UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]            QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

[  ]            TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to ________

Commission file number:     001-35593

HOMETRUST BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Maryland
 
          45-5055422
(State or other jurisdiction of incorporation of organization)
 
(I.R.S. Employer Identification No.)

10 Woodfin Street, Asheville, North Carolina 28801
(Address of principal executive offices; Zip Code)

(828) 259-3939
(Registrant's telephone number, including area code)

None
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $.01 per share

HTBI
The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 and 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.        Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [  ]      
 
 
 
Accelerated filer [X]
 
 
Non-accelerated filer   [  ]
Smaller reporting company [  ]
 
 
Emerging growth company [ ]
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
[ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [  ] No [X]
There were 17,020,081 shares of common stock, par value of $.01 per share, issued and outstanding as of May 6, 2020.




HOMETRUST BANCSHARES, INC. AND SUBSIDIARIES
10-Q
TABLE OF CONTENTS
 
 
 
Page
Number
 
 
 
 
Item 1. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2. 
 
 
 
 
Item 3. 
 
 
 
 
Item 4. 
 
 
 
 
 
 
 
 
 
Item 1. 
 
 
 
 
Item 1A. 
 
 
 
 
Item 2. 
 
 
 
 
Item 3. 
 
 
 
 
Item 4. 
 
 
 
 
Item 5 
 
 
 
 
Item 6. 
 
 
 
 

1



Glossary of Defined Terms
The following items may be used throughout this Form 10-Q, including the Notes to Consolidated Financial Statements in Item 1 and Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this Form 10-Q.
Term
 
Definition
AFS
 
Available-For-Sale
ASC
 
Accounting Standard Codification
ASU
 
Accounting Standard Update
BOLI
 
Bank Owned Life Insurance
CARES Act
 
Coronavirus Aid, Relief, and Economic Security Act of 2020
CD
 
Certificates of Deposit
CET1
 
Common Equity Tier 1
COVID-19
 
Coronavirus Disease 2019
CPI
 
Consumer Price Index
EPS
 
Earnings Per Share
ESOP
 
Employee Stock Ownership Plan
FASB
 
Financial Accounting Standards Board
FDIC
 
Federal Deposit Insurance Corporation
FHLB
 
Federal Home Loan Bank
FRB
 
Federal Reserve Bank of Richmond
GAAP
 
Generally Accepted Accounting Principles in the United States
GSE
 
Government-Sponsored Enterprises
HELOC
 
Home Equity Line of Credit
MBS
 
Mortgage-Backed Security
NCCOB
 
North Carolina Office of the Commissioner of Banks
PCI
 
Purchase Credit Impaired
PPP
 
Paycheck Protection Program
PPPLF
 
Paycheck Protection Program Liquidity Facility
REO
 
Real Estate Owned
ROU
 
Right of Use
SEC
 
Securities and Exchange Commission
SBA
 
Small Business Administration
SBIC
 
Small Business Investment Companies
TDR
 
Troubled Debt Restructuring

2



PART I.  FINANCIAL INFORMATION
Item 1.    Financial Statements
HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
 
(Unaudited)
 
 
 
March 31, 2020
 
June 30,
2019 (1)
Assets
 
 
 
Cash
$
41,206

 
$
40,909

Interest-bearing deposits
40,855

 
30,134

Cash and cash equivalents
82,061

 
71,043

Commercial paper
281,955

 
241,446

Certificates of deposit in other banks
57,544

 
52,005

Debt securities available for sale, at fair value
158,621

 
121,786

Other investments, at cost
41,201

 
45,378

Loans held for sale
38,682

 
18,175

Total loans, net of deferred loan costs
2,663,524

 
2,705,190

Allowance for loan losses
(26,850
)
 
(21,429
)
Net loans
2,636,674

 
2,683,761

Premises and equipment, net
58,738

 
61,051

Accrued interest receivable
9,501

 
10,533

REO
1,075

 
2,929

Deferred income taxes
21,750

 
26,523

BOLI
91,612

 
90,254

Goodwill
25,638

 
25,638

Core deposit intangibles
1,381

 
2,499

Other assets
41,600

 
23,157

Total Assets
$
3,548,033

 
$
3,476,178

Liabilities and Stockholders' Equity
 

 
 

Liabilities
 

 
 

Deposits
$
2,554,787

 
$
2,327,257

Borrowings
535,000

 
680,000

Other liabilities
52,806

 
60,025

Total liabilities
3,142,593

 
3,067,282

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, 17,101,954 shares
    issued and outstanding at March 31, 2020; 17,984,105 at June 30, 2019
171

 
180

Additional paid in capital
170,368

 
190,315

Retained earnings
240,325

 
224,545

Unearned ESOP shares
(6,480
)
 
(6,877
)
Accumulated other comprehensive income
1,056

 
733

Total stockholders' equity
405,440

 
408,896

Total Liabilities and Stockholders' Equity
$
3,548,033

 
$
3,476,178

(1)    Derived from audited financial statements.
The accompanying notes are an integral part of these consolidated financial statements.

3



HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Income
(Dollars in thousands, except per share data)
 
(Unaudited)
 
Three Months Ended
 
Nine Months Ended
 
March 31,
 
March 31,
 
2020
 
2019
 
2020
 
2019
Interest and Dividend Income
 
 
 
 
 
 
 
Loans
$
29,781

 
$
30,770

 
$
94,166

 
$
90,042

Commercial paper and interest-bearing deposits in other banks
1,794

 
2,283

 
5,959

 
6,106

Securities available for sale
912

 
850

 
2,901

 
2,582

Other investments
550

 
811

 
2,154

 
2,664

Total interest and dividend income
33,037

 
34,714

 
105,180

 
101,394

Interest Expense
 

 
 

 
 

 
 

Deposits
5,971

 
4,404

 
18,145

 
10,761

Borrowings
1,757

 
3,741

 
7,619

 
10,691

Total interest expense
7,728

 
8,145

 
25,764

 
21,452

Net Interest Income
25,309

 
26,569

 
79,416

 
79,942

Provision for Loan Losses
5,400

 
5,500

 
5,800

 
5,500

Net Interest Income after Provision for Loan Losses
19,909

 
21,069

 
73,616

 
74,442

Noninterest Income
 

 
 

 
 

 
 

Service charges and fees on deposit accounts
2,304

 
2,265

 
7,352

 
7,243

Loan income and fees
294

 
134

 
2,047

 
757

Gain on sale of loans held for sale
1,503

 
1,472

 
7,577

 
4,086

BOLI income
518

 
518

 
1,724

 
1,574

Other, net
1,756

 
1,007

 
4,409

 
2,434

Total noninterest income
6,375

 
5,396

 
23,109

 
16,094

Noninterest Expense
 

 
 

 
 

 
 

Salaries and employee benefits
14,455

 
13,463

 
42,537

 
39,005

Net occupancy expense
2,246

 
2,294

 
6,972

 
7,046

Computer services
2,023

 
1,980

 
6,032

 
5,724

Telephone, postage, and supplies
862

 
698

 
2,462

 
2,210

Marketing and advertising
396

 
400

 
1,716

 
1,219

Deposit insurance premiums
462

 
320

 
474

 
959

Loss (gain) on sale and impairment of REO
(15
)
 
246

 
88

 
500

REO expense
250

 
200

 
746

 
548

Core deposit intangible amortization
334

 
488

 
1,118

 
1,580

Other
3,890

 
2,889

 
10,332

 
7,928

Total noninterest expense
24,903

 
22,978

 
72,477

 
66,719

Income Before Income Taxes
1,381

 
3,487

 
24,248

 
23,817

Income Tax Expense
188

 
185

 
5,060

 
4,684

Net Income
$
1,193

 
$
3,302

 
$
19,188

 
$
19,133

Per Share Data:
 

 
 

 
 

 
 

Net income per common share:
 

 
 

 
 

 
 

Basic
$
0.07

 
$
0.19

 
$
1.12

 
$
1.07

Diluted
$
0.07

 
$
0.18

 
$
1.08

 
$
1.02

Average shares outstanding:
 

 
 

 
 

 
 

Basic
16,688,646

 
17,506,018

 
16,898,391

 
17,811,962

Diluted
17,258,428

 
18,197,429

 
17,524,252

 
18,528,161

The accompanying notes are an integral part of these consolidated financial statements.

4



HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Comprehensive Income
(Dollars in thousands)
 
(Unaudited)
 
Three Months Ended
 
Nine Months Ended
 
March 31,
 
March 31,
 
2020
 
2019
 
2020
 
2019
Net Income
$
1,193

 
$
3,302

 
$
19,188

 
$
19,133

Other Comprehensive Income
 

 
 

 
 

 
 

  Unrealized holding gains on securities available for sale
 

 
 

 
 

 
 

Gains arising during the period
395

 
992

 
419

 
1,740

Deferred income tax expense
(91
)
 
(228
)
 
(96
)
 
(400
)
Total other comprehensive income
$
304

 
$
764

 
$
323

 
$
1,340

Comprehensive Income
$
1,497

 
$
4,066

 
$
19,511

 
$
20,473

The accompanying notes are an integral part of these consolidated financial statements.

