HTBI HomeTrust Bancshares Inc

HomeTrust Bancshares, Inc. (NASDAQ: HTBI) ("Company"), the holding company of HomeTrust Bank ("Bank"), today announced preliminary net income for the first quarter of the year ending December 31, 2024 and approval of its quarterly cash dividend. In addition, on April 22, 2024, the Company's Board of Directors re-authorized the repurchase the remaining 266,639 shares of the Company’s common stock under the repurchase plan originally authorized in February of 2022. The shares may be purchased in the open market or in privately negotiated transactions from time to time depending upon market conditions and other factors.

For the quarter ended March 31, 2024 compared to the quarter ended December 31, 2023:

• net income was $15.1 million compared to $13.5 million;
• diluted earnings per share ("EPS") was $0.88 compared to $0.79;
• annualized return on assets ("ROA") was 1.37% compared to 1.21%;
• annualized return on equity ("ROE") was 11.91% compared to 10.81%;
• net interest margin was 4.02% for both periods;
• provision for credit losses was $1.2 million compared to $3.4 million;
• tax-free death benefit proceeds from life insurance of $1.1 million compared to $1.6 million;
• quarterly cash dividends continued at $0.11 per share totaling $1.9 million for both periods.

The Company also announced today that its Board of Directors declared a quarterly cash dividend of $0.11 per common share payable on May 30, 2024 to shareholders of record as of the close of business on May 16, 2024.

“Once again, I am pleased with the continuation of HomeTrust’s top quartile financial performance which has led to national recognition from both Forbes and S&P Global,” said Hunter Westbrook, President and Chief Executive Officer. “This quarter, we remained focused on further strengthening the balance sheet which resulted in the expansion of customer deposits by over $100 million, maintaining our net interest margin above 4.00% and continuing our strong credit quality. This is a direct reflection of HomeTrust’s philosophy of prudent, sound and profitable balance sheet management, its strong culture of engaged teammates and demonstrates the Company’s resilience through economic rate cycles.

“As previously stated, our Board of Directors re-authorized the repurchase of shares of the Company’s stock. This action allows the Company to take advantage of its low stock price as compared to its tangible book value while also publicly exhibiting our optimism regarding the Company’s future financial performance.

“Lastly, it has been over one year since the merger with, and integration of, Quantum National Bank, and I am extremely pleased that the legacy Quantum employees have embraced our culture and operating philosophies. The performance of these employees, combined with further hires in the Atlanta market, have validated this strategic opportunity.”

WEBSITE: WWW.HTB.COM

Comparison of Results of Operations for the Three Months Ended March 31, 2024 and December 31, 2023Net Income.  Net income totaled $15.1 million, or $0.88 per diluted share, for the three months ended March 31, 2024 compared to net income of $13.5 million, or $0.79 per diluted share, for the three months ended December 31, 2023, an increase of $1.6 million, or 11.9%. Results for the three months ended March 31, 2024 were positively impacted by a decrease of $2.2 million in the provision for credit losses and a $563,000 increase in noninterest income, partially offset by a decrease of $693,000 in net interest income. Details of the changes in the various components of net income are further discussed below.

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.

