income tax rates that were enacted July 23, 2013, and effective January 1, 2014 through 2017. The lower corporate income tax rate resulted in a reduction in the deferred tax assets as of December 31, 2017 and June 30, 2017 and an increase in income tax expense for the six months ended December 31, 2017 and 2016.

26
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The valuation allowance for deferred tax assets as of December 31, 2017 and June 30, 2017 was $54 and $238, respectively. The net decrease in the total valuation allowance relates to North Carolina state income taxes due to limitations on state net operating loss carry forwards.
Retained earnings at December 31, 2017 and June 30, 2017 include $19,570 representing pre-1988 tax bad debt reserve base year amounts for which no deferred tax liability has been provided since these reserves are not expected to reverse and may never reverse. Circumstances that would require an accrual of a portion or all of this unrecorded tax liability are a failure to meet the definition of a bank, dividend payments in excess of current year or accumulated earnings and profits, or other distributions in dissolution or liquidation of the Bank. The Company is no longer subject to examination for federal and state purposes for tax years prior to 2013.
8.Net Income (Loss) per Share
The following is a reconciliation of the numerator and denominator of basic and diluted net income (loss) per share of common stock:
 Three Months Ended December 31, Six Months Ended December 31,
 2017 2016 2017 2016
Numerator:       
Net income (loss)$(10,666) $2,983
 $(5,099) $6,807
Allocation of earnings to participating securities—
 (44) —
 (100)
Numerator for basic EPS - Net income (loss) available to common stockholders$(10,666) $2,939
 $(5,099) $6,707
Effect of dilutive securities:       
Dilutive effect to participating securities—
 1
 —
 3
Numerator for diluted EPS$(10,666) $2,940
 $(5,099) $6,710
Denominator: 
  
  
  
Weighted-average common shares outstanding - basic17,975,883
 16,900,387
 17,971,439
 16,893,775
Effect of dilutive shares—
 543,757
 —
 497,629
Weighted-average common shares outstanding - diluted17,975,883
 17,444,144
 17,971,439
 17,391,404
Net income (loss) per share - basic$(0.59) $0.17
 $(0.28) $0.39
Net income (loss) per share - diluted$(0.59) $0.17
 $(0.28) $0.39
stock as of the dates indicated:
Three Months Ended March 31,Nine Months Ended March 31,
2022202120222021
Numerator:
Net income$8,023 $7,869 $29,628 $23,083 
Allocation of earnings to participating securities(69)(72)(254)(209)
Numerator for basic EPS - Net income available to common stockholders$7,954 $7,797 $29,374 $22,874 
Effect of dilutive securities:
Dilutive effect of participating securities— 2 — 2 
Numerator for diluted EPS$7,954 $7,799 $29,374 $22,876 
Denominator:    
Weighted-average common shares outstanding - basic15,523,813 15,979,590 15,666,093 16,139,059 
Dilutive effect of assumed exercises of stock options269,199 506,128 331,284 200,071 
Weighted-average common shares outstanding - diluted15,793,012 16,485,718 15,997,377 16,339,130 
Net income per share - basic$0.51 $0.49 $1.87 $1.42 
Net income per share - diluted$0.51 $0.48 $1.84 $1.40 
Potential dilutive shares are excluded from the computation of earnings per share if their effect is anti-dilutive. There were no47,850 and 95,350 stock options that were anti-dilutive for the three and nine months ended DecemberMarch 31, 2016.2022, respectively. There were 46,500524,850 stock options that were anti-dilutive for each of the sixthree and nine months ended DecemberMarch 31, 2016.2021.
9.Equity Incentive Plan
8.    Equity Incentive Plan
The Company provides stock-based awards through the 2013 Omnibus Incentive Plan, which provides for awards of restricted stock, restricted stock units, stock options, stock appreciation rights and cash awards to directors, directors emeritus, directors, officers, employees and advisory directors. The cost of equity-based awards under the 2013 Omnibus Incentive Plan generally is based on the fair value of the awards on their grant date for current directors, officers, and employees. The fair value of equity-based awards is updated quarterly for certain nonemployee emeritus directors and advisory directors.date. The maximum number of shares that may be utilized for awards under the plan is 2,962,400, including 2,116,000 for stock options and stock appreciation rights and 846,400 for awards of restricted stock and restricted stock units.
Shares of common stock issued under the 2013 Omnibus Incentive Plan mayplan would be issued out of authorized but unissued shares, some or all of which may be repurchased shares. During fiscal 2013,The Company repurchased a number of shares on the Company had repurchased the 846,400 shares available foropen market sufficient to cover awards of restricted stock and restricted stock units available to be granted under the 2013 Omnibus Incentive Plan, on the open market, for $13,297, at an average cost of $15.71 per share.share during the year ended June 30, 2013.
The table below presents share basedshare-based compensation expense and the estimated related tax benefit for stock options and restricted stock for the three and sixnine months ended DecemberMarch 31, 20172022 and 2016:2021, respectively:
Three Months Ended March 31,Nine Months Ended March 31,
2022202120222021
Share-based compensation expense$507 $489 $1,407 $1,449 
Tax benefit120 115 332 341 
26
 Three Months Ended December 31, Six Months Ended December 31,
 2017 2016 2017 2016
Share based compensation expense$841
 $2,053
 $2,014
 $2,792
Tax benefit$235
 $698
 $564
 $950

27
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The table below presents stock option activity and related information for the sixnine months ended DecemberMarch 31, 20172022 and 2016:2021:
 Options Weighted-
average
exercise
price		 Remaining
contractual
life
(years)		 Aggregate
Intrinsic
Value
Options outstanding at June 30, 20161,529,300
 $14.50
 6.8
 $6,117
Exercised—
 —
 —
 —
Forfeited—
 —
 —
 —
Expired—
 —
 —
 —
Options outstanding at December 31, 20161,529,300
 $14.50
 6.3
 $17,433
Exercisable at December 31, 2016829,400
 $14.40
    
        
Options outstanding at June 30, 20171,470,043
 $15.22
 5.8
 $13,533
Exercised3,900
 14.37
 —
 —
Forfeited24,700
 14.43
 —
 —
Expired43,273
 23.82
 —
 —
Options outstanding at December 31, 20171,398,170
 $14.97
 5.4
 $15,077
Exercisable at December 31, 2017986,670
 $14.43
 5.2
 $11,169
Non-vested at December 31, 2017411,500
 $16.25
 6.0
 $3,908
OptionsWeighted-
Average
Exercise
Price		Remaining
Contractual
Life
(Years)		Aggregate
Intrinsic
Value
Options outstanding at June 30, 20201,615,500 $18.12 4.4$1,711 
Granted44,750 22.92 — — 
Exercised(172,866)14.40 — — 
Forfeited(26,900)25.77 — — 
Options outstanding at March 31, 20211,460,484 $18.57 3.9$9,268 
Exercisable at March 31, 20211,220,734 $17.24 3.2$9,152 
Non-vested at March 31, 2021239,750 $25.31 7.7$116 
Options outstanding at June 30, 20211,319,456 $19.07 3.9$11,657 
Granted42,850 31.35 — — 
Exercised(413,636)14.70 — — 
Forfeited(20,800)23.17 — — 
Options outstanding at March 31, 2022927,870 $21.49 4.3$7,541 
Exercisable at March 31, 2022756,720 $20.24 3.5$7,028 
Non-vested at March 31, 2022171,150 $26.99 7.7$513 
Assumptions used in estimating the fair value of options granted during the nine months ended March 31, 2022 and 2021 are presented below:
March 31, 2022March 31, 2021
Weighted-average volatility28.02 %28.30 %
Expected dividend yield1.12 %1.35 %
Risk-free interest rate1.90 %0.72 %
Expected life (years)6.56.5
Weighted-average fair value of options granted$8.68 $5.61 
At DecemberMarch 31, 2017,2022, the Company had $835$1,076 of unrecognized compensation expense related to 411,500171,150 stock options originally scheduled to vest over five- and seven-year vesting periods.a five-year period. The weighted average period over which compensation cost related to non-vested awards expected to be recognized was 0.71.8 years at DecemberMarch 31, 2017.2022. At DecemberMarch 31, 2016,2021, the Company had $2,444$1,460 of unrecognized compensation expense related to 699,900239,750 stock options originally scheduled to vest over five- and seven-year vesting periods.a five-year period. The weighted average period over which compensation cost related to non-vested awards expected to be recognized was 0.92.0 years at DecemberMarch 31, 2016.2021.
The table below presents restricted stock award activity for the six months ended Decemberand related information:
Restricted
Stock Awards		Weighted-
Average Grant
Date Fair Value		Aggregate
Intrinsic
Value
Non-vested at June 30, 2020144,046 $25.89 $2,305 
Granted56,547 22.92 — 
Vested(45,296)25.17 — 
Forfeited(7,650)25.65 — 
Non-vested at March 31, 2021147,647 $24.98 $2,119 
Non-vested at June 30, 2021151,575 $25.06 $4,229 
Granted49,679 31.35 — 
Vested(53,744)25.22 — 
Forfeited(12,000)24.90 — 
Non-vested at March 31, 2022135,510 $27.41 $2,817 
The table above includes non-vested performance-based restricted stock units totaling 33,218 and 28,852 at March 31, 20172022 and 2016:
 
Restricted
stock awards
 
Weighted-
average grant
date fair value
 
Aggregate
Intrinsic
Value
Non-vested at June 30, 2016248,750
 $14.81
 $4,602
Granted2,000
 19.02
 —
Vested—
 —
 —
Non-vested at December 31, 2016250,750
 $14.84
 $6,494
      
Non-vested at June 30, 2017185,630
 $17.46
 $4,780
Granted2,000
 23.05
 —
Vested400
 19.02
 —
Forfeited6,600
 14.37
 —
Non-vested at December 31, 2017180,630
 $17.57
 $4,651
At December 31, 2017, unrecognized compensation expense was $1,671 related to 180,630 shares2021, respectively. Each issuance of restrictedthese stock units is scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.13.0 years at December 31, 2017. At December 31, 2016, unrecognized compensation expense was $2,230 related to 250,750 shares of restricted stock scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.0 years at December 31, 2016.

assuming the applicable dilutive EPS goals are met.
28
27
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

At March 31, 2022, unrecognized compensation expense was $3,137 related to 135,510 shares of restricted stock originally scheduled to vest over three- and five-year periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.9 years at March 31, 2022. At March 31, 2021, unrecognized compensation expense was $3,196 related to 147,647 shares of restricted stock originally scheduled to vest over three- and five-year periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.9 years at March 31, 2021.
10.Commitments and Contingencies
9.    Commitments and Contingencies
Loan Commitments – Legally binding commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. In the normal course of business, there are various outstanding commitments to extend credit that are not reflected in the consolidated financial statements. At DecemberMarch 31, 20172022 and June 30, 2017,2021, respectively, loan commitments (excluding $123,262$290,532 and $158,380$277,600 of undisbursed portions of construction loans) totaled $54,720$95,848 and $43,730$123,463 of which $25,846$29,156 and $21,221$45,270 were variable rate commitments and $28,874$66,692 and $22,509$78,193 were fixed rate commitments. The fixed rate loans had interest rates ranging from 2.03%1.08% to 7.75%8.65% at DecemberMarch 31, 20172022 and 1.95%2.50% to 6.25%8.36% at June 30, 2017,2021, and terms ranging from three to 30 years. Pre-approved but unused lines of credit (principally second mortgage home equity loans and overdraft protection loans) totaled $447,787$498,315 and $414,373$530,505 at DecemberMarch 31, 20172022 and June 30, 2017,2021, respectively. These amounts represent the Company's exposure to credit risk, and in the opinion of management have no more than the normal lending risk that the Company commits to its borrowers. The Company has two types of commitments related to certain one-to-four family loans held for sale: rate lock commitments and forward loan commitments. Rate lock commitments are commitments to extend credit to a customer that has an interest rate lock and are considered derivative instruments. The rate lock commitments do not qualify for hedge accounting. In order to mitigate the risk from interest rate fluctuations, we enterthe Company enters into forward loan sale commitments on a “best efforts” basis, which do not meet the definition of a derivative instrument. The fair value of these interest rate lock commitments was not material at DecemberMarch 31, 20172022 or June 30, 2017.2021.
The Company grants construction and permanent loans collateralized primarily by residential and commercial real estate to customers throughout its primary market area.areas. In addition, the Company grants equipment financing throughout the United States and municipal leasesfinancing to customers throughout North and South Carolina. The Company'sCompany’s loan portfolio can be affected by the general economic conditions within these market areas. Management believes that the Company has no significant concentration of credit in the loan portfolio.
Restrictions on Cash – TheIn response to COVID-19, the FRB reduced the reserve requirements to zero on March 15, 2020. Prior to this change the Bank iswas required by regulation to maintain a varying cash reserve balance with the Federal Reserve System. The daily average calculated cash reserve required as of December 31, 2017 and June 30, 2017 was $2,513, and $2,152, respectively, which was satisfied by vault cash and balances held at the FRB.
Guarantees – Standby letters of credit obligate the Company to meet certain financial obligations of its customers, if, under the contractual terms of the agreement, the customers are unable to do so. The financial standby letters of credit issued by the Company are irrevocable and payment is only guaranteed upon the borrower's failure to perform its obligations to the beneficiary. Total commitments under standby letters of credit as of DecemberMarch 31, 20172022 and June 30, 20172021 were $9,927$17,492 and $5,164,$8,681, respectively. There was no liability recorded for these letters of credit at DecemberMarch 31, 20172022 or June 30, 2017,2021, respectively.
Litigation –TheFrom time to time, the Company is involved in several litigation matters in the ordinary course of business. These proceedings and the associated legal claims are often contested, and the outcome of individual matters is not always predictable. These claims and counter claims typically arise during the course of collection efforts on problem loans or with respect to actions to enforce liens on properties in which the Company holds a security interest. The Company is not a party to any pending legal proceedings that management believes would have a material adverse effect on the Company’s financial condition or results of operations.
11.Fair Value of Financial Instruments
10.    Fair Value of Financial Instruments
The Company utilizes fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. SecuritiesDebt securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. The Company measures the fair value of loans receivable under the exit price notion. The fair value of nonperforming loans is based on the underlying value of the collateral.
Fair Value Hierarchy
The Company groups assets at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:
Level 1:Valuation is based upon quoted prices for identical instruments traded in active markets.
Level 2:
Level 1:    Valuation is based upon quoted prices for identical instruments traded in active markets.
Level 2:    Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3:Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.
Following is a description of valuation methodologies used for assets recorded at fair value. The Company does not have any liabilities recorded at fair value.
Investment Securities Available for Sale
Securities available for sale are valued on a recurring basis at quoted market prices where available. If quoted market prices are not available, fair valuesactive, and model-based valuation techniques for which all significant assumptions are based on quoted pricesobservable in the market.
Level 3:    Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of comparable securities. Level 2 securitiesassumptions that market participants would use in pricing the asset. Valuation techniques include mortgage-backed securitiesuse of option pricing models, discounted cash flow models and debentures issued by government sponsored enterprises, municipal bonds, and corporate debt securities. The Company has no Level 3 securities.

similar techniques.
29
28
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

Loans
The Company does not record loans at fair value on a recurring basis. From time to time, however, a loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that paymentmethods of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, the fair value is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. The Company reviews all impaired loans each quarter to determine if an allowance is necessary. Those impaired loans not requiring an allowance represent loans for whichdetermining the fair value of assets and liabilities presented in this note are consistent with the expected repayments or collateral exceed the recorded investmentsmethodologies disclosed in such loans.
The fair value of impaired loans is estimated in one of two ways, which include collateral value and discounted cash flows. Loans are considered collateral dependent if repayment is expected solely from the collateral. For these collateral dependent impaired loans, the Company obtains updated appraisals at least annually. These appraisals are reviewed for appropriateness and then discounted for estimated closing costs to determine if an allowance is necessary. As partNote 20 of the quarterly review of impaired loans, the Company reviews these appraisals to determine if any additional discounts to the fair value are necessary. If a current appraisal is not obtained, the Company determines whether a discount is needed to the value from the original appraisal based on the decline in value of similar properties with recent appraisals. For loans that are not collateral dependent, estimated fair value is based on the present value of expected future cash flows using the interest rate implicit in the original agreement. Impaired loans where a charge-off has occurred or an allowance is established during the period being reported require classification in the fair value hierarchy. The Company records such impaired loans as a nonrecurring Level 3 in the fair value hierarchy. 
Loans Held for Sale
Loans held for sale are adjusted to lower of cost or fair value.  Fair value is based upon investor pricing. The Company considers all loans held for sale carried at fair value as nonrecurring Level 3.
Real Estate Owned
REO is considered held for sale and is adjusted to fair value less estimated selling costs upon transfer of the loan to foreclosed assets.  Fair value is based upon independent market prices, appraised value of the collateral or management's estimation of the value of the collateral. The Company considers all REO that has been charged off or received an allowance during the period as nonrecurring Level 3.2021 Form 10-K.
Financial Assets Recorded at Fair Value on a Recurring Basis
The following table presents financial assets measured at fair value on a recurring basis at the dates indicated:
March 31, 2022
TotalLevel 1Level 2Level 3
U.S government agencies$18,576 $— $18,576 $— 
MBS, residential34,063 — 34,063 — 
Municipal bonds5,667 — 5,667 — 
Corporate bonds48,009 — 48,009 — 
Total$106,315 $— $106,315 $— 
 December 31, 2017
DescriptionTotal Level 1 Level 2 Level 3
U.S Government Agencies$47,693
 $—
 $47,693
 $—
Residential Mortgage-backed Securities of U.S. Government Agencies and Government Sponsored Enterprises81,278
 —
 81,278
 —
Municipal Bonds32,423
 —
 32,423
 —
Corporate Bonds6,212
 —
 6,212
 —
Equity Securities63
 —
 63
 —
Total$167,669
 $—
 $167,669
 $—
 June 30, 2017
DescriptionTotal Level 1 Level 2 Level 3
U.S Government Agencies$65,830
 $—
 $65,830
 $—
Residential Mortgage-backed Securities of U.S. Government Agencies and Government Sponsored Enterprises92,971
 —
 92,971
 —
Municipal Bonds34,510
 —
 34,510
 —
Corporate Bonds6,293
 —
 6,293
 —
Equity Securities63
 —
 63
 —
Total$199,667
 $—
 $199,667
 $—
June 30, 2021
TotalLevel 1Level 2Level 3
U.S government agencies$19,073 $— $19,073 $— 
MBS, residential43,404 — 43,404 — 
Municipal bonds9,551 — 9,551 — 
Corporate bonds84,431 — 84,431 — 
Total$156,459 $— $156,459 $— 
There were no transfers between levels during the three or sixnine months ended DecemberMarch 31, 2017.2022 and 2021.

