HomeTrust Bancshares, Inc. Reports First Quarter Fiscal Year 2013 Financial Results
ASHEVILLE, N.C., Oct. 31, 2012 (GLOBE NEWSWIRE) -- HomeTrust Bancshares, Inc. (Nasdaq: HTBI), the holding company of HomeTrust Bank, today announced preliminary net income of $1.2 million for the first quarter of fiscal year 2013, compared to $284,000 for the same period a year ago. The increase in net income for the first quarter of fiscal 2013 was primarily a result of the decrease in the provision for losses on loans. On a basic and diluted per share basis, the Company earned $0.06 per share in the first quarter of fiscal 2013, while it had no shares outstanding during the first quarter of fiscal 2012.
In announcing these results, Dana Stonestreet, President and COO said, "While record low interest rates continue to pressure our net interest income, we are pleased to report solid quarterly earnings which benefited from ongoing loan demand, a decrease in net loan charge offs, and prudent expense management. Net loan charge-offs for the current quarter totaled $713,000 compared to $3.0 million in the quarter ended June 30, 2012, a 76.2% percent decrease."
Income Statement Review
Net interest income was $13.5 million for the three months ended September 30, 2012 compared to $13.8 million for the three months ended September 30, 2011. Net interest income for the first quarter of fiscal 2013 decreased $309,000, or 2.2%, compared to the same period in the prior year as declines in interest income on loans of $1.7 million outpaced a decrease in deposit and other borrowing costs of $1.2 million. Net interest margin for the three months ended September 30, 2012 decreased 7 basis points to 3.79% over the same period last year, primarily due to a 36 basis point decline in the yield on interest-earning assets to 4.38%, partially offset by a 25 basis point decline in the rate paid on interest-bearing liabilities to 0.75%. The decline in the yield on interest-earning assets was primarily due to the investment of the proceeds from our July 2012 stock conversion at lower interest rates.
Noninterest income was $2.3 million for the three months ended September 30, 2012 compared to $1.7 million for the same three month period in the prior fiscal year. Mortgage banking income increased $504,000 as loans originated for sale increased to $64.0 million during the first quarter of fiscal 2013 compared to $30.0 million for the same quarter in the prior fiscal year. Mortgage banking loan origination volume remains favorable from a historical perspective as a result of continuing loan refinancing due to very low mortgage interest rates.
Noninterest expense for the three months ended September 30, 2012 increased $3.4 million, or 33.5%, to $13.4 million compared to $10.0 million for the three months ended September 30, 2011. This increase was primarily related to $1.6 million in prepayment penalties on Federal Home Loan Bank (FHLB) borrowings repaid during the first fiscal quarter of 2013 and a $1.2 million or 22% increase in salaries and employee benefits as compared to the same period in the prior fiscal year. Salaries and employee benefits increased as a direct result of hiring an additional 30 full time employees (primarily in mortgage banking and credit administration) coupled with additional expense related to the Company's new employee stock ownership plan.
Balance Sheet Review
Total assets decreased $117.1 million, or 6.8%, to $1.60 billion at September 30, 2012 from $1.72 billion at June 30, 2012, primarily due to the refunding of $76.0 million in funds held on deposit for orders to purchase shares of the Company's common stock in its recent oversubscribed stock offering, which was consummated on July 10, 2012. Net loans receivable decreased $26.8 million or 2.2% to $1.17 billion at September 30, 2012 from $1.19 billion at June 30, 2012 as new loan originations during the quarter were offset by normal loan repayments, refinances, charge-offs and foreclosures.
Total deposits decreased $305.9 million or 20.9% from $1.47 billion at June 30, 2012 to $1.16 billion at September 30, 2012. This decrease was primarily due to the reduction of $264.2 million in funds held on deposit at June 30, 2012 for orders to purchase shares of the Company's common stock. In addition, certificates of deposit decreased $45.9 million during the quarter as a result of the managed decline of higher rate certificates of deposit consistent with the Company's strategy to decrease the percentage of time deposits in its deposit base and to increase the percentage of lower cost checking and savings accounts. Other borrowings decreased 36.1%, or $8.1 million, at September 30, 2012 to $14.2 million from $22.3 million at June 30, 2012 as $7.5 million of longer term FHLB advances were prepaid during the current quarter.
