0001538263htbi:MoneyMarketAccountsMemberus-gaap:FairValueInputsLevel1Member2022-06-30



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, 20172023


[  ]☐            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 17,370,063shares of common stock, par value of $.01$0.01 per share, issued and outstanding as of February 6, 2018.

May 4, 2023.



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

Number
Item 1. 
23
34
45
56
68
810
Item 2. 
3436
Item 3. 
5149
Item 4. 
5149
Item 1. 
5149
Item 1A. 
5149
Item 2. 
5149
Item 3. 
5249
Item 4. 
5250
Item 5 
5250
Item 6. 
5250
5352
EXHIBIT INDEX
54



1

Glossary of Defined Terms
The following terms may be used throughout this Form 10-Q, including the Notes to Consolidated Financial Statements in Item 1 and Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this Form 10-Q.
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
EPSEarnings Per Share
ESOPEmployee Stock Ownership Plan
FASBFinancial Accounting Standards Board
FDICFederal Deposit Insurance Corporation
Federal ReserveBoard of Governors of the Federal Reserve System
FHLB or FHLB of AtlantaFederal Home Loan Bank
FRBFederal Reserve Bank of Richmond
GSEGovernment-Sponsored Enterprises
HELOCHome Equity Line of Credit
IRLCInterest Rate Lock Commitments
LIBORLondon Interbank Offered Rate
MBSMortgage-Backed Securities
NCCOBNorth Carolina Office of the Commissioner of Banks
PCDPurchased Financial Assets with Credit Deterioration
PPPPaycheck Protection Program
QuantumQuantum Capital Corp. and its wholly owned subsidiary, Quantum National Bank
REOReal Estate Owned
ROAReturn on Assets
ROEReturn on Equity
ROURight of Use
RSURestricted Stock Unit
SBAU.S. Small Business Administration
SBICSmall Business Investment Companies
SECSecurities and Exchange Commission
TBATo-be-announced
TDRTroubled Debt Restructuring
US GAAPGenerally Accepted Accounting Principles in the United States

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)  
 December 31, 2017 June 30,
2017
Assets   
Cash$46,743
 $41,982
Interest-bearing deposits51,922
 45,003
Cash and cash equivalents98,665
 86,985
Commercial paper199,722
 149,863
Certificates of deposit in other banks100,349
 132,274
Securities available for sale, at fair value167,669
 199,667
Other investments, at cost38,877
 39,355
Loans held for sale7,072
 5,607
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
Premises and equipment, net62,435
 63,648
Accrued interest receivable9,371
 8,758
Real estate owned ("REO")4,818
 6,318
Deferred income taxes36,526
 57,387
Bank owned life insurance ("BOLI")86,984
 85,981
Goodwill25,638
 25,638
Core deposit intangibles5,773
 7,173
Other assets9,765
 7,560
Total Assets$3,250,588
 $3,206,533
Liabilities and Stockholders' Equity 
  
Liabilities 
  
Deposits$2,108,208
 $2,048,451
Borrowings685,000
 696,500
Capital lease obligations1,925
 1,937
Other liabilities60,094
 61,998
Total liabilities2,855,227
 2,808,886
Stockholders' Equity 
  
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued or
outstanding		—
 —
Common stock, $0.01 par value, 60,000,000 shares authorized, 18,967,175 shares
    issued and outstanding at December 31, 2017; 18,967,875 at June 30, 2017		190
 190
Additional paid in capital215,928
 213,459
Retained earnings187,241
 191,660
Unearned Employee Stock Ownership Plan ("ESOP") shares(7,670) (7,935)
Accumulated other comprehensive income (loss)(328) 273
Total stockholders' equity395,361
 397,647
Total Liabilities and Stockholders' Equity$3,250,588
 $3,206,533
(Unaudited)
March 31, 2023June 30, 2022
Assets
Cash$18,262 $20,910 
Interest-bearing deposits296,151 84,209 
Cash and cash equivalents314,413 105,119 
Commercial paper, net— 194,427 
Certificates of deposit in other banks33,102 23,551 
Debt securities available for sale, at fair value (amortized cost of $158,658 and $130,099 at March 31, 2023 and June 30, 2022, respectively)154,718 126,978 
FHLB and FRB stock19,125 9,326 
SBIC investments, at cost13,620 12,758 
Loans held for sale, at fair value1,209 — 
Loans held for sale, at the lower of cost or fair value89,172 79,307 
Total loans, net of deferred loan fees and costs3,649,333 2,769,295 
Allowance for credit losses – loans(47,503)(34,690)
Loans, net3,601,830 2,734,605 
Premises and equipment, net74,107 69,094 
Accrued interest receivable13,813 8,573 
Deferred income taxes, net10,894 11,487 
BOLI105,952 95,281 
Goodwill33,682 25,638 
Core deposit intangibles, net11,637 93 
Other assets49,596 52,967 
Total assets$4,526,870 $3,549,204 
Liabilities and stockholders' equity  
Liabilities  
Deposits$3,675,599 $3,099,761 
Junior subordinated debt9,945 — 
Borrowings320,263 — 
Other liabilities62,821 60,598 
Total liabilities4,068,628 3,160,359 
Commitments and contingencies – See Note 12
Stockholders' equity  
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued or outstanding— — 
Common stock, $0.01 par value, 60,000,000 shares authorized, 17,370,063 shares issued and outstanding at March 31, 2023; 15,591,466 at June 30, 2022174 156 
Additional paid in capital170,670 126,106 
Retained earnings295,325 270,276 
Unearned ESOP shares(4,893)(5,290)
Accumulated other comprehensive loss(3,034)(2,403)
Total stockholders' equity458,242 388,845 
Total liabilities and stockholders' equity$4,526,870 $3,549,204 
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 31,2023202220232022
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$47,908 $26,616 $120,148 $81,440 
Securities available for sale904
 862
 1,875
 1,742
Certificates of deposit and other interest-bearing deposits1,303
 939
 2,472
 1,982
Other investments501
 391
 1,007
 778
Commercial paperCommercial paper— 411 1,300 869 
Debt securities available for saleDebt securities available for sale1,183 384 3,012 1,319 
Other investments and interest-bearing depositsOther investments and interest-bearing deposits1,575 784 3,535 2,360 
Total interest and dividend income28,848
 22,063
 56,744
 44,854
Total interest and dividend income50,666 28,195 127,995 85,988 
Interest Expense 
  
  
  
Interest expenseInterest expense   
Deposits1,541
 1,041
 2,887
 2,140
Deposits7,864 1,151 12,862 4,028 
Junior subordinated debtJunior subordinated debt109 — 109 — 
Borrowings2,077
 607
 4,046
 1,162
Borrowings1,239 4 1,505 45 
Total interest expense3,618
 1,648
 6,933
 3,302
Total interest expense9,212 1,155 14,476 4,073 
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 income41,454 27,040 113,519 81,915 
Provision (benefit) for credit lossesProvision (benefit) for credit losses8,760 (45)14,987 (4,005)
Net interest income after provision (benefit) for credit lossesNet interest income after provision (benefit) for credit losses32,694 27,085 98,532 85,920 
Noninterest incomeNoninterest income   
Service charges and fees on deposit accounts2,185
 1,886
 4,224
 3,800
Service charges and fees on deposit accounts2,256 2,216 7,117 7,101 
Loan income and fees1,361
 937
 2,463
 1,914
Loan income and fees562 752 1,779 2,536 
Gain on sale of loans held for saleGain on sale of loans held for sale1,811 2,969 4,499 10,927 
BOLI income518
 503
 1,080
 1,065
BOLI income522 492 1,543 1,500 
Gain from sale of premises and equipment—
 —
 164
 385
Other, net723
 615
 1,433
 1,019
Operating lease incomeOperating lease income1,505 1,661 4,246 4,920 
Gain (loss) on sale of premises and equipmentGain (loss) on sale of premises and equipment900 — 2,015 (87)
OtherOther754 857 2,963 2,496 
Total noninterest income4,787
 3,941
 9,364
 8,183
Total noninterest income8,310 8,947 24,162 29,393 
Noninterest Expense 
  
  
  
Noninterest expenseNoninterest expense   
Salaries and employee benefits11,973
 11,839
 24,325
 22,530
Salaries and employee benefits16,246 14,730 45,545 44,882 
Net occupancy expense2,473
 2,015
 4,822
 4,076
Occupancy expense, netOccupancy expense, net2,467 2,483 7,291 7,201 
Computer servicesComputer services2,911 2,686 8,470 7,817 
Telephone, postage, and suppliesTelephone, postage, and supplies613 623 1,791 1,946 
Marketing and advertising319
 459
 772
 889
Marketing and advertising372 573 1,443 2,110 
Telephone, postage, and supplies748
 574
 1,433
 1,187
Deposit insurance premiums419
 203
 833
 481
Deposit insurance premiums612 412 1,700 1,280 
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
Core deposit intangible amortization681
 618
 1,400
 1,268
Core deposit intangible amortization606 50 666 208 
Merger-related expenses—
 27
 —
 334
Merger-related expenses4,741 — 5,465 — 
Other2,658
 2,380
 5,127
 4,780
Other4,265 4,242 12,627 12,194 
Total noninterest expense21,175
 20,480
 42,256
 39,611
Total noninterest expense32,833 25,799 84,998 77,638 
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 taxes8,171 10,233 37,696 37,675 
Income tax expenseIncome tax expense1,437 2,210 8,105 8,047 
Net incomeNet income$6,734 $8,023 $29,591 $29,628 
Per share dataPer share data   
Net income per common shareNet income per common share    
Basic$(0.59) $0.17
 $(0.28) $0.39
Basic$0.40 $0.51 $1.91 $1.87 
Diluted$(0.59) $0.17
 $(0.28) $0.39
Diluted$0.40 $0.51 $1.90 $1.84 
Average shares outstanding: 
  
  
  
Average shares outstandingAverage shares outstanding    
Basic17,975,883
 16,900,387
 17,971,439
 16,893,775
Basic16,021,994 15,523,813 15,341,222 15,666,093 
Diluted17,975,883
 17,444,144
 17,971,439
 17,391,404
Diluted16,077,116 15,793,012 15,449,060 15,997,377 
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,
 2023202220232022
Net income$6,734 $8,023 $29,591 $29,628 
Other comprehensive income (loss)   
  Unrealized holding gains (losses) on debt securities available for sale    
Gains (losses) arising during the period908 (2,595)(819)(3,781)
Deferred income tax benefit (expense)(209)598 188 870 
Total other comprehensive income (loss)699 (1,997)(631)(2,911)
Comprehensive income$7,433 $6,026 $28,960 $26,717 
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, 2023
Common StockAdditional
Paid In
Capital		Retained
Earnings		Unearned
ESOP
Shares		Accumulated
Other
Comprehensive
Loss		Total
Stockholders'
Equity
SharesAmount
Balance at December 31, 202215,673,595 $157 $128,486 $290,271 $(5,026)$(3,733)$410,155 
Net income— — — 6,734 — — 6,734 
Cash dividends declared on common stock, $0.10/ common share— — — (1,680)— — (1,680)
Retired stock(9,066)— (249)— — — (249)
Granted restricted stock53,339 — — — — — — 
Stock issued for Quantum merger1,374,646 14 37,720 — — — 37,734 
Exercised stock options277,549 3 4,063 — — — 4,066 
Share-based compensation expense— — 434 — — — 434 
ESOP compensation expense— — 216 — 133 — 349 
Other comprehensive income— — — — — 699 699 
Balance at March 31, 202317,370,063 $174 $170,670 $295,325 $(4,893)$(3,034)$458,242 
(Unaudited)
Three Months Ended March 31, 2022
Common StockAdditional
Paid In
Capital		Retained
Earnings		Unearned
ESOP
Shares		Accumulated
Other
Comprehensive
Loss		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 











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 (Continued)
(Dollars in thousands)
(Unaudited)
Nine Months Ended March 31, 2023
Common StockAdditional
Paid In
Capital		Retained
Earnings		Unearned
ESOP
Shares		Accumulated
Other
Comprehensive
Loss		Total
Stockholders'
Equity
SharesAmount
Balance at June 30, 202215,591,466 $156 $126,106 $270,276 $(5,290)$(2,403)$388,845 
Net income— — — 29,591 — — 29,591 
Cash dividends declared on common stock, $0.29/common share— — — (4,542)— — (4,542)
Forfeited restricted stock(6,200)— — — — — — 
Retired stock(13,145)— (344)— — — (344)
Granted restricted stock57,839 — — — — — — 
Stock issued for RSUs13,861 — — — — — — 
Stock issued for Quantum merger1,374,646 14 37,720 — — — 37,734 
Exercised stock options351,596 4 5,127 — — — 5,131 
Share-based compensation expense— — 1,465 — — — 1,465 
ESOP compensation expense— — 596 — 397 — 993 
Other comprehensive loss— — — — — (631)(631)
Balance at March 31, 202317,370,063 $174 $170,670 $295,325 $(4,893)$(3,034)$458,242 
(Unaudited)
Nine Months Ended March 31, 2022
Common StockAdditional
Paid In
Capital		Retained
Earnings		Unearned
ESOP
Shares		Accumulated
Other
Comprehensive
Loss		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 
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,
 20232022
Operating activities
Net income$29,591 $29,628 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (benefit) for credit losses14,987 (4,005)
Depreciation and amortization of premises and equipment and equipment for operating leases6,669 7,107 
Deferred income tax (benefit) expense(559)5,277 
Net accretion of purchase accounting adjustments on loans(725)(1,283)
Net amortization and accretion3,213 1,582 
Loss (gain) from sale of premises and equipment(2,015)87 
Gain on sale of REO78 7 
Loss incurred at the end of operating leases172 17 
BOLI income(1,543)(1,500)
Gain on sale of loans held for sale(4,499)(10,927)
Origination of loans held for sale(196,695)(387,252)
Proceeds from sale of loans held for sale178,007 402,161 
New deferred loan origination fees, net(3,039)(640)
Decrease in accrued interest receivable and other assets(1,537)(3,612)
ESOP compensation expense993 1,164 
Share-based compensation expense1,465 1,407 
Decrease in other liabilities(3,656)(971)
Net cash provided by operating activities20,907 38,247 
Investing activities  
Purchases of debt securities available for sale(66,994)(9,762)
Proceeds from maturities, calls and paydowns of debt securities available for sale49,221 55,600 
Purchases of commercial paper(210,292)(463,446)
Proceeds from maturities and calls of commercial paper406,269 340,999 
Purchases of CDs in other banks(15,676)(996)
Proceeds from maturities of CDs in other banks6,125 12,993 
Net (purchases) redemptions of FHLB and FRB stock(8,674)3,087 
Net capital contributions in SBIC investments, at cost(862)(2,417)
Net (increase) decrease in loans(305,363)39,394 
Purchase of BOLI(62)(132)
Purchase of equipment for operating leases(5,337)(2,888)
Sale of equipment for operating leases4,120 5,981 
Purchase of premises and equipment(3,240)(6,043)
Proceeds from sale of premises and equipment and assets held for sale7,534 2,322 
Proceeds from sale of REO1 181 
Net cash received in merger30,601 — 
Net cash used in investing activities(112,629)(25,127)






8

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows (Continued)
(Dollars in thousands)
(Unaudited)
Nine Months Ended March 31,
 20232022
Financing activities  
Net increase in deposits5,236 103,616 
Net increase in revolving lines of credit20,263 — 
Net increase (decrease) in short-term borrowings300,000 (115,000)
Proceeds from long-term borrowings— 60,000 
Repayment of long-term borrowings(24,728)(30,000)
Common stock repurchased— (32,318)
Cash dividends paid(4,542)(4,094)
Retired stock(344)(345)
Exercised stock options5,131 6,081 
Net cash provided by (used in) financing activities301,016 (12,060)
Net increase in cash and cash equivalents209,294 1,060 
Cash and cash equivalents at beginning of period105,119 50,990 
Cash and cash equivalents at end of period$314,413 $52,050 
Supplemental disclosures
Cash paid during the period for:
Interest$12,854 $4,080 
Income taxes5,931 269 
Noncash transactions  
Unrealized loss in value of debt securities available for sale, net of income taxes$(631)$(2,911)
Transfer of loans held for sale to loans held for investment14,298 19,032 
Transfer of loans held for investment to loans held for sale— 12,827 
ROU asset and lease liabilities for operating lease accounting2,108 1,186 
Transfer of premises and equipment to assets held for sale (included in other assets)— 3,229 
Business combinations
Fair value of assets acquired$664,840 $— 
Fair value of liabilities assumed609,938 — 
Net assets acquired$54,902 $— 
The accompanying notes are an integral part of these consolidated financial statements.

9

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Dollars in thousands)
 (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
The accompanying notes are an integral part of these consolidated financial statements.


