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 December 31, 2017September 30, 2023


[  ]☐            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 17,383,307shares of common stock, par value of $.01$0.01 per share, issued and outstanding as of February 6, 2018.

November 2, 2023.



HOMETRUST BANCSHARES, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
Page
Number
Item 1. 1
Consolidated Balance Sheets (Unaudited) at December 31, 2017September 30, 2023 and June 30, 20172023
23
Consolidated Statements of Income (Unaudited) for the Three and Six Months Ended December 31, 2017September 30, 2023 and 20162022
34
Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Six Months Ended December 31, 2017September 30, 2023 and 20162022
45
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) for the Three and Six Months Ended December 31, 2017September 30, 2023 and 20162022
56
Consolidated Statements of Cash Flows (Unaudited) for the Three and Six Months Ended DecemberSeptember 30, 20172023 and 20162022
67
Notes to Consolidated Financial Statements
89
Item 2. 2
3432
Item 3. 3
5142
Item 4. 4
5142
Item 1. 1
5142
Item 1A. 1A
5142
Item 2. 2
5142
Item 3. 3
5242
Item 4. 4
5242
Item 5
5242
Item 6. 6
5242
5345
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
DCFDiscounted Cash Flows
Dodd-Frank ActDodd-Frank Wall Street Reform and Consumer Protection Act
ECLExpected Credit Losses
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 Security
NCCOBNorth Carolina Office of the Commissioner of Banks
PCDPurchased Financial Assets with Credit Deterioration
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
SOFRSecured Overnight Financing Rate
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)
September 30, 2023June 30, 2023
Assets
Cash$18,090 $19,266 
Interest-bearing deposits306,924 284,231 
Cash and cash equivalents325,014 303,497 
Certificates of deposit in other banks35,380 33,152 
Debt securities available for sale, at fair value (amortized cost of $140,316 and $157,251 at September 30, 2023 and June 30, 2023, respectively)134,348 151,926 
FHLB and FRB stock19,612 20,208 
SBIC investments, at cost14,586 14,927 
Loans held for sale, at fair value4,616 6,947 
Loans held for sale, at the lower of cost or fair value200,834 161,703 
Total loans, net of deferred loan fees and costs3,659,914 3,658,823 
Allowance for credit losses – loans(47,417)(47,193)
Loans, net3,612,497 3,611,630 
Premises and equipment, net72,463 73,171 
Accrued interest receivable16,513 14,829 
Deferred income taxes, net9,569 10,912 
BOLI106,059 106,572 
Goodwill34,111 34,111 
Core deposit intangibles, net9,918 10,778 
Other assets56,477 53,124 
Total assets$4,651,997 $4,607,487 
Liabilities and stockholders' equity  
Liabilities  
Deposits$3,640,961 $3,601,168 
Junior subordinated debt9,995 9,971 
Borrowings452,263 457,263 
Other liabilities64,367 67,899 
Total liabilities4,167,586 4,136,301 
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, 17,380,307 shares issued and outstanding at September 30, 2023; 17,366,673 at June 30, 2023174 174 
Additional paid in capital171,663 171,222 
Retained earnings321,799 308,651 
Unearned ESOP shares(4,629)(4,761)
Accumulated other comprehensive loss(4,596)(4,100)
Total stockholders' equity484,411 471,186 
Total liabilities and stockholders' equity$4,651,997 $4,607,487 
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 Ended September 30,
Three Months Ended Six Months Ended20232022
December 31, December 31,
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$58,496 $33,245 
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— 1,116 
Debt securities available for saleDebt securities available for sale1,259 678 
Other investments and interest-bearing depositsOther investments and interest-bearing deposits2,110 888 
Total interest and dividend income28,848
 22,063
 56,744
 44,854
Total interest and dividend income61,865 35,927 
Interest Expense 
  
  
  
Interest expenseInterest expense  
Deposits1,541
 1,041
 2,887
 2,140
Deposits16,429 1,395 
Junior subordinated debtJunior subordinated debt236 — 
Borrowings2,077
 607
 4,046
 1,162
Borrowings3,040 12 
Total interest expense3,618
 1,648
 6,933
 3,302
Total interest expense19,705 1,407 
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 income42,160 34,520 
Provision for credit lossesProvision for credit losses2,570 3,987 
Net interest income after provision for credit lossesNet interest income after provision for credit losses39,590 30,533 
Noninterest incomeNoninterest income  
Service charges and fees on deposit accounts2,185
 1,886
 4,224
 3,800
Service charges and fees on deposit accounts2,318 2,338 
Loan income and fees1,361
 937
 2,463
 1,914
Loan income and fees559 570 
Gain on sale of loans held for saleGain on sale of loans held for sale1,293 1,586 
BOLI income518
 503
 1,080
 1,065
BOLI income1,749 527 
Gain from sale of premises and equipment—
 —
 164
 385
Other, net723
 615
 1,433
 1,019
Operating lease incomeOperating lease income1,785 1,585 
Loss on sale of premises and equipmentLoss on sale of premises and equipment— (12)
OtherOther923 804 
Total noninterest income4,787
 3,941
 9,364
 8,183
Total noninterest income8,627 7,398 
Noninterest Expense 
  
  
  
Noninterest expenseNoninterest expense  
Salaries and employee benefits11,973
 11,839
 24,325
 22,530
Salaries and employee benefits16,514 14,815 
Net occupancy expense2,473
 2,015
 4,822
 4,076
Occupancy expense, netOccupancy expense, net2,489 2,396 
Computer servicesComputer services3,173 2,763 
Telephone, postage, and suppliesTelephone, postage, and supplies652 603 
Marketing and advertising319
 459
 772
 889
Marketing and advertising487 590 
Telephone, postage, and supplies748
 574
 1,433
 1,187
Deposit insurance premiums419
 203
 833
 481
Deposit insurance premiums717 542 
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 amortization859 34 
Merger-related expenses—
 27
 —
 334
Merger-related expenses— 474 
Other2,658
 2,380
 5,127
 4,780
Other4,673 3,872 
Total noninterest expense21,175
 20,480
 42,256
 39,611
Total noninterest expense29,564 26,089 
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 taxes18,653 11,842 
Income tax expenseIncome tax expense3,820 2,643 
Net incomeNet income$14,833 $9,199 
Per share dataPer share data  
Net income per common shareNet income per common share  
Basic$(0.59) $0.17
 $(0.28) $0.39
Basic$0.88 $0.61 
Diluted$(0.59) $0.17
 $(0.28) $0.39
Diluted$0.88 $0.60 
Average shares outstanding: 
  
  
  
Average shares outstandingAverage shares outstanding  
Basic17,975,883
 16,900,387
 17,971,439
 16,893,775
Basic16,792,177 14,988,006 
Diluted17,975,883
 17,444,144
 17,971,439
 17,391,404
Diluted16,800,901 15,130,762 
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 Ended September 30,
 20232022
Net income$14,833 $9,199 
Other comprehensive loss 
Unrealized holding losses on debt securities available for sale  
Losses arising during the period(643)(2,138)
Deferred income tax benefit147 492 
Total other comprehensive loss(496)(1,646)
Comprehensive income$14,337 $7,553 
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)
 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
(Unaudited)
Three Months Ended September 30, 2023
Common StockAdditional
Paid In
Capital		Retained
Earnings		Unearned
ESOP
Shares		Accumulated
Other
Comprehensive
Loss		Total
Stockholders'
Equity
SharesAmount
Balance at June 30, 202317,366,673 $174 $171,222 $308,651 $(4,761)$(4,100)$471,186 
Net income— — — 14,833 — — 14,833 
Cash dividends declared on common stock, $0.10/common share— — — (1,685)— — (1,685)
Forfeited restricted stock(1,630)— — — — — — 
Retired stock(5,730)— (133)— — — (133)
Granted restricted stock1,000 — — — — — — 
Stock issued for RSUs18,494 — — — — — — 
Exercised stock options1,500 — 24 — — — 24 
Share-based compensation expense— — 383 — — — 383 
ESOP compensation expense— — 167 — 132 — 299 
Other comprehensive loss— — — — — (496)(496)
Balance at September 30, 202317,380,307 $174 $171,663 $321,799 $(4,629)$(4,596)$484,411 
(Unaudited)
Three Months Ended September 30, 2022
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— — — 9,199 — — 9,199 
Cash dividends declared on common stock, $0.09/common share— — — (1,355)— — (1,355)
Forfeited restricted stock(400)— — — — — — 
Retired stock(4,079)— (95)— — — (95)
Granted restricted stock4,500 — — — — — — 
Stock issued for RSUs13,861 — — — — — — 
Exercised stock options27,000 — 388 — — — 388 
Share-based compensation expense— — 567 — — — 567 
ESOP compensation expense— — 187 — 132 — 319 
Other comprehensive loss— — — — — (1,646)(1,646)
Balance at September 30, 202215,632,348 $156 $127,153 $278,120 $(5,158)$(4,049)$396,222 
The accompanying notes are an integral part of these consolidated financial statements.











6

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Three Months Ended September 30,
 20232022
Operating activities
Net income$14,833 $9,199 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses2,570 3,987 
Depreciation and amortization of premises and equipment and equipment for operating leases2,401 2,169 
Deferred income tax expense1,490 141 
Net accretion of purchase accounting adjustments on loans(378)(178)
Net amortization and accretion1,693 (105)
SBIC investments income(540)(349)
Loss from sale of premises and equipment— 12 
Gain incurred at the end of operating leases(51)(148)
BOLI income(1,749)(527)
Gain on sale of loans held for sale(1,293)(1,586)
Origination of loans held for sale(107,559)(58,035)
Proceeds from sale of loans held for sale65,451 57,570 
New deferred loan origination fees, net(1,139)(1,856)
(Increase) decrease in accrued interest receivable and other assets(6,279)1,291 
ESOP compensation expense299 319 
Share-based compensation expense383 567 
Decrease in other liabilities(3,093)(4,697)
Net cash (used in) provided by operating activities(32,961)7,774 
Investing activities  
Purchases of debt securities available for sale(601)(48,014)
Proceeds from maturities, calls and paydowns of debt securities available for sale17,859 11,045 
Purchases of commercial paper— (210,292)
Proceeds from maturities and calls of commercial paper— 320,689 
Purchases of CDs in other banks(3,972)(4,980)
Proceeds from maturities of CDs in other banks1,744 996 
Net (purchases) redemptions of FHLB and FRB stock596 (78)
Net capital distributions from SBIC investments, at cost881 872 
Net decrease (increase) in loans3,498 (92,109)
Purchase of BOLI(23)(29)
Death benefit proceeds from BOLI policies2,285 — 
Purchase of equipment for operating leases(5,261)(577)
Sale of equipment for operating leases4,749 1,239 
Purchase of premises and equipment(276)(616)
Proceeds from sale of premises and equipment and assets held for sale— 1,275 
Net cash provided by (used in) investing activities21,479 (20,579)
Financing activities  
Net increase in deposits39,793 2,907 
Net decrease in short-term borrowings(5,000)— 
Cash dividends paid(1,685)(1,355)
Retired stock(133)(95)
Exercised stock options24 388 
Net cash provided by financing activities32,999 1,845 
Net increase (decrease) in cash and cash equivalents21,517 (10,960)
Cash and cash equivalents at beginning of period303,497 105,119 
Cash and cash equivalents at end of period$325,014 $94,159 
7
 (Unaudited)
 Six Months Ended December 31,
 2017 2016
Operating Activities:   
Net income (loss)$(5,099) $6,807
Adjustments to reconcile net income (loss) to net cash provided by operating activities: 
  
Depreciation1,950
 1,745
Deferred income tax expense21,780
 3,097
Net amortization and accretion(2,567) (3,505)
Gain from sale of premises and equipment(164) (385)
Loss (gain) on sale and impairment of REO(42) 469
Gain on sale of loans held for sale(1,555) (1,444)
Origination of loans held for sale(61,981) (77,526)
Proceeds from sales of loans held for sale62,071
 79,755
Increase (decrease) in deferred loan fees, net297
 (397)
Increase in accrued interest receivable and other assets(2,818) (5,280)
Amortization of core deposit intangibles1,400
 1,268
BOLI income(1,080) (1,065)
ESOP compensation expense663
 538
Restricted stock and stock option expense2,014
 2,792
Decrease in other liabilities(1,904) (3,920)
Net cash provided by operating activities12,965
 2,949
Investing Activities: 
  
Purchase of securities available for sale—
 (15,091)
Proceeds from maturities of securities available for sale19,680
 17,795
Net maturities (purchases) of commercial paper(48,440) 50,928
Purchase of certificates of deposit in other banks(12,619) (24,708)
Maturities of certificates of deposit in other banks44,544
 36,073
Principal repayments of mortgage-backed securities10,941
 13,080
Net redemptions (purchases) of other investments478
 (2,855)
Net increase in loans(65,808) (121,236)
Purchase of BOLI(69) (110)
Proceeds from redemption of BOLI146
 —
Purchase of premises and equipment(1,496) (2,020)
Capital improvements to REO(18) —
Proceeds from sale of premises and equipment923
 395
Proceeds from sale of REO2,151
 1,169
Acquisition costs related to United Financial of North Carolina Inc.—
 (200)
Acquisition costs related to TriSummit Bancorp, Inc.—
 (16,074)
Net cash used in investing activities(49,587) (62,854)
Financing Activities: 
  
Net increase (decrease) in deposits59,757
 (16,531)
Net increase (decrease) in other borrowings(11,500) 69,000
Exercised stock options57
 —
Decrease in capital lease obligations(12) (11)
Net cash provided by financing activities48,302
 52,458
Net Increase (Decrease) in Cash and Cash Equivalents11,680
 (7,447)
Cash and Cash Equivalents at Beginning of Period86,985
 52,596
Cash and Cash Equivalents at End of Period$98,665
 $45,149



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

680
 —
Payable related to the acquisition of United Financial Inc. of North Carolina—
 225
(Unaudited)
Three Months Ended September 30,
 20232022
Supplemental disclosures
Cash paid during the period for
Interest$17,191 $1,296 
Income taxes5,400 127 
Noncash transactions  
Unrealized loss in value of debt securities available for sale, net of income taxes(496)(1,646)
Transfer of loans held for sale to loans held for investment8,214 5,219 
ROU asset and lease liabilities for operating lease accounting846 — 
The accompanying notes are an integral part of these consolidated financial statements.