The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated:
March 31, 2022
TotalLevel 1Level 2Level 3
Collateral dependent loans:
Commercial real estate$— $— $— $— 
Commercial and industrial164 — — 164 
Total$164 $— $— $164 
June 30, 2021
TotalLevel 1Level 2Level 3
Collateral dependent loans:
Commercial real estate$4,841 $— $— $4,841 
Equipment finance275 — — 275 
Total$5,116 $— $— $5,116 
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 individual asset 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.

30
29
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated:
 December 31, 2017
DescriptionTotal Level 1 Level 2 Level 3
Impaired loans$8,538
 $—
 $—
 $8,538
REO3,018
 —
 —
 3,018
Total$11,556
 $—
 $—
 $11,556
 June 30, 2017
DescriptionTotal Level 1 Level 2 Level 3
Impaired loans$9,156
 $—
 $—
 $9,156
REO4,044
 —
 —
 4,044
Total$13,200
 $—
 $—
 $13,200
Quantitative information about Level 3 fair value measurements during the period ended December 31, 2017 is shown in the table below:
 Fair Value at December 31, 2017 
Valuation
Techniques
 
Unobservable
Input
 Range 
Weighted
Average
Nonrecurring measurements:         
Impaired loans, net$8,538
 Discounted appraisals and discounted cash flows Collateral discounts
and discount spread		 3% - 26%

1% - 4%		 4%
REO$3,018
 Discounted appraisals Collateral discounts 10% - 20% 13%
The stated carrying value and estimated fair value amounts of financial instruments as of DecemberMarch 31, 20172022 and June 30, 2017,2021, are summarized below:
 March 31, 2022
Carrying
Value		Fair
Value		Level 1Level 2Level 3
Assets:
Cash and cash equivalents$52,050 $52,050 $52,050 $— $— 
Commercial paper312,918 312,918 312,918 — — 
Certificates of deposit in other banks28,125 28,125 — 28,125 — 
Debt securities available for sale106,315 106,315 — 106,315 — 
Loans held for sale85,263 86,338 — — 86,338 
Loans, net2,668,504 2,620,750 — — 2,620,750 
FHLB stock3,038 N/AN/AN/AN/A
FRB stock7,413 N/AN/AN/AN/A
SBIC investments12,589 12,589 — — 12,589 
Accrued interest receivable7,980 7,980 — 553 7,427 
Liabilities:
Noninterest-bearing and NOW accounts1,356,921 1,356,921 — 1,356,921 — 
Money market accounts1,026,595 1,026,595 — 1,026,595 — 
Savings accounts232,831 232,831 — 232,831 — 
Certificates of deposit442,810 439,407 — 439,407 — 
Borrowings30,000 29,997 — 29,997 — 
Accrued interest payable45 45 — 45 — 
 June 30, 2021
Carrying
Value		Fair
Value		Level 1Level 2Level 3
Assets:
Cash and cash equivalents$50,990 $50,990 $50,990 $— $— 
Commercial paper189,596 189,596 189,596 — — 
Certificates of deposit in other banks40,122 40,122 — 40,122 — 
Debt securities available for sale156,459 156,459 — 156,459 — 
Loans held for sale93,539 94,779 — — 94,779 
Loans, net2,697,799 2,668,570 — — 2,668,570 
FHLB stock6,153 N/AN/AN/AN/A
FRB stock7,386 N/AN/AN/AN/A
SBIC investments10,171 10,171 — — 10,171 
Accrued interest receivable7,933 7,933 52 542 7,339 
Liabilities:
Noninterest-bearing and NOW accounts1,281,372 1,281,372 — 1,281,372 — 
Money market accounts975,001 975,001 — 975,001 — 
Savings accounts226,391 226,391 — 226,391 — 
Certificates of deposit472,777 474,397 — 474,397 — 
Borrowings115,000 115,000 — 115,000 — 
Accrued interest payable52 52 — 52 — 
The Company had off-balance sheet financial commitments, which included approximately $902,187 and $940,249 of commitments to originate loans, undisbursed portions of construction loans, unused lines of credit, and standby letters of credit at March 31, 2022 and June 30, 2021, respectively (see "Note 9 – Commitments and Contingencies"). Since these commitments are based on current rates, the carrying amount approximates the fair value.

30
 December 31, 2017
 
Carrying
Value
 
Fair
Value
 Level 1 Level 2 Level 3
Cash and interest-bearing deposits$98,665
 $98,665
 $98,665
 $—
 $—
Commercial paper199,722
 199,722
 199,722
 —
 —
Certificates of deposit in other banks100,349
 100,349
 —
 100,349
 —
Securities available for sale167,669
 167,669
 —
 167,669
 $—
Loans, net2,396,924
 2,312,758
 —
 —
 2,312,758
Loans held for sale7,072
 7,213
 —
 —
 7,213
FHLB stock31,582
 31,582
 31,582
 —
 —
FRB stock7,295
 7,295
 7,295
 —
 —
Accrued interest receivable9,371
 9,371
 —
 1,268
 8,103
Noninterest-bearing and NOW deposits803,161
 803,161
 —
 803,161
 —
Money market accounts638,259
 638,259
 —
 638,259
 —
Savings accounts224,732
 224,732
 —
 224,732
 —
Certificates of deposit442,056
 437,304
 —
 437,304
 —
Borrowings685,000
 684,852
 —
 684,852
 —
Accrued interest payable655
 655
 —
 655
 —
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
11.    Leases
As Lessee - Operating Leases
The Company's operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at management's sole discretion. When it is reasonably certain that the Company will exercise its option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. 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.
Supplemental Balance Sheet Information:March 31, 2022June 30, 2021
ROU assets$6,172 $5,498 
Lease liabilities6,961 5,926 
Weighted-average remaining lease terms (years)10.789.49
Weighted-average discount rate2.89 %3.18 %
The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2022:
Fiscal year ending June 30:
Remaining 2022$1,573 
20231,293 
2024847 
2025541 
2026414 
Thereafter3,653 
Total undiscounted minimum lease payments8,321 
Less: amount representing interest(1,360)
Total lease liability$6,961 
The following table presents components of operating lease expense for the three and nine months ended March 31, 2022 and 2021:
Three Months Ended March 31,Nine Months Ended March 31,
2022202120222021
Operating lease cost (included in occupancy expense, net)$347 $398 $1,215 $1,192 
Variable lease cost (included in occupancy expense, net)7 6 13 18 
Sublease income (included in other, noninterest income)(60)(33)(154)(147)
Total operating lease expense, net$294 $371 $1,074 $1,063 
As Lessee - Finance Lease
The Company currently leases land for one of its branch office locations under a finance lease. The ROU asset for the finance lease totaled $2,052 at March 31, 2022 and June 30, 2021 and is included in other assets. The corresponding lease liability totaled $1,773 and $1,804 at March 31, 2022 and June 30, 2021, respectively, and is included in other liabilities. For the three and nine months ended March 31, 2022, interest expense on the lease liability totaled $23 and $70, respectively. The finance lease has a maturity date of July 2028 and a discount rate of 5.18%.
31
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 this finance lease obligation at March 31, 2022:
Fiscal year ending June 30:
Remaining 2022$33 
2023134 
2024145 
2025146 
2026146 
Thereafter1,702 
Total undiscounted minimum lease payments2,306 
Less: amount representing interest(533)
Total lease liability$1,773 
 June 30, 2017
 
Carrying
Value
 
Fair
Value
 Level 1 Level 2 Level 3
Cash and interest-bearing deposits$86,985
 $86,985
 $86,985
 $—
 $—
Commercial paper149,863
 149,863
 149,863
 —
 —
Certificates of deposit in other banks132,274
 132,274
 —
 132,274
 —
Securities available for sale199,667
 199,667
 —
 199,667
 —
Loans, net2,330,319
 2,230,683
 —
 —
 2,230,683
Loans held for sale5,607
 5,719
 —
 —
 5,719
FHLB stock32,071
 32,071
 32,071
 —
 —
FRB stock7,284
 7,284
 7,284
 —
 —
Accrued interest receivable8,758
 8,758
 331
 1,078
 7,349
Noninterest-bearing and NOW deposits779,549
 779,549
 —
 779,549
 —
Money market accounts569,607
 569,607
 —
 569,607
 —
Savings accounts237,149
 237,149
 —
 237,149
 —
Certificates of deposit462,146
 458,818
 —
 458,818
 —
Borrowings696,500
 696,500
 —
 696,500
 —
Accrued interest payable512
 512
 —
 512
 —
Supplemental lease cash flow information for the nine months ended March 31, 2022 and 2021:
Nine Months Ended March 31,
20222021
ROU assets - noncash additions (operating leases)$1,186 $599 
Cash paid for amounts included in the measurement of lease liabilities (operating leases)1,281 1,632 
Cash paid for amounts included in the measurement of lease liabilities (finance leases)100 100 
As Lessor - General
The Company had off-balance sheet financial commitments, whichleases equipment to commercial end users under operating and finance lease arrangements. The Company's equipment finance leases consist mainly of construction, transportation, medical, 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 nominal fixed purchase option; and most of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. The Company's leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease.
As Lessor - Operating Leases
Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from one to five years. Assets related to operating leases are included approximately $625,769in other assets and $616,483the corresponding depreciation expense is recorded on a straight-line basis as a component of commitments to originate loans, undisbursed portionsother noninterest expense. The net book value of interim construction loans,leased assets totaled $21,117 and unused lines$25,932 with a residual value of credit at December$12,941 and $15,330 as of March 31, 20172022 and June 30, 2017, respectively (see Note 10). Since these commitments are based on current rates,2021, respectively.
The following table presents total equipment finance operating lease income and depreciation expense for the carrying amount approximates the fair value.three and nine months ended March 31, 2022 and 2021:
Estimated fair values were determined using the
Three Months Ended March 31,Nine Months Ended March 31,
2022202120222021
Operating lease income$1,661 $1,432 $4,920 $4,107 
Depreciation expense1,339 1,417 4,221 4,371 
The following methods and assumptions:
Cash and interest-bearing deposits – The stated amounts approximate fair values as maturities are less than 90 days.
Commercial paper - The stated amounts approximate fair value due to the short-term nature of these investments.
Certificates of deposit in other banks – The stated amounts approximate fair values.
Securities available for sale – Fair values are based on quoted market prices where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.
Loans held for sale – The fair value of loans held for sale is determined by outstanding commitments from investors on a "best efforts" basis or current investor yield requirements, calculated on theschedule summarizes aggregate loan basis.
Loans, net – Fair values for loans are estimated by segregating the portfolio by type of loan and discounting scheduled cash flows using current market interest rates for loans with similar terms and credit quality.  A prepayment assumption is used as an estimate of the portion of loans that will be repaid prior to their scheduled maturity.  Both the carrying value and estimated fair value amounts are shown net of the allowance for loan losses and purchase discounts.
FHLB and FRB stock– No ready market exists for these stocks and they have no quoted market value. However, redemptions of these securities have historically been at par value. Accordingly, cost is deemedfuture minimum lease payments to be a reasonable estimate of fair value.received at March 31, 2022:
Deposits– Fair values for demand deposits, money market accounts, and savings accounts are the amounts payable on demand as of December 31, 2017 and June 30, 2017. The fair value of certificates of deposit is estimated by discounting the contractual cash flows using current market interest rates for accounts with similar maturities.
Fiscal year ending June 30:
Remaining 2022$1,436 
20234,989 
20242,895 
2025889 
2026246 
Thereafter13 
Total of future minimum lease payments$10,468 
Borrowings – The fair value of advances from the FHLB is estimated based on current rates for borrowings with similar terms.
Accrued interest receivable and payable – The stated amounts of accrued interest receivable and payable approximate the fair value.
Limitations – Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Fair value estimates are based on existing on-and-off balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, a significant asset not considered


32
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

As Lessor - Direct Financing Leases
Finance lease income is recognized as a financial asset is premises and equipment. In addition, tax ramifications related tocomponent of loan interest income over the realizationlease term. The finance leases are included as a component of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in anyequipment finance class of financing receivables under the commercial loan segment of the estimates.

loan portfolio. For the three months ended March 31, 2022 and 2021, total interest income on equipment finance leases totaled $763 and $638, respectively. For the nine months ended March 31, 2022 and 2021, total interest income on equipment finance leases totaled $2,275 and $1,736, respectively.

The lease receivable component of finance lease net investment included within equipment finance class of financing receivables was $62.6 million and $63.3 million at March 31, 2022 and June 30, 2021, respectively.

The following schedule summarizes aggregate future minimum finance lease payments to be received at March 31, 2022:
Fiscal year ending June 30:
Remaining 2022$5,853 
202321,226 
202418,262 
202513,038 
20268,405 
Thereafter4,299 
Total undiscounted minimum lease payments71,083 
Less: amount representing interest(8,476)
Total lease receivable$62,607 

33

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, including,statements.
The factors that could result in material differentiation include, but are not limited to:
•the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity;
•the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write offs and changes in our allowance for loancredit losses and provision for loancredit losses that may be impacted by deterioration in the housing and commercial real estate markets;
•changes in general economic conditions, either nationally or 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;
•uncertainty regarding the limited future of LIBOR, and the expected transition toward new interest rate benchmarks;
•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 Board of Governors of the Federal Reserve System (“Federal Reserve”), the North Carolina Office of the Commissioner of Banks (“NCCOB”),NCCOB, or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for loancredit losses, 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 effect of Dodd-Frank Wall Street Reform and Consumer Protection Act, (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, or the interpretation of regulatory capital or other rules, including as a result of Basel III;
•our ability to attract and retain deposits;
•management's assumptions in determining the adequacy of the allowance for loancredit losses;
•our ability to control operating costs and expenses, especially costs associated with our operation as a public company;
•the use of estimates in determining 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; computer
•disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on which we depend could fail or experience a security breach; 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;
•our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may in the future acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto;
•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; statements with respect to our intentions regarding disclosure and other changes resulting from the Jumpstart Our Business Startups Act of 2012 ("JOBS Act");
34