	Three Months Ended
	March 31, 2024												December 31, 2023
(Dollars in thousands)	AverageBalanceOutstanding				InterestEarned /Paid				Yield /Rate				AverageBalanceOutstanding				InterestEarned /Paid				Yield /Rate
Assets
Interest-earning assets
Loans receivable(1)	$	3,864,258			$	59,952				6.24	%		$	3,876,051			$	60,069				6.15	%
Debt securities available for sale		126,686				1,313				4.17				136,945				1,257				3.64
Other interest-earning assets(2)		131,495				2,090				6.39				121,366				1,493				4.88
Total interest-earning assets		4,122,439				63,355				6.18				4,134,362				62,819				6.03
Other assets		298,117												271,767
Total assets	$	4,420,556											$	4,406,129
Liabilities and equity
Interest-bearing liabilities
Interest-bearing checking accounts	$	590,738			$	1,426				0.97	%		$	594,805			$	1,209				0.81	%
Money market accounts		1,281,340				9,664				3.03				1,251,170				8,930				2.83
Savings accounts		191,747				43				0.09				198,522				45				0.09
Certificate accounts		887,618				9,185				4.16				818,698				8,105				3.93
Total interest-bearing deposits		2,951,443				20,318				2.77				2,863,195				18,289				2.53
Junior subordinated debt		10,029				236				9.46				10,005				239				9.48
Borrowings		103,155				1,571				6.13				156,619				2,368				6.00
Total interest-bearing liabilities		3,064,627				22,125				2.90				3,029,819				20,896				2.74
Noninterest-bearing deposits		810,114												837,048
Other liabilities		36,945												45,156
Total liabilities		3,911,686												3,912,023
Stockholders' equity		508,870												494,106
Total liabilities and stockholders' equity	$	4,420,556											$	4,406,129
Net earning assets	$	1,057,812											$	1,104,543
Average interest-earning assets to average interest-bearing liabilities		134.52	%											136.46	%
Non-tax-equivalent
Net interest income					$	41,230											$	41,923
Interest rate spread										3.28	%											3.29	%
Net interest margin(3)										4.02	%											4.02	%
Tax-equivalent(4)
Net interest income					$	41,579											$	42,264
Interest rate spread										3.32	%											3.32	%
Net interest margin(3)										4.06	%											4.06	%

(1) Average loans receivable balances include loans held for sale and nonaccruing loans.(2) Average other interest-earning assets consist of FRB stock, FHLB stock, SBIC investments and deposits in other banks.(3) Net interest income divided by average interest-earning assets.(4) Tax-equivalent results include adjustments to interest income of $349 and $341 for the three months ended March 31, 2024 and December 31, 2023, respectively, calculated based on a combined federal and state tax rate of 24%.

Total interest and dividend income for the three months ended March 31, 2024 increased $536,000, or 0.9%, compared to the three months ended December 31, 2023, which was driven by a $597,000, or 40.0%, increase in income on other investments and interest-bearing deposits due to the allocation of liquid funds in higher-yielding deposit accounts. Accretion income on acquired loans of $715,000 and $405,000 was recognized during the same periods, respectively, and was included in interest income on loans.

Total interest expense for the three months ended March 31, 2024 increased $1.2 million, or 5.9%, compared to the three months ended December 31, 2023. The increase was the result of both increases in the average cost of funds and average balances across interest-bearing deposit types, partially offset by a decline in average borrowings outstanding.

The following table shows the effects that changes in average balances (volume), including differences in the number of days in the periods compared, and average interest rates (rate) had on the interest earned on interest-earning assets and interest paid on interest-bearing liabilities:

	Increase / (Decrease)Due to								TotalIncrease /(Decrease)
(Dollars in thousands)	Volume				Rate
Interest-earning assets
Loans receivable	$	(1,008	)		$	891			$	(117	)
Debt securities available for sale		(112	)			168				56
Other interest-earning assets		96				501				597
Total interest-earning assets		(1,024	)			1,560				536
Interest-bearing liabilities
Interest-bearing checking accounts		(28	)			245				217
Money market accounts		82				652				734
Savings accounts		(2	)			—				(2	)
Certificate accounts		556				524				1,080
Junior subordinated debt		(3	)			—				(3	)
Borrowings		(830	)			33				(797	)
Total interest-bearing liabilities		(225	)			1,454				1,229
Decrease in net interest income									$	(693	)

Provision for Credit Losses.  The provision for credit losses is the amount of expense that, based on our judgment, is required to maintain the allowance for credit losses ("ACL") at an appropriate level under the current expected credit losses model.

The following table presents a breakdown of the components of the provision for credit losses:

	Three Months Ended
(Dollars in thousands)	March 31, 2024				December 31, 2023				$ Change					% Change
Provision for credit losses
Loans	$	1,145			$	4,050			$	(2,905	)			(72	)%
Off-balance-sheet credit exposure		20				(690	)			710				103
Total provision for credit losses	$	1,165			$	3,360			$	(2,195	)			(65	)%

For the quarter ended March 31, 2024, the "loans" portion of the provision for credit losses was the result of the following, offset by net charge-offs of $2.3 million during the quarter:

• $0.1 million benefit driven by changes in the loan mix.
• $0.9 million benefit due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments.
• $0.2 million decrease in specific reserves on individually evaluated credits.