8

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, 20172023 ("20172023 Form 10-K") filed with the SEC on September 12, 2017.11, 2023. The results of operations for the three and six months ended December 31, 2017September 30, 2023 are not necessarily indicative of results that may be expected for the entiresix-month transition period ending December 31, 2023, the period which will be covered on a Transition Report Form 10-KT associated with the Company's change in fiscal year ending June 30, 2018.end.
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; the accounting for business combinations, core deposit intangible, and acquired loans; and goodwill as accounting policies that, due to the judgments, estimates and assumptions inherent in thosethese policies, are critical to an understanding of the Company's financial statements. These policies relate to (i) the determination of the provision 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 are 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 2023 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 these critical accounting policies, the use of other judgments, estimates, and assumptions could result in material differences in the Company's results of operations or financial condition. Further, subsequent changes in economic or market conditions could have a material impact on these estimates and the Company's financial condition and operating results in future periods.
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.
2.Recent Accounting Pronouncements
In August 2015, the Financial2.    Recent Accounting Pronouncements
Adoption of New Accounting Standards Board ("FASB") issued
ASU No. 2015-14, “Revenue from Contracts with Customers2022-02, "Financial Instruments—Credit Losses (Topic 606)”, which defers326): Troubled Debt Restructurings and Vintage Disclosures." This ASU eliminates the effective date of Accounting Standard Update ("ASU") No. 2014-09 one year. ASU No. 2014-09 created Topic 606TDR recognition and supersedes Topic 605, Revenue Recognition. The core principle of Topic 606 ismeasurement guidance and requires that an entity recognizes revenueevaluate whether the modification represents a new loan or a continuation of an existing loan. The amendment also adjusts the disclosures related to depictmodifications and requires entities to disclose current-period gross write-offs by year of origination within the transferexisting vintage disclosures.
The Company adopted the standard using the modified retrospective transition method on July 1, 2023. The adoption of promised goods or servicesthis ASU did not have a material impact on the Company's ACL, but as a result of the elimination of the concept of TDRs, the balance of individually evaluated loans decreased by $1.9 million. The changes to customersfinancial statement disclosures have been reflected in an amount that reflectsthis filing, specifically "Note 6 – Loans and Allowance for Credit Losses on Loans".
3.    Merger with Quantum
On February 12, 2023, the consideration toCompany merged with Quantum which the entity expects to be entitled in exchange for those goods or services. In general, the new guidance requires companies to use more judgment and make more estimates than under current guidance, including identifying performance obligationsoperated two locations in the contract, estimating theAtlanta metro area. The aggregate amount of variable consideration paid per the purchase agreement of approximately $70,771, inclusive of consideration of common stock, other cash consideration, and cash in lieu of fractional shares, included $15,869 of cash consideration paid by Quantum to includeits stockholders 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 alladvance of the periods presented, or modified retrospective adoption, meaning the standardclosing date as 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 significantfurther described below. These distributions reduced Quantum's stockholders' equity by an equal amount of the Company’s revenues are derived from net interest income on financial assets and liabilities, which are excluded from the scope of the amended guidance. With respect to noninterest income, the Company is in its preliminary stages of identifying and evaluating the revenue streams and underlying revenue contracts within the scope of the guidance. 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 implementationtransaction closing 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 measured at fair value with changes in fair value recognized in net income; (ii) requires the use of exit price notion when measuring the fair value of financial instruments for disclosure purposes; (iii) require separate presentation of financial assets and

89

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 notes to the financial statements; (iv) allows an equity investment that does not have readily determinable fair values, to be measured at cost minus impairment (if any), plus or minus changes resulting from observable price changes in orderly transactions for the identical orThe following table provides a similar investmentsummary of the same issuer; (v) eliminatesassets acquired, liabilities assumed, associated preliminary fair value adjustments, and provisional period adjustments by the requirementCompany as of the merger date. As provided for under US GAAP, management has up to disclose12 months following the method(s) and significant assumptions useddate of merger to estimatefinalize the fair value that is requiredadjustments.
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 (179)3,117 
Total assets acquired$644,556 $12,240 $(179)$656,617 
Liabilities assumed  
Deposits$570,419 $183 $— $570,602 
Junior subordinated debt11,341 (1,408)— 9,933 
Other borrowings24,728 — — 24,728 
Deferred income taxes— 1,341 250 1,591 
Other liabilities3,334 — — 3,334 
Total liabilities assumed$609,822 $116 $250 $610,188 
Net assets acquired  $46,429 
  
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$8,473 
(1)Adjustments to be disclosedQuantum's total loans include the elimination of Quantum's existing allowance for financial instruments measuredloan losses of $5,972, the recognition of an ACL at amortized costclose on PCD loans of $369, and adjustments to reflect the estimated credit fair value mark on the balance sheet,non-PCD loan portfolio of $2,932 and requiresthe estimated interest rate fair value adjustment on the loan portfolio as a reporting organization to present separatelywhole (non-PCD and PCD) of $7,878.
(2)As indicated in other comprehensive income the portionCurrent Report on Form 8-K/A filed with the SEC on March 30, 2023, the amount of cash consideration paid at closing differs from the $57.54 per share, or $33,037, reported in the Current Report on Form 8-K filed on February 13, 2023, which announced the closing of the total changemerger. Consistent with the merger agreement, between the execution of the merger agreement and the transaction closing date, Quantum's principal stockholders had the option to withdraw some or all of the amount of cash consideration to eventually be paid at closing in advance of the fair valueclosing date. The amount of a liabilitycash consideration paid at closing was reduced by the amount withdrawn during this time period.
Goodwill of $8,473 arising from the merger consisted largely of synergies and the cost saves resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) whencombining of operations of the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) requires separate presentation of financial assetscompanies, and financial liabilities by measurement category and form of financial asset (i.e. securities or loans and receivables) on the balance sheet or in the accompanying notes to the financial statements; and (vii) clarifies that a valuation allowance on a deferred tax asset related to available-for-sale securities should be evaluated in combination with the organization’s other deferred tax assets. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The adoption of ASU No. 2016-01 is not expected to have a material impact on the Company's Consolidated Financial Statements. Management is in the planning stages of developing processes and procedures to comply with the disclosures requirements of this ASU, which could impact the disclosures the Company makes related to fair value of its financial instruments.
In February 2016, the FASB issued ASU 2016-02, "Leases (ASC 842)." The guidance in this ASU requires most leases to be recognized on the balance sheet as a right-of-use asset and a lease liability. It will be critical to identify leases embedded in a contract to avoid misstating the lessee’s balance sheet. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. The amendments in this ASU are effectivedeductible for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. We are currently evaluating the impact of this guidance on our Consolidated Financial Statements and the timing of adoption. The Company will compile an inventory of all leased assets to determine the impact of ASU 2016-02 on its financial condition and results of operations. Once adopted, we expect to report higher assets and liabilities on our Consolidated Balance Sheets as a result of including right-of-use assets and lease liabilities related to certain banking offices and certain equipment under noncancelable operating lease agreements, which currently are not reflected in our Consolidated Balance Sheets. We do not expect the guidance to have a material impact on the Consolidated Statements of Income or the Consolidated Statements of Changes in Stockholders' Equity.
In March 2016, the FASB issued ASU 2016-09, "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." The ASU changes the accounting for certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. We have elected to account for forfeitures of stock-based awards as they occur. The Company has adopted the amendments in this ASU and appropriate disclosures have been included in this Note. At the adoption of this ASU, we had a cumulative adjustment to retained earnings of $680,000. In accordance with the transition guidance outlined in this ASU, the adoption had no effect on net income or shareholder's equity in any previously issued periods. Going forward, we expect this ASU to create some volatility in our reported income tax expense related to the excess tax benefits for employee stock-based transactions, however, the actual amounts recognized will be dependent on the amount of employee stock-based transactions and the stock price at the time of exercise or vesting.
In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The ASU significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted for all entities beginning after December 15, 2018, including interim periods within those fiscal years. The Company is in the process of identifying required changes to the loan loss estimation models and processes and evaluating the impact of this new guidance. Once adopted, we expect our allowance for loan losses to increase, however, until our evaluation is complete the magnitude of the increase will be unknown.
In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." The ASU amends the guidance on the classification of certain cash receipts and payments in the statement of cash flows and is intended to reduce the diversity in practice. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted for all entities beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of the pending adoption of the ASU on its Consolidated Financial Statements.
In December 2016, FASB issued ASU No. 2016-19, "Technical Corrections and Improvements" and ASU 2016-20, "Technical Corrections and Improvements to Topic 606: Revenue from Contracts with Customers." On November 10, 2010 FASB added a standing project that will facilitate the FASB Accounting Standards Codification ("Codification”) updates for technical corrections, clarifications, and improvements. These amendments are referred to as Technical Corrections and Improvements. Maintenance updates include non-substantive corrections to the Codification, such as editorial corrections, various link-related changes, and changes to source fragment information. These updates contain amendments that will affect a wide variety of Topics in the Codification. The amendments in these ASUs will apply to all reporting entities within the scope of the affected accounting guidance and generally fall into one of four categories: amendments related to differences between original guidance and the Codification, guidance clarification and reference corrections, simplification, and minor improvements. In summary, the amendments represent changes to clarify the Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice. Transition guidance varies based on the amendments

purposes.
9
10

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

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

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

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

TriSummit Bancorp. Inc.

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

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

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

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

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

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

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


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

The following table presents the performing loans receivable purchased from TriSummit at January 1, 2017, the acquisition date:
Contractually required principal payments receivable$255,852
Adjustment for credit, interest rate, and liquidity5,489
Balance of purchased loans receivable$250,363
The following table presents the PCI loans acquired from TriSummit at January 1, 2017, the acquisition date:
Contractually required principal and interest payments receivable$11,474
Amounts not expected to be collected - nonaccretable difference2,490
Estimated payments expected to be received8,984
Accretable yield1,288
Fair value of PCI loans$7,696
4.Securities Available for Sale
Securities available for sale consist of the following at the dates indicated:
September 30, 2023
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value
U.S. government agencies$15,000 $— $(92)$14,908 
MBS, residential101,820 — (4,469)97,351 
Municipal bonds3,496 — (144)3,352 
Corporate bonds20,000 — (1,263)18,737 
Total$140,316 $— $(5,968)$134,348 
 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, 2023
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value
U.S. government agencies$15,000 $— $(286)$14,714 
MBS, residential110,865 — (3,451)107,414 
Municipal bonds3,505 — (117)3,388 
Corporate bonds27,881 — (1,471)26,410 
Total$157,251 $— $(5,325)$151,926 
Debt securities available for sale by contractual maturity at the dates indicatedSeptember 30, 2023 and June 30, 2023 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.
 September 30, 2023
Amortized
Cost		Estimated
Fair Value
Due within one year$30,000 $29,556 
Due after one year through five years2,987 2,885 
Due after five years through ten years5,509 4,556 
Due after ten years— — 
MBS, residential101,820 97,351 
Total$140,316 $134,348 
December 31, 2017 June 30, 2023
Amortized
Cost
 
Estimated
Fair Value
Amortized
Cost		Estimated
Fair Value
Due within one year$12,260
 $12,187
Due within one year$37,881 $37,060 
Due after one year through five years54,404
 54,153
Due after one year through five years2,994 2,903 
Due after five years through ten years10,243
 10,483
Due after five years through ten years5,511 4,549 
Due after ten years9,449
 9,505
Due after ten years— — 
Mortgage-backed securities81,675
 81,278
MBS, residentialMBS, residential110,865 107,414 
Total$168,031
 $167,606
Total$157,251 $151,926 

The Company had no sales of debt securities available for sale and no gross realized gains or losses were recognized during the three months ended September 30, 2023 and 2022.
Debt securities available for sale with amortized costs totaling $61,272 and $42,329 and market values of $59,962 and $40,475 at September 30, 2023 and June 30, 2023, respectively, were pledged as collateral to secure various public deposits and other borrowings.
13
11

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

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

Securities available for sale with costs totaling $131,784 and $156,592 and market values of $131,337 and $154,264 at December 31, 2017 and June 30, 2017, respectively, were pledged as collateral to secure various public deposits and other borrowings.
The gross unrealized losses and the fair value for debt securities available for sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2017September 30, 2023 and June 30, 20172023 were as follows:
September 30, 2023
Less than 12 Months12 Months or MoreTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
U.S. government agencies$— $— $14,908 $(92)$14,908 $(92)
MBS, residential50,586 (1,781)46,765 (2,688)97,351 (4,469)
Municipal bonds— — 3,352 (144)3,352 (144)
Corporate bonds605 (145)17,382 (1,118)17,987 (1,263)
Total$51,191 $(1,926)$82,407 $(4,042)$133,598 $(5,968)
 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
 $(698)
June 30, 2023
Less than 12 Months12 Months or MoreTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
U.S. government agencies$— $— $14,714 $(286)$14,714 $(286)
MBS, residential83,281 (1,674)24,133 (1,777)107,414 (3,451)
Municipal bonds2,420 (69)968 (48)3,388 (117)
Corporate bonds607 (143)25,053 (1,328)25,660 (1,471)
Total$86,308 $(1,886)$64,868 $(3,439)$151,176 $(5,325)
The total number of securities with unrealized losses at December 31, 2017,September 30, 2023 and June 30, 20172023 were 164206 and 136,205, 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 September 30, 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 2023 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 ECL on investment securities prior to a recovery in value.and does not record an ACL on accrued interest receivable. As of September 30, 2023 and June 30, 2023, accrued interest receivable for debt securities available for sale was $372 and $532, respectively.
5.    Loans Held For Sale
Loans held for sale, at the lower of cost or fair value, consist of the following as of the dates indicated:
September 30, 2023June 30, 2023
SBA$20,946 $28,804 
HELOCs179,888 132,899 
Total loans held for sale, at the lower of cost or fair value$200,834 $161,703 
Excluded from the table above are loans held for sale, at fair value, of which were entirely comprised of one-to-four family loans from our residential mortgage loan pipeline for both periods. The decline incarrying balance of the 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 31, 2017 or the year ended$4,616 and $6,947 at September 30, 2023 and June 30, 2017.
As a requirement for membership,2023, respectively, while the Bank invests inamortized cost of these loans was $4,558 and $6,902 at 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.


same dates.
14
12

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:
September 30, 2023June 30, 2023
Commercial real estate loans
Construction and land development$352,143 $356,674 
Commercial real estate – owner occupied526,534 529,721 
Commercial real estate – non-owner occupied880,348 901,685 
Multifamily83,430 81,827 
Total commercial real estate loans1,842,455 1,869,907 
Commercial loans
Commercial and industrial237,366 245,428 
Equipment finance470,387 462,211 
Municipal leases147,821 142,212 
Total commercial loans855,574 849,851 
Residential real estate loans
Construction and land development103,381 110,074 
One-to-four family560,399 529,703 
HELOCs185,289 187,193 
Total residential real estate loans849,069 826,970 
Consumer loans112,816 112,095 
Total loans, net of deferred loan fees and costs3,659,914 3,658,823 
ACL on loans(47,417)(47,193)
Loans, net$3,612,497 $3,611,630 
 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 September 30, 2023 and June 30, 2023 accrued interest receivable of $15,748 and $14,101, respectively, was accounted for separately from the amortized cost basis.
All qualifying one-to-four family first mortgage loans, HELOCs, commercial real estate loans, and FHLB Stockof Atlanta stock are pledged as collateral by a blanket pledge to secure any outstanding FHLB advances.
Loans are made to the Company's executive officers, directors and their associates during the ordinary course of business. The Company's total non-purchasedaggregate amount of loans to such related parties totaled approximately $213 and purchased performing$215 at September 30, 2023 and June 30, 2023, respectively. In addition, there are unfunded commitments related to these loans that totaled approximately $264 and $264 at September 30, 2023 and June 30, 2023, respectively.
Loans are monitored for credit quality on a recurring basis and the composition of the loans outstanding by segment, class,credit quality indicator is provided below. Loan credit quality indicators are developed through review of individual borrowers on an ongoing basis. Generally, loans are monitored for performance on a quarterly basis with the credit quality indicators adjusted as needed. The indicators represent the rating for loans as of the date presented based on the most recent assessment performed. These credit quality indicators are defined as follows:
Pass – A pass rated loan is not adversely classified because it does not display any of the characteristics for adverse classification.
Special Mention – A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention loans are not adversely classified and risk grade atdo not warrant adverse classification.
Substandard – A substandard loan is inadequately protected by the dates indicated follow:current net worth and paying capacity of the obligor, or of the collateral pledged, if any. Loans classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility of loss if the deficiencies are not corrected.
Doubtful – A loan classified as doubtful has all the weaknesses inherent in a loan classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions, and values.
Loss – Loans classified as loss are considered uncollectible and of such little value that their continuing to be carried as a loan is not warranted. This classification is not necessarily equivalent to no potential for recovery or salvage value, but rather that it is not appropriate to defer a full write-off even though partial recovery may be effected in the future.






