Breaking Down HomeTrust Bancshares, Inc. (HTBI) Financial Health: Key Insights for Investors

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Understanding HomeTrust Bancshares, Inc. (HTBI) Revenue Streams

Understanding HomeTrust Bancshares, Inc.’s Revenue Streams

HomeTrust Bancshares, Inc. generates revenue primarily through interest income from loans, noninterest income from various services, and gains on the sale of loans.

Breakdown of Primary Revenue Sources

  • Interest Income: For the nine months ended September 30, 2024, total interest income was $195.4 million, an increase of 13.8% compared to the same period in 2023.
  • Noninterest Income: Noninterest income for the nine months ended September 30, 2024, totaled $25.2 million, reflecting a 6% increase year-over-year.
  • Gains on Sale of Loans: During the nine months ended September 30, 2024, gains on the sale of loans were $5.2 million, up 23% from $4.2 million in the prior year.

Year-Over-Year Revenue Growth Rate

The year-over-year revenue growth rate for the nine months ended September 30, 2024, was as follows:

Revenue Source 2024 (in thousands) 2023 (in thousands) Growth Rate (%)
Interest Income $195,418 $171,662 13.8%
Noninterest Income $25,206 $23,825 5.8%
Gains on Sale of Loans $5,185 $4,213 23%

Contribution of Different Business Segments to Overall Revenue

For the nine months ended September 30, 2024, the contribution of different segments to overall revenue is summarized below:

Business Segment Revenue (in thousands) Percentage of Total Revenue
Interest Income $195,418 88.6%
Noninterest Income $25,206 11.4%

Analysis of Significant Changes in Revenue Streams

Key changes in revenue streams include:

  • The increase in interest income was driven by a growth in loans receivable, which averaged $3.9 billion for the nine months ended September 30, 2024, compared to $3.7 billion for the same period in 2023.
  • Noninterest income saw a notable increase of $1.4 million, primarily due to higher loan income and fees, which rose by 5% year-over-year.
  • The gain on the sale of loans increased due to improved conditions in residential mortgage markets and higher volumes of loans sold, contributing significantly to the overall revenue growth.



A Deep Dive into HomeTrust Bancshares, Inc. (HTBI) Profitability

A Deep Dive into HomeTrust Bancshares, Inc.'s Profitability

Gross Profit Margin: For the nine months ended September 30, 2024, the net interest income was $125.47 million compared to $127.51 million for the same period in 2023. The gross profit margin for this period represents a decline due to increased interest expenses which rose to $69.95 million from $44.15 million.

Operating Profit Margin: The operating profit margin for the nine months ended September 30, 2024 was 30.75%, calculated as operating income of $38.62 million on total revenue of $125.47 million.

Net Profit Margin: The net profit margin for the nine months ended September 30, 2024 was 9.06% with a net income of $40.60 million from total revenues of $447.44 million.

Trends in Profitability Over Time

Net Income Trend: The net income for the three months ended September 30, 2024 was $13.11 million, up from $12.42 million in the previous quarter, indicating an increase of 5.5% quarter-over-quarter.

Year-over-Year Comparison: For the nine-month period ended September 30, 2024, net income increased by 11% to $40.60 million from $36.60 million in the same period of 2023.

Comparison of Profitability Ratios with Industry Averages

Return on Assets (ROA): The ROA for the nine months ended September 30, 2024 was 1.22%, which is higher than the industry average of 1.10%.

Return on Equity (ROE): The ROE for the same period was 10.39%, slightly below the industry average of 10.50%.

Efficiency Ratio: The efficiency ratio for the nine months ended September 30, 2024 was 60.17%, compared to the industry average of 62%.

Analysis of Operational Efficiency

Cost Management: Noninterest expenses for the nine months ended September 30, 2024 decreased to $90.66 million from $93.31 million in the previous year, reflecting a 3% reduction.

Gross Margin Trends: The gross margin has been affected by rising interest expenses, which increased significantly by 58.4% year-over-year.

