# HomeTrust Bancshares, Inc.: Form 10-Q for the period ended Sep 30, 2025

- Company: [HomeTrust Bancshares, Inc.](/companies/htb.md) (CIK 1538263)
- Form: 10-Q
- Filed: 2025-11-06
- Accepted by EDGAR: Nov 6, 2025, 16:26 ET
- Period: 2025-09-30
- Accession: 0001538263-25-000116
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1538263/000153826325000116/htb-20250930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1538263/000153826325000116/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Income tax | 3 months, 2025-07-01 to 2025-09-30 | $4.4m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2025-01-01 to 2025-09-30 | $12.9m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-07-01 to 2025-09-30 | $16.5m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2025-01-01 to 2025-09-30 | $48.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-07-01 to 2025-09-30 | $0.95 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2025-01-01 to 2025-09-30 | $2.79 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-07-01 to 2025-09-30 | $0.96 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2025-01-01 to 2025-09-30 | $2.81 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-07-01 to 2025-09-30 | 17,130,030 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2025-01-01 to 2025-09-30 | 17,117,605 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2025-01-01 to 2025-09-30 | $51.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2025-01-01 to 2025-09-30 | $3.1m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2025-01-01 to 2025-09-30 | $6.2m | us-gaap:PaymentsOfDividends |
| Share repurchases | 9 months, 2025-01-01 to 2025-09-30 | $3.3m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-09-30 | $315.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2025-09-30 | $4.59bn | us-gaap:Assets |
| Total liabilities | at 2025-09-30 | $4.00bn | us-gaap:Liabilities |
| Shareholders' equity | at 2025-09-30 | $595.8m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 57,465 characters.

### Forward-Looking Statements

Certain matters in this Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. Forward-looking statements are not statements of historical fact, but instead are based on certain assumptions and are generally identified by use of the words "believes," "expects," "anticipates," "estimates," "forecasts," "intends," "plans," "targets," "potentially," "probably," "projects," "outlook" or similar expressions or future or conditional verbs such as "may," "will," "should," "would" and "could." Forward-looking statements include statements with respect to our 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 our forward-looking statements.

The factors that could result in material differentiation include, but are not limited to:

- the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write offs and changes in our ACL and provision for credit losses that may be impacted by deterioration in the housing and commercial real estate markets;
- changes in general economic conditions, both nationally and in our market areas;
- the potential imposition of new or increased tariffs or changes to existing trade policies that could affect economic activity or specific industry sectors;
- natural disasters, including the lingering effects of Hurricane Helene;
- 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;
- fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas;
- decreases in the secondary market for the sale of loans that we originate;
- expected revenues, cost savings, synergies and other benefits from our 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;
- results of examinations of us by the Federal Reserve, the NCCOB or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our ACL, write-down assets, increase our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings;
- changes in laws or regulations, changes in regulatory policies and principles or the application or interpretation of laws and regulations by regulatory agencies and tax authorities, including changes in deferred tax asset and liability activity, and the interpretation of regulatory capital or other rules;
- the availability of resources to address changes in laws, rules or regulations, or to respond to regulatory actions;
- our ability to attract and retain deposits;
- our ability to access cost-effective funding and maintain sufficient liquidity;
- management's assumptions in determining the adequacy of the ACL;
- our ability to control operating costs and expenses, especially costs associated with our operation as a public company;
- the use of estimates in determining the fair value of certain assets, which estimates may prove to be incorrect and result in significant declines in valuation;
- difficulties in reducing risks associated with the loans on our balance sheet;
- staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges;
- disruptions, security breaches or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions;
- our ability to retain key members of our senior management team;
- costs and effects of litigation, including settlements and judgments;
- 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;
- increased competitive pressures among financial services companies;
- changes in consumer spending, borrowing and savings habits;
- adverse changes in the securities markets;
- inability of key third-party providers to perform their obligations to us;
- changes in accounting principles, policies or guidelines and practices, as may be adopted by the financial institution regulatory agencies, the Public Company Accounting Oversight Board or the FASB;
- the impact of governmental actions or inactions, including a prolonged shutdown of the federal government;
- other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services; and
- other risks detailed from time to time in documents we file with or furnish to the SEC, including this Form 10-Q.

Any forward-looking statements are based upon management’s beliefs and assumptions at the time they are made. We undertake no obligation to publicly update or revise any forward-looking statements included in this report or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this report might not occur and you should not put undue reliance on any forward-looking statements.

As used throughout this report, the terms “we,” “our,” “us,” “HomeTrust Bancshares” or the “Company” refer to HomeTrust Bancshares, Inc. and its consolidated subsidiaries, including HomeTrust Bank (“HomeTrust” or "Bank") unless the context indicates otherwise.