13
 Pass 
Special
Mention
 Substandard Doubtful Loss Total
December 31, 2017           
Retail consumer loans:           
One-to-four family$658,436
 $4,783
 $14,298
 $1,132
 $132
 $678,781
HELOCs - originated146,733
 756
 2,318
 —
 21
 149,828
HELOCs - purchased161,991
 —
 190
 —
 —
 162,181
Construction and land/lots59,496
 389
 409
 —
 —
 60,294
Indirect auto finance149,660
 —
 382
 —
 —
 150,042
Consumer9,656
 10
 20
 1
 9
 9,696
Commercial loans: 
  
  
  
  
  
Commercial real estate760,262
 7,584
 5,809
 —
 —
 773,655
Construction and development179,946
 714
 2,829
 —
 —
 183,489
Commercial and industrial122,282
 906
 2,099
 —
 2
 125,289
Municipal leases99,798
 309
 98
 —
 —
 100,205
Total loans$2,348,260
 $15,451
 $28,452
 $1,133
 $164
 $2,393,460

15

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

 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 September 30, 2023:
Term Loans By Origination Fiscal Year
September 30, 202320242023202220212020PriorRevolvingTotal
Construction and land development
Risk rating
Pass$7,583 $36,391 $63,033 $13,787 $2,759 $7,865 $220,361 $351,779 
Special mention— — 74 — — — — 74 
Substandard— — 290 — — — — 290 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and land development$7,583 $36,391 $63,397 $13,787 $2,759 $7,865 $220,361 $352,143 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Commercial real estate – owner occupied
Risk rating
Pass$16,826 $59,318 $101,083 $88,927 $66,257 $160,947 $22,232 $515,590 
Special mention— — 526 449 2,044 3,766 — 6,785 
Substandard— — — 1 341 3,326 — 3,668 
Doubtful— — — — 280 211 — 491 
Loss— — — — — — — — 
Total commercial real estate – owner occupied$16,826 $59,318 $101,609 $89,377 $68,922 $168,250 $22,232 $526,534 
Current period gross charge-offs$— $— $— $— $— $290 $— $290 
Commercial real estate – non-owner occupied
Risk rating
Pass$9,182 $81,239 $151,910 $135,816 $98,259 $316,051 $75,573 $868,030 
Special mention— — — — — 299 — 299 
Substandard— — — — 5,265 6,754 — 12,019 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate – non-owner occupied$9,182 $81,239 $151,910 $135,816 $103,524 $323,104 $75,573 $880,348 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Multifamily
Risk rating
Pass$4,729 $3,824 $15,546 $21,642 $10,056 $26,418 $839 $83,054 
Special mention— — — — — 89 — 89 
Substandard— — — — — 287 — 287 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total multifamily$4,729 $3,824 $15,546 $21,642 $10,056 $26,794 $839 $83,430 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Total commercial real estate
Risk rating
Pass$38,320 $180,772 $331,572 $260,172 $177,331 $511,281 $319,005 $1,818,453 
Special mention— — 600 449 2,044 4,154 — 7,247 
Substandard— — 290 1 5,606 10,367 — 16,264 
Doubtful— — — — 280 211 — 491 
Loss— — — — — — — — 
Total commercial real estate$38,320 $180,772 $332,462 $260,622 $185,261 $526,013 $319,005 $1,842,455 
Total current period gross charge-offs$— $— $— $— $— $290 $— $290 

14
 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
September 30, 202320242023202220212020PriorRevolvingTotal
Commercial and industrial
Risk rating
Pass$10,974 $55,601 $62,578 $17,264 $12,036 $25,536 $43,986 $227,975 
Special mention— 935 238 290 964 98 — 2,525 
Substandard— — 237 39 559 4,072 — 4,907 
Doubtful— 754 382 139 166 123 264 1,828 
Loss— — — — — 131 — 131 
Total commercial and industrial$10,974 $57,290 $63,435 $17,732 $13,725 $29,960 $44,250 $237,366 
Current period gross charge-offs$— $469 $— $— $166 $647 $55 $1,337 
Equipment finance
Risk rating
Pass$48,431 $186,517 $124,784 $65,326 $31,080 $7,568 $— $463,706 
Special mention— 513 1,572 367 399 363 — 3,214 
Substandard— 207 — — — 108 — 315 
Doubtful— 836 1,197 908 135 — — 3,076 
Loss— — 8 — 68 — — 76 
Total equipment finance$48,431 $188,073 $127,561 $66,601 $31,682 $8,039 $— $470,387 
Current period gross charge-offs$— $295 $229 $243 $— $63 $— $830 
Municipal leases
Risk rating
Pass$8,703 $32,827 $28,907 $13,867 $7,687 $50,794 $5,036 $147,821 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total municipal leases$8,703 $32,827 $28,907 $13,867 $7,687 $50,794 $5,036 $147,821 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Total commercial
Risk rating
Pass$68,108 $274,945 $216,269 $96,457 $50,803 $83,898 $49,022 $839,502 
Special mention— 1,448 1,810 657 1,363 461 — 5,739 
Substandard— 207 237 39 559 4,180 — 5,222 
Doubtful— 1,590 1,579 1,047 301 123 264 4,904 
Loss— — 8 — 68 131 — 207 
Total commercial$68,108 $278,190 $219,903 $98,200 $53,094 $88,793 $49,286 $855,574 
Total current period gross charge-offs$— $764 $229 $243 $166 $710 $55 $2,167 


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






15
 Past Due   Total
 30-89 Days 90 Days+ Total Current Loans
December 31, 2017         
Retail consumer loans:         
One-to-four family$4,730
 $3,601
 $8,331
 $677,898
 $686,229
HELOCs - originated531
 740
 1,271
 148,813
 150,084
HELOCs - purchased—
 —
 —
 162,181
 162,181
Construction and land/lots164
 133
 297
 60,508
 60,805
Indirect auto finance441
 67
 508
 149,534
 150,042
Consumer7
 4
 11
 9,688
 9,699
Commercial loans:         
Commercial real estate341
 2,854
 3,195
 783,186
 786,381
Construction and development831
 2,062
 2,893
 183,028
 185,921
Commercial and industrial267
 538
 805
 126,904
 127,709
Municipal leases—
 —
 —
 100,205
 100,205
Total loans$7,312
 $9,999
 $17,311
 $2,401,945
 $2,419,256
The table above includes PCI loans of $797 30-89 days past due and $2,023 90 days or more past due as of December 31, 2017.
 Past Due   Total
 30-89 Days 90 Days+ Total Current Loans
June 30, 2017         
Retail consumer loans:         
One-to-four family$3,496
 $3,990
 $7,486
 $676,603
 $684,089
HELOCs - originated1,037
 274
 1,311
 155,757
 157,068
HELOCs - purchased—
 —
 —
 162,407
 162,407
Construction and land/lots132
 129
 261
 49,875
 50,136
Indirect auto finance96
 —
 96
 140,783
 140,879
Consumer5
 14
 19
 7,881
 7,900
Commercial loans: 
  
  
  
  
Commercial real estate809
 3,100
 3,909
 726,499
 730,408
Construction and development385
 887
 1,272
 196,694
 197,966
Commercial and industrial37
 831
 868
 119,519
 120,387
Municipal leases—
 —
 —
 101,175
 101,175
Total loans$5,997
 $9,225
 $15,222
 $2,337,193
 $2,352,415
The table above includes PCI loans of $854 30-89 days past due and $4,211 90 days or more past due as of June 30, 2017.

17

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

Term Loans By Origination Fiscal Year
September 30, 202320242023202220212020PriorRevolvingTotal
Construction and land development
Risk rating
Pass$— $11,711 $7,022 $785 $46 $1,329 $82,350 $103,243 
Special mention— — — — — — — — 
Substandard— — — — — 138 — 138 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and land development$— $11,711 $7,022 $785 $46 $1,467 $82,350 $103,381 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
One-to-four family
Risk rating
Pass$8,610 $87,868 $140,747 $111,000 $52,388 $145,139 $9,057 $554,809 
Special mention— — — — — 538 — 538 
Substandard— 184 259 — 203 4,380 — 5,026 
Doubtful— — — — — 25 — 25 
Loss— — — — — 1 — 1 
Total one-to-four family$8,610 $88,052 $141,006 $111,000 $52,591 $150,083 $9,057 $560,399 
Current period gross charge-offs$— $— $13 $3 $8 $3 $— $27 
HELOCs
Risk rating
Pass$415 $8,268 $513 $857 $408 $7,694 $165,939 $184,094 
Special mention— — — — — — — — 
Substandard— 510 10 — — 541 105 1,166 
Doubtful— — — — — 29 — 29 
Loss— — — — — — — — 
Total HELOCs$415 $8,778 $523 $857 $408 $8,264 $166,044 $185,289 
Current period gross charge-offs$— $— $— $— $— $— $— $— 
Total residential real estate
Risk rating
Pass$9,025 $107,847 $148,282 $112,642 $52,842 $154,162 $257,346 $842,146 
Special mention— — — — — 538 — 538 
Substandard— 694 269 — 203 5,059 105 6,330 
Doubtful— — — — — 54 — 54 
Loss— — — — — 1 — 1 
Total residential real estate$9,025 $108,541 $148,551 $112,642 $53,045 $159,814 $257,451 $849,069 
Total current period gross charge-offs$— $— $13 $3 $8 $3 $— $27 
The Company's recorded investment in loans, by segment and class, that are not accruing interest or are 90 days or more past due and still accruing interest at the dates indicated follow:
Term Loans By Origination Fiscal Year
September 30, 202320242023202220212020PriorRevolvingTotal
Total consumer
Risk rating
Pass$13,672 $57,028 $16,171 $11,069 $7,556 $5,893 $289 $111,678 
Special mention— — — — — — — — 
Substandard40 262 210 232 199 177 16 1,136 
Doubtful— 1 — — — — — 1 
Loss— — — — — 1 — 1 
Total consumer$13,712 $57,291 $16,381 $11,301 $7,755 $6,071 $305 $112,816 
Total current period gross charge-offs$— $164 $27 $10 $7 $112 $— $320 







16
 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") 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, or a longer term to maturity. Additionally, all 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 the payment terms of TDRs that were excluded from nonaccruing loans above at the dates indicated follow:
 December 31, 2017 June 30, 2017
Performing TDRs included in impaired loans$25,181
 $27,043
An analysis of the allowance for loan losses 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
 Six Months Ended December 31, 2017 Six Months Ended December 31, 2016
 PCI 
Retail
Consumer
 Commercial Total PCI 
Retail
Consumer
 Commercial Total
Balance at beginning of period$727
 $8,585
 $11,839
 $21,151
 $361
 $11,549
 $9,382
 $21,292
Provision for (recovery of) loan losses184
 (250) 66
 —
 (25) (1,505) 1,530
 —
Charge-offs(345) (528) (363) (1,236) —
 (574) (675) (1,249)
Recoveries—
 384
 791
 1,175
 —
 343
 600
 943
Balance at end of period$566
 $8,191
 $12,333
 $21,090
 $336
 $9,813
 $10,837
 $20,986

18

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


The Company's ending balancesfollowing 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 loans and the related allowance, by segment and class, at the dates indicated follows:June 30, 2023:
Term Loans By Origination Fiscal Year
June 30, 202320232022202120202019PriorRevolvingTotal
Construction and land development
Risk rating
Pass$27,234 $26,157 $5,469 $2,226 $1,560 $5,836 $287,615 $356,097 
Special mention— 73 — — — — — 73 
Substandard— 481 — — — 23 — 504 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and land development$27,234 $26,711 $5,469 $2,226 $1,560 $5,859 $287,615 $356,674 
Commercial real estate – owner occupied
Risk rating
Pass$58,671 $106,738 $91,575 $68,054 $54,176 $115,425 $23,984 $518,623 
Special mention— 177 909 2,017 361 3,437 — 6,901 
Substandard— — 76 343 399 3,379 — 4,197 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate – owner occupied$58,671 $106,915 $92,560 $70,414 $54,936 $122,241 $23,984 $529,721 
Commercial real estate – non-owner occupied
Risk rating
Pass$85,574 $156,244 $137,659 $99,442 $68,794 $265,099 $76,508 $889,320 
Special mention— — — — — 4,047 5,301 9,348 
Substandard— — — — — 3,017 — 3,017 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate – non-owner occupied$85,574 $156,244 $137,659 $99,442 $68,794 $272,163 $81,809 $901,685 
Multifamily
Risk rating
Pass$3,850 $16,410 $21,867 $10,172 $5,843 $22,321 $980 $81,443 
Special mention— — — — 28 61 — 89 
Substandard— — — — — 295 — 295 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total multifamily$3,850 $16,410 $21,867 $10,172 $5,871 $22,677 $980 $81,827 
Total commercial real estate
Risk rating
Pass$175,329 $305,549 $256,570 $179,894 $130,373 $408,681 $389,087 $1,845,483 
Special mention— 250 909 2,017 389 7,545 5,301 16,411 
Substandard— 481 76 343 399 6,714 — 8,013 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial real estate$175,329 $306,280 $257,555 $182,254 $131,161 $422,940 $394,388 $1,869,907 
17
 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)

