HomeTrust Bancshares, Inc.
For the period ended Mar 31, 2026. Filed May 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
HTB$46.98+0.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001538263-25-000116
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001538263-26-000046
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 157 previous paragraphs and 117 current paragraphs.
65 unchanged; 26 reworded; 24 added; 55 removed; 11 previous and 2 current paragraphs rearranged.
Tables are not compared: 17 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
•the impact of geopolitical instability and trade policies on our operations including the imposition of tariffs and retaliatory tariffs;
Current report
•effects of natural disasters, other severe weather events, epidemics and other public health issues, and other external events;
Current report
•changes in interest rate levels and the duration of such changes, whether or not through actions by the Federal Reserve, which could materially affect our net interest margin, funding costs, asset values, and access to capital and liquidity;
Current report
•the impact of inflation or a potential recession, including monetary and fiscal policy responses thereto, and the impact on consumer and business behavior;
Current report
•the effects of a Federal government shutdown, a debt ceiling standoff, or other fiscal policy uncertainty;
Current report
•the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking and cybersecurity;
Current report
•net income was $16.8 million compared to $16.1 million;
Current report
•diluted EPS were $0.99 compared to $0.93;
Current report
•annualized ROA was 1.55% compared to 1.44%;
Current report
•annualized ROE was 11.35% compared to 10.63%;
Current report
•provision for credit losses was $370,000 compared to $2.1 million;
Current report
Total interest and dividend income for the three months ended March 31, 2026 decreased $2.0 million, or 3.1%, when compared to the three months ended December 31, 2025. A decline of $1.9 million, or 3.1%, in loan interest income drove this change, primarily due to fewer days in the current quarter and the impact of decreases in the federal funds rate upon loan yields, partially offset by an increase of $348,000 in accretion income.
Current report
For the quarter ended March 31, 2026, the "loans" portion of the provision for credit losses was primarily the result of the following, offset by net charge-offs of $1.8 million during the quarter:
Current report
•$0.5 million benefit driven by changes in the loan mix.
Current report
For the quarter ended December 31,2025, the "loans" portion of the provision for credit losses was primarily the result of the following, offset by net charge-offs of $3.1 million during the quarter:
Current report
•$0.9 million benefit driven by changes in the loan mix.
Current report
•Loan income and fees: The decrease was primarily the result of $144,000 less in interest rate swap fees in addition to smaller decreases across several other loan fee categories.
Current report
•Gain on sale of premises and equipment: In both periods presented, gains were recognized on the sale of excess parcels of land.
Current report
Debt Securities Available for Sale. Debt securities available for sale increased $7.2 million, or 5.0%, to $149.7 million at March 31, 2026 from $142.5 million at December 31, 2025. Outside of changes in value, the changes between periods were the result of $13.0 million in purchases, partially offset by $5.2 million in proceeds from the maturity, call and paydown of securities. All purchases were MBS and consistent with the composition of the existing securities held in the portfolio.
Current report
SBA loans made up 48.3%, 46.5% and 23.1% of total nonperforming assets at March 31, 2026, December 31, 2025 and March 31, 2025, respectively. The year-over-year increase was primarily the result of a management decision to accelerate the repurchase of the sold portion of nonperforming SBA loans (fully guaranteed portion) to simplify the workout process.
Current report
The following table summarizes the distribution of the ACL by loan category at the dates indicated.
Current report
Net loan charge-offs totaled $1.8 million for the quarter ended March 31,2026 compared to $3.1 million and $1.3 million for the three months ended December 31, 2025 and March 31, 2025, respectively. For all three periods, net charge-offs were concentrated within our equipment finance portfolio, primarily related to over-the-road truck loans, where we recognized net charge-offs of $1.5 million, $2.0 million and $1.0 million for the same periods, respectively. Annualized net charge-offs as a percentage of average loans were 0.19% for the three months ended March 31,2026 as compared to 0.33% and 0.14% for the three months ended December 31, 2025 and March 31, 2025, respectively.