### Overview

For the quarter ended September 30, 2025 compared to the quarter ended June 30, 2025:

- net income was $16.5 million compared to $17.2 million;
- diluted EPS were $0.95 compared to $1.00;
- annualized ROA was 1.48% compared to 1.58%;
- annualized ROE was 11.10% compared to 11.97%;
- net interest margin was 4.31% compared to 4.32%;
- provision for credit losses was $2.0 million compared to $1.3 million;
- there was no gain on the sale of branches in the current quarter compared to $1.4 million in the prior quarter;
- quarterly cash dividends continued at $0.12 per share totaling $2.1 million for each period; and
- 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.

For the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024:

- net income was $48.2 million compared to $40.6 million;
- diluted EPS were $2.79 compared to $2.37;
- annualized ROA was 1.46% compared to 1.22%;
- annualized ROE was 11.20% compared to 10.39%;
- net interest margin was 4.27% compared to 4.06%;
- provision for credit losses was $4.9 million compared to $8.4 million;
- gain on the sale of our two Knoxville, Tennessee branches was $1.4 million compared to $0;
- tax-free death benefit proceeds from life insurance were $0 compared to $1.1 million;
- cash dividends of $0.36 per share totaling $6.2 million compared to $0.33 per share totaling $5.6 million; and
- 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.

*(Dollars in thousands)*

|  | Three Months Ended September 30, 2025 | June 30, 2025 | Nine Months Ended September 30, 2025 | September 30, 2024 |
| --- | ---: | ---: | ---: | ---: |
| Interest and dividend income | $65,395 | $63,641 | $192,671 | $195,418 |
| Interest expense | 20,006 | 19,412 | 60,146 | 69,119 |
| Net interest income | 45,389 | 44,229 | 132,525 | 126,299 |
| Provision for credit losses | 2,015 | 1,303 | 4,858 | 8,400 |
| Net interest income after provision for credit losses | 43,374 | 42,926 | 127,667 | 117,899 |
| Noninterest income | 8,751 | 10,157 | 26,935 | 25,206 |
| Noninterest expense | 31,266 | 31,255 | 93,482 | 91,488 |
| Income before income taxes | 20,859 | 21,828 | 61,120 | 51,617 |
| Income tax expense | 4,368 | 4,618 | 12,880 | 11,020 |
| Net income | $16,491 | $17,210 | $48,240 | $40,597 |
| Net income per common share(1) |  |  |  |  |
| Basic | $0.96 | $1.01 | $2.81 | $2.38 |
| Diluted | 0.95 | 1.00 | 2.79 | 2.37 |
| Cash dividends declared per common share | 0.12 | 0.12 | 0.36 | 0.33 |
| Book value per share at end of period | 34.01 | 33.12 | 34.01 | 30.83 |
| Tangible book value per share at end of period(2) | 31.83 | 30.92 | 31.83 | 28.57 |
| Market price per share at end of period | 40.94 | 37.41 | 40.94 | 34.08 |

(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.

### Critical Accounting Policies and Estimates

Certain of our accounting policies are important to the portrayal of our financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Estimates associated with these policies are susceptible to material changes as a result of changes in facts and circumstances which could include, but are not limited to, changes in interest rates, changes in the performance of the economy and changes in the financial condition of borrowers. The following represents our critical accounting policy:

***Allowance for Credit Losses, or ACL, on Loans.*** The ACL on loans held for investment reflects our estimate of credit losses that will result from the inability of our borrowers to make required loan payments. We charge off loans against the ACL and subsequent recoveries, if any, increase the ACL when they are recognized. We use a systematic methodology to determine our ACL for loans held for investment and certain off-balance-sheet credit exposures. The ACL on loans held for investment is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the loan portfolio. The estimate of our ACL on loans held for investment involves a high degree of judgment including consideration of the effects of past events, current conditions and reasonable and supportable forecasts on the collectability of the loan portfolio. We recognize in net income the amount needed to adjust the ACL on loans held for investment and certain off-balance-sheet credit exposures for management’s current estimate of ECLs. Our ACL on loans held for investment is calculated using collectively evaluated and individually evaluated loans.

### GAAP Reconciliation of Non-GAAP Financial Measures

We believe the non-GAAP financial measures included within this report provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with US GAAP; however, we acknowledge that our non-GAAP financial measures have a number of limitations. The following reconciliation tables provide detailed analyses of these non-GAAP financial measures.

