HomeTrust's profit rises to $18.0 million as its margin widens and a tax benefit helps

HomeTrust Bancshares earned $18.0 million in the third quarter, or $1.11 per diluted share, up from $16.5 million and $0.95 a year earlier, as a $1.9 million federal tax benefit from purchased renewable-energy credits lowered the tax line and more than offset a slight decline in pre-tax income. The Asheville, North Carolina, parent of HomeTrust Bank declared a quarterly cash dividend of $0.15 per common share, payable November 25, 2026 to shareholders of record on November 12, 2026.

A wider margin, more accretion and a smaller tax bill

Net interest income rose $1.2 million from the June quarter as the margin widened to 4.46% from 4.41%, helped by an increase of $1.0 million in accretion income. Funding costs still climbed from the second quarter: total interest expense rose $547,000, or 3.4%, while deposit interest expense rose $729,000, or 4.7%, as money-market and certificate balances and rates increased. Return on assets was 1.65% annualized, against 1.48% a year earlier, and return on equity 12.06% against 11.10%. Chief Executive Hunter Westbrook said the quarter “continued the momentum established in the first half of the year, as our top-quartile net interest margin expanded to 4.46%”.

The tax line did more than the loan book. Income tax expense fell $1.4 million as the effective rate dropped to 12.7% from 20.4%, after a $1.9 million federal tax benefit from purchased renewable energy income tax credits. That decline was larger than the $1.2 million gain in net interest income, so lower taxes rather than a wider spread supplied the bigger part of the $2.4 million sequential increase in profit. The provision for credit losses eased to $805,000 from $920,000, and the efficiency ratio improved to 61.47% from 62.30%.

Credit quality weakens as one commercial loan is reclassified

Nonperforming assets reached 1.59% of total assets at September 30, from 1.23% at June 30 and 0.98% at December 31. Classified assets rose $21.4 million, or 30.2%, to $92.1 million, or 2.08% of assets, from $70.7 million three months earlier. The allowance covered 60.02% of nonperforming loans, down from 78.63%.

HomeTrust said it moved to accelerate repurchases of the guaranteed portion of nonperforming SBA loans to simplify workouts, and it reported that one $18.0 million commercial loan relationship was newly classified as nonperforming “although no loss is anticipated.” SBA loans were 41.3% of nonperforming assets. Net charge-offs for the nine months were $4.7 million, or 0.17% of average loans annualized, against $6.1 million and 0.21% a year earlier, while the allowance slipped to $39.5 million, or 1.09% of loans, from $41.5 million and 1.16% at December 31.

Coverage at 60.02% leaves less room than June's 78.63% if that credit needs a specific reserve, and the release gives no collateral detail behind it.

Buybacks quicken while the dividend holds

Total assets fell $123.9 million to $4.4 billion since December 31, 2025, a move HomeTrust traced to the use of existing liquidity and loan-sale proceeds to fund $50.2 million of loan growth, alongside a $126.4 million decline in deposits, $145.6 million of it brokered, and stock repurchases. HomeTrust repurchased 923,897 shares at an average price of $48.03 in the quarter, against 153,606 shares at $46.31 in the June quarter; for the nine months it bought 1,610,743 shares at $46.15, compared with 93,212 shares at $35.41 a year earlier. Earlier this month, HomeTrust said it had completed the repurchase program initiated in August 2026 and authorized the repurchase of an additional 5% of its outstanding shares.

Nine-month repurchases of $75.0 million were the main reason stockholders' equity fell $30.6 million to $570.1 million, even though net income reached $50.4 million, or $3.04 a diluted share, against $48.2 million and $2.79. Book value per share was $36.05, from $35.90 at June 30 and $34.01 a year earlier; tangible book value was $33.70. The board held the quarterly dividend at $0.15, or $2.4 million; a year earlier it declared $0.13, up from $0.12. Nine-month dividends were $7.1 million, or $0.43 a share, against $6.2 million and $0.36.

Blue Ridge, and the gaps in a preliminary release

On August 16, 2026, HomeTrust agreed to acquire Blue Ridge Bankshares in an all-stock deal converting each Blue Ridge share into 0.086 of a HomeTrust share; Blue Ridge holders are expected to own about 35% of the combined company. HomeTrust describes the pro forma bank as “creating a commercial bank with more than $7 billion in assets and over 60 locations across the Southeast”, and says all required regulatory applications have been filed, with closing expected early in the first quarter of 2027, subject to all regulatory and shareholder approvals and the satisfaction of customary closing conditions. The quarter carried $904,000 of merger-related expense.

The release is preliminary and unaudited and carries no full-year guidance, no margin or revenue outlook and no estimate of merger cost savings, so it sets no expectation for the fourth quarter. The near-dated checkpoints are the dividend record date on November 12 and payment on November 25, the definitive joint proxy statement/prospectus for the merger, and the closing HomeTrust expects early in the first quarter of 2027.