For the quarter ended December 31, 2023, the "loans" portion of the provision for credit losses was primarily the result of the following, offset by net charge-offs of $2.8 million during the quarter:

• $0.5 million benefit driven by changes in the loan mix.
• $0.9 million provision due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments.
• $0.8 million increase in specific reserves on individually evaluated credits.

For the quarters ended March 31, 2024 and December 31, 2023, 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.

Noninterest Income.  Noninterest income for the three months ended March 31, 2024 increased $572,000, or 6.9%, when compared to the quarter ended December 31, 2023. Changes in the components of noninterest income are discussed below:

	Three Months Ended
(Dollars in thousands)	March 31, 2024				December 31, 2023				$ Change				% Change
Noninterest income
Service charges and fees on deposit accounts	$	2,149			$	2,368			$	(219	)			(9	)%
Loan income and fees		678				423				255				60
Gain on sale of loans held for sale		1,457				1,037				420				41
Bank owned life insurance ("BOLI") income		1,835				2,152				(317	)			(15	)
Operating lease income		1,859				1,592				267				17
Loss on sale of premises and equipment		(9	)			(248	)			239				96
Other		842				924				(82	)			(9	)
Total noninterest income	$	8,811			$	8,248			$	563				7	%

• Loan income and fees: The increase was the result of loan servicing fee income returning to normal levels in the current quarter. The prior quarter included $150,000 of expense associated with the early payoff and/or charge-off of loans being serviced.
• Gain on sale of loans held for sale: The increase was primarily driven by SBA loans sold during the period. There were $12.9 million in sales of the guaranteed portion of SBA commercial loans with gains of $1.1 million for the quarter compared to $5.6 million sold and gains of $439,000 for the prior quarter. There were $15.3 million of residential mortgage loans originated for sale which were sold during the current quarter with gains of $316,000 compared to $20.5 million sold with gains of $417,000 in the prior quarter. Our hedging of mandatory commitments on the residential mortgage loan pipeline resulted in a gain of $55,000 for the quarter ended March 31, 2024 versus a loss of $142,000 for the quarter ended December 31, 2023. There were $7.8 million of HELOCs sold for a gain of $16,000 compared to $37.5 million sold with gains of $322,000 in the prior quarter. The decrease in the gain on sale of HELOCs was due to only one sale in the current quarter versus three sales in the prior quarter as well as a combined $78,000 in expense recorded in the current quarter to refund premiums previously received under sold loan recourse provisions and to establish a liability for potential future requests. No such expense was recorded in the prior quarter.
• BOLI income: The decrease was due to only $1.1 million in tax-free gains on death benefit proceeds in excess of the cash surrender value of the policies in the current quarter compared to $1.6 million in the prior quarter, partially offset by an increase in policy earnings as a result of the partial restructuring of the Company's BOLI policies, which was executed at the end of the prior quarter.
• Operating lease income: The increase was the result of an increase in the average outstanding balance as well as gains/losses incurred on previously leased equipment, where we recognized net losses of $145,000 and $192,000 in the quarters ended March 31, 2024 and December 31, 2023, respectively.
• Loss on sale of premises and equipment: During the quarter ended December 31, 2023, the Company recognized $625,000 of expense due to the impairment of the remaining right of use asset associated with a previously closed branch, partially offset by a $380,000 gain on the sale of a parcel of land.

Noninterest Expense.  Noninterest expense for the three months ended March 31, 2024 increased $92,000, or 0.3%, when compared to the three months ended December 31, 2023. Changes in the components of noninterest expense are discussed below:

	Three Months Ended
(Dollars in thousands)	March 31, 2024				December 31, 2023				$ Change				% Change
Noninterest expense
Salaries and employee benefits	$	16,976			$	16,256			$	720				4	%
Occupancy expense, net		2,437				2,443				(6	)			—
Computer services		3,088				3,002				86				3
Telephone, postage and supplies		585				603				(18	)			(3	)
Marketing and advertising		645				625				20				3
Deposit insurance premiums		554				702				(148	)			(21	)
Core deposit intangible amortization		762				860				(98	)			(11	)
Other		4,817				5,290				(473	)			(9	)
Total noninterest expense	$	29,864			$	29,781			$	83				—	%

• Salaries and employee benefits: The quarter-over-quarter increase was primarily the result of $389,000 in additional FICA taxes.
• Deposit insurance premiums: The decrease was due to a drop in the assessment rate the Company is charged for deposit insurance.
• Other: The decrease was primarily the result of a $173,000 decrease in fraud losses and $115,000 of severance expense included in the prior quarter related to staff reductions.

