• HomeTrust Bancshares, Inc. Announces Financial Results for the Third Quarter of Fiscal 2022 and Quarterly Dividend

    Source: Nasdaq GlobeNewswire / 27 Apr 2022 08:30:01   America/New_York

    ASHEVILLE, N.C., April 27, 2022 (GLOBE NEWSWIRE) -- HomeTrust Bancshares, Inc. (NASDAQ: HTBI) ("Company"), the holding company of HomeTrust Bank ("Bank"), today announced preliminary net income for the third quarter of fiscal 2022 and approval of its quarterly dividend.

    For the quarter ended March 31, 2022 compared to the corresponding quarter in the previous year:

    • net income was $8.0 million, compared to $7.9 million;
    • diluted earnings per share ("EPS") was $0.51, compared to $0.48;
    • annualized return on assets ("ROA") was 0.92%, compared to 0.84%;
    • annualized return on equity ("ROE") was 8.15%, compared to 7.78%;
    • provision for credit losses was a net benefit of $45,000, compared to a net benefit of $4.1 million;
    • noninterest income was $8.9 million compared to $10.7 million;
    • prepayment penalty on the early retirement of borrowings was $0 compared to $3.7 million;
    • 419,931 shares of Company common stock were repurchased during the quarter at an average price of $30.76 per share;
    • net commercial loan growth, excluding U.S. Small Business Administration's ("SBA") Paycheck Protection Program ("PPP") loans, was $29.8 million, or 6.0% annualized compared to $42.7 million, or 9.7% annualized, in the prior year; and
    • quarterly cash dividends continued at $0.09 per share, totaling $1.4 million.

    For the nine months ended March 31, 2022 compared to the previous year:

    • net income was $29.6 million, compared to $23.1 million;
    • diluted earnings per share ("EPS") was $1.84, compared to $1.40;
    • annualized return on assets ("ROA") was 1.12%, compared to 0.83%;
    • annualized return on equity ("ROE") was 9.91%, compared to 7.64%;
    • provision for credit losses was a net benefit of $4.0 million, compared to a net benefit of $6.2 million;
    • noninterest income was $29.5 million compared to $28.7 million;
    • prepayment penalty on the early retirement of borrowings was $0 compared to $3.7 million;
    • 1,095,763 shares of Company common stock were repurchased during the nine months at an average price of $29.50 per share; and
    • net commercial loan growth, excluding PPP loans, was $108.7 million, or 7.5% annualized compared to $31.7 million, or 2.4% annualized in the prior year.

    The Company also announced today that its Board of Directors declared a quarterly cash dividend of $0.09 per common share payable on June 2, 2022 to shareholders of record as of the close of business on May 19, 2022.

    “The Company was able to maintain it’s positive momentum this past quarter,” said Dana Stonestreet, Chairman and Chief Executive Officer. “Our commercial loan portfolio had another strong quarter of net growth, primarily within the construction and development and equipment finance portfolios. As expected, upward movement in interest rates resulted in a decline in both the volume of residential mortgage sales and the value of our investment portfolio; however, due to the short-term duration of our investments, our tangible book value per share actually increased even after repurchasing $12.9 million of shares during the quarter. The Company is well-positioned to benefit from an increase in yield on our loan and investment portfolios going forward.”

    Comparison of Results of Operations for the Three Months Ended March 31, 2022 and 2021

    Net interest income increased by $1.3 million, or 5.2%, to $27.0 million for the quarter ended March 31, 2022, compared to $25.7 million for the comparative quarter in fiscal 2021. Interest and dividend income decreased by $1.1 million, or 3.8%, primarily driven by lower average balances on interest-earning assets combined with lower loan yields. This decrease was offset by a $2.5 million, or 68.2% decrease in interest expense. Average interest-earning assets decreased $225.4 million, or 6.4%, to $3.3 billion for the quarter ended March 31, 2022. The main drivers of the change were decreases of $179.4 million, or 34.3%, in the average balance of commercial paper and deposits in other banks and $42.0 million, or 27.3%, in debt securities available for sale as the Company used excess liquidity to reduce borrowings, which declined by $431.5 million, or 92.8%, when compared to the prior period. Net interest margin (on a fully taxable-equivalent basis) for the three months ended March 31, 2022 increased to 3.39% from 3.02% for the same period a year ago as all higher rate long-term borrowings were repaid during the quarter ended June 30, 2021.

    Total interest and dividend income decreased $1.1 million, or 3.8%, for the quarter ended March 31, 2022 as compared to the same quarter last year, which was primarily a result of a $1.0 million, or 3.7%, decrease in loan interest income. The lower loan interest income was driven by a decline in the average yield on loans of 17 basis points, from 4.08% to 3.91%. Loan interest income for the quarter included the amortization of $265,000 of PPP loan origination fees, a decline of $349,000 when compared to the $614,000 recognized in the prior period. The overall average yield on interest-earning assets increased 10 basis points to 3.54% for the current quarter compared to 3.44% in the same quarter last year primarily due to the change in the mix of interest-earning assets.