•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 Financial Accounting Standards Board; and
•other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services;services including the CARES Act; and the
•other risks detailed from time to time in our filings with the Securities and Exchange Commission ("SEC"),SEC, including our 20172021 Form 10-K.
AnyMany of the 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" orand the "Company" refer to HomeTrust Bancshares, Inc. and its consolidated subsidiaries, includingsubsidiary, HomeTrust Bank (the "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 HomeTrustthe Bank’s conversion from mutual to stock form, which was completed on July 10, 2012 (the “Conversion”). As a bank holding company and financial holding company, HomeTrust Bancshares, Inc. iswe are regulated by the Federal Reserve. As a North Carolina state-chartered bank, and member of the Federal Reserve System,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 Federal Deposit Insurance Corporation ("FDIC").FDIC. The Bank is a member of the Federal Home Loan BankFHLB of Atlanta, (“FHLB” or “FHLB of Atlanta”), which is one of the 12 regional banks in the Federal Home Loan Bank System (“FHLB System”).System. Our headquarters is located in Asheville, North Carolina.
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 loans, and construction and land/lot loans, commercial real estate loans, construction and development loans, commercial and industrial loans, indirect automobile loans, and municipal leases. Municipal leases are secured primarily by a ground lease for a firehouse or an equipment lease for fire trucks and firefighting equipment to fire departments located throughout North and South Carolina.other consumer loans. We also purchase investmentoriginate one-to-four family loans, SBA loans, and HELOCs to sell to third parties. In addition, we invest in debt securities consisting primarily of securities issued


by United States Government agencies and government-sponsored enterprises, as well as,GSEs, corporate bonds, commercial paper and certificates of deposit in other banks insured by the FDIC.
We offer a variety of deposit accounts for individuals, businesses, and nonprofit organizations. Deposits and borrowings are our primary source of funds for our lending and investing activities.
We are significantly affected by prevailing economic conditions, as well as government policies and regulations concerning, among other things, monetary and fiscal affairs, housing and financial institutions. Deposit flows are influenced by a number of factors, including interest rates paid on competing time deposits, other investments, account maturities, and the overall level of personal income and savings. Lending activities are influenced by the demand for funds, the number and quality of lenders, and regional economic cycles.
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 payis paid 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, SBA lending fees,lease income, gain on the sale of loans held for sale, and gains and losses from sales of debt securities.
An offset to net interest income is the provision for loancredit losses which is required to establish and maintain the allowanceACL. All financial assets measured at amortized cost and off balance sheet credit exposures, including loans, investment securities and unfunded commitments are evaluated for loan losses at a level that adequately providescredit losses. See "Note 1 – Summary of Significant Accounting Policies" in Item 1 of our 2021 Form 10-K for probable losses inherent in our loan portfolio. As a loan's risk rating improves, property values increase, or recoveries of amounts previously charged off are received, a recapture of previously recognized provision for loan losses may be added to net interest income.further discussion.
Our noninterest expenses consist primarily of salaries and employee benefits, expenses for occupancy marketingexpense, and computer services, and FDIC deposit insurance premiums.services. 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.
In recent years, we have expanded ourOur geographic footprint intoincludes seven additional markets obtained through numerous strategic acquisitions as well as threetwo de novo commercial loan offices. Looking forward, we believe opportunities currently exist within our market areas and in surrounding market areas to grow our franchise. We anticipate organicWhile COVID-19 has dampened our growth activities, we believe as the local economy and loan demand strengthens, through our marketing efforts and asglobal economies return to normalcy the Company remains in a result of the opportunities being created as a result of the consolidation of financial institutions occurring in our market areas.position to create growth. We may also seek to expand our franchise through the selective acquisition of individual branches, loan purchases and, to a lesser degree, whole bank transactions that meet our investment and market objectives. We will continue to be disciplined as it pertains to future expansion focusing primarily on organic growth in our current and surrounding market areas.
On January 1, 2017, the Company completed its acquisition of TriSummit pursuant to an Agreement and Plan of Merger, dated as of September 20, 2016, under which TriSummit merged with and into HomeTrust with HomeTrust as the surviving corporation in the Merger. Immediately following the Merger, TriSummit's wholly owned subsidiary bank, TriSummit Bank, merged with and into the Bank. See Note 3 of the Notes to Consolidated Financial Statements under Item 1 of this report for more details on the Merger.
On August 1, 2017, the Company opened a commercial loan production office in Greensboro, North Carolina.
At DecemberMarch 31, 2017,2022, we had 43over 30 locations in North Carolina (including the Asheville metropolitan area, Greensboro/"Piedmont"the "Piedmont" region, Charlotte, and Raleigh)Raleigh/Cary), Upstate South Carolina (Greenville), East Tennessee (including Kingsport/Johnson City/Bristol,City, Knoxville, and Morristown) and
35

Southwest Virginia (including the Roanoke Valley). During the quarter ended September 30, 2021, we closed nine branches located in North Carolina, Tennessee, and Virginia.
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. Facts and circumstances which could affect these judgments 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. These policies relate
The following represents our critical accounting policy:
Allowance for Credit Losses, or ACL, on Loans.  The ACL reflects our estimate of credit losses that will result from the inability of our borrowers to (i)make required loan payments. We charge off loans against the determinationACL 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 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. We consider the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of the provision and the allowanceloan portfolio. The estimate of our ACL involves a high degree of judgment; therefore, our process for loandetermining expected credit losses (ii) business combinations and acquired loans, (iii) the valuationmay result in a range of REO, (iv) the valuation of goodwill and other intangible assets, and (v) the valuation of or recognition of deferred tax assets and liabilities. These policies and estimates are described in further detail in Part II, Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 1, Summary of Significant Accounting Policies with the 2017 Form 10-K. There have not been any material changesexpected credit losses. Our ACL recorded in the Company's critical accounting policies and estimates duringbalance sheet reflects our best estimate within the six months ended December 31, 2017 as compared to the disclosure containedrange of expected credit losses. We recognize in the Company's 2017 Form 10-K, with the exception of the revaluation of net deferred tax assets related to the Tax Act. For more information on the revaluation, see Note 7 of the Notes to Consolidated Financial Statements under Item 1 of this report.
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an "emerging growth company" we may delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. We intend to take advantage of the benefits of this extended transition period, although we have not done so to date. Accordingly, our financial statements may not be comparable to companies that comply with such new or revised accounting standards or disclosures.
Reclassifications and corrections. To maintain consistency and comparability, certain amounts from prior periods have been reclassified to conform to current period presentation with no effect on net income or shareholders’ equity as previously reported.the amount needed to adjust the ACL for management’s current estimate of expected credit losses. Our ACL is calculated using collectively evaluated and individually evaluated loans.


Recent Accounting Pronouncements. Refer to Note 2 of our consolidated financial statements for a description of recent accounting pronouncements including the respective dates of adoption and effects on results of operations and financial condition.
Non-GAAP Financial Measures


In addition to results presented in accordance with GAAP, this report contains certain non-GAAP financial measures, which include: tangible book value, tangible book value per share;share and tangible equity to tangible assets ratio; net interest income and net interest margin as adjusted to exclude additional FHLB borrowings and proceeds from such borrowings; net income, earnings per share ("EPS"), return on assets ("ROA"), and return on equity ("ROE") excluding merger-related expenses, certain state tax expense, adjustments for the change in federal tax law, and gain from the sale of premises and equipment; and the ratio of the allowance for loan losses to total loans excluding acquired loans. Management elected to utilize short-term FHLB borrowings beginning in November 2014 as part of a leverage strategy to increase net interest income. The Company believes that showing the effects of these borrowings on net interest income and net interest margin is useful to both management and investors as these measures are commonly used to measure financial institution's performance and against peers.

ratio. Management has presented the non-GAAP financial measures in this discussion and analysis excluding merger-related expenses, certain state tax expense, adjustments for the change in federal tax law, and gain from the sale of premises because it believes excludingincluding these items is more indicative of and provides useful and comparative information to assess trends in our core operations while facilitating the comparison of the quality and composition of the Company’sour earnings over time and in comparison to itsour competitors. However, these non-GAAP financial measures are supplemental, are not audited and are not a substitute for operating results or any analysis determined in accordance with GAAP. Where applicable, we have also presented comparable earnings information using GAAP financial measures. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. See “Comparison of Results of Operations for the Three and Six Months Ended December 31, 2017 and 2016”Operations" for more detailed information about our financial performance.performance for the three and nine months ended March 31, 2022 and 2021.

Set forth below is a reconciliation to GAAP of tangible book value and tangible book value per share:
As of
(Dollars in thousands, except per share data)March 31,June 30,March 31,
202220212021
Total stockholders' equity$395,131 $396,519 $406,452 
Less: goodwill, core deposit intangibles, net of taxes25,742 25,902 26,002 
Tangible book value$369,389 $370,617 $380,450 
Common shares outstanding15,978,262 16,636,483 16,655,347 
Tangible book value per share$23.12 $22.28 $22.84 
Book value per share$24.73 $23.83 $24.40 
  As of
  December 31, June 30, December 31,
(Dollars in thousands, except per share data) 2017 2017 2016
Total stockholders' equity $395,361
 $397,647
 $367,776
Less: goodwill, core deposit intangibles, net of taxes 30,083
 30,157
 16,795
Tangible book value (1)
 $365,278
 $367,490
 $350,981
Common shares outstanding 18,967,175
 18,967,875
 18,000,750
Tangible book value per share $19.26
 $19.37
 $19.50
Book value per share $20.84
 $20.96
 $20.43

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


Set forth below is a reconciliation to GAAP of tangible equity to tangible assets:
  As of
  December 31, June 30, December 31,
(Dollars in thousands) 2017 2017 2016
Tangible book value(1)
 $365,278
 $367,490
 $350,981
Total assets 3,250,588
 3,206,533
 2,774,240
Less: goodwill, core deposit intangibles, net of taxes 30,083
 30,157
 16,795
Total tangible assets(2)
 $3,220,505
 $3,176,376
 $2,757,445
Tangible equity to tangible assets 11.34% 11.57% 12.73%
As of
(Dollars in thousands)March 31,June 30,March 31,
202220212021
Tangible equity (1)
$369,389 $370,617 $380,450 
Total assets3,541,785 3,524,723 3,648,613 
Less: goodwill, core deposit intangibles, net of taxes25,742 25,902 26,002 
Total tangible assets$3,516,043 $3,498,821 $3,622,611 
Tangible equity to tangible assets10.51 %10.59 %10.50 %

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





Set forth below is a reconciliation to GAAP of net interest income and net interest margin as adjusted to exclude additional FHLB borrowings and proceeds from such borrowings:
 Three Months Ended December 31,
 2017 2016
(Dollars in thousands)Average Balance Outstanding Interest Earned / Paid Yield/ Rate Average Balance Outstanding Interest Earned / Paid Yield/ Rate
Interest-earning assets (1)
$2,974,198
 $29,226
 3.93 % $2,521,311
 $22,636
 3.59 %
Less: Interest-earning assets funded by additional FHLB borrowings (2)
255,000
 1,056
 1.66 % 340,000
 908
 1.07 %
Interest-earning assets - adjusted$2,719,198
 $28,170
 4.14 % $2,181,311
 $21,728
 3.98 %
            
Interest-bearing liabilities$2,469,855
 $3,618
 0.58 % $2,088,325
 $1,648
 0.31 %
Additional FHLB borrowings255,000
 782
 1.23 % 340,000
 378
 0.44 %
Interest-bearing liabilities - adjusted$2,214,855
 $2,836
 0.51 % $1,748,325
 $1,270
 0.29 %
            
Tax equivalent net interest income and net interest margin  $25,608
 3.44 %   $20,988
 3.33 %
Tax equivalent net interest income and net interest margin - adjusted  25,334
 3.73 %   20,458
 3.75 %
Difference  $274
 (0.29)%   $530
 (0.42)%
 Six Months Ended December 31,
 2017 2016
(Dollars in thousands)Average Balance Outstanding Interest Earned / Paid Yield/ Rate Average Balance Outstanding Interest Earned / Paid Yield/ Rate
Interest-earning assets (1)
$2,946,607
 $57,508
 3.90 % $2,524,362
 $46,017
 3.65 %
Less: Interest-earning assets funded by additional FHLB borrowings (2)
250,000
 2,024
 1.62 % 367,500
 1,907
 1.04 %
Interest-earning assets - adjusted$2,696,607
 $55,484
 4.12 % $2,156,862
 $44,110
 4.20 %
            
Interest-bearing liabilities$2,444,457
 $6,933
 0.56 % $2,093,127
 $3,302
 0.31 %
Less: Additional FHLB borrowings250,000
 1,505
 1.20 % 367,500
 788
 0.43 %
Interest-bearing liabilities - adjusted$2,194,457
 $5,428
 0.49 % $1,725,627
 $2,514
 0.29 %
            
Tax equivalent net interest income and net interest margin  $50,575
 3.43 %   $42,715
 3.38 %
Tax equivalent net interest income and net interest margin - adjusted  50,056
 3.71 %   41,596
 3.86 %
Difference  $519
 (0.28)%   $1,119
 (0.48)%

(1)Interest income used in the average interest/earned and yield calculation includes the tax equivalent adjustment of $378 and $573 for the three months ended December 31, 2017 and 2016, respectively, calculated based on a combined federal and state tax rate of 30% and 37%, respectively. Interest income used in the average interest/earned and yield calculation includes the tax equivalent adjustment of $764 and $1,163 for the six months ended December 31, 2017 and 2016, respectively, calculated based on a combined federal and state tax rate of 30% and 37%, respectively.
(2)Proceeds from the additional borrowings were invested in various interest-earning assets including: deposits with the FRB, FHLB stock, certificates of deposit in other banks, and commercial paper.


Set forth below is a reconciliation to GAAP net income (loss), EPS, ROA, and ROE as adjusted to exclude merger-related expenses, certain state tax expense, adjustments for the change in federal tax law, and gain from the sale of premises and equipment:
  Three Months Ended Six months ended
(Dollars in thousands, except per share data) December 31, December 31,
  2017 2016 2017 2016
Merger-related expenses $—
 $27
 $—
 $334
State tax expense adjustment (1)
 —
 —
 133
 490
Change in federal tax law adjustment (2)
 17,693
 —
 17,693
 —
Gain from sale of premises and equipment —
 —
 (164) (385)
Total adjustments 17,693
 27
 17,662
 439
Tax effect (3)
 —
 (10) 49
 49
Total adjustments, net of tax 17,693
 17
 17,711
 488
  

 

 

 

Net income (loss) (GAAP) (10,666) 2,983
 (5,099) 6,807
         
Net income (non-GAAP) $7,027
 $3,000
 $12,612
 $7,295
         
Per Share Data        
Average shares outstanding - basic 17,975,883
 16,900,387
 17,971,439
 16,893,775
Average shares outstanding - diluted 17,975,883
 17,444,144
 17,971,439
 17,391,404
Average shares outstanding - diluted (adjusted) (4)
 18,689,894
 17,444,144
 18,655,048
 17,391,404
         
Basic EPS        
EPS (GAAP) $(0.59) $0.17
 $(0.28) $0.39
Non-GAAP adjustment 0.98
 0.01
 0.98
 0.04
EPS (non-GAAP) $0.39
 $0.18
 $0.70
 $0.43
         
Diluted EPS        
EPS (GAAP) $(0.59) $0.17
 $(0.28) $0.39
Non-GAAP adjustment 0.97
 —
 0.96
 0.04
EPS (non-GAAP) $0.38
 $0.17
 $0.68
 $0.43
         
Average Balances        
Average assets $3,249,632
 $2,765,047
 $3,223,758
 $2,764,985
Average equity 405,993
 365,740
 403,708
 364,018
         
ROA        
ROA (GAAP) (1.31)% 0.43% (0.32)% 0.49%
Non-GAAP adjustment 2.17 % —% 1.10 % 0.04%
ROA (non-GAAP) 0.86 % 0.43% 0.78 % 0.53%
         
ROE        
ROE (GAAP) (10.51)% 3.26% (2.53)% 3.74%
Non-GAAP adjustment 17.43 % 0.02% 8.78 % 0.27%
ROE (non-GAAP) 6.92 % 3.28% 6.25 % 4.01%

(1)State tax adjustment is a result of a decrease in value of our deferred tax assets stemming from recent decreases in North Carolina's corporate tax rate.
(2)Revaluation of net deferred tax assets due to the Tax Cuts and Jobs Act.
(3)Tax amounts have been adjusted for certain nondeductible merger-related expenses.
(4)Average shares outstanding - diluted were adjusted for the three and six months ended December 31, 2017 to include potentially dilutive shares not considered due to the corresponding net losses under GAAP.