Term Loans By Origination Fiscal Year
June 30, 202320232022202120202019PriorRevolvingTotal
Commercial and industrial
Risk rating
Pass$57,377 $72,662 $18,845 $13,849 $6,441 $21,620 $47,934 $238,728 
Special mention— 327 467 179 116 — — 1,089 
Substandard— 13 28 605 858 43 3,649 5,196 
Doubtful— 9 8 — 134 — 260 411 
Loss— — — — — 4 — 4 
Total commercial and industrial$57,377 $73,011 $19,348 $14,633 $7,549 $21,667 $51,843 $245,428 
Equipment finance
Risk rating
Pass$200,054 $136,226 $73,363 $36,589 $10,178 $256 $— $456,666 
Special mention805 808 140 441 344 — — 2,538 
Substandard— — 227 13 115 — — 355 
Doubtful342 1,283 825 198 — — — 2,648 
Loss— — — — 4 — — 4 
Total equipment finance$201,201 $138,317 $74,555 $37,241 $10,641 $256 $— $462,211 
Municipal leases
Risk rating
Pass$31,462 $27,910 $14,292 $8,212 $9,838 $43,251 $7,247 $142,212 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total municipal leases$31,462 $27,910 $14,292 $8,212 $9,838 $43,251 $7,247 $142,212 
Total commercial
Risk rating
Pass$288,893 $236,798 $106,500 $58,650 $26,457 $65,127 $55,181 $837,606 
Special mention805 1,135 607 620 460 — — 3,627 
Substandard— 13 255 618 973 43 3,649 5,551 
Doubtful342 1,292 833 198 134 — 260 3,059 
Loss— — — — 4 4 — 8 
Total commercial$290,040 $239,238 $108,195 $60,086 $28,028 $65,174 $59,090 $849,851 
The Company's impaired loans and the related allowance, by segment and class, at the dates indicated follows:







18
 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)

Term Loans By Origination Fiscal Year
June 30, 202320232022202120202019PriorRevolvingTotal
Construction and land development
Risk rating
Pass$671 $850 $— $47 $— $1,270 $107,096 $109,934 
Special mention— — — — — — — — 
Substandard— — — — — 140 — 140 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and land development$671 $850 $— $47 $— $1,410 $107,096 $110,074 
One-to-four family
Risk rating
Pass$78,574 $122,091 $109,669 $51,927 $31,491 $120,331 $10,122 $524,205 
Special mention— — — — — 543 — 543 
Substandard185 125 — 204 55 4,356 — 4,925 
Doubtful— — — — — 29 — 29 
Loss— — — — — 1 — 1 
Total one-to-four family$78,759 $122,216 $109,669 $52,131 $31,546 $125,260 $10,122 $529,703 
HELOCs
Risk rating
Pass$8,966 $561 $120 $371 $946 $7,251 $168,311 $186,526 
Special mention— — — — — — — — 
Substandard— 10 — — — 494 134 638 
Doubtful— — — — — 29 — 29 
Loss— — — — — — — — 
Total HELOCs$8,966 $571 $120 $371 $946 $7,774 $168,445 $187,193 
Total residential real estate
Risk rating
Pass$88,211 $123,502 $109,789 $52,345 $32,437 $128,852 $285,529 $820,665 
Special mention— — — — — 543 — 543 
Substandard185 135 — 204 55 4,990 134 5,703 
Doubtful— — — — — 58 — 58 
Loss— — — — — 1 — 1 
Total residential real estate$88,396 $123,637 $109,789 $52,549 $32,492 $134,444 $285,663 $826,970 
The Company's average recorded investment in impaired loans and interest income recognized on impaired loans for the three and six months ended December 31, 2017 and 2016 was as follows:
 Three Months Ended
 December 31, 2017 December 31, 2016
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Retail consumer loans:       
One-to-four family$24,519
 $287
 $26,673
 $283
HELOCs - originated2,750
 31
 2,544
 33
HELOC - purchased191
 3
 —
 —
Construction and land/lots1,588
 27
 1,594
 38
Indirect auto finance232
 3
 134
 1
Consumer33
 4
 32
 5
Commercial loans: 
  
  
  
Commercial real estate7,184
 77
 7,673
 63
Construction and development2,973
 31
 2,530
 31
Commercial and industrial1,723
 23
 3,372
 22
Municipal leases102
 6
 408
 —
Total loans$41,295
 $492
 $44,960
 $476
 Six Months Ended
 December 31, 2017 December 31, 2016
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Retail consumer loans:       
One-to-four family$24,721
 $585
 $26,356
 $585
HELOCs - originated2,767
 61
 2,755
 65
HELOCs - purchased191
 7
 —
 —
Construction and land/lots1,651
 56
 1,548
 75
Indirect auto finance155
 9
 96
 3
Consumer36
 8
 29
 10
Commercial loans: 
  
  
  
Commercial real estate7,425
 152
 7,326
 130
Construction and development2,862
 52
 2,530
 49
Commercial and industrial1,841
 42
 3,624
 58
Municipal leases201
 6
 412
 12
Total loans$41,850
 $978
 $44,676
 $987
A summary of changes in the accretable yield for PCI loans for the three and six months ended December 31, 2017 and 2016 was as follows:
Term Loans By Origination Fiscal Year
June 30, 202320232022202120202019PriorRevolvingTotal
Total consumer
Risk rating
Pass$62,861 $17,913 $12,627 $8,954 $5,172 $2,847 $473 $110,847 
Special mention— — — — — — — — 
Substandard302 211 242 247 54 154 37 1,247 
Doubtful— — — — — — — — 
Loss— — — — 1 — — 1 
Total consumer$63,163 $18,124 $12,869 $9,201 $5,227 $3,001 $510 $112,095 
19
 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 aging analyses of past due loans (including nonaccrual loans) by segment and class for the periods indicated:
Past DueTotal Loans
30-89 Days90 Days+TotalCurrent
September 30, 2023
Commercial real estate
Construction and land development$— $— $— $352,143 $352,143 
Commercial real estate – owner occupied660 491 1,151 525,383 526,534 
Commercial real estate – non-owner occupied953 — 953 879,395 880,348 
Multifamily— — — 83,430 83,430 
Total commercial real estate1,613 491 2,104 1,840,351 1,842,455 
Commercial
Commercial and industrial1,902 828 2,730 234,636 237,366 
Equipment finance4,226 2,283 6,509 463,878 470,387 
Municipal leases297 — 297 147,524 147,821 
Total commercial6,425 3,111 9,536 846,038 855,574 
Residential real estate
Construction and land development— 132 132 103,249 103,381 
One-to-four family654 1,144 1,798 558,601 560,399 
HELOCs627 1,107 1,734 183,555 185,289 
Total residential real estate1,281 2,383 3,664 845,405 849,069 
Consumer461 232 693 112,123 112,816 
Total loans$9,780 $6,217 $15,997 $3,643,917 $3,659,914 
Past DueTotal Loans
30-89 Days90 Days+TotalCurrent
June 30, 2023
Commercial real estate
Construction and land development$— $— $— $356,674 $356,674 
Commercial real estate – owner occupied1,514 76 1,590 528,131 529,721 
Commercial real estate – non-owner occupied— — — 901,685 901,685 
Multifamily— — — 81,827 81,827 
Total commercial real estate1,514 76 1,590 1,868,317 1,869,907 
Commercial
Commercial and industrial873 403 1,276 244,152 245,428 
Equipment finance826 1,837 2,663 459,548 462,211 
Municipal leases— — — 142,212 142,212 
Total commercial1,699 2,240 3,939 845,912 849,851 
Residential real estate
Construction and land development— 132 132 109,942 110,074 
One-to-four family1,698 1,060 2,758 526,945 529,703 
HELOCs379 769 1,148 186,045 187,193 
Total residential real estate2,077 1,961 4,038 822,932 826,970 
Consumer320 288 608 111,487 112,095 
Total loans$5,610 $4,565 $10,175 $3,648,648 $3,658,823 

 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
20

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


22

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

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.
For the three and six months ended December 31, 2017 and 2016, the following table presents a breakdownthe recorded investment in nonaccrual loans and loans past due 90 days or more and still accruing, by segment and class. It also includes interest income recognized on nonaccrual loans for the three months ended September 30, 2023.
September 30, 2023
 June 30, 2023
90 Days+ &
Still Accruing as of September 30, 2023
Nonaccrual with No ACL as of September 30, 2023Interest Income Recognized
Commercial real estate
Construction and land development$— $23 $— $— $— 
Commercial real estate – owner occupied918 517 — — 7 
Commercial real estate – non-owner occupied953 — — 953 1 
Multifamily79 84 — — — 
Total commercial real estate1,950 624 — 953 8 
Commercial
Commercial and industrial2,606 1,222 — 382 23 
Equipment finance3,339 2,862 — — 44 
Municipal leases— 106 — — — 
Total commercial5,945 4,190 — 382 67 
Residential real estate
Construction and land development132 132 — — 4 
One-to-four family2,142 1,935 — — 23 
HELOCs1,245 957 — — 8 
Total residential real estate3,519 3,024 — — 35 
Consumer428 477 — — 38 
Total loans$11,842 $8,315 $— $1,335 $148 
The following tables present analyses of the typesACL on loans by segment for the periods indicated below. In addition to the provision (benefit) for credit losses on loans presented below, provisions (benefits) of concessions made on TDRs by loan class:$(280) and $443 for off-balance sheet credit exposures and $0 and $(150) for commercial paper were recorded for the three months ended September 30, 2023 and 2022, respectively.
Three Months Ended September 30, 2023
Commercial Real EstateCommercialResidential Real EstateConsumerTotal
Balance at beginning of period$20,690 $15,216 $9,284 $2,003 $47,193 
Provision (benefit) for credit losses(30)2,383 260 237 2,850 
Charge-offs(290)(2,167)(27)(320)(2,804)
Recoveries1 94 31 52 178 
Net (charge-offs) recoveries(289)(2,073)4 (268)(2,626)
Balance at end of period$20,371 $15,526 $9,548 $1,972 $47,417 
Three Months Ended September 30, 2022
Commercial Real EstateCommercialResidential Real EstateConsumerTotal
Balance at beginning of period$13,414 $12,036 $7,611 $1,629 $34,690 
Provision for credit losses1,264 1,064 674 692 3,694 
Charge-offs— (274)(72)(101)(447)
Recoveries2 152 170 40 364 
Net (charge-offs) recoveries2 (122)98 (61)(83)
Balance at end of period$14,680 $12,978 $8,383 $2,260 $38,301 

 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
21
 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)

In estimating ECL, ASC 326 prescribes that if foreclosure is expected, a CDA is required to be measured at the fair value of collateral, but as a practical expedient, if foreclosure is not probable, fair value measurement is optional. For those CDA loans measured at the fair value of collateral, a credit loss expense is recorded for loan amounts in excess of fair value. The following table presentstables provide a breakdown between loans identified as CDAs and non-CDAs, by segment and class, and securing collateral, as well as collateral coverage for those loans for the periods indicated below:
Type and Extent of Collateral Securing CDAsNon-CDAs
September 30, 2023Residential PropertyInvestment PropertyCommercial PropertyBusiness AssetsTotal
Commercial real estate
Construction and land development$— $— $— $— $352,143 $352,143 
Commercial real estate – owner occupied— — 1,444 — 525,090 526,534 
Commercial real estate – non-owner occupied— — 3,999 — 876,349 880,348 
Multifamily— — — — 83,430 83,430 
Total commercial real estate— — 5,443 — 1,837,012 1,842,455 
Commercial
Commercial and industrial— — — 706 236,660 237,366 
Equipment finance— — — 342 470,045 470,387 
Municipal leases— — — — 147,821 147,821 
Total commercial— — — 1,048 854,526 855,574 
Residential real estate
Construction and land development— — — — 103,381 103,381 
One-to-four family— — — — 560,399 560,399 
HELOCs510 — — — 184,779 185,289 
Total residential real estate510 — — — 848,559 849,069 
Consumer— — — — 112,816 112,816 
Total$510 $— $5,443 $1,048 $3,652,913 $3,659,914 
Total collateral value$413 $— $9,432 $— 
Type and Extent of Collateral Securing CDAsNon-CDAs
June 30, 2023Residential PropertyInvestment PropertyCommercial PropertyBusiness AssetsTotal
Commercial real estate
Construction and land development$— $— $— $— $356,674 $356,674 
Commercial real estate – owner occupied— — 1,045 — 528,676 529,721 
Commercial real estate – non-owner occupied— — 3,018 — 898,667 901,685 
Multifamily— — — — 81,827 81,827 
Total commercial real estate— — 4,063 — 1,865,844 1,869,907 
Commercial
Commercial and industrial— — — 811 244,617 245,428 
Equipment finance— — — 342 461,869 462,211 
Municipal leases— — — — 142,212 142,212 
Total commercial— — — 1,153 848,698 849,851 
Residential real estate
Construction and land development— — — — 110,074 110,074 
One-to-four family752 — — — 528,951 529,703 
HELOCs— — — — 187,193 187,193 
Total residential real estate752 — — — 826,218 826,970 
Consumer— — — — 112,095 112,095 
Total$752 $— $4,063 $1,153 $3,652,855 $3,658,823 
Total collateral value$1,435 $— $9,202 $— 
Modifications to Borrowers Experiencing Financial Difficulty
Management identifies loans as modifications to borrowers experiencing financial difficulty when a borrower is experiencing financial difficulties and the Company has altered the cash flow of the loan as part of a modification or in the loan renewal process. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that were modified as TDRs within the previous 12 months and for which there was aborrower will be in 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 determinationon any of the allowance for loan losses, management considers TDRs for all loan classes, andborrower's debt in the subsequent nonperformanceforeseeable future without the modification. This evaluation is performed in accordance with their modified terms, by measuring impairment 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.