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

1.Summary of Significant Accounting Policies
1.    Summary of Significant Accounting Policies
The consolidated unaudited financial statements presented in this report include the accounts of HomeTrust Bancshares, Inc., a Maryland corporation ("HomeTrust"(“HomeTrust”), and its wholly-owned subsidiary, HomeTrust Bank (the "Bank"“Bank”). As used throughout this report, the term the "Company"“Company” refers to HomeTrust and the Bank, its consolidated subsidiary, unless the context otherwise requires. HomeTrust is a bank holding company primarily engaged in the business of planning, directing, and coordinating the business activities of the Bank. The Bank is a North Carolina state chartered bank and provides a wide range of retail and commercial banking products within its geographic footprint, which includes: North Carolina (the Asheville metropolitan area, Greensboro/"Piedmont" region, Charlotte, and Raleigh/Cary), Upstate South Carolina (Greenville), East Tennessee (Kingsport/Johnson City, Knoxville, and Morristown), Southwest Virginia (the Roanoke Valley) and Georgia (Greater Atlanta). The Bank operates under a single set of corporate policies and procedures and is recognized as a single banking segment for financial reporting purposes.
As a result of its merger with Quantum on February 12, 2023, HomeTrust became the 100% successor owner of the Quantum Capital Statutory Trust II Delaware trust. The sole assets of the trust represent the proceeds of offerings loaned in exchange for subordinated debentures with similar terms to the trust preferred securities.
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP")US GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission ("SEC").SEC. Accordingly, they do not include all the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. It is recommended that these unaudited interim consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended June 30, 20172022 ("20172022 Form 10-K") filed with the SEC on September 12, 2017.2022. The results of operations for the three and sixnine months ended DecemberMarch 31, 20172023 are not necessarily indicative of results that may be expected for the entire fiscal year ending June 30, 2018.2023.
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Various elements of the Company's accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions, and other subjective assessments. In particular, management has identified severalthe determination of the provision and the ACL 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 2022 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.
CertainReclassifications
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.
Loans Held for Sale
2.Recent Accounting Pronouncements
In August 2015, the Financial Accounting Standards Board ("FASB") issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606)”, which defers the effective date of Accounting Standard Update ("ASU") No. 2014-09 one year. ASU No. 2014-09 created Topic 606Residential mortgages originated and supersedes Topic 605, Revenue Recognition. The core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchangeintended 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 obligationssale in the contract, estimating the amount of variable consideration to include 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, but does not change the core revenue recognition principle in Topic 606. ASU No. 2015-14 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For financial reporting purposes, the standard allows for either full retrospective 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 revenuessecondary market through mandatory delivery contracts 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. The Company is expecting to begin developing processes and procedures during fiscal 2018 to ensure it is fully compliant with these amendments at the adoption date. To date, 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 the guidance in GAAP on the classification and measurement of 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 measuredrecorded at fair value (fair value option elected). The fair value includes the servicing value of the loans as well as any accrued interest, with changes in value recorded through the gain on sale of loans held for sale. Conversely, residential mortgages originated and intended for sale in the secondary market on a best efforts basis are sold with servicing released and carried at the lower of cost or fair value recognizedas determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.
The Company originates loans guaranteed by the SBA for the purchase of businesses, business startups, business expansion, equipment, and working capital. All SBA loans are underwritten and documented as prescribed by the SBA. SBA loans are generally fully amortizing and have maturity dates and amortizations of up to 25 years. SBA loans are classified as held for sale and are carried at the lower of cost or fair value. The guaranteed portion of the loan is sold and the servicing rights are retained. A gain is recorded for any premium received in excess of the carrying value of the net income; (ii) requiresassets transferred in the usesale and is included in the gain on sale of exit price notion when measuring theloans held for sale. The portion of SBA loans that are retained are adjusted to fair value and reclassified to total loans, net of deferred costs (loans held for investment). The net value of the retained loans is included in the appropriate loan classification for disclosure purposes.
HELOCs held for sale are originated through a third party in various states outside the Company's geographic footprint, but are underwritten to the Company's underwriting guidelines. The loans are generally held for sale by the Company over a 90 to 180 day period and are serviced by the third party. The loans are marketed by the third party to investors in pools and once sold the Company recognizes a gain or loss on the sale which is recorded through the gain on sale of loans held for sale.
Derivative Instruments and Hedging
The Company holds and issues derivative financial instruments for disclosure purposes; (iii) require separate presentation of financial assetssuch as IRLCs and

other forward sale commitments. IRLCs are subject to pricing risk primarily related to fluctuations in market interest rates. To hedge the interest rate risk on certain IRLCs, the Company uses forward sale commitments such as TBAs or mandatory delivery commitments with investors. Management expects these forward sale
8
10

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

financial liabilities by measurement category and form of financial asset (i.e. securities or loans and receivables) on the balance sheet or the accompanying notescommitments to experience changes in fair value opposite to the financial statements; (iv) allowschanges in fair value of the IRLCs, thereby reducing earnings volatility. Forward sale commitments are also used to hedge the interest rate risk on mortgage loans held for sale that are not committed to investors and still subject to price risk. If the mandatory delivery commitments are not fulfilled, the Company pays a pair-off fee. Best effort forward sale commitments are also executed with investors, whereby certain loans are locked with a borrower and simultaneously committed to an equity investment thatinvestor at a fixed price. If the best effort IRLC does not have readily determinable fair values,fund, there is no obligation to be measured at cost minus impairment (if any), plus or minus changes resulting from observable price changesfulfill the investor commitment.
The Company considers various factors and strategies 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 thedetermining what portion of the total changeIRLCs and uncommitted mortgage loans held for sale to economically hedge. All derivative instruments are recognized as other assets or other liabilities on the consolidated statements of financial condition at their fair value. Changes in the fair value of a liabilitythe derivative instruments and gains and losses resulting from a changethe pairing-out of forward sale commitments are recognized 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 optiongain on sale of loans held 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)sale on the balance sheet orconsolidated statements of income in the accompanying notes toperiod in which they occur. The Company accounts for all derivative instruments as free-standing derivative instruments and does not designate any for hedge accounting.
2.    Recent Accounting Pronouncements
Newly Issued but Not Yet Effective Accounting Standards
ASU 2022-02, "Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures." This ASU eliminates the financial statements;TDR recognition and (vii) clarifiesmeasurement guidance and requires that an entity evaluate whether the modification represents a valuation allowance onnew loan or a deferred tax assetcontinuation of an existing loan. The amendment also adjusts the disclosures related to available-for-sale securities should be evaluated in combination withmodifications and requires entities to disclose current-period gross write-offs by year of origination within the organization’s other deferred tax assets.existing vintage disclosures. The amendments in this ASU are effective for annual periods,fiscal years beginning after December 15, 2022, 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 processesfiscal years 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. Earlyearly 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.permitted. The Company is currently evaluating the impact of adopting the pending adoptionnew guidance on the consolidated financial statements.
3.    Merger with Quantum
On February 12, 2023, the Company merged with Quantum which operated two locations in the Atlanta metro area. The aggregate amount of consideration to be paid per the purchase agreement of approximately $70.8 million, inclusive of consideration of common stock, other cash consideration, and cash in lieu of fractional shares, included $15.9 million of cash consideration already paid by Quantum to its stockholders in advance 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.closing date as is further described below. These amendments are referred to as Technical Corrections and Improvements. Maintenance updates include non-substantive correctionsdistributions reduced Quantum's stockholders' equity by an equal amount prior to the Codification, such as editorial corrections, various link-related changes, and changes to source fragment information. These updates contain amendments that will affecttransaction closing date.
The following table provides a wide variety of Topics in the Codification. The amendments in these ASUs will apply to all reporting entities within the scopesummary of the affected accounting guidanceassets acquired, liabilities assumed, associated preliminary fair value adjustments, and generally fall into oneprovisional period adjustments by the Company as of four categories: amendments relatedthe merger date. As provided for under US GAAP, management has up to differences between original guidance12 months following the date of merger to finalize the fair value adjustments.
QuantumFair Value AdjustmentsProvisional Period AdjustmentsAs Recorded by HomeTrust
Assets acquired
Cash and cash equivalents$47,769 $— $— $47,769 
Debt securities available for sale10,608 — — 10,608 
FHLB and FRB stock1,125 — — 1,125 
Loans(1)
567,140 (5,207)— 561,933 
Premises and equipment4,415 4,668 — 9,083 
Accrued interest receivable1,706 — — 1,706 
BOLI9,066 — — 9,066 
Core deposit intangibles— 12,210 — 12,210 
Other assets2,727 569 — 3,296 
Total assets acquired$644,556 $12,240 $— $656,796 
Liabilities assumed  
Deposits$570,419 $183 $— $570,602 
Junior subordinated debt11,341 (1,408)— 9,933 
Other borrowings24,728 — — 24,728 
Deferred income taxes— 1,341 — 1,341 
Other liabilities3,334 — — 3,334 
Total liabilities assumed$609,822 $116 $— $609,938 
Net assets acquired  $46,858 
(1)Adjustments to Quantum's total loans include the elimination of Quantum's existing allowance for loan losses of $6.0 million, the recognition of an ACL at close on PCD loans of $0.4 million, and adjustments to reflect the estimated credit fair value mark on the non-PCD loan portfolio of $3.0 million 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 basedestimated interest rate fair value adjustment on the amendments

loan portfolio as a whole (non-PCD and PCD) of $7.9 million.
9
11

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

QuantumFair Value AdjustmentsProvisional Period AdjustmentsAs Recorded by HomeTrust
Consideration paid
Common stock consideration
Shares of Quantum574,157 
Exchange ratio2.3942 
HomeTrust common stock issued1,374,647 
Price per share of HomeTrust common stock on February 10, 2023$27.45 
HomeTrust common stock consideration$37,734 
Cash consideration(2)
17,168 
Total consideration$54,902 
Goodwill$8,044 
(2)As indicated 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 adoptionCurrent Report on Form 8-K/A filed with the SEC on March 30, 2023, the amount of cash consideration paid at closing differs from the $57.54 per share, or $33.0 million, reported 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 impactCurrent Report on Form 8-K filed on February 13, 2023, which announced 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 2closing of the goodwill impairment test. Undermerger. Consistent with the ASU, registrants would perform their goodwill impairment testmerger agreement, between the execution of the merger agreement and recognize an impairment charge for anythe transaction closing date, Quantum's principal stockholders had the option to withdraw some or all of the amount of cash consideration to eventually be paid at closing in advance of the carrying value exceeds the reporting unit's fair value, but limitedclosing date. The amount of cash consideration paid at closing was reduced by the amount withdrawn during this time period.
Goodwill of goodwill allocated to that reporting unit. The amendments in this ASU are effective for annual periods,$8,044 arising from the merger consisted largely of synergies 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 amortizecost saves resulting from the premium on certain purchased callable debt securities to the earliest call date, which more closely aligns the amortization periodcombining 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 lifeoperations of the investment. The amendments in this ASU are effective for annual periods,companies, 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 havebe deductible for income tax purposes.
The following table provides a material impact on the Company's Consolidated Financial Statements.
In May 2017, the FASB issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scopesummary 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 effectPCD loans purchased as part of the modification of terms or conditions: the fair value, the vesting conditions and the classificationQuantum merger as an equity or liability instrument of the modified award ismerger date:
Commercial Real EstateCommercialResidential Real EstateConsumerTotal
Unpaid principal balance$4,472 $9,631 $393 $— $14,496 
ACL(292)(72)(5)— (369)
Non-credit premium (discount)(1,448)(190)4 — (1,634)
Fair value of PCD loans at merger date$2,732 $9,369 $392 $— $12,493 
The following unaudited pro forma combined condensed consolidated financial information presents 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 adoptionresults 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 effectoperations of the hedging instrument inCompany, including the same income statement line item in which the earnings effecteffects of the hedged item is reported. The amendments in this ASU are effective for annual periods,purchase accounting adjustments 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. Perexpenses, had 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.taken place at July 1, 2021. The schedule excludes merger-related credit loss and merger-related expenses.

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

(Unaudited)
Three Months EndedNine Months Ended
March 31,March 31,
2023202220232022
Interest and dividend income$56,512 $36,480 $154,621 $112,282 
Interest expense10,201 1,514 17,606 5,021 
Net interest income46,311 34,966 137,015 107,261 
Provision (benefit) for credit losses3,490 (45)9,717 (4,490)
Net interest income after provision (benefit) for credit losses42,821 35,011 127,298 111,751 
Noninterest income8,835 9,399 26,068 34,055 
Noninterest expense30,296 30,293 89,928 91,715 
Net income before income taxes21,360 14,117 63,438 54,091 
Income tax expense4,470 3,103 14,026 11,823 
Net income$16,890 $11,014 $49,412 $42,268 
Per share data
Net income per common share
Basic$0.96 $0.65 $2.93 $2.46 
Diluted$0.96 $0.64 $2.91 $2.41 
Average shares outstanding
Basic17,396,640 16,898,459 16,715,868 17,040,739 
Diluted17,451,762 17,167,658 16,823,706 17,372,023 
10
12

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

4.    Debt Securities
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
SecuritiesDebt securities available for sale consist of the following at the dates indicated:
March 31, 2023
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value
U.S. government agencies$15,999 $— $(434)$15,565 
MBS, residential103,078 135 (2,082)101,131 
Municipal bonds3,513 — (81)3,432 
Corporate bonds36,068 — (1,478)34,590 
Total$158,658 $135 $(4,075)$154,718 
 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, 2022
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value
U.S. government agencies$18,993 $5 $(539)$18,459 
MBS, residential48,377 3 (1,147)47,233 
Municipal bonds5,545 31 (18)5,558 
Corporate bonds57,184 1 (1,457)55,728 
Total$130,099 $40 $(3,161)$126,978 
Debt securities available for sale by contractual maturity at the dates indicatedMarch 31, 2023 and June 30, 2022 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, 2023
Amortized
Cost		Estimated
Fair Value
Due within one year$47,067 $45,656 
Due after one year through five years3,000 2,940 
Due after five years through ten years5,513 4,991 
Due after ten years— — 
MBS, residential103,078 101,131 
Total$158,658 $154,718 
December 31, 2017 June 30, 2022
Amortized
Cost
 
Estimated
Fair Value
Amortized
Cost		Estimated
Fair Value
Due within one year$12,260
 $12,187
Due within one year$35,350 $34,956 
Due after one year through five years54,404
 54,153
Due after one year through five years40,325 39,018 
Due after five years through ten years10,243
 10,483
Due after five years through ten years6,047 5,771 
Due after ten years9,449
 9,505
Due after ten years— — 
Mortgage-backed securities81,675
 81,278
MBS, residentialMBS, residential48,377 47,233 
Total$168,031
 $167,606
Total$130,099 $126,978 

The Company had no sales of debt securities available for sale and no gross realized gains or losses were recognized during the nine months ended March 31, 2023 and 2022.
Debt securities available for sale with amortized costs totaling $58,138 and $43,187 and market values of $56,884 and $41,876 at March 31, 2023 and June 30, 2022, respectively, were pledged as collateral to secure various public deposits and other borrowings.
13

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, 20172023 and June 30, 20172022 were as follows:
March 31, 2023
Less than 12 Months12 Months or MoreTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
U.S. government agencies$996 $(4)$14,569 $(430)$15,565 $(434)
MBS, residential59,175 (826)18,034 (1,256)77,209 (2,082)
Municipal bonds3,432 (81)— — 3,432 (81)
Corporate bonds15,462 (205)17,227 (1,273)32,689 (1,478)
Total$79,065 $(1,116)$49,830 $(2,959)$128,895 $(4,075)
 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, 2022
Less than 12 Months12 Months or MoreTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
U.S. government agencies$14,461 $(539)$— $— $14,461 $(539)
MBS, residential41,658 (994)5,269 (153)46,927 (1,147)
Municipal bonds1,970 (18)— — 1,970 (18)
Corporate bonds39,454 (730)14,273 (727)53,727 (1,457)
Total$97,543 $(2,281)$19,542 $(880)$117,085 $(3,161)
The total number of securities with unrealized losses at DecemberMarch 31, 2017,2023 and June 30, 20172022 were 164190 and 136,177, 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, 2023 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 Accounting Policies" in our 2022 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. and does not record an ACL on accrued interest receivable. As of March 31, 2023, the accrued interest receivable for debt securities available for sale was $518.
5.    Loans Held For Sale
Loans held for sale, at the lower of cost or fair value, consist of the following as of the dates indicated:
March 31, 2023June 30, 2022
One-to-four family$156 $4,176 
SBA29,884 14,774 
HELOCs59,132 60,357 
Total loans held for sale, at the lower of cost or fair value$89,172 $79,307 
The decline incarrying balance of loans held for sale, at fair value, was largely due to increases in market interest rates. The Company had no other-than-temporary impairment losses during the six months ended December$1,209 and $0 at March 31, 2017 or the year ended2023 and June 30, 2017.2022, respectively, while the amortized cost of these loans was $1,179 and $0 at the same dates.
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"). No ready market exists for these securities so carrying value approximates their fair value based on the redemption provisions of the FHLB of Atlanta and the FRB, respectively.


14

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

6.    Loans and Allowance for Credit Losses on Loans
5.Loans
Loans consist of the following at the dates indicated:indicated(1):
March 31, 2023June 30, 2022
Commercial real estate loans
Construction and land development$368,756 $291,202 
Commercial real estate - owner occupied524,247 335,658 
Commercial real estate - non-owner occupied926,991 662,159 
Multifamily85,285 81,086 
Total commercial real estate loans1,905,279 1,370,105 
Commercial loans
Commercial and industrial229,840 193,313 
Equipment finance440,345 394,541 
Municipal leases138,436 129,766 
Total commercial loans808,621 717,620 
Residential real estate loans
Construction and land development105,617 81,847 
One-to-four family518,274 354,203 
HELOCs193,037 160,137 
Total residential real estate loans816,928 596,187 
Consumer loans118,505 85,383 
Total loans, net of deferred loan fees and costs3,649,333 2,769,295 
ACL on loans(47,503)(34,690)
Loans, net$3,601,830 $2,734,605 
 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, 2023 and June 30, 2022 accrued interest receivable of $13,027 and $7,969 was accounted for separately from the amortized cost basis.

As a result of HomeTrust's merger with Quantum on February 12, 2023,$561.9 million in loans (net of purchase accounting adjustments) were added to the portfolio.
All qualifying one-to-four family first mortgage loans, HELOCs, commercial real estate loans, indirect auto, municipal leases and FHLB Stockof Atlanta stock are pledged as collateral by a blanket pledge to secure any outstanding FHLB and FRB advances.
Loans are monitored for credit quality on a recurring basis and the composition of the loans outstanding by credit quality indicator is provided below. Loan credit quality indicators are developed through review of individual borrowers on an ongoing basis. Generally, loans are monitored for performance on a quarterly basis with the credit quality indicators adjusted as needed. The Company's total non-purchasedindicators 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 purchased performing loansdo not warrant adverse classification.
Substandard—A substandard asset is inadequately protected by segment, class,the current net worth and risk grade atpaying capacity of the dates indicated follow: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.
 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
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.