    Total interest expense decreased $2.5 million, or 68.2%, for the quarter ended March 31, 2022 compared to the same period last year. The decrease was driven by a $1.6 million, or 99.8%, decrease in interest expense on borrowings as discussed above and a $845,000, or 42.3%, decrease in interest expense on deposits. The average balance of total deposits increased by $228.1 million, or 8.1%, with noninterest-bearing deposits and interest-bearing deposits increasing $161.7 million and $66.4 million, respectively. The increase in interest-bearing deposits was driven by a $113.5 million, or 12.5% increase in money market accounts, partially offset by a $74.9 million, or 14.5%, decrease in certificates of deposit. As stated above, average borrowings for the quarter ended March 31, 2022 decreased $431.5 million, or 92.8%, along with a 137 basis point decrease in the average cost of borrowings compared to the same period last year. The decrease in the average cost of borrowings was primarily driven by the early retirement of long-term borrowings reducing the average balance and partially driven by a shift to short-term borrowings at lower rates. The overall average cost of funds decreased 34 basis points to 0.20% for the current quarter compared to 0.54% in the same quarter last year.

    Noninterest income decreased $1.7 million, or 16.2%, to $8.9 million for the quarter ended March 31, 2022 from $10.7 million for the same period in the previous year. This change was primarily due to a $1.9 million, or 39.2%, decrease in gain on sale of loans, partially offset by a $229,000, or 16.0%, increase in operating lease income. The decrease in gain on sale of loans was driven by decreases in loan principal sold across all portfolios. During the quarter ended March 31, 2022, $53.4 million of residential mortgage loans originated for sale were sold with gains of $1.3 million compared to $106.5 million sold and gains of $2.7 million in the corresponding period in the prior year. There were $16.5 million of sales of the guaranteed portion of SBA commercial loans with gains of $1.5 million in the current quarter compared to $20.2 million sold and gains of $1.8 million for the same period last year. The Company sold $25.0 million of home equity lines of credit (HELOC) during the quarter for a gain of $156,000 compared to $43.8 million sold and gains of $301,000 in the corresponding period last year.

    Noninterest expense decreased $4.7 million, or 15.4%, for the quarter ended March 31, 2022 as compared to the same period last year, which was primarily a result of a decrease of $3.7 million in prepayment penalties on long-term borrowings, and a $1.1 million, or 6.7%, decrease in salaries and benefits expense due to branch closures and lower mortgage banking incentive pay in the period.

    For the quarter ended March 31, 2022, the Company's income tax expense increased $114,000, or 5.4%, to $2.2 million from $2.1 million primarily as a result of higher taxable income. The effective tax rates for the quarters ended March 31, 2022 and 2021 were 21.6% and 21.0%, respectively.

    Comparison of Results of Operations for the Nine Months Ended March 31, 2022 and 2021

    Net interest income increased by $4.6 million, or 5.9%, to $81.9 million for the nine months ended March 31, 2022, compared to the same period last year. Interest and dividend income decreased by $3.9 million, or 4.4%, primarily driven by lower average balances on interest-earning assets. This decrease was offset by a $8.5 million, or 67.7%, decrease in interest expense. Average interest-earning assets decreased $184.0 million, or 5.3%, to $3.3 billion for the nine months ended March 31, 2022. The biggest reason for the change was a decrease of $143.2 million, or 31.5%, in commercial paper and deposits in other banks, as the Company used excess liquidity to reduce borrowings, where the average balance declined from $471.7 million to $48.9 million. Net interest margin (on a fully taxable-equivalent basis) for the nine months ended March 31, 2022 increased to 3.38% from 3.02% for the same period a year ago as all higher rate long-term borrowings were repaid during the quarter ended June 30, 2021.

    Total interest and dividend income decreased $3.9 million, or 4.4%, for the nine months ended March 31, 2022 as compared to the same period last year, which was primarily a result of a $3.1 million, or 3.7%, decrease in loan interest income and a $744,000, or 35.3%, decrease in interest income on commercial paper and deposits in other banks. The lower interest income in each category was driven by the combined effect of a decrease in average balances, as discussed above, and a decline in average loan yields which decreased 13 basis points to 3.90%, and average yields on debt securities available for sale which decreased 13 basis points to 1.42%. Loan interest income for the nine months included the amortization of $975,000 of PPP loan origination fees, a decline of $381,000 when compared to the $1.4 million recognized in the prior period. The overall average yield on interest-earning assets increased three basis points to 3.54% for the nine months compared to 3.51% in the same period last year as a result of a shift to higher yielding assets.