Company’s internal underwriting policy.
24
22

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

The Company modifies loans to borrowers experiencing financial difficulty by providing principal forgiveness, a term extension, an other-than-insignificant payment delay or interest rate adjustments. In some cases, the Company provides multiple types of modifications on one loan. Typically, one type of modification, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another modification, such as principal forgiveness, may be granted. For loans included in the combination columns in the table below, multiple types of modifications have been made on the same loan within the current reporting period.
The starting point for the estimate of the ACL is historical loss information, which includes losses from modifications of loans to borrowers experiencing financial difficulty. As a result, the effect of most modifications made to borrowers experiencing financial difficulty is already included in the ACL and a change to the ACL is generally not recorded upon modification. When principal forgiveness is provided, however, the amount of forgiveness is charged off against the ACL.
The following table presents the amortized cost basis of loans at September 30, 2023 that were both experiencing financial difficulty and modified during the three months ended September 30, 2023 by class and type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial difficulty as compared to the amortized cost basis of each class of financing receivable is also presented.
6.Real Estate OwnedThree Months Ended September 30, 2023
Principal ForgivenessPayment DelayTerm ExtensionInterest Rate AdjustmentCombination Term Extension & Principal ForgivenessCombination Term Extension & Interest Rate Reduction% of Total Class of Financing Receivable
Residential real estate loans
One-to-four family$— $— $162 $— $— $— — %
The activity within REOfollowing table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the periods shownperiod indicated below:
Three Months Ended September 30, 2023
Principal ForgivenessWeighted-Average Interest Rate ReductionWeighted-Average Term Extension (Years)
Residential real estate loans
One-to-four family$— — %7.0
There were no loans that had a payment default during the three months ended September 30, 2023 that had previously been modified within the same period.
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 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
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 December 31, 2017September 30, 2023 and June 30, 2017,2023, the Bank had $1,081ACL on off-balance sheet credit exposures included in other liabilities was $3,277 and $1,015 respectively, of foreclosed residential real estate property in REO. The recorded investment in consumer mortgage loans collateralized by residential real estate in$3,557, respectively.
7. Deposit Accounts
Deposit accounts at the process of foreclosure totaled $2,268 and $2,230 at December 31, 2017 and June 30, 2017, respectively.
7. Income Taxes
Income tax expense consists of:
 Three Months Ended December 31, Six Months Ended December 31,
 2017 2016 2017 2016
Current:       
Federal$92
 $40
 $230
 $191
State(3) 22
 8
 29
Total current expense89
 62
 238
 220
Deferred:       
Federal1,611
 751
 3,681
 2,356
State115
 80
 406
 741
Adjustment due to the Tax Cuts and Jobs Act17,693
 —
 17,693
 —
Total deferred expense19,419
 831
 21,780
 3,097
Total income tax expense$19,508
 $893
 $22,018
 $3,317
Income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 28% and 34% for the periods ended December 31, 2017 and 2016, respectively, to pretax income from continuing operations before income taxes as a resultdates indicated consist of the following:
September 30, 2023June 30, 2023
Noninterest-bearing accounts$827,362 $825,481 
NOW accounts602,804 611,105 
Money market accounts1,195,482 1,241,840 
Savings accounts202,971 212,220 
Certificates of deposit812,342 710,522 
Total$3,640,961 $3,601,168 
 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 %

Deposits received from executive officers and directors and their associates totaled approximately $1,929 and $5,130 at September 30, 2023 and June 30, 2023, respectively.
25
23

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

As of September 30, 2023, scheduled maturities of certificates of deposit are as follows:
The sources
Fiscal year ending June 30
Remainder of 2024$684,790 
2025109,095 
20269,471 
20275,003 
20283,606 
Thereafter377 
Total$812,342 
Certificates of deposit with balances of $250 or greater totaled $121,058 and tax effects$120,666 at September 30, 2023 and June 30, 2023, respectively. Generally, deposit amounts in excess of temporary differences$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 $11,000 of trust preferred securities that give risewere designed to significant portionsqualify as Tier I capital under Federal Reserve Board guidelines. All of the deferred tax assets (liabilities) at December 31, 2017 and June 30, 2017 are presented below:
 December 31, 2017 June 30, 2017
Deferred tax assets:   
Alternative minimum tax credit$4,637
 $4,418
Allowance for loan losses4,646
 7,452
Deferred compensation and post-retirement benefits9,672
 16,055
Accrued vacation and sick leave18
 29
Impairments on real estate owned877
 1,337
Other than temporary impairment on investments2,262
 3,617
Net operating loss carryforward11,109
 21,443
Discount from business combination3,056
 3,645
Unrealized loss on securities held for sale98
 —
Stock compensation plans2,154
 2,884
Other1,904
 2,687
Total gross deferred tax assets40,433
 63,567
Less valuation allowance(54) (238)
Deferred tax assets40,379
 63,329
Deferred tax (liabilities): 
  
Depreciable basis of fixed assets(589) (670)
Deferred loan fees(406) (493)
FHLB stock, book basis in excess of tax(89) (143)
Unrealized gain on securities available for sale—
 (152)
Other(2,769) (4,484)
Total gross deferred tax liabilities(3,853) (5,942)
Net deferred tax assets$36,526
 $57,387
We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portioncommon securities of the deferred tax asset will not be realized. We exercise significant judgment in evaluatingTrust were owned by Quantum. The proceeds from the amount and timing of recognitionissuance of the resulting tax liabilitiescommon securities and assets. These judgments require us to make projections of future taxable income. The judgments and estimates we make in determining our deferred tax assets, which are inherently subjective, are reviewed on a continual basis as regulatory and business factors change. Any reduction in estimated future taxable income may require us to record a valuation allowance against our deferred tax assets.
The decrease in net deferred tax assets was driventhe trust preferred securities were used by the enactmentTrust to purchase $11,341 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 usejunior subordinated debentures 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.Quantum. As a result of this blended rate, income tax expense forits merger with Quantum on February 12, 2023, HomeTrust became 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 quarter100% successor owner of the fiscal year. Trust.
The estimated $17.7 million deferred tax revaluation includes provisional amounts wheretrust preferred securities accrue and pay quarterly distributions at a reasonable estimatefloating rate of 3-month Term SOFR plus 2.20%, which was made7.60% at September 30, 2023. The Company has guaranteed distributions and other payments due on the trust preferred securities to complythe 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 Tax Act, which can be adjusted throughouttrust preferred securities is that the measurement periodCompany 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 up to one year. These provisional amounts include estimates related toupon earlier redemption as provided in the timing of potential reversals of various deferred tax assets and liabilities during fiscal year 2018 using the blended tax rate as described above.indenture. The Company will continuehas the right to updateredeem the provisional amounts as additional information becomes available and expects all adjustments to be finalizeddebentures purchased by the endTrust, 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 fiscal 2018.junior subordinated debt, consist of the following at the dates indicated:
The
September 30, 2023June 30, 2023
BalanceWeighted
Average Rate		BalanceWeighted
Average Rate
FHLB advances$130,000 5.47 %$180,000 5.19 %
FRB advances302,000 5.50 257,000 5.25 
Revolving lines of credit20,263 9.00 20,263 8.75 
Total borrowings$452,263 5.65 %$457,263 5.38 %
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 September 30, 2023 and June 30, 2023, the Company had federal net operating loss ("NOL") carry forwardsthe ability to borrow $67,693 and $22,673, respectively, through additional FHLB advances and $62,142 and $91,316, respectively, through the unused portion of $52,655 and $62,041 asa line of December 31, 2017credit with the FRB.
At September 30, 2023 and June 30, 2017, respectively,2023, the Company maintained revolving lines of credit with a recorded tax benefitthree unaffiliated banks, the unused portions 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 assetswhich totaled $144,737 as of December 31, 2017both dates. At both September 30, 2023 and June 30, 20172023, HomeTrust had drawn $20,263 on a $40,000 revolving line of credit which bears interest at The Wall Street Journal prime rate plus 50 basis points, maturing on January 30, 2024, although the term may be extended for an additional year two times if no events of default have occurred.
9.    Leases
As Lessee - Operating Leases
The Company's operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at management's sole discretion. When it is reasonably certain that the Company will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of the Company's lease agreements include periodic rate adjustments for inflation. The depreciable lives of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an increase in income tax expenseinitial 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 six months ended December 31, 2017 and 2016.

lease term.
26
24

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

The following table presents supplemental balance sheet information related to operating leases:
September 30, 2023June 30, 2023
ROU assets (included in other assets)$10,177 $9,674 
Lease liabilities (included in other liabilities)$11,278 $10,790 
Weighted-average remaining lease terms (years)8.99.2
Weighted-average discount rate3.40 %3.32 %
The valuation allowancefollowing schedule summarizes aggregate future minimum lease payments under these operating leases at September 30, 2023:
Fiscal year ending June 30
Remainder of 2024$1,384 
20251,788 
20261,676 
20271,707 
20281,737 
Thereafter4,968 
Total undiscounted minimum lease payments13,260 
Less: amount representing interest(1,982)
Total lease liability$11,278 
The following table presents components of operating lease expense for deferred taxthe periods indicated:
Three Months Ended September 30,
20232022
Operating lease cost (included in occupancy expense, net)$380 $347 
Variable lease cost (included in occupancy expense, net)61 2 
Sublease income (included in other, noninterest income)(42)(57)
Total operating lease expense, net$399 $292 
As Lessee - Finance Lease
During the year ended June 30, 2023, the Company purchased the property associated with the finance lease reported historically. The Company purchased the property for $1,249, terminating the existing land lease. Prior to the purchase, interest expense on the lease liability totaled $23 for the three months ended September 30, 2022.
Supplemental lease cash flow information for the periods indicated:
Three Months Ended September 30,
20232022
ROU assets - noncash additions (operating leases)$846 $— 
Cash paid for amounts included in the measurement of lease liabilities (operating leases)299 315 
Cash paid for amounts included in the measurement of lease liabilities (finance leases)— 33 
As Lessor - General
The Company leases equipment to commercial end users under operating and finance lease arrangements. The Company's equipment finance leases consist mainly of construction, transportation, healthcare, and manufacturing equipment. Many of its operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a fixed purchase option; and most of the leases that do not have a purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. The Company's leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease.
As Lessor - Operating Leases
Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from one to seven years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. The net book value of leased assets totaled $23,558 and $21,749 with a residual value of $13,383 and $13,267 as of December 31, 2017September 30, 2023 and June 30, 20172023, respectively.
The following table presents total equipment finance operating lease income and depreciation expense for the periods indicated:
Three Months Ended September 30,
20232022
Operating lease income$1,785 $1,585 
Depreciation expense1,393 1,164 
25

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The following schedule summarizes aggregate future minimum lease payments to be received at September 30, 2023:
Fiscal year ending June 30
Remainder of 2024$4,747 
20254,506 
20263,248 
2027774 
2028230 
Thereafter366 
Total of future minimum payments$13,871 
As Lessor - Financing Leases
Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment of the loan portfolio. For the three months ended September 30, 2023 and 2022, interest income on equipment finance leases totaled $995 and $758, respectively.
The lease receivable component of finance lease net investment included within the equipment finance class of financing receivables was $54$69,594 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$70,605 at December 31, 2017September 30, 2023 and June 30, 2017 include $19,570 representing pre-1988 tax bad debt reserve base year amounts2023, respectively.
The following schedule summarizes aggregate future minimum finance lease payments to be received at September 30, 2023:
Fiscal year ending June 30
Remainder of 2024$19,265 
202520,764 
202616,628 
202711,888 
20286,077 
Thereafter4,555 
Total undiscounted minimum lease payments79,177 
Less: amount representing interest(9,583)
Total lease receivable$69,594 
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 September 30,
20232022
Share-based compensation expense$383 $567 
Tax benefit90 134 
26

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
The table below presents stock option activity and related information for the three months ended September 30, 2023 and 2022:
OptionsWeighted-Average Exercise PriceRemaining Contractual Life
(Years)		Aggregate
Intrinsic
Value
Options outstanding at June 30, 2022928,870 $21.49 4.1$4,036 
Granted5,000 24.07 
Exercised(27,000)14.37 
Forfeited(400)31.35 
Options outstanding at September 30, 2022906,470 $21.71 3.9$2,633 
Exercisable at September 30, 2022729,720 $20.46 3.1$2,633 
Non-vested at September 30, 2022176,750 $26.87 7.3$— 
Options outstanding at June 30, 2023569,224 $25.69 5.1$141 
Exercised(1,500)15.80 
Forfeited(25,374)26.00 
Options outstanding at September 30, 2023542,350 $25.70 4.8$157 
Exercisable at September 30, 2023467,390 $25.40 4.4$157 
Non-vested at September 30, 202374,960 $27.58 7.7$— 
Assumptions used in estimating the fair value of options granted during the three months ended September 30, 2022 are a failure to meetdetailed below. There were no options granted during the definition of a bank, dividend payments in excess of current year or accumulated earnings and profits, or other distributions in dissolution or liquidation of the Bank. The Company is no longer subject to examination for federal and state purposes for tax years prior to 2013.three months ended September 30, 2023.
8.Net Income (Loss) per ShareSeptember 30, 2022
Weighted-average volatility27.78 %
Expected dividend yield1.62 %
Risk-free interest rate3.11 %
Expected life (years)6.5
Weighted-average fair value of options granted$6.77 
At September 30, 2023, the Company had $428 of unrecognized compensation expense related to 74,960 stock options originally scheduled to vest over a five-year period. The weighted average period over which compensation cost related to non-vested awards expected to be recognized was 1.4 years at September 30, 2023. At September 30, 2022, the Company had $800 of unrecognized compensation expense related to 176,750 stock options originally scheduled to vest over a five-year period. The weighted average period over which compensation cost related to non-vested awards expected to be recognized was 1.4 years at September 30, 2022.
The table below presents restricted stock award activity and related information:
Restricted
Stock Awards(1)
Performance-Based Restricted
Stock Units(2)
Weighted-
Average Grant
Date Fair Value		Aggregate
Intrinsic
Value
Non-vested at June 30, 2022102,692 33,218 $27.40 $2,345 
Granted4,500 3,486 25.32 
Vested— (13,861)27.11 
Forfeited(400)— 31.35 
Non-vested at September 30, 2022106,792 22,843 $27.29 $1,943 
Non-vested at June 30, 2023108,851 37,330 $27.32 $3,054 
Granted1,000 6,165 22.91 
Vested— (18,494)22.92 
Forfeited(1,630)— 27.57 
Non-vested at September 30, 2023108,221 25,001 $27.69 $2,887 
(1)Restricted stock awards are scheduled to vest over 1.0 year for director awards and 5.0 years for employee awards.
(2)Performance-based restricted stock units are scheduled to vest over 3.0 years assuming the applicable financial goals are met.
At September 30, 2023, unrecognized compensation expense was $2,751 related to 133,222 shares of restricted stock originally scheduled to vest over three- and five-year periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.7 years at September 30, 2023. At September 30, 2022, unrecognized compensation expense was $2,490 related to 129,635 shares of restricted stock originally scheduled to vest over three- and five-year periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.6 years at September 30, 2022.
27