Set forth below is a reconciliation to GAAP of the allowance for loan losses to total loans and the allowance for loan losses as adjusted to exclude acquired loans:
36
 As of
(Dollars in thousands)December 31, June 30, December 31,
 2017 2017 2016
Total gross loans receivable (GAAP)$2,419,256
 $2,352,415
 $1,955,629
Less: acquired loans311,508
 374,538
 169,234
Adjusted gross loans (non-GAAP)$2,107,748
 $1,977,877
 $1,786,395
      
Allowance for loan losses (GAAP)$21,090
 $21,151
 $20,986
Less: allowance for loan losses on acquired loans566
 727
 336
Adjusted allowance for loan losses (non-GAAP)$20,524
 $20,424
 $20,650
Adjusted allowance for loan losses / Adjusted gross loans (non-GAAP)0.97% 1.03% 1.16%


Comparison of Financial Condition at DecemberMarch 31, 20172022 and June 30, 20172021
General.  Total assets and liabilities increased $44.0by $17.1 million and $18.5 million to $3.5 billion and $3.1 billion, respectively, at March 31, 2022 as compared to June 30, 2021. Deposits increased by $103.6 million, or 1.4%3.5%, which were used to $3.3 billion at December 31, 2017continue paying down borrowings during the period. In addition, excess liquidity from $3.2 billion at June 30, 2017. Total liabilities increased $46.3a $50.1 million, or 1.6% to $2.9 billion at December 31, 2017 from $2.8 billion at June 30, 2017. Deposit growth of $59.832.0%, decrease in debt securities available for sale, a $33.7 million, or 2.9% and the cumulative1.2%, decrease of $63.9in loans receivable, a $12.0 million, or 19.3%29.9%, decrease in certificates of deposit in other banks, and securities availablea $8.3 million, or 8.8% decrease in loans held for sale during the first six months of fiscal 2018 were used to partially fund the $66.5 million, or 2.8% increase in total loans, the $49.9 million, or 33.3% increasewas invested in commercial paper and reduce borrowingswhich increased by $11.5$123.3 million, or 1.7%. We continue to utilize our leveraging strategy, where designated short-term FHLB borrowings are invested in various short-term liquid assets to generate additional net interest income, as well as65.0%, during the required purchase of additional FHLB stock which generates increased dividend income.period.
Cash and cash equivalents and commercial paper.  Total cash and cash equivalents increased $11.7$1.1 million, or 13.4%2.1%, to $98.7$52.1 million at DecemberMarch 31, 20172022 from $87.0$51.0 million at June 30, 2017 mainly due to additional funds held at the Federal Reserve Bank. In conjunction with our leveraging strategy, we purchase commercial2021. Commercial paper to take advantage of higher returns with relatively low risk while remaining highly liquid. The commercial paper balance increased $49.9$123.3 million, or 33.3%65.0%, to $199.7$312.9 million at DecemberMarch 31, 20172022 from $149.9$189.6 million at June 30, 2017.2021.
Investments. SecuritiesDebt securities available for sale and other investments. Debt securities available for sale decreased $32.0$50.1 million, or 16.0%32.0%, to $167.7$106.3 million at DecemberMarch 31, 20172022 from $199.7$156.5 million at June 30, 2017. During the six months ended December2021. At March 31, 2017, $19.7 million of securities matured and $10.9 million of principal payments were received. At December 31, 2017,2022, certificates of deposit in other banks decreased $32.0$12.0 million, or 24.1%29.9%, to $100.3$28.1 million compared to $132.3$40.1 million at June 30, 2017.2021. The decrease in certificates of deposit in other banks was due to $44.5$13.0 million in maturities partially offset by $12.6$1.0 million in purchases. All certificates of deposit in other banks are fully insured by the FDIC. We evaluate individual investment securities quarterly for other-than-temporary declines in market value. We did not believe that there were any other-than-temporary impairments at December 31, 2017; therefore, no impairment losses were recorded during the first six months of fiscal 2018. Other investments at cost decreased $670,000, or 2.8%, to $23.0 million at DecemberMarch 31, 20172022 from $23.7 million at June 30, 2021. Other investments at cost included SBIC investments, FRB stock, and FHLB stock totaling $7.3$12.6 million, $7.4 million, and $31.6$3.0 million, respectively. In total, other investments decreased $478,000,The overall decrease was driven by a $3.1 million, or 1.2% from June 30, 201750.6%, reduction in FHLB stock as a result of required redemptions of FHLB stock due to reductionsthe paydowns in our FHLB borrowings.
Loans held for sale. Loans held for sale increased $1.5decreased $8.2 million, or 26.1%8.8%, to $85.3 million at DecemberMarch 31, 2017 to $7.1 million2022 from $5.6$93.5 million at June 30, 2017.2021. The decrease was primarily driven by a $17.2 million, or 39.7%, decrease in mortgage loans held for sale, offset by a $5.0 million, or 8.7%, increase in HELOCs originated for sale and a $4.0 million, or 94.8%, increase in SBA loans held for sale.
Loans, net of deferred loan fees and costs.  Total loans decreased $33.7 million, or 1.2%, to $2.7 billion at March 31, 2022 from the balance at June 30, 2021. The decrease in loans was driven by volume increases asPPP forgiveness of $43.9 million and a result of expanding our mortgage operations into our newer market areas and adding additional seasoned loan officers.
Loans.  Net loans receivable increased $66.6$98.5 million, or 2.9%12.9%, at December 31, 2017 to $2.4 billion from June 30, 2017decrease in retail consumer loans primarily due to $66.8 million of organicwithin the one-to-four family loans and indirect auto loan growth.
For the six-month period ended December 31, 2017, retail loan portfolio originations increased $16.2portfolios. This decrease was partially offset by a $108.7 million, or 11.0% to $163.7 million from $147.5 million, compared to5.7%, increase in commercial loans (excluding PPP loans) as the same period inCompany continues its focus on the previous year. Forgrowth of the six-month period ended December 31, 2017, commercial loan portfolio originations increased $68.2 million, or 30.2% to $294.0 million, from $225.8 million, compared to the same period in the previous year. For the quarter ended December 31, 2017, organic net loan growth, which excludes loans acquired through acquisitionssegment.
Commercial and purchases of HELOCs, was $66.8 million or 6.1% annualized.


Retailretail consumer and commercial loans consist of the following at the dates indicated:
As of     Percent of total
December 31, June 30, Change December 31, June 30,As ofPercent of total
(Dollars in thousands)2017 2017 $ % 2017 2017(Dollars in thousands)March 31,June 30,ChangeMarch 31,June 30,
20222021$%20222021
Commercial loans:Commercial loans:
Commercial real estateCommercial real estate$1,102,184 $1,142,276 $(40,092)(3.5)%40.8 %41.8 %
Construction and developmentConstruction and development251,668 179,427 72,241 40.3 9.3 6.6 
Commercial and industrialCommercial and industrial167,342 141,341 26,001 18.4 6.2 5.2 
Equipment financeEquipment finance378,629 317,920 60,709 19.1 14.0 11.6 
Municipal leasesMunicipal leases130,260 140,421 (10,161)(7.2)4.8 5.1 
PPP loansPPP loans2,756 46,650 (43,894)(94.1)0.1 1.7 
Total commercial loansTotal commercial loans2,032,839 1,968,035 64,804 3.3 75.3 72.0 
Retail consumer loans:           Retail consumer loans:
One-to-four family$686,229
 $684,089
 $2,140
 0.3 % 28.4% 29.1%One-to-four family347,945 406,549 (58,604)(14.4)12.9 14.9 
HELOCs - originated150,084
 157,068
 (6,984) (4.4) 6.2
 6.7
HELOCs - originated128,445 130,225 (1,780)(1.4)4.8 4.8 
HELOCs - purchased162,181
 162,407
 (226) (0.1) 6.7
 6.9
HELOCs - purchased26,911 38,976 (12,065)(31.0)1.0 1.4 
Construction and land/lots60,805
 50,136
 10,669
 21.3
 2.5
 2.1
Construction and land/lots72,735 66,027 6,708 10.2 2.7 2.4 
Indirect auto finance150,042
 140,879
 9,163
 6.5
 6.2
 6.0
Indirect auto finance83,903 115,093 (31,190)(27.1)3.1 4.2 
Consumer9,699
 7,900
 1,799
 22.8
 0.4
 0.3
Consumer6,760 8,362 (1,602)(19.2)0.3 0.3 
Total retail consumer loans1,219,040
 1,202,479
 16,561
 1.4
 50.4
 51.1
Total retail consumer loans666,699 765,232 (98,533)(12.9)24.7 28.0 
Commercial loans: 
  
        
Commercial real estate786,381
 730,408
 55,973
 7.7
 32.5
 31.0
Construction and development185,921
 197,966
 (12,045) (6.1) 7.7
 8.4
Commercial and industrial127,709
 120,387
 7,322
 6.1
 5.3
 5.1
Municipal leases100,205
 101,175
 (970) (1.0) 4.1
 4.3
Total commercial loans1,200,216
 1,149,936
 50,280
 4.4
 49.6
 48.9
Total loans$2,419,256
 $2,352,415
 $66,841
 2.8 % 100.0% 100.0%Total loans$2,699,538 $2,733,267 $(33,729)(1.2)%100.0 %100.0 %
Recently, our expansion into larger metro markets as well as in-market acquisitions combined with improvements in the economy, employment rates, stronger real estate prices, and a general lack of new housing inventory in certain markets have led to us significantly increasing originations of construction loans for properties located in our market areas. We have hired experienced commercial real estate relationship managers, credit officers, and developed a construction risk management group to better manage construction risk, as part of our efforts to grow the construction portfolio. We will continue to take a disciplined approach in our construction and land development lending by concentrating our efforts on smaller one-to-four residential loans to builders known to us and developers of commercial real estate and multifamily properties with proven success in this type of construction. At December 31, 2017, construction and land/lots totaled $60.8 million including $46.4 million of one-to-four family construction loans that will roll over to permanent loans upon completion of the construction period, excluding unfunded loan commitments of $59.3 million. Total construction and development loans at December 31, 2017, were $185.9 million, excluding unfunded loan commitments of $123.3 million, of which $69.5 million was for non-residential commercial real estate construction, $65.0 million was for land development, $39.6 million was for speculative construction of single family properties, and $11.8 million was for multi-family construction. Undisbursed construction and development loan commitments at December 31, 2017 included $80.9 million of commercial real estate projects, multi-family residential projects of $8.7 million and $33.7 million for the speculative construction of one- to four-family residential properties.
Asset Quality. Our overall asset quality metrics continue to demonstrate our commitment to growing and maintaining a loan portfolio with a moderate risk profile.quality. Nonperforming assets decreased $800,000 to $19.2by $7.0 million, or 0.59%54.6%, to $5.8 million, or 0.16%, of total assets at DecemberMarch 31, 2017 from $20.02022 compared to $12.8 million, or 0.36% of total assets at June 30, 2017.2021. The significant decrease from June 30, 2021 was primarily a result of the payoff of two commercial real estate loan relationships totaling $5.1 million during the nine month period. Nonperforming assets included $14.4$5.8 million in nonaccruing loans and $4.8 million inno REO at DecemberMarch 31, 2017,2022, compared to $13.7$12.6 million and $6.3 million,$188,000 in nonaccruing loans and REO, respectively, at June 30, 2017. Included in nonperforming loans are $4.8 million of loans restructured from their original terms of which $2.1 million were current with respect to their modified payment terms. The increase in nonaccruing loans was primarily due to one construction and development relationship totaling $771,000, partially offset by loans returning to performing status as payment history and the borrower's financial status improved. At December 31, 2017, $4.6 million, or 32.1%, of nonaccruing loans were current on their loan payments. Purchased credit impaired loans aggregating $4.6 million were excluded from nonaccruing loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations.2021. Nonperforming loans to total loans was 0.59%0.22% at DecemberMarch 31, 2017 compared to 0.58%2022 and 0.46% at June 30, 2017.2021.
37

As of March 31, 2022, we had no loans with full principal and interest payment deferrals related to COVID-19 which had been granted prior to January 1, 2022, compared to $107,000 at June 30, 2021. All loans placed on full payment deferral during the pandemic have come out of deferral and borrowers are either making regular loan payments or interest-only payments. As of March 31, 2022, the Company had $9.6 million in commercial loan deferrals on interest-only payments compared to $78.9 million at June 30, 2021.
The ratio of classified assets to total assets decreased to 1.39%0.61% at DecemberMarch 31, 20172022 from 1.57%0.76% at June 30, 2017.2021. Classified assets decreased 10.8%$5.0 million, or 18.5%, to $44.8$21.7 million at DecemberMarch 31, 20172022 compared to $50.2$26.7 million at June 30, 20172021 primarily due to payoffsthe payoff of two commercial real estate loan relationships discussed above.
Our individually evaluated loans totaling $1.6 million and the decrease in REO of $1.5 million. Delinquent loans (loans delinquent 30 days or more) increased to $17.3 million at December 31, 2017, from $15.2 million at June 30, 2017 primarily due to one construction and development loan relationship in the 90+ day category and one-to-four family loans in the 30-60 day category.
As of December 31, 2017, we had identified $40.8 million of impaired loans compared to $43.0 million at June 30, 2017. Our impaired loans are comprised ofinclude loans on non-accrualnonaccrual status and all TDRs, whether performing or on non-accrualnonaccrual status under their restructured terms. ImpairedIndividually evaluated loans may be evaluated for reserve purposes using either a specific impairment analysisthe discounted cash flow or on a collective basis as part of homogeneous pools.the collateral valuation method. As of DecemberMarch 31, 2017,2022, there were $19.8$4.9 million in loans individually evaluated for impairment and $21.0 million were collectively evaluated. For more information on these impairedindividually evaluated loans, see Note 5 of the Notes to Consolidated Financial Statements under Item 1 of this report.
"Note 6 - Loans and Allowance for loanCredit Losses on Loans" in this Quarterly Report on Form 10-Q.
Allowance for credit losses.  We establish an allowance for loan losses by charging amounts to the loan loss provision at a level required to reflect estimated credit losses in the loan portfolio. In evaluating the level of the allowance for loan losses, management considers, among other factors, historical loss experience, the types of  The ACL on loans and the amount of loans in the loan portfolio, adverse situations that may affect borrowers' ability


to repay, estimated value of any underlying collateral, prevailing economic conditions and current risk factors specifically related to each loan type.
The allowance for loan losses was $21.1$31.0 million, or 0.87%1.15%, of total loans at DecemberMarch 31, 20172022 compared to $21.2$35.5 million, or 0.90%1.30%, of total loans at June 30, 2017.2021. The allowanceoverall decrease was driven by lower expected credit losses estimated by management based on an improving economic outlook.
There was a net benefit for loancredit losses to gross loans excluding acquired loans was 0.97% at Decemberof $4.0 million for the nine months ended March 31, 2017,2022, compared to 1.03% at June 30, 2017. Loans acquired from acquisitions are recorded at fair value, which includes a credit discount, therefore, no allowance$6.2 million net benefit for the corresponding period in fiscal year 2021. Net loan losses is establishedcharge-offs totaled $19,000 for these acquired loans unless the credit quality deteriorates further subsequent to the acquisition. The allowance for our acquired loans at December 31, 2017 was $566,000 compared to $727,000 at June 30, 2017.
There was no provision for loan loss during the three and sixnine months ended DecemberMarch 31, 2017 and December 31, 2016 as the allowance for loan losses required by our loan growth was offset by continued improvements in our asset quality. Net loan charge offs totaled $907,000 for the three months ended December 31, 20172022, compared to net recoveriescharge-offs of $35,000$452,000 for the same period during the prior fiscallast year. Net charge offs totaled $61,000 for the six months ended December 31, 2017 compared to $306,000 for the same period during the prior fiscal year. Net charge offscharge-offs as a percentage of average loans increased to 0.15%was 0.00% for the threenine months ended DecemberMarch 31, 2017 from2022 compared to net recoveriescharge-offs of (0.01)%0.02% for the samecorresponding period last fiscal year. Net charge offs as a percentage of average loans decreased to 0.01% compared to 0.03% for the same period last fiscal year.
The allowance as a percentage of nonaccruingnonperforming loans decreasedincreased to 146.79%534.06% at DecemberMarch 31, 20172022 from 154.77%281.38% at June 30, 2017.2021.
We believe that the allowance for loan losses as of December 31, 2017 was adequate to absorb the known and inherent risks of loss in the loan portfolio at that date. While we believe the estimates and assumptions used in our determination of the adequacy of the allowance are reasonable, there can be no assurance that such estimates and assumptions will not be proven incorrect in the future, or that the actual amount of future provisions will not exceed the amount of past provisions or that any increased provisions that may be required will not adversely impact our financial condition and results of operations. In addition, the determination of the amount of the allowance for loan losses is subject to review by bank regulators as part of the routine examination process, which may result in the establishment of additional reserves based upon their judgment of information available to them at the time of their examination.
Real estate owned. REO decreased $1.5 million, to $4.8 million at December 31, 2017 primarily due to $2.2 million in REO sales during the period, partially offset by $591,000 in properties transferred to REO and a gain on sale of REO of $393,000 during the period. The total balance of REO at December 31, 2017 included $1.9 million in land, construction and development projects (both residential and commercial), $1.8 million in commercial real estate, and $1.1 million in single-family homes.
Deferred income taxes. Deferred income taxes decreased $20.9$4.4 million, or 36.4%26.1%, to $36.5$12.5 million at DecemberMarch 31, 20172022 from $57.4$16.9 million at June 30, 2017.2021. The decrease was primarily a result of a release and reduction of the ACL, depreciation on new equipment finance leases, and bonus tax depreciation on new premises.
Other assets. Other assets decreased $2.5 million, or 4.4%, to $55.0 million at March 31, 2022 from $57.5 million at June 30, 2021. The decrease was primarily driven by the previously mentioned revaluation as a result of the Tax Act, the realization oflower net operating losses through increases in taxable income,operated lease assets and to a lesser extent, the revaluation of deferred tax assets relating to a change in North Carolina's corporate tax rate, as discussed below.
Goodwill. Goodwill remained at $25.6 million at December 31, 2017 and June 30, 2017.
Deposits. Deposits increased $59.8 million, or 2.9%, to $2.1 billion at December 31, 2017 as compared to $2.0 billion at June 30, 2017. The increase was primarily due to an increase of $79.8 million in our core deposits (which excludes certificates of deposit) as a result of recent deposit gathering initiatives, which were partiallycurrent taxes receivable, offset by a $20.1reclassification of assets held for sale from premises and equipment related to the nine branch closures.
Deposits. Deposits increased $103.6 million, managed run offor 3.5%, during the nine months ended March 31, 2022 to $3.1 billion, driven by our successful efforts to increase core deposits which increased $133.6 million, or 5.4%. Partially offsetting this deposit increase was a decrease of $30.0 million, or 6.3%, in our higher costing certificates of deposit and brokered deposits by competing less aggressively for time deposits.as part of our managed runoff of the portfolio.
The following table sets forth our deposits by type of deposit account as of the dates indicated:
As ofPercent of total
(Dollars in thousands)March 31,June 30,ChangeMarch 31,June 30,
20222021$%20222021
Core deposits:
     Noninterest-bearing accounts$704,344 $636,414 $67,930 10.7 %23.0 %21.5 %
     NOW accounts652,577 644,958 7,619 1.2 21.3 21.8 
     Money market accounts1,026,595 975,001 51,594 5.3 33.6 33.0 
     Savings accounts232,831 226,391 6,440 2.8 7.6 7.7 
Core deposits2,616,347 2,482,764 133,583 5.4 85.5 84.0 
Certificates of deposit442,810 472,777 (29,967)(6.3)14.5 16.0 
Total$3,059,157 $2,955,541 $103,616 3.5 %100.0 %100.0 %
 As of   Percent of total
 December 31, June 30, Change December 31, June 30,
(Dollars in thousands)2017 2017 $ % 2017 2017
Core deposits:           
     Noninterest-bearing accounts$313,493
 $310,172
 3,321
 1.1 % 14.9% 15.1%
     NOW accounts489,668
 469,377
 20,291
 4.3 % 23.2% 22.9%
     Money market accounts638,259
 569,607
 68,652
 12.1 % 30.3% 27.8%
     Savings accounts224,732
 237,149
 (12,417) (5.2)% 10.7% 11.6%
Core deposits1,666,152
 1,586,305
 79,847
 5.0 % 79.0% 77.4%
Certificates of deposit442,056
 462,146
 (20,090) (4.3)% 21.0% 22.6%
Total$2,108,208
 $2,048,451
 59,757
 2.9 % 100.0% 100.0%
Borrowings. Borrowings decreased $85.0 million, or 73.9%, to $685.0$30.0 million at DecemberMarch 31, 2017 from $696.52022 compared to $115.0 million at June 30, 2017. A total of $585.0 million of these FHLB advances have maturities of less than 90 days with a weighted average interest rate of 1.34% at December 31, 2017.2021 as excess liquidity was used to pay down borrowings.