5



HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity
(Dollars in thousands)
 
Three Months Ended March 31, 2020
 
Common Stock
 
Additional
Paid In
Capital
 
Retained
Earnings
 
Unearned
ESOP
Shares
 
Accumulated
Other
Comprehensive
Income
 
Total
Stockholders'
Equity
 
Shares
 
Amount
Balance at December 31, 2019
17,664,384

 
$
177

 
$
182,366

 
$
240,312

 
$
(6,612
)
 
$
752

 
$
416,995

Net income

 

 

 
1,193

 

 

 
1,193

Cash dividends declared on common stock, $0.07/common share

 

 

 
(1,180
)
 

 

 
(1,180
)
Stock repurchased
(635,800
)
 
(7
)
 
(12,996
)
 

 

 

 
(13,003
)
Retired stock
(7,950
)
 

 
(215
)
 

 

 

 
(215
)
Granted restricted stock
41,306

 

 

 

 

 

 

Exercised stock options
40,014

 
1

 
577

 

 

 

 
578

Stock option expense

 

 
168

 

 

 

 
168

Restricted stock expense

 

 
290

 

 

 

 
290

ESOP shares allocated

 

 
178

 

 
132

 

 
310

Other comprehensive income

 

 

 

 

 
304

 
304

Balance at March 31, 2020
17,101,954

 
$
171

 
$
170,368

 
$
240,325

 
$
(6,480
)
 
$
1,056

 
$
405,440

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended March 31, 2020
 
Common Stock
 
Additional
Paid In
Capital
 
Retained
Earnings
 
Unearned
ESOP
Shares
 
Accumulated
Other
Comprehensive
Income
 
Total
Stockholders'
Equity
 
Shares
 
Amount
Balance at June 30, 2019
17,984,105

 
$
180

 
$
190,315

 
$
224,545

 
$
(6,877
)
 
$
733

 
$
408,896

Net income

 

 

 
19,188

 

 

 
19,188

Cash dividends declared on common stock, $0.20/common share

 

 

 
(3,408
)
 

 

 
(3,408
)
Stock repurchased
(1,032,221
)
 
(11
)
 
(23,211
)
 

 

 

 
(23,222
)
Forfeited restricted stock
(3,200
)
 

 

 

 

 

 

Retired stock
(7,950
)
 

 
(215
)
 

 

 

 
(215
)
Granted restricted stock
54,306

 

 

 

 

 

 

Exercised stock options
106,914

 
2

 
1,539

 

 

 

 
1,541

Stock option expense

 

 
556

 

 

 

 
556

Restricted stock expense

 

 
785

 

 

 

 
785

ESOP shares allocated

 

 
599

 

 
397

 

 
996

Other comprehensive income

 

 

 

 

 
323

 
323

Balance at March 31, 2020
17,101,954

 
$
171

 
$
170,368

 
$
240,325

 
$
(6,480
)
 
$
1,056

 
$
405,440
















6







HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity (Continued)
(Dollars in thousands)
 
Three Months Ended March 31, 2019
 
Common Stock
 
Additional
Paid In
Capital
 
Retained
Earnings
 
Unearned
ESOP
Shares
 
Accumulated
Other
Comprehensive
Income (loss)
 
Total
Stockholders'
Equity
 
Shares
 
Amount
Balance at December 31, 2018
18,520,825

 
$
185

 
$
203,660

 
$
215,289

 
$
(7,142
)
 
$
(1,022
)
 
$
410,970

Net income

 

 

 
3,302

 

 

 
3,302

Cash dividends declared on common stock, $0.06/common share

 

 

 
(1,101
)
 

 

 
(1,101
)
Stock repurchased
(297,400
)
 
(2
)
 
(7,673
)
 

 

 

 
(7,675
)
Forfeited restricted stock
(1,600
)
 

 

 

 

 

 

Retired stock
(6,826
)
 

 
(188
)
 

 

 

 
(188
)
Granted restricted stock
23,625

 

 

 

 

 

 

Exercised stock options
26,911

 

 
396

 

 

 

 
396

Stock option expense

 

 
181

 

 

 

 
181

Restricted stock expense

 

 
228

 

 

 

 
228

ESOP shares allocated

 

 
220

 

 
133

 

 
353

Other comprehensive income

 

 

 

 

 
764

 
764

Balance at March 31, 2019
18,265,535

 
$
183

 
$
196,824

 
$
217,490

 
$
(7,009
)
 
$
(258
)
 
$
407,230

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended March 31, 2019
 
Common Stock
 
Additional
Paid In
Capital
 
Retained
Earnings
 
Unearned
ESOP
Shares
 
Accumulated
Other
Comprehensive
Income (loss)
 
Total
Stockholders'
Equity
 
Shares
 
Amount
Balance at June 30, 2018
19,041,668

 
$
191

 
$
217,480

 
$
200,575

 
$
(7,406
)
 
$
(1,598
)
 
$
409,242

Net income

 

 

 
19,133

 

 

 
19,133

Cash dividends declared on common stock, $0.12/common share

 

 

 
(2,218
)
 

 

 
(2,218
)
Stock repurchased
(857,155
)
 
(8
)
 
(23,313
)
 

 

 

 
(23,321
)
Forfeited restricted stock
(4,300
)
 

 

 

 

 

 

Retired stock
(7,414
)
 

 
(205
)
 

 

 
 
 
(205
)
Granted restricted stock
23,625

 

 

 

 

 
 
 

Exercised stock options
69,111

 

 
1,004

 

 

 

 
1,004

Stock option expense

 

 
540

 

 

 

 
540

Restricted stock expense

 

 
625

 

 

 

 
625

ESOP shares allocated

 

 
693

 

 
397

 

 
1,090

Other comprehensive income

 

 

 

 

 
1,340

 
1,340

Balance at March 31, 2019
18,265,535

 
$
183

 
$
196,824

 
$
217,490

 
$
(7,009
)
 
$
(258
)
 
$
407,230

The accompanying notes are an integral part of these consolidated financial statements.


7



HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Dollars in thousands)
 
(Unaudited)
 
Nine Months Ended March 31,
 
2020
 
2019
Operating Activities:
 
 
 
Net income
$
19,188

 
$
19,133

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 

 
 

Provision for loan losses
5,800

 
5,500

Depreciation
4,137

 
3,046

Deferred income tax expense
4,677

 
3,333

Net amortization and accretion
(4,275
)
 
(5,648
)
Loss on sale and impairment of REO
88

 
500

Gain on sale of loans held for sale
(7,577
)
 
(4,086
)
Origination of loans held for sale
(226,834
)
 
(122,763
)
Proceeds from sales of loans held for sale
200,512

 
114,010

Increase in deferred loan costs, net
(1,017
)
 
(389
)
Decrease in accrued interest receivable and other assets
(571
)
 
(4,127
)
Amortization of core deposit intangibles
1,118

 
1,580

BOLI income
(1,724
)
 
(1,574
)
ESOP compensation expense
996

 
1,090

Restricted stock and stock option expense
1,341

 
1,165

Decrease in other liabilities
(12,515
)
 
(1,562
)
Net cash provided by (used in) operating activities
(16,656
)
 
9,208

Investing Activities:
 

 
 

Purchase of securities available for sale
(75,530
)
 
(31,675
)
Proceeds from maturities of securities available for sale
27,823

 
21,400

Net purchases of commercial paper
(35,949
)
 
(12,986
)
Purchase of certificates of deposit in other banks
(24,200
)
 
(15,664
)
Maturities of certificates of deposit in other banks
18,661

 
26,392

Principal repayments of mortgage-backed securities
10,902

 
27,144

Net redemptions (purchases) of other investments
4,177

 
(9,191
)
Proceeds from sale of loans not originated for sale
154,870

 

Net increase in loans
(99,116
)
 
(131,671
)
Purchase of BOLI
(111
)
 
(75
)
Proceeds from redemption of BOLI
477

 
14

Purchase of premises and equipment
(2,321
)
 
(1,068
)
Purchase of operating lease equipment
(11,047
)
 
(7,424
)
Proceeds from sale of REO
1,812

 
759

Net cash used in investing activities
(29,552
)
 
(134,045
)
Financing Activities:
 

 
 

Net increase in deposits
227,530

 
112,142

Net increase (decrease) in other borrowings
(145,000
)
 
45,000

Common stock repurchased
(23,222
)
 
(23,321
)
Cash dividends paid
(3,408
)
 
(2,218
)
Retired stock
(215
)
 
(205
)
Exercised stock options
1,541

 
1,004

Net cash provided by financing activities
57,226

 
132,402

Net Increase in Cash and Cash Equivalents
11,018

 
7,565

Cash and Cash Equivalents at Beginning of Period
71,043

 
70,746

Cash and Cash Equivalents at End of Period
$
82,061

 
$
78,311


8



HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows (continued)
(Dollars in thousands)
 
(Unaudited)
Supplemental Disclosures:
Nine Months Ended March 31,
 
2020
 
2019
Cash paid during the period for:
 
 
 
Interest
$
26,708

 
$
19,907

Income taxes
1,300

 
455

Noncash transactions:
 

 
 

Unrealized gain in value of securities available for sale, net of income taxes
323

 
1,340

Transfer of loans to REO
46

 
578

Transfer of loans held for sale to total loans
96,962

 
5,794

Transfer of one-to-four family loans to held for sale
240,453

 
9,761

Transfer of land from property and equipment to other assets for new finance lease accounting
2,052

 

New ROU asset and lease liabilities from adoption of new lease accounting standard
5,296

 

The accompanying notes are an integral part of these consolidated financial statements.