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
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:for the periods indicated:
 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
Three Months Ended September 30,
20232022
Numerator
Net income$14,833 $9,199 
Allocation of earnings to participating securities(117)(79)
Numerator for basic and diluted EPS - net income available to common stockholders$14,716 $9,120 
Denominator  
Weighted-average common shares outstanding - basic16,792,177 14,988,006 
Dilutive effect of assumed exercises of stock options8,724 142,756 
Weighted-average common shares outstanding - diluted16,800,901 15,130,762 
Net income per share - basic$0.88 $0.61 
Net income per share - diluted$0.88 $0.60 
Potential dilutive shares are excluded from the computation of earnings per share if their effect is anti-dilutive. There were no512,150 and 550,400 of stock options that were anti-dilutive for the three months ended December 31, 2016. There were 46,500 stock options that were anti-dilutive for the six months ended December 31, 2016.September 30, 2023 and 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 December 31, 2017September 30, 2023 and June 30, 2017,2023, respectively, loan commitments (excluding $123,262$217,115 and $158,380$220,818 of undisbursed portions of construction loans) totaled $54,720$54,160 and $43,730$86,393 of which $25,846$26,408 and $21,221$45,533 were variable rate commitments and $28,874$27,752 and $22,509$40,860 were fixed rate commitments. The fixed rate loans had interest rates ranging from 2.03%2.11% to 7.75%12.24% at December 31, 2017September 30, 2023 and 1.95%1.74% to 6.25% at11.00% June 30, 2017,2023, 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$672,648 and $414,373$608,169 at December 31, 2017September 30, 2023 and June 30, 2017,2023, respectively. These amounts represent the Company's exposure to credit risk, and in the opinion of management have no more than the normal lending risk that the Company commits to its borrowers.
The Company has two types of commitments related to certain one-to-four family loans held for sale: rate lock commitments and forward loan commitments. Rate lock commitments are commitments to extend credit to a customer that has an interest rate lock and are considered derivative instruments. The rate lock commitments do not qualify for hedge accounting. In order to mitigate the risk from interest rate fluctuations, we enterthe Company enters into forward loan sale commitments on a “best efforts” basis, which do not meet the definition of a derivative instrument.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 December 31, 2017September 30, 2023 or June 30, 2017.2023.
The Company grants constructionSBIC Commitments – As of both September 30, 2023 and permanent loans collateralized primarily by residential and commercial real estate to customers throughout its primary market area. In addition,June 30, 2023, the Company grants municipal leaseshad committed $24,000 across eight SBIC investments with $7,984 remaining to customers throughout North and South Carolina. Thebe drawn. Although the remaining capital commitments may or may not be called in the future, under the terms of the associated limited partnership agreements, the Company's loan portfolio can be affected byexposure will not extend beyond the general economic conditions within these market areas.amount of the original commitments.
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 December 31, 2017September 30, 2023 and June 30, 20172023 were $9,927$54,242 and $5,164,$35,007, respectively. There was no liability recorded for these letters of credit at December 31, 2017September 30, 2023 or June 30, 2017, respectively.2023.
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.
28

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
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 September 30, 2023 and June 30, 2023, the Company doesdid not have any liabilities recorded at fair value.
Investment Securities Available for SaleThe methods of determining the fair value of assets and liabilities presented in this note are consistent with the methodologies disclosed in Note 20 of the 2023 Form 10-K.
SecuritiesFinancial Assets Recorded at Fair Value
The following table presents financial assets measured at fair value on a recurring basis at the dates indicated:
September 30, 2023
TotalLevel 1Level 2Level 3
Debt securities available for sale
U.S. government agencies$14,908 $— $14,908 $— 
MBS, residential97,351 — 97,351 — 
Municipal bonds3,352 — 3,352 — 
Corporate bonds18,737 — 18,737 — 
Total debt securities available for sale$134,348 $— $134,348 $— 
Loans held for sale$4,616 $— $4,616 $— 
June 30, 2023
TotalLevel 1Level 2Level 3
Debt securities available for sale
U.S. government agencies$14,714 $— $14,714 $— 
MBS, residential107,414 — 107,414 — 
Municipal bonds3,388 — 3,388 — 
Corporate bonds26,410 — 26,410 — 
Total debt securities available for sale$151,926 $— $151,926 $— 
Loans held for sale$6,947 $— $6,947 $— 
Debt securities available for sale are valued on a recurring basis at quoted market prices where available. If quoted market prices are not available, fair values are based on quoted prices of comparable securities. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange or U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securitiesMBS and debentures issued by government sponsored enterprises,GSEs, municipal bonds, and corporate debt securities. The Company has no Level 3 securities.

Loans held for sale carried at fair value are valued at the individual loan level using quoted secondary market prices.
There were no transfers between levels during the three months ended September 30, 2023 or June 30, 2023.
The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated, all of which are considered collateral dependent:
September 30, 2023
TotalLevel 1Level 2Level 3
Commercial real estate
Commercial real estate – owner occupied$441 $— $— $441 
Residential real estate loans
HELOCs413 — — 413 
Total$854 $— $— $854 
June 30, 2023
TotalLevel 1Level 2Level 3
Commercial real estate loans
Commercial real estate – owner occupied$364 $— $— $364 
Commercial loans
Commercial and industrial167 — — 167 
Total$531 $— $— $531 
29

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, aA loan is considered impairedto be collateral dependent when, based on current information 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 withevents, the contractual termsCompany expects repayment of the loan agreement are considered impaired. Once a loanfinancial assets to be provided substantially through the operation or sale of the collateral and the Company has determined that the borrower is identifiedexperiencing financial difficulty as individually impaired,of 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 impairedmeasurement date. For real estate 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 repaymentsloan'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 collateral exceedcost) vary based on the recorded investments in such loans.
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 impaired loans is estimatedthe 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 one of two ways, which include collateral value and discounted cash flows. Loans are considered collateral dependent if repayment is expected solelymarket conditions 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 parttime of the quarterly reviewvaluation, and management's expertise and knowledge of impaired loans, the Company reviews these appraisals to determine if any additional discounts to the faircustomer and customer's business.
The stated carrying 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,and estimated fair value is based on the present valueamounts 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 loansfinancial instruments as a nonrecurring Level 3 in the fair value hierarchy. of September 30, 2023 and June 30, 2023, are summarized below:
Loans Held for Sale
 September 30, 2023
Carrying
Value		Fair
Value		Level 1Level 2Level 3
Assets
Cash and cash equivalents$325,014 $325,014 $325,014 $— $— 
Certificates of deposit in other banks35,380 35,380 — 35,380 — 
Debt securities available for sale, at fair value134,348 134,348 — 134,348 — 
FHLB and FRB stock19,612 N/AN/AN/AN/A
SBIC investments, at cost14,586 14,586 — — 14,586 
Loans held for sale, at fair value4,616 4,616 4,616 — — 
Loans held for sale, at the lower of cost or fair value200,834 203,333 — — 203,333 
Loans, net3,612,497 3,436,553 — — 3,436,553 
Accrued interest receivable16,513 16,513 283 482 15,748 
Liabilities
Noninterest-bearing and NOW deposits1,430,166 1,430,166 — 1,430,166 — 
Money market accounts1,195,482 1,195,482 — 1,195,482 — 
Savings accounts202,971 202,971 — 202,971 — 
Certificates of deposit812,342 805,646 — 805,646 — 
Junior subordinated debt9,995 9,864 — 9,864 — 
Borrowings452,263 452,239 — 452,239 — 
Accrued interest payable6,093 6,093 — 6,093 — 
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.
 June 30, 2023
Carrying
Value		Fair
Value		Level 1Level 2Level 3
Assets
Cash and cash equivalents$303,497 $303,497 $303,497 $— $— 
Certificates of deposit in other banks33,152 33,152 — 33,152 — 
Debt securities available for sale, at fair value151,926 151,926 — 151,926 — 
FHLB and FRB stock20,208 N/AN/AN/AN/A
SBIC investments, at cost14,927 14,927 — — 14,927 
Loans held for sale, at fair value6,947 6,947 6,947 — — 
Loans held for sale, at the lower of cost or fair value161,703 163,874 — — 163,874 
Loans, net3,611,630 3,455,390 — — 3,455,390 
Accrued interest receivable14,829 14,829 99 410 14,320 
Liabilities
Noninterest-bearing and NOW deposits1,436,586 1,436,586 — 1,436,586 — 
Money market accounts1,241,840 1,241,840 — 1,241,840 — 
Savings accounts212,220 212,220 — 212,220 — 
Certificates of deposit710,522 701,965 — 701,965 — 
Junior subordinated debt9,971 9,746 — 9,746 — 
Borrowings457,263 457,213 — 457,213 — 
Accrued interest payable3,537 3,537 — 3,537 — 
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:
 December 31, 2017
DescriptionTotal Level 1 Level 2 Level 3
U.S Government Agencies$47,693
 $—
 $47,693
 $—
Residential Mortgage-backed Securities of U.S. Government Agencies and Government Sponsored Enterprises81,278
 —
 81,278
 —
Municipal Bonds32,423
 —
 32,423
 —
Corporate Bonds6,212
 —
 6,212
 —
Equity Securities63
 —
 63
 —
Total$167,669
 $—
 $167,669
 $—
 June 30, 2017
DescriptionTotal Level 1 Level 2 Level 3
U.S Government Agencies$65,830
 $—
 $65,830
 $—
Residential Mortgage-backed Securities of U.S. Government Agencies and Government Sponsored Enterprises92,971
 —
 92,971
 —
Municipal Bonds34,510
 —
 34,510
 —
Corporate Bonds6,293
 —
 6,293
 —
Equity Securities63
 —
 63
 —
Total$199,667
 $—
 $199,667
 $—
There were no transfers between levels during the three or six months ended December 31, 2017.

30

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 December 31, 2017 and June 30, 2017, are summarized below:
 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, 2017
 
Carrying
Value
 
Fair
Value
 Level 1 Level 2 Level 3
Cash and interest-bearing deposits$86,985
 $86,985
 $86,985
 $—
 $—
Commercial paper149,863
 149,863
 149,863
 —
 —
Certificates of deposit in other banks132,274
 132,274
 —
 132,274
 —
Securities available for sale199,667
 199,667
 —
 199,667
 —
Loans, net2,330,319
 2,230,683
 —
 —
 2,230,683
Loans held for sale5,607
 5,719
 —
 —
 5,719
FHLB stock32,071
 32,071
 32,071
 —
 —
FRB stock7,284
 7,284
 7,284
 —
 —
Accrued interest receivable8,758
 8,758
 331
 1,078
 7,349
Noninterest-bearing and NOW deposits779,549
 779,549
 —
 779,549
 —
Money market accounts569,607
 569,607
 —
 569,607
 —
Savings accounts237,149
 237,149
 —
 237,149
 —
Certificates of deposit462,146
 458,818
 —
 458,818
 —
Borrowings696,500
 696,500
 —
 696,500
 —
Accrued interest payable512
 512
 —
 512
 —
The Company had off-balance sheet financial commitments, which included approximately $625,769$998,165 and $616,483$950,387 of commitments to originate loans, undisbursed portions of interim construction loans, and unused lines of credit, and standby letters of credit at December 31, 2017September 30, 2023 and June 30, 2017,2023, 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:
31
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
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 impact of bank failures or adverse developments of other banks and related negative press about the banking industry in general on investor and depositor sentiment;
•the remaining effects of the COVID-19 pandemic on general economic and financial market conditions and on public health, both nationally and in our market areas;
•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, costs or difficulties relating to integration matters, including but not limited to: to customer and employee retention, might be greater than expected, and goodwill impairment charges might be incurred;
•the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write offs and changes in our allowance for loan lossesACL 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;
•the transition from LIBOR to 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 loan losses,ACL, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings;
•legislative or regulatory changes that adversely affect our business including the 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;
•our ability to access cost-effective funding and maintain sufficient liquidity;
•management's assumptions in determining the adequacy of the allowance for loan losses; ACL;
•our ability to control operating costs and expenses, especially costs associated with our operation as a public company;
•the use of estimates in determining the fair value of certain assets, which estimates may prove to be incorrect and result in significant declines in valuation;
•difficulties in reducing risks associated with the loans on our balance sheet;
•staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges; 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;
•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 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.
32

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.
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 probable lossesECLs 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 2023 Form 10-K for loan losses may be added to net interest income.further discussion, and "Note 2 – Recent Accounting Pronouncements" in this Quarterly Report on Form 10-Q for further discussion of our adoption of ASU 2022-02.
Our noninterest expenses consist primarily of salaries and employee benefits, occupancy 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 relateThe following represent our critical accounting policies:
Allowance for Credit Losses, or ACL, on Loans. The ACL on loans held for investment reflects our estimate of credit losses that will result from the inability of our borrowers to (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 on loans held for investment is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the loan portfolio. 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 on loans held for investment involves a high degree of judgment; therefore, our process for determining ECLs may result in a range of ECLs. Our ACL recorded in the balance sheet reflects our best estimate within the range of ECLs. We recognize in net income the amount needed to adjust the ACL on loans held for investment and certain off-balance-sheet credit exposures for management’s current estimate of ECLs. Our ACL on loans held for investment is calculated using collectively evaluated and individually evaluated loans.
Business Combinations, Core Deposit Intangible 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.
The primary identifiable intangible asset we typically record in connection with a whole bank or branch acquisition is the value of the core deposit intangible which represents the estimated value of the long-term deposit relationships acquired loans, (iii)in the valuationtransaction. Determining the amount of REO, (iv) the valuation of goodwill and otheridentifiable intangible assets and (v) the valuation of or recognition of deferred tax assets and liabilities. These policiestheir average lives involves multiple assumptions and estimates and is typically determined by performing a DCF analysis, which involves a combination of any or all of the following assumptions: customer attrition/runoff, alternative funding costs, deposit servicing costs, and discount rates. The core deposit intangibles are described in further detail in Part II, Item 7 Management's Discussionamortized using an accelerated method over the estimated useful lives of the related deposits, typically between five 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 material10 years. We review identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the Company's criticalcarrying value may not be recoverable.
The fair value for acquired loans at the time of 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 fair value adjustment is recorded as premium or discount to the
33

unpaid principal balance of each 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 policiesadjustments, 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 estimatesinterest 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.
Goodwill. We review goodwill for potential impairment on an annual basis during the six monthslast quarter of the fiscal year, or more often if events or circumstances indicate there may be impairment. In testing goodwill for impairment, we have the option to assess either qualitative or quantitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount. If we elect to perform a qualitative assessment and determine that an impairment is more likely than not, we are then required to perform a quantitative impairment test, otherwise no further analysis is required. Under the quantitative impairment test, the evaluation involves comparing the current fair value of each reporting unit to its carrying value, including goodwill. If the estimated fair value of a reporting unit equals or exceeds its carrying value, goodwill is considered not to be impaired. If the carrying value exceeds estimated fair value an impairment charge is recognized for the difference, but limited by the amount of goodwill allocated to that reporting unit.
Financial Highlights
For the quarter ended December 31, 2017 asSeptember 30, 2023 compared to the disclosure containedquarter ended June 30, 2023:
•net income was $14.8 million compared to $15.0 million;
•diluted EPS was $0.88 compared to $0.90;
•annualized ROA was 1.33% compared to 1.39%;
•annualized ROE was 12.23% compared to 12.85%;
•net interest income was $42.2 million compared to $43.9 million;
•net interest margin was 4.02% compared to 4.32%;
•provision for credit losses was $2.6 million compared to $405,000;
•noninterest income was$8.6 million compared to $6.9 million;
•tax-free death benefit proceeds from BOLI of $1.1 million compared to $0, which was the primary driver of the change in the Company's 2017 Form 10-K,noninterest income noted above;
•net portfolio loan growth was $1.1 million, or 0.1% annualized, compared to $9.8 million, or 1.1% annualized; and
•quarterly cash dividends continued at $0.10 per share totaling $1.7 million for both periods.
Three Months Ended
(Dollars in thousands)September 30, 2023June 30, 2023
Interest and dividend income$61,865 $59,131 
Interest expense19,705 15,235 
Net interest income42,160 43,896 
Provision for credit losses2,570 405 
Net interest income after provision for credit losses39,590 43,491 
Noninterest income8,627 6,888 
Noninterest expense29,564 30,911 
Income before income taxes18,653 19,468 
Income tax expense3,820 4,455 
Net income$14,833 $15,013 
Net income per common share(1)
Basic$0.88 $0.91 
Diluted0.88 0.90 
Cash dividends declared per common share0.10 0.10 
Book value per share at end of period27.87 27.13 
Tangible book value per share at end of period(2)
25.47 24.69 
Market price per share at end of period21.67 20.89 
(1)Basic and diluted net income per common share have been prepared in accordance with the exceptiontwo-class method.
(2)See Non-GAAP reconciliations below for adjustments.
34

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
  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.