Current report
The decrease in deposits was driven by a reduction in brokered certificates of deposit of $116.1 million, partially offset by an increase of $45.7 million in core deposits and other certificates of deposit.
Current report
Stockholders' Equity. Stockholders' equity decreased $8.3 million, or 1.4%, to $592.4 million at March 31,2026 as compared to December 31,2025. Activity within stockholders' equity included $16.8 million in net income and $1.4 million in share-based compensation and stock option exercises, which was more than offset by $2.2 million in cash dividends declared and $23.1 million in stock repurchases. In addition, accumulated other comprehensive income declined by $622,000 due to an increase in the unrealized loss on available for sale securities due to higher market interest rates.
Removed paragraphs (55)
Previous report
•the potential imposition of new or increased tariffs or changes to existing trade policies that could affect economic activity or specific industry sectors;
Previous report
•natural disasters, including the lingering effects of Hurricane Helene;
Previous report
•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 and the effects of inflation or a potential recession;
Previous report
•the impact of governmental actions or inactions, including a prolonged shutdown of the federal government;
Previous report
•net income was $16.5 million compared to $17.2 million;
Previous report
•diluted EPS were $0.95 compared to $1.00;
Previous report
•annualized ROA was 1.48% compared to 1.58%;
Previous report
•annualized ROE was 11.10% compared to 11.97%;
Previous report
•provision for credit losses was $2.0 million compared to $1.3 million;
Previous report
•there was no gain on the sale of branches in the current quarter compared to $1.4 million in the prior quarter;
Previous report
For the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024:
Previous report
•net income was $48.2 million compared to $40.6 million;
Previous report
•diluted EPS were $2.79 compared to $2.37;
Previous report
•annualized ROA was 1.46% compared to 1.22%;
Previous report
•annualized ROE was 11.20% compared to 10.39%;
Previous report
•net interest margin was 4.27% compared to 4.06%;
Previous report
•provision for credit losses was $4.9 million compared to $8.4 million;
Previous report
•gain on the sale of our two Knoxville, Tennessee branches was $1.4 million compared to $0;
Previous report
•tax-free death benefit proceeds from life insurance were $0 compared to $1.1 million;
Previous report
•cash dividends of $0.36 per share totaling $6.2 million compared to $0.33 per share totaling $5.6 million; and
Previous report
Net Income. Net income totaled $16.5 million, or $0.95 per diluted share, for the three months ended September 30, 2025 compared to $17.2 million, or $1.00 per diluted share, for the three months ended June 30, 2025, a decrease of $719,000, or 4.2%. Results for the three months ended September 30, 2025 were positively impacted by a $1.2 million increase in net interest income, offset by a $712,000 increase in the provision for credit losses and a $1.4 million decrease in noninterest income due to a $1.4 million gain on the sale of two branch locations in the prior quarter, with no similar activity in the current quarter. Details of the changes in the various components of net income are further discussed below.
Previous report
Total interest and dividend income for the three months ended September 30, 2025 increased $1.8 million when compared to the three months ended June 30, 2025. Regarding the components of this income, loan interest income increased $1.3 million, or 2.2%, primarily due to an overall increase in the average loan balance and an additional day in the current quarter, and interest income on other interest-bearing assets increased $441,000, or 28.5%, mainly due to a $421,000, or 154.8%, increase in SBIC investment income where significant investment appreciation was recognized in the current quarter. Accretion income on acquired loans of $352,000 and $1.0 million was recognized during the same periods, respectively, and was included in interest income on loans.
Previous report
Total interest expense for the three months ended September 30, 2025 increased $594,000, or 3.1%, compared to the three months ended June 30, 2025. The change was primarily the result of an increase in the average balance of certificate accounts.
Previous report
For the quarter ended September 30, 2025, the "loans" portion of the provision for credit losses was the result of the following, offset by net charge-offs of $2.8 million during the quarter:
Previous report
•$0.6 million benefit driven by changes in the loan mix.