The provision for loan losses totaled $1.5 million for the three months ended September 30, 2012 compared to $5.3 million for the three months ended September 30, 2011. The decrease in the provision was due to the combination of fewer loan charge-offs and lower average loan balances compared to the same period during the prior fiscal year. Average loans receivable decreased $89.5 million, or 6.7%, to $1.24 billion in the first quarter of fiscal 2013 from $1.33 billion in the same quarter of fiscal 2012.
The allowance for loan losses was $35.9 million, or 2.98% of total loans, at September 30, 2012 compared to $35.1 million, or 2.85% of total loans, at June 30, 2012. Net loan charge-offs decreased significantly to $713,000 for the three months ended September 30, 2012 from $3.0 million and $14.9 million for the three months ended June 30, 2012 and September 30, 2011, respectively. Net charge-offs as a percentage of average loans also decreased dramatically to 0.23% for the three months ended September 30, 2012 from 0.96% for the quarter ended June 30, 2012 and 4.50% for the same period last fiscal year.
Nonperforming assets totaled $83.7 million, or 5.22% of total assets, at September 30, 2012, compared to $80.3 million, or 4.67% of total assets, at June 30, 2012 and $73.9 million, or 4.59% at September 30, 2011. Nonperforming assets included $69.7 million in nonperforming loans and $13.1 million in foreclosed real estate at September 30, 2012, compared to $64.2 million and $16.1 million, respectively, at June 30, 2012. At September 30, 2012, $34.2 million or 48.9% of nonperforming loans were current on their loan payments.
The ratio of classified assets to total assets increased to 8.40% at September 30, 2012 from 7.75% at June 30, 2012 and decreased from 9.71% at September 30, 2011. Classified assets totaled $134.7 million at September 30, 2012, compared to $133.4 million and $156.4 million at June 30, 2012 and September 30, 2011, respectively.
"Improving our risk profile and aggressively managing our troubled assets has been, and will remain, a primary focus for our management team," said Stonestreet. "As a result of this focus, credit costs continued to decline and were significantly below those of a year ago."
About HomeTrust Bancshares, Inc.
On July 10, 2012, HomeTrust Bancshares, Inc. (the "Company") became the holding company for HomeTrust Bank (the "Bank") in connection with the completion of the Bank's conversion from the mutual to the stock form of organization and the Company's related public stock offering. In the offering, the Company sold 21,160,000 shares of common stock at a price of $10.00, for gross offering proceeds of $211.6 million. HomeTrust Bancshares' common stock began trading on the Nasdaq Global Market on July 11, 2012, under the symbol "HTBI."
HomeTrust Bank, including its banking divisions – HomeTrust Bank, Tryon Federal Bank, Shelby Savings Bank, Home Savings Bank, Industrial Federal Bank, Cherryville Federal Bank and Rutherford County Bank, is a community-oriented financial institution with $1.60 billion in assets as of September 30, 2012. The Bank offers traditional financial services within its local communities through its 20 full service offices in Western North Carolina, including the Asheville metropolitan area, and the "Piedmont" region of North Carolina. The Bank is the 10th largest bank headquartered in North Carolina.
The HomeTrust Bancshares, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=13586
This press release may contain certain forward-looking statements. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They 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, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results for the businesses of HomeTrust Bancshares, Inc. and HomeTrust Bank include: 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 losses and provision for loan 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; 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 OCC or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our reserve for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings; legislative or regulatory changes that adversely affect our business including the effect of Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and Basel III, changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules; our ability to attract and retain deposits; increases in premiums for deposit insurance; management's assumptions in determining the adequacy of the allowance for loan losses; our ability to control operating costs and expenses, especially new costs associated with our operation as a public company; the use of estimates in determining fair value of certain of our 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 systems on which we depend could fail or experience a security breach; 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 policies and practices, as may be adopted by the financial institution regulatory agencies, the Public Company Accounting Oversight Board or the Financial Accounting Standards Board; and other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and the other risks described in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended June 30, 2012.