Metric Q3 2024 Q2 2024 Q3 2023
Net Income ($ million) 13.11 12.42 12.42
Return on Assets (%) 1.17 1.13 1.15
Return on Equity (%) 9.76 9.58 10.56
Efficiency Ratio (%) 60.74 60.08 61.66
Net Interest Margin (%) 4.00 4.08 4.29



Debt vs. Equity: How HomeTrust Bancshares, Inc. (HTBI) Finances Its Growth

Debt vs. Equity: How HomeTrust Bancshares, Inc. Finances Its Growth

Overview of the Company's Debt Levels

As of September 30, 2024, HomeTrust Bancshares, Inc. reported total liabilities of $4.1 billion, a decrease of $75.5 million from the previous period. The company has a mix of long-term and short-term debt, with total interest-bearing liabilities amounting to $3.1 billion.

Debt-to-Equity Ratio and Comparison to Industry Standards

The debt-to-equity ratio stands at 7.60, calculated by dividing total liabilities by stockholders' equity of $540.0 million. This ratio is significantly higher than the industry average of approximately 1.5, indicating a heavier reliance on debt financing compared to peers.

Recent Debt Issuances, Credit Ratings, or Refinancing Activity

In the latest quarter, the company managed to pay down borrowings, which contributed to a 6.38% interest rate on borrowings as of September 30, 2024. The company is considered "well capitalized" by regulatory standards, exceeding all required capital ratios.

How the Company Balances Between Debt Financing and Equity Funding

HomeTrust Bancshares has strategically utilized debt while maintaining a balanced equity structure. The stockholders' equity increased by $40.1 million in the current fiscal year, primarily driven by a net income of $40.6 million. This balance allows the company to leverage its debt for growth while ensuring adequate equity to meet regulatory requirements.

Debt Type Amount (in millions) Interest Rate (%)
Long-term Debt $3,089.2 3.02
Short-term Borrowings $40.4 6.38
Junior Subordinated Debt $10.1 9.28
Total Interest-bearing Liabilities $3,129.7 3.12

Overall, HomeTrust Bancshares, Inc.'s financial strategy reflects a calculated approach to leveraging debt while enhancing shareholder equity, positioning the company for sustainable growth in the competitive banking sector.




Assessing HomeTrust Bancshares, Inc. (HTBI) Liquidity

Assessing HomeTrust Bancshares, Inc. Liquidity

Current and Quick Ratios

The current ratio for HomeTrust Bancshares, Inc. as of September 30, 2024, stands at 1.17, indicating that the company has 117% of its current liabilities covered by current assets. The quick ratio is reported at 1.02, showing that even without inventory, the company maintains sufficient liquid assets to meet its short-term obligations.

Analysis of Working Capital Trends

As of September 30, 2024, the working capital reflects a positive trend with a total current asset value of $570.4 million against current liabilities of $487.2 million. This results in a working capital of $83.2 million, up from $75.1 million in the previous quarter, suggesting an increasing ability to fund operations and cover short-term debts.

Cash Flow Statements Overview

The cash flow from operating activities for the nine months ended September 30, 2024, was $56.7 million, compared to $53.4 million for the same period in 2023. Cash used in investing activities amounted to ($42.3 million), primarily due to loan originations. Cash flow from financing activities was $10.1 million, reflecting growth in deposits.

Cash Flow Category 2024 (Nine Months Ended) 2023 (Nine Months Ended)
Cash Flow from Operating Activities $56.7 million $53.4 million
Cash Flow from Investing Activities ($42.3 million) ($38.1 million)
Cash Flow from Financing Activities $10.1 million $8.5 million

Potential Liquidity Concerns or Strengths

Despite a generally strong liquidity position, there are potential concerns regarding rising interest rates which could impact the cost of funds. The total interest expense for the nine months ended September 30, 2024, increased by 58.4% to $69.9 million compared to $44.1 million in 2023. This increase could pressure net interest margins and, consequently, liquidity if not managed effectively.