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

*(Dollars in thousands, except per share data)*

|  | September 30, 2025 | June 30, 2025 | September 30, 2024 |
| --- | ---: | ---: | ---: |
| Total stockholders' equity | $595,833 | $579,274 | $540,004 |
| Less: goodwill, core deposit intangibles, net of taxes | 38,160 | 38,477 | 39,626 |
| Tangible book value | $557,673 | $540,797 | $500,378 |
| Common shares outstanding | 17,520,425 | 17,492,143 | 17,514,922 |
| Book value per share | $34.01 | $33.12 | $30.83 |
| Tangible book value per share | $31.83 | $30.92 | $28.57 |

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

*(Dollars in thousands)*

|  | September 30, 2025 | June 30, 2025 | September 30, 2024 |
| --- | ---: | ---: | ---: |
| Tangible equity(1) | $557,673 | $540,797 | $500,378 |
| Total assets | 4,592,137 | 4,578,053 | 4,637,293 |
| Less: goodwill, core deposit intangibles, net of taxes | 38,160 | 38,477 | 39,626 |
| Total tangible assets | $4,553,977 | $4,539,576 | $4,597,667 |

Tangible equity to tangible assets 12.25 % 11.91 % 10.88 %

(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.

### Comparison of Results of Operations for the Three Months Ended September 30, 2025 and June 30, 2025

***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.

***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.

*(Dollars in thousands)*

| Assets Interest-earning assets | Three Months Ended September 30, 2025 Average Balance Outstanding | Interest Earned / Paid | Yield / Rate | June 30, 2025 Average Balance Outstanding | Interest Earned / Paid | Yield / Rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Loans receivable(1) | $3,876,200 | $61,749 | 6.32% | $3,804,502 | $60,440 | 6.37% |
| Debt securities available for sale | 146,374 | 1,662 | 4.50 | 149,611 | 1,658 | 4.45 |
| Other interest-earning assets(2) | 152,130 | 1,984 | 5.17 | 149,175 | 1,543 | 4.15 |
| Total interest-earning assets | 4,174,704 | 65,395 | 6.21 | 4,103,288 | 63,641 | 6.22 |
| Other assets | 256,449 |  |  | 263,603 |  |  |
| **Total assets** | $4,431,153 |  |  | $4,366,891 |  |  |
| **Liabilities and equity** |  |  |  |  |  |  |
| Interest-bearing liabilities |  |  |  |  |  |  |
| Interest-bearing checking accounts | $544,229 | $1,081 | 0.79% | $563,817 | $1,251 | 0.89% |
| Money market accounts | 1,330,856 | 9,276 | 2.77 | 1,329,973 | 9,004 | 2.72 |
| Savings accounts | 176,660 | 31 | 0.07 | 182,340 | 37 | 0.08 |
| Certificate accounts | 932,361 | 9,086 | 3.87 | 868,321 | 8,564 | 3.96 |
| Total interest-bearing deposits | 2,984,106 | 19,474 | 2.59 | 2,944,451 | 18,856 | 2.57 |
| Junior subordinated debt | 10,179 | 207 | 8.07 | 10,154 | 206 | 8.14 |
| Borrowings | 28,716 | 325 | 4.49 | 31,154 | 350 | 4.51 |
| Total interest-bearing liabilities | 3,023,001 | 20,006 | 2.63 | 2,985,759 | 19,412 | 2.61 |
| Noninterest-bearing deposits | 757,828 |  |  | 744,585 |  |  |
| Other liabilities | 60,692 |  |  | 59,973 |  |  |
| **Total liabilities** | 3,841,521 |  |  | 3,790,317 |  |  |
| Stockholders' equity | 589,632 |  |  | 576,574 |  |  |
| **Total liabilities and stockholders' equity** | $4,431,153 |  |  | $4,366,891 |  |  |
| Net earning assets | $1,151,703 |  |  | $1,117,529 |  |  |
| Average interest-earning assets to average interest-bearing liabilities | 138.10% |  |  | 137.43% |  |  |
| Non-tax-equivalent |  |  |  |  |  |  |
| Net interest income |  | $45,389 |  |  | $44,229 |  |
| Interest rate spread |  |  | 3.58% |  |  | 3.61% |
| Net interest margin(3) |  |  | 4.31% |  |  | 4.32% |
| Tax-equivalent(4) |  |  |  |  |  |  |
| Net interest income |  | $45,829 |  |  | $44,660 |  |
| Interest rate spread |  |  | 3.63% |  |  | 3.65% |
| Net interest margin(3) |  |  | 4.36% |  |  | 4.37% |

(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 $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%.

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.

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.