9



HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
1.
Summary of Significant Accounting Policies
The consolidated financial statements presented in this report include the accounts of HomeTrust Bancshares, Inc., a Maryland corporation ("HomeTrust"), and its wholly-owned subsidiary, HomeTrust Bank (the "Bank"). As used throughout this report, the term the "Company" refers to HomeTrust and the Bank, its consolidated subsidiary, unless the context otherwise requires.
The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the SEC. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. It is recommended that these unaudited interim consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended June 30, 2019 ("2019 Form 10-K") filed with the SEC on September 13, 2019. The results of operations for the three and nine months ended March 31, 2020 are not necessarily indicative of results that may be expected for the entire fiscal year ending June 30, 2020.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Various elements of the Company's accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions, and other subjective assessments. In particular, management has identified several accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Company's financial statements. These policies relate to (i) the determination of the provision and the allowance for loan losses, (ii) the valuation of goodwill and other intangible assets, and (iii) the valuation of or recognition of deferred tax assets and liabilities. These policies and judgments, estimates and assumptions are described in greater detail in notes to the Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations (Critical Accounting Policies) in our 2019 Form 10-K. Management believes that the judgments, estimates and assumptions used in the preparation of the financial statements are appropriate based on the factual circumstances at the time. However, given the sensitivity of the financial statements to these critical accounting policies, the use of other judgments, estimates and assumptions could result in material differences in the Company's results of operations or financial condition. Further, subsequent changes in economic or market conditions could have a material impact on these estimates and the Company's financial condition and operating results in future periods.
Certain amounts reported in prior periods' consolidated financial statements have been reclassified to conform to the current presentation. Such reclassifications had no effect on previously reported cash flows, stockholders' equity or net income.
Operating, Accounting and Reporting Considerations related to COVID-19
The COVID-19 pandemic has negatively impacted the global economy. In response to this crisis, the CARES Act was passed by Congress and signed into law on March 27, 2020. The CARES Act provides an estimated $2.2 trillion to fight the COVID-19 pandemic and stimulate the economy by supporting individuals and businesses through loans, grants, tax changes, and other types of relief. Some of the provisions applicable to the Company include, but are not limited to:
• Accounting for Loan Modifications - The CARES Act provides that a financial institution may elect to suspend (1) the requirements under GAAP for certain loan modifications that would otherwise be categorized as a TDR and (2) any determination that such loan modifications would be considered a TDR, including the related impairment for accounting purposes. The Bank has elected this as a policy change.
• Paycheck Protection Program - The CARES Act established the Paycheck Protection Program, an expansion of the SBA's 7(a) loan program and the Economic Injury Disaster Loan Program, administered directly by the SBA.
Also in response to the COVID-19 pandemic, the Board of Governors of the Federal Reserve System, the FDIC, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Consumer Financial Protection Bureau, in consultation with the state financial regulators (collectively, the “agencies”) issued a joint interagency statement (issued March 22, 2020; revised statement issued April 7, 2020). Some of the provisions applicable to the Company include, but are not limited to:
• Accounting for Loan Modifications - Loan modifications that do not meet the conditions of the CARES Act may still qualify as a modification that does not need to be accounted for as a TDR. The agencies confirmed with FASB staff that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or insignificant delays in payment.
• Past Due Reporting - With regard to loans not otherwise reportable as past due, financial institutions are not expected to designate loans with deferrals granted due to COVID-19 as past due because of the deferral. A loan’s payment date is governed by the due date stipulated in the legal agreement. If a financial institution agrees to a payment deferral, these loans would not be considered past due during the period of the deferral.

10

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

• Nonaccrual Status and Charge-offs - While short-term COVID-19 modifications are in effect, these loans generally should not be reported as nonaccrual or as classified.
Adoption of Lease Accounting Standard
On July 1, 2019, the Company adopted ASU 2016-02, Leases (“Topic 842”), and subsequent related ASUs. The new leasing standard modifies the accounting, presentation, and disclosures for both lessees and lessors. The Company elected the modified retrospective transition option which allows for application of the Topic 842 guidance at the adoption date. Therefore, comparative prior period financial information was not adjusted and will continue to be reported under the previous accounting guidance of ASC 840, Leases (“ASC 840”). No cumulative-effect adjustment to retained earnings as of July 1, 2019 was necessary as a result of adopting the new standard. The Company elected the “package of practical expedients” permitted under the transition guidance which allows the Company not to reassess its prior conclusions regarding lease identification, classification of existing leases, and treatment of initial direct costs on existing leases. Any lease arrangements and significant modifications entered into subsequent to the adoption date are accounted for in accordance with the new standard.
Lessee Topic 842 Accounting
The new leasing standard requires recognition of operating leases on the consolidated balance sheets as ROU assets and lease liabilities. ROU assets represent our right to use underlying assets for the lease terms and lease liabilities represent our obligation to make lease payments arising from the leases. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. We use our estimated incremental borrowing rate in determining the present value of lease payments for operating leases and the implicit rate in the lease for our one finance lease.
For operating leases, the Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months as of July 1, 2019. The ROU assets were adjusted per Topic 842 transition guidance for existing lease-related balances of accrued and prepaid rent, and unamortized lease incentives provided by lessors. As a result, the Company recognized ROU assets of approximately $5.3 million in other assets and corresponding lease liabilities of approximately $5.3 million in other liabilities as of July 1, 2019. The July 1, 2019 incremental borrowing rates determined on a collateralized basis for the remaining lease terms were utilized when determining the present value of lease payments at the date of initial adoption.
For our finance lease, the Company leases land for one of its retail locations. Upon adoption of Topic 842, the Company reclassed $2.1 million from land to ROU assets in other assets. In addition, the corresponding liability of $1.9 million, which was disclosed separately on the balance sheet was reclassified to other liabilities.
The Company elected the lessee practical expedient to not separate lease and non-lease components. The Company also elected the short-term lease recognition exemption and will not recognize ROU assets or lease liabilities for leases with a term less than 12 months.
Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in net occupancy expense. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur.
Finance lease cost is recognized as a single lease cost using the effective interest method and is recorded in net occupancy expense.
Lessee Accounting Prior to Adoption of Topic 842
Prior to the adoption of ASC 842, the Company applied the guidance of ASC 840. Under ASC 840, operating lease arrangements were off-balance sheet and ROU assets and lease liabilities were not recognized. Operating lease rent expense was recognized on a straight-line basis over the lease term and recorded in net occupancy expense. Common area maintenance, property taxes, and other operating expenses related to leased premises were also recognized in net occupancy expenses, consistent with similar costs for owned locations.
Lessor Topic 842 Accounting
Prior to the adoption of Topic 842, we determined the lease classification at commencement date. Leases not classified as sales-type or direct financing leases are classified as operating leases. The primary accounting criteria we use for  lease classification are (i) review to determine if the lease transfers ownership of the underlying asset to the lessee by the end of the lease term, ii) review to determine if the lease grants the lessee a purchase option that the lessee is reasonably certain to exercise, (iii) determine if the lease term is for a major part of the remaining economic life of the underlying asset and (iv) determine if the present value of the sum of the lease payments and any residual value guarantees equals or exceeds substantially all of the fair value of the underlying asset. We do not lease equipment of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.
The Company elected a lessor accounting policy to exclude from revenue and expenses sales taxes and other similar taxes assessed by a governmental authority on lease revenue-producing transactions and collected by the lessor from a lessee.
Operating Leases - Assets leased under an operating lease are carried at cost less accumulated depreciation. These assets are depreciated to their estimated residual value using the straight-line method over the lesser of the lease term or estimated useful life of the asset. Assets received at the end of the lease, which are intended to be sold, are marked to the lower of cost or fair value less selling costs with the adjustment recorded in other noninterest income.