15

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

 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 PCIfollowing table presents the credit risk profile by risk grade for commercial real estate, commercial, residential real estate, and consumer loans by segment, class, and risk grade at the dates indicated follow:origination year as of March 31, 2023:
Term Loans By Origination Fiscal Year
March 31, 202320232022202120202019PriorRevolvingTotal
Construction and land development
Risk rating
Pass$40,745 $45,061 $9,070 $2,766 $1,549 $6,920 $261,693 $367,804 
Special mention73 — — — — — 362 435 
Substandard— 481 — — — 36 — 517 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and land development40,818 45,542 9,070 2,766 1,549 6,956 262,055 368,756 
Commercial real estate - owner occupied
Risk rating
Pass195,337 65,636 67,866 42,634 38,712 81,856 24,534 516,575 
Special mention— 132 — 380 376 2,934 — 3,822 
Substandard1,054 — — — — 2,496 300 3,850 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate - owner occupied196,391 65,768 67,866 43,014 39,088 87,286 24,834 524,247 
Commercial real estate - non-owner occupied
Risk rating
Pass237,787 106,637 117,075 89,284 55,862 233,180 74,662 914,487 
Special mention2,390 — — — — 4,517 5,341 12,248 
Substandard256 — — — — — — 256 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate - non-owner occupied240,433 106,637 117,075 89,284 55,862 237,697 80,003 926,991 
Multifamily
Risk rating
Pass18,584 11,649 18,759 10,286 3,341 21,409 863 84,891 
Special mention— — — — 29 62 — 91 
Substandard— — — — — 303 — 303 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total multifamily18,584 11,649 18,759 10,286 3,370 21,774 863 85,285 
Total commercial real estate
Risk rating
Pass$492,453 $228,983 $212,770 $144,970 $99,464 $343,365 $361,752 $1,883,757 
Special mention2,463 132 — 380 405 7,513 5,703 16,596 
Substandard1,310 481 — — — 2,835 300 4,926 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate$496,226 $229,596 $212,770 $145,350 $99,869 $353,713 $367,755 $1,905,279 
 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)

Term Loans By Origination Fiscal Year
March 31, 202320232022202120202019PriorRevolvingTotal
Commercial and industrial
Risk rating
Pass$54,377 $62,247 $16,449 $12,538 $6,893 $20,989 $48,060 $221,553 
Special mention— 327 465 93 139 — — 1,024 
Substandard1,633 13 25 588 864 44 3,513 6,680 
Doubtful— — 70 — 152 — 360 582 
Loss— — — — — 1 — 1 
Total commercial and industrial56,010 62,587 17,009 13,219 8,048 21,034 51,933 229,840 
Equipment finance
Risk rating
Pass146,546 149,488 83,516 43,049 13,619 734 — 436,952 
Special mention— 143 349 497 441 — — 1,430 
Substandard— 81 — 20 145 — — 246 
Doubtful— 815 527 233 138 — — 1,713 
Loss— — — — 4 — — 4 
Total equipment finance146,546 150,527 84,392 43,799 14,347 734 — 440,345 
Municipal leases
Risk rating
Pass17,088 28,164 22,987 8,495 9,990 45,723 5,989 138,436 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total municipal leases17,088 28,164 22,987 8,495 9,990 45,723 5,989 138,436 
Total commercial
Risk rating
Pass$218,011 $239,899 $122,952 $64,082 $30,502 $67,446 $54,049 $796,941 
Special mention— 470 814 590 580 — — 2,454 
Substandard1,633 94 25 608 1,009 44 3,513 6,926 
Doubtful— 815 597 233 290 — 360 2,295 
Loss— — — — 4 1 — 5 
Total commercial$219,644 $241,278 $124,388 $65,513 $32,385 $67,491 $57,922 $808,621 


The Company's total loans by segment, class, and delinquency status at the dates indicated follows:

 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)

Term Loans By Origination Fiscal Year
March 31, 202320232022202120202019PriorRevolvingTotal
Construction and land development
Risk rating
Pass$620 $857 $— $48 $— $1,311 $102,447 $105,283 
Special mention— — — — — — — — 
Substandard— — — — — 334 — 334 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and land development620 857 — 48 — 1,645 102,447 105,617 
One-to-four family
Risk rating
Pass119,751 84,901 96,028 47,502 27,421 121,007 15,971 512,581 
Special mention416 — — — — 587 — 1,003 
Substandard— 126 — 56 — 4,471 — 4,653 
Doubtful— — — — — 36 — 36 
Loss— — — — — 1 — 1 
Total one-to-four family120,167 85,027 96,028 47,558 27,421 126,102 15,971 518,274 
HELOCs
Risk rating
Pass12,328 882 142 341 862 7,489 170,223 192,267 
Special mention— — — — — — — — 
Substandard— 10 — — 46 673 12 741 
Doubtful— — — — — 29 — 29 
Loss— — — — — — — — 
Total HELOCs12,328 892 142 341 908 8,191 170,235 193,037 
Total residential real estate
Risk rating
Pass$132,699 $86,640 $96,170 $47,891 $28,283 $129,807 $288,641 $810,131 
Special mention416 — — — — 587 — 1,003 
Substandard— 136 — 56 46 5,478 12 5,728 
Doubtful— — — — — 65 — 65 
Loss— — — — — 1 — 1 
Total residential real estate$133,115 $86,776 $96,170 $47,947 $28,329 $135,938 $288,653 $816,928 
Term Loans By Origination Fiscal Year
March 31, 202320232022202120202019PriorRevolvingTotal
Total consumer
Risk rating
Pass$62,141 $19,306 $14,570 $10,175 $6,539 $4,140 $531 $117,402 
Special mention— — — — — — — — 
Substandard55 251 221 277 80 181 37 1,102 
Doubtful— — — — — — — — 
Loss— — — — 1 — — 1 
Total consumer$62,196 $19,557 $14,791 $10,452 $6,620 $4,321 $568 $118,505 












18

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The Company'sfollowing table presents the credit risk profile by risk grade for commercial real estate, commercial, residential real estate, and consumer loans by origination year as of June 30, 2022:
Term Loans By Origination Fiscal Year
June 30, 202220222021202020192018PriorRevolvingTotal
Construction and land development
Risk rating
Pass$21,988 $5,686 $627 $2,089 $1,092 $5,819 $248,189 $285,490 
Special mention— — — — — 97 4,677 4,774 
Substandard871 — — — — 67 — 938 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and land development22,859 5,686 627 2,089 1,092 5,983 252,866 291,202 
Commercial real estate - owner occupied
Risk rating
Pass55,167 71,429 45,665 43,786 21,720 74,602 16,857 329,226 
Special mention— — 396 418 — 2,416 — 3,230 
Substandard— — — — 577 2,227 398 3,202 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate - owner occupied55,167 71,429 46,061 44,204 22,297 79,245 17,255 335,658 
Commercial real estate - non-owner occupied
Risk rating
Pass97,885 122,975 95,268 56,846 81,037 182,664 7,214 643,889 
Special mention— — — — 13,844 4,421 — 18,265 
Substandard— — — — — 5 — 5 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate - non-owner occupied97,885 122,975 95,268 56,846 94,881 187,090 7,214 662,159 
Multifamily
Risk rating
Pass10,135 19,985 15,881 8,614 2,796 20,587 2,495 80,493 
Special mention— — — 29 — 217 — 246 
Substandard— — — — — 347 — 347 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total multifamily10,135 19,985 15,881 8,643 2,796 21,151 2,495 81,086 
Total commercial real estate
Risk rating
Pass$185,175 $220,075 $157,441 $111,335 $106,645 $283,672 $274,755 $1,339,098 
Special mention— — 396 447 13,844 7,151 4,677 26,515 
Substandard871 — — — 577 2,646 398 4,492 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate$186,046 $220,075 $157,837 $111,782 $121,066 $293,469 $279,830 $1,370,105 
19

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
Term Loans By Origination Fiscal Year
June 30, 202220222021202020192018PriorRevolvingTotal
Commercial and industrial
Risk rating
Pass$70,863 $21,434 $11,647 $9,377 $6,338 $20,856 $43,119 $183,634 
Special mention— 346 260 364 — — 1,957 2,927 
Substandard— 770 343 1,152 — 52 4,337 6,654 
Doubtful— 98 — — — — — 98 
Loss— — — — — — — — 
Total commercial and industrial70,863 22,648 12,250 10,893 6,338 20,908 49,413 193,313 
Equipment finance
Risk rating
Pass186,139 113,363 64,400 26,467 1,755 — — 392,124 
Special mention200 331 1,002 547 — — — 2,080 
Substandard— 123 18 159 — — — 300 
Doubtful32 — — 5 — — — 37 
Loss— — — — — — — — 
Total equipment finance186,371 113,817 65,420 27,178 1,755 — — 394,541 
Municipal leases
Risk rating
Pass19,425 24,480 8,962 11,034 13,584 39,529 12,715 129,729 
Special mention— 37 — — — — — 37 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total municipal leases19,425 24,517 8,962 11,034 13,584 39,529 12,715 129,766 
Total commercial
Risk rating
Pass$276,427 $159,277 $85,009 $46,878 $21,677 $60,385 $55,834 $705,487 
Special mention200 714 1,262 911 — — 1,957 5,044 
Substandard— 893 361 1,311 — 52 4,337 6,954 
Doubtful32 98 — 5 — — — 135 
Loss— — — — — — — — 
Total commercial$276,659 $160,982 $86,632 $49,105 $21,677 $60,437 $62,128 $717,620 








20

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
Term Loans By Origination Fiscal Year
June 30, 202220222021202020192018PriorRevolvingTotal
Construction and land development
Risk rating
Pass$864 $— $53 $— $— $1,783 $78,775 $81,475 
Special mention— — — — — — — — 
Substandard— — — — — 372 — 372 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and land development864 — 53 — — 2,155 78,775 81,847 
One-to-four family
Risk rating
Pass55,415 74,035 47,364 29,075 23,250 113,307 4,077 346,523 
Special mention— — — — — 835 — 835 
Substandard128 — 1,002 540 430 4,590 — 6,690 
Doubtful— — — — — 155 — 155 
Loss— — — — — — — — 
Total one-to-four family55,543 74,035 48,366 29,615 23,680 118,887 4,077 354,203 
HELOCs
Risk rating
Pass1,466 458 282 901 107 7,441 148,526 159,181 
Special mention— — — — — — — — 
Substandard— — — — — 879 49 928 
Doubtful— — — — — 28 — 28 
Loss— — — — — — — — 
Total HELOCs1,466 458 282 901 107 8,348 148,575 160,137 
Total residential real estate
Risk rating
Pass$57,745 $74,493 $47,699 $29,976 $23,357 $122,531 $231,378 $587,179 
Special mention— — — — — 835 — 835 
Substandard128 — 1,002 540 430 5,841 49 7,990 
Doubtful— — — — — 183 — 183 
Loss— — — — — — — — 
Total residential real estate$57,873 $74,493 $48,701 $30,516 $23,787 $129,390 $231,427 $596,187 
Term Loans By Origination Fiscal Year
June 30, 202220222021202020192018PriorRevolvingTotal
Total consumer
Risk rating
Pass$25,935 $20,443 $15,849 $11,329 $8,235 $2,398 $277 $84,466 
Special mention— — — — — — — — 
Substandard72 169 274 85 182 100 33 915 
Doubtful— — — — — — — — 
Loss— — — 2 — — — 2 
Total consumer$26,007 $20,612 $16,123 $11,416 $8,417 $2,498 $310 $85,383 
21

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following tables present aging analyses of past due loans (including nonaccrual loans) by segment and class for the periods indicated below:
Past DueTotal
30-89 Days90 Days+TotalCurrentLoans
March 31, 2023
Commercial real estate
Construction and land development$— $— $— $368,756 $368,756 
Commercial real estate - owner occupied67 — 67 524,180 524,247 
Commercial real estate - non-owner occupied— — — 926,991 926,991 
Multifamily— — — 85,285 85,285 
Total commercial real estate67 — 67 1,905,212 1,905,279 
Commercial
Commercial and industrial— 620 620 229,220 229,840 
Equipment finance1,387 843 2,230 438,115 440,345 
Municipal leases— — — 138,436 138,436 
Total commercial1,387 1,463 2,850 805,771 808,621 
Residential real estate
Construction and land development— 132 132 105,485 105,617 
One-to-four family830 1,178 2,008 516,266 518,274 
HELOCs245 914 1,159 191,878 193,037 
Total residential real estate1,075 2,224 3,299 813,629 816,928 
Consumer245 259 504 118,001 118,505 
Total loans$2,774 $3,946 $6,720 $3,642,613 $3,649,333 
Past DueTotal
30-89 Days90 Days+TotalCurrentLoans
June 30, 2022
Commercial real estate
Construction and land development$— $— $— $291,202 $291,202 
Commercial real estate - owner occupied— 52 52 335,606 335,658 
Commercial real estate - non-owner occupied— — — 662,159 662,159 
Multifamily— — — 81,086 81,086 
Total commercial real estate— 52 52 1,370,053 1,370,105 
Commercial
Commercial and industrial255 — 255 193,058 193,313 
Equipment finance186 56 242 394,299 394,541 
Municipal leases— — — 129,766 129,766 
Total commercial441 56 497 717,123 717,620 
Residential real estate
Construction and land development115 22 137 81,710 81,847 
One-to-four family910 1,394 2,304 351,899 354,203 
HELOCs283 122 405 159,732 160,137 
Total residential real estate1,308 1,538 2,846 593,341 596,187 
Consumer330 177 507 84,876 85,383 
Total loans$2,079 $1,823 $3,902 $2,765,393 $2,769,295 

22

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following table presents recorded investment in loans on nonaccrual status, by segment and class, 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, 2023.
March 31, 2023
 June 30, 2022
90 Days+ &
Still Accruing as of March 31, 2023
Nonaccrual With No Allowance as of March 31, 2023Interest Income Recognized
Commercial real estate
Construction and land development$36 $67 $— $— $1 
Commercial real estate - owner occupied603 706 — — 13 
Commercial real estate - non-owner occupied2 5 — — 6 
Multifamily89 103 — — 6 
Total commercial real estate730 881 — — 26 
Commercial
Commercial and industrial1,389 1,951 — 59 92 
Equipment finance1,929 270 — — 100 
Municipal leases106 — — — 6 
Total commercial3,424 2,221 — 59 198 
Residential real estate
Construction and land development132 137 — — 2 
One-to-four family2,000 1,773 — — 44 
HELOCs1,144 724 — — 37 
Total residential real estate3,276 2,634 — — 83 
Consumer481 384 — — 13 
Total loans$7,911 $6,120 $— $59 $320 
 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 June 30, 2017 are excluded from nonaccruing loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations.
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 $8,548 and $9,818 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, 2023 and June 30, 2022, respectively.
 December 31, 2017 June 30, 2017
Performing TDRs included in impaired loans$25,181
 $27,043
An analysisThe following tables present analyses of the allowance for loan lossesACL 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. In addition to the provision (benefit) for credit losses on loans presented below, provisions (benefits) of $400 and $758 for off-balance sheet credit exposures and $0 and $(250) for commercial paper were recorded for the three and nine months ended March 31, 2023, respectively. Provisions (benefits) of $650 and $415 for off-balance sheet credit exposures and $(55) and $(5) for commercial paper were recorded for the three and nine months ended March 31, 2022. For the three and nine months ended March 31, 2023, $4.9 million and $0.4 million of the provision for credit losses were recognized to establish ACLs on both Quantum's loan portfolio and off-balance-sheet credit exposure, respectively.
Six Months Ended December 31, 2017 Six Months Ended December 31, 2016Three Months Ended March 31, 2023
PCI 
Retail
Consumer
 Commercial Total PCI 
Retail
Consumer
 Commercial TotalCommercial Real EstateCommercialResidential Real EstateConsumerTotal
Balance at beginning of period$727
 $8,585
 $11,839
 $21,151
 $361
 $11,549
 $9,382
 $21,292
Balance at beginning of period$15,059 $12,382 $9,048 $2,370 $38,859 
Provision for (recovery of) loan losses184
 (250) 66
 —
 (25) (1,505) 1,530
 —
Provision (benefit) for credit lossesProvision (benefit) for credit losses6,262 2,413 (100)(215)8,360 
Initial ACL on PCD loansInitial ACL on PCD loans292 72 5 — 369 
Charge-offs(345) (528) (363) (1,236) —
 (574) (675) (1,249)Charge-offs— (484)(3)(91)(578)
Recoveries—
 384
 791
 1,175
 —
 343
 600
 943
Recoveries— 275 172 46 493 
Net (charge-offs) recoveriesNet (charge-offs) recoveries— (209)169 (45)(85)
Balance at end of period$566
 $8,191
 $12,333
 $21,090
 $336
 $9,813
 $10,837
 $20,986
Balance at end of period$21,613 $14,658 $9,122 $2,110 $47,503 

Nine Months Ended March 31, 2023
Commercial Real EstateCommercialResidential Real EstateConsumerTotal
Balance at beginning of period$13,414 $12,036 $7,611 $1,629 $34,690 
Provision (benefit) for credit losses7,904 4,709 1,267 599 14,479 
Initial ACL on PCD loans292 72 5 — 369 
Charge-offs— (2,617)(126)(261)(3,004)
Recoveries3 458 365 143 969 
Net (charge-offs) recoveries3 (2,159)239 (118)(2,035)
Balance at end of period$21,613 $14,658 $9,122 $2,110 $47,503 
18
23

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

Three Months Ended March 31, 2022
Commercial Real EstateCommercialResidential Real EstateConsumerTotal
Balance at beginning of period$12,750 $10,219 $5,917 $2,047 $30,933 
Provision (benefit) for credit losses62 (1,357)1,063 (408)(640)
Charge-offs— (261)(45)(28)(334)
Recoveries23 887 72 93 1,075 
Net (charge-offs) recoveries23 626 27 65 741 
Balance at end of period$12,835 $9,488 $7,007 $1,704 $31,034 
The Company's ending balances of loans and the related allowance, by segment and class, at the dates indicated follows:
Nine Months Ended March 31, 2022
Commercial Real EstateCommercialResidential Real EstateConsumerTotal
Balance at beginning of period$15,084 $9,663 $8,185 $2,536 $35,468 
Provision (benefit) for credit losses(2,527)469 (1,463)(894)(4,415)
Charge-offs(439)(1,572)(72)(107)(2,190)
Recoveries717 928 357 169 2,171 
Net (charge-offs) recoveries278 (644)285 62 (19)
Balance at end of period$12,835 $9,488 $7,007 $1,704 $31,034 



















24
 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)