38

Equity.  Stockholders' equity at December 31, 2017 decreased to $395.4 million from $397.6 million at June 30, 2017. The decrease was primarily driven by $5.1 million in net losses due to the deferred tax revaluation, and a $601,000 decrease in other comprehensive income, partially offset by $2.0 million representing stock-based compensation, and $680,000 in a cumulative adjustment for the adoption of Accounting Standard Update 2016-09, "Improvements to Employee Share-Based Payment Accounting."



Average Balances, Interest and Average Yields/Yield/Cost
Our operating results depend primarily on our net interest income, which is the difference between interest income on interest-earning assets, including loans and securities, and interest expense incurred on interest-bearing liabilities, including deposits and other borrowed funds. Interest rate fluctuations, as well as changes in the amount and type of interest-earning assets and interest-bearing liabilities, combine to affect net interest income. Our net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as a "volume change". It is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing liabilities, referred to as a "rate change".
The following table sets forth forpresents the periods indicated, information regardingdistribution of average balances of assets, liabilities and liabilitiesequity, as well as the total dollar amounts of interest income fromon average interest-earning assets and interest expense paid on average interest-bearing liabilities, resultant yields, interest rate spread, net interest margin (otherwise known as net yield on interest-earning assets), and the ratio of average interest-earning assets to 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.




39

 For the Three Months Ended December 31,
 2017 2016
 Average
Balance
Outstanding		 
Interest
Earned/
Paid(2)
 
Yield/
Rate(2)
 Average
Balance
Outstanding		 
Interest
Earned/
Paid(2)
 
Yield/
Rate(2)
 (Dollars in thousands)
Assets:           
Interest-earning assets:           
Loans receivable(1)
$2,406,014
 $26,518
 4.41% $1,910,134
 $20,444
 4.28%
Deposits in other financial institutions151,197
 517
 1.37% 178,119
 478
 1.07%
Investment securities175,039
 903
 2.06% 188,023
 862
 1.83%
Other interest-earning assets(3)
241,948
 1,288
 2.13% 245,035
 852
 1.39%
Total interest-earning assets2,974,198
 29,226
 3.93% 2,521,311
 22,636
 3.59%
Other assets275,434
     243,736
    
Total assets3,249,632
     2,765,047
    
Liabilities and equity:           
Interest-bearing deposits:           
Interest-bearing checking accounts471,474
 236
 0.20% 405,340
 172
 0.17%
Money market accounts644,928
 585
 0.36% 518,095
 351
 0.27%
Savings accounts227,933
 76
 0.13% 210,223
 70
 0.13%
Certificate accounts448,507
 644
 0.57% 408,314
 448
 0.44%
Total interest-bearing deposits1,792,842
 1,541
 0.33% 1,541,972
 1,041
 0.28%
Borrowings677,013
 2,077
 1.22% 546,353
 607
 0.44%
  Total interest-bearing liabilities2,469,855
 3,618
 0.58% 2,088,325
 1,648
 0.31%
Noninterest-bearing deposits307,934
     250,914
    
Other liabilities65,850
     60,068
    
Total liabilities2,843,639
     2,399,307
    
Stockholders' equity405,993
     365,740
    
Total liabilities and stockholders' equity$3,249,632
     $2,765,047
    
            
Net earning assets$504,343
  
   $432,986
    
Average interest-earning assets to           
average interest-bearing liabilities120.42%     120.73%    
Tax-equivalent:           
Net interest income  $25,608
     $20,988
  
Interest rate spread    3.35%     3.28%
Net interest margin(4)
    3.44%     3.33%
Non-tax-equivalent:           
Net interest income  $25,230
     $20,415
  
Interest rate spread    3.30%     3.18%
Net interest margin(4)
    3.39%     3.24%
The following table presents the distribution of average assets, liabilities and equity, as well as interest income and fees on average interest-earning assets and interest expense and interest-bearing liabilities:
For the Three Months Ended March 31,
20222021
(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)(2)
$2,791,650 $26,936 3.91 %$2,779,094 $27,955 4.08 %
Commercial paper and deposits in other banks342,878 563 0.67 522,256 611 0.47 
Debt securities available for sale111,874 384 1.39 153,871 496 1.31 
Other interest-earning assets(3)
22,614 632 11.33 39,184 585 6.05 
Total interest-earning assets3,269,016 28,515 3.54 3,494,405 29,647 3.44 
Other assets258,126 258,858 
Total assets$3,527,142 $3,753,263 
Liabilities and equity:
Interest-bearing deposits:
Interest-bearing checking accounts$650,072 $310 0.19 %$637,381 $391 0.25 %
Money market accounts1,020,734 340 0.14 907,228 373 0.17 
Savings accounts227,936 40 0.07 212,809 39 0.08 
Certificate accounts441,314 461 0.42 516,221 1,193 0.94 
Total interest-bearing deposits2,340,056 1,151 0.20 2,273,639 1,996 0.36 
Borrowings33,599 4 0.05 465,111 1,632 1.42 
  Total interest-bearing liabilities2,373,655 1,155 0.20 2,738,750 3,628 0.54 
Noninterest-bearing deposits714,753 553,045 
Other liabilities39,374 56,655 
Total liabilities3,127,782 3,348,450 
Stockholders' equity399,360 404,813 
Total liabilities and stockholders' equity$3,527,142 $3,753,263 
Net earning assets$895,361  $755,655 
Average interest-earning assets to
average interest-bearing liabilities137.72 %127.59 %
Tax-equivalent:
Net interest income$27,360 $26,019 
Interest rate spread3.34 %2.90 %
Net interest margin(4)
3.39 %3.02 %
Non-tax-equivalent:
Net interest income$27,040 $25,693 
Interest rate spread3.30 %2.87 %
Net interest margin(4)
3.35 %2.98 %

(1)The average loans receivable net balances include loans held for sale and nonaccruing loans.
(2)Interest income used in the average interest/interest earned and yield calculation includes the tax equivalent adjustment of $378,000$320 and $573,000$326 for the three months ended DecemberMarch 31, 20172022 and 2016,2021, respectively, calculated based on a combined federal and state tax rate of 30% and 37%, respectively.24%.
(3)The average other interest-earning assets consistsconsist of FRB stock, FHLB stock, and commercial paper. See Comparison of Results of Operation for the Three Months Ended December 31, 2017 for discussion of our leveraging strategy.SBIC investments.
(4)Net interest income divided by average interest-earning assets.


40

For the Six Months Ended December 31,
2017 2016For the Nine Months Ended March 31,
Average
Balance
Outstanding
 
Interest
Earned/
Paid(2)
 
Yield/
Rate(2)
 
Average
Balance
Outstanding
 
Interest
Earned/
Paid(2)
 
Yield/
Rate(2)
20222021
(Dollars in thousands) (Dollars in thousands)Average
Balance
Outstanding		Interest
Earned/
Paid		Yield/
Rate		Average
Balance
Outstanding		Interest
Earned/
Paid		Yield/
Rate
Assets:           Assets:
Interest-earning assets:           Interest-earning assets:
Loans receivable(1)(2)
$2,383,768
 $52,154
 4.38% $1,879,110
 $41,515
 4.42%$2,810,205 $82,377 3.90 %$2,826,886 $85,505 4.03 %
Deposits in other financial institutions155,175
 1,053
 1.36% 184,918
 974
 1.05%
Investment securities182,479
 1,875
 2.06% 192,456
 1,742
 1.81%
Commercial paper and deposits in other banksCommercial paper and deposits in other banks311,457 1,362 0.58 454,609 2,106 0.62 
Debt securities available for saleDebt securities available for sale124,053 1,319 1.42 131,332 1,528 1.55 
Other interest-earning assets(3)
225,185
 2,426
 2.15% 267,878
 1,786
 1.33%
Other interest-earning assets(3)
22,218 1,867 11.19 39,140 1,729 5.88 
Total interest-earning assets2,946,607
 57,508
 3.90% 2,524,362
 46,017
 3.65%Total interest-earning assets3,267,933 86,925 3.54 3,451,967 90,868 3.51 
Other assets277,151
     240,623
    Other assets259,570 256,026 
Total assets$3,223,758
     $2,764,985
    Total assets$3,527,503 $3,707,993 
Liabilities and equity:           Liabilities and equity:
Interest-bearing liabilities:           Interest-bearing liabilities:
Interest-bearing checking accounts467,201
 452
 0.19% 404,581
 345
 0.17%Interest-bearing checking accounts$640,194 1,038 0.22 %$593,815 1,142 0.26 %
Money market accounts625,095
 1,062
 0.34% 518,672
 698
 0.27%Money market accounts1,002,542 1,056 0.14 860,170 1,337 0.21 
Savings accounts230,436
 153
 0.13% 210,201
 140
 0.13%Savings accounts224,664 120 0.07 206,478 114 0.07 
Certificate accounts449,173
 1,220
 0.54% 419,552
 957
 0.46%Certificate accounts447,623 1,814 0.54 594,565 5,003 1.12 
Total interest-bearing deposits1,771,905
 2,887
 0.33% 1,553,006
 2,140
 0.27%Total interest-bearing deposits2,315,023 4,028 0.23 2,255,028 7,596 0.45 
Borrowings672,552
 4,046
 1.20% 540,121
 1,162
 0.43%Borrowings48,894 45 0.12 471,716 5,007 1.41 
Total interest-bearing liabilities2,444,457
 6,933
 0.56% 2,093,127
 3,302
 0.31%Total interest-bearing liabilities2,363,917 4,073 0.23 2,726,744 12,603 0.62 
Noninterest-bearing deposits309,265
     246,212
    Noninterest-bearing deposits719,872 522,406 
Other liabilities66,328
     61,628
    Other liabilities45,443 56,141 
Total liabilities2,820,050
     2,400,967
    Total liabilities3,129,232 3,305,291 
Stockholders' equity403,708
     364,018
    Stockholders' equity398,271 402,702 
Total liabilities and stockholders' equity$3,223,758
     $2,764,985
    Total liabilities and stockholders' equity$3,527,503 $3,707,993 
           
Net earning assets$502,150
     $431,235
    Net earning assets$904,016 $725,223 
Average interest-earning assets to           Average interest-earning assets to
average interest-bearing liabilities120.54%     120.60%    average interest-bearing liabilities138.24 %126.60 %
Tax-equivalent:           Tax-equivalent:
Net interest income  $50,575
     $42,715
  Net interest income$82,852 $78,265 
Interest rate spread    3.34%     3.34%Interest rate spread3.31 %2.89 %
Net interest margin(4)
    3.43%     3.38%
Net interest margin(4)
3.38 %3.02 %
Non-tax-equivalent:           Non-tax-equivalent:
Net interest income  $49,811
     $41,552
  Net interest income$81,915 $77,323 
Interest rate spread   
 3.29%     3.24%Interest rate spread 3.28 %2.85 %
Net interest margin(4)
    3.38%     3.29%
Net interest margin(4)
3.34 %2.98 %

__________________
(1)The average loans receivable net balances include loans held for sale and nonaccruing loans.
(2)Interest income used in the average interest/interest earned and yield calculation includes the tax equivalent adjustment of $764,000$937 and $1,163,000$942 for the sixnine months ended DecemberMarch 31, 20172022 and 2016,2021, respectively, calculated based on a combined federal and state tax rate of 30% and 37%, respectively.24%.
(3)The average other interest-earning assets consistsconsist of FRB stock, FHLB stock, and commercial paper. See Comparison of Results of Operation for the Six Months Ended December 31, 2017 for discussion of our leveraging strategy.SBIC investments.
(4)Net interest income divided by average interest-earning assets.


41

Rate/Volume Analysis
The following table presentsshows the dollar amount ofeffects that changes in average balances (volume) and average interest income andrates (rate) had on the interest expense for major components ofearned on our interest-earning assets and interest-bearing liabilities. It distinguishes between the changes related to outstanding balances and that due to the changes in interest rates. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume (i.e., changes in volume multiplied by old rate) and (ii) changes in rate (i.e., changes in rate multiplied by old volume). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to the change due to volume and the change due to rate.liabilities:
Three Months Ended March 31, 2022
Compared to
Three Months Ended March 31, 2021
(Dollars in thousands)Increase/
(Decrease)
due to		Total
Increase/(Decrease)
VolumeRate
Interest-earning assets:
Loans receivable(1)
$126 $(1,145)$(1,019)
Commercial paper and deposits in other banks(210)162 (48)
Debt securities available for sale(135)23 (112)
Other interest-earning assets(247)294 47 
    Total interest-earning assets(466)(666)(1,132)
Interest-bearing liabilities:
Interest-bearing checking accounts8 (89)(81)
Money market accounts47 (80)(33)
Savings accounts 
3 (2)1 
Certificate accounts(174)(558)(732)
 Total interest-bearing deposits(116)(729)(845)
Borrowings(1,514)(114)(1,628)
    Total interest-bearing liabilities(1,630)(843)(2,473)
Net increase (decrease) in tax equivalent interest income$1,164 $177 $1,341 
 Three Months Ended December 31, 2017
 Compared to
 Three Months Ended December 31, 2016
 
Increase/
(decrease)
due to
 Total
increase/(decrease)
(Dollars in thousands)Volume Rate 
Interest-earning assets:     
 Loans receivable(1)
$5,306
 $768
 $6,074
Deposits in other financial institutions(72) 111
 39
 Investment securities(60) 101
 41
 Other interest-earning assets(11) 447
 436
    Total interest-earning assets$5,163
 $1,427
 $6,590
Interest-bearing liabilities:     
 Interest-bearing checking accounts$29
 $35
 $64
 Money market accounts85
 149
 234
 Savings accounts 
6
 —
 6
 Certificate accounts44
 152
 196
 Borrowings145
 1,325
 1,470
    Total interest-bearing liabilities309
 1,661
 1,970
Net increase (decrease) in tax equivalent interest income$4,854
 $(234) $4,620

 Six Months Ended December 31, 2017
 Compared to
 Six Months Ended December 31, 2016
 
Increase/
(decrease)
due to
 
Total
increase/(decrease)
(Dollars in thousands)Volume Rate 
Interest-earning assets:     
 Loans receivable(1)
$11,151
 $(512) $10,639
Deposits in other financial institutions(156) 235
 79
 Investment securities(90) 223
 133
 Other interest-earning assets(285) 925
 640
    Total interest-earning assets10,620
 871
 11,491
Interest-bearing liabilities:     
 Interest-bearing checking accounts 
$54
 $53
 $107
 Money market accounts143
 221
 364
 Savings accounts13
 —
 13
 Certificate accounts68
 195
 263
 Borrowings285
 2,599
 2,884
    Total interest-bearing liabilities563
 3,068
 3,631
Net increase (decrease) in tax equivalent interest income$10,057
 $(2,197) $7,860
_____________
Nine Months Ended March 31, 2022
Compared to
Nine Months Ended March 31, 2021
(Dollars in thousands)Increase/
(Decrease)
due to		Total
Increase/(Decrease)
VolumeRate
Interest-earning assets:
Loans receivable(1)
$(504)$(2,624)$(3,128)
Commercial paper and deposits in other banks(664)(80)(744)
Debt securities available for sale(85)(124)(209)
Other interest-earning assets(747)885 138 
    Total interest-earning assets(2,000)(1,943)(3,943)
Interest-bearing liabilities:
Interest-bearing checking accounts 89 (193)(104)
Money market accounts221 (502)(281)
Savings accounts10 (4)6 
Certificate accounts(1,236)(1,953)(3,189)
 Total interest-bearing deposits(916)(2,652)(3,568)
Borrowings(4,488)(474)(4,962)
    Total interest-bearing liabilities(5,404)(3,126)(8,530)
Net increase (decrease) in tax equivalent interest income$3,404 $1,183 $4,587 
_________________________________________________________________
(1) Interest income used in the average interest/interest earned and yield calculation includes the tax equivalent adjustment of $378,000$320 and $573,000$326 for the three months ended DecemberMarch 31, 20172022 and 2016,2021, respectively, calculated based on a combined federal and state income tax rate of 30% and 37%24%. Interest income used in the average interest/interest earned and yield calculation includes the tax equivalent adjustment of $764,000$937 and $1,163,000$942 for the sixnine months ended DecemberMarch 31, 20172022 and 2016,2021, respectively, calculated based on a combined federal and state income tax rate of 30% and 37%24%.