11

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

At the inception of each operating lease, we record a residual value for the leased equipment based on our estimate of the future value of the equipment at the end of the lease term or end of the equipment’s estimated useful life as indicated by industry data. Operating leases have higher risk because a smaller percentage of the equipment's value is covered by contractual cash flows over the term of the lease. If the market value of leased equipment under operating leases decreases at a rate greater than we projected, whether due to rapid technological or economic obsolescence, unusual wear and tear on the equipment, excessive use of the equipment, recession or other adverse economic conditions, or other factors, it could adversely affect the current values or the residual values of such equipment. The Company seeks to mitigate these risks by maintaining a relatively young fleet of leased assets with wide operator bases, which can facilitate attractive lease and utilization rates. The Company manages and evaluates residual values by performing periodic reviews of estimated residual values and monitoring levels of residual realizations. A change in estimated operating lease residual values would result in a change in future depreciation expense. Any impairments are recognized at the time a change is identified.
Rental revenue on operating leases is recognized on a straight-line basis over the lease term and is included in other noninterest income.
Finance Leases - The Company’s finance leases are classified as direct financing leases under ASC 842. The Company’s finance lease activity primarily relates to leasing of new equipment with the equipment purchase price equal to fair value and therefore there is no selling profit or loss at lease commencement. When there is no selling profit or loss, initial direct costs are deferred at the commencement date and included in the measurement of the net investment in the lease.  
A lease receivable is recorded for finance leases at present value discounted using the rate implicit in the lease. The lease receivable includes lease payments not yet paid and the guarantee of the residual value by the lessee or unrelated third party, as applicable. Interest income is recognized over the lease term at a constant periodic discount rate on the remaining balance of the lease net investment using the rate implicit in the lease. After the commencement date, lease payments collected are applied to reduce net investment and recognize interest income.
The recognition of interest income is suspended, and an account is placed on non-accrual status when, in the opinion of management, full collection of all principal and interest due is doubtful. All future interest income accruals, as well as amortization of deferred fees, costs, and purchase premiums or discounts are suspended. Subsequent lease payments received are applied to the outstanding net investment balance until such time as the account is collected, charged-off or returned to accrual status. Finance leases that are nonaccrual do not accrue interest income; however, payments designated by the borrower as interest payments may be recorded as interest income. To qualify for this treatment, the remaining recorded investment in the lease must be deemed fully collectible.
The recognition of interest income on finance leases is suspended, and all previously accrued but uncollected revenue is reversed, when lease payments are contractually delinquent for 90 days or more. Accounts, including accounts that have been modified, are returned to accrual status when, in the opinion of management, collection of remaining lease receivables are reasonably assured, and there is a sustained period of repayment performance, generally for a minimum of six months.
Certain finance leases also have residual values at the inception of the lease which are based on our estimate of the future value of the equipment at the end of the lease term or end of the equipment’s estimated useful life as indicated by industry data. Finance leases bear the least risk because contractual payments usually cover approximately 90% of the equipment's cost at the inception of the lease. A change in estimated finance lease residual values during the lease term may impact the loss allowance as a decrease in the residual value may cause an impairment to be recorded on the finance lease.
Lessor Accounting Prior to Adoption of Topic 842
Lessor accounting was not fundamentally changed by Topic 842 and remains similar to the prior accounting model, with updates to align with certain changes to the lessee model (e.g., certain definitions, such as initial direct costs, have been updated) and the new revenue recognition standard. The new rules did not have a significant impact on our classification of leases as finance or operating. The new lease guidance has a narrower definition of initial direct costs that may be capitalized and allocated internal costs and professional fees to negotiate and arrange the lease agreement that would have been incurred regardless of lease execution no longer qualify as initial direct cost.
2.
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The ASU significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted for all entities beginning after December 15, 2018, including interim periods within those fiscal years. The Company has selected a third-party vendor to provide ongoing support under the new methodology. The Bank's project team is evaluating our current expected loss methodology of its loan and investment portfolios to identify the necessary modifications in accordance with this standard and expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Bank has compiled and uploaded all historical data that will be used to calculate expected credit losses on its loan portfolio and intends to run parallel models during the fourth quarter of 2020 to ensure it is fully compliant with the ASU at the adoption date. The team continues to work with the third-party vendor and is finalizing documentation on the methodologies utilized as well as the controls, processes, policies, and disclosures in preparation for performing the full end-to-end parallel run. A valuation adjustment to our allowance for loan losses or investment portfolio that is identified in this process will be reflected as a one-time adjustment in equity rather than earnings. Once adopted, the Company expects its allowance for loan losses to increase; however, until its evaluation is complete the magnitude of the increase will be unknown.

12

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

In August 2017, FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." This ASU improves the transparency and understandability of disclosures in the financial statements regarding the entities risk management activities and reduces the complexity of hedge accounting. The amendments in this ASU permit hedge accounting for hedging relationships involving nonfinancial risk and interest rate risk by removing certain limitations in cash flow and fair value hedging relationships. In addition, the ASU requires an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and early adoption is permitted. The Company adopted this ASU on July 1, 2019. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement." The amendments in this ASU remove, modify, and add certain disclosure requirements related to fair value measurements in ASC 820. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The adoption of ASU No. 2018-13 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In November 2018, the FASB issued ASU 2018-19, "Codification Improvements to Topic 326, Financial Instruments—Credit Losses." This update clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. The effective date and transition requirements for this ASU are the same as ASU 2016-13. The adoption of ASU No. 2018-19 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In December 2018, the FASB issued ASU 2018-20, "Leases (Topic 842): Narrow-Scope Improvements for Lessors." The amendments in this update permit lessors, as an accounting policy election, to not evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs. Instead, those lessors will account for those costs as if they are lessee costs. A lessor making this election will exclude from the consideration in the contract and from variable payments not included in the consideration in the contract all collections from lessees of taxes within the scope of the election and will provide certain disclosures. For certain lessor costs, the lessor must exclude from variable payments, and therefore revenue, lessor costs paid by lessees directly to third parties from variable payments. In addition, the lessor must account for costs excluded from the consideration of a contract that are paid by the lessor and reimbursed by the lessee as variable payments. A lessor will record those reimbursed costs as revenue. The amendments in this ASU related to recognizing variable payments for contracts with lease and nonlease components require lessors to allocate (rather than recognize as currently required) certain variable payments to the lease and nonlease components when the changes in facts and circumstances on which the variable payment is based occur. After the allocation, the amount of variable payments allocated to the lease components will be recognized as income in profit or loss in accordance with Topic 842, while the amount of variable payments allocated to nonlease components will be recognized in accordance with other Topics, such as Topic 606. The Company adopted this ASU on July 1, 2019. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In March 2019, the FASB issued ASU 2019-01, "Leases (Topic 842): Codification Improvements." The amendments in this update include the following items: i) determining the fair value of the underlying asset by lessors that are not manufacturers or dealers; ii) requiring cash received from lessors from sales-type and direct financing leases to be presented in the cash flow statement within investing activities; and iii) clarifying interim disclosure requirements. The Company adopted this ASU on July 1, 2019. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In April 2019, the FASB issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments." The amendments in this update are part of the FASB's ongoing project to improve codification and correcting unintended application. The items within this ASU are not expected to have a significant effect on current accounting practice. The effective date and transition requirements for the amendments to Financial Instruments (ASU 2016-01) are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The effective date and transition requirements for the amendments to Financial Instruments-Credit Losses (ASU 2016-13) are the same as ASU 2016-13 noted above. The effective date and transition requirements for the amendments to Derivatives and Hedging (ASU 2017-12) are the same as ASU 2017-12 noted above.The adoption of ASU No. 2019-04 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In May 2019, the FASB issued ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief." The amendments in this update allow companies to irrevocably elect, upon the adoption of ASU 2016-13, the fair value option for financial instruments that i) were previously recorded at amortized cost and ii) are within the scope of the credit losses guidance in ASC 326-20, iii) are eligible for the fair value option under ASC 825-10, and iv) are not held-to-maturity debt securities. The effective date and transition requirements for this ASU is the same as ASU 2016-13. The adoption of ASU No. 2019-05 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In July 2019, the FASB issued ASU 2019-07, "Codification Updates to SEC Sections." This ASU amends certain paragraphs in the ASC to reflect the issuance of SEC final rules on Disclosure Update and Simplification and Investment Company Reporting Modernization and other miscellaneous updates. The amendments became effective upon issuance. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In November 2019, the FASB issued ASU 2019-11, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses." This ASU clarifies certain aspects of the amendments in ASU 2016-13 and is part of the FASB's ongoing project to improve codification and correcting

13

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

unintended application. The items within this ASU are not expected to have a significant effect on current accounting practice. The effective date and transition requirements for this ASU is the same as ASU 2016-13. The adoption of ASU No. 2019-11 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU is part of the FASB's simplification initiative to reduce complexity in accounting standards. The items within this ASU are not expected to have a significant effect on current accounting practice. The effective date and transition requirements for the first and second items of this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2020 and early adoption is permitted. The adoption of ASU No. 2019-12 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In January 2020, the FASB issued ASU 2020-01, "Investment—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815." This ASU clarified the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2021 and early adoption is permitted. The adoption of ASU No. 2020-01 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In March 2020, the FASB issued ASU 2020-03, "Codification Improvements to Financial Instruments." This ASU makes certain narrow-scope amendments to the following: i) clarified that all entities are required to provide fair value option disclosures; ii) clarified the applicability of the portfolio exception in ASC 820 to nonfinancial items; iii) aligned disclosures for depository and lending institutions (Topic 942) with guidance in Topic 320; iv) added cross-references to guidance in ASC 470-50 on line-of-credit or revolving-debt arrangements; v) added cross-references to net asset value practical expedient in ASC 820-10; vi) clarified the interaction between ASC 842 and ASC 326; and vii) clarified the interaction between ASC 326 and ASC 860-20. The amendments for issues i, ii, iv, and v became effective upon issuance and did not have a material effect on the Company's Consolidated Financial Statements. The amendment related to issue iii has the same effective date and transition requirements as ASU 2019-04 and is not expected to have a material impact on the Company's Consolidated Financial Statements. The amendments related to issues vi and vii have the same effective date and transition requirements as ASU 2016-13 and is not expected to have a material impact on the Company's Consolidated Financial Statements.