In estimating expected credit losses, 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, even if foreclosure is not probable, this method may be applied. 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 AssetsFinancial Assets Not Considered Collateral Dependent
March 31, 2023Residential PropertyInvestment PropertyCommercial PropertyBusiness AssetsTotal
Commercial real estate
Construction and land development$— $— $— $— $368,756 $368,756 
Commercial real estate - owner occupied— — 1,054 — 523,193 524,247 
Commercial real estate - non-owner occupied— — 3,025 — 923,966 926,991 
Multifamily— — — — 85,285 85,285 
Total commercial real estate— — 4,079 — 1,901,200 1,905,279 
Commercial
Commercial and industrial— — — 1,238 228,602 229,840 
Equipment finance— — — — 440,345 440,345 
Municipal leases— — — — 138,436 138,436 
Total commercial— — — 1,238 807,383 808,621 
Residential real estate
Construction and land development— — — — 105,617 105,617 
One-to-four family758 — — — 517,516 518,274 
HELOCs— — — — 193,037 193,037 
Total residential real estate758 — — — 816,170 816,928 
Consumer— — — — 118,505 118,505 
Total$758 $— $4,079 $1,238 $3,643,258 $3,649,333 
Total collateral value$1,435 $— $8,870 $110 
Type of Collateral and Extent to Which Collateral Secures Financial AssetsFinancial Assets Not Considered Collateral Dependent
June 30, 2022Residential PropertyInvestment PropertyCommercial PropertyBusiness AssetsTotal
Commercial real estate
Construction and land development$— $— $— $— $291,202 $291,202 
Commercial real estate - owner occupied— — — — 335,658 335,658 
Commercial real estate - non-owner occupied— — — — 662,159 662,159 
Multifamily— — — — 81,086 81,086 
Total commercial real estate— — — — 1,370,105 1,370,105 
Commercial
Commercial and industrial— — — 2,594 190,719 193,313 
Equipment finance— — — — 394,541 394,541 
Municipal leases— — — — 129,766 129,766 
Total commercial— — — 2,594 715,026 717,620 
Residential real estate
Construction and land development— — — — 81,847 81,847 
One-to-four family1,318 — — — 352,885 354,203 
HELOCs— — — — 160,137 160,137 
Total residential real estate1,318 — — — 594,869 596,187 
Consumer— — — — 85,383 85,383 
Total$1,318 $— $— $2,594 $2,765,383 $2,769,295 
Total collateral value$2,443 $— $— $69 


25
 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 recognizedfollowing tables present a breakdown of the types of concessions made on impaired loansTDRs by loan class 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
periods indicated below:
 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
Three Months Ended March 31,
20232022
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 industrial— $— $— 2 $841 $835 
Residential real estate
One-to-four family— — — 1 37 37 
Consumer— — — 1 5 5 
Total other TDRs— $— $— 4 $883 $877 
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:
Nine Months Ended March 31,
20232022
Number
of
Loans		Pre
Modification
Outstanding
Recorded
Investment		Post
Modification
Outstanding
Recorded
Investment		Number
of
Loans		Pre
Modification
Outstanding
Recorded
Investment		Post
Modification
Outstanding
Recorded
Investment
Below market interest rate
Commercial loans
Commercial and industrial5 $569 $565 — $— $— 
Residential real estate
One-to-four family— — — 1 124 121 
Total below market interest rate5 569 565 1 124 121 
Extended payment terms
Residential real estate
One-to-four family— — — 1 35 35 
HELOCs— — — 1 50 50 
Total extended payment terms— — — 2 85 85 
Other TDRs
Commercial
Commercial and industrial— — — 2 841 835 
Residential real estate loans
One-to-four family— — — 2 93 92 
HELOCs— — — 1 18 18 
Consumer4 49 34 6 89 82 
Total other TDRs4 49 34 11 1,041 1,027 
Total9 $618 $599 14 $1,250 $1,233 













26
 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 tables present loans that were modified as TDRs within the previous 12 months and for which there was a payment default during the periods indicated below:
 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

(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.

Three Months Ended March 31,
20232022
Number of
Loans		Recorded
Investment		Number of
Loans		Recorded
Investment
Below market interest rate
Commercial loans
Commercial and industrial5 $592 — $— 

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

Nine Months Ended March 31,
20232022
Number of
Loans		Recorded
Investment		Number of
Loans		Recorded
Investment
Below market interest rate
Commercial loans
Commercial and industrial6 $732 — $— 
Extended payment terms
Residential real estate loans
One-to-four family1 34 — — 
Other TDRs
Consumer1 2 2 44 
Total8 $768 2 $44 
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.

Off-Balance-Sheet Credit Exposure
The Company maintains a separate reserve for credit losses on off-balance-sheet credit exposures, including unfunded loan commitments, which is included in other liabilities on the consolidated balance sheet. The reserve for credit losses on off-balance-sheet credit exposures is adjusted as a provision for credit losses in the consolidated statement of income. The estimate includes consideration of the likelihood that funding will occur and an estimate of ECLs on commitments expected to be funded over its estimated life, utilizing the same models and approaches for the Company's other loan portfolio segments described above, as these unfunded commitments share similar risk characteristics as its loan portfolio segments. The Company has identified the unfunded portion of certain lines of credit as unconditionally cancellable credit exposures, meaning the Company can cancel the unfunded commitment at any time. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company or for undrawn amounts under such arrangements that may be drawn prior to the cancellation of the arrangement. At March 31, 2023 and June 30, 2022, the ACL on off-balance-sheet credit exposures included in other liabilities was $4,062 and $3,304, respectively.
7. Deposit Accounts
Deposit accounts at the dates indicated consist of the following:
March 31, 2023June 30, 2022
Core deposits
Noninterest-bearing accounts$872,492 $745,746 
NOW accounts678,178 654,981 
Money market accounts1,299,503 969,661 
Savings accounts228,390 238,197 
Total core deposits3,078,563 2,608,585 
Certificates of deposit597,036 491,176 
Total$3,675,599 $3,099,761 
As a result of HomeTrust's merger with Quantum on February 12, 2023, $570.6 million in deposits, net of purchase accounting adjustments, were added to the portfolio.
24
27

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

Deposits received from executive officers and directors and their associates totaled approximately $1,316 and $1,012 at March 31, 2023 and June 30, 2022, respectively.
6.Real Estate Owned
The activity within REO for the periods shown isAs of March 31, 2023, scheduled maturities of certificates of deposit are as follows:
 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
Fiscal year ending June 30
Remaining 2023$122,230 
2024414,223 
202544,759 
20267,288 
20275,242 
Thereafter3,294 
Total$597,036 
At DecemberThe balance of uninsured deposits was $730.4 million, or 19.9% of total deposits. Included within this amount, certificates of deposit with balances of $250 or greater totaled $255,089 and $156,558 at March 31, 20172023 and June 30, 2017,2022, respectively. Generally, deposit amounts in excess of $250 are not federally insured.
8. Borrowings
Junior Subordinated Debentures
On February 21, 2007, Quantum formed a Connecticut statutory trust, Quantum Capital Statutory Trust II (the "Trust"), which issued $11.0 million of trust preferred securities that were designed to qualify as Tier I capital under Federal Reserve Board guidelines. All of the Bank had $1,081 and $1,015 respectively,common securities of foreclosed residential real estate property in REO.the Trust were owned by Quantum. The recorded investment in consumer mortgage loans collateralized 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 differedproceeds from the amounts computedissuance of the common securities and the trust preferred securities were used by applying the U.S. federal income tax rateTrust to purchase $11.3 million of 28% and 34% for the periods ended December 31, 2017 and 2016, respectively, to pretax income from continuing operations before income taxes asjunior subordinated debentures of Quantum. As a result of its merger with Quantum on February 12, 2023, HomeTrust became the following:100% successor owner of the Trust.
The trust preferred securities accrue and pay quarterly distributions at a floating rate of 3-month LIBOR plus 194 basis points, which was 7.13% at March 31, 2023. The Company has guaranteed distributions and other payments due on the trust preferred securities to the extent the Trust has insufficient funds with which to make the distributions and other payments. The net combined effect of all documents entered into in connection with the trust preferred securities is that the Company is liable to make the distributions and other payments required on the trust preferred securities.
The trust preferred securities are mandatorily redeemable upon maturity of the debentures on March 15, 2037, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the debentures purchased by the Trust, in whole or in part, on or after March 15, 2012. As specified in the indenture, if the debentures are redeemed prior to maturity, the redemption price will be the principal amount and any accrued but unpaid interest.
Other Borrowings
Borrowings, outside of junior subordinated debt, consist of the following at the dates indicated:
March 31, 2023June 30, 2022
BalanceWeighted
Average Rate		BalanceWeighted
Average Rate
FHLB advances$200,000 5.03 %$— — %
FRB advances100,000 5.00 — — 
Revolving lines of credit20,263 8.50 — — 
Total borrowings$320,263 5.24 %$— — %
All qualifying one-to-four family loans, HELOCs, commercial real estate loans, and FHLB of Atlanta stock are pledged as collateral to secure outstanding FHLB advances while commercial construction, indirect auto and municipal loans are pledged as collateral to secure outstanding FRB advances.
At March 31, 2023 and June 30, 2022, the Company had the ability to borrow $68,484 and $277,561, respectively, through additional FHLB advances and $23,055 and $68,230, respectively, through the unused portion of a line of credit with the FRB. At March 31, 2023 and June 30, 2022, the Company had revolving lines of credit with three unaffiliated banks, the unused portion of which totaled $129,737 and $120,000, respectively.
28
 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)

9.    Leases
As Lessee - Operating Leases
The sourcesCompany's operating leases primarily include office space and tax effectsbank 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 temporary differenceslease renewal options is at management's sole discretion. When it is reasonably certain that give risethe Company will exercise its option to significant portionsrenew or extend the lease term, that option is included in estimating the value of the deferred tax assets (liabilities) at December 31, 2017ROU 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 uselease liability. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of the asset and liability methodCompany's lease agreements include periodic rate adjustments for inflation. The depreciable life of accounting for income taxes. Under this method, deferred taxROU 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 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 incomeincluded 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.other liabilities.
Supplemental Balance Sheet InformationMarch 31, 2023June 30, 2022
ROU assets$6,854 $5,846 
Lease liabilities7,872 6,641 
Weighted-average remaining lease terms (years)10.710.8
Weighted-average discount rate3.24 %2.90 %
The decrease in net deferred tax assets was driven by the enactmentfollowing schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2023:
Fiscal year ending June 30
Remaining 2023$422 
20241,247 
2025946 
2026821 
2027838 
Thereafter5,267 
Total undiscounted minimum lease payments9,541 
Less: amount representing interest(1,669)
Total lease liability$7,872 
The following table presents components 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 taxoperating lease expense for the periods indicated:
Three Months Ended March 31,Nine Months Ended March 31,
2023202220232022
Operating lease cost (included in occupancy expense, net)$394 $347 $1,086 $1,215 
Variable lease cost (included in occupancy expense, net)3 7 7 13 
Sublease income (included in other, noninterest income)(42)(60)(127)(154)
Total operating lease expense, net$355 $294 $966 $1,074 
As Lessee - Finance Lease
During the quarter ended DecemberMarch 31, 2017 includes approximately $418,000 in tax benefit from adjusting2023, the federal income tax rateCompany purchased the property associated with the finance lease reported historically. The Company purchased the property for $1.2 million, terminating the existing land lease. Prior to 27.5% from 34%the purchase, for the first quarter ofthree months ended March 31, 2023 and 2022, interest expense on 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 assetslease liability totaled $15 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$23, while for the sixnine months ended DecemberMarch 31, 20172023 and 2016.2022, interest expense on the lease liability totaled $60 and $70, respectively.

Supplemental lease cash flow information for the periods indicated:
Nine Months Ended March 31,
20232022
ROU assets - noncash additions (operating leases)$2,108 $1,186 
Cash paid for amounts included in the measurement of lease liabilities (operating leases)994 1,281 
Cash paid for amounts included in the measurement of lease liabilities (finance leases)89 100 
26
29

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

As Lessor - General
The valuation allowanceCompany leases equipment to commercial end users under operating and finance lease arrangements. The Company's equipment finance leases consist mainly of construction, transportation, healthcare, and manufacturing equipment. Many of its operating and finance leases offer the lessee the option to purchase the equipment at fair value or for deferred taxa 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 in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. The net book value of leased assets totaled $19,200 and $20,075 with a residual value of $13,226 and $12,874 as of DecemberMarch 31, 20172023 and June 30, 20172022, respectively.
The following table presents total equipment finance operating lease income and depreciation expense for the periods indicated:
Three Months Ended March 31,Nine Months Ended March 31,
2023202220232022
Operating lease income$1,505 $1,661 $4,246 $4,920 
Depreciation expense1,266 1,339 3,608 4,221 
The following schedule summarizes, as of March 31, 2023, aggregate future minimum lease payments to be received:
Fiscal year ending June 30
Remaining 2023$1,424 
20245,206 
20251,962 
2026689 
2027113 
Thereafter— 
Total of future minimum lease payments$9,394 
As Lessor - Direct Financing Leases
Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment of the loan portfolio. For the three months ended March 31, 2023 and 2022, interest income on equipment finance leases totaled $860 and $763, respectively. For the nine months ended March 31, 2023 and 2022, interest income on equipment finance leases totaled $2,435 and $2,275, respectively.
The lease receivable component of finance lease net investment included within the equipment finance class of financing receivables was $54$66.7 million 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$62.2 million at DecemberMarch 31, 20172023 and June 30, 2017 include $19,570 representing pre-1988 tax bad debt reserve base year amounts2022, respectively.
The following schedule summarizes, as of March 31, 2023, aggregate future minimum finance lease payments to be received:
Fiscal year ending June 30
Remaining 2023$8,260 
202422,284 
202517,749 
202613,532 
20278,494 
Thereafter6,716 
Total undiscounted minimum lease payments77,035 
Less: amount representing interest(10,304)
Total lease receivable$66,731 
30

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
10.    Equity Incentive Plan
The Company historically provided stock-based awards through the 2013 Omnibus Incentive Plan, which provided for awards of restricted stock, restricted stock units, stock options, stock appreciation rights and cash awards to directors, directors emeritus, officers, employees and advisory directors. On November 14, 2022, at the Company's annual meeting, stockholders approved the 2022 Omnibus Incentive Plan which no deferred tax liability has been provided since these reserves are not expected to reverse andprovides for the same types of awards as described under the 2013 Omnibus Incentive Plan. Going forward, any future grants will be made under this plan.
The cost of equity-based awards under the 2022 Omnibus Incentive Plan generally is based on the fair value of the awards on their grant date. The maximum number of shares that may never reverse. Circumstances that would require an accrualbe utilized for awards under the plan is 1,000,000. Shares of a portioncommon stock issued under the plan will be issued out of authorized but unissued shares, some or all of this unrecordedwhich may be repurchased shares.
The table below presents share-based compensation expense and the estimated related tax liabilitybenefit for stock options and restricted stock for the dates indicated below:
Three Months Ended March 31,Nine Months Ended March 31,
2023202220232022
Share-based compensation expense$434 $507 $1,465 $1,407 
Tax benefit102 120 347 332 
The table below presents stock option activity and related information for the nine months ended March 31, 2023 and 2022:
OptionsWeighted-
Average
Exercise
Price		Remaining
Contractual
Life
(Years)		Aggregate
Intrinsic
Value
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 
Options outstanding at June 30, 2022928,870 $21.49 4.1$4,036 
Granted5,000 24.07 — — 
Exercised(351,596)14.59 — — 
Forfeited(11,700)25.36 — — 
Options outstanding at March 31, 2023570,574 $25.68 5.3$327 
Exercisable at March 31, 2023493,764 $25.39 4.9$287 
Non-vested at March 31, 202376,810 $27.55 8.2$40 
Assumptions used in estimating the fair value of options granted during the nine months ended March 31, 2023 and March 31, 2022 are detailed below:
March 31, 2023March 31, 2022
Weighted-average volatility27.78 %28.02 %
Expected dividend yield1.62 %1.12 %
Risk-free interest rate3.11 %1.90 %
Expected life (years)6.56.5
Weighted-average fair value of options granted$6.77 $8.68 
At March 31, 2023, the Company had $529 of unrecognized compensation expense related to 76,810 stock options originally scheduled to vest over a failurefive-year period. The weighted average period over which compensation cost related to meetnon-vested awards expected to be recognized was 1.8 years at March 31, 2023. At March 31, 2022, the definitionCompany had $1,076 of unrecognized compensation expense related to 171,150 stock options originally scheduled to vest over a bank, dividend paymentsfive-year period. The weighted average period over which compensation cost related to non-vested awards expected to be recognized was 1.8 years at March 31, 2022.
31

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in excessthousands, except per share data)
The table below presents restricted stock award activity and related information:
Restricted
Stock Awards		Weighted-
Average Grant
Date Fair Value		Aggregate
Intrinsic
Value
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 
Non-vested at June 30, 2022135,910 $27.40 $2,345 
Granted75,358 27.24 — 
Vested(55,449)27.38 — 
Forfeited(6,200)27.64 — 
Non-vested at March 31, 2023149,619 $27.31 $3,134 
The table above includes non-vested performance-based restricted stock units totaling 40,362 and 33,218 at March 31, 2023 and 2022, respectively. Each issuance of current year or accumulated earningsthese stock units is scheduled to vest over 3.0 years assuming the applicable dilutive EPS goals are met.
At March 31, 2023, unrecognized compensation expense was $3,628 related to 149,619 shares of restricted stock originally scheduled to vest over three- and profits, or other distributions in dissolution or liquidationfive-year periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 2.0 years at March 31, 2023. At March 31, 2022, unrecognized compensation expense was $3,137 related to 135,510 shares of the Bank.restricted stock originally scheduled to vest over three- and five-year periods. The Companyweighted average period over which compensation cost related to non-vested awards is no longer subjectexpected to examination for federal and state purposes for taxbe recognized was 1.9 years prior to 2013.at March 31, 2022.
8.Net Income (Loss) per Share
11.    Net Income per Share
The following is a reconciliation oftable sets forth the numerator and denominatorcomputation of basic and diluted net income (loss) per common share of common stock:
 Three Months Ended December 31, Six Months Ended December 31,
 2017 2016 2017 2016
Numerator:       
Net income (loss)$(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
for the periods indicated:
Three Months Ended March 31,Nine Months Ended March 31,
2023202220232022
Numerator
Net income$6,734 $8,023 $29,591 $29,628 
Allocation of earnings to participating securities(64)(69)(292)(254)
Numerator for basic EPS - Net income available to common stockholders$6,670 $7,954 $29,299 $29,374 
Effect of dilutive securities
Dilutive effect of participating securities$— $— $— $— 
Numerator for diluted EPS$6,670 $7,954 $29,299 $29,374 
Denominator    
Weighted-average common shares outstanding - basic16,021,994 15,523,813 15,341,222 15,666,093 
Dilutive effect of assumed exercises of stock options55,122 269,199 107,838 331,284 
Weighted-average common shares outstanding - diluted16,077,116 15,793,012 15,449,060 15,997,377 
Net income per share - basic$0.40 $0.51 $1.91 $1.87 
Net income per share - diluted$0.40 $0.51 $1.90 $1.84 
Potential dilutive shares are excluded from the computation of earnings per share if their effect is anti-dilutive. There were no112,250 and 538,374 of stock options that were anti-dilutive for the three and nine months ended DecemberMarch 31, 2016.2023. There were 46,50047,850 and 95,350 of stock options that were anti-dilutive for the sixthree and nine months ended DecemberMarch 31, 2016.2022, respectively.
9.Equity Incentive Plan
The Company provides stock-based awards through the 2013 Omnibus Incentive Plan, which provides for awards of restricted stock, restricted stock units, stock options, stock appreciation rights12.    Commitments and cash awards to 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. 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.Contingencies
Shares of common stock issued under the 2013 Omnibus Incentive Plan may be authorized but unissued shares or repurchased shares. During fiscal 2013, the Company had repurchased the 846,400 shares available for awards of restricted stock and restricted stock units under the 2013 Omnibus Incentive Plan on the open market, for $13,297, at an average cost of $15.71 per share.
The table below presents share based compensation expense and the estimated related tax benefit for stock options and restricted stock for the three and six months ended December 31, 2017 and 2016:
 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 for the six months ended December 31, 2017 and 2016:
 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
At December 31, 2017, the Company had $835 of unrecognized compensation expense related to 411,500 stock options originally scheduled to vest over five- and seven-year vesting periods.  The weighted average period over which compensation cost related to non-vested awards expected to be recognized was 0.7 years at December 31, 2017. At December 31, 2016, the Company had $2,444 of unrecognized compensation expense related to 699,900 stock options originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards expected to be recognized was 0.9 years at December 31, 2016.
The table below presents restricted stock award activity for the six months ended December 31, 2017 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 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 1.1 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.