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Comparison of Results of OperationOperations for the Three Months Ended DecemberMarch 31, 20172022 and 20162021
General.  During the three months ended DecemberMarch 31, 2017, we had a2022, net loss of $10.7income increased $154,000, or 2.0% to $8.0 million driven by an estimated $17.7 million deferred tax revaluation resulting from enactment of the Tax Cuts and Jobs Act (the "Tax Act”), compared to net income of $3.0$7.9 million for the three months ended DecemberMarch 31, 2016. The Company's2021, while our diluted lossearnings per share was $0.59 for the three months ended December 31, 2017increased to $0.51 compared to earning per share of $0.17$0.48 for the same period in fiscal 2017. The Tax Act, among other things, reduced the federal corporate tax rate to 21% effective January 1, 2018 requiring the Company to revalue2021. Third quarter of fiscal 2022 earnings were positively impacted by a $1.3 million, or 5.2%, increase in net deferred tax assets. The resulting estimated $17.7interest income driven by lower borrowing costs, and a $4.7 million, deferred tax revaluation was reflected as an increase to the Company's income taxor 15.4%, decrease in noninterest expense. Net income and diluted earnings per share before the change in the federal tax rate and prior year merger-related expenses for the quarter ended December 31, 2017 was $7.0 million and $0.38, compared to $3.0 million and $0.17, respectively.
Net Interest Income.Net interest income increased $4.8by $1.3 million, or 23.6%5.2%, to $25.2$27.0 million for the quarter ended DecemberMarch 31, 20172022, compared to $20.4$25.7 million for the corresponding periodcomparative quarter in 2016. The increase in net interest income for the quarter ended December 31, 2017 was driven by a $6.8 million, or 30.8% increase in interestfiscal 2021. Interest and dividend income duedecreased by $1.1 million, or 3.8%, primarily to an increasedriven by lower average balances on interest-earning assets combined with lower loan yields. This decrease was offset by a $2.5 million, or 68.2% decrease in average interest-earning assets.interest expense.
Average interest-earning assets increased $452.9decreased $225.4 million, or 18.0%6.4%, to $3.0$3.3 billion for the quarter ended DecemberMarch 31, 2017 compared to $2.5 billion for2022. The main drivers of the corresponding quarterchange were decreases of $179.4 million, or 34.3%, in fiscal 2017. Thethe average balance of loans receivable for the quarter ended December 31, 2017 increased $495.9commercial paper and deposits in other banks and $42.0 million, or 26.0% due to the TriSummit acquisition and organic net loan growth, which was mainly funded by the cumulative decrease of $43.0 million, or 7.0%27.3%, in average interest-earning deposits with banks,debt securities available for sale and other interest-earning assets, an increase in average deposits of $307.9as the Company used excess liquidity to reduce borrowings, which declined by $431.5 million, or 17.2%92.8%, and an increase in average FHLB borrowings of $130.7 million, or 23.9% aswhen compared to the same quarter last year.prior period. Net interest margin (on a fully taxable-equivalent basis) for the three months ended DecemberMarch 31, 20172022 increased to 3.44%3.39% from 3.33%3.02% for the same period a year ago. Duringago as all higher rate long-term borrowings were repaid during the three monthsquarter ended December 31, 2017 our leveraging strategy produced an additional $1.1 million in interest and dividend income at an average yield of 1.66%, while the average cost of the borrowings was 1.23%, resulting in approximately $274,000 in net interest income. During the same quarter in the prior fiscal year, our leveraging strategy produced an additional $908,000 in interest and dividend income at an average yield of 1.07%, while the average cost of the borrowings was 0.44%, resulting in approximately $530,000 in net interest income. Excluding the effects of the leveraging strategy, the tax equivalent net interest margin would be 3.73% and 3.75% for the quarters ended December 31, 2017 and 2016, respectively.June 30, 2021.
Total interest and dividend income increased $6.8decreased $1.1 million, or 30.8%3.8%, for the quarter ended March 31, 2022 as compared to the same quarter last year, which was primarily a result of a $1.0 million, or 3.7%, decrease in loan interest income. The lower loan interest income was driven by a decline in the average yield on loans of 17 basis points, from 4.08% to 3.91%. Loan interest income for the quarter included the amortization of $265,000 of PPP loan origination fees, a decline of $349,000 when compared to the $614,000 recognized in the prior period. The overall average yield on interest-earning assets increased 10 basis points to 3.54% for the current quarter compared to 3.44% in the same quarter last year primarily due to the change in the mix of interest-earning assets.
Total interest expense decreased $2.5 million, or 68.2%, for the quarter ended March 31, 2022 compared to the same period last year. The decrease was driven by a $1.6 million, or 99.8%, decrease in interest expense on borrowings as discussed above and a $845,000, or 42.3%, decrease in interest expense on deposits. The average balance of total deposits increased by $228.1 million, or 8.1%, with noninterest-bearing deposits and interest-bearing deposits increasing $161.7 million and $66.4 million, respectively. The increase in interest-bearing deposits was driven by a $113.5 million, or 12.5% increase in money market accounts, partially offset by a $74.9 million, or 14.5%, decrease in certificates of deposit. As stated above, average borrowings for the quarter ended March 31, 2022 decreased $431.5 million, or 92.8%, along with a 137 basis point decrease in the average cost of borrowings compared to the same period last year. The decrease in the average cost of borrowings was primarily driven by the early retirement of long-term borrowings reducing the average balance and partially driven by a shift to short-term borrowings at lower rates. The overall average cost of funds decreased 34 basis points to 0.20% for the current quarter compared to 0.54% in the same quarter last year.
Provision (Benefit) for Credit Losses. During the three months ended March 31, 2022, there was a $45,000 net benefit for credit losses compared to a $4.1 million net benefit for the corresponding quarter of fiscal 2021. Net loan recoveries totaled $741,000 for the three months ended DecemberMarch 31, 20172022, compared to net recoveries of $185,000 for the same period last year. Annualized net recoveries as a percentage of average loans were 0.11% for the quarter ended March 31, 2022 compared to 0.03% for the corresponding quarter last year. See "Comparison of Financial Condition - Asset Quality" for additional details.
Noninterest Income. Noninterest income decreased $1.7 million, or 16.2%, to $8.9 million for the quarter ended March 31, 2022 from $10.7 million for the same period in the previous year. This change was primarily due to a $1.9 million, or 39.2%, decrease in gain on sale of loans, partially offset by a $229,000, or 16.0%, increase in operating lease income. The decrease in gain on sale of loans was driven by decreases in loan principal sold across all portfolios. During the quarter ended March 31, 2022, $53.4 million of residential mortgage loans originated for sale were sold with gains of $1.3 million compared to $106.5 million sold and gains of $2.7 million in the corresponding period in the prior year. There were $16.5 million of sales of the guaranteed portion of SBA commercial loans with gains of $1.5 million in the current quarter compared to $20.2 million sold and gains of $1.8 million for the same period last year. The Company sold $25.0 million of HELOCs during the quarter for a gain of $156,000 compared to $43.8 million sold and gains of $301,000 in the corresponding period last year.
Noninterest Expense.Noninterest expense decreased $4.7 million, or 15.4%, for the quarter ended March 31, 2022 as compared to the same period last year, which was primarily driven by a $6.3result of a decrease of $3.7 million in prepayment penalties on long-term borrowings, and a $1.1 million, or 31.6% increase6.7%, decrease in loan interest income, a $364,000, or 38.8% increase in interest income on certificates of depositsalaries and other interest-bearing deposits, and a $110,000, or 28.1% increase in other investment interest income. The additional loan interest income was primarilybenefits expense due to the increasebranch closures and lower mortgage banking incentive pay in the average balance of loans receivable as well as an increase in the average loan yields due to increases in the federal funds rate over the past 12 months. Average loan yields increased 13 basis points to 4.41%period.
Income Taxes. Our income tax expense for the quarterthree months ended DecemberMarch 31, 20172022 increased $114,000, or 5.4%, to $2.2 million from 4.28% in the corresponding quarter from last year. In addition, there was a $146,000, or 18.9% increase in the accretion of purchase discounts on acquired loans to $920,000$2.1 million for the quarterthree months ended DecemberMarch 31, 2017 from $774,000 for the same quarter in fiscal 20172021 primarily as a result of prepayments. Accretable income on acquired loans stems from the discount established at the time these loan portfolios were acquired and the related impact of prepayments on purchased loans. Each quarter, the Company analyzes the cash flow assumptions on the PCI loan pools and, at least semi-annually, the Company updates loss estimates, prepayment speeds and other variables when analyzing cash flows. In addition to this accretion income, which is recognized over the estimated life of the loan pools, if a loan is removed from a pool due to payoff or foreclosure, the unaccreted discount in excess of losses is recognized as an accretion gain in interesthigher taxable income. As a result, income from loan pools can be volatile from quarter to quarter. ForThe effective tax rates for the quarters ended DecemberMarch 31, 20172022 and 2016,2021 were 21.6% and 21.0%, respectively.
Comparison of Results of Operations for the average loan yields included 15Nine Months Ended March 31, 2022 and 16 basis points, respectively, from2021
General.  During the accretion of purchase discounts on acquired loans.
Total interest expensenine months ended March 31, 2022, net income increased $2.0by $6.5 million, or 119.5%28.4%, to $29.6 million from $23.1 million for the quarternine months ended DecemberMarch 31, 20172021, while our diluted earnings per share increased to $1.84 for the nine months ended March 31, 2022 compared to $1.40 in the same period in fiscal 2021. Year-to-date earnings were positively impacted by a $5.2 million, or 6.3%, decrease in noninterest expense and a $4.6 million, or 5.9%, increase in net interest margin.
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Net Interest Income. Net interest income increased by $4.6 million, or 5.9%, to $81.9 million for the nine months ended March 31, 2022, compared to the same period last year. This increase was primarily related to the TriSummit acquisitionInterest and recent deposit gathering initiatives contributing to a $250.9dividend income decreased by $3.9 million, or 16.3% increase4.4%, primarily driven by lower average balances on interest-earning assets. This decrease was offset by a $8.5 million, or 67.7%, decrease in interest expense.
Average interest-earning assets decreased $184.0 million, or 5.3%, to $3.3 billion for the nine months ended March 31, 2022. The biggest reason for the change was a decrease of $143.2 million, or 31.5%, in commercial paper and deposits in other banks, as the Company used excess liquidity to reduce borrowings, where the average balance declined from $471.7 million to $48.9 million. Net interest margin (on a fully taxable-equivalent basis) for the nine months ended March 31, 2022 increased to 3.38% from 3.02% for the same period a year ago as all higher rate long-term borrowings were repaid during the quarter ended June 30, 2021.
Total interest and dividend income decreased $3.9 million, or 4.4%, for the nine months ended March 31, 2022 as compared to the same period last year, which was primarily a result of a $3.1 million, or 3.7%, decrease in loan interest income and a $744,000, or 35.3%, decrease in interest income on commercial paper and deposits in other banks. The lower interest income in each category was driven by the combined effect of a decrease in average balances, as discussed above, and a decline in average loan yields which decreased 13 basis points to 3.90%, and average yields on debt securities available for sale which decreased 13 basis points to 1.42%. Loan interest income for the nine months included the amortization of $975,000 of PPP loan origination fees, a decline of $381,000 when compared to the $1.4 million recognized in the prior period. The overall average yield on interest-earning assets increased three basis points to 3.54% for the nine months compared to 3.51% in the same period last year as a result of a shift to higher yielding assets.
Total interest expense decreased $8.5 million, or 67.7%, for the nine months ended March 31, 2022 compared to the same period last year. The decrease was driven by a $5.0 million, or 99.1%, decrease in interest expense on borrowings as discussed above and a $3.6 million, or 47.0%, decrease in interest expense on deposits. The average balance of total deposits increased by $257.5 million, or 9.3%, with noninterest-bearing deposits and interest-bearing deposits. In addition,deposits increasing $197.5 million and $60.0 million, respectively. The increase in interest-bearing deposits was driven by a $142.4 million, or 16.6%, increase in money market accounts and $46.4 million, or 7.8%, increase in interest-bearing checking accounts, partially offset by a $146.9 million, or 24.7%, decrease in certificates of deposit. As stated above average borrowings consisting primarily of short-term FHLB advances, increased by $130.7for the nine months ended March 31, 2022 decreased $422.8 million, to $677.0 million due to funding for loan growthor 89.6%, along with a 78129 basis point increasedecrease in the average cost of such borrowings during the quarter as compared to the same quarterperiod last year. The increase in average deposits (interest and noninterest-bearing) was due to successful deposit gathering campaigns and the effect of government stimulus in prior periods. The decrease in the average cost of borrowings was primarily driven by the early retirement of long-term borrowings reducing the average balance and partially driven by a shift to short-term borrowings at lower rates. The overall average cost of funds increased 27decreased 39 basis points to 0.58%0.23% for the current quarter asnine months compared to 0.62% in the same quarterperiod last year due primarily to the impact of the recent increases in the federal funds rate on our borrowings.year.
Provision (Benefit) for Loan Losses. During  During the threenine months ended DecemberMarch 31, 2017 and 2016,2022 there was no provisiona $4.0 million net benefit for loancredit losses as improvedcompared to a $6.2 million net benefit for credit quality measures have been sufficient to cover reserves neededlosses for loan growth and changes in the mixcorresponding period of loans.fiscal 2021. Net loan charge-offs totaled $907,000$19,000 for the threenine months ended DecemberMarch 31, 20172022, compared to net recoveriesloan charge-offs of $35,000$452,000 for the same period last year. Net charge-offs as a percentage of average loans increased to 0.15%was 0.00% for the threenine months ended DecemberMarch 31, 2017 from2022 compared to net recoveriescharge-offs of (0.01%)0.02% for the samecorresponding period last fiscal year.
See Comparison"Comparison of Financial Condition - Asset QualityQuality" for additional details.
Noninterest Income.  Noninterest income increased $846,000,$819,000, or 21.5%2.9%, to $4.8$29.5 million for the threenine months ended DecemberMarch 31, 20172022 from $3.9$28.7 million for the same period in the comparative quarterprevious year. This change was due to an $857,000, or 51.0%, increase in loan income and fees, an $813,000, or 19.8% increase in operating lease income, a $394,000, or 5.9% increase in service charges and fees on deposit accounts, partially offset by a $1.0 million, or 8.4%, decrease in gain on sale of 2016.loans. The leading factorsincrease in loan income and fees was primarily a result of $924,000 in additional loan servicing fees as a result of bringing the Company's SBA loan servicing process in-house, which began July 1, 2021. The increase included a $299,000, or 15.9%in operating lease income was primarily driven by increases in loan originations and higher outstanding lease balances during the period, while the increase in service charges on deposit accounts as awas the result of thea $234,000 increase in deposit accounts as well as a $424,000, or 45.3% increase in loaninterchange income fromdriven by higher debit card usage. During the gain on salenine months ended March 31, 2022, $204.1 million of residential mortgage loans and various commercial loan-related fees driven by the new SBA loan lineoriginated for sale were sold with gains of business.
Noninterest Expense. Noninterest expense for the quarter ended December 31, 2017 increased $695,000, or 3.4%, to $21.2$5.6 million compared to $20.5$297.2 million for the quarter ended December 31, 2016. The TriSummit acquisition led to additional noninterest expenses as shown in the cumulative increase of $973,000, or 17.4% in net occupancy expense; telephone, postage,and supplies; core deposit intangible amortization; and