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:

*(Dollars in thousands)*

| Interest-earning assets | Increase / (Decrease) Due to Volume | Rate | Total Increase / (Decrease) |
| --- | ---: | ---: | ---: |
| Loans receivable | $1,810 | $(501) | $1,309 |
| Debt securities available for sale | (18) | 22 | 4 |
| Other interest-earning assets | 52 | 389 | 441 |
| **Total interest-earning assets** | 1,844 | (90) | 1,754 |
| **Interest-bearing liabilities** |  |  |  |
| Interest-bearing checking accounts | (32) | (138) | (170) |
| Money market accounts | 107 | 165 | 272 |
| Savings accounts | (1) | (5) | (6) |
| Certificate accounts | 730 | (208) | 522 |
| Junior subordinated debt | 3 | (2) | 1 |
| Borrowings | (24) | (1) | (25) |
| **Total interest-bearing liabilities** | 783 | (189) | 594 |
| **Increase in net interest income** |  |  | $1,160 |

***Provision for Credit Losses.*** The provision for credit losses is the amount of expense that, based on our judgment, is required to maintain the 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:

*(Dollars in thousands)*

| Provision for credit losses | Three Months Ended September 30, 2025 | June 30, 2025 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Loans | $1,755 | $1,385 | $370 | 27% |
| Off-balance-sheet credit exposure | 260 | (82) | 342 | 417 |
| **Total provision for credit losses** | $2,015 | $1,303 | $712 | 55% |

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:

- $0.6 million benefit driven by changes in the loan mix.
- $0.2 million provision due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments.
- $0.6 million decrease in specific reserves on individually evaluated loans.

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:

- $0.3 million benefit driven by changes in the loan mix.
- $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.
- $1.3 million increase in specific reserves on individually evaluated loans.

For the quarters ended September 30, 2025 and June 30, 2025, the amounts recorded for off-balance-sheet credit exposure were the result of changes in the balance of loan commitments, loan mix, projected economic forecast and qualitative allocations as outlined above.

***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:

*(Dollars in thousands)*

| Noninterest income | Three Months Ended September 30, 2025 | June 30, 2025 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Service charges and fees on deposit accounts | $2,527 | $2,502 | $25 | 1% |
| Loan income and fees | 577 | 548 | 29 | 5 |
| Gain on sale of loans held for sale | 1,725 | 2,109 | (384) | (18) |
| BOLI income | 882 | 852 | 30 | 4 |
| Operating lease income | 1,777 | 1,876 | (99) | (5) |
| Gain on sale of branches | — | 1,448 | (1,448) | (100) |
| Gain on sale of premises and equipment | — | 28 | (28) | (100) |
| Other | 1,263 | 794 | 469 | 59 |
| **Total noninterest income** | $8,751 | $10,157 | $(1,406) | (14)% |

- *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.
- *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.
- *Other:* The increase was driven by $290,000 in additional investment services income quarter-over-quarter.

***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:

*(Dollars in thousands)*

| Noninterest expense | Three Months Ended September 30, 2025 | June 30, 2025 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Salaries and employee benefits | $18,508 | $18,208 | $300 | 2% |
| Occupancy expense, net | 2,563 | 2,375 | 188 | 8 |
| Computer services | 2,562 | 2,488 | 74 | 3 |
| Operating lease depreciation expense | 1,770 | 1,789 | (19) | (1) |
| Telephone, postage and supplies | 539 | 561 | (22) | (4) |
| Marketing and advertising | 471 | 442 | 29 | 7 |
| Deposit insurance premiums | 468 | 473 | (5) | (1) |
| Core deposit intangible amortization | 410 | 411 | (1) | — |
| Other | 3,975 | 4,508 | (533) | (12) |
| **Total noninterest expense** | $31,266 | $31,255 | $11 | —% |

- *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.