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

10.Commitments and Contingencies
Loan Commitments – Legally binding commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. In the normal course of business, there are various outstanding commitments to extend credit that are not reflected in the consolidated financial statements. At DecemberMarch 31, 20172023 and June 30, 2017,2022, respectively, loan commitments (excluding $123,262$270,491 and $158,380$312,893 of undisbursed portions of construction loans) totaled $54,720$93,915 and $43,730$104,745 of which $25,846$13,754 and $21,221$23,159 were variable rate commitments and $28,874$80,161 and $22,509$81,586 were fixed rate commitments. The fixed rate loansloan commitments had interest rates ranging from 2.03%1.55% to 7.75%9.69% at DecemberMarch 31, 20172023 and 1.95%1.41% to 6.25%9.00% at June 30, 2017,2022, 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$597,522 and $414,373$485,239 at DecemberMarch 31, 20172023 and June 30, 2017,2022, 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.
32

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
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.such as TBAs, mandatory delivery commitments with investors, or best efforts forward sale commitments with investors. The fair value of these interest rate lock commitments was not material at DecemberMarch 31, 20172023 or June 30, 2017.2022.
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, 20172023 and June 30, 20172022 were $9,927$31,090 and $5,164,$18,362, respectively. There was no liability recorded for these letters of credit at DecemberMarch 31, 20172023 or June 30, 2017, respectively.2022.
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
The Company utilizes13.    Fair Value of Financial Instruments
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:
Level 1:    Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
Level 2:    Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3:    Significant unobservable inputs that reflect a company's own assumptions about the assumptions that market participants would use in pricing an asset or liability.
A financial instrument's level within the fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets.
Fair Value Hierarchy
The Company groups assets at fair value in three levels,hierarchy is based on the markets in whichlowest level of any input that is significant to the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:
Level 1:Valuation is based upon quoted prices for identical instruments traded in active markets.
Level 2:Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
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.
Followingvalue measurement. The following is a description of valuation methodologies used for assets recorded at fair value. TheAs of both March 31, 2023 and June 30, 2022, the Company doesdid not have any liabilities recorded at fair value.
Investment Securities Available for Sale
Securities available for saleThe methods of determining the fair value of assets and liabilities presented in this note are valued on a recurring basis at quoted market prices where available. If quoted market prices are not available, fair values are based on quoted pricesconsistent with the methodologies disclosed in Note 19 of comparable securities. Level 2 securities include mortgage-backed securities and debentures issued by government sponsored enterprises, municipal bonds, and corporate debt securities. The Company has no Level 3 securities.

the 2022 Form 10-K.
29
33

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 payment 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 which the fair value of the expected repayments or collateral exceed the recorded investments 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 part 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.
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, 2023
TotalLevel 1Level 2Level 3
Debt securities available for sale
U.S government agencies$15,565 $— $15,565 $— 
MBS, residential101,131 — 101,131 — 
Municipal bonds3,432 — 3,432 — 
Corporate bonds34,590 — 34,590 — 
Total debt securities available for sale$154,718 $— $154,718 $— 
Loans held for sale$1,209 $— $1,209 $— 
 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, 2022
TotalLevel 1Level 2Level 3
Debt securities available for sale
U.S government agencies$18,459 $— $18,459 $— 
MBS, residential47,233 — 47,233 — 
Municipal bonds5,558 — 5,558 — 
Corporate bonds55,728 — 55,728 — 
Total debt securities available for sale$126,978 $— $126,978 $— 
 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
 $—
Loans held for sale carried at fair value are valued at the individual loan level using quoted secondary market prices.
There were no transfers between levels during the three or sixnine months ended DecemberMarch 31, 2017.2023 and June 30, 2022.

The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated:
March 31, 2023
TotalLevel 1Level 2Level 3
Collateral dependent loans
Commercial real estate
Commercial real estate - owner occupied$920 $— $— $920 
Commercial real estate - non-owner occupied2,971 — — 2,971 
Commercial loans
Commercial and industrial336 — — 336 
Total$4,227 $— $— $4,227 
June 30, 2022
TotalLevel 1Level 2Level 3
Collateral dependent loans
Commercial loans
Commercial and industrial$415 $— $— $415 
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
34

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, 20172023 and June 30, 2017,2022, are summarized below:
 March 31, 2023
Carrying
Value		Fair
Value		Level 1Level 2Level 3
Assets
Cash and cash equivalents$314,413 $314,413 $314,413 $— $— 
Certificates of deposit in other banks33,102 33,102 — 33,102 — 
Debt securities available for sale, at fair value154,718 154,718 — 154,718 — 
FHLB and FRB stock19,125 N/AN/AN/AN/A
SBIC investments, at cost13,620 13,620 — — 13,620 
Loans held for sale, at fair value1,209 1,209 — 1,209 — 
Loans held for sale, at the lower of cost
  or fair value		89,172 91,040 — — 91,040 
Loans, net3,601,830 3,468,167 — — 3,468,167 
Accrued interest receivable13,813 13,813 — 786 13,027 
Liabilities
Noninterest-bearing and NOW deposits1,550,670 1,550,670 — 1,550,670 — 
Money market accounts1,299,503 1,299,503 — 1,299,503 — 
Savings accounts228,390 228,390 — 228,390 — 
Certificates of deposit597,036 588,776 — 588,776 — 
Junior subordinated debt9,945 9,980 — 9,980 — 
Borrowings320,263 320,261 — 320,261 — 
Accrued interest payable1,660 1,660 — 1,660 — 
 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
 —

31
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

June 30, 2022
June 30, 2017Carrying
Value		Fair
Value		Level 1Level 2Level 3
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
 —
 —
AssetsAssets
Cash and cash equivalentsCash and cash equivalents$105,119 $105,119 $105,119 $— $— 
Commercial paper, netCommercial paper, net194,427 194,427 194,427 — — 
Certificates of deposit in other banks132,274
 132,274
 —
 132,274
 —
Certificates of deposit in other banks23,551 23,551 — 23,551 — 
Securities available for sale199,667
 199,667
 —
 199,667
 —
Debt securities available for saleDebt securities available for sale126,978 126,978 — 126,978 — 
FHLB and FRB stockFHLB and FRB stock9,326 N/AN/AN/AN/A
SBIC investments, at costSBIC investments, at cost12,758 12,758 — — 12,758 
Loans held for saleLoans held for sale79,307 80,489 — — 80,489 
Loans, net2,330,319
 2,230,683
 —
 —
 2,230,683
Loans, net2,734,605 2,687,293 — — 2,687,293 
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
Accrued interest receivable8,573 8,573 24 580 7,969 
LiabilitiesLiabilities
Noninterest-bearing and NOW deposits779,549
 779,549
 —
 779,549
 —
Noninterest-bearing and NOW deposits1,400,727 1,400,727 — 1,400,727 — 
Money market accounts569,607
 569,607
 —
 569,607
 —
Money market accounts969,661 969,661 — 969,661 — 
Savings accounts237,149
 237,149
 —
 237,149
 —
Savings accounts238,197 238,197 — 238,197 — 
Certificates of deposit462,146
 458,818
 —
 458,818
 —
Certificates of deposit491,176 485,452 — 485,452 — 
Borrowings696,500
 696,500
 —
 696,500
 —
Accrued interest payable512
 512
 —
 512
 —
Accrued interest payable80 80 — 80 — 
The Company had off-balance sheet financial commitments, which included approximately $625,769$993,018 and $616,483$921,239 of commitments to originate loans, undisbursed portions of interim construction loans, and unused lines of credit, and standby letters of credit at DecemberMarch 31, 20172023 and June 30, 2017,2022, respectively (see Note 10)"Note 12 – Commitments and Contingencies"). Since these commitments are based on current rates, the carrying amount approximates the fair value.
Estimated fair values were determined using the following methods and assumptions:
35
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 the 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 deemed to be a reasonable estimate of fair value.
Deposits– Fair values for demand deposits, money market accounts, and savings accounts are the amounts payable on demand 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.
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)

a financial asset is premises and equipment. In addition, tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.


Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations
In November 2020, the SEC adopted amendments to Regulation S-K to eliminate certain disclosure requirements and to revise several others to make the disclosures provided in the management's discussion and analysis section more useful for investors. When providing a discussion and analysis of interim period results, the amendments provide a registrant with the option to discuss its interim results by comparing its most recent quarter to the immediately preceding quarter rather than to the same quarter of the prior year. The Company elected to exercise this option as it believes that the comparison of current quarter results to a linked quarter, rather than the prior year comparable quarter, more accurately reflects management's perspective of the organization and its results.
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,statements.
The factors that could result in material differentiation include, but are not limited to:
•the remaining effects of the COVID-19 pandemic on general economic and financial market conditions and on public health, both nationally and in our market areas;
•expected revenues, cost savings, synergies and other benefits from our merger and acquisition activities, including our recent merger with Quantum, might not be realized to the extent anticipated, within the anticipated time frames, or at all, and costs or difficulties relating to integration matters, including but not limited to: to customer and employee retention, might be greater than expected;
•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; sources and the effects of inflation or a potential recession;
•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 effecteffects of the 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");
•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 FASB;
36

•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 2017this report on Form 10-K.10-Q.
Any of the forward-looking statements are based upon management'smanagement’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"“we,” “our,” “us,” “HomeTrust Bancshares” or the "Company"“Company” refer to HomeTrust Bancshares, Inc. and its consolidated subsidiaries, including HomeTrust Bank (the(“HomeTrust” or "Bank") unless the context indicates otherwise.
Overview
HomeTrust Bancshares, Inc., a Maryland corporation, was formed for the purpose of becoming the holding company for HomeTrust Bank in connection with HomeTrustthe Bank’s conversion from mutual to stock form, which was completed on July 10, 2012 (the “Conversion”).2012. As a bank holding company and financial holding company, HomeTrust Bancshares, Inc. iswe are regulated by the Federal Reserve. The Company has not engaged in any significant activity other than holding the stock of the Bank. 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 1211 regional banks in the Federal Home Loan Bank System (“FHLB System”).System. Our headquarters is located in Asheville, North Carolina.
After completing our merger with Quantum on February 12, 2023, the Bank has more than 30 locations across Georgia, North Carolina, South Carolina, Tennessee, and Virginia, many of which are located in markets experiencing growth rates above the national average. Historically, our branches and facilities have primarily been located in small- to medium-sized communities, but in recent years we have implemented a strategy of expanding into larger, higher growth markets via business banking centers rather than retail-focused branches.
Our principal business consists of attracting deposits from the general public and investing those funds, along with borrowed funds, in commercial real estate loans, construction and development loans, commercial and industrial loans, equipment finance leases, municipal leases, loans secured by first and second mortgages on one-to-four family residences including home equity and other consumer loans. We also originate one-to-four family loans, SBA loans, and 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 equipmentHELOCs to fire departments located throughout North and South Carolina. We also purchase investmentsell 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 pay on our deposits and borrowings. Changes in levels of interest rates affect our net interest income.
A secondary source of income is noninterest income, which includes revenue we receive from providing products and services, including service charges and fees on deposit accounts, loan income and fees, SBA lending fees,gains on the sale of loans held for sale, BOLI income, and gains and losses from sales of securities.operating lease income.
An offset to net interest income is the provision for loancredit losses which is required to establish the allowance for loan lossesACL at a level that adequately provides for probablecurrent expected credit losses inherent in our loan portfolio. As a loan's risk rating improves, property values increase, or recoveriesportfolio, off balance sheet credit commitments, and available for sale debt securities. See "Note 1 – Summary of amounts previously charged off are received, a recaptureSignificant Accounting Policies" in Item 1 of previously recognized provisionour 2022 Form 10-K 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, marketing and computer services, and FDIC deposit insurance premiums. Salaries and benefits consist primarily of the salaries and wages paid to our employees, payroll taxes, expenses for retirement, and other employee benefits. Occupancy expenses, which are the fixed and variable costs of buildings and equipment, consist primarily of lease payments, property taxes, depreciation charges, maintenance, and costs of utilities.
In recent years, we have expanded our geographic footprint into seven additional markets through strategic acquisitions as well as three de novo commercial loan offices. Looking forward, we believe opportunities currently exist within our market areas to grow our franchise. We anticipate organic growth as the local economy and loan demand strengthens, through our marketing efforts and as a result of the opportunities being created as a result of the consolidation of financial institutions occurring in our market areas. 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 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 December 31, 2017, we had 43 locations in North Carolina (including the Asheville metropolitan area, Greensboro/"Piedmont" region, Charlotte, and Raleigh), Upstate South Carolina (Greenville), East Tennessee (including Kingsport/Johnson City/Bristol, Knoxville, and Morristown) and Southwest Virginia (including the Roanoke Valley).
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 represent our critical accounting policies:
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 provisionloan portfolio. The estimate of our ACL involves a high degree of judgment; therefore, our process for determining expected credit losses may result in a range of expected credit losses. Our ACL recorded in the balance sheet reflects our best estimate within the range of expected credit losses. We recognize in net income 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.
Business Combinations and Acquired Loans.  ASC 805 requires that we use the allowanceacquisition method of accounting for loan losses, (ii)all business combinationscombinations. The acquisition method of accounting requires us as the acquirer to recognize the fair value of assets acquired and liabilities assumed at the acquisition date, as well as, recognize goodwill or a gain from a bargain purchase, if appropriate. Any acquisition-related costs and restructuring costs are recognized as period expenses as incurred.
37

The fair value for acquired loans (iii)at the valuationtime of REO, (iv)acquisition is based on a variety of factors including discounted expected cash flows, adjusted for estimated prepayments and credit losses. In accordance with ASC 326, the valuationfair value adjustment is recorded as premium or discount to the unpaid principal balance of goodwilleach acquired loan. Loans that have been identified as having experienced a more-than-insignificant deterioration in credit quality since origination are PCD loans. An ACL on PCD loans is established at the time of acquisition as part of the purchase accounting adjustments, while the remaining net premium or discount is accreted or amortized into interest income over the remaining life of the loan using the level yield method. The net premium or discount on non-PCD loans, that includes credit quality and other intangibleinterest rate considerations, is accreted or amortized into interest income over the remaining life of the loan using the level yield method. The Company then records the necessary ACL on the non-PCD loans through provision for credit losses expense.
Financial Highlights
Results for the quarter ended March 31, 2023 include the impact of the merger of Quantum into the Company effective February 12, 2023. The addition of Quantum contributed total assets of $656.7 million, including loans of $561.9 million, and (v)$570.6 million of deposits, all reflecting the valuationimpact of or recognitionpurchase accounting adjustments. Merger-related expenses of deferred tax assets$4.7 million 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 changes in the Company's critical accounting policies and estimates$5.5 million were recognized during the sixthree and nine months ended March 31, 2023, while a $5.3 million provision for credit losses was recognized during the three months ended March 31, 2023 to establish allowances for credit losses on both Quantum's loan portfolio and off-balance-sheet credit exposure. Quantum's scheduled core system conversion was completed in March.
For the quarter ended March 31, 2023 compared to the quarter ended December 31, 2017 as2022:
•net income was $6.7 million compared to $13.7 million;
•diluted EPS was $0.40 compared to $0.90;
•annualized ROA was 0.69% compared to 1.54%;
•annualized ROE was 6.21% compared to 13.37%;
•net interest income was $41.5 million compared to $37.5 million;
•net interest margin was 4.55% compared to 4.53%;
•provision for credit losses was $8.8 million compared to $2.2 million;
•noninterest income was $8.3 million compared to $8.5 million;
•net organic loan growth was $104.1 million, or 14.2% annualized, compared to $121.9 million, or 17.4% annualized; and
•quarterly cash dividends of $0.10 per share totaling $1.7 million compared to $1.5 million.
For the nine months ended March 31, 2023 compared to the disclosure containednine months ended March 31, 2022:
•net income was $29.6 million compared to $29.6 million;
•diluted EPS was $1.90 compared to $1.84;
•annualized ROA was 1.07% compared to 1.12%;
•annualized ROE was 9.52% compared to 9.91%;
•net interest income was $113.5 million compared to $81.9 million;
•net interest margin was 4.40% compared to 3.34%;
•provision for credit losses was $15.0 million compared to a net benefit of $4.0 million;
•noninterest income was $24.2 million compared to $29.4 million;
•net organic loan growth was $307.8 million, or 15.1% annualized, compared to $34.9 million, or 1.8% annualized; and
•cash dividends of $0.29 per share totaling $4.5 million compared to $0.26 per share totaling $4.1 million.
Three Months EndedNine Months Ended
(Dollars in thousands)March 31, 2023December 31, 2022March 31, 2023March 31, 2022
Interest and dividend income$50,666 $41,402 $127,995 $85,988 
Interest expense9,212 3,857 14,476 4,073 
Net interest income41,454 37,545 113,519 81,915 
Provision (benefit) for credit losses8,760 2,240 14,987 (4,005)
Net interest income after provision (benefit) for credit losses32,694 35,305 98,532 85,920 
Noninterest income8,310 8,454 24,162 29,393 
Noninterest expense32,833 26,076 84,998 77,638 
Income before income taxes8,171 17,683 37,696 37,675 
Income tax expense1,437 4,025 8,105 8,047 
Net income$6,734 $13,658 $29,591 $29,628 
Net income per common share(1)
  
Basic$0.40 $0.90 $1.91 $1.87 
Diluted0.40 0.90 1.90 1.84 
Cash dividends declared per common share0.10 0.10 0.29 0.26 
Book value per share at end of period26.38 26.17 26.38 24.73 
Tangible book value per share at end of period(2)
23.93 24.53 23.93 23.13 
Market price per share at end of period24.59 24.17 24.59 29.53 
(1)Basic and diluted net income per common share have been prepared in the Company's 2017 Form 10-K,accordance with the exceptiontwo-class method.
(2)See Non-GAAP reconciliations below for adjustments.
38

GAAP Reconciliation of Non-GAAP Financial Measures
We believe the revaluation of net deferred tax assets relatednon-GAAP financial measures included within this report provide useful information to the Tax Act. For more information on the revaluation, see Note 7 of the Notesmanagement and investors that is supplementary 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.