    Total interest expense decreased $8.5 million, or 67.7%, for the nine months ended March 31, 2022 compared to the same period last year. The decrease was driven by a $5.0 million, or 99.1%, decrease in interest expense on borrowings as discussed above and a $3.6 million, or 47.0%, decrease in interest expense on deposits. The average balance of total deposits increased by $257.5 million, or 9.3%, with noninterest-bearing deposits and interest-bearing deposits increasing $197.5 million and $60.0 million, respectively. The increase in interest-bearing deposits was driven by a $142.4 million, or 16.6%, increase in money market accounts and $46.4 million, or 7.8%, increase in interest-bearing checking accounts, partially offset by a $146.9 million, or 24.7%, decrease in certificates of deposit. As stated above average borrowings for the nine months ended March 31, 2022 decreased $422.8 million, or 89.6%, along with a 129 basis point decrease in the average cost of borrowings compared to the same period last year. The increase in average deposits (interest and noninterest-bearing) was due to successful deposit gathering campaigns and the effect of government stimulus in prior periods. The decrease in the average cost of borrowings was primarily driven by the early retirement of long-term borrowings reducing the average balance and partially driven by a shift to short-term borrowings at lower rates. The overall average cost of funds decreased 39 basis points to 0.23% for the nine months compared to 0.62% in the same period last year.

    Noninterest income increased $819,000, or 2.9%, to $29.5 million for the nine months ended March 31, 2022 from $28.7 million for the same period in the previous year. This change was due to an $857,000, or 51.0%, increase in loan income and fees, an $813,000, or 19.8% increase in operating lease income, a $394,000, or 5.9% increase in service charges and fees on deposit accounts, partially offset by a $1.0 million, or 8.4%, decrease in gain on sale of loans. The increase in loan income and fees was primarily a result of $924,000 in additional loan servicing fees as a result of bringing the Company's SBA loan servicing process in-house, which began July 1, 2021. The increase in operating lease income was primarily driven by increases in loan originations and higher outstanding lease balances during the period, while the increase in service charges on deposit accounts was the result of a $234,000 increase in interchange income driven by higher debit card usage. During the nine months ended March 31, 2022, $204.1 million of residential mortgage loans originated for sale were sold with gains of $5.6 million compared to $297.2 million sold and gains of $7.7 million in the corresponding period in the prior year. There were $43.5 million of sales of the guaranteed portion of SBA commercial loans with gains of $4.5 million in the nine months compared to $44.6 million sold and gains of $3.7 million for the same period last year. The Company sold $97.2 million of HELOCs during the nine months ended March 31, 2022 for a gain of $581,000 compared to $85.9 million sold and gains of $559,000 in the corresponding period last year. Lastly, $11.5 million of indirect auto finance loans were sold out of the held for investment portfolio during the current period for a gain of $205,000. No such sales occurred in the same period in the prior year.

    Noninterest expense decreased $5.2 million, or 6.3%, for the nine months ended March 31, 2022 as compared to the same period last year, which was primarily a result of a decrease of $3.7 million in prepayment penalties on borrowings, a $1.8 million, or 3.9%, decrease in salaries and benefits expense due to branch closures and lower mortgage banking incentive pay in the period, and a reduction of core deposit amortization expense of $397,000, or 65.6%, partially offset by an increase of $1.1 million, or 117.2%, in marketing and advertising expense driven by reduced media advertising in prior periods as a result of the pandemic as well as current year advertising for newly opened locations.

    For the nine months ended March 31, 2022, the Company's income tax expense increased $1.9 million, or 31.2%, to $8.0 million from $6.1 million primarily as a result of higher taxable income. The effective tax rates for the nine months ended March 31, 2022 and 2021 were 21.4% and 21.0%, respectively.

    Balance Sheet Review

    Total assets and liabilities increased by $17.1 million and $18.5 million to $3.5 billion and $3.1 billion, respectively, at March 31, 2022 as compared to June 30, 2021. Deposits increased by $103.6 million, or 3.5%, which were used to continue paying down borrowings during the period. In addition, excess liquidity from a $50.1 million, or 32.0%, decrease in debt securities available for sale, a $33.7 million, or 1.2%, decrease in loans receivable, a $12.0 million, or 29.9%, decrease in certificates of deposits in other banks, and a $8.3 million, or 8.8%, decrease in loans held for sale was invested in commercial paper which increased by $123.3 million, or 65.0%, during the period.

    The decrease in loans was driven by PPP forgiveness of $43.9 million and a $98.5 million, or 12.9%, decrease in retail consumer loans primarily within the one-to-four family loans and indirect auto loan portfolios. This decrease was partially offset by a $108.7 million, or 5.7%, increase in commercial loans (excluding PPP loans) as the Company continues its focus on the growth of the commercial loan segment.

    Stockholders' equity decreased $1.4 million, or 0.4%, to $395.1 million at March 31, 2022 as compared to June 30, 2021. Activity within stockholders' equity included $29.6 million in net income, $6.7 million in stock-based compensation expense and option exercises, stock repurchases of $32.3 million, and $4.1 million in cash dividends declared. As of March 31, 2022, the Bank was considered "well capitalized" in accordance with its regulatory capital guidelines and exceeded all regulatory capital requirements.