Previous report
For the quarter ended June 30, 2025, the "loans" portion of the provision for credit losses was the result of the following, offset by net charge-offs of $2.0 million during the quarter:
Previous report
•$0.3 million benefit driven by changes in the loan mix.
Previous report
•$1.6 million benefit due to changes in qualitative adjustments, partially offset by a slight worsening of the projected economic forecast, specifically the national unemployment rate. Of note, we released the$2.2 million qualitative allocation previously established for the potential impact of Hurricane Helene upon our loan portfolio which had been established in the quarter ended September 30, 2024. Any residual impact of the Hurricane was believed to have been reflected elsewhere within the ACL calculation.
Previous report
•Gain on sale of branches: On May 23, 2025, we completed the previously announced sale of our two Knoxville, Tennessee branches, recognizing a gain of $1.4 million. The gain was primarily the result of a premium received on the deposits assumed by the purchasing institution, partially offset by expenses associated with the transaction. No similar activity occurred during the current quarter.
Previous report
•Other: The increase was driven by $290,000 in additional investment services income quarter-over-quarter.
Previous report
•Other: The change was driven by a $96,000 decline in losses recognized on the sale of repossessed assets in addition to small decreases across several other expense categories.
Previous report
Comparison of Results of Operations for the Nine Months Ended September 30, 2025 and September 30, 2024
Previous report
Total interest and dividend income for the nine months ended September 30, 2025 decreased $2.7 million, or 1.4%, compared to the nine months ended September 30, 2024, which was driven by a $4.6 million, or 2.5%, decrease in interest income on loans, partially offset by an increase of $1.2 million, or 21.3%, in income from other interest-bearing assets and an increase of $683,000, or 15.4%, in income from debt securities available for sale. Accretion income on acquired loans of $1.7 million and $2.0 million was recognized during the same periods, respectively, and was included in interest income on loans. The overall decrease in average yield on interest-earning assets was mainly the result of both a reduction in interest rates and a decline in the average balance of the loan portfolio where we continue to be focused on prudent loan growth.
Previous report
For the nine months ended September 30, 2025, the "loans" portion of the provision for credit losses was the result of the following, offset by net charge-offs of $6.1 million during the period.
Previous report
•$1.5 million benefit driven by changes in the loan mix.
Previous report
•$1.5 million benefit due to changes in qualitative adjustments, partially offset by a slight worsening of the projected economic forecast, specifically the national unemployment rate. Of note, we released the$2.2 million qualitative allocation previously established for the potential impact of Hurricane Helene upon our loan portfolio which had been established in the quarter ended September 30, 2024. Any residual impact of the Hurricane is believed to have now been reflected elsewhere within the ACL calculation.
Previous report
•$0.8 million increase in specific reserves on individually evaluated loans.
Previous report
For the nine months ended September 30, 2024, the "loans" portion of the provision for credit losses was the result of net charge-offs of $8.9 million during the period, partially offset by a $0.4 million benefit due to changes in the loan mix.
Previous report
Noninterest Income. Noninterest income for the nine months ended September 30, 2025 increased $1.7 million, or 6.9%, when compared to the same period last year. Changes in the components of noninterest income are discussed below:
Previous report
•Gain on sale of loans held for sale: The increase was primarily driven by growth in the volume of HELOCs and residential mortgage loans sold during the period, partially offset by a reduction in the sale of the guaranteed portion of SBA commercial loans. During the nine months ended September 30, 2025, there were $243.5 million of HELOCs sold with gains of $2.3 million compared to $95.4 million sold with gains of $887,000 for the corresponding period in the prior year. There were $82.4 million of residential mortgage loans originated for sale which were sold with gains of $1.8 million compared to $58.3 million sold with gains of $1.1 million for the corresponding period in the prior year. There were $21.6 million of sales of the guaranteed portion of SBA commercial loans with gains of $1.5 million compared to $38.5 million sold and gains of $3.1 million for the corresponding period in the prior year. Our hedging of mandatory commitments on the residential mortgage loan pipeline resulted in a net gain of $163,000 for the nine months ended September 30, 2025 versus $15,000 for the nine months ended September 30, 2024.