other expenses. Deposit insurance premiums increased $216,000, or 106.4% as the net asset base has increased. These increases in noninterest expense were partially offset by the absence of $27,000 in merger-related expenses, a $140,000, or 30.5% decrease in marketing and advertising expense, and a $408,000, or 56.9% decrease in real estate owned ("REO") related expenses for the quarter ended December 31, 2017 compared to the same period last year. For the three months ended December 31, 2017, there was a $235,000 decrease on writedowns and losses from REO sales compared to the corresponding quarter last year; and a $173,000 decrease in REO expenses as a result of fewer REO properties held.
Income Taxes.  The Company had income tax expense of $19.5 million for the three months ended December 31, 2017, an increase of $18.6 million compared to $893,000 for the three months ended December 31, 2016 as a result of the Tax Act. As previously mentioned, the reduction in the corporate tax rate required the Company to revalue net deferred tax assets, resulting in a $17.7 million adjustment through income tax expense. In addition, our June 30 fiscal year end required the use of a blended rate as prescribed by the Internal Revenue Code. The blended federal rate of 27.5% was effective retroactively to July 1, 2017 and will be used for the entire fiscal year ended June 30, 2018. As a result of this blended rate, income tax expense for the quarter ended December 31, 2017 includes approximately $418,000 in tax benefit from adjusting the federal income tax rate to 27.5% from 34% for the first quarter of the fiscal year. Excluding the effect of the revaluation of net deferred tax assets, the additional income tax expense was due to higher taxable income. For more information on the Tax Act's impact on the Company's income tax expense, see Note 7 of the Notes to Consolidated Financial Statements under Item 1 of this report.
Comparison of Results of Operation for the Six Months Ended December 31, 2017 and 2016
General.  During the six months ended December 31, 2017, we had a net loss of $5.1 million compared to net income of $6.8 million for the six months ended December 31, 2016 as a result of the previously mentioned deferred tax revaluation. Diluted loss per share was $0.28 for the first six months of fiscal year 2018, compared to $0.39 per share in the same period in fiscal 2017. Net income and diluted earnings per share before the change in the federal tax rate, prior year merger-related expenses, certain state income tax expenses,sold and gains from the sale of premises and equipment for the six months ended December 31, 2017 was $12.6 million and $0.68, compared to $7.3 million and $0.43, respectively.
Net Interest Income. Net interest income increased $8.3 million, or 19.9% to $49.8 million for the six months ended December 31, 2017 compared to $41.6 million for the six months ended December 31, 2016. This increase in net interest income was driven by an $11.9 million, or 26.5% increase in interest and dividend income partially offset by a $3.6 million, or 110.0% increase in interest expense.
Average interest-earning assets increased $422.2 million, or 16.7% to $2.9 billion for the six months ended December 31, 2017 compared to $2.5 billion in the same period in fiscal 2017. The $504.7 million, or 26.9% increase in average balance of loans receivable for the six months ended December 31, 2017 was due to the TriSummit acquisition and increased organic loan growth, which was mainly funded by the cumulative decrease of $82.4 million, or 12.8% in average interest-earning deposits with banks, securities available for sale, and other interest-earning assets, an increase in average deposits of $282.0 million, or 15.7% and an increase in average FHLB borrowings of $132.4 million, or 24.5%. Net interest margin (on a fully taxable-equivalent basis) for the six months ended December 31, 2017 increased five basis points to 3.43% from 3.38% for the period last year. For the six months ended December 31, 2017, our leveraging strategy produced an additional $2.0$7.7 million in interest and dividend income at an average yield of 1.62%, while the average cost of the borrowings was 1.20%, resulting in approximately $519,000 in net interest income. Our leveraging strategy produced an additional $1.9 million in interest and dividend income at an average yield of 1.04% during the corresponding period in fiscal 2017, while the average costprior year. There were $43.5 million of sales of the borrowings was 0.43%, resulting in approximately $1.1guaranteed portion of SBA commercial loans with gains of $4.5 million in net interest income. Excluding the effects of the leveraging strategy, the tax equivalent net interest margin would be 3.71% and 3.86% for the sixnine months ended December 31, 2017 and 2016, respectively.
Total interest income increased $11.9 million, or 26.5% for the six months ended December 31, 2017 as compared to $44.6 million sold and gains of $3.7 million for the same period last year. The increase was primarily driven by an $11.0Company sold $97.2 million or 27.4% increase in loan interest income,of HELOCs during the nine months ended March 31, 2022 for a $490,000, or 24.7% increase in certificatesgain of deposit$581,000 compared to $85.9 million sold and other interest-bearing deposits, and a $229,000, or 29.4% increase in other investment income. The additional loan interest income was primarily due to the increasegains of $559,000 in the average balance of loans receivable, which was partially offset by a $908,000 decrease in the accretion of purchase discounts on acquired loans to $1.7 million for the six months ended December 31, 2017 from $2.6 million for the same period in fiscal 2017, as a result of full repayments of several loans with large discounts in the previous year. Overall, average loan yields decreased four basis points to 4.38% for the six months ended December 31, 2017 from 4.42% in the fiscal 2017 period. Excluding the effects of the accretion on purchase discounts on acquired loans, loan yields increased nine basis points to 4.23% for the six months ended December 31, 2017 compared to 4.14% in the same period last year.
Total interest expense increased $3.6 million, or 110.0% for the six months ended December 31, 2017 compared to the samecorresponding period last year. This increase was primarily related toLastly, $11.5 million of indirect auto finance loans were sold out of the increaseheld for investment portfolio during the current period for a gain of $205,000. No such sales occurred in average borrowings and the corresponding 77 basis point increase in the average cost of those borrowings, resulting in additional interest expense of $2.9 million for the six months ended December 31, 2017 as compared to the same period in the prior year. The overall increase in average interest-bearing deposits and the seven basis point increase in cost of funds resulted in an additional $747,000 in interest
Noninterest Expense.  Noninterest expense decreased $5.2 million, or 6.3%, for the sixnine months ended DecemberMarch 31, 2017 compared to the corresponding period last year.
Provision for Loan Losses.  There was no provision for loan losses during the six months ended December 31, 2017 or 2016. Net charge-offs for the six months ended December 31, 2017 and 2016 were $61,000 and $306,000, respectively. Net charge-offs2022 as a percentage of average loans was 0.01% for the six months ended December 31, 2017 compared to 0.03% for the same period last fiscal year.
See Comparison of Financial Condition - Asset Quality for additional details.
Noninterest Income.  Noninterest income increased $1.2 million, or 14.4%, to $9.4 million for the six months ended December 31, 2017 from $8.2 million for the six months ended December 31, 2016. The increase was primarily the result of a $424,000, or 11.2% increase in service charges on deposit accounts; a $549,000, or 28.7% increase in loan income from the gain on sale of mortgage loans and various commercial


loan-related fees; and $414,000, or 40.6% increase in other income. Partially offsetting these increases was a $221,000, or 57.4% decrease in gains from the sale of fixed assets for the six months ended December 31, 2017 compared to the same period last year.
Noninterest Expense. Noninterest expense for the six months ended December 31, 2017 increased $2.6 million, or 6.7%, to $42.3 million compared to $39.6 million for the six months ended December 31, 2016. Salaries and employee benefits increased $1.8 million, or 8.0% primarily as a result of the TriSummit acquisition. The TriSummit acquisition was the leading factor in the $1.5 million, or 13.0% cumulative increase in net occupancy expense; telephone, postage, and supplies; core deposit intangible amortization; and other expenses. Partially offsetting these increases was the absence of $334,000 in merger-related expenses, and a $587,000, or 59.2% decrease in REO-related expenses for the six months ended December 31, 2017 compared to the same period last year, which was primarily a result of a decrease of $3.7 million in prepayment penalties on borrowings, a $1.8 million, or 3.9%, decrease in salaries and benefits expense due to branch closures and lower mortgage banking incentive pay in the period, and a reduction of core deposit amortization expense of $397,000, or 65.6%, partially offset by an increase of $1.1 million, or 117.2%, in marketing and advertising expense driven by reduced media advertising in prior periods as a $42,000 gain onresult of the sale of REO compared to a $469,000 loss on the sale of REO in the corresponding period in the prior year.pandemic as well as current year advertising for newly opened locations.
Income Taxes.For the sixnine months ended DecemberMarch 31, 2017,2022, the Company's income tax expense was $22.0increased $1.9 million, comparedor 31.2%, to $3.3$8.0 million for the six months ended December 31, 2016. The increase wasfrom $6.1 million primarily as a result of the deferred tax revaluation and to a lesser extent, higher taxable income. In addition,The effective tax rates for the Company had a $133,000 and a $490,000 charge during the sixnine months ended DecemberMarch 31, 20172022 and 2016, respectively, related to the decrease in value of our deferred tax assets based on decreases in North Carolina's corporate tax rate.2021 were 21.4% and 21.0%, respectively.
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Liquidity
Management maintains a liquidity position that it believes will adequately provide funding for 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, and cash flows from loan payments, commercial paper, and the securities portfolio.
In addition to these primary sources of funds, management has several secondary sources available to meet potential funding requirements. As of DecemberMarch 31, 2017,2022, the Bank had an available borrowing capacity of $56.3$255.7 million with the FHLB of Atlanta, a $115.4$72.1 million line of credit with the FRB and three linesa line of credit with three unaffiliated banks totaling $60.0$125.0 million. At DecemberMarch 31, 2017,2022, we had $685.0$30.0 million in FHLB advances outstanding, nothing in FRB borrowings outstanding, and nothing outstanding under our other lines of credit. Additionally, the Company classifies itswe classify our securities portfolio as available for sale, providing an additional source of liquidity. Management believes that our securitysecurities portfolio is of high quality and the securities would therefore be marketable. In addition, weWe have historically sold longer term 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 may 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 DecemberMarch 31, 20172022 brokered deposits totaled $11.8$2.3 million, or 0.6%0.1%, of total deposits.deposits, compared to $4.3 million, or 0.2%, of total deposits, at June 30, 2021.
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, federal funds, and federal funds.commercial paper. On a longer term basis, we maintain a strategy of investing in various lending products and investment securities, including mortgage-backed securities and commercial paper.MBS. HomeTrust Bancshares on a stand-alone levelbasis is a separate legal entity from the Bank and must provide for its own liquidity and paypayment of its own operating expenses. The Company's primary source of funds consists of the net proceeds retained from the Conversion. The Company alsoIt has the ability to receive dividends or capital distributions from the Bank, although there are regulatory restrictions on the ability of the Bank to pay dividends. At DecemberMarch 31, 2017, the Company (on an unconsolidated basis)2022, HomeTrust Bancshares on a stand-alone basis had liquid assets of $20.1$8.5 million.
We use our sources of funds primarily to meet our ongoing commitments, pay maturing deposits and fund withdrawals, and to fund loan commitments. At DecemberMarch 31, 2017,2022, the total approved loan commitments and unused lines of credit outstanding amounted to $178.0$386.4 million and $447.8$498.3 million, respectively, as compared to $202.1$401.1 million and $414.4$530.5 million, respectively, as of June 30, 2017.2021. Certificates of deposit scheduled to mature in one year or less at DecemberMarch 31, 2017,2022 totaled $302.2$389.4 million. It is management's policy to manage deposit rates that are competitive with other local financial institutions. Based on this management strategy, we believe that a majority of our maturing deposits will continue to remain with us.
During the first sixnine months of fiscal 2018,2022, cash and cash equivalents increased $11.7$1.1 million, or 13.4%2.1%, from $87.0to $52.1 million as of June 30, 2017 to $98.7March 31, 2022 from $51.0 million as of December 31, 2017. Cash provided by operating and financing activities was $13.0 million and $48.3 million, respectively; while cash used in investing activities was $49.6 million. Primary sources of cash for the six months ended December 31, 2017 included $19.7 million in proceeds from the maturity of securities available for sale, $31.9 million in maturing certificates of deposit in other banks, net of purchases, $10.9 million in principal repayments from mortgage-backed securities, and a $59.8 million increase in deposits. Primary uses of cash during the period included a net increase in commercial paper of $48.4 million, an increase in loans of $65.8 million, and a $11.5 million decrease in borrowings. All sources and uses of cash reflect our cash management strategy to increase our number of higher yielding investments and loans by increasing lower costing borrowings and reducing our holdings in lower yielding investments.June 30, 2021.
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. These transactions involve varying degrees of off-balance sheet credit, interest rate and liquidity risks. These transactions are used primarily to manage customers' requests for funding and take the form of loan commitments and lines of credit. For the sixnine months ended DecemberMarch 31, 2017,2022, we engageddid not engage in noany off-balance sheet transactions likely to have a material effect on our financial condition, results of operations or cash flows.


A summary of our off-balance sheet commitments to extend credit at DecemberMarch 31, 2017,2022, is as follows (in thousands):follows:
(Dollars in thousands)
Undisbursed portion of construction loans$290,532 
Commitments to originate loans95,848 
Unused lines of credit498,315 
Standby letters of credit17,492 
Total loan commitments$902,187 
Undisbursed portion of construction loans$123,262
Commitments to make loans54,720
Unused lines of credit447,787
Unused letters of credit9,927
Total loan commitments$635,696
Capital Resources
At DecemberMarch 31, 2017, stockholder's2022, stockholders' equity totaled $395.4$395.1 million. HomeTrust Bancshares, Inc. is a bank holding company and a financial 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. Our 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.
45

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 December 31, 2017, HomeTrust Bancshares, Inc. and the Bank each exceeded all regulatory capital requirements as of that date.March 31, 2022. Consistent with our goals to operate a sound and profitable organization, our 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 DecemberMarch 31, 20172022 under applicable regulatory requirements.


HomeTrust Bancshares, Inc. and the Bank's actual and required minimum capital amounts and ratiosare as follows (dollars in thousands):follows:
 Regulatory Requirements
(Dollars in thousands)ActualMinimum for Capital
Adequacy Purposes		Minimum to Be
Well Capitalized
AmountRatioAmountRatioAmountRatio
HomeTrust Bancshares, Inc.
March 31, 2022
CET1 Capital (to risk-weighted assets)$376,838 10.83 %$156,538 4.50 %$226,110 6.50 %
Tier I Capital (to total adjusted assets)376,838 10.74 %140,287 4.00 %175,359 5.00 %
Tier I Capital (to risk-weighted assets)376,838 10.83 %208,717 6.00 %278,289 8.00 %
Total Risk-based Capital (to risk-weighted assets)396,908 11.41 %278,289 8.00 %347,861 10.00 %
June 30, 2021      
CET1 Capital (to risk-weighted assets)$375,320 11.26 %$149,943 4.50 %$216,584 6.50 %
Tier I Capital (to total adjusted assets)375,320 10.29 %145,915 4.00 %182,393 5.00 %
Tier I Capital (to risk-weighted assets)375,320 11.26 %199,924 6.00 %266,565 8.00 %
Total Risk-based Capital (to risk-weighted assets)398,408 11.96 %266,565 8.00 %333,206 10.00 %
HomeTrust Bank:      
March 31, 2022      
CET1 Capital (to risk-weighted assets)$368,478 10.59 %$156,536 4.50 %$226,107 6.50 %
Tier I Capital (to total adjusted assets)368,478 10.51 %140,244 4.00 %175,305 5.00 %
Tier I Capital (to risk-weighted assets)368,478 10.59 %208,714 6.00 %278,286 8.00 %
Total Risk-based Capital (to risk-weighted assets)388,548 11.17 %278,286 8.00 %347,857 10.00 %
June 30, 2021      
CET1 Capital (to risk-weighted assets)$357,767 10.74 %$149,936 4.50 %$216,575 6.50 %
Tier I Capital (to total adjusted assets)357,767 9.81 %145,933 4.00 %182,417 5.00 %
Tier I Capital (to risk-weighted assets)357,767 10.74 %199,915 6.00 %266,553 8.00 %
Total Risk-based Capital (to risk-weighted assets)380,855 11.43 %266,553 8.00 %333,192 10.00 %
   Regulatory Requirements
 Actual 
Minimum for Capital
Adequacy Purposes
 
Minimum to Be
Well Capitalized
 Amount Ratio Amount Ratio Amount Ratio
HomeTrust Bancshares, Inc.           
            