***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.

### Comparison of Results of Operations for the Nine Months Ended September 30, 2025 and September 30, 2024

***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.

***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.

*(Dollars in thousands)*

| Assets Interest-earning assets | Nine Months Ended September 30, 2025 Average Balance Outstanding | Interest Earned / Paid | Yield / Rate | September 30, 2024 Average Balance Outstanding | Interest Earned / Paid | Yield / Rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Loans receivable(1) | $3,827,840 | $180,802 | 6.32% | $3,883,040 | $185,418 | 6.38% |
| Debt securities available for sale | 149,525 | 5,107 | 4.57 | 133,779 | 4,424 | 4.42 |
| Other interest-earning assets(2) | 168,984 | 6,762 | 5.35 | 138,956 | 5,576 | 5.36 |
| Total interest-earning assets | 4,146,349 | 192,671 | 6.21 | 4,155,775 | 195,418 | 6.28 |
| Other assets | 262,029 |  |  | 276,516 |  |  |
| **Total assets** | $4,408,378 |  |  | $4,432,291 |  |  |
| **Liabilities and equity** |  |  |  |  |  |  |
| Interest-bearing liabilities |  |  |  |  |  |  |
| Interest-bearing checking accounts | $560,348 | $3,656 | 0.87% | $574,954 | $4,149 | 0.96% |
| Money market accounts | 1,335,414 | 27,457 | 2.75 | 1,305,217 | 29,813 | 3.05 |
| Savings accounts | 180,760 | 106 | 0.08 | 187,447 | 124 | 0.09 |
| Certificate accounts | 917,394 | 27,474 | 4.00 | 934,702 | 30,778 | 4.40 |
| Total interest-bearing deposits | 2,993,916 | 58,693 | 2.62 | 3,002,320 | 64,864 | 2.89 |
| Junior subordinated debt | 10,155 | 618 | 8.14 | 10,054 | 705 | 9.37 |
| Borrowings | 24,117 | 835 | 4.63 | 76,823 | 3,550 | 6.17 |
| Total interest-bearing liabilities | 3,028,188 | 60,146 | 2.66 | 3,089,197 | 69,119 | 2.99 |
| Noninterest-bearing deposits | 740,785 |  |  | 766,110 |  |  |
| Other liabilities | 63,791 |  |  | 55,217 |  |  |
| **Total liabilities** | 3,832,764 |  |  | 3,910,524 |  |  |
| Stockholders' equity | 575,614 |  |  | 521,767 |  |  |
| **Total liabilities and stockholders' equity** | $4,408,378 |  |  | $4,432,291 |  |  |
| Net earning assets | $1,118,161 |  |  | $1,066,578 |  |  |
| Average interest-earning assets to average interest-bearing liabilities | 136.93% |  |  | 134.53% |  |  |
| Non-tax-equivalent |  |  |  |  |  |  |
| Net interest income |  | $132,525 |  |  | $126,299 |  |
| Interest rate spread |  |  | 3.55% |  |  | 3.29% |
| Net interest margin(3) |  |  | 4.27% |  |  | 4.06% |
| Tax-equivalent(4) |  |  |  |  |  |  |
| Net interest income |  | $133,814 |  |  | $127,371 |  |
| Interest rate spread |  |  | 3.59% |  |  | 3.33% |
| Net interest margin(3) |  |  | 4.31% |  |  | 4.09% |

(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 $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%.

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.

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.

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:

*(Dollars in thousands)*

| Interest-earning assets | Increase / (Decrease) Due to Volume | Rate | Total Increase / (Decrease) |
| --- | ---: | ---: | ---: |
| Loans receivable | $(2,802) | $(1,814) | $(4,616) |
| Debt securities available for sale | 516 | 167 | 683 |
| Other interest-earning assets | 1,199 | (13) | 1,186 |
| **Total interest-earning assets** | (1,087) | (1,660) | (2,747) |
| **Interest-bearing liabilities** |  |  |  |
| Interest-bearing checking accounts | (109) | (384) | (493) |
| Money market accounts | 664 | (3,020) | (2,356) |
| Savings accounts | (5) | (13) | (18) |
| Certificate accounts | (595) | (2,709) | (3,304) |
| Junior subordinated debt | 7 | (94) | (87) |
| Borrowings | (2,436) | (279) | (2,715) |
| **Total interest-bearing liabilities** | (2,474) | (6,499) | (8,973) |
| **Increase in net interest income** |  |  | $6,226 |

***Provision for Credit Losses.*** The following table presents a breakdown of the components of the provision for credit losses:

*(Dollars in thousands)*

| Provision for credit losses | Nine Months Ended September 30, 2025 | September 30, 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Loans | $3,940 | $8,435 | $(4,495) | (53)% |
| Off-balance-sheet credit exposure | 918 | (35) | 953 | 2,723 |
| **Total provision for credit losses** | $4,858 | $8,400 | $(3,542) | (42)% |

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.

- $1.5 million benefit driven by changes in the loan mix.
- $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.
- $0.8 million increase in specific reserves on individually evaluated loans.

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.

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.