    Asset Quality

    The allowance for credit losses on loans was $31.0 million, or 1.15%, of total loans at March 31, 2022 compared to $35.5 million, or 1.30%, of total loans at June 30, 2021. The overall decrease was driven by lower expected credit losses estimated by management based on an improving economic outlook.

    The provision for credit losses was a net benefit of $4.0 million for the nine months ended March 31, 2022, compared to a net benefit of $6.2 million for the corresponding period in fiscal year 2021. Net loan charge-offs totaled $19,000 for the nine months ended March 31, 2022, compared to $452,000 for the same period last year. Net charge-offs as a percentage of average loans were 0.00% for the nine months ended March 31, 2022 compared to 0.02% for the corresponding period last year.

    Nonperforming assets decreased by $7.0 million, or 54.6%, to $5.8 million, or 0.16%, of total assets at March 31, 2022 compared to $12.8 million, or 0.36% of total assets at June 30, 2021. The significant decrease from June 30, 2021 was primarily a result of the payoff of two commercial real estate loan relationships totaling $5.1 million during the nine month period. Nonperforming assets included $5.8 million in nonaccruing loans and no REO at March 31, 2022, compared to $12.6 million and $188,000 in nonaccruing loans and REO, respectively, at June 30, 2021. Nonperforming loans to total loans was 0.22% at March 31, 2022 and 0.46% at June 30, 2021.

    As of March 31, 2022, the Company had no loans with full principal and interest payment deferrals related to COVID-19 which had been granted prior to January 1, 2022, compared to $107,000 at June 30, 2021. All loans placed on full payment deferral during the pandemic have come out of deferral and borrowers are either making regular loan payments or interest-only payments. As of March 31, 2022, the Company had $9.6 million in commercial loan deferrals on interest-only payments compared to $78.9 million at June 30, 2021.

    The ratio of classified assets to total assets decreased to 0.61% at March 31, 2022 from 0.76% at June 30, 2021. Classified assets decreased $5.0 million, or 18.5%, to $21.7 million at March 31, 2022 compared to $26.7 million at June 30, 2021 primarily due to the payoff of two commercial real estate loan relationships discussed above.

    About HomeTrust Bancshares, Inc.

    HomeTrust Bancshares, Inc. is the holding company for the Bank. As of March 31, 2022, the Company had assets of $3.5 billion. The Bank, founded in 1926, is a North Carolina state chartered, community-focused financial institution committed to providing value added relationship banking with over 30 locations as well as online/mobile channels. Locations include: North Carolina (including the Asheville metropolitan area, the "Piedmont" region, Charlotte, and Raleigh/Cary), Upstate South Carolina (Greenville), East Tennessee (including Kingsport/Johnson City, Knoxville, and Morristown) and Southwest Virginia (including the Roanoke Valley).

    Forward-Looking Statements

    This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements often include words such as "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of the Company's control. Actual results may differ, possibly materially, from those currently expected or projected in these forward-looking statements. Factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements include: the effect of the COVID-19 pandemic, including on the Company's credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; increased competitive pressures; changes in the interest rate environment; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and other factors described in the Company's latest annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other documents filed with or furnished to the Securities and Exchange Commission - which are available on the Company's website at www.htb.com and on the SEC's website at www.sec.gov. These risks could cause the Company's actual results for fiscal 2022 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, the Company and could negatively affect its operating and stock performance. Any of the forward-looking statements that the Company makes in this press release or the documents they file with or furnish to the SEC are based upon management's beliefs and assumptions at the time they are made and may turn out to be wrong because of inaccurate assumptions they might make, because of the factors described above or because of other factors that they cannot foresee. The Company does not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

    WEBSITE: WWW.HTB.COM

    Consolidated Balance Sheets (Unaudited)