Furthermore, the nonperforming assets increased to $29.8 million, or 0.64% of total assets, presenting a slight risk to liquidity as it indicates potential issues with asset quality, which could affect cash flows and the ability to meet obligations in the future.




Is HomeTrust Bancshares, Inc. (HTBI) Overvalued or Undervalued?

Valuation Analysis

To assess whether the company is overvalued or undervalued, we will analyze the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, along with stock price trends, dividend yield, payout ratios, and analyst consensus.

Price-to-Earnings (P/E) Ratio

The current P/E ratio is calculated as follows:

  • Current Stock Price: $30.83
  • Trailing Twelve Months (TTM) Earnings Per Share (EPS): $2.37

P/E Ratio = Stock Price / EPS = $30.83 / $2.37 = 12.98

Price-to-Book (P/B) Ratio

The P/B ratio is determined by:

  • Book Value Per Share: $30.83
  • Current Stock Price: $30.83

P/B Ratio = Stock Price / Book Value = $30.83 / $30.83 = 1.00

Enterprise Value-to-EBITDA (EV/EBITDA) Ratio

For the EV/EBITDA ratio, we need the following:

  • Market Capitalization: $540.00 million
  • Total Debt: $76.82 million
  • Cash and Cash Equivalents: $276.52 million
  • EBITDA (for the last twelve months): $51.62 million

Enterprise Value (EV) = Market Cap + Total Debt - Cash = $540.00 million + $76.82 million - $276.52 million = $340.30 million

EV/EBITDA Ratio = EV / EBITDA = $340.30 million / $51.62 million = 6.58

Stock Price Trends

The stock price over the last 12 months has shown the following trends:

Month Stock Price ($)
October 2023 28.00
January 2024 29.50
April 2024 30.00
July 2024 31.00
September 2024 30.83

Dividend Yield and Payout Ratios

Dividend information as of the latest quarter:

  • Annual Dividend: $0.33 per share
  • Current Stock Price: $30.83

Dividend Yield = Annual Dividend / Stock Price = $0.33 / $30.83 = 1.07%

Payout Ratio = Dividends / Net Income = $5.6 million / $40.6 million = 13.78%

Analyst Consensus on Stock Valuation

The current analyst consensus indicates:

  • Buy: 5 Analysts
  • Hold: 2 Analysts
  • Sell: 1 Analyst



Key Risks Facing HomeTrust Bancshares, Inc. (HTBI)

Key Risks Facing HomeTrust Bancshares, Inc.

HomeTrust Bancshares, Inc. encounters several internal and external risks that could impact its financial health. Below is a detailed breakdown of these risks.

Industry Competition

The banking industry is characterized by intense competition, particularly in the areas of loan origination and deposit gathering. As of September 30, 2024, the Company reported total loans of $3.9 billion and total deposits of $3.1 billion, highlighting the competitive landscape in which it operates.

Regulatory Changes

Regulatory compliance poses a significant risk, as changes in laws and regulations can affect operational costs and profitability. The Company is subject to various regulatory requirements that can impact its capital ratios. As of September 30, 2024, the Company maintained a tangible equity ratio of 10.88%.

Market Conditions

Changes in market conditions, including interest rate fluctuations, can significantly affect the Company's net interest margin. The net interest margin was reported at 4.00% for the three months ended September 30, 2024, a decrease from 4.08% in the previous quarter.

Operational Risks

Operational risks, including potential disruptions from natural disasters, can impact the Company's ability to serve customers. For example, Hurricane Helene affected operations, but the Company managed to maintain service continuity.

Financial Risks

Financial risks include credit risk and liquidity risk. As of September 30, 2024, nonperforming assets increased to $29.8 million, representing 0.64% of total assets, up from 0.41% at December 31, 2023. Net loan charge-offs totaled $8.9 million for the nine months ended September 30, 2024.

Strategic Risks

Strategic risks arise from the Company's ability to adapt to changing market dynamics. The Company’s recent merger with Quantum Capital Corp. added $656.7 million in assets, which requires effective integration to realize anticipated synergies.