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, 2024 and December 31, 2023 were 20.8% and 20.9%, respectively. In both periods, the effective tax rate was positively impacted by tax-free gains on BOLI death benefit proceeds of $1.1 million and $1.6 million, respectively.

Balance Sheet ReviewTotal assets increased by $11.4 million to $4.7 billion and total liabilities decreased by $1.9 million to $4.2 billion, respectively, at March 31, 2024 as compared to December 31, 2023. The majority of these changes were the result of an increase in deposits, which, combined with amounts received from maturing investments, were used to fund growth in loans held for sale, pay down borrowings, and provide additional liquidity.

Stockholders' equity increased $13.3 million to $513.2 million at March 31, 2024 as compared to December 31, 2023. Activity within stockholders' equity included $15.1 million in net income, partially offset by $1.9 million in cash dividends declared. As of March 31, 2024, the Bank was considered "well capitalized" in accordance with its regulatory capital guidelines and exceeded all regulatory capital requirements.

Asset QualityThe ACL on loans was $47.5 million, or 1.30% of total loans, at March 31, 2024 compared to $48.6 million, or 1.34% of total loans, at December 31, 2023. The drivers of this change are discussed in the "Comparison of Results of Operations for the Three Months Ended March 31, 2024 and December 31, 2023 – Provision for Credit Losses" section above.

Net loan charge-offs totaled $2.3 million for the three months ended March 31, 2024 compared to $2.8 million for the three months ended December 31, 2023. Annualized net charge-offs as a percentage of average assets were 0.24% for the three months ended March 31, 2024 compared to 0.29% for the three months ended December 31, 2023. The net charge-offs recognized the past two quarters have been concentrated in our equipment finance and SBA portfolios, with net charge-offs in these portfolios totaling $2.8 million and $0.9 million, respectively.

Nonperforming assets, made up entirely of nonaccrual loans for both periods, increased by $865,000, or 4.5%, to $20.2 million, or 0.43% of total assets, at March 31, 2024 compared to $19.3 million, or 0.41% of total assets, at December 31, 2023. Consistent with last quarter, equipment finance loans, specifically smaller over-the-road truck loans, made up the largest portion of nonperforming assets at $6.6 million and $6.5 million, respectively, at these same dates. During the quarter, the Company elected to cease further originations within the transportation sector of equipment finance loans. The ratio of nonperforming loans to total loans was 0.55% at March 31, 2024 compared to 0.53% at December 31, 2023.

The ratio of classified assets to total assets decreased to 0.80% at March 31, 2024 from 0.90% at December 31, 2023 as classified assets decreased $4.6 million, or 11.0%, to $37.4 million at March 31, 2024 compared to $42.0 million at December 31, 2023. The decrease was primarily due to the upgrade of a $3.7 million commercial and industrial relationship and a $1.3 million owner-occupied commercial real estate relationship during the period.

About HomeTrust Bancshares, Inc.HomeTrust Bancshares, Inc. is the holding company for the Bank. As of March 31, 2024, the Company had assets of $4.7 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 (the Asheville metropolitan area, the "Piedmont" region, Charlotte and Raleigh/Cary), South Carolina (Greenville and Charleston), East Tennessee (Kingsport/Johnson City, Knoxville and Morristown), Southwest Virginia (the Roanoke Valley) and Georgia (Greater Atlanta).