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 oncondition, results of operations and financial condition.
Non-GAAP Financial Measures

In addition to results presentedcash flows computed in accordance with GAAP, this report contains certainUS GAAP; however, we acknowledge that our non-GAAP financial measures which include: tangible book value per share; 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 salehave a number of premises and equipment; and the ratiolimitations. The following reconciliation tables provide detailed analyses 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.

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 excluding these items is more indicative of and provides useful and comparative information to assess trends in our core operations while facilitating comparison of the quality and composition of the Company’s earnings over time and in comparison to its 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” for more detailed information about our financial performance.
Set forth below is a reconciliation to US GAAP of tangible book value and tangible book value per share:
As of
March 31,December 31,September 30,June 30,
(Dollars in thousands, except per share data)2023202220222022
Total stockholders' equity$458,242 $410,155 $396,222 $388,845 
Less: goodwill, core deposit intangibles, net of taxes42,642 25,663 25,683 25,710 
Tangible book value$415,600 $384,492 $370,539 $363,135 
Common shares outstanding17,370,063 15,673,595 15,632,348 15,591,466 
Book value per share at end of period$26.38 $26.17 $25.35 $24.94 
Tangible book value per share at end of period$23.93 $24.53 $23.70 $23.29 
  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 US GAAP of tangible equity to tangible assets:
As of
March 31,December 31,September 30,June 30,
(Dollars in thousands)2023202220222022
Tangible equity (1)
$415,600 $384,492 $370,539 $363,135 
Total assets4,526,870 3,647,015 3,555,186 3,549,204 
Less: goodwill, core deposit intangibles, net of taxes42,642 25,663 25,683 25,710 
Total tangible assets$4,484,228 $3,621,352 $3,529,503 $3,523,494 
Tangible equity to tangible assets9.27 %10.62 %10.50 %10.31 %
(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.
39
  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%

(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, adjustmentsComparison of Results of Operations 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:
 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 DecemberThree Months Ended March 31, 2017 and June 30, 2017
General. Total assets increased $44.0 million, or 1.4% to $3.3 billion at December 31, 2017 from $3.2 billion at June 30, 2017. Total liabilities increased $46.3 million, or 1.6% to $2.9 billion at December 31, 2017 from $2.8 billion at June 30, 2017. Deposit growth of $59.8 million, or 2.9% and the cumulative decrease of $63.9 million, or 19.3% in certificates of deposit in other banks and securities available 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% increase in commercial paper, and reduce borrowings by $11.5 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 as the required purchase of additional FHLB stock which generates increased dividend income.
Cash, cash equivalents, and commercial paper.  Total cash and cash equivalents increased $11.7 million, or 13.4%, to $98.7 million at December 31, 2017 from $87.0 million at June 30, 2017 mainly due to additional funds held at the Federal Reserve Bank. In conjunction with our leveraging strategy, we purchase commercial paper to take advantage of higher returns with relatively low risk while remaining highly liquid. The commercial paper balance increased $49.9 million, or 33.3% to $199.7 million at December 31, 2017 from $149.9 million at June 30, 2017.
Investments. Securities available for sale decreased $32.0 million, or 16.0%, to $167.7 million at December 31, 2017 from $199.7 million at June 30, 2017. During the six months ended December 31, 2017, $19.7 million of securities matured and $10.9 million of principal payments were received. At December 31, 2017, certificates of deposit in other banks decreased $32.0 million, or 24.1% to $100.3 million compared to $132.3 million at June 30, 2017. The decrease in certificates of deposit in other banks was due to $44.5 million in maturities partially offset by $12.6 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 at December 31, 2017 included FRB and FHLB stock totaling $7.3 million and $31.6 million, respectively. In total, other investments decreased $478,000, or 1.2% from June 30, 2017 as a result of required redemptions of FHLB stock due to reductions in our FHLB borrowings.
Loans held for sale. Loans held for sale increased $1.5 million, or 26.1% at December 31, 2017 to $7.1 million from $5.6 million at June 30, 2017. The increase was driven by volume increases as 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 million, or 2.9%, at December 31, 2017 to $2.4 billion from June 30, 2017 primarily due to $66.8 million of organic loan growth.
For the six-month period ended December 31, 2017, retail loan portfolio originations increased $16.2 million, or 11.0% to $163.7 million from $147.5 million, compared to the same period in the previous year. For 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 acquisitions and purchases of HELOCs, was $66.8 million or 6.1% annualized.


Retail 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,
(Dollars in thousands)2017 2017 $ % 2017 2017
Retail consumer loans:           
One-to-four family$686,229
 $684,089
 $2,140
 0.3 % 28.4% 29.1%
HELOCs - originated150,084
 157,068
 (6,984) (4.4) 6.2
 6.7
HELOCs - purchased162,181
 162,407
 (226) (0.1) 6.7
 6.9
Construction and land/lots60,805
 50,136
 10,669
 21.3
 2.5
 2.1
Indirect auto finance150,042
 140,879
 9,163
 6.5
 6.2
 6.0
Consumer9,699
 7,900
 1,799
 22.8
 0.4
 0.3
Total retail consumer loans1,219,040
 1,202,479
 16,561
 1.4
 50.4
 51.1
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%
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. Nonperforming assets decreased $800,000 to $19.2 million, or 0.59% of total assets, at December 31, 2017 from $20.0 million at June 30, 2017. Nonperforming assets included $14.4 million in nonaccruing loans and $4.8 million in REO at December 31, 2017, compared to $13.7 million and $6.3 million, 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. Nonperforming loans to total loans was 0.59% at December 31, 2017 compared to 0.58% at June 30, 2017.
The ratio of classified assets to total assets decreased to 1.39% at December 31, 2017 from 1.57% at June 30, 2017. Classified assets decreased 10.8% to $44.8 million at December 31, 2017 compared to $50.2 million at June 30, 2017 primarily due to payoffs of two commercial real estate 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 of loans on non-accrual status and all TDRs, whether performing or on non-accrual status under their restructured terms. Impaired loans may be evaluated for reserve purposes using either a specific impairment analysis or on a collective basis as part of homogeneous pools. As of December 31, 2017, there were $19.8 million loans individually evaluated for impairment and $21.0 million were collectively evaluated. For more information on these impaired loans, see Note 5 of the Notes to Consolidated Financial Statements under Item 1 of this report.
Allowance for loan 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 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 million, or 0.87% of total loans, at December 31, 2017 compared to $21.2 million, or 0.90% of total loans, at June 30, 2017. The allowance for loan losses to gross loans excluding acquired loans was 0.97% at December 31, 2017, 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 for loan losses is established 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 six months ended December 31, 20172023 and December 31, 2016 as2022
Net Income.  Net income totaled $6.7 million, or $0.40 per diluted share, for the allowance for loan losses required by our loan growth was offset by continued improvements in our asset quality. Net loan charge offs totaled $907,000three months ended March 31, 2023 compared to net income of $13.7 million, or $0.90 per diluted share, for the three months ended December 31, 2017 compared to net recoveries2022, a decrease of $35,000 for the same period during the prior fiscal 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 offs as a percentage of average loans increased to 0.15%$7.0 million, or 50.7%. The results for the three months ended DecemberMarch 31, 2017 from net recoveries2023 were negatively impacted by increases of (0.01)% for the same 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 nonaccruing loans decreased to 146.79% at December 31, 2017 from 154.77% at June 30, 2017.
We believe that the allowance for loan losses as of December 31, 2017 was adequate to absorb the known and inherent risks of loss$6.5 million in the loan portfolio at that date. While we believe the estimatesprovision for credit losses 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$6.8 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 million, or 36.4%, to $36.5 million at December 31, 2017 from $57.4 million at June 30, 2017. The decrease was primarily driven by the previously mentioned revaluation as a result of the Tax Act, the realization of net operating losses through increases in taxable income, 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 werenoninterest expense, partially offset by a $20.1$4.0 million managed run offincrease in our higher costing certificatesnet interest income. These changes were primarily related to the merger with Quantum completed this quarter. Details of deposit and brokered deposits by competing less aggressively for time deposits.the changes in the various components of net income are further discussed below.
Net Interest Income.The following table sets forth our deposits by typepresents the distribution of deposit account as of the dates indicated:
 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 to $685.0 million at December 31, 2017 from $696.5 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.


Equity.  Stockholders'assets, liabilities and 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/Cost
The following table sets forth for the periods indicated, information regarding average balances of assets and liabilities as well as the total dollar amounts of interest income fromearned on 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.
 Three Months Ended
 March 31, 2023December 31, 2022
(Dollars in thousands)Average
Balance
Outstanding		Interest
Earned /
Paid		Yield /
Rate		Average
Balance
Outstanding		Interest
Earned /
Paid		Yield /
Rate
Assets
Interest-earning assets
Loans receivable(1)
$3,413,641$47,908 5.69 %$2,999,207$38,995 5.16 %
Commercial paper—— — 34,487184 2.12 
Debt securities available for sale156,7781,183 3.06 167,8181,151 2.72 
Other interest-earning assets(2)
124,1201,575 5.15 86,4301,072 4.92 
Total interest-earning assets3,694,53950,666 5.56 3,287,94241,402 5.00 
Other assets253,746236,159
Total assets$3,948,285$3,524,101
Liabilities and equity
Interest-bearing liabilities
Interest-bearing checking accounts$645,011$976 0.61 %$627,548$571 0.36 %
Money market accounts1,133,4154,338 1.55 954,0071,935 0.80 
Savings accounts230,82048 0.08 236,02745 0.08 
Certificate accounts515,3262,502 1.97 444,8451,052 0.94 
Total interest-bearing deposits2,524,5727,864 1.26 2,262,4273,603 0.63 
Junior subordinated debt5,299109 8.34 —— — 
Borrowings98,4001,239 5.11 26,063254 3.87 
Total interest-bearing liabilities2,628,2719,212 1.42 2,288,4903,857 0.67 
Noninterest-bearing deposits830,510785,785
Other liabilities49,67444,333
Total liabilities3,508,4553,118,608
Stockholders' equity439,830405,493
Total liabilities and stockholders' equity$3,948,285$3,524,101
Net earning assets$1,066,268$999,452
Average interest-earning assets to average interest-bearing liabilities140.57 %143.67 %
Non-tax-equivalent
Net interest income$41,454 $37,545 
Interest rate spread4.14 %4.33 %
Net interest margin(3)
4.55 %4.53 %
Tax-equivalent(4)
Net interest income$41,744 $37,832 
Interest rate spread4.17 %4.36 %
Net interest margin(3)
4.58 %4.56 %
 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%
(1) The averageAverage loans receivable net balances include loans held for sale and nonaccruing loans.
(2)Average other interest-earning assets consist of FRB stock, FHLB stock, SBIC investments, and deposits in other banks.
(3)Net interest income divided by average interest-earning assets.
(4)Interest income used in the average interest/interest earned and yield calculation includes the tax equivalent adjustment of $378,000$290 and $573,000$287 for the three months ended March 31, 2023 and December 31, 2017 and 2016,2022, respectively, calculated based on a combined federal and state tax rate of 30%24%.
Total interest and 37%dividend income for the three months ended March 31, 2023 increased $9.3 million, or 22.4%, respectively.compared to the three months ended December 31, 2022, which was driven by a $8.9 million, or 22.9%, increase in interest income on loans. Accretion income on acquired loans of $353,000 and $195,000 was recognized during the same periods, respectively, and was included in interest income on loans.
(3)
40

Beyond accretion income, the increase was driven by a continued increase in the average yield on loans and the inclusion of Quantum's loan portfolio for roughly half a quarter.
Total interest expense for the three months ended March 31, 2023 increased $5.4 million, or 138.8%, compared to the three months ended December 31, 2022. The increase was the result of increases in the average othercost of funds across funding sources, an increase in average deposits outstanding and the inclusion of junior subordinated debt assumed from Quantum.
The following table shows the effects that changes in average balances (volume), including differences in the number of days in the periods compared, and average interest rates (rate) had on the interest earned on interest-earning assets consistsand interest paid on interest-bearing liabilities:
Increase / (Decrease)
Due to		Total
Increase /
(Decrease)
(Dollars in thousands)VolumeRate
Interest-earning assets
Loans receivable$4,324 $4,589 $8,913 
Commercial paper(184)— (184)
Debt securities available for sale(102)134 32 
Other interest-earning assets432 71 503 
Total interest-earning assets4,470 4,794 9,264 
Interest-bearing liabilities
Interest-bearing checking accounts(6)411 405 
Money market accounts267 2,136 2,403 
Savings accounts(2)5 3 
Certificate accounts111 1,339 1,450 
Junior subordinated debt109 — 109 
Borrowings677 308 985 
Total interest-bearing liabilities1,156 4,199 5,355 
Net increase in interest income$3,909 
Provision for Credit Losses.The provision for credit losses is the amount of FRBexpense that, based on our judgment, is required to maintain the ACL at an appropriate level under the CECL model.
The following table presents a breakdown of the components of the provision for credit losses:
Three Months Ended
(Dollars in thousands)March 31, 2023December 31, 2022$ Change% Change
Provision for credit losses
Loans$8,360 $2,425 $5,935 245 %
Off-balance-sheet credit exposure400 (85)485 571 
Commercial paper— (100)100 100 
Total provision for credit losses$8,760 $2,240 $6,520 291 %
For the quarter ended March 31, 2023, the "loans" portion of the provision for credit losses was the result of the following, offset by net charge-offs of $0.1 million during the quarter:
•$4.9 million provision to establish an allowance on Quantum's loan portfolio.
•$2.0 million provision driven by loan growth and changes in the loan mix.
•$1.2 million provision due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments.
•$0.2 million increase in specific reserves on individually evaluated credits.
For the quarter ended December 31, 2022, the "loans" portion of the provision for credit losses was the result of the following, offset by net charge-offs of $1.9 million during the quarter:
•$1.6 million provision driven by loan growth and changes in the loan mix.
•$0.4 million provision due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments.
•$1.5 million reduction of specific reserves on individually evaluated credits, which was tied to two relationships which were fully charged-off during the quarter.
For the quarter ended March 31, 2023, a provision of $0.4 million was also recorded to establish an allowance on Quantum's off-balance-sheet credit exposure. For the quarter ended December 31, 2022, the change was the result of changes in the balance of loan commitments as well as changes in the loan mix and changes in the projected economic forecast outlined above.

41

Noninterest Income.  Noninterest income for the three months ended March 31, 2023 decreased $0.1 million, or 1.7%, when compared to the quarter ended December 31, 2022. Changes in the components of noninterest income are discussed below:
Three Months Ended
(Dollars in thousands)March 31, 2023December 31, 2022$ Change% Change
Noninterest income
Service charges and fees on deposit accounts$2,256 $2,523 $(267)(11)%
Loan income and fees562 647 (85)(13)
Gain on sale of loans held for sale1,811 1,102 709 64 
BOLI income522 494 28 6 
Operating lease income1,505 1,156 349 30 
Gain (loss) on sale of premises and equipment900 1,127 (227)(20)
Other754 1,405 (651)(46)
Total noninterest income$8,310 $8,454 $(144)(2)%
•Gain on sale of loans held for sale: The increase in the gain on sale of loans held for sale was primarily driven by an increase in volume of SBA loans sold during the period. During the quarter ended March 31, 2023, there were $16.6 million in sales of the guaranteed portion of SBA commercial loans with gains of $1.2 million compared to $8.2 million sold and gains of $568,000 for the quarter ended December 31, 2022. There were $6.4 million of residential mortgage loans originated for sale which were sold during the current quarter with gains of $147,000 compared to $7.3 million sold with gains of $183,000 in the prior quarter. There were $35.2 million of HELOCs sold during the current quarter for a gain of $354,000 compared to $41.4 million sold and gains of $340,000 in the prior quarter.
•Operating lease income: The increase in operating lease income was the result of a net gain of $17,000 at the end of operating leases for the quarter ended March 31, 2023 versus a net loss of $337,000 for the quarter ended December 31, 2022.
•Gain (loss) on sale of premises and equipment: During the quarter ended March 31, 2023, one property was sold for a gain of $900,000. During the quarter ended December 31, 2022, two properties were sold for a combined gain of $1.6 million, partially offset by additional impairment of $420,000 on premises and equipment associated with prior branch closures.
•Other: The decrease in other income was driven by a $721,000 gain recognized during the quarter ended December 31, 2022 on the sale of closely held equity securities which the Company obtained through a prior bank acquisition. No such sales occurred during the quarter ended March 31, 2023.
Noninterest Expense.  Noninterest expense for the three months ended March 31, 2023 increased $6.8 million, or 25.9%, when compared to the three months ended December 31, 2022. Changes in the components of noninterest expense are discussed below:
Three Months Ended
(Dollars in thousands)March 31, 2023December 31, 2022$ Change% Change
Noninterest expense
Salaries and employee benefits$16,246 $14,484 $1,762 12 %
Occupancy expense, net2,467 2,428 39 2 
Computer services2,911 2,796 115 4 
Telephone, postage and supplies613 575 38 7 
Marketing and advertising372 481 (109)(23)
Deposit insurance premiums612 546 66 12 
Core deposit intangible amortization606 26 580 2,231 
Merger-related expenses4,741 250 4,491 1,796 
Other4,265 4,490 (225)(5)
Total noninterest expense$32,833 $26,076 $6,757 26 %
•Salaries and employee benefits: The increase in salaries and employee benefits expense is primarily the result of the inclusion of Quantum employees for half a quarter, partially offset by lower mortgage banking incentive pay as a result of the reduction in the volume of originations due to rising interest rates.
•Core deposit intangible amortization: The increase in amortization expense is a result of a $12.2 million core deposit intangible associated with the Company's merger with Quantum, which will be amortized on an accelerated basis over ten years.
•Merger-related expenses: With the closing of the Company's merger with Quantum, merger-related expenses increased both in anticipation of and after the closing. The most significant expenses incurred included the payout of severance and employment contracts, professional fees, termination of prior contracts, and conversion of IT systems which occurred during the quarter.
Income Taxes.  The amount of income tax expense is influenced by the amount of pre-tax income, the amount of tax-exempt income, changes in the statutory rate, and the effect of changes in valuation allowances maintained against deferred tax benefits. Income tax expense for the three months ended March 31, 2023 decreased $2.6 million as a result of lower pre-tax income and permanent tax differences associated with employee stock FHLB stock, and commercial paper. See options recognized during the current quarter.
42

Comparison of Results of OperationOperations for the ThreeNine Months Ended DecemberMarch 31, 20172023 and March 31, 2022
Net Income.  Net income totaled $29.6 million, or $1.90 per diluted share, for discussionthe nine months ended March 31, 2023 compared to net income of our leveraging strategy.$29.6 million, or $1.84 per diluted share, for the nine months ended March 31, 2022, a decrease of $37,000, or 0.1%. The results for the nine months ended March 31, 2023 were negatively impacted by an increase of $19.0 million in the provision for credit losses, a $5.2 million decrease in noninterest income, and a $7.4 million increase in noninterest expense driven by $5.5 million in merger-related expenses, partially offset by a $31.6 million increase in net interest income. Details of the changes in the various components of net income are further discussed below.
(4) Net Interest Income.  The following table presents the distribution of average assets, liabilities and equity, as well as interest income divided byearned on average interest-earning assets.assets and interest expense paid on average interest-bearing liabilities. All average balances are daily average balances. Nonaccruing loans have been included in the table as loans carrying a zero yield.