    (Dollars in thousands)March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    (1)    		 March 31,
    2021
    Assets         
    Cash$19,783  $20,586  $22,431  $22,312  $24,621 
    Interest-bearing deposits 32,267   14,240   20,142   28,678   139,474 
    Cash and cash equivalents 52,050   34,826   42,573   50,990   164,095 
    Commercial paper 312,918   254,157   196,652   189,596   238,445 
    Certificates of deposit in other banks 28,125   34,002   35,495   40,122   42,015 
    Debt securities available for sale, at fair value 106,315   121,851   124,576   156,459   162,417 
    Other investments, at cost 23,040   22,117   20,891   23,710   28,899 
    Loans held for sale 85,263   102,070   105,161   93,539   86,708 
    Total loans, net of deferred loan fees and costs 2,699,538   2,696,072   2,719,642   2,733,267   2,690,153 
    Allowance for credit losses - loans (31,034)  (30,933)  (34,406)  (35,468)  (36,059)
    Loans, net 2,668,504   2,665,139   2,685,236   2,697,799   2,654,094 
    Premises and equipment, net 69,629   69,461   68,568   70,909   70,886 
    Accrued interest receivable 7,980   8,200   8,429   7,933   8,271 
    Real estate owned ("REO") —   45   45   188   143 
    Deferred income taxes, net 12,494   12,019   15,722   16,901   16,889 
    Bank owned life insurance ("BOLI") 94,740   94,209   93,679   93,108   93,877 
    Goodwill 25,638   25,638   25,638   25,638   25,638 
    Core deposit intangibles, net 135   185   250   343   473 
    Other assets 54,954   58,900   58,445   57,488   55,763 
    Total assets$3,541,785  $3,502,819  $3,481,360  $3,524,723  $3,648,613 
    Liabilities and stockholders' equity         
    Liabilities         
    Deposits$3,059,157  $2,998,691  $2,987,284  $2,955,541  $2,908,478 
    Borrowings 30,000   48,000   40,000   115,000   275,000 
    Other liabilities 57,497   54,382   57,565   57,663   58,683 
    Total liabilities 3,146,654   3,101,073   3,084,849   3,128,204   3,242,161 
    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 (2) 160   163   163   167   167 
    Additional paid in capital 136,181   147,552   151,425   160,582   162,010 
    Retained earnings 265,609   258,986   249,331   240,075   248,767 
    Unearned Employee Stock Ownership Plan ("ESOP") shares (5,422)  (5,555)  (5,687)  (5,819)  (5,951)
    Accumulated other comprehensive income (loss) (1,397)  600   1,279   1,514   1,459 
    Total stockholders' equity 395,131   401,746   396,511   396,519   406,452 
    Total liabilities and stockholders' equity$3,541,785  $3,502,819  $3,481,360  $3,524,723  $3,648,613 

    _________________________________

    (1)    Derived from audited financial statements.
    (2)    Shares of common stock issued and outstanding were 15,978,262 at March 31, 2022; 16,303,461 at December 31, 2021; 16,307,658 at September 30, 2021; 16,636,483 at June 30, 2021; and 16,655,347 at March 31, 2021.    


    Consolidated Statements of Income (Unaudited)

     Three Months Ended Nine Months Ended
    (Dollars in thousands)March 31,
    2022    		 December 31,
    2021    		 March 31,
    2021    		 March 31,
    2022    		 March 31,
    2021
    Interest and dividend income         
    Loans$26,616  $26,929  $27,629  $81,440  $84,564 
    Commercial paper and interest-bearing deposits 563   468   611  $1,362   2,106 
    Debt securities available for sale 384   411   496   1,319   1,528 
    Other investments 632   680   585   1,867   1,729 
    Total interest and dividend income 28,195   28,488   29,321   85,988   89,927 
    Interest expense         
    Deposits 1,151   1,305   1,996   4,028   7,596 
    Borrowings 4   15   1,632   45   5,007 
    Total interest expense 1,155   1,320   3,628   4,073   12,603 
    Net interest income 27,040   27,168   25,693   81,915   77,324 
    Provision (benefit) for credit losses (45)  (2,500)  (4,100)  (4,005)  (6,180)
    Net interest income after provision (benefit) for credit losses 27,085   29,668   29,793   85,920   83,504 
    Noninterest income         
    Service charges and fees on deposit accounts 2,216   2,513   2,194   7,101   6,707 
    Loan income and fees 752   805   636   2,536   1,679 
    Gain on sale of loans held for sale 2,969   3,901   4,881   10,927   11,929 
    BOLI income 492   490   508   1,500   1,551 
    Operating lease income 1,661   1,718   1,432   4,920   4,107 
    Other 857   753   1,027   2,496   2,688 
    Total noninterest income 8,947   10,180   10,678   29,480   28,661 
    Noninterest expense         
    Salaries and employee benefits 14,730   14,872   15,784   44,882   46,691 
    Occupancy expense, net 2,483   2,401   2,456   7,201   7,010 
    Computer services 2,455   2,369   2,581   7,148   7,108 
    Telephone, postage, and supplies 686   735   812   2,133   2,345 
    Marketing and advertising 573   832   319   2,110   971 
    Deposit insurance premiums 412   302   363   1,280   1,361 
    REO related expense, net 220   116   84   478   462 
    Core deposit intangible amortization 50   65   165   208   605 
    Prepayment penalties on borrowings —   —   3,656   —   3,656 
    Other 4,190   4,217   4,286   12,285   12,740 
    Total noninterest expense 25,799   25,909   30,506   77,725   82,949 
    Net income before income taxes 10,233   13,939   9,965   37,675   29,216 
    Income tax expense 2,210   2,861   2,096   8,047   6,133 
    Net income$8,023  $11,078  $7,869  $29,628  $23,083 


     