14

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

3.
Debt Securities
Securities available for sale consist of the following at the dates indicated:
 
March 31, 2020
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
U.S. Government Agencies
$
6,645

 
$
197

 
$

 
$
6,842

Residential MBS of U.S. Government Agencies and GSEs
50,290

 
1,561

 
(99
)
 
51,752

Municipal Bonds
21,208

 
503

 
(8
)
 
21,703

Corporate Bonds
79,107

 
37

 
(820
)
 
78,324

Total
$
157,250

 
$
2,298

 
$
(927
)
 
$
158,621

 
June 30, 2019
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
U.S. Government Agencies
$
15,099

 
$
122

 
$
(11
)
 
$
15,210

Residential MBS of U.S. Government Agencies and GSEs
74,778

 
586

 
(184
)
 
75,180

Municipal Bonds
24,896

 
423

 
(7
)
 
25,312

Corporate Bonds
6,061

 
43

 
(20
)
 
6,084

Total
$
120,834

 
$
1,174

 
$
(222
)
 
$
121,786

Debt securities available for sale by contractual maturity at March 31, 2020 are shown below. MBS are not included in the maturity categories because the borrowers in the underlying pools may prepay without penalty; therefore, it is unlikely that the securities will pay at their stated maturity schedule.
 
March 31, 2020
 
Amortized
Cost
 
Estimated
Fair Value
Due within one year
$
41,056

 
$
40,883

Due after one year through five years
59,538

 
59,464

Due after five years through ten years
4,292

 
4,445

Due after ten years
2,074

 
2,077

Mortgage-backed securities
50,290

 
51,752

Total
$
157,250

 
$
158,621

The Company had no sales of securities available for sale during the three and nine months ended March 31, 2020 and 2019. There were no gross realized gains or losses for the three and nine months ended March 31, 2020 and 2019.

Securities available for sale with costs totaling $80,593 and $94,337 and market values of $82,028 and $94,876 at March 31, 2020 and June 30, 2019, respectively, were pledged as collateral to secure various public deposits and other borrowings.
The gross unrealized losses and the fair value for securities available for sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2020 and June 30, 2019 were as follows:
 
March 31, 2020
 
Less than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Residential MBS of U.S. Government Agencies and GSEs
$
5,308

 
$
(58
)
 
$
1,982

 
$
(41
)
 
$
7,290

 
$
(99
)
Municipal Bonds
1,744

 
(8
)
 

 

 
1,744

 
(8
)
Corporate Bonds
61,782

 
(820
)
 

 

 
61,782

 
(820
)
Total
$
68,834

 
$
(886
)
 
$
1,982

 
$
(41
)
 
$
70,816

 
$
(927
)

15

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

 
June 30, 2019
 
Less than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
U.S. Government Agencies
$

 
$

 
$
6,988

 
$
(11
)
 
$
6,988

 
$
(11
)
Residential MBS of U.S. Government Agencies and GSEs
1,144

 
(3
)
 
24,242

 
(181
)
 
25,386

 
(184
)
Municipal Bonds

 

 
4,895

 
(7
)
 
4,895

 
(7
)
Corporate Bonds
393

 
(5
)
 
3,630

 
(15
)
 
4,023

 
(20
)
Total
$
1,537

 
$
(8
)
 
$
39,755

 
$
(214
)
 
$
41,292

 
$
(222
)
The total number of securities with unrealized losses at March 31, 2020, and June 30, 2019 were 48 and 100, respectively. Unrealized losses on securities have not been recognized in income because management has the intent and ability to hold the securities for the foreseeable future, and has determined that it is not more likely than not that the Company will be required to sell the securities prior to a recovery in value. The decline in fair value was largely due to increases in market interest rates subsequent to the purchase dates of the securities. The Company had no other-than-temporary impairment losses during the nine months ended March 31, 2020.
4.
Other Investments
Other investments, at cost consist of the following at the dates indicated:
 
March 31, 2020
 
June 30, 2019
FHLB of Atlanta stock
$
25,859

 
$
31,969

FRB stock
7,353

 
7,335

SBIC investments
7,989

 
6,074

Total
$
41,201

 
$
45,378

As a requirement for membership, the Bank invests in the stock of both the FHLB of Atlanta and the FRB. No ready market exists for these securities so carrying value approximates their fair value based on the redemption provisions of the FHLB of Atlanta and the FRB, respectively. SBIC investments are equity securities without a readily determinable fair value.

16

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

5.
Loans
Loans consist of the following at the dates indicated:
 
March 31, 2020
 
June 30, 2019
Retail consumer loans:
 
 
 
One-to-four family
$
487,777

 
$
660,591

HELOCs - originated
144,804

 
139,435

HELOCs - purchased
82,232

 
116,972

Construction and land/lots
80,765

 
80,602

Indirect auto finance
135,449

 
153,448

Consumer
11,576

 
11,416

Total retail consumer loans
942,603

 
1,162,464

Commercial loans:
 
 
 
Commercial real estate
990,693

 
927,261

Construction and development
249,714

 
210,916

Commercial and industrial
164,539

 
160,471

Equipment finance
198,962

 
132,058

Municipal finance
115,992

 
112,016

Total commercial loans
1,719,900

 
1,542,722

Total loans
2,662,503

 
2,705,186

Deferred loan costs, net
1,021

 
4

Total loans, net of deferred loan costs
2,663,524

 
2,705,190

Allowance for loan losses
(26,850
)
 
(21,429
)
Loans, net
$
2,636,674

 
$
2,683,761

All qualifying one-to-four family first mortgage loans, HELOCs, commercial real estate loans, and FHLB Stock are pledged as collateral by a blanket pledge to secure any outstanding FHLB advances.
The Company's total non-purchased and purchased performing loans by segment, class, and risk grade at the dates indicated follows:
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Loss
 
Total
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
473,723

 
$
1,974

 
$
6,984

 
$
258

 
$

 
$
482,939

HELOCs - originated
142,630

 
833

 
1,341

 

 

 
144,804

HELOCs - purchased
81,712

 

 
520

 

 

 
82,232

Construction and land/lots
80,276

 
3

 
147

 

 

 
80,426

Indirect auto finance
134,382

 

 
1,067

 

 

 
135,449

Consumer
11,058

 
5

 
513

 

 

 
11,576

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 
Commercial real estate
963,953

 
8,191

 
12,631

 

 
30

 
984,805

Construction and development
244,801

 
4,055

 
249

 
1

 

 
249,106

Commercial and industrial
154,215

 
6,139

 
2,637

 

 
1

 
162,992

Equipment finance
197,651

 
559

 
752

 

 

 
198,962

Municipal finance
115,709

 
283

 

 

 

 
115,992

Total loans
$
2,600,110

 
$
22,042

 
$
26,841

 
$
259

 
$
31

 
$
2,649,283


17

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Loss
 
Total
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
644,159

 
$
2,089

 
$
8,072

 
$
384

 
$
19

 
$
654,723

HELOCs - originated
137,001

 
766

 
1,434

 

 
9

 
139,210

HELOCs - purchased
116,306

 

 
666

 

 

 
116,972

Construction and land/lots
79,995

 
71

 
164

 

 

 
80,230

Indirect auto finance
152,393

 
13

 
1,042

 

 

 
153,448

Consumer
11,375

 
1

 
33

 
3

 
4

 
11,416

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
901,183

 
8,066

 
10,306

 

 

 
919,555

Construction and development
207,827

 
790

 
1,357

 
1

 

 
209,975

Commercial and industrial
157,325

 
877

 
600

 

 

 
158,802

Equipment finance
131,674

 

 
384

 

 

 
132,058

Municipal finance
111,721

 
295

 

 

 

 
112,016

Total loans
$
2,650,959

 
$
12,968

 
$
24,058

 
$
388

 
$
32

 
$
2,688,405

The Company's total purchased credit impaired ("PCI") loans by segment, class, and risk grade at the dates indicated follows:
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Loss
 
Total
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
3,368

 
$
463

 
$
1,007

 
$

 
$

 
$
4,838

Construction and land/lots
108

 

 
231

 

 

 
339

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
3,191

 
1,790

 
907

 

 

 
5,888

Construction and development
277

 

 
331

 

 

 
608

Commercial and industrial
1,544

 

 

 

 
3

 
1,547

Total loans
$
8,488

 
$
2,253

 
$
2,476

 
$

 
$
3

 
$
13,220

 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Loss
 
Total
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
4,124

 
$
248

 
$
1,496

 
$

 
$

 
$
5,868

HELOCs - originated
225

 

 

 

 

 
225

Construction and land/lots
142

 

 
230

 

 

 
372

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
4,503

 
1,903

 
1,300

 

 

 
7,706

Construction and development
453

 

 
488

 

 

 
941

Commercial and industrial
1,666

 

 

 

 
3

 
1,669

Total loans
$
11,113

 
$
2,151

 
$
3,514

 
$

 
$
3

 
$
16,781


18

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The Company's total loans by segment, class, and delinquency status at the dates indicated follows:
 
Past Due
 
 
 
Total
 
30-89 Days
 
90 Days+
 
Total
 
Current
 
Loans
March 31, 2020
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
One-to-four family
$
996

 
$
2,732

 
$
3,728

 
$
484,049

 
$
487,777

HELOCs - originated
438

 
275

 
713

 
144,091

 
144,804

HELOCs - purchased
761

 
47

 
808

 
81,424

 
82,232

Construction and land/lots

 
242

 
242

 
80,523

 
80,765

Indirect auto finance
378

 
284

 
662

 
134,787

 
135,449

Consumer
17

 
21

 
38

 
11,538

 
11,576

Commercial loans:
 
 
 
 
 
 
 
 
 