 Nine Months Ended
 March 31, 2023March 31, 2022
(Dollars in thousands)Average
Balance
Outstanding		Interest
Earned /
Paid		Yield /
Rate		Average
Balance
Outstanding		Interest
Earned /
Paid		Yield /
Rate
Assets
Interest-earning assets
Loans receivable(1)
$3,095,358$120,148 5.17 %$2,810,240$81,440 3.86 %
Commercial paper83,5061,300 2.07 211,739869 0.55 
Debt securities available for sale153,1783,012 2.62 124,0531,319 1.42 
Other interest-earning assets(2)
108,0073,535 4.36 121,9362,360 2.58 
Total interest-earning assets3,440,049127,995 4.96 3,267,96885,988 3.51 
Other assets244,271259,535
Total assets$3,684,320$3,527,503
Liabilities and equity
Interest-bearing liabilities
Interest-bearing checking accounts$642,217$1,814 0.38 %$640,194$1,038 0.22 %
Money market accounts1,017,6636,794 0.89 1,002,5421,056 0.14 
Savings accounts235,312137 0.08 224,664120 0.07 
Certificate accounts478,7124,117 1.15 447,6231,814 0.54 
Total interest-bearing deposits2,373,90412,862 0.72 2,315,0234,028 0.23 
Junior subordinated debt1,741109 8.34 —— — 
Borrowings41,5851,505 4.82 48,89445 0.12 
Total interest-bearing liabilities2,417,23014,476 0.80 2,363,9174,073 0.23 
Noninterest-bearing deposits805,555719,872
Other liabilities47,54445,443
Total liabilities3,270,3293,129,232
Stockholders' equity413,991398,271
Total liabilities and stockholders' equity$3,684,320$3,527,503
Net earning assets$1,022,819$904,051
Average interest-earning assets to average interest-bearing liabilities142.31 %138.24 %
Non-tax-equivalent
Net interest income$113,519 $81,915 
Interest rate spread4.16 %3.28 %
Net interest margin(3)
4.40 %3.34 %
Tax-equivalent
Net interest income$114,383 $82,852 
Interest rate spread4.19 %3.31 %
Net interest margin(3)
4.43 %3.38 %

 For the Six 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)
$2,383,768
 $52,154
 4.38% $1,879,110
 $41,515
 4.42%
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%
Other interest-earning assets(3)
225,185
 2,426
 2.15% 267,878
 1,786
 1.33%
Total interest-earning assets2,946,607
 57,508
 3.90% 2,524,362
 46,017
 3.65%
Other assets277,151
     240,623
    
Total assets$3,223,758
     $2,764,985
    
Liabilities and equity:           
Interest-bearing liabilities:           
Interest-bearing checking accounts467,201
 452
 0.19% 404,581
 345
 0.17%
Money market accounts625,095
 1,062
 0.34% 518,672
 698
 0.27%
Savings accounts230,436
 153
 0.13% 210,201
 140
 0.13%
Certificate accounts449,173
 1,220
 0.54% 419,552
 957
 0.46%
Total interest-bearing deposits1,771,905
 2,887
 0.33% 1,553,006
 2,140
 0.27%
Borrowings672,552
 4,046
 1.20% 540,121
 1,162
 0.43%
Total interest-bearing liabilities2,444,457
 6,933
 0.56% 2,093,127
 3,302
 0.31%
Noninterest-bearing deposits309,265
     246,212
    
Other liabilities66,328
     61,628
    
Total liabilities2,820,050
     2,400,967
    
Stockholders' equity403,708
     364,018
    
Total liabilities and stockholders' equity$3,223,758
     $2,764,985
    
            
Net earning assets$502,150
     $431,235
    
Average interest-earning assets to           
average interest-bearing liabilities120.54%     120.60%    
Tax-equivalent:           
Net interest income  $50,575
     $42,715
  
Interest rate spread    3.34%     3.34%
Net interest margin(4)
    3.43%     3.38%
Non-tax-equivalent:           
Net interest income  $49,811
     $41,552
  
Interest rate spread   
 3.29%     3.24%
Net interest margin(4)
    3.38%     3.29%
__________________
(1) The averageAverage loans receivable net balances include loans held for sale and nonaccruing loans.
(2)Average other interest-earning assets consist of FRB stock, FHLB stock, SBIC investments, and deposits in other banks.
(3)Net interest income divided by average interest-earning assets.
(4)Interest income used in the average interest/interest earned and yield calculation includes the tax equivalent adjustment of $764,000$864 and $1,163,000$937 for the sixnine months ended DecemberMarch 31, 20172023 and 2016,March 31, 2022, respectively, calculated based on a combined federal and state tax rate of 30% and 37%, respectively.
(3) The average other interest-earning assets consists 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.
(4) Net interest income divided by average interest-earning assets.


Rate/Volume Analysis
The following table presents the dollar amount of changes in interest income and interest expense for major components of 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)24%. 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.
 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
_____________
(1) Interest income used in the average interest/earned and yield calculation includes the tax equivalent adjustment of $378,000 and $573,000 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%. Interest income used in the average interest/earned and yield calculation includes the tax equivalent adjustment of $764,000 and $1,163,000 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%.


Comparison of Results of Operation for the Three Months Ended December 31, 2017 and 2016
General.  During the three months ended December 31, 2017, we had a net loss of $10.7 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 million for the three months ended December 31, 2016. The Company's diluted loss per share was $0.59 for the three months ended December 31, 2017 compared to earning per share of $0.17 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 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. 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 $4.8 million, or 23.6% to $25.2 million for the quarter ended December 31, 2017 compared to $20.4 million for the corresponding period 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 interest and dividend income due primarily to an increase in average interest-earning assets.
Average interest-earning assets increased $452.9 million, or 18.0% to $3.0 billion for the quarter ended December 31, 2017 compared to $2.5 billion for the corresponding quarter in fiscal 2017. The average balance of loans receivable for the quarter ended December 31, 2017 increased $495.9 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% in average interest-earning deposits with banks, securities available for sale, and other interest-earning assets, an increase in average deposits of $307.9 million, or 17.2%, and an increase in average FHLB borrowings of $130.7 million, or 23.9% as compared to the same quarter last year. Net interest margin (on a fully taxable-equivalent basis) for the three months ended December 31, 2017 increased to 3.44% from 3.33% for the same period a year ago. During the three months 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.
Total interest and dividend income for the nine months ended March 31, 2023 increased $6.8$42.0 million, or 30.8%48.9%, compared to the nine months ended March 31, 2022, which was driven by a $38.7 million, or 47.5%, increase in interest income on loans, a combined increase of $2.1 million, or 97.4%, in interest income on commercial paper and debt securities available for sale, and an increase of $1.2 million, or 49.8%, in interest income on other interest-earning assets. The overall increase in average yield on interest-earning assets and rate paid on
43

liabilities was the result of rising interest rates. Specific to debt securities available for sale, the Company has intentionally maintained a relatively short-term duration portfolio which has allowed, and will continue to allow, the Company to take advantage of rising rates when reinvesting the proceeds of maturing instruments.
Total interest expense for the threenine months ended DecemberMarch 31, 20172023 increased $10.4 million, or 255.4%, compared to the nine months ended March 31, 2022. The increase was primarily the result of increases in the average cost of funds across all funding sources driven by higher market interest rates.
The following table shows the effects that changes in average balances (volume), including differences in the number of days in the periods compared, and average interest rates (rate) had on the interest earned on interest-earning assets and interest paid on interest-bearing liabilities:
Increase / (Decrease)
Due to		Total
Increase /
(Decrease)
(Dollars in thousands)VolumeRate
Interest-earning assets
Loans receivable$8,263 $30,445 $38,708 
Commercial paper(526)957 431 
Debt securities available for sale310 1,383 1,693 
Other interest-earning assets(270)1,445 1,175 
Total interest-earning assets7,777 34,230 42,007 
Interest-bearing liabilities
Interest-bearing checking accounts3 773 776 
Money market accounts16 5,722 5,738 
Savings accounts6 11 17 
Certificate accounts126 2,177 2,303 
Junior subordinated debt109 — 109 
Borrowings(7)1,467 1,460 
Total interest-bearing liabilities253 10,150 10,403 
Net increase in interest income$31,604 
Provision (Benefit) for Credit Losses.  The following table presents a breakdown of the components of the provision (benefit) for credit losses:
Nine Months Ended
(Dollars in thousands)March 31, 2023March 31, 2022$ Change% Change
Provision (benefit) for credit losses
Loans$14,479 $(4,415)$18,894 428 %
Off-balance-sheet credit exposure758 415 343 83 
Commercial paper(250)(5)(245)(4,900)
Total provision (benefit) for credit losses$14,987 $(4,005)$18,992 474 %
For the nine months ended March 31, 2023, the "loans" portion of the provision (benefit) for credit losses was the result of the following, offset by net charge-offs of $2.0 million during the period:
•$4.9 million provision to establish an allowance on Quantum's loan portfolio.
•$0.9 million provision specific to fintech portfolios which have a riskier credit profile than loans originated in-house. The elevated credit risk is offset by the higher yields earned on the portfolios.
•$4.9 million provision driven by loan growth and changes in the loan mix.
•$3.1 million provision due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments.
•$1.3 million reduction of specific reserves on individually evaluated credits, which was tied to two relationships which were fully charged-off during the period.
For the nine months ended March 31, 2022, the "loans" portion of the benefit for credit losses was driven by an improvement in the economic forecast, as more clarity was gained regarding the impact of COVID-19 upon the loan portfolio.
For the nine months ended March 31, 2023, a provision of $0.4 million was also recorded to establish an allowance on Quantum's off-balance-sheet credit exposure. The remainder of the change was the result of changes in the balance of loan commitments as well as changes in the loan mix and changes in the projected economic forecast outlined above, which is the same reasoning for the provision for the nine months ended March 31, 2022.

44

Noninterest Income.  Noninterest income for the nine months ended March 31, 2023 decreased $5.2 million, or 17.8%, when compared to the same period last year. Changes in the components of noninterest income are discussed below:
Nine Months Ended
(Dollars in thousands)March 31, 2023March 31, 2022$ Change% Change
Noninterest income
Service charges and fees on deposit accounts$7,117 $7,101 $16 — %
Loan income and fees1,779 2,536 (757)(30)
Gain on sale of loans held for sale4,499 10,927 (6,428)(59)
BOLI income1,543 1,500 43 3 
Operating lease income4,246 4,920 (674)(14)
Gain (loss) on sale of premises and equipment2,015 (87)2,102 2,416 
Other2,963 2,496 467 19 
Total noninterest income$24,162 $29,393 $(5,231)(18)%
•Loan income and fees: The decrease in loan income and fees was driven by lower underwriting fees, interest rate swap fees, and prepayment penalties in the current period compared to the same period last year, all of which were impacted by rising interest rates.
•Gain on sale of loans held for sale: The decrease in the gain on sale of loans held for sale was primarily driven by a $6.3 million, or 31.6% increasedecrease in loan interest income, a $364,000, or 38.8% increase in interest income on certificatesvolume of depositSBA loans and other interest-bearing deposits, and a $110,000, or 28.1% increase in other investment interest income. The additional loan interest income was primarily due toresidential mortgages sold during the increase 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% for the quarter ended December 31, 2017 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 for the quarter ended December 31, 2017 from $774,000 for the same quarter in fiscal 2017period as a result of prepayments. Accretablerising interest rates. During the nine months ended March 31, 2023, there were $36.9 million of sales of the guaranteed portion of SBA commercial loans with gains of $2.7 million compared to $43.5 million sold and gains of $4.5 million for the corresponding period in the prior year. There were $34.6 million of residential mortgage loans originated for sale which were sold during the current period with gains of $823,000 compared to $204.1 million sold with gains of $5.6 million for the corresponding period in the prior year. There were $99.4 million of HELOCs sold during the current period for a gain of $897,000 compared to $97.2 million sold and gains of $581,000 for the corresponding period in the prior year. Lastly, $11.5 million of indirect auto finance loans were sold out of the held for investment portfolio during the nine months ended March 31, 2022 for a gain of $205,000. No such sales occurred in the same period in the current year.
•Operating lease income: The decrease in operating lease income on acquired loans stems fromwas the discount establishedresult of lower contractual earnings as well as gains or losses incurred at the time these loan portfoliosend of operating leases, where we recognized a net loss of $172,000 for the nine months ended March 31, 2023 versus a net loss of $17,000 in the same period last year.
•Gain (loss) on sale of premises and equipment: During the nine months ended March 31, 2023 three properties were acquired andsold for a combined gain of $2.5 million, partially offset by additional impairment of $420,000 on premises associated with prior branch closures. For the related impactnine months ended March 31, 2022, no sales occurred but $87,000 of prepaymentsadditional impairment was recorded on purchased loans. Each quarter,premises held for sale.
•Other: The increase in other income was driven by a $721,000 gain recognized on the sale of closely held equity securities which the Company analyzesobtained through a prior bank acquisition. No such sales occurred in the cash flow assumptions onsame period in the PCI loan pools and, at least semi-annually,prior year.
Noninterest Expense.  Noninterest expense for 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 interest income. As a result, income from loan pools can be volatile from quarter to quarter. For the quartersnine months ended DecemberMarch 31, 2017 and 2016, the average loan yields included 15 and 16 basis points, respectively, from the accretion of purchase discounts on acquired loans.
Total interest expense2023 increased $2.0$7.4 million, or 119.5% for the quarter ended December 31, 20179.5%, when compared to the same period last year. ThisChanges in the components of noninterest expense are discussed below:
Nine Months Ended
(Dollars in thousands)March 31, 2023March 31, 2022$ Change% Change
Noninterest expense
Salaries and employee benefits$45,545 $44,882 $663 1 %
Occupancy expense, net7,291 7,201 90 1 
Computer services8,470 7,817 653 8 
Telephone, postage and supplies1,791 1,946 (155)(8)
Marketing and advertising1,443 2,110 (667)(32)
Deposit insurance premiums1,700 1,280 420 33 
Core deposit intangible amortization666 208 458 220 
Merger-related expenses5,465 — 5,465 100 
Other12,627 12,194 433 4 
Total noninterest expense$84,998 $77,638 $7,360 9 %
•Computer services: The increase wasin expense between periods is due to continued investments in technology as well as increases in the cost of services provided by third parties.
•Marketing and advertising: The decrease in expense is primarily driven by a reduction in traditional media advertising (print, billboards, etc.) in favor of digital platforms at lower costs during the current fiscal year.
•Deposit insurance premiums: The increase in expense can be traced to an increase in rates the Company is charged for deposit insurance and the inclusion of Quantum's deposit portfolio for roughly half a quarter.
45