Showing the first 40 of 55 passages. Open the source sections for the rest.
Reworded paragraphs (26)
Previous wording
•our ability to control operating costs and expenses, especially costs associated with our operation as a public company;
Current wording
•our ability to control operating costs and expenses, including costs associated with our operation as a public company;
Previous wording
•net interest margin was 4.31% compared to 4.32%;
Current wording
•net interest margin was 4.31% compared to 4.20%;
Previous wording
•quarterly cash dividends continued at $0.12 per share totaling $2.1 million for each period; and
Current wording
•quarterly cash dividends continued at $0.13 per share totaling $2.2 million for both periods; and
Previous wording
•no shares of Company common stock were repurchased during the current quarter compared to 78,412 shares at an average price of $35.74 in the prior quarter.
Current wording
•533,240 shares of Company common stock were repurchased during the current quarter at an average price of $42.85 compared to 241,201 shares repurchased at an average price of $42.19 in the prior quarter.
Previous wording
Set forth below is a reconciliation to US GAAP of tangible equity to tangible assets:
Current wording
Set forth below is a reconciliation to GAAP of tangible equity to tangible assets:
Previous wording
Net Income. Net income totaled $48.2 million, or $2.79 per diluted share, for the nine months ended September 30, 2025 compared to $40.6 million, or $2.37 per diluted share, for the nine months ended September 30, 2024, an increase of $7.6 million, or 18.8%. The results for the nine months ended September 30, 2025 were positively impacted by a $6.2 million increase in net interest income, a decrease of $3.5 million in the provision for credit losses, and a $1.7 million increase in noninterest income, partially offset by a $2.0 million increase in noninterest expense. Details of the changes in the various components of net income are further discussed below.
Current wording
Net Income. Net income totaled $16.8 million, or $0.99 per diluted share, for the three months ended March 31, 2026 compared to $16.1 million, or $0.93 per diluted share, for the three months ended December 31, 2025, an increase of $648,000, or 4.0%. The results for the three months ended March 31, 2026 compared to the three months ended December 31, 2025 benefited from a $1.7 million decrease in the provision for credit losses and a $635,000 increase in noninterest income, partially offset by a $1.3 million increase in the noninterest expense. Details of the changes in the various components of net income are further discussed below.
Previous wording
(4)Tax-equivalent results include adjustments to interest income of $440 and $431 for the three months ended September 30, 2025 and June 30, 2025, respectively, calculated based on a combined federal and state tax rate of 24%.
Current wording
(4)Tax-equivalent results include adjustments to interest income of $435 and $448 for the three months ended March 31,2026 and December 31, 2025, respectively, calculated based on combined federal and state tax rates of 23% and 24% for the same periods, respectively.
Previous wording
Total interest expense for the nine months ended September 30, 2025 decreased $9.0 million, or 13.0%, compared to the nine months ended September 30, 2024. The change was primarily the result of a decrease in the average balance of borrowings in addition to the cost of funds across all funding sources.
Current wording
Total interest expense for the three months ended March 31, 2026 decreased $2.1 million, or 10.7%, when compared to the three months ended December 31, 2025. A decline of $2.1 million, or 10.9%, in deposit interest expense drove this change, the result of a decline in the average balance of certificate accounts, specifically brokered deposits, a decline in the average cost of funds across funding categories, and fewer days in the current quarter.