***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:

*(Dollars in thousands)*

| Noninterest income | Nine Months Ended September 30, 2025 | September 30, 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Service charges and fees on deposit accounts | $7,273 | $6,839 | $434 | 6% |
| Loan income and fees | 1,846 | 2,009 | (163) | (8) |
| Gain on sale of loans held for sale | 5,742 | 5,185 | 557 | 11 |
| BOLI income | 2,576 | 3,470 | (894) | (26) |
| Operating lease income | 5,032 | 5,087 | (55) | (1) |
| Gain on sale of branches | 1,448 | — | 1,448 | 100 |
| Gain (loss) on sale of premises and equipment | 28 | (9) | 37 | 411 |
| Other | 2,990 | 2,625 | 365 | 14 |
| **Total noninterest income** | $26,935 | $25,206 | $1,729 | 7% |

- *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.
- *BOLI income:* The decrease was due to $1.1 million in tax-free gains on death benefit proceeds in excess of the cash surrender value of the policies recognized in the prior period with no similar activity in the current period, partially offset by higher yielding policies as a result of restructuring the portfolio at the end of the calendar year ended December 31, 2023.
- *Gain on sale of branches:* As discussed earlier, during the current period we completed the previously announced sale of our two Knoxville, Tennessee branches, recognizing a gain of $1.4 million in the current period, with no similar activity occurring in the prior period.
- *Other:* The change was driven by $109,000 in additional investment services income period-over-period in addition to smaller increases across several other income categories.

***Noninterest Expense.*** Noninterest expense for the nine months ended September 30, 2025 increased $2.0 million, or 2.2%, when compared to the same period last year. Changes in the components of noninterest expense are discussed below:

*(Dollars in thousands)*

| Noninterest expense | Nine Months Ended September 30, 2025 | September 30, 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Salaries and employee benefits | $54,415 | $50,666 | $3,749 | 7% |
| Occupancy expense, net | 7,449 | 7,292 | 157 | 2 |
| Computer services | 7,855 | 9,396 | (1,541) | (16) |
| Operating lease depreciation expense | 5,427 | 5,667 | (240) | (4) |
| Telephone, postage and supplies | 1,646 | 1,712 | (66) | (4) |
| Marketing and advertising | 1,365 | 1,659 | (294) | (18) |
| Deposit insurance premiums | 1,452 | 1,674 | (222) | (13) |
| Core deposit intangible amortization | 1,336 | 1,896 | (560) | (30) |
| Other | 12,537 | 11,526 | 1,011 | 9 |
| **Total noninterest expense** | $93,482 | $91,488 | $1,994 | 2% |

- *Salaries and employee benefits*: The increase was primarily the result of increases in both pay and incentive compensation.
- *Computer services:* At the end of the prior calendar year, we finalized the multiyear renewal of our largest core processing contract. The decrease in expense period-over-period is a reflection of the improved vendor pricing negotiated through this effort.
- *Marketing and advertising:* The decrease was the result of a reduction in spending in the nine months ended September 30, 2025 when compared to the same period of the prior year, as we re-evaluated our marketing strategy for future periods.
- *Deposit insurance premiums:* The decrease period-over-period was the result of higher regulatory capital ratios.
- *Core deposit intangible amortization:* The intangible recorded associated with the Quantum merger is being amortized on an accelerated basis, so the rate of amortization slowed year-over-year.
- *Other:* The change period-over-period was driven by increases of $377,000 in community association banking deposit line of business referral fees, $331,000 in losses on the sale of repossessed equipment, and $233,000 in consulting fees.

***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.

### Comparison of Financial Condition at September 30, 2025 and December 31, 2024

***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.

***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.

***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.

***Debt Securities Available for Sale.*** Debt securities available for sale decreased $6.3 million, or 4.2%, to $145.7 million at September 30, 2025 from $152.0 million at December 31, 2024.

***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.

***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:

*(Dollars in thousands)*

| Commercial real estate loans | As of September 30, 2025 | December 31, 2024 $% | Change September 30, 2025 | December 31, 2024 | Percent of Total |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Construction and land development | $268,953 | $274,356 | $(5,403) | (2)% | 7% | 8% |
| Commercial real estate – owner occupied | 540,807 | 545,490 | (4,683) | (1) | 15 | 15 |
| Commercial real estate – non-owner occupied | 861,244 | 866,094 | (4,850) | (1) | 24 | 24 |
| Multifamily | 115,403 | 120,425 | (5,022) | (4) | 3 | 3 |
| Total commercial real estate loans | 1,786,407 | 1,806,365 | (19,958) | (1) | 49 | 50 |
| **Commercial loans** |  |  |  |  |  |  |
| Commercial and industrial | 399,155 | 316,159 | 82,996 | 26 | 11 | 9 |
| Equipment finance | 340,322 | 406,400 | (66,078) | (16) | 9 | 11 |
| Municipal leases | 164,967 | 165,984 | (1,017) | (1) | 5 | 5 |
| Total commercial loans | 904,444 | 888,543 | 15,901 | 2 | 25 | 25 |
| **Residential real estate loans** |  |  |  |  |  |  |
| Construction and land development | 51,110 | 53,683 | (2,573) | (5) | 1 | 1 |
| One-to-four family | 636,857 | 630,391 | 6,466 | 1 | 18 | 17 |
| HELOCs | 216,122 | 195,288 | 20,834 | 11 | 6 | 5 |
| Total residential real estate loans | 904,089 | 879,362 | 24,727 | 3 | 25 | 23 |
| **Consumer loans** | 48,679 | 74,029 | (25,350) | (34) | 1 | 2 |
| **Total loans, net of deferred loan fees and costs** | $3,643,619 | $3,648,299 | $(4,680) | —% | 100% | 100% |