Forward-Looking StatementsThis press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, but instead are based on certain assumptions including statements with respect to the Company's beliefs, plans, objectives, goals, expectations, assumptions and statements about future economic performance and projections of financial items. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated or implied by forward-looking statements. The factors that could result in material differentiation include, but are not limited to the impact of bank failures or adverse developments involving other banks and related negative press about the banking industry in general on investor and depositor sentiment; the remaining effects of the COVID-19 pandemic on general economic and financial market conditions and on public health, both nationally and in the Company's market areas; expected revenues, cost savings, synergies and other benefits from merger and acquisition activities might not be realized to the extent anticipated, within the anticipated time frames, or at all, costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected, and goodwill impairment charges might be incurred; increased competitive pressures among financial services companies; changes in the interest rate environment; changes in general economic conditions, both nationally and in our market areas; legislative and regulatory changes; and the effects of inflation, a potential recession, 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. Any of the forward-looking statements that the Company makes in this press release or in the documents the Company files with or furnishes 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, the factors described above or other factors that management cannot foresee. The Company does not undertake, and specifically disclaims 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.

Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)	March 31, 2024				December 31, 2023(1)				September 30, 2023				June 30, 2023(1)				March 31, 2023
Assets
Cash	$	16,134			$	18,307			$	18,090			$	19,266			$	18,262
Interest-bearing deposits		364,359				328,833				306,924				284,231				296,151
Cash and cash equivalents		380,493				347,140				325,014				303,497				314,413
Certificates of deposit in other banks		33,625				34,722				35,380				33,152				33,102
Debt securities available for sale, at fair value		120,807				126,950				134,348				151,926				157,718
FHLB and FRB stock		13,691				18,393				19,612				20,208				19,125
SBIC investments, at cost		14,568				13,789				14,586				14,927				13,620
Loans held for sale, at fair value		2,764				3,359				4,616				6,947				1,209
Loans held for sale, at the lower of cost or fair value		220,699				198,433				200,834				161,703				89,172
Total loans, net of deferred loan fees and costs		3,648,152				3,640,022				3,659,914				3,658,823				3,649,333
Allowance for credit losses – loans		(47,502	)			(48,641	)			(47,417	)			(47,193	)			(47,503	)
Loans, net		3,600,650				3,591,381				3,612,497				3,611,630				3,601,830
Premises and equipment, net		70,588				70,937				72,463				73,171				74,107
Accrued interest receivable		16,944				16,902				16,513				14,829				13,813
Deferred income taxes, net		11,222				11,796				9,569				10,912				10,894
BOLI		88,369				88,257				106,059				106,572				105,952
Goodwill		34,111				34,111				34,111				34,111				33,682
Core deposit intangibles, net		8,297				9,059				9,918				10,778				11,637
Other assets		67,183				107,404				56,477				53,124				49,596
Total assets	$	4,684,011			$	4,672,633			$	4,651,997			$	4,607,487			$	4,529,870
Liabilities and stockholders' equity
Liabilities
Deposits	$	3,799,807			$	3,661,373			$	3,640,961			$	3,601,168			$	3,675,599
Junior subordinated debt		10,045				10,021				9,995				9,971				9,945
Borrowings		291,513				433,763				452,263				457,263				320,263
Other liabilities		69,473				67,583				64,367				67,899				62,821
Total liabilities		4,170,838				4,172,740				4,167,586				4,136,301				4,068,628
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)		175				174				174				174				174
Additional paid in capital		172,919				172,366				171,663				171,222				170,670
Retained earnings		346,598				333,401				321,799				308,651				295,325
Unearned Employee Stock Ownership Plan ("ESOP") shares		(4,364	)			(4,497	)			(4,629	)			(4,761	)			(4,893	)
Accumulated other comprehensive loss		(2,155	)			(1,551	)			(4,596	)			(4,100	)			(3,034	)
Total stockholders' equity		513,173				499,893				484,411				471,186				458,242
Total liabilities and stockholders' equity	$	4,684,011			$	4,672,633			$	4,651,997			$	4,607,487			$	4,526,870

(1) Derived from audited financial statements.(2) Shares of common stock issued and outstanding were 17,444,787 at March 31, 2024; 17,387,069 at December 31, 2023; 17,380,307 at September 30, 2023; 17,366,673 at June 30, 2023; and 17,370,063 at March 31, 2023.