Previous wording
The following table shows the effects that changes in average balances (volume), including the difference 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:
Current wording
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:
Previous wording
Noninterest Income. Noninterest income for the three months ended September 30, 2025 decreased $1.4 million, or 13.8%, when compared to the quarter ended June 30, 2025. Changes in the components of noninterest income are discussed below:
Current wording
Noninterest Income. Noninterest income for the three months ended March 31, 2026 increased $635,000, or 6.8%, when compared to the quarter ended December 31, 2025. Changes in the components of noninterest income are discussed below:
Previous wording
•Gain on sale of loans held for sale: The decrease was primarily driven by a reduction in the sales volume of HELOCs originated for sale, partially offset by increased sales volume of residential mortgage and SBA commercial loans. There were $45.3 million of HELOCs originated for sale which were sold during the current quarter with gains of $243,000 compared to $108.8 million sold with gains of $954,000 in the prior quarter. There were $33.3 million of residential mortgage loans sold for gains of $764,000 during the current quarter compared to $30.3 million sold with gains of $558,000 in the prior quarter. There were $9.8 million in sales of the guaranteed portion of SBA commercial loans with gains of $595,000 for the current quarter compared to $7.3 million sold and gains of $570,000 for the prior quarter. Our hedging of mandatory commitments on the residential mortgage loan pipeline resulted in a net gain of $123,000 for the current quarter compared to a net gain of $27,000 for the prior quarter.
Current wording
•Gain on sale of loans held for sale: The increase was primarily driven by an increase in the sales volume of HELOC loans originated for sale, partially offset by reduced sales volume of residential mortgage loans and SBA commercial loans. There were $103.0 million of HELOCs originated for sale which were sold during the current quarter with gains of $934,000 compared to $13.7 million sold with gains of $121,000 in the prior quarter. There were $23.3 million of residential mortgage loans sold for gains of $431,000 during the current quarter compared to $31.1 million sold with gains of $606,000 in the prior quarter. There were $16.4 million in sales of the guaranteed portion of SBA commercial loans with gains of $1.2 million for the current quarter compared to $18.9 million sold and gains of $1.5 million for the prior quarter. Our hedging of mandatory commitments on the residential mortgage loan pipeline resulted in a net gain of $68,000 for the current quarter compared to a net loss of $295,000 for the prior quarter.
Previous wording
Noninterest Expense. Noninterest expense for the three months ended September 30, 2025 remained stable, when compared to the three months ended June 30, 2025. Changes in the components of noninterest expense are discussed below:
Current wording
Noninterest Expense. Noninterest expense for the three months ended March 31, 2026 increased $1.3 million, or 4.0%, when compared to the three months ended December 31, 2025. Changes in the components of noninterest expense are discussed below:
Previous wording
•Salaries and employee benefits: The increase was primarily the result of increases in both pay and incentive compensation.
Current wording
•Salaries and employee benefits: The increase was primarily the result of a $449,000 increase in incentive compensation and $409,000 in additional FICA taxes.
Previous wording
Income Taxes. The amount of income tax expense is influenced by the amount of pre-tax income, 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, 2025 and June 30, 2025 were 20.9% and 21.2%, respectively.
Current wording
Income Taxes. The amount of income tax expense is influenced by the amount of pre-tax income, 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 March 31, 2026 and December 31, 2025 were 20.1% and 18.7%, respectively, with the quarter-over-quarter increase driven by the prior quarter impact of the Company's investment in a tax credit equity fund.
Previous wording
General. Total assets decreased by $3.3 million to $4.6 billion and total liabilities decreased by $47.4 million to $4.0 billion, respectively, at September 30, 2025 as compared to December 31, 2024. These changes can be traced to the use of the proceeds from both loan sales and maturities of debt securities and certificates of deposit to partially offset a $81.0 million decline in deposits. The decrease in deposits was mainly the result of a $68.8 million reduction in brokered deposits and $34.3 million of deposits which were assumed by the purchaser of our two Knoxville, Tennessee branches. Borrowings increased by $42.0 million to provide additional liquidity.