***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.

Nonperforming assets increased by $4.4 million, or 15.2%, to $33.1 million, or 0.72% of total assets, at September 30, 2025 compared to $28.8 million, or 0.63% of total assets, at December 31, 2024. The ratio of nonperforming loans to total loans was 0.89% at September 30, 2025 compared to 0.76% at December 31, 2024.

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.

Lastly, in an effort to assist customers in their post-Hurricane Helene recovery and clean-up efforts, at the end of the prior calendar year we granted payment deferrals of up to six months to provide short-term relief to impacted customers. The outstanding balance of these deferrals declined from $136.0 million at December 31, 2024 to $318,000 at September 30, 2025. To date, $27,000 in charge-offs have been recognized which were directly related to Hurricane Helene.

***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.

Net loan charge-offs totaled $6.1 million for the nine months ended September 30, 2025 compared to $8.9 million for the same period last year. Annualized net charge-offs as a percentage of average loans were 0.21% for the nine months ended September 30, 2025 as compared to 0.31% for the nine months ended September 30, 2024.

***Premises and Equipment.*** Premises and equipment decreased by $7.4 million, or 10.5%, to $63.0 million at September 30, 2025 from $70.5 million at December 31, 2024. The majority of the change can be traced to the completion of the sale of our two Knoxville, Tennessee branches, which included the sale of $6.3 million of premises and equipment.

***Deposits.*** The following table summarizes the composition of our deposit portfolio as of the dates indicated:

*(Dollars in thousands)*

| Core deposits | September 30, 2025 | December 31, 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Noninterest-bearing accounts | $689,352 | $680,926 | $8,426 | 1% |
| NOW accounts | 537,954 | 575,238 | (37,284) | (6) |
| Money market accounts | 1,343,008 | 1,341,995 | 1,013 | — |
| Savings accounts | 172,883 | 181,317 | (8,434) | (5) |
| Total core deposits | 2,743,197 | 2,779,476 | (36,279) | (1) |
| **Certificates of deposit** | 955,030 | 999,727 | (44,697) | (4) |
| **Total** | $3,698,227 | $3,779,203 | $(80,976) | (2)% |

### Liquidity Management

Management maintains a liquidity position that it believes will adequately provide for funding of loan demand and deposit run-off that may occur in the normal course of business. We rely on a number of different sources in order to meet our potential liquidity demands. The primary sources are increases in deposit accounts, wholesale borrowings and cash flows from loan payments and the securities portfolio.

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.

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.

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.

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.

### Off-Balance Sheet Activities

In the normal course of operations, we engage in a variety of financial transactions that are not recorded in our financial statements, mainly to manage customers' requests for funding. These transactions primarily take the form of loan commitments and lines of credit and involve varying degrees of off-balance sheet credit, interest rate and liquidity risks. For further information, see "Note 13 – Commitments and Contingencies" in this Quarterly Report on Form 10-Q.

### Capital Resources

HomeTrust Bancshares, Inc. is a bank holding company subject to regulation by the Federal Reserve. As a bank holding company, we are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended and the regulations of the Federal Reserve. The Company's subsidiary, the Bank, an FDIC-insured, North Carolina state-chartered bank and a member of the Federal Reserve System, is supervised and regulated by the Federal Reserve and the NCCOB and is subject to minimum capital requirements applicable to state member banks established by the Federal Reserve that are calculated in a manner similar to those applicable to bank holding companies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by bank regulators that, if undertaken, could have a direct material effect on the Company's financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

At September 30, 2025, HomeTrust Bancshares, Inc. and the Bank each exceeded all regulatory capital requirements. Consistent with the Company's goals to operate a sound and profitable organization, its policy is for the Bank to maintain a “well-capitalized” status under the regulatory capital categories of the Federal Reserve. The Bank was categorized as "well-capitalized" at September 30, 2025 under applicable regulatory requirements.