Consolidated Statements of Income (Unaudited)

	Three Months Ended
(Dollars in thousands)	March 31, 2024				December 31, 2023
Interest and dividend income
Loans	$	59,952			$	60,069
Debt securities available for sale		1,313				1,257
Other investments and interest-bearing deposits		2,090				1,493
Total interest and dividend income		63,355				62,819
Interest expense
Deposits		20,318				18,289
Junior subordinated debt		236				239
Borrowings		1,571				2,368
Total interest expense		22,125				20,896
Net interest income		41,230				41,923
Provision for credit losses		1,165				3,360
Net interest income after provision for credit losses		40,065				38,563
Noninterest income
Service charges and fees on deposit accounts		2,149				2,368
Loan income and fees		678				423
Gain on sale of loans held for sale		1,457				1,037
BOLI income		1,835				2,152
Operating lease income		1,859				1,592
Loss on sale of premises and equipment		(9	)			(248	)
Other		842				924
Total noninterest income		8,811				8,248
Noninterest expense
Salaries and employee benefits		16,976				16,256
Occupancy expense, net		2,437				2,443
Computer services		3,088				3,002
Telephone, postage and supplies		585				603
Marketing and advertising		645				625
Deposit insurance premiums		554				702
Core deposit intangible amortization		762				860
Other		4,817				5,290
Total noninterest expense		29,864				29,781
Income before income taxes		19,012				17,030
Income tax expense		3,945				3,566
Net income	$	15,067			$	13,464

Per Share Data

	Three Months Ended
	March 31, 2024				December 31, 2023
Net income per common share(1)
Basic	$	0.88			$	0.79
Diluted	$	0.88			$	0.79
Average shares outstanding
Basic		16,859,738				16,820,369
Diluted		16,872,840				16,827,460
Book value per share at end of period	$	29.42			$	28.75
Tangible book value per share at end of period(2)	$	27.10			$	26.39
Cash dividends declared per common share	$	0.11			$	0.11
Total shares outstanding at end of period		17,444,787				17,387,069

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

Selected Financial Ratios and Other Data

	Three Months Ended
	March 31, 2024				December 31, 2023
Performance ratios(1)
Return on assets (ratio of net income to average total assets)		1.37	%			1.21	%
Return on equity (ratio of net income to average equity)		11.91				10.81
Yield on earning assets		6.18				6.03
Rate paid on interest-bearing liabilities		2.90				2.74
Average interest rate spread		3.28				3.29
Net interest margin(2)		4.02				4.02
Average interest-earning assets to average interest-bearing liabilities		134.52				136.46
Noninterest expense to average total assets		2.72				2.68
Efficiency ratio		59.69				59.36
Efficiency ratio – adjusted(3)		60.64				60.52

(1) Ratios are annualized where appropriate.(2) Net interest income divided by average interest-earning assets.(3) See Non-GAAP reconciliations below for adjustments.

	At or For the Three Months Ended
	March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023
Asset quality ratios
Nonperforming assets to total assets(1)		0.43	%			0.41	%			0.25	%			0.18	%			0.18	%
Nonperforming loans to total loans(1)		0.55				0.53				0.32				0.23				0.22
Total classified assets to total assets		0.80				0.90				0.76				0.53				0.49
Allowance for credit losses to nonperforming loans(1)		235.18				251.60				400.41				567.56				600.47
Allowance for credit losses to total loans		1.30				1.34				1.30				1.29				1.30
Net charge-offs to average loans (annualized)		0.24				0.29				0.27				0.13				0.01
Capital ratios
Equity to total assets at end of period		10.96	%			10.70	%			10.41	%			10.23	%			10.12	%
Tangible equity to total tangible assets(2)		10.18				9.91				9.60				9.39				9.27
Average equity to average assets		11.51				11.03				10.84				10.79				11.14

(1) Nonperforming assets include nonaccruing loans and REO. There were no accruing loans more than 90 days past due at the dates indicated. At March 31, 2024, $7.7 million, or 38.2%, of nonaccruing loans were current on their loan payments as of that date.(2) See Non-GAAP reconciliations below for adjustments.