Commercial real estate
1,854

 
1,160

 
3,014

 
987,679

 
990,693

Construction and development
217

 
125

 
342

 
249,372

 
249,714

Commercial and industrial
65

 
27

 
92

 
164,447

 
164,539

Equipment finance
1,364

 
689

 
2,053

 
196,909

 
198,962

Municipal finance

 

 

 
115,992

 
115,992

Total loans
$
6,090

 
$
5,602

 
$
11,692

 
$
2,650,811

 
$
2,662,503

 
Past Due
 
 
 
Total
 
30-89 Days
 
90 Days+
 
Total
 
Current
 
Loans
June 30, 2019
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
One-to-four family
$
1,615

 
$
1,389

 
$
3,004

 
$
657,587

 
$
660,591

HELOCs - originated
226

 
231

 
457

 
138,978

 
139,435

HELOCs - purchased

 
485

 
485

 
116,487

 
116,972

Construction and land/lots
138

 
6

 
144

 
80,458

 
80,602

Indirect auto finance
459

 
237

 
696

 
152,752

 
153,448

Consumer
6

 
8

 
14

 
11,402

 
11,416

Commercial loans:
 

 
 

 
 

 
 

 
 

Commercial real estate
2,279

 
516

 
2,795

 
924,466

 
927,261

Construction and development

 
1,133

 
1,133

 
209,783

 
210,916

Commercial and industrial
207

 
99

 
306

 
160,165

 
160,471

Equipment finance
649

 
384

 
1,033

 
131,025

 
132,058

Municipal finance

 

 

 
112,016

 
112,016

Total loans
$
5,579

 
$
4,488

 
$
10,067

 
$
2,695,119

 
$
2,705,186



19

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The Company's recorded investment in loans, by segment and class, that are not accruing interest or are 90 days or more past due and still accruing interest at the dates indicated follows:
 
March 31, 2020
 
June 30, 2019
 
Nonaccruing
 
90 Days + &
still accruing
 
Nonaccruing
 
90 Days + &
still accruing
Retail consumer loans:
 
 
 
 
 
 
 
One-to-four family
$
3,863

 
$

 
$
3,223

 
$

HELOCs - originated
431

 

 
372

 

HELOCs - purchased
520

 

 
666

 

Construction and land/lots
19

 

 
6

 

Indirect auto finance
623

 

 
463

 

Consumer
27

 

 
21

 

Commercial loans:
 

 
 

 
 

 
 

Commercial real estate
9,253

 

 
3,559

 

Construction and development
250

 

 
1,357

 

Commercial and industrial
269

 

 
307

 

Equipment finance
410

 

 
384

 

Total loans
$
15,665

 
$

 
$
10,358

 
$

PCI loans totaling $1,018 at March 31, 2020 and $1,344 at June 30, 2019 are excluded from nonaccruing loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations.
TDRs are loans which have renegotiated loan terms to assist borrowers who are unable to meet the original terms of their loans. Such modifications to loan terms may include a lower interest rate, a reduction in principal, or a longer term to maturity. Additionally, all TDRs are considered impaired. The Company had no commitments to lend additional funds on these TDR loans at March 31, 2020.
The Company's loans that were performing under the payment terms of TDRs that were excluded from nonaccruing loans above at the dates indicated follows:
 
March 31, 2020
 
June 30, 2019
Performing TDRs included in impaired loans
$
14,732

 
$
23,116

An analysis of the allowance for loan losses by segment for the periods shown is as follows:
 
Three Months Ended March 31, 2020
 
Three Months Ended March 31, 2019
 
PCI
 
Retail
Consumer
 
Commercial
 
Total
 
PCI
 
Retail
Consumer
 
Commercial
 
Total
Balance at beginning of period
$
152

 
$
5,400

 
$
16,479

 
$
22,031

 
$
199

 
$
7,236

 
$
13,984

 
$
21,419

Provision for (recovery of) loan losses
30

 
1,519

 
3,851

 
5,400

 
2

 
(818
)
 
6,316

 
5,500

Charge-offs

 
(295
)
 
(706
)
 
(1,001
)
 

 
(288
)
 
(2,648
)
 
(2,936
)
Recoveries

 
359

 
61

 
420

 

 
331

 
102

 
433

Balance at end of period
$
182

 
$
6,983

 
$
19,685

 
$
26,850

 
$
201

 
$
6,461

 
$
17,754

 
$
24,416

 
Nine Months Ended March 31, 2020
 
Nine Months Ended March 31, 2019
 
PCI
 
Retail
Consumer
 
Commercial
 
Total
 
PCI
 
Retail
Consumer
 
Commercial
 
Total
Balance at beginning of period
$
201

 
$
6,419

 
$
14,809

 
$
21,429

 
$
483

 
$
7,527

 
$
13,050

 
$
21,060

Provision for (recovery of) loan losses
(19
)
 
(80
)
 
5,899

 
5,800

 
(282
)
 
(1,223
)
 
7,005

 
5,500

Charge-offs

 
(678
)
 
(1,448
)
 
(2,126
)
 

 
(881
)
 
(2,728
)
 
(3,609
)
Recoveries

 
1,322

 
425

 
1,747

 

 
1,038

 
427

 
1,465

Balance at end of period
$
182

 
$
6,983

 
$
19,685

 
$
26,850

 
$
201

 
$
6,461

 
$
17,754

 
$
24,416


20

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The Company's ending balances of loans and the related allowance, by segment and class, at the dates indicated follows:
 
Allowance for Loan Losses
 
Total Loans Receivable
 
PCI
 
Loans
individually
evaluated for
impairment
 
Loans
collectively
evaluated
 
Total
 
PCI
 
Loans
individually
evaluated for
impairment
 
Loans
collectively
evaluated
 
Total
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
17

 
$
5

 
$
2,427

 
$
2,449

 
$
4,838

 
$
4,313

 
$
478,626

 
$
487,777

HELOCs - originated

 

 
1,384

 
1,384

 

 

 
144,804

 
144,804

HELOCs - purchased

 

 
485

 
485

 

 

 
82,232

 
82,232

Construction and land/lots
33

 

 
1,387

 
1,420

 
339

 
303

 
80,123

 
80,765

Indirect auto finance

 

 
1,145

 
1,145

 

 
10

 
135,439

 
135,449

Consumer

 

 
150

 
150

 

 

 
11,576

 
11,576

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 
Commercial real estate
113

 
772

 
9,574

 
10,459

 
5,888

 
7,114

 
977,691

 
990,693

Construction and development
4

 
5

 
4,147

 
4,156

 
608

 
310

 
248,796

 
249,714

Commercial and industrial
15

 
1

 
2,384

 
2,400

 
1,547

 
28

 
162,964

 
164,539

Equipment finance

 

 
2,182

 
2,182

 

 
411

 
198,551

 
198,962

Municipal finance

 

 
620

 
620

 

 

 
115,992

 
115,992

Total
$
182

 
$
783

 
$
25,885

 
$
26,850

 
$
13,220

 
$
12,489

 
$
2,636,794

 
$
2,662,503

June 30, 2019
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Retail consumer loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

One-to-four family
$
62

 
$
74

 
$
2,375

 
$
2,511

 
$
5,868

 
$
5,318

 
$
649,405

 
$
660,591

HELOCs - originated

 
7

 
1,060

 
1,067

 
225

 
7

 
139,203

 
139,435

HELOCs - purchased

 

 
518

 
518

 

 

 
116,972

 
116,972

Construction and land/lots

 

 
1,265

 
1,265

 
372

 
323

 
79,907

 
80,602

Indirect auto finance

 

 
927

 
927

 

 

 
153,448

 
153,448

Consumer

 
4

 
189

 
193

 

 
4

 
11,412

 
11,416

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
118

 
28

 
7,890

 
8,036

 
7,706

 
8,692

 
910,863

 
927,261

Construction and development
4

 
5

 
3,187

 
3,196

 
941

 
1,397

 
208,578

 
210,916

Commercial and industrial
17

 
2

 
1,957

 
1,976

 
1,669

 
2

 
158,800

 
160,471

Equipment finance

 

 
1,305

 
1,305

 

 

 
132,058

 
132,058

Municipal finance

 

 
435

 
435

 

 

 
112,016

 
112,016

Total
$
201

 
$
120

 
$
21,108

 
$
21,429

 
$
16,781

 
$
15,743

 
$
2,672,662

 
$
2,705,186

Loans acquired through acquisitions are initially excluded from the allowance for loan losses in accordance with the acquisition method of accounting for business combinations. The Company records these loans at fair value, which includes a credit discount, therefore, no allowance for loan losses is established for these acquired loans at acquisition. A provision for loan losses is recorded for any further deterioration in these acquired loans subsequent to the acquisition.