As of
(Dollars in thousands, except per share data)September 30, 2023June 30, 2023
Total stockholders' equity$484,411 $471,186 
Less: goodwill, core deposit intangibles, net of taxes41,748 42,410 
Tangible book value$442,663 $428,776 
Common shares outstanding17,380,307 17,366,673 
Book value per share$27.87 $27.13 
Tangible book value per share$25.47 $24.69 
Set forth below is a reconciliation to US GAAP of tangible equity to tangible assets:
As of
(Dollars in thousands)September 30, 2023June 30, 2023
Tangible equity(1)
$442,663 $428,776 
Total assets4,651,997 4,607,487 
Less: goodwill, core deposit intangibles, net of taxes41,748 42,410 
Total tangible assets$4,610,249 $4,565,077 
Tangible equity to tangible assets9.60 %9.39 %
(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.
35
  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 December 31, 2017Three Months Ended September 30, 2023 and June 30, 20172023
General. Total assets increased $44.0Net Income.  Net income totaled $14.8 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, 2017 and December 31, 2016 as the allowance for loan losses required by our loan growth was offset by continued improvements in our asset quality. Net loan charge offs totaled $907,000$0.88 per diluted share, for the three months ended December 31, 2017September 30, 2023 compared to net recoveriesincome 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%$15.0 million, or $0.90 per diluted share, for the three months ended December 31, 2017 from net recoveriesJune 30, 2023, a decrease of (0.01)%$179,000, or 1.2%. The results for the same period last fiscal year. Net charge offs as a percentagethree months ended September 30, 2023 were negatively impacted by an increase 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 in the loan portfolio at that date. While we believe the estimates and assumptions used in our determination of the adequacy of the allowance are reasonable, there can be no assurance that such estimates and assumptions will not be proven incorrect in the future, or that the actual amount of future provisions will not exceed the amount of past provisions or that any increased provisions that may be required will not adversely impact our financial condition and results of operations. In addition, the determination of the amount of the allowance for loan losses is subject to review by bank regulators as part of the routine examination process, which may result in the establishment of additional reserves based upon their judgment of information available to them at the time of their examination.
Real estate owned. REO decreased $1.5 million, to $4.8 million at December 31, 2017 primarily due to $2.2 million in REO sales during the period, partially offset by $591,000 in properties transferred to REOprovision for credit losses and a gain on saledecrease of REO of $393,000 during the period. The total balance of REO at December 31, 2017 included $1.9$1.7 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.
Deferrednet interest 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 were partially offset by a $20.1$1.7 million managed run offincrease in our higher costing certificatesnoninterest income and a $1.3 million decrease in noninterest expense. 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
 September 30, 2023June 30, 2023
(Dollars in thousands)Average
Balance
Outstanding		Interest
Earned /
Paid		Yield /
Rate		Average
Balance
Outstanding		Interest
Earned /
Paid		Yield /
Rate
Assets
Interest-earning assets
Loans receivable(1)
$3,865,502$58,496 6.00 %$3,769,449$56,122 5.97 %
Debt securities available for sale146,8771,259 3.40 164,1051,338 3.27 
Other interest-earning assets(2)
148,3862,110 5.64 138,4201,671 4.84 
Total interest-earning assets4,160,76561,865 5.90 4,071,97459,131 5.82 
Other assets276,210270,410
Total assets$4,436,975$4,342,384
Liabilities and equity
Interest-bearing liabilities
Interest-bearing checking accounts$597,856$1,117 0.74 %$639,250$1,148 0.72 %
Money market accounts1,222,3727,726 2.51 1,261,5906,539 2.08 
Savings accounts207,48946 0.09 217,99749 0.09 
Certificate accounts789,6687,540 3.79 641,2564,926 3.08 
Total interest-bearing deposits2,817,38516,429 2.31 2,760,09312,662 1.84 
Junior subordinated debt9,979236 9.38 9,954218 8.78 
Borrowings208,1573,040 5.79 169,1342,355 5.58 
Total interest-bearing liabilities3,035,52119,705 2.58 2,939,18115,235 2.08 
Noninterest-bearing deposits861,788879,303
Other liabilities58,51355,268
Total liabilities3,955,8223,873,752
Stockholders' equity481,153468,632
Total liabilities and stockholders' equity$4,436,975$4,342,384
Net earning assets$1,125,244$1,132,793
Average interest-earning assets to average interest-bearing liabilities137.07 %138.54 %
Non-tax-equivalent
Net interest income$42,160 $43,896 
Interest rate spread3.32 %3.74 %
Net interest margin(3)
4.02 %4.32 %
Tax-equivalent(4)
Net interest income$42,475 $44,194 
Interest rate spread3.35 %3.77 %
Net interest margin(3)
4.05 %4.35 %
 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) InterestAverage other interest-earning assets consist of FRB stock, FHLB stock, SBIC investments and deposits in other banks.
(3)Net interest income used in thedivided by average interest/earnedinterest-earning assets.
(4)Tax-equivalent results include adjustments to interest income of $315 and yield calculation includes the tax equivalent adjustment of $378,000 and $573,000$298 for the three months ended December 31, 2017September 30, 2023 and 2016,June 30, 2023, 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 Three Months Ended December 31, 2017 for discussion of our leveraging strategy.
(4) Net interest income divided by average interest-earning assets.


 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 average loans receivable, net balances include loans held for sale and nonaccruing loans.
(2) 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%, 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 increased $6.8 million, or 30.8% for the three months ended December 31, 2017 asSeptember 30, 2023 increased $2.7 million, or 4.6%, compared to the same period last year,three months ended June 30, 2023, which was primarily driven by a $6.3$2.4 million, or 31.6% increase in loan interest income, a $364,000, or 38.8%4.2%, increase in interest income on certificates of deposit 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 to 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 2017 as a result of prepayments. Accretableloans. Accretion income on acquired loans stems fromof $378,000 and $973,000 was recognized during the discount established at the time these loan portfolios were acquiredsame periods, respectively, and the related impact of prepayments on purchased loans. Each quarter, the Company analyzes the cash flow assumptions on the PCI loan pools and, at least semi-annually, the Company updates loss estimates, prepayment speeds and other variables when analyzing cash flows. In addition to this accretion income, which is recognized over the estimated life of the loan pools, if a loan is removed from a pool due to payoff or foreclosure, the unaccreted discount in excess of losses is recognized as an accretion gainwas included in interest income. As a result, income from loan pools can be volatile from quarter to quarter. For the quarters ended December 31, 2017 and 2016, the average loan yields included 15 and 16 basis points, respectively, from the accretion of purchase discounts on acquired loans.
36

Total interest expense for the three months ended September 30, 2023 increased $2.0$4.5 million, or 119.5% for the quarter ended December 31, 201729.3%, compared to the same period last year. Thisthree months ended June 30, 2023. The increase was primarily related to the TriSummit acquisition and recent deposit gathering initiatives contributing to a $250.9 million, or 16.3% increase in the average balanceresult of interest-bearing deposits. In addition, average borrowings, consisting primarily of short-term FHLB advances, increased by $130.7 million to $677.0 million due to funding for loan growth along with a 78 basis point increaseboth increases in the average cost of suchfunds across funding sources and an increase in average deposits and borrowings outstanding.
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$2,066 $308 $2,374 
Debt securities available for sale(127)48 (79)
Other interest-earning assets143 296 439 
Total interest-earning assets2,082 652 2,734 
Interest-bearing liabilities
Interest-bearing checking accounts(62)31 (31)
Money market accounts(119)1,306 1,187 
Savings accounts(2)(1)(3)
Certificate accounts1,222 1,392 2,614 
Junior subordinated debt3 15 18 
Borrowings576 109 685 
Total interest-bearing liabilities1,618 2,852 4,470 
Decrease in net interest income$(1,736)
Provision for Credit Losses.The provision for credit losses is the amount of expense that, based on our judgment, is required to maintain the ACL at an appropriate level under the current expected credit losses model.
The following table presents a breakdown of the components of the provision for credit losses:
Three Months Ended
(Dollars in thousands)September 30, 2023June 30, 2023$ Change% Change
Provision for credit losses
Loans$2,850 $910 $1,940 213 %
Off-balance-sheet credit exposure(280)(505)225 45 
Total provision for credit losses$2,570 $405 $2,165 535 %
For the quarter ended September 30, 2023, the "loans" portion of the provision for credit losses was the result of the following, offset by net charge-offs of $2.6 million during the quarter as compared to the same quarter last year. The overall average cost of funds increased 27 basis points to 0.58% for the current quarter as compared to the same quarter last year due primarily to the impact of the recent increasesquarter:
•$0.2 million benefit driven by changes in the federal fundsloan mix.
•$0.2 million provision due to changes in the projected economic forecast, specifically the national unemployment rate, on our borrowings.
Provision for Loan Losses. During the three months ended December 31, 2017 and 2016, there was no provision for loan losses as improved credit quality measures have been sufficient to cover reserves needed for loan growth and changes in qualitative adjustments.
•$0.3 million increase in specific reserves on individually evaluated credits.
For the quarter ended June 30, 2023, the "loans" portion of the provision for credit losses was primarily the result of the following, offset by net charge-offs of $1.2 million during the quarter:
•$0.1 million provision driven by changes in the loan mix.
•$0.3 million benefit due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments.
•$0.1 million decrease in specific reserves on individually evaluated credits.
For the quarters ended September 30, 2023 and June 30, 2023, the amounts recorded for off-balance-sheet credit exposure were the result of changes in the balance of loan commitments, loan mix of loans. Net loan charge-offs totaled $907,000and projected economic forecast as outlined above.