Loans

(Dollars in thousands)	March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023
Commercial real estate loans
Construction and land development	$	304,727			$	305,269			$	352,143			$	356,674			$	368,756
Commercial real estate – owner occupied		532,547				536,545				526,534				529,721				524,247
Commercial real estate – non-owner occupied		881,143				875,694				880,348				901,685				926,991
Multifamily		89,692				88,623				83,430				81,827				85,285
Total commercial real estate loans		1,808,109				1,806,131				1,842,455				1,869,907				1,905,279
Commercial loans
Commercial and industrial		243,732				237,255				237,366				245,428				229,840
Equipment finance		462,649				465,573				470,387				462,211				440,345
Municipal leases		151,894				150,292				147,821				142,212				138,436
Total commercial loans		858,275				853,120				855,574				849,851				808,621
Residential real estate loans
Construction and land development		85,840				96,646				103,381				110,074				105,617
One-to-four family		605,570				584,405				560,399				529,703				518,274
HELOCs		184,274				185,878				185,289				187,193				193,037
Total residential real estate loans		875,684				866,929				849,069				826,970				816,928
Consumer loans		106,084				113,842				112,816				112,095				118,505
Total loans, net of deferred loan fees and costs		3,648,152				3,640,022				3,659,914				3,658,823				3,649,333
Allowance for credit losses – loans		(47,502	)			(48,641	)			(47,417	)			(47,193	)			(47,503	)
Loans, net	$	3,600,650			$	3,591,381			$	3,612,497			$	3,611,630			$	3,601,830

Deposits

(Dollars in thousands)	March 31, 2024				December 31,2023				September 30, 2023				June 30, 2023				March 31, 2023
Core deposits
Noninterest-bearing accounts	$	773,901			$	784,950			$	827,362			$	825,481			$	872,492
NOW accounts		600,561				591,270				602,804				611,105				678,178
Money market accounts		1,308,467				1,246,807				1,195,482				1,241,840				1,299,503
Savings accounts		191,302				194,486				202,971				212,220				228,390
Total core deposits		2,874,231				2,817,513				2,828,619				2,890,646				3,078,563
Certificates of deposit		925,576				843,860				812,342				710,522				597,036
Total	$	3,799,807			$	3,661,373			$	3,640,961			$	3,601,168			$	3,675,599

Non-GAAP ReconciliationsIn 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 and the tangible equity to tangible assets ratio. 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
(Dollars in thousands)	March 31, 2024				December 31, 2023
Noninterest expense	$	29,864			$	29,781
Net interest income	$	41,230			$	41,923
Plus: tax-equivalent adjustment		349				341
Plus: noninterest income		8,811				8,248
Less: BOLI death benefit proceeds in excess of cash surrender value		1,143				1,554
Less: loss on sale of premises and equipment		(9	)			(248	)
Net interest income plus noninterest income – adjusted	$	49,256			$	49,206
Efficiency ratio		59.69	%			59.36	%
Efficiency ratio – adjusted		60.64	%			60.52	%

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

	As of
(Dollars in thousands, except per share data)	March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023
Total stockholders' equity	$	513,173			$	499,893			$	484,411			$	471,186			$	458,242
Less: goodwill, core deposit intangibles, net of taxes		40,500				41,086				41,748				42,410				42,642
Tangible book value	$	472,673			$	458,807			$	442,663			$	428,776			$	415,600
Common shares outstanding		17,444,787				17,387,069				17,380,307				17,366,673				17,370,063
Book value per share	$	29.42			$	28.75			$	27.87			$	27.13			$	26.38
Tangible book value per share	$	27.10			$	26.39			$	25.47			$	24.69			$	23.93

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

	As of
(Dollars in thousands)	March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023
Tangible equity(1)	$	472,673			$	458,807			$	442,663			$	428,776			$	415,600
Total assets		4,684,011				4,672,633				4,651,997				4,607,487				4,526,870
Less: goodwill, core deposit intangibles, net of taxes		40,500				41,086				41,748				42,410				42,642
Total tangible assets	$	4,643,511			$	4,631,547			$	4,610,249			$	4,565,077			$	4,484,228
Tangible equity to tangible assets		10.18	%			9.91	%			9.60	%			9.39	%			9.27	%

(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:
C. Hunter Westbrook – President and Chief Executive Officer
Tony J. VunCannon – Executive Vice President, Chief Financial Officer, Corporate Secretary and Treasurer
828-259-3939