Current wording
General. Total assets decreased by $159.3 million to $4.4 billion and total liabilities decreased by $151.0 million to $3.8 billion at March 31,2026 as compared to December 31, 2025. These changes can be traced to the use of proceeds from both loan sales and loan paydowns to offset a $70.5 million decline in deposits. The decrease in deposits was the result of a $116.1 million reduction in brokered deposits, partially offset by an increase of $45.7 million in all other deposit categories.
Previous wording
Cash and Cash Equivalents. Total cash and cash equivalents increased $36.6 million, or 13.1%, to $315.8 million at September 30, 2025 from $279.2 million at December 31, 2024.
Current wording
Cash and Cash Equivalents. Total cash and cash equivalents decreased $24.0 million, or 7.4%, to $300.7 million at March 31, 2026 from $324.7 million at December 31, 2025.
Previous wording
Certificates of Deposit in Other Banks. Total certificates of deposit in other banks decreased $7.7 million, or 27.0%, to $20.8 million at September 30, 2025 from $28.5 million at December 31, 2024.
Current wording
Certificates of Deposit in Other Banks. Total certificates of deposit in other banks decreased $5.2 million, or 27.7%, to $13.6 million at March 31, 2026 compared to December 31, 2025.
Previous wording
Loans Held for Sale. Loans held for sale decreased $9.2 million, or 4.5%, to $197.0 million at September 30, 2025 from $206.2 million at December 31, 2024. This was driven by an decrease of $25.9 million, or 14.5%, in HELOCs held for sale due to loan sales during the current quarter, partially offset by a $13.3 million, or 58.3%, increase in SBA loans held for sale.
Current wording
Loans Held for Sale. Loans held for sale decreased $97.2 million, or 47.3%, to $108.5 million at March 31, 2026 from $205.7 million at December 31, 2025. This was driven by a decrease of $103.3 million, or 63.4%, in HELOCs held for sale due to loan sales during the current quarter, partially offset by a $5.8 million, or 16.3%, increase in SBA loans held for sale.
Previous wording
Loans, Net of Deferred Loan Fees and Costs. Total loans decreased $4.7 million, to $3.6 billion at September 30, 2025 as compared to the balance at December 31, 2024. The following table illustrates the changes within the portfolio:
Current wording
Loans, Net of Deferred Loan Fees and Costs. Loans held for investment totaled $3.5 billion at March 31, 2026, a decrease of $31.6 million, 0.9%, compared to the balance as of December 31, 2025. The following table illustrates the changes within the portfolio:
Previous wording
Asset Quality. Nonperforming assets, made up of nonaccrual loans and repossessed assets, increased by $2.6 million, or 8.6%, to $33.1 million, or 0.72% of total assets, at September 30, 2025 compared to $30.5 million, or 0.67% of total assets, at June 30, 2025. SBA loans made up the largest portion of nonperforming assets at $11.9 million and $9.4 million, respectively, at these same dates of which $6.6 million and $4.8 million, respectively, was fully guaranteed. Of the remaining nonperforming assets, HELOCs totaled $5.9 million and $3.3 million, respectively, and equipment finance loans (concentrated in the transportation sector) made up $5.5 million and $5.9 million, respectively, both at these same dates. The ratio of nonperforming loans to total loans was 0.89% at September 30, 2025 compared to 0.81% at June 30, 2025.
Current wording
Asset Quality. The following table sets forth the composition of nonperforming assets, made up of nonaccrual loans and repossessed assets, across our asset categories.
Previous wording
Classified assets increased by $7.8 million, or 15.9%, to $56.6 million, or 1.23% of total assets, as of September 30, 2025 when compared to the balance of $48.8 million, or 1.07% of total assets, at June 30, 2025. Similarly, classified assets increased by $7.9 million, or 16.1%, to $56.6 million, or 1.23% of total assets, as of September 30, 2025 when compared to the balance of $48.8 million, or 1.06% of total assets, at December 31, 2024. SBA loans made up the largest portion of classified assets at $20.0 million and $17.1 million, respectively, as of September 30, 2025 and June 30, 2025 of which $12.7 million and $9.9 million, respectively, was fully guaranteed. The remaining population of classified assets at September 30, 2025 included $8.8 million of equipment finance loans (concentrated in the transportation sector), $7.7 million of non-owner occupied CRE loans, $7.5 million of HELOCs, and $6.7 million of 1-4 family residential real estate loans.