Any of the forward-looking statements that we make in this release 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 we might make, because of the factors illustrated above or because of other factors that we cannot foresee. We do 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. These risks could cause our actual results for fiscal 2013 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect our operating and stock price performance.
|Selected Financial Data|
|Selected Financial Condition Data:|
|Loans receivable, net(2)||1,167,134||1,193,945|
|Allowance for loan losses||35,887||35,100|
|Certificates of deposit in other banks||122,245||108,010|
|Securities available for sale, at fair value||30,534||31,335|
|Federal Home Loan Bank stock||3,047||6,300|
|At or For the Three Months Ended|
|Asset quality ratios:|
|Non-performing assets to total assets(4)||5.22%||4.67%||4.59%|
|Non-performing loans to total loans(4)||5.78||5.21||4.90|
|Total classified assets to total assets||8.40||7.75||9.71|
|Allowance for loan losses to non-performing loans(4)||51.47||54.69||67.05|
|Allowance for loan losses to total loans||2.98||2.85||3.29|
|Net charge-offs to average loans||0.23||0.96||4.50|
|Equity to total assets at end of period||23.18%||10.03%||10.44%|
|Average equity to average assets||21.30||10.98||10.36|
|Three Months Ended|
|Selected Operations Data:|
|Total interest and dividend income||$15,728||$17,207|
|Total interest expense||2,209||3,379|
|Net interest income||13,519||13,828|
|Provision for loan losses||1,500||5,300|
|Net interest income after provision for loan losses||12,019||8,528|
|Fees and service charges||653||709|
|Mortgage banking income and fees||1,176||672|
|Loss on sale of fixed assets||--||(3)|
|Other non-interest income||514||296|
|Total non-interest income||2,343||1,674|
|Salaries and employee benefits||6,329||5,179|
|Net occupancy expense||1,259||1,156|
|FHLB advance prepayment penalty||1,561||--|
|Total non-interest expense||13,393||10,032|
|Income before benefit for income taxes||969||170|
|Income tax benefit||(183)||(114)|
|Three Months Ended|
|Selected Financial Ratios and Other Data:|
|Return on assets (ratio of net income to average total assets)||0.28%||0.07%|
|Return on equity (ratio of net income to average equity)||1.32||0.68|
|Tax equivalent yield on earning assets(5)||4.38||4.74|
|Rate paid on interest-bearing liabilities||0.75||1.00|
|Tax equivalent average interest rate spread (5)||3.63||3.74|
|Tax equivalent net interest margin(5) (6)||3.79||3.86|
|Average interest-earning assets to average interest-bearing liabilities||129.24||113.54|
|Operating expense to average total assets||3.27||2.48|
|Three Months Ended|
|Per Share Data:|
|Net income per common share:|
|Average shares outstanding:|
|For the Three Months Ended September 30,|
|(Dollars in thousands)|
|Interest-earning deposits with banks||229,419||0.66||138,785||0.47|
|Securities available for sale||31,237||1.23||49,562||1.00|
|Other interest-earning assets||15,646||0.92||9,303||0.79|
|Federal Home Loan Bank advances||14,835||4.94||93,160||1.63|
|Tax equivalent interest rate spread||3.63%||3.74%|
|Tax equivalent net interest margin||3.79||3.86|
(1) Derived from audited financial statements.
(2) Net of allowances for loan losses, loans in process and deferred loan fees.
(3) Ratios are annualized where appropriate.
(4) Non-performing assets include non-performing loans and real estate owned. Non-performing loans consist of non-accruing loans, certain restructured loans and accruing loans more than 90 days past due. At September 30, 2012, there were $30.0 million of restructured loans included in non-performing loans and $34.2 million, or 48.9%, of non-accruing loans were current on their loan payments.
(5) The weighted average rate for municipal leases is adjusted for a 34% federal tax rate since the interest from these leases is tax exempt.
(6) Net interest income divided by average interest earning assets.
(7) A non-GAAP measure calculated by dividing total non-interest expense, net of FHLB advance prepayment penalties, by the sum of net interest income and total non-interest income, net of realized gain/loss on securities. This non-GAAP financial measure should not be considered as a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled financial measures used by other companies.