HomeTrust Bancshares, Inc. and the Bank's actual and required minimum capital amounts and ratios are as follows:

*(Dollars in thousands)*

| HomeTrust Bancshares, Inc. September 30, 2025 | Actual Amount | Ratio | Regulatory Requirements Minimum for Capital Adequacy Purposes Amount | Ratio | Minimum to Be Well Capitalized Amount | Ratio |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| CET1 Capital (to risk-weighted assets) | $555,996 | 13.57% | $184,430 | 4.50% | $266,399 | 6.50% |
| Tier I Capital (to total adjusted assets) | 566,191 | 12.89 | 175,683 | 4.00 | 219,604 | 5.00 |
| Tier I Capital (to risk-weighted assets) | 566,191 | 13.81 | 245,907 | 6.00 | 327,876 | 8.00 |
| Total Risk-based Capital (to risk-weighted assets) | 613,342 | 14.97 | 327,876 | 8.00 | 409,845 | 10.00 |
| **December 31, 2024** |  |  |  |  |  |  |
| CET1 Capital (to risk-weighted assets) | $515,455 | 12.71% | $182,537 | 4.50% | $263,664 | 6.50% |
| Tier I Capital (to total adjusted assets) | 525,575 | 11.88 | 176,978 | 4.00 | 221,222 | 5.00 |
| Tier I Capital (to risk-weighted assets) | 525,575 | 12.96 | 243,382 | 6.00 | 324,509 | 8.00 |
| Total Risk-based Capital (to risk-weighted assets) | 570,119 | 14.06 | 324,509 | 8.00 | 405,637 | 10.00 |
| **HomeTrust Bank** |  |  |  |  |  |  |
| **September 30, 2025** |  |  |  |  |  |  |
| CET1 Capital (to risk-weighted assets) | $545,977 | 13.32% | $184,430 | 4.50% | $266,399 | 6.50% |
| Tier I Capital (to total adjusted assets) | 545,977 | 12.44 | 175,577 | 4.00 | 219,472 | 5.00 |
| Tier I Capital (to risk-weighted assets) | 545,977 | 13.32 | 245,907 | 6.00 | 327,876 | 8.00 |
| Total Risk-based Capital (to risk-weighted assets) | 593,128 | 14.47 | 327,876 | 8.00 | 409,845 | 10.00 |
| **December 31, 2024** |  |  |  |  |  |  |
| CET1 Capital (to risk-weighted assets) | $516,762 | 12.74% | $182,528 | 4.50% | $263,652 | 6.50% |
| Tier I Capital (to total adjusted assets) | 516,762 | 11.68 | 176,943 | 4.00 | 221,179 | 5.00 |
| Tier I Capital (to risk-weighted assets) | 516,762 | 12.74 | 243,371 | 6.00 | 324,494 | 8.00 |
| Total Risk-based Capital (to risk-weighted assets) | 561,306 | 13.84 | 324,494 | 8.00 | 405,618 | 10.00 |

As permitted by the interim final rule issued on March 27, 2020 by the federal banking regulatory agencies, the Company elected the option to delay the estimated impact on regulatory capital of ASU 2016-13, which was adopted on July 1, 2020. The initial adoption of ASU 2016-13 as well as 25% of the quarterly increases in the ACL subsequent to adoption (collectively the “transition adjustments”) was delayed for two years. After two years, the cumulative amount of the transition adjustments became fixed and were phased out of the regulatory capital calculations evenly over a three-year period, with 75% recognized in year three, 50% recognized in year four, and 25% recognized in year five. Starting with the quarter ended March 31, 2025, the temporary regulatory capital benefits have been fully reversed.

In addition to the minimum CET1, Tier 1 and total risk-based capital ratios, both HomeTrust Bancshares, Inc. and the Bank have to maintain a capital conservation buffer consisting of additional CET1 capital of more than 2.50% above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. As of September 30, 2025, the Company's and Bank's risk-based capital exceeded the required capital contribution buffer.

Dividends paid by HomeTrust Bank are limited, without prior regulatory approval, to current year earnings and earnings less dividends paid during the preceding two years.

## Controls and procedures

As filed, 2,682 characters.

*Evaluation of Disclosure Controls and Procedures:* An evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the "Act")) as of September 30, 2025, was carried out under the supervision and with the participation of the Company's Chief Executive Officer, Chief Financial Officer and several other members of the Company's senior management. The Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures in effect as of September 30, 2025, were effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Act is: (i) accumulated and communicated to the Company's management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

The Company does not expect that its disclosure controls and procedures and internal control over financial reporting will prevent all errors and all fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls may be circumvented by the individual acts of some persons, by collusion of two or more people, or by override of the control. The design of any control procedure also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected.

*Changes in Internal Controls*: There have been no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Filed Nov 6, 2025.
Source: SEC EDGAR, the filing index for accession 0001538263-25-000116. Last ingested by Listed: Nov 6, 2026, 16:44 ET. No prices; not investment advice.