Current wording
Classified assets increased by $6.0 million, or 9.1%, to $72.2 million, or 1.65% of total assets, as of March 31, 2026 when compared to the balance of $66.2 million, or 1.46% of total assets, as of December 31, 2025. Similarly, classified assets increased by $31.5 million, or 77.4%, to $72.2 million, or 1.65% of total assets, as of March 31, 2026 when compared to the balance of $40.7 million, or 0.89% of total assets, as of March 31, 2025. SBA loans made up the largest portion of classified assets at $25.7 million and $27.3 million, respectively, as of March 31, 2026 and December 31, 2025, of which $18.1 million $19.8 million, respectively, was fully guaranteed. The remaining population of classified assets as of March 31, 2026 included $10.0 million of HELOCs, $9.3 million of 1-4 family residential real estate loans, $7.7 million of equipment finance loans (concentrated in the transportation sector) and $7.4 million of non-owner occupied CRE loans.
Previous wording
Allowance for Credit Losses on Loans. The ACL on loans was $43.1 million, or 1.18% of total loans, at September 30, 2025 compared to $45.3 million, or 1.24% of total loans, at December 31, 2024. The drivers of this change are discussed in the "Comparison of Results of Operations for the Nine Months Ended September 30, 2025 and September 30, 2024–Provision for Credit Losses" section above.
Current wording
Allowance for Credit Losses on Loans. The ACL on loans was $40.6 million, or 1.14% of total loans, at March 31,2026 compared to$41.5 million, or 1.16% of total loans, at December 31,2025. The drivers of this change are discussed inthe "Comparison of Results of Operations for the Quarters Ended March 31, 2026 and December 31, 2025 – Provision for Credit Losses" section above.
Previous wording
In addition to these primary sources of funds, management has several secondary sources available to meet potential funding requirements. All qualifying one-to-four family loans, HELOCs, commercial real estate loans, multifamily loans and FHLB of Atlanta stock are pledged as collateral to secure outstanding FHLB advances while commercial construction, indirect auto, and equipment and municipal leases are pledged as collateral to secure outstanding FRB advances. At September 30, 2025, the Company had the ability to borrow $363.8 million through additional FHLB advances and $18.7 million through the unused portion of a line of credit with the FRB. At this same date, the Company maintained revolving lines of credit with three unaffiliated banks which totaled $165.0 million, all of which was unused.
Current wording
In addition to these primary sources of funds, management has several secondary sources available to meet potential funding requirements. All qualifying one-to-four family loans, HELOCs, commercial real estate loans, multifamily loans and FHLB of Atlanta stock are pledged as collateral to secure outstanding FHLB advances while commercial construction loans, indirect auto loans, and equipment and municipal leases are pledged as collateral to secure outstanding FRB advances. At March 31, 2026, the Company had the ability to borrow $366.6 million through additional FHLB advances and $140.6 million through the unused portion of a line of credit with the FRB. At this same date, the Company maintained revolving lines of credit with four unaffiliated banks which totaled $135.0 million, all of which was unused.
Previous wording
We also classify our securities portfolio as available for sale, providing an additional source of liquidity. Management believes that our securities portfolio is of high quality, of short duration, and the securities would therefore be readily marketable. In addition, we have historically sold 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 September 30, 2025, brokered deposits totaled $318.3 million, or 8.6% of total deposits.
Current wording
We also classify our securities portfolio as available for sale, providing an additional source of liquidity. Management believes that our securities portfolio is of high quality, of short duration, and the securities would therefore be readily marketable. In addition, we have historically sold 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 March 31, 2026, brokered deposits totaled $155.2 million, or 4.3% of total deposits.