    Per Share Data

      Three Months Ended Nine Months Ended
      March 31,
    2022    		 December 31,
    2021    		 March 31,
    2021    		 March 31,
    2022    		 March 31,
    2021
    Net income per common share:(1)          
    Basic $0.51 $0.70 $0.49 $1.87 $1.42
    Diluted $0.51 $0.68 $0.48 $1.84 $1.40
    Average shares outstanding:          
    Basic  15,523,813  15,632,283  15,979,590  15,666,093  16,139,059
    Diluted  15,793,012  15,989,606  16,485,718  15,997,377  16,339,130
    Book value per share at end of period $24.73 $24.64 $24.40 $24.73 $24.40
    Tangible book value per share at end of period (2) $23.12 $23.06 $22.84 $23.13 $22.84
    Cash dividends declared per common share $0.09 $0.09 $0.08 $0.26 $0.23
    Total shares outstanding at end of period  15,978,262  16,303,461  16,655,347  15,978,262  16,655,347

    _________________________________

    (1)    Basic and diluted net income per common share have been prepared in accordance with the two-class method.
    (2)    See Non-GAAP reconciliation tables below for adjustments.    


    Selected Financial Ratios and Other Data

      Three Months Ended Nine Months Ended
      March 31,
    2022    		 December 31,
    2021    		 March 31,
    2021    		 March 31,
    2022    		 March 31,
    2021
    Performance ratios: (1)      
    Return on assets (ratio of net income to average total assets) 0.92% 1.24% 0.84% 1.12% 0.83%
    Return on equity (ratio of net income to average equity) 8.15  11.02  7.78  9.91  7.64 
    Tax equivalent yield on earning assets(2) 3.54  3.49  3.44  3.54  3.51 
    Rate paid on interest-bearing liabilities 0.20  0.22  0.54  0.23  0.62 
    Tax equivalent average interest rate spread (2) 3.34  3.27  2.90  3.31  2.89 
    Tax equivalent net interest margin(2) (3) 3.39  3.33  3.02  3.38  3.02 
    Average interest-earning assets to average interest-bearing liabilities 137.72  139.06  127.59  138.24  126.60 
    Noninterest expense to average total assets 2.97  2.91  3.25  2.94  2.98 
    Efficiency ratio 71.69  69.37  83.87  69.77  78.26 
    Efficiency ratio - adjusted (4) 71.06  68.81  73.17  69.19  74.16 

    _________________________________

    (1)    Ratios are annualized where appropriate.
    (2)    The weighted average rate for municipal leases is adjusted for a 24% combined federal and state tax rate since the interest from these leases is tax exempt.
    (3)    Net interest income divided by average interest-earning assets.
    (4)    See Non-GAAP reconciliation tables below for adjustments.   

     Three Months Ended
     March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    (1)    		 March 31,
    2021
    Asset quality ratios:         
    Nonperforming assets to total assets(1)0.16% 0.18% 0.19% 0.36% 0.37%
    Nonperforming loans to total loans(1)0.22  0.23  0.25  0.46  0.49 
    Total classified assets to total assets0.61  0.65  0.65  0.76  0.76 
    Allowance for credit losses to nonperforming loans(1)534.06  500.70  510.63  281.38  272.64 
    Allowance for credit losses to total loans1.15  1.15  1.27  1.30  1.34 
    Net charge-offs (recoveries) to average loans (annualized)(0.11) 0.15  (0.04) (0.04) (0.03)
    Capital ratios:         
    Equity to total assets at end of period11.16% 11.47% 11.39% 11.25% 11.14%
    Tangible equity to total tangible assets(2)10.51  10.81  10.73  10.59  10.50 
    Average equity to average assets11.32  11.28  11.27  11.06  10.79 

    _________________________________

    (1)    Nonperforming assets include nonaccruing loans, consisting of certain restructured loans, and REO. There were no accruing loans more than 90 days past due at the dates indicated. At March 31, 2022, there were $1.8 million of restructured loans included in nonaccruing loans and $2.9 million, or 50.6% of nonaccruing loans were current on their loan payments.
    (2)    See Non-GAAP reconciliation tables below for adjustments.

    Average Balance Sheet Data

     Three Months Ended
    (Dollars in thousands)March 31, 2022 March 31, 2021
     Average
    Balance
    Outstanding    		 Interest
    Earned/
    Paid(2)    		 Yield/
    Rate(2)    		 Average
    Balance
    Outstanding    		 Interest
    Earned/
    Paid(2)    		 Yield/
    Rate(2)
      
    Assets:           
    Interest-earning assets:           
    Loans receivable(1)(2)$2,791,650  $26,936 3.91% $2,779,094  $27,955 4.08%
    Commercial paper and deposits in other banks 342,878   563 0.67   522,256   611 0.47 
    Debt securities available for sale 111,874   384 1.39   153,871   496 1.31 
    Other interest-earning assets(3) 22,614   632 11.33   39,184   585 6.05 
    Total interest-earning assets 3,269,016   28,515 3.54%  3,494,405   29,647 3.44%
    Other assets 258,126       258,858     
    Total assets$3,527,142      $3,753,263     
    Liabilities and equity:           
    Interest-bearing deposits:           
    Interest-bearing checking accounts 650,072   310 0.19%  637,381   391 0.25%
    Money market accounts 1,020,734   340 0.14   907,228   373 0.17 
    Savings accounts 227,936   40 0.07   212,809   39 0.08 
    Certificate accounts 441,314   461 0.42   516,221   1,193 0.94 
    Total interest-bearing deposits 2,340,056   1,151 0.20   2,273,639   1,996 0.36 
    Borrowings 33,599   4 0.05   465,111   1,632 1.42 
      Total interest-bearing liabilities 2,373,655   1,155 0.20%  2,738,750   3,628 0.54%
    Noninterest-bearing deposits 714,753       553,045     
    Other liabilities 39,374       56,655     
    Total liabilities 3,127,782       3,348,450     
    Stockholders' equity 399,360       404,813     
    Total liabilities and stockholders' equity$3,527,142      $3,753,263     
                