•Core deposit intangible amortization: The increase in amortization expense during the nine months ended March 31, 2023 is a result of a $12.2 million core deposit intangible associated with the Company's merger with Quantum, which will be amortized on an accelerated basis over ten years.
•Merger-related expenses: These are expenses related to the TriSummit acquisitionmerger of Quantum into the Company. The most significant expenses incurred included the payout of severance and recent deposit gathering initiatives contributing toemployment contracts, due diligence, professional fees, termination of prior contracts, due diligence, and conversion of IT systems which occurred during the period.
•Other: During the nine months ended March 31, 2023 the Company wrote off $350,000 in previously capitalized costs associated with a $250.9 million, or 16.3% increasetechnology project which the Company is no longer pursuing. No such expense was incurred in the average balanceprior period.
Income Taxes.  The amount of interest-bearing deposits. In addition, average borrowings, consisting primarilyincome tax expense is influenced by the amount of short-term FHLB advances,pre-tax income, the amount of tax-exempt income, changes in the statutory rate, and the effect of changes in valuation allowances maintained against deferred tax benefits. Income tax expense for the nine months ended March 31, 2023 increased $58,000 compared to the prior period.
Comparison of Financial Condition at March 31, 2023 and June 30, 2022
General.  Total assets increased by $130.7$977.7 million to $677.0$4.5 billion and total liabilities increased by $908.3 million due to funding for loan growth along with a 78 basis point increase in the average cost of such borrowings during the quarter$4.1 billion, respectively, at March 31, 2023 as compared to June 30, 2022. The majority of these changes were the same quarter last year.result of the Company's merger with Quantum.
Cash and cash equivalents and commercial paper.  Total cash and cash equivalents increased $209.3 million, or 199.1%, to $314.4 million at March 31, 2023 from $105.1 million at June 30, 2022. Commercial paper decreased from $194.4 million to none at March 31, 2023 as the proceeds were used to fund loan growth during the period.
Debt securities available for sale and other investments. Debt securities available for sale increased $27.7 million, or 21.8%, to $154.7 million at March 31, 2023 from $127.0 million at June 30, 2022. This increase can be traced to securities acquired from Quantum.
Loans held for sale. Loans held for sale increased $11.1 million, or 14.0%, to $90.4 million at March 31, 2023 from $79.3 million at June 30, 2022. This was driven by an increase of $15.1 million, or 102.3%, in SBA loans held for sale, partially offset by a $2.8 million, or 67.3%, decrease in mortgage loans held for sale.
Loans, net of deferred loan fees and costs.  Total loans increased $880.0 million, or 31.8%, to $3.6 billion at March 31, 2023 from $2.8 billion at June 30, 2022. Excluding the $561.9 million acquired as part of the merger with Quantum, total loans increased $318.1 million, or 11.5%. The overall average costfollowing table illustrates the changes within the portfolio:
As ofPercent of Total
(Dollars in thousands)March 31,June 30,ChangeMarch 31,June 30,
20232022$%20232022
Commercial real estate loans
Construction and land development$368,756 $291,202 $77,554 27 %10 %11 %
Commercial real estate - owner occupied524,247 335,658 188,589 56 15 12 
Commercial real estate - non-owner occupied926,991 662,159 264,832 40 25 24 
Multifamily85,285 81,086 4,199 5 2 3 
Total commercial real estate loans1,905,279 1,370,105 535,174 39 52 50 
Commercial loans
Commercial and industrial229,840 193,313 36,527 19 6 7 
Equipment finance440,345 394,541 45,804 12 12 14 
Municipal leases138,436 129,766 8,670 7 4 5 
Total commercial loans808,621 717,620 91,001 13 22 26 
Residential real estate loans
Construction and land development105,617 81,847 23,770 29 3 3 
One-to-four family518,274 354,203 164,071 46 14 13 
HELOCs193,037 160,137 32,900 21 6 6 
Total residential real estate loans816,928 596,187 220,741 37 23 22 
Consumer loans118,505 85,383 33,122 39 3 2 
Loans, net of deferred loan fees and costs$3,649,333 $2,769,295 $880,038 32 %100 %100 %
Asset quality. Nonperforming assets increased by $1.7 million, or 27.1%, to $8.0 million, or 0.18% of funds increased 27 basis points to 0.58% for the current quarter astotal assets, at March 31, 2023 compared to $6.3 million, or 0.18% of total assets, at June 30, 2022. Nonperforming assets included $7.9 million in nonaccruing loans and $123,000 of REO at March 31, 2023, compared to $6.1 million and $200,000 in nonaccruing loans and REO, respectively, at June 30, 2022. Nonperforming loans to total loans was 0.22% at March 31, 2023 and 0.22% at June 30, 2022.
The ratio of classified assets to total assets decreased to 0.49% at March 31, 2023 from 0.61% at June 30, 2022, mainly due to growth in the same quarter last yearbalance sheet as a result of the merger with Quantum. Classified assets increased $416,000, or 1.9%, to $22.0 million at March 31, 2023 compared to $21.5 million at June 30, 2022.
Our individually evaluated loans include loans on nonaccrual status and all TDRs, whether performing or on nonaccrual status under their restructured terms. Individually evaluated loans may be evaluated for reserve purposes using either the discounted cash flow or the collateral valuation method. As of March 31, 2023, there was $7.5 million in loans individually evaluated compared to $5.3 million at June 30, 2022, due primarily to the impactinclusion of PCD loans from the recent increases in the federal funds ratemerger with Quantum.
46

Allowance for credit losses.  The ACL on our borrowings.
Provision for Loan Losses. During the three months ended Decemberloans was $47.5 million, or 1.30% of total loans, at March 31, 2017 and 2016, there was no provision for loan losses2023 compared to $34.7 million, or 1.25% of total loans, as improved credit quality measures have been sufficient to cover reserves needed for loan growth and changes in the mix of loans.June 30, 2022. Net loan charge-offs totaled $907,000$2.0 million, or 0.09% as a percentage of average loans, for the threenine months ended DecemberMarch 31, 20172023 compared to net recoveries$19,000, or 0.00% as a percentage of $35,000average loans, for the same period last year. Net charge-offs as a percentageThe drivers of average loans increased to 0.15% forthese changes are discussed in the three months ended December"Nine Months Ended March 31, 2017 from net recoveries of (0.01%) for the same period last fiscal year.2023 and March 31, 2022" section above.
See Comparison of Financial Condition - Asset Quality for additional details.
Noninterest Income.  Noninterest income increased $846,000,Other assets. Other assets decreased $3.4 million, or 21.5%6.4%, to $4.8$49.6 million for the three months ended Decemberat March 31, 20172023 from $3.9$53.0 million in the comparative quarter of 2016. The leading factors of the increase included a $299,000, or 15.9% increase in service charges on deposit accounts as a result of the increase in deposit accounts as well as a $424,000, or 45.3% increase in loan income from the gain on sale of mortgage loans and various commercial loan-related fees driven by the new SBA loan line of business.
Noninterest Expense. Noninterest expense for the quarter ended December 31, 2017 increased $695,000, or 3.4%, to $21.2 million compared to $20.5 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, ourat June 30, fiscal year end required the use of a blended rate as prescribed by the Internal Revenue Code.2022. 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, 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 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 cost of the borrowings was 0.43%, resulting in approximately $1.1 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 six 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 the same period last year. The increase was primarily driven by an $11.0lower current taxes receivable and the sale of properties held for sale.
Deposits. The following table summarizes the composition of our deposit portfolio as of the dates indicated:
As of
March 31,June 30,Change
(Dollars in thousands)20232022$%
Core deposits
Noninterest-bearing accounts$872,492 $745,746 $126,746 17 %
NOW accounts678,178 654,981 23,197 4 
Money market accounts1,299,503 969,661 329,842 34 
Savings accounts228,390 238,197 (9,807)(4)
Total core deposits3,078,563 2,608,585 469,978 18 
Certificates of deposit597,036 491,176 105,860 22 
Total$3,675,599 $3,099,761 $575,838 19 %
The following bullet points provide further information regarding the composition of our deposit portfolio as of March 31, 2023:
•Total deposits increased $57.0 million, or 27.4% increase in loan interest income, a $490,000,1.9% (7.6% annualized), during the quarter, excluding the $570.6 million assumed as part of the merger with Quantum.
•The balance of uninsured deposits was $730.4 million, or 24.7% increase in certificates19.9% of deposittotal deposits, which excludes collateralized deposits to municipalities.
•The balance of brokered deposits was $134.9 million, or 3.7% of total deposits.
•Total deposits are evenly distributed between commercial and other interest-bearing deposits, and a $229,000, or 29.4% increase in other investment income. consumer depositors.
•The additional loan interest income was primarily due to the increase in the average balance of loans receivable, whichour deposit accounts 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.$33,000.
Total interest expense increased $3.6•Our largest 25 depositors made up $643.8 million, or 110.0% for the six months ended December 31, 2017 compared to the same period last year. This increase was primarily related to the increase in average borrowings and the corresponding 77 basis point increase in the average cost17.5% 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 expense for the six months ended December 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-offs 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 $1.2total deposits. Of these depositors, $443.5 million, or 14.4%,12.1% of total deposits, are collateralized deposits 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 commercialmunicipalities.


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 driven by a $42,000 gain on the sale of REO compared to a $469,000 loss on the sale of REO in the corresponding period in the prior year.
Income Taxes.  For the six months ended December 31, 2017, the Company's income tax expense was $22.0 million compared to $3.3 million for the six months ended December 31, 2016. The increase was a result of the deferred tax revaluation and to a lesser extent, higher taxable income. In addition, the Company had a $133,000 and a $490,000 charge during the six months ended December 31, 2017 and 2016, respectively, related to the decrease in value of our deferred tax assets based on decreases in North Carolina's corporate tax rate.
Liquidity
Management maintains a liquidity position that it believes will adequately provide for funding forof loan demand and deposit run-off that may occur in the normal course of business. We rely on a number of different sources in order to meet our potential liquidity demands. The primary sources are increases in deposit accounts, wholesale borrowings, and cash flows from loan payments and the securities portfolio.
In addition to these primary sources of funds, management has several secondary sources available to meet potential funding requirements. As of DecemberMarch 31, 2017,2023, the Bank had an available borrowing capacity of $56.3$68.5 million and $23.1 million with the FHLB of Atlanta a $115.4 million line of credit with theand FRB, respectively, and threerevolving lines of credit with three unaffiliated banks, totaling $60.0the unused portion of which totaled $129.7 million. At December 31, 2017,Additionally, we had $685.0 million in FHLB advances outstanding and nothing outstanding underclassify our other lines of credit. Additionally, the Company classifies its 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 readily marketable. In addition, we 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 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, 20172023 brokered deposits totaled $11.8$134.9 million, or 0.6%3.7%, of total deposits.
Liquidity management is both a daily and long-term function of business management. Excess liquidity is generally invested in short-term investments, such as overnight deposits and federal funds. On a longer term basis, we maintain a strategy of investing in various lending products and investmentdebt securities, including mortgage-backed securities and commercial paper. HomeTrust Bancshares onMBS. On a stand-alone level isbasis we are a separate legal entity from the Bank and must provide for itsour own liquidity and pay itsour own operating expenses. The Company'sOur primary source of funds consists of the net proceeds retained from the Conversion. The Company also 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 Company2023, we (on an unconsolidated basis) had liquid assets of $20.1$3.4 million.
WeAt the Bank level, we use our sources of funds primarily to meet our ongoing commitments, pay maturing deposits and fund withdrawals, and to fund loan commitments. At DecemberMarch 31, 2017,2023, the total approved loan commitments and unused lines of credit outstanding amounted to $178.0$364.4 million and $447.8$597.5 million, respectively, as compared to $202.1$417.6 million and $414.4$485.2 million respectively, as of June 30, 2017.2022. Certificates of deposit scheduled to mature in one year or less at DecemberMarch 31, 2017,2023, totaled $302.2$495.8 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 remain with us.
During the first six months of fiscal 2018, cash and cash equivalents increased $11.7 million, or 13.4%, from $87.0 million as of June 30, 2017 to $98.7 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.
47

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.statements, mainly to manage customers' requests for funding. These transactions primarily take the form of loan commitments and lines of credit and involve varying degrees of off-balance sheet credit, interest rate, and liquidity risks. These transactions are used primarily to manage customers' requests for fundingFor further information, see "Note 12 – Commitments and take the form of loan commitments and lines of credit. For the six months ended December 31, 2017, we engagedContingencies" in no off-balance sheet transactions likely to have a material effectthis Quarterly Report on our financial condition, results of operations or cash flows.Form 10-Q.


A summary of our off-balance sheet commitments to extend credit at December 31, 2017, is as follows (in thousands):
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's2023, stockholders' equity totaled $395.4 million.$458.2 million compared to $388.8 million at June 30, 2022, an increase of $69.4 million which was the result of net income for the nine months and the issuance of our common stock as consideration in our merger with Quantum. 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 ReserveFRB and the NCCOB and is subject to minimum capital requirements applicable to state member banks established by the Federal Reserve that are calculated in a manner similar to those applicable to bank holding companies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly discretionary actions by bank regulators that, if undertaken, could have a direct material effect on the Company's financial statements.
Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
At DecemberMarch 31, 2017,2023, HomeTrust Bancshares, Inc. and the Bank each exceeded all regulatory capital requirements as of that date.requirements. 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 December 31, 2017 under applicable regulatory requirements.


HomeTrust Bancshares, Inc.'s and the Bank's actual and required minimum capital amounts and ratiosare as follows (dollarsfollows:
 Regulatory Requirements
ActualMinimum for Capital
Adequacy Purposes		Minimum to Be
Well Capitalized
(Dollars in thousands)AmountRatioAmountRatioAmountRatio
HomeTrust Bancshares, Inc.
March 31, 2023
CET1 Capital (to risk-weighted assets)$423,577 10.43 %$182,836 4.50 %$264,096 6.50 %
Tier I Capital (to total adjusted assets)433,522 11.08 156,481 4.00 195,602 5.00 
Tier I Capital (to risk-weighted assets)433,522 10.67 243,781 6.00 325,041 8.00 
Total Risk-based Capital (to risk-weighted assets)473,543 11.65 325,041 8.00 406,301 10.00 
June 30, 2022      
CET1 Capital (to risk-weighted assets)$372,797 10.76 %$155,844 4.50 %$225,108 6.50 %
Tier I Capital (to total adjusted assets)372,797 10.50 142,028 4.00 177,535 5.00 
Tier I Capital (to risk-weighted assets)372,797 10.76 207,792 6.00 277,057 8.00 
Total Risk-based Capital (to risk-weighted assets)395,962 11.43 277,057 8.00 346,321 10.00 
HomeTrust Bank      
March 31, 2023      
CET1 Capital (to risk-weighted assets)$443,910 10.93 %$182,836 4.50 %$264,096 6.50 %
Tier I Capital (to total adjusted assets)443,910 11.35 156,493 4.00 195,617 5.00 
Tier I Capital (to risk-weighted assets)443,910 10.93 243,781 6.00 325,041 8.00 
Total Risk-based Capital (to risk-weighted assets)483,931 11.91 325,041 8.00 406,301 10.00 
June 30, 2022      
CET1 Capital (to risk-weighted assets)$358,600 10.35 %$155,844 4.50 %$225,108 6.50 %
Tier I Capital (to total adjusted assets)358,600 10.11 141,814 4.00 177,267 5.00 
Tier I Capital (to risk-weighted assets)358,600 10.35 207,792 6.00 277,057 8.00 
Total Risk-based Capital (to risk-weighted assets)381,765 11.02 277,057 8.00 346,321 10.00 
As permitted by the interim final rule issued on March 27, 2020 by the federal banking regulatory agencies, the Company elected the option to delay the estimated impact on regulatory capital of ASU 2016-13, which was adopted on July 1, 2020. The initial adoption of ASU 2016-13 as well as 25% of the quarterly increases in thousands):the ACL subsequent to adoption (collectively the “transition adjustments”) was delayed for two years. Starting July 1, 2022, the cumulative amount of the transition adjustments became fixed and will be phased out of the regulatory capital calculations evenly over a three-year period, with 75% recognized in year three, 50% recognized in year four, and 25% recognized in year five. After five years, the temporary regulatory capital benefits will be fully reversed.
48
   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 2.50% above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. This new capital conservation buffer requirement has phased in starting in January 2016 at 0.625%As of risk-weighted assetsMarch 31, 2023, the Company's 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, the Bank’s CET1Bank's risk-based capital exceeded the required capital conservation buffer of 1.25%.contribution buffer.
Dividends paid by HomeTrust Bank are limited, without regulatory approval, to current year earnings less dividends paid during the preceding two years.
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") 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. In years of high inflation and 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 DisclosureDisclosures About Market Risk
There has not been any material change in the market risk disclosures contained in our 20172022 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, 2017,2023, 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, 2017,2023, 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 12 – 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 20172022 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
OctoberJanuary 1 - OctoberJanuary 31, 20172023—
$—
—
443,155
November 1 - November 30, 2017—
—
—
443,155
December 1 - December 31, 2017—
—
—
443,155
Total—
$—
—
443,155
On December 15, 2015 the Company announced that its Board of Directors had authorized the repurchase of up to 922,855 shares of the Company's common stock, representing 5% of the Company's outstanding shares at the time of the announcement. 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.


266,639 
Item 3.February 1 - February 28, 2023Defaults Upon Senior Securities— — — 266,639 
March 1 - March 31, 2023— — — 266,639 
Total— $— — 266,639 
No stock was repurchased during the nine months ended March 31, 2023.
Item 3.     Defaults Upon Senior Securities
Nothing to report.
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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
Item 6.Regulation
S-K Exhibit Number		ExhibitsDocumentReference to Prior Filing or Exhibit Number Attached Hereto
3.1(d)
3.2(f)
10.1(a)
10.2(a)
10.3(g)
10.3A(b)
10.3B(h)
10.3C(o)
10.3D(e)
10.4(g)
10.4A(a)
10.5(d)
10.6(m)
10.7(l)
10.7A(d)
10.7B(d)
10.7C(d)
10.7D(d)
10.7E(d)
10.7F(d)
10.7G(d)
10.7H(d)
10.7I(i)
10.8(d)
10.8A(d)
10.8B(d)
10.8C(d)
10.8D(d)
10.8E(d)
10.8F(d)
10.8G(d)
10.9(d)
10.9A(m)
10.9B(m)
10.9C(r)
10.10(d)
10.10A(m)
10.11(d)
See Exhibit Index.


50

10.11A(m)
10.12(j)
10.13(q)
10.14(k)
10.15(k)
10.16(k)
10.17(k)
10.18(k)
10.19(n)
10.20(c)
10.20A(a)
10.21(g)
10.21A(a)
10.22(p)
10.22A(a)
10.23(r)
10.23A(a)
10.24(r)
10.24A(a)
10.25(a)
31.131.1
31.231.2
32.032.0
101The following materials from HomeTrust Bancshares’ Annual Report on Form 10-K for the year ended June 30, 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 Annual Report on Form 10-K for the fiscal year ended June 30, 2022 (File No. 001-35593).
(b)Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on September 25, 2018 (File No. 001-35593).
(c)Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 (File No. 001-35593).
(d)Filed as an exhibit to HomeTrust Bancshares’s Registration Statement on Form S-1 (File No. 333-178817) filed on December 29, 2011.
(e)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on May 24, 2022 (File No. 001-35593).
(f)Filed as an exhibit to HomeTrust Bancshares's 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 October 28, 2020 (File No. 001-35593).
(i)Filed as an exhibit to Amendment No. 1 to HomeTrust Bancshares’s Registration Statement on Form S-1 (File No. 333-178817) filed on March 9, 2012.
(j)Attached as Appendix A to HomeTrust Bancshares’s definitive proxy statement filed on December 5, 2012 (File No. 001-35593).
(k)Filed as an exhibit to HomeTrust Bancshares’s Registration Statement on Form S-8 (File No. 333-186666) filed on February 13, 2013.
(l)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on February 15, 2022 (File No. 001-35593).
(m)Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (File No. 001-35593).
(n)Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2014 (File No. 001-35593).
(o)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on July 28, 2021 (File No. 001-35593).
(p)Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2018 (File No. 001-35593).
(q)Attached as Appendix A to HomeTrust Bancshares’s definitive proxy statement filed on October 3, 2022 (File No. 001-35593).
(r)Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 (File No. 001-35593).
51

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, 2023HomeTrust Bancshares, Inc.By:/s/ C. Hunter Westbrook
C. Hunter Westbrook
President and Chief Executive Officer
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, 2023DocumentBy: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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52