Previous wording
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 debt securities, including MBS. On a stand-alone level we are a separate legal entity from the Bank and must provide for our own liquidity and pay our own operating expenses. Our primary source of funds consists of dividends or capital distributions from the Bank, although there are regulatory restrictions on the ability of the Bank to pay dividends. At September 30, 2025, we (on an unconsolidated basis) had liquid assets of $13.1 million.
Current wording
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 debt securities, including MBS. On a stand-alone level we are a separate legal entity from the Bank and must provide for our own liquidity and pay our own operating expenses. Our primary source of funds consists of dividends or capital distributions from the Bank, although there are regulatory restrictions on the ability of the Bank to pay dividends. At March 31, 2026, we (on an unconsolidated basis) had liquid assets of $6.6 million.
Previous wording
At 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 September 30, 2025, the total approved loan commitments and unused lines of credit outstanding amounted to $287.1 million and $858.8 million, respectively, as compared to $230.5 million and $712.3 million as of December 31, 2024. Certificates of deposit scheduled to mature in one year or less at September 30, 2025 totaled $930.5 million. It is management's policy to manage deposit rates that are competitive with other local financial institutions. Based on this strategy, we believe that a majority of maturing deposits will be retained.
Current wording
At 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 March 31, 2026, the total approved loan commitments and unused lines of credit outstanding amounted to $323.1 million and $884.6 million, respectively. Certificates of deposit scheduled to mature in one year or less at March 31, 2026 totaled $745.4 million. It is management's policy to manage deposit rates that are competitive with other local financial institutions. Based on this strategy, we believe that a majority of maturing deposits will be retained.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
•$0.1 million benefit due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments.
Current report — wording carried from elsewhere
•$0.6 million decrease in specific reserves on individually evaluated loans.
Rearranged previous paragraphs (11)
Previous report — wording carried elsewhere
•93,212 shares of Company common stock were repurchased during the nine months at an average price of $35.41 compared to 23,483 shares repurchased at an average price of $27.48 in the same period last year.
Previous report — wording carried elsewhere
•$1.3 million increase in specific reserves on individually evaluated loans.
Previous report — wording carried elsewhere
Net Interest Income. The following table presents the distribution of average assets, liabilities and equity, as well as interest income earned on average interest-earning assets and interest expense paid on average interest-bearing liabilities. All average balances are daily average balances. Nonaccruing loans have been included in the table as loans carrying a zero yield.
Previous report — wording carried elsewhere
(1)Average loans receivable balances include loans held for sale and nonaccruing loans.
Previous report — wording carried elsewhere
(2)Average other interest-earning assets consist of FRB stock, FHLB stock, SBIC investments and deposits in other banks.
Previous report — wording carried elsewhere
(3)Net interest income divided by average interest-earning assets.
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(4)Tax-equivalent results include adjustments to interest income of $1,289 and $1,072 for the nine months ended September 30, 2025 and September 30, 2024, respectively, calculated based on a combined federal and state tax rate of 24%.
Previous report — wording carried elsewhere
The following table shows the effects that changes in average balances (volume), including the difference 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:
Previous report — wording carried elsewhere
Provision for Credit Losses. The following table presents a breakdown of the components of the provision for credit losses:
Previous report — wording carried elsewhere
For the nine months ended September 30, 2025 and September 30, 2024, the amounts recorded for off-balance-sheet credit exposure were the result of changes in the balance of loan commitments, loan mix and projected economic forecast as outlined above.
Previous report — wording carried elsewhere
Income Taxes. The amount of income tax expense is influenced by the amount of pre-tax income, tax-exempt income, changes in the statutory rate and the effect of changes in valuation allowances maintained against deferred tax benefits. The effective tax rate was 21.1% and 21.3% for the nine months ended September 30, 2025 and September 30, 2024, respectively.