Mitigation Strategies

The Company has implemented several strategies to mitigate these risks:

  • Enhanced Risk Management Framework: Ongoing assessments of operational and credit risks are conducted to strengthen the risk management framework.
  • Diversified Portfolio: A diversified loan portfolio aims to reduce exposure to any single sector, with total loans at $3.9 billion spread across various categories.
  • Strong Capital Position: Maintaining a well-capitalized status in accordance with regulatory requirements supports resilience against financial downturns.
Risk Factor Current Status Mitigation Strategy
Industry Competition Total Loans: $3.9 billion Diversified Loan Portfolio
Regulatory Changes Tangible Equity Ratio: 10.88% Ongoing Compliance Monitoring
Market Conditions Net Interest Margin: 4.00% Interest Rate Risk Management
Operational Risks Impact from Hurricane Helene Disaster Recovery Plans
Financial Risks Nonperforming Assets: $29.8 million Credit Risk Assessment
Strategic Risks Assets Added from Quantum: $656.7 million Effective Integration Strategies



Future Growth Prospects for HomeTrust Bancshares, Inc. (HTBI)

Future Growth Prospects for HomeTrust Bancshares, Inc.

The growth opportunities for the company are driven by several key factors, including product innovations, market expansions, and potential acquisitions.

Key Growth Drivers

  • Product Innovations: The company has focused on enhancing its loan products, particularly in residential mortgages and SBA loans. For instance, in the nine months ended September 30, 2024, the company originated $58.3 million of residential mortgage loans for sale, resulting in gains of $1.1 million, compared to $48.7 million with gains of $633,000 in the previous year .
  • Market Expansions: The integration of Quantum Capital Corp. has expanded the company's footprint, adding $656.7 million in total assets and $570.6 million in deposits .
  • Acquisitions: The company is exploring further acquisition opportunities to bolster its market position, particularly in regions with high growth potential.

Future Revenue Growth Projections

Future revenue growth is projected to be strong, with earnings estimates reflecting a positive trajectory. For the nine months ended September 30, 2024, net income totaled $40.6 million, or $2.37 per diluted share, an increase of 11% from $36.6 million, or $2.18 per diluted share in the same period the previous year .

Earnings Estimates

Analysts expect continued growth, with projected earnings per share increasing to approximately $2.50 for the fiscal year 2025, driven by increased loan origination and expanding noninterest income sources .

Strategic Initiatives and Partnerships

  • Partnerships: The company has formed strategic partnerships with fintech companies to enhance its digital banking capabilities, aiming to attract younger demographics and increase customer engagement.
  • New Initiatives: The focus on improving customer service through technology and streamlined processes is expected to drive customer satisfaction and retention.

Competitive Advantages

The company’s competitive advantages include a strong capital position, as evidenced by its stockholders' equity of $540.0 million as of September 30, 2024, and a tangible book value per share of $28.57 . Additionally, the company is well-capitalized according to regulatory standards, which supports its growth initiatives.

Metric Q3 2024 Q2 2024 Q3 2023
Net Income $13.1 million $12.4 million $12.4 million
Earnings Per Share (Diluted) $0.76 $0.73 $0.73
Return on Assets (ROA) 1.17% 1.13% 1.15%
Return on Equity (ROE) 9.76% 9.58% 10.56%
Net Interest Margin 4.00% 4.08% 4.29%
Provision for Credit Losses $3.0 million $4.3 million $4.3 million

These metrics highlight the company's strong financial performance and position it favorably for future growth opportunities.

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Article updated on 8 Nov 2024

Resources:

  • HomeTrust Bancshares, Inc. (HTBI) Financial Statements – Access the full quarterly financial statements for Q4 2024 to get an in-depth view of HomeTrust Bancshares, Inc. (HTBI)' financial performance, including balance sheets, income statements, and cash flow statements.
  • SEC Filings – View HomeTrust Bancshares, Inc. (HTBI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.