    Net earning assets$895,361      $755,655     
    Average interest-earning assets to           
    average interest-bearing liabilities 137.72%      127.59%    
    Tax-equivalent:           
    Net interest income  $27,360     $26,019  
    Interest rate spread    3.34%     2.90%
    Net interest margin(4)    3.39%     3.02%
    Non-tax-equivalent:           
    Net interest income  $27,040     $25,693  
    Interest rate spread    3.30%     2.87%
    Net interest margin(4)    3.35%     2.98%

    _________________________________

    (1)    The average loans receivable 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 $320 and $326 for the three months ended March 31, 2022 and 2021, respectively, calculated based on a combined federal and state tax rate of 24%.
    (3)    The average other interest-earning assets consist of FRB stock, FHLB stock, and SBIC investments.
    (4)    Net interest income divided by average interest-earning assets.

     Nine Months Ended
    (Dollars in thousands)March 31, 2022 March 31, 2021
     Average
    Balance
    Outstanding    		 Interest
    Earned/
    Paid(2)    		 Yield/
    Rate(2)    		 Average
    Balance
    Outstanding    		 Interest
    Earned/
    Paid(2)    		 Yield/
    Rate(2)
      
    Assets:           
    Interest-earning assets:           
    Loans receivable(1)(2)$2,810,205  $82,377 3.90% $2,826,886  $85,505 4.03%
    Commercial paper and deposits in other banks 311,457   1,362 0.58   454,609   2,106 0.62 
    Debt securities available for sale 124,053   1,319 1.42   131,332   1,528 1.55 
    Other interest-earning assets(3) 22,218   1,867 11.19   39,140   1,729 5.88 
    Total interest-earning assets 3,267,933   86,925 3.54%  3,451,967   90,868 3.51%
    Other assets 259,570       256,026     
    Total assets$3,527,503      $3,707,993     
    Liabilities and equity:           
    Interest-bearing liabilities:           
    Interest-bearing checking accounts 640,194   1,038 0.22%  593,815   1,142 0.26%
    Money market accounts 1,002,542   1,056 0.14   860,170   1,337 0.21 
    Savings accounts 224,664   120 0.07   206,478   114 0.07 
    Certificate accounts 447,623   1,814 0.54   594,565   5,003 1.12 
    Total interest-bearing deposits 2,315,023   4,028 0.23   2,255,028   7,596 0.45 
    Borrowings 48,894   45 0.12   471,716   5,007 1.41 
      Total interest-bearing liabilities 2,363,917   4,073 0.23%  2,726,744   12,603 0.62%
    Noninterest-bearing deposits 719,872       522,406     
    Other liabilities 45,443       56,141     
    Total liabilities 3,129,232       3,305,291     
    Stockholders' equity 398,271       402,702     
    Total liabilities and stockholders' equity$3,527,503      $3,707,993     
                
    Net earning assets$904,016      $725,223     
    Average interest-earning assets to           
    average interest-bearing liabilities 138.24%      126.60%    
    Tax-equivalent:           
    Net interest income  $82,852     $78,265  
    Interest rate spread    3.31%     2.89%
    Net interest margin(4)    3.38%     3.02%
    Non-tax-equivalent:           
    Net interest income  $81,915     $77,323  
    Interest rate spread    3.28%     2.85%
    Net interest margin(4)            3.34%             2.98%

    _________________________________

    (1)    The average loans receivable 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 $937 and $942 for the nine months ended March 31, 2022 and 2021, respectively, calculated based on a combined federal and state tax rate of 24%.
    (3)    The average other interest-earning assets consist of FRB stock, FHLB stock, and SBIC investments.
    (4)    Net interest income divided by average interest-earning assets.   