As of December 31, 2017           
Common Equity Tier I Capital to Risk-Weighted Assets$354,765
 13.02% $122,649
 4.50% $177,160
 6.50%
Tier I Capital (to Total Adjusted Assets)$354,765
 11.06% $128,323
 4.00% $160,404
 5.00%
Tier I Capital (to Risk-weighted Assets)$354,765
 13.02% $163,533
 6.00% $218,043
 8.00%
Total Risk-based Capital (to Risk-weighted Assets)$376,310
 13.81% $218,043
 8.00% $272,554
 10.00%
            
As of June 30, 2017 
  
  
  
  
  
Common Equity Tier I Capital to Risk-Weighted Assets$342,664
 13.07% $118,024
 4.50% $170,478
 6.50%
Tier I Capital (to Total Adjusted Assets)$342,664
 11.13% $123,149
 4.00% $153,936
 5.00%
Tier I Capital (to Risk-weighted Assets)$342,664
 13.07% $157,365
 6.00% $209,820
 8.00%
Total Risk-based Capital (to Risk-weighted Assets)$364,269
 13.89% $209,820
 8.00% $262,275
 10.00%
            
HomeTrust Bank: 
  
  
  
  
  
            
As of December 31, 2017 
  
  
  
  
  
Common Equity Tier I Capital to Risk-Weighted Assets$318,394
 11.73% $122,157
 4.50% $176,449
 6.50%
Tier I Capital (to Total Adjusted Assets)$318,394
 9.95% $128,038
 4.00% $160,047
 5.00%
Tier I Capital (to Risk-weighted Assets)$318,394
 11.73% $162,876
 6.00% $217,168
 8.00%
Total Risk-based Capital (to Risk-weighted Assets)$339,816
 12.52% $217,168
 8.00% $271,461
 10.00%
            
As of June 30, 2017 
  
  
  
  
  
Common Equity Tier I Capital to Risk-Weighted Assets$305,216
 11.68% $117,560
 4.50% $169,809
 6.50%
Tier I Capital (to Total Adjusted Assets)$305,216
 9.97% $122,453
 4.00% $153,066
 5.00%
Tier I Capital (to Risk-weighted Assets)$305,216
 11.68% $156,747
 6.00% $208,996
 8.00%
Total Risk-based Capital (to Risk-weighted Assets)$326,635
 12.50% $208,996
 8.00% $261,245
 10.00%
In addition to the minimum common equity Tier 1 ("CET1"),CET1, Tier 1 and total risk-based capital ratios, both HomeTrust Bancshares, Inc. and the Bank now have to maintain a capital conservation buffer consisting of additional CET1 capital of more than 2.5% 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. This new capitalAt March 31, 2022, the conservation buffer requirement has phased in starting in January 2016 at 0.625% of risk-weighted assetswas 3.41% and will increase each year until fully implemented to an amount equal to 2.5% of risk-weighted assets in January 2019. At December 31, 2017,3.17%for HomeTrust Bancshares, Inc. and the Bank’s CET1 capital exceeded the required capital conservation buffer of 1.25%.Bank, respectively.
Impact of Inflation
The effects of price changes and inflation can vary substantially for most financial institutions. While management believes that inflation affects the growth of total assets, it believes that it is difficult to assess the overall impact. Management believes this to be the case due to the fact that generally neither the timing nor the magnitude of the inflationary changes in the consumer price index ("CPI")CPI coincides with changes in interest rates. The price of one or more of the components of the CPI may fluctuate considerably and thereby influence the overall CPI without having a corresponding effect on interest rates or upon the cost of those goods and services normally purchased by the Company.us. In years of high inflation and
46

high interest rates, intermediate and long-term interest rates tend to increase, thereby adversely impacting the market values of investment securities, mortgage loans and other long-term fixed rate loans. In addition, higher short-term interest rates caused by inflation tend to increase the cost of funds. In other years, the opposite may occur.


Item 3.Quantitative and Qualitative Disclosure About Market Risk
There has not been any material change in the market risk disclosures contained in our 20172021 Form 10-K.
Item 4.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 DecemberMarch 31, 2017,2022, was carried out under the supervision and with the participation of the Company's Chief Executive Officer, Chief Financial Officerand 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 DecemberMarch 31, 2017,2022, 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. In addition, there have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Act) that occurred during the quarter ended December 31, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The Company does not expect that its disclosure controls and procedures and internal control over financial reporting will prevent all errorerrors 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.
PART II.  OTHER INFORMATION
Item 1.Legal Proceedings
The "Litigation" section of Note 10"Note 9 - Commitments and Contingencies" to the Consolidated Financial Statements included in Part I, Item 1 is incorporated herein by reference.
Item 1A.Risk Factors
Item 1A.    Risk Factors
There have been no material changes in the Risk Factors previously disclosed in Item 1A of the Company's 20172021 Form 10-K.
Item 2.Unregistered Sales of Equity Securities and use of Proceeds
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 December 31, 2017:Not applicable
Period
Total Number
Of Shares Purchased
Average
Price Paid per Share
Total Number Of Shares Purchased as Part of Publicly Announced Plans
Maximum
Number of
Shares that May
Yet Be Purchased Under Publicly Announced Plans
October 1 - October 31, 2017—
$—
—
443,155
November 1 - November 30, 2017—
—
—
443,155
December 1 - December 31, 2017—
—
—
443,155
Total—
$—
—
443,155
Total Number
Of Shares Purchased		Average
Price Paid per Share		Total Number Of Shares Purchased as Part of Publicly Announced PlansMaximum
Number of
Shares that May
Yet Be Purchased Under Publicly Announced Plans
January 1 - January 31, 202257,394 $31.46 57,394 210,372 
February 1 - February 28, 2022210,372 31.07 210,372 806,000 
March 1 - March 31, 2022152,165 30.07 152,165 653,835 
Total419,931 $30.76 419,931 653,835 
On December 15, 2015April 2, 2020, the Company announced that itsCompany's Board of Directors had authorized the repurchase of up to 922,855851,004 shares of the Company's common stock, representing 5% of its outstanding shares at the time of the announcement. This repurchase plan was completed on July 26, 2021. On July 28, 2021, 825,941 shares of common stock were authorized for repurchase representing 5% of the Company's outstanding shares at the time of the announcement. This repurchase plan was completed on February 28, 2022. Also on February 28, 2022, an additional 806,000 shares of
47

common stock were authorized for repurchase representing approximately 5% of the Company's outstanding shares at the time of the announcement. For the nine months ended March 31, 2022, 1,095,763 shares were repurchased at an average price of $29.50 per share. 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. As of December 31, 2017, 479,700 of the shares approved on December 15, 2015 had been purchased at an average price of $18.00.


Item 3.Defaults Upon Senior Securities
Item 3.     Defaults Upon Senior Securities
Nothing to report.
Item 4.Mine Safety Disclosures
Item 4.     Mine Safety Disclosures
Not applicable.
Item 5.Other Information
Item 5.     Other Information
Nothing to report.
Item 6.Exhibits
See Exhibit Index.


Item 6.     Exhibits
Regulation S-K Exhibit NumberDocumentReference to Prior Filing or Exhibit Number Attached Hereto
  
3.1(a)
3.2(b)
3.3(f)
4.1(b)
4.2(d)
4.3

(e)
10.1(p)
10.2(g)
10.3(g)
10.3A(h)
10.3B(i)
10.3C(c)
10.4(g)
10.5(a)
10.610.6
10.7(q)
10.7A(a)
10.7B(a)
10.7C(a)
10.7D(a)
10.7E(a)
10.7F(a)
48

10.7G(a)
10.7H(a)
10.7I(j)
10.8(a)
10.8A(a)
10.8B(a)
10.8C(a)
10.8D(a)
10.8E(a)
10.8F(a)
10.8G(a)
10.9(a)
10.9A10.9A
10.9B10.9B
10.10(a)
10.10A10.10A
10.11(a)
10.11A10.11A
10.12(k)
10.13(l)
10.14(l)
10.15(l)
10.16(l)
10.17(l)
10.18(f)
10.19(m)
10.20(n)
10.21(g)
10.22(o)
31.131.1
31.231.2
32.032.0
101The following materials from HomeTrust Bancshares' Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, 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 Registration Statement on Form S-1 (File No. 333-178817) filed on December 29, 2011.
(b)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on September 25, 2012 (File No. 001-35593).
(c)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on July 26, 2021 (File No. 001-35593).
(d)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on August 31, 2015 (File No. 001-35593).
(e)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on August 21, 2018 (File No. 001-35593).
(f)Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 (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 September 25, 2018 (File No. 001-35593.
(i)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on October 28, 2020 (File No. 001-35593).
49

(j)Filed as an exhibit to Amendment No. One to HomeTrust Bancshares's Registration Statement on Form S-1 (File No. 333-178817) filed on March 9, 2012.
(k)Attached as Appendix A to HomeTrust Bancshares's definitive proxy statement filed on December 5, 2012 (File No. 001-35593).
(l)Filed as an exhibit to HomeTrust Bancshares's Registration Statement on Form S-8 (File No. 333-186666) filed on February 13, 2013.
(m)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).
(n)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).
(o)Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2018 (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, 2021 (File No. 001-35593).
(q)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on February 15, 2022 (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: May 9, 2022HomeTrust Bancshares, Inc.
By:
Date: February 9, 2018By:/s/ Dana L. Stonestreet
Dana L. Stonestreet
Chairman President and CEO
(Duly Authorized Officer)
Date: February 9, 2018By:/s/ Tony J. VunCannon
Tony J. VunCannon
Executive Vice President, CFO, and Treasurer
(Principal Financial and Accounting Officer)


EXHIBIT INDEX
Regulation S-K Exhibit NumberDate: May 9, 2022DocumentBy:Reference to Prior Filing or Exhibit Number Attached Hereto
2.1
Agreement and Plan of Merger, dated as of September 20, 2016, by and between HomeTrust Bancshares, Inc. and TriSummit Bancorp, Inc.

(a)
3.1
Charter of HomeTrust Bancshares, Inc.
(b)
3.2
Articles Supplementary to the Charter of HomeTrust Bancshares, Inc. for HomeTrust Bancshares, Inc.'s Junior Participating Preferred Stock, Series A
(c)
3.3
Bylaws of HomeTrust Bancshares, Inc.
(d)
3.4
Amended and Restated Bylaws of HomeTrust Bancshares, Inc., dated as of January 29, 2018
(q)
4.1
Tax Benefits Preservation Plan, dated as of September 25, 2012, between HomeTrust Bancshares, Inc. and Registrar and Transfer Company, as Rights Agent
(e)
4.2
Amendment No. 1, dated as of August 31, 2015, to Tax Benefit Preservation Plan, dated as of September 25, 2012, between HomeTrust Bancshares, Inc. and Computershare Trust Company, N.A., as successor rights agent to Registrar and Transfer Company
(m)
10.1
HomeTrust Bancshares, Inc. Strategic Operating Committee Incentive Plan
(p)
10.2
Amended and Restated Employment Agreement entered into between HomeTrust Bancshares, Inc. and Dana L. Stonestreet
(e)
10.3
Employment Agreement entered into between HomeTrust Bancshares, Inc. and each of/s/ Tony J. VunCannon and Howard L. Sellinger
(b)
10.4
Employment Agreement entered into between HomeTrust Bancshares, Inc. and C. Hunter Westbrook
(f)
10.5
Employment Agreement between HomeTrust Bank and Sidney A. Biesecker
(b)
10.6
Employment Agreement between HomeTrust Bank and Stan Allen
(b)
10.7
HomeTrust Bank Executive Supplemental Retirement Income Master Agreement ("SERP")
(b)
10.7A
SERP Joinder Agreement for F. Edward Broadwell, Jr.
(b)
10.7B
SERP Joinder Agreement for Dana L. Stonestreet
(b)
10.7C
SERP Joinder Agreement for Tony J. VunCannon
(b)
10.7D
SERP Joinder Agreement for Howard L. Sellinger
(b)Executive Vice President, CFO, Corporate Secretary and Treasurer
10.7E
SERP Joinder Agreement for Stan Allen
(b)(Principal Financial and Accounting Officer)
10.7F
SERP Joinder Agreement for Sidney A. Biesecker
(b)
10.7G
SERP Joinder Agreement for Peggy C. Melville
(b)
10.7H
SERP Joinder Agreement for William T. Flynt
(b)
10.7I
Amended and Restated Supplemental Income Agreement between HomeTrust Bank, as successor to Industrial Federal Savings Bank, and Sidney Biesecker
(g)
10.8
HomeTrust Bank Director Emeritus Plan ("Director Emeritus Plan")
(b)
10.8A
Director Emeritus Plan Joinder Agreement for William T. Flynt
(b)
10.8B
Director Emeritus Plan Joinder Agreement for J. Steven Goforth
(b)
10.8C
Director Emeritus Plan Joinder Agreement for Craig C. Koontz
(b)
10.8D
Director Emeritus Plan Joinder Agreement for Larry S. McDevitt
(b)
10.8E
Director Emeritus Plan Joinder Agreement for F.K. McFarland, III
(b)
10.8F
Director Emeritus Plan Joinder Agreement for Peggy C. Melville
(b)
10.8G
Director Emeritus Plan Joinder Agreement for Robert E. Shepherd, Sr.
(b)
10.9
HomeTrust Bank Defined Contribution Executive Medical Care Plan
(b)
10.10
HomeTrust Bank 2005 Deferred Compensation Plan
(b)
10.11
HomeTrust Bank Pre-2005 Deferred Compensation Plan
(b)
10.12
HomeTrust Bancshares, Inc. Strategic Operating Committee Incentive Plan
(n)
10.13
HomeTrust Bancshares, Inc. 2013 Omnibus Incentive Plan ("Omnibus Incentive Plan")
(h)
10.14
Form of Incentive Stock Option Award Agreement under Omnibus Incentive Plan
(i)


10.15
Form of Non-Qualified Stock Option Award Agreement under Omnibus Incentive Plan
(i)
10.16
Form of Stock Appreciation Right Award Agreement under Omnibus Incentive Plan
(i)
10.17
Form of Restricted Stock Award Agreement under Omnibus Incentive Plan
(i)
10.18
Form of Restricted Stock Unit Award Agreement under Omnibus Incentive Plan
(i)
10.19
Fully Restated Employment Agreement between HomeTrust Bank and Anderson L. Smith
(j)
10.20
Amended and Restated Jefferson Federal Bank Supplemental Executive Retirement Plan
(k)
10.21
Money Purchase Deferred Compensation Agreement, dated as of September 1, 1987, between HomeTrust Bank and F. Edward Broadwell, Jr.
(l)
10.22
Retirement Payment Agreement, dated as of September 1, 1987, between HomeTrust Bank and F. Edward Broadwell, Jr., as amended
(l)
10.23
Retirement Payment Agreement, dated as of September 1, 1987, between HomeTrust Bank and Larry S. McDevitt, as amended
(l)
10.24
Retirement Payment Agreement, dated as of September 1, 1987, between HomeTrust Bank and Peggy C. Melville, as amended
(l)
10.25
Retirement Payment Agreement, dated as of August 1, 1988, between HomeTrust Bank and Robert E. Shepherd, Sr., as amended
(l)
10.26
Retirement Payment Agreement, dated as of May 1, 1991, between HomeTrust Bank and William T. Flynt, as amended
(l)
10.27
Offer Letter between HomeTrust Bank and Keith J. Houghton
(n)
10.28
Form of Relocation Repayment Agreement between HomeTrust Bank and Keith J. Houghton
(n)
10.29
Form of Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and each of Keith J. Houghton and R. Parrish Little
(o)
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
Certificate of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.0
101The following materials from HomeTrust Bancshares' Quarterly Report on Form 10-Q for the quarter ended December 31, 2017, 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)Attached as Appendix A to the proxy statement/prospectus filed by HomeTrust Bancshares on November 2, 2016 pursuant to Rule 424(b) of the Securities Act of 1933.
(b)Filed as an exhibit to HomeTrust Bancshares's Registration Statement on Form S-1 (File No. 333-178817) filed on December 29, 2011.
(c)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on September 25, 2012 (File No. 001-35593).
(d)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on January 29, 2014 (File No. 001-35593).
(e)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on November 27, 2013 (File No. 001-35593).
(f)Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2012 (File No. 001-35593).
(g)Filed as an exhibit to Amendment No. One to HomeTrust Bancshares's Registration Statement on Form S-1 (File No. 333-178817) filed on March 9, 2012.
(h)Attached as Appendix A to HomeTrust Bancshares's definitive proxy statement filed on December 5, 2012 (File No. 001-35593).
(i)Filed as an exhibit to HomeTrust Bancshares's Registration Statement on Form S-8 (File No. 333-186666) filed on February 13, 2013.
(j)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on June 3, 2014 (File No. 001-35593).
(k)Filed as an exhibit to Jefferson Bancshares, Inc.'s Quarterly Report on Form 10-Q for the quarter ended December 31, 2008 (File No. 000-50347).
(l)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).
(m)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on August 31, 2015 (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, 2015 (File No. 001-35593).
(o)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on January 29, 2016 (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, 2017 (File No. 001-35593).
(q)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on January 30, 2018 (File No. 001-35593)



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