21

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The Company's impaired loans and the related allowance, by segment and class, excluding PCI loans, at the dates indicated follows:
 
Total Impaired Loans
 
Unpaid
Principal
Balance
 
Recorded
Investment
With a
Recorded
Allowance
 
Recorded
Investment
With No
Recorded
Allowance
 
Total
 
Related
Recorded
Allowance
March 31, 2020
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
One-to-four family
$
18,211

 
$
10,914

 
$
3,975

 
$
14,889

 
$
383

HELOCs - originated
1,724

 
1,636

 
52

 
1,688

 
42

HELOCs - purchased
474

 
474

 

 
474

 
2

Construction and land/lots
1,547

 
756

 
303

 
1,059

 
22

Indirect auto finance
1,003

 
392

 
299

 
691

 
4

Consumer
53

 
16

 
28

 
44

 
2

Commercial loans:
 

 
 

 
 

 
 

 
 

Commercial real estate
10,078

 
7,669

 
1,847

 
9,516

 
803

Construction and development
1,591

 
621

 
80

 
701

 
8

Commercial and industrial
9,823

 
246

 
853

 
1,099

 
4

Equipment finance
1,466

 

 
411

 
411

 

Total impaired loans
$
45,970

 
$
22,724

 
$
7,848

 
$
30,572

 
$
1,270

June 30, 2019
 

 
 

 
 

 
 

 
 

Retail consumer loans:
 

 
 

 
 

 
 

 
 

One-to-four family
$
18,302

 
$
12,461

 
$
3,152

 
$
15,613

 
$
472

HELOCs - originated
2,410

 
564

 
1,219

 
1,783

 
46

HELOCs - purchased
666

 

 
666

 
666

 

Construction and land/lots
1,917

 
957

 
323

 
1,280

 
26

Indirect auto finance
601

 
353

 
137

 
490

 
2

Consumer
379

 
7

 
41

 
48

 
6

Commercial loans:
 

 
 

 
 

 
 

 
 

Commercial real estate
10,127

 
6,434

 
3,404

 
9,838

 
36

Construction and development
2,574

 
940

 
791

 
1,731

 
7

Commercial and industrial
10,173

 
354

 
768

 
1,122

 
6

Equipment finance
462

 

 
384

 
384

 

Total impaired loans
$
47,611

 
$
22,070

 
$
10,885

 
$
32,955

 
$
601

The table above includes $18,083 and $17,212, of impaired loans that were not individually evaluated at March 31, 2020 and June 30, 2019, respectively, because these loans did not meet the Company's threshold for individual impairment evaluation. The recorded allowance above includes $487 and $481 related to these loans that were not individually evaluated at March 31, 2020 and June 30, 2019, respectively.

22

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The Company's average recorded investment in impaired loans and interest income recognized on impaired loans for the three and nine months ended March 31, 2020 and 2019 follows:
 
Three Months Ended
 
March 31, 2020
 
March 31, 2019
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Retail consumer loans:
 
 
 
 
 
 
 
One-to-four family
$
14,189

 
$
175

 
$
16,499

 
$
237

HELOCs - originated
1,724

 
23

 
957

 
18

HELOC - purchased
474

 
30

 
333

 
3

Construction and land/lots
1,091

 
19

 
1,356

 
24

Indirect auto finance
625

 
8

 
361

 
6

Consumer
53

 
3

 
1,580

 
17

Commercial loans:
 

 
 

 
 

 
 

Commercial real estate
8,728

 
59

 
4,116

 
123

Construction and development
712

 
10

 
1,696

 
16

Commercial and industrial
1,119

 
11

 
188

 
80

Equipment finance
$
727

 
3

 
$

 
$

Total loans
$
29,442

 
$
341

 
$
27,086

 
$
524

 
Nine Months Ended
 
March 31, 2020
 
March 31, 2019
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Retail consumer loans:
 
 
 
 
 
 
 
One-to-four family
$
14,861

 
$
560

 
$
17,878

 
$
699

HELOCs - originated
1,706

 
76

 
1,067

 
52

HELOCs - purchased
524

 
37

 
235

 
10

Construction and land/lots
1,174

 
63

 
1,491

 
75

Indirect auto finance
506

 
42

 
341

 
19

Consumer
229

 
9

 
1,335

 
58

Commercial loans:
 

 
 

 
 

 
 

Commercial real estate
8,496

 
237

 
4,376

 
313

Construction and development
1,323

 
36

 
1,800

 
51

Commercial and industrial
812

 
103

 
201

 
222

Equipment finance
664

 
6

 

 

Total loans
$
30,295

 
$
1,169

 
$
28,724

 
$
1,499


23

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

A summary of changes in the accretable yield for PCI loans for the three and nine months ended March 31, 2020 and 2019 follows:
 
Three Months Ended
 
March 31, 2020
 
March 31, 2019
Accretable yield, beginning of period
$
4,355

 
$
5,232

Reclass from nonaccretable yield (1)
171

 
118

Other changes, net (2)
(23
)
 
528

Interest income
(378
)
 
(412
)
Accretable yield, end of period
$
4,125

 
$
5,466

 
Nine Months Ended
 
March 31, 2020
 
March 31, 2019
Accretable yield, beginning of period
$
5,259

 
$
5,734

Reclass from nonaccretable yield (1)
421

 
542

Other changes, net (2)
(332
)
 
863

Interest income
(1,223
)
 
(1,673
)
Accretable yield, end of period
$
4,125

 
$
5,466

______________________________________
(1)
Represents changes attributable to expected loss assumptions.
(2)
Represents changes in cash flows expected to be collected due to the impact of modifications, changes in prepayment assumptions, and changes in interest rates.
For the three and nine months ended March 31, 2020 and 2019, the following tables present a breakdown of the types of concessions made on TDRs by loan class:
 
Three Months Ended March 31, 2020
 
Three Months Ended March 31, 2019
 
Number
of
Loans
 
Pre
Modification
Outstanding
Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
 
Number
of
Loans
 
Pre
Modification
Outstanding
Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
Below market interest rate:
 
 
 
 
 
 
 
 
 
 
 
Retail consumer:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family

 
$

 
$

 
2

 
$
15

 
$
15

Home equity lines of credit

 

 

 
1

 
212

 
212

Total

 
$

 
$

 
3

 
$
227

 
$
227

Other TDRs:
 

 
 

 
 

 
 

 
 

 
 

Retail consumer:
 

 
 

 
 

 
 

 
 

 
 

One-to-four family
2

 
$
319

 
$
317

 
2

 
$
335

 
$
334

Construction and land/lots

 

 

 
1

 
29

 
28

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
1

 
30

 
30

 
2

 
5,424

 
5,423

Construction and development

 

 

 
1

 
182

 
182

Total
3

 
$
349

 
$
347

 
6

 
$
5,970

 
$
5,967

Total
3

 
$
349

 
$
347

 
9

 
$
6,197

 
$
6,194


24

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

 
Nine Months Ended March 31, 2020
 
Nine Months Ended March 31, 2019
 
Number
of
Loans
 
Pre
Modification
Outstanding
Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
 
Number
of
Loans
 
Pre
Modification Outstanding Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
Below market interest rate:
 
 
 
 
 
 
 
 
 
 
 
Retail consumer:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family

 
$

 
$

 
1

 
$
85

 
$
84

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
1

 
88

 
87

 

 

 

Total
1

 
$
88

 
$
87

 
1

 
$
85

 
$
84

Extended payment terms:
 

 
 

 
 

 
 

 
 

 
 

Retail consumer:
 

 
 

 
 

 
 

 
 

 
 

One-to-four family
2

 
$
70

 
$
67

 
2

 
$
212

 
$
212

HELOCs - originated

 

 

 
1

 
15

 
15

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
1

 
826

 
826

 

 

 

Total
3

 
$
896

 
$
893

 
3

 
$
227

 
$
227

Other TDRs:
 

 
 

 
 

 
 

 
 

 
 

Retail consumer:
 

 
 

 
 

 
 

 
 

 
 

One-to-four family
4

 
$
353

 
$
348

 
10

 
$
841

 
$
829

Construction and land/lots

 

 

 
1

 
29

 
28

Indirect auto finance
4

 
68

 
57

 
1

 
33

 
29

Consumer

 

 

 
1

 
2

 
2

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
1

 
30

 
30

 
2

 
5,424

 
5,423

Construction and development
1

 
182

 
79

 
1

 
182

 
182

Total
10

 
$
633

 
$
514

 
16

 
$
6,511

 
$
6,493

Total
14

 
$
1,617

 
$
1,494

 
20

 
$
6,823

 
$
6,804

Other TDRs include TDRs that have a below market interest rate and extended payment terms. The Company does not typically forgive principal when restructuring troubled debt.