37

Noninterest Income.  Noninterest income for the three months ended December 31, 2017September 30, 2023 increased $1.7 million, or 25.2%, when compared to net recoveriesthe quarter ended June 30, 2023. Changes in the components of $35,000noninterest income are discussed below:
Three Months Ended
(Dollars in thousands)September 30, 2023June 30, 2023$ Change% Change
Noninterest income
Service charges and fees on deposit accounts$2,318 $2,393 $(75)(3)%
Loan income and fees559 792 (233)(29)
Gain on sale of loans held for sale1,293 1,109 184 17 
BOLI income1,749 573 1,176 205 
Operating lease income1,785 1,225 560 46 
Gain on sale of premises and equipment— 82 (82)(100)
Other923 714 209 29 
Total noninterest income$8,627 $6,888 $1,739 25 %
•Loan income and fees: The decrease in loan income and fees was due to a $308,000 reduction in prepayment penalties quarter over quarter.
•Gain on sale of loans held for sale: The increase in the gain on sale of loans held for sale was primarily driven by HELOCs sold during the period. During the quarter ended September 30, 2023, there were $31.2 million of HELOCs sold for a gain of $197,000 compared to no HELOCs sold in the prior quarter. There were $20.3 million of residential mortgage loans originated for sale which were sold during the current quarter with gains of$251,000compared to $22.0 million sold with gains of $236,000 in the prior quarter. Our hedging of mandatory commitments on the residential mortgage loan pipeline contributed an additional $158,000 and $152,000 in income in the same periods, respectively. Lastly, there were $12.4 million in sales of the guaranteed portion of SBA commercial loans with gains of $687,000 for the same period last year.quarter ended September 30, 2023, compared to $12.1 million sold and gains of $721,000 for the quarter ended June 30, 2023.
•BOLI income: The increase in BOLI income was due to a $1.1 million tax-free gain on death benefit proceeds in excess of the cash surrender value of the policies. No such gains were recognized in the prior quarter.
•Operating lease income: The increase in operating lease income was the result of higher contractual earnings as well as gains or losses incurred at the end of operating leases, where we recognized a net gain of $51,000 at the end of operating leases for the quarter ended September 30, 2023 versus a net loss of $279,000 for the quarter ended June 30, 2023.
Noninterest Expense.  Noninterest expense for the three months ended September 30, 2023 decreased $1.3 million, or 4.4%, when compared to the three months ended June 30, 2023. Changes in the components of noninterest expense are discussed below:
Three Months Ended
(Dollars in thousands)September 30, 2023June 30, 2023$ Change% Change
Noninterest expense
Salaries and employee benefits$16,514 $16,676 $(162)(1)%
Occupancy expense, net2,489 2,600 (111)(4)
Computer services3,173 3,302 (129)(4)
Telephone, postage and supplies652 677 (25)(4)
Marketing and advertising487 696 (209)(30)
Deposit insurance premiums717 549 168 31 
Core deposit intangible amortization859 859 — — 
Other4,673 5,552 (879)(16)
Total noninterest expense$29,564 $30,911 $(1,347)(4)%
•Marketing and advertising: The decrease in marketing and advertising was due to changes in media and product campaign spending quarter over quarter.
•Deposit insurance premiums: The increase in deposit insurance premiums was due to an increase in the rates the Company is charged for deposit insurance as well as growth in the assessment base.
•Other: The decrease was primarily the result of $552,000 in fraud losses recorded during the prior quarter versus a $16,000 net recovery of previously recorded losses in the current 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. The effective tax rates for the three months ended September 30, 2023 and June 30, 2023 were 20.5% and 22.9%, respectively. The decline in the effective tax rate was primarily driven by the tax-free gain on BOLI death benefit proceeds in addition to other changes in permanent book/tax differences.
Comparison of Financial Condition at September 30, 2023 and June 30, 2023
General.  Total assets increased by $44.5 million to $4.7 billion and total liabilities increased by $31.3 million to $4.2 billion, respectively, at September 30, 2023 as compared to June 30, 2023. The majority of these changes were the result of increases in deposits, which, combined with maturing investments, were used to fund growth in loans held for sale and provide additional liquidity.
Cash and Cash Equivalents.  Total cash and cash equivalents increased $21.5 million, or 7.1%, to $325.0 million at September 30, 2023 from $303.5 million at June 30, 2023.
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Debt Securities Available for Sale. Debt securities available for sale decreased $17.6 million, or 11.6%, to $134.3 million at September 30, 2023 from $151.9 million at June 30, 2023. This decrease was a result of maturing investments which were used to provide additional liquidity rather than being reinvested in other securities.
Loans Held for Sale. Loans held for sale increased $36.8 million, or 21.8%, to $205.5 million at September 30, 2023 from $168.7 million at June 30, 2023. This was driven by an increase of $47.0 million, or 35.4%, in HELOCs held for sale, partially offset by a $7.9 million, or 27.3%, decrease in SBA loans held for sale and a $2.3 million, or 33.6% decrease in mortgage loans held for sale.
Loans, Net of Deferred Loan Fees and Costs.  Total loans increased $1.1 million, or 0.0%, to $3.7 billion at September 30, 2023. The following table illustrates the changes within the portfolio:
As ofChangePercent of Total
September 30, 2023June 30, 2023September 30, 2023June 30, 2023
(Dollars in thousands)$%
Commercial real estate loans
Construction and land development$352,143 $356,674 $(4,531)(1)%10 %10 %
Commercial real estate – owner occupied526,534 529,721 (3,187)(1)14 15 
Commercial real estate – non-owner occupied880,348 901,685 (21,337)(2)24 25 
Multifamily83,430 81,827 1,603 2 2 2 
Total commercial real estate loans1,842,455 1,869,907 (27,452)(1)50 52 
Commercial loans
Commercial and industrial237,366 245,428 (8,062)(3)7 7 
Equipment finance470,387 462,211 8,176 2 13 13 
Municipal leases147,821 142,212 5,609 4 4 4 
Total commercial loans855,574 849,851 5,723 1 24 24 
Residential real estate loans
Construction and land development103,381 110,074 (6,693)(6)3 3 
One-to-four family560,399 529,703 30,696 6 15 14 
HELOCs185,289 187,193 (1,904)(1)5 5 
Total residential real estate loans849,069 826,970 22,099 3 23 22 
Consumer loans112,816 112,095 721 1 3 2 
Total loans, net of deferred loan fees and costs$3,659,914 $3,658,823 $1,091 — %100 %100 %
Asset Quality. Nonperforming assets, made up entirely of nonaccrual loans for both periods, increased by $3.5 million, or 42.4%, to $11.8 million, or 0.25% of total assets, at September 30, 2023 compared to $8.3 million, or 0.18% of total assets, at June 30, 2023. Nonperforming loans to total loans was 0.32% at September 30, 2023 and 0.23% at June 30, 2023.
The ratio of classified assets to total assets increased to 0.76% at September 30, 2023 from 0.53% at June 30, 2023 as classified assets increased $10.7 million, or 43.7%, to $35.2 million at September 30, 2023 compared to $24.5 million at June 30, 2023. The increase was primarily due to a single commercial real estate non-owner occupied relationship which totaled approximately $9.0 million.
Our individually evaluated loans are comprised of loans meeting certain dollar thresholds and those on nonaccrual status, and may be evaluated for reserve purposes using either the cash flow or collateral valuation method. As of September 30, 2023, there was $7.3 million in loans individually evaluated compared to $6.8 million at June 30, 2023.
Allowance for Credit Losses on Loans.The ACL on loans was $47.4 million, or 1.30% of total loans, at September 30, 2023 compared to $47.2 million, or 1.29% of total loans, as of June 30, 2023. The drivers of this change are discussed in the "Comparison of Results of Operations for the Three Months Ended September 30, 2023 and June 30, 2023 – Provision for Credit Losses" section above.
Net loan charge-offs totaled $2.6 million, or 0.27% as a percent of average loans, for the three months ended September 30, 2023 compared to $1.2 million, or 0.13% as a percentage of average loans, increased to 0.15% for the three months ended December 31, 2017 from net recoveries of (0.01%) forJune 30, 2023. The charge-offs recognized the same period last fiscal year.
See Comparison of Financial Condition - Asset Quality for additional details.
Noninterest Income.  Noninterest income increased $846,000, or 21.5%, to $4.8 million for the three months ended December 31, 2017 from $3.9 millionpast two quarters have been concentrated in the comparative quarter of 2016. The leading factors ofour equipment finance and SBA portfolios, with 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 feesquarter-over-quarter being driven by the new SBA loan line of business.portfolio.
Noninterest Expense. Noninterest expense for the quarter ended December 31, 2017Other Assets. Other assets increased $695,000,$3.4 million, or 3.4%6.3%, to $21.2$56.5 million compared to $20.5at September 30, 2023 from $53.1 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. 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.2023. The increase was primarily driven by an $11.0the change in taxes receivable/payable.
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Deposits. The following table summarizes the composition of our deposit portfolio as of the dates indicated:
(Dollars in thousands)September 30, 2023June 30, 2023$ Change% Change
Core deposits
Noninterest-bearing accounts$827,362 $825,481 $1,881 — %
NOW accounts602,804 611,105 (8,301)(1)
Money market accounts1,195,482 1,241,840 (46,358)(4)
Savings accounts202,971 212,220 (9,249)(4)
Total core deposits2,828,619 2,890,646 (62,027)(2)
Certificates of deposit812,342 710,522 101,820 14 
Total$3,640,961 $3,601,168 $39,793 1 %
The following bullet points provide further information regarding the composition of our deposit portfolio as of September 30, 2023:
•Total deposits increased $39.8 million, or 27.4% increase in loan interest income, a $490,000,1.1%, during the quarter.
•The balance of uninsured deposits was $962.7 million, or 24.7% increase in certificates26.4% of deposittotal deposits, which included $294.8 million of collateralized deposits to municipalities.
•The balance of brokered deposits was $328.0 million, or 9.0% of total deposits.
•Commercial and other interest-bearingconsumer depositors represented 51% and 49% of total deposits, and a $229,000, or 29.4% increase in other investment income. respectively.
•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 $541.9 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 cost15.0% 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.total deposits.
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 $1.2 million, or 14.4%, to $9.4 million for the six months ended December 31, 2017 from $8.2 million for the six months ended December 31, 2016. The increase was primarily the result of a $424,000, or 11.2% increase in service charges on deposit accounts; a $549,000, or 28.7% increase in loan income from the gain on sale of mortgage loans and various commercial


loan-related fees; and $414,000, or 40.6% increase in other income. Partially offsetting these increases was a $221,000, or 57.4% decrease in gains from the sale of fixed assets for the six months ended December 31, 2017 compared to the same period last year.
Noninterest Expense. Noninterest expense for the six months ended December 31, 2017 increased $2.6 million, or 6.7%, to $42.3 million compared to $39.6 million for the six months ended December 31, 2016. Salaries and employee benefits increased $1.8 million, or 8.0% primarily as a result of the TriSummit acquisition. The TriSummit acquisition was the leading factor in the $1.5 million, or 13.0% cumulative increase in net occupancy expense; telephone, postage, and supplies; core deposit intangible amortization; and other expenses. Partially offsetting these increases was the absence of $334,000 in merger-related expenses, and a $587,000, or 59.2% decrease in REO-related expenses for the six months ended December 31, 2017 compared to the same period last year, which was 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
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 December 31, 2017, the Bank had an available borrowing capacity of $56.3 million with theAll 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 leases are pledged as collateral to secure outstanding FRB advances. At September 30, 2023, the Company had the ability to borrow $67.7 million through FHLB advances and $62.1 million through the unused portion of a $115.4 million line of credit with the FRB and threeFRB. At this same date, the Company maintained revolving lines of credit with three unaffiliated banks, totaling $60.0the unused portion of which totaled $144.7 million. At December 31, 2017, we had $685.0 million in FHLB advances outstanding and nothing outstanding under our otherOne of these revolving lines of credit. credit is a $40.0 million line on which HomeTrust had drawn $20.3 million, bearing interest at The Wall Street Journal prime rate plus 50 basis points, maturing on January 30, 2024, although the term may be extended for an additional year two times if no events of default have occurred.
Additionally, the Company classifies itswe classify our securities portfolio as available for sale, providing an additional source of liquidity. Management believes that our securitysecurities portfolio is of high quality and the securitiesshort duration, and 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 December 31, 2017September 30, 2023, brokered deposits totaled $11.8$328.0 million, or 0.6%9.0% 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 December 31, 2017, the CompanySeptember 30, 2023, we (on an unconsolidated basis) had liquid assets of $20.1$1.1 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 December 31, 2017,September 30, 2023, the total approved loan commitments and unused lines of credit outstanding amounted to $178.0$271.3 million and $447.8$672.6 million, respectively, as compared to $202.1$307.2 million and $414.4$608.2 million respectively, as of June 30, 2017.2023. Certificates of deposit scheduled to mature in one year or less at December 31, 2017,September 30, 2023 totaled $302.2$791.2 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 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.
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.


A summary of our off-balance sheet commitments to extend credit at December 31, 2017, is as follows (in thousands):Form 10-Q.
40
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 December 31, 2017, stockholder's equity totaled $395.4 million. HomeTrust Bancshares, Inc. is a bank holding company and a financial holding company subject to regulation by the Federal Reserve. As a bank holding company, we are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended and the regulations of the Federal Reserve. Our subsidiary, the Bank, an FDIC-insured, North Carolina state-chartered bank and a member of the Federal Reserve System, is supervised and regulated by the Federal 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 December 31, 2017,September 30, 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.requirements as of September 30, 2023.


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.
September 30, 2023
CET1 Capital (to risk-weighted assets)$449,746 10.89 %$185,864 4.50 %$268,470 6.50 %
Tier I Capital (to total adjusted assets)459,741 10.44 176,072 4.00 220,091 5.00 
Tier I Capital (to risk-weighted assets)459,741 11.13 247,818 6.00 330,424 8.00 
Total Risk-based Capital (to risk-weighted assets)503,133 12.18 330,424 8.00 413,030 10.00 
June 30, 2023      
CET1 Capital (to risk-weighted assets)$437,768 10.60 %$185,794 4.50 %$268,370 6.50 %
Tier I Capital (to total adjusted assets)447,738 10.39 172,328 4.00 215,411 5.00 
Tier I Capital (to risk-weighted assets)447,738 10.84 247,726 6.00 330,301 8.00 
Total Risk-based Capital (to risk-weighted assets)487,298 11.80 330,301 8.00 412,876 10.00 
HomeTrust Bank      
September 30, 2023      
CET1 Capital (to risk-weighted assets)$471,466 11.42 %$185,859 4.50 %$268,463 6.50 %
Tier I Capital (to total adjusted assets)471,466 10.71 176,032 4.00 220,040 5.00 
Tier I Capital (to risk-weighted assets)471,466 11.42 247,812 6.00 330,416 8.00 
Total Risk-based Capital (to risk-weighted assets)514,858 12.47 330,416 8.00 413,020 10.00 
June 30, 2023      
CET1 Capital (to risk-weighted assets)$459,871 11.14 %$185,791 4.50 %$268,365 6.50 %
Tier I Capital (to total adjusted assets)459,871 10.68 172,221 4.00 215,277 5.00 
Tier I Capital (to risk-weighted assets)459,871 11.14 247,721 6.00 330,295 8.00 
Total Risk-based Capital (to risk-weighted assets)499,431 12.10 330,295 8.00 412,869 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):
   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%
the ACL subsequent to adoption (collectively the “transition adjustments”) was delayed for two years. Starting July 1, 2022, the cumulative amount of the transition adjustments became fixed and will be phased out of the regulatory capital calculations evenly over a three-year period, with 75% recognized in year three, 50% recognized in year four, and 25% recognized in year five. After five years, the temporary regulatory capital benefits will be fully reversed.
In addition to the minimum 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 assetsSeptember 30, 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 and earnings less dividends paid during the preceding two years.
Impact of Inflation
41
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 20172023 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 December 31, 2017,September 30, 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 December 31, 2017,September 30, 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 20172023 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# of Shares Purchased
Average
Price Paid per Share
Total Number Of# of Shares Purchased as Part of Publicly Announced Plans
Maximum
Number # of

Shares that May

Yet Be Purchased Under Publicly Announced Plans
OctoberJuly 1 - OctoberJuly 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.August 1 - August 31, 2023Defaults Upon Senior Securities— — — 266,639 
September 1 - September 30, 2023— — — 266,639 
Total— $— — 266,639 
No stock was repurchased during the three months ended September 30, 2023.
Item 3.     Defaults Upon Senior Securities
Nothing to report.
Item 4.Mine Safety Disclosures
Item 4.     Mine Safety Disclosures
Not applicable.
Item 5.Other Information
Item 5.     Other Information
Nothing to report.
Item 6.     Exhibits
Regulation
S-K Exhibit #		DocumentReference to Prior Filing or Exhibit # Attached Hereto
   
3.1(d)
3.23.2
10.110.1
10.2(a)
42

Item 6.Regulation
S-K Exhibit #		ExhibitsDocumentReference to Prior Filing or Exhibit # Attached Hereto
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)
10.9D(t)
10.10(d)
10.10A(m)
10.11(d)
10.11A(m)
10.12(j)
10.12A(k)
10.12B(k)
10.12C(k)
10.12D(k)
10.12E(k)
10.13(q)
10.13A(u)
See Exhibit Index.


43

Regulation
S-K Exhibit #		DocumentReference to Prior Filing or Exhibit # Attached Hereto
10.13B(u)
10.13C(u)
10.14(n)
10.15(c)
10.15A(a)
10.16(g)
10.16A(a)
10.17(s)
10.18(r)
10.18A(a)
10.19(a)
10.2010.20
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, 2023, formatted in Extensible Business Reporting Language (XBRL): (a) Consolidated Balance Sheets; (b) Consolidated Statements of Income; (c) Consolidated Statements of Comprehensive Income; (d) Consolidated Statements of Changes in Stockholders' Equity; (e) Consolidated Statements of Cash Flows; and (f) Notes to Consolidated Financial Statements.101
(a)Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2022 (File No. 001-35593).
(b)Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on September 25, 2018 (File No. 001-35593).
(c)Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 (File No. 001-35593).
(d)Filed as an exhibit to HomeTrust Bancshares’s Registration Statement on Form S-1 (File No. 333-178817) filed on December 29, 2011.
(e)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on May 24, 2022 (File No. 001-35593).
(f)Filed as an exhibit to HomeTrust Bancshares's 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).
(s)Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2023 (File No. 001-35593).
(t)Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on August 28, 2023 (File No. 001-35593).
(u)Filed as an exhibit to HomeTrust Bancshares's Registration Statement on Form S-8 (File No. 333-186666) filed on February 6, 2023.
44

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
HOMETRUST BANCSHARES, INC.
Date: November 8, 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: November 8, 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)
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(Principal Financial 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)Accounting Officer)



45
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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