    Loans

    (Dollars in thousands)March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    (1)    		 March 31,
    2021
    Commercial loans:         
    Commercial real estate$1,102,184  $1,113,330  $1,132,764  $1,142,276  $1,088,178 
    Construction and development 251,668   226,439   187,900   179,427   162,820 
    Commercial and industrial 167,342   162,396   153,612   141,341   140,579 
    Equipment finance 378,629   367,008   341,995   317,920   291,950 
    Municipal leases 130,260   131,078   142,100   140,421   129,141 
    PPP loans 2,756   19,044   28,762   46,650   73,090 
    Total commercial loans 2,032,839   2,019,295   1,987,133   1,968,035   1,885,758 
    Retail consumer loans         
    One-to-four family 347,945   356,850   384,901   406,549   430,001 
    HELOCs - originated 128,445   128,189   129,791   130,225   131,867 
    HELOCs - purchased 26,911   30,795   33,943   38,976   46,086 
    Construction and land/lots 72,735   69,253   69,835   66,027   68,118 
    Indirect auto finance 83,903   84,581   106,184   115,093   119,656 
    Consumer 6,760   7,109   7,855   8,362   8,667 
    Total retail consumer loans 666,699   676,777   732,509   765,232   804,395 
    Total loans, net of deferred loan fees and costs 2,699,538   2,696,072   2,719,642   2,733,267   2,690,153 
    Allowance for credit losses - loans (31,034)  (30,933)  (34,406)  (35,468)  (36,059)
    Loans, net$2,668,504  $2,665,139  $2,685,236  $2,697,799  $2,654,094 

    Deposits

    (Dollars in thousands)March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    (1)    		 March 31,
    2021
    Core deposits:         
    Noninterest-bearing accounts$704,344 $677,159 $711,764 $636,414 $528,711
    NOW accounts 652,577  644,343  621,675  644,958  727,240
    Money market accounts 1,026,595  1,010,901  987,650  975,001  927,519
    Savings accounts 232,831  224,474  220,614  226,391  221,537
    Total core deposits 2,616,347  2,556,877  2,541,703  2,482,764  2,405,007
    Certificates of deposit 442,810  441,814  445,581  472,777  503,471
    Total deposits$3,059,157 $2,998,691 $2,987,284 $2,955,541 $2,908,478

    Non-GAAP Reconciliations

    In addition to results presented in accordance with generally accepted accounting principles utilized in the United States ("GAAP"), this earnings release contains certain non-GAAP financial measures, which include: the efficiency ratio; tangible book value; tangible book value per share; tangible equity to tangible assets ratio; and the ratio of the allowance for credit losses to total loans excluding PPP loans. The Company believes these non-GAAP financial measures and ratios as presented are useful for both investors and management to understand the effects of certain items and provide an alternative view of its performance over time and in comparison to its competitors. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for total stockholders' equity or operating results determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. 

    Set forth below is a reconciliation to GAAP of the Company's efficiency ratio:

      Three Months Ended Nine Months Ended
    (Dollars in thousands) March 31,
    2022    		 December 31,
    2021    		 March 31,
    2021    		 March 31,
    2022    		 March 31,
    2021
    Noninterest expense $25,799  $25,909  $30,506  $77,725  $82,949 
    Less: prepayment penalties on borrowings  —   —   3,656   —   3,656 
    Noninterest expense $25,799  $25,909  $26,850  $77,725  $79,293 
               
    Net interest income $27,040  $27,168  $25,693  $81,915  $77,324 
    Plus: noninterest income  8,947   10,180   10,678   29,480   28,661 
    Plus: tax equivalent adjustment  320   307   326   937   942 
    Net interest income plus noninterest income – adjusted $36,307  $37,655  $36,697  $112,332  $106,927 
    Efficiency ratio  71.69%  69.37%  83.87%  69.77%  78.26%
    Efficiency ratio - adjusted  71.06%  68.81%  73.17%  69.19%  74.16%

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

    (Dollars in thousands, except per share data) March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    (1)    		 March 31,
    2021
    Total stockholders' equity $395,131 $401,746 $396,511 $396,519 $406,452
    Less: goodwill, core deposit intangibles, net of taxes  25,742  25,780  25,830  25,902  26,002
    Tangible book value $369,389 $375,966 $370,681 $370,617 $380,450
    Common shares outstanding  15,978,262  16,303,461  16,307,658  16,636,483  16,655,347
    Tangible book value per share $23.12 $23.06 $22.73 $22.28 $22.84
    Book value per share $24.73 $24.64 $24.31 $23.83 $24.40

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

    (Dollars in thousands) March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021    		 June 30,
    2021    (1)    		 March 31,
    2021
    Tangible equity(1) $369,389  $375,966  $370,681  $370,617  $380,450 
    Total assets  3,541,785   3,502,819   3,481,360   3,524,723   3,648,613 
    Less: goodwill, core deposit intangibles, net of taxes  25,742   25,780   25,830   25,902   26,002 
    Total tangible assets $3,516,043  $3,477,039  $3,455,530  $3,498,821  $3,622,611 
    Tangible equity to tangible assets  10.51%  10.81%  10.73%  10.59%  10.50%

    _________________________________

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


    Contact:
Dana L. Stonestreet – Chairman and Chief Executive Officer
C. Hunter Westbrook – President and Chief Operating Officer
Tony J. VunCannon – Executive Vice President, Chief Financial Officer, Corporate Secretary and Treasurer
828-259-3939

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