25

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The following tables present loans that were modified as TDRs within the previous 12 months and for which there was a payment default during the three and nine months ended March 31, 2020 and 2019:
 
Three Months Ended March 31, 2020
 
Three Months Ended March 31, 2019
 
Number of
Loans
 
Recorded
Investment
 
Number of
Loans
 
Recorded
Investment
Retail consumer:
 

 
 

 
 

 
 

One-to-four family

 
$

 
2

 
$
184

Consumer

 

 
1

 
2

Total

 
$

 
3

 
$
186

Total

 
$

 
3

 
$
186

 
Nine Months Ended March 31, 2020
 
Nine Months Ended March 31, 2019
 
Number of
Loans
 
Recorded
Investment
 
Number of
Loans
 
Recorded
Investment
Other TDRs:
 

 
 

 
 

 
 

Retail consumer:
 

 
 

 
 

 
 

One-to-four family
2

 
$
49

 
2

 
$
184

Consumer

 

 
1

 
2

Total
2

 
$
49

 
3

 
$
186

Total
2

 
$
49

 
3

 
$
186

In the determination of the allowance for loan losses, management considers TDRs for all loan classes, and the subsequent nonperformance in accordance with their modified terms, by measuring impairment on a loan-by-loan basis based on either the value of the loan's expected future cash flows discounted at the loan's original effective interest rate or on the collateral value, net of the estimated costs of disposal, if the loan is collateral dependent.
Modifications in response to COVID-19
The Company began offering short-term loan modifications to assist borrowers during the COVID-19 pandemic. The CARES Act along with a joint agency statement issued by banking agencies and confirmed by FASB staff that short-term modifications made in response to COVID-19 are not TDRs. Accordingly, the Company does not account for such loan modifications as TDRs. As of March 31, 2020, modifications totaling $14.3 million and $162.4 million had been granted in retail consumer loans and commercial loans, respectively. See Note 1 Summary of Significant Accounting Policies and Note 12 Subsequent Events for more information.
6.
Real Estate Owned
The activity within REO for the periods shown is as follows:
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2020
 
2019
 
2020
 
2019
Balance at beginning of period
$
1,451

 
$
2,955

 
$
2,929

 
$
3,684

Transfers from loans

 
482

 
46

 
578

Sales, net of gain or loss
(376
)
 
(397
)
 
(1,722
)
 
(971
)
Writedowns

 
(37
)
 
(178
)
 
(288
)
Balance at end of period
$
1,075

 
$
3,003

 
$
1,075

 
$
3,003

At March 31, 2020 and June 30, 2019, the Bank had $205 and $1,018, respectively, of foreclosed residential real estate property in REO. The recorded investment in consumer mortgage loans collateralized by residential real estate in the process of foreclosure totaled $61 and $243 at March 31, 2020 and June 30, 2019, respectively.

26

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

7.
Net Income per Share
The following is a reconciliation of the numerator and denominator of basic and diluted net income per share of common stock as of the dates indicated:
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2020
 
2019
 
2020
 
2019
Numerator:
 
 
 
 
 
 
 
Net income
$
1,193

 
$
3,302

 
$
19,188

 
$
19,133

Allocation of earnings to participating securities
(11
)
 
(23
)
 
(167
)
 
(132
)
Numerator for basic EPS - Net income available to common stockholders
$
1,182

 
$
3,279

 
$
19,021

 
$
19,001

Effect of dilutive securities:
 
 
 
 
 
 
 
Dilutive effect to participating securities
2

 
3

 
6

 
5

Numerator for diluted EPS
$
1,184

 
$
3,282

 
$
19,027

 
$
19,006

Denominator:
 

 
 

 
 

 
 

Weighted-average common shares outstanding - basic
16,688,646

 
17,506,018

 
16,898,391

 
17,811,962

Effect of dilutive shares
569,782

 
691,411

 
625,861

 
716,199

Weighted-average common shares outstanding - diluted
17,258,428

 
18,197,429

 
17,524,252

 
18,528,161

Net income per share - basic
$
0.07

 
$
0.19

 
$
1.12

 
$
1.07

Net income per share - diluted
$
0.07

 
$
0.18

 
$
1.08

 
$
1.02

Potential dilutive shares are excluded from the computation of earnings per share if their effect is anti-dilutive. There were 506,800 stock options that were anti-dilutive for the three and nine months ended March 31, 2020. There were 434,400 and 445,800 stock options that were anti-dilutive for the three and nine months ended March 31, 2019, respectively.
8.
Equity Incentive Plan
The Company provides stock-based awards through the 2013 Omnibus Incentive Plan, which provides for awards of restricted stock, restricted stock units, stock options, stock appreciation rights and cash awards to directors, directors emeritus, officers, employees and advisory directors. The cost of equity-based awards under the 2013 Omnibus Incentive Plan generally is based on the fair value of the awards on their grant date. The maximum number of shares that may be utilized for awards under the plan is 2,962,400, including 2,116,000 for stock options and stock appreciation rights and 846,400 for awards of restricted stock and restricted stock units.
Shares of common stock issued under the 2013 Omnibus Incentive Plan may be authorized but unissued shares or, in the case of restricted stock awards, may be repurchased shares.
The table below presents share-based compensation expense and the estimated related tax benefit for stock options and restricted stock for the three and nine months ended March 31, 2020 and 2019, respectively:
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2020
 
2019
 
2020
 
2019
Share-based compensation expense
$
458

 
$
409

 
$
1,341

 
$
1,165

Tax benefit
$
108

 
$
96

 
$
315

 
$
274


27

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The table below presents stock option activity for the nine months ended March 31, 2020 and 2019:
 
Options
 
Weighted-
average
exercise
price
 
Remaining
contractual
life
(years)
 
Aggregate
Intrinsic
Value
Options outstanding at June 30, 2018
1,718,270

 
$
17.29

 
5.9

 
$
18,664

Granted
40,500

 
27.51

 

 

Exercised
69,111

 
14.53

 

 

Forfeited
20,300

 
23.39

 

 

Expired
945

 
23.82

 

 

Options outstanding at March 31, 2019
1,668,414

 
$
17.57

 
5.3

 
$
13,098

Exercisable at March 31, 2019
1,290,814

 
$
15.39

 
4.4

 
$
12,733

Non-vested at March 31, 2019
377,600

 
$
25.04

 
8.5

 
$
365

 
 
 
 
 
 
 
 
Options outstanding at June 30, 2019
1,657,214

 
$
17.59

 
5.0

 
$
12,909

Granted
61,000

 
26.40

 

 

Exercised
106,914

 
14.41

 

 

Forfeited
800

 
17.35

 

 

Options outstanding at March 31, 2020
1,610,500

 
$
18.13

 
4.6

 
$
1,617

Exercisable at March 31, 2020
1,298,000

 
$
15.45

 
3.7

 
$
1,617

Non-vested at March 31, 2020
312,500

 
$
25.86

 
8.2

 
$

Assumptions used in estimating the fair value of options granted during the nine months ended March 31, 2020 and 2019 are presented below:
 
March 31,
 
March 31,
 
2020
 
2019
Weighted-average volatility
17.77
%
 
17.84
%
Expected dividend yield
0.98
%
 
0.87
%
Risk-free interest rate
1.50
%
 
2.54
%
Expected life (years)
6.5

 
6.5

Weighted-average fair value of options granted
$
4.79

 
$
5.88

At March 31, 2020, the Company had $1,853 of unrecognized compensation expense related to 312,500 stock options originally scheduled to vest over a five-year vesting period. The weighted average period over which compensation cost related to non-vested awards expected to be recognized was 2.0 years at March 31, 2020. At March 31, 2019, the Company had $2,326 of unrecognized compensation expense related to 377,600 stock options originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards expected to be recognized was 2.1 years at March 31, 2019.
The table below presents restricted stock award activity for the nine months ended March 31, 2020 and 2019:
 
Restricted
stock awards
 
Weighted-
average grant
date fair value
 
Aggregate
Intrinsic
Value
Non-vested at June 30, 2018
133,410

 
$
22.85

 
$
3,755

Granted
34,000

 
27.51

 

Vested
39,310

 
21.64

 

Forfeited
4,300

 
19.22

 

Non-vested at March 31, 2019
123,800

 
$
24.64

 
$
2,263

 
 
 
 
 
 
Non-vested at June 30, 2019
123,800

 
$
24.65

 
$
3,322

Granted
65,556

 
26.76

 

Vested
37,425

 
22.90

 

Forfeited
3,200

 
20.62

 

Non-vested at March 31, 2020
148,731

 
$
26.11

 
$
2,638


28

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The table above includes nonvested performance-based restrictive stock units totaling 21,625 and 10,375 at March 31, 2020 and 2019, respectively. Each issuance of these stock units are scheduled to vest over 3.0 years assuming certain performance metrics are met.
At March 31, 2020, unrecognized compensation expense was $3,736 related to 148,731 shares of restricted stock originally scheduled to vest over three- and five-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 2.0 years at March 31, 2020. At March 31, 2019, unrecognized compensation expense was $2,790 related to 123,800 shares of restricted stock originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 2.1 years at March 31, 2019.
9.
Commitments and Contingencies
Loan Commitments – Legally binding commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. In the normal course of business, there are various outstanding commitments to extend credit that are not reflected in the consolidated financial statements. At March 31, 2020 and June 30, 2019, respectively, loan commitments (excluding $161,655 and $181,477 of undisbursed portions of construction loans) totaled $54,884 and $93,432 of which $13,013 and $34,631 were variable rate commitments and $41,871 and $58,801 were fixed rate commitments. The fixed rate loans had interest rates ranging from 1.69% to 8.53% at March 31, 2020 and 2.69% to 8.59% at June 30, 2019, and terms ranging from three to 30 years. Pre-approved but unused lines of credit (principally second mortgage home equity loans and overdraft protection loans) totaled $374,401 and $353,663 at March 31, 2020 and June 30, 2019, respectively. These amounts represent the Company's exposure to credit risk, and in the opinion of management have no more than the normal lending risk that the Company commits to its borrowers. The Company has two types of commitments related to certain one-to-four family loans held for sale: rate lock commitments and forward loan commitments. Rate lock commitments are commitments to extend credit to a customer that has an interest rate lock and are considered derivative instruments. The rate lock commitments do not qualify for hedge accounting. In order to mitigate the risk from interest rate fluctuations, we enter into forward loan sale commitments on a “best efforts” basis, which do not meet the definition of a derivative instrument. The fair value of these interest rate lock commitments was not material at March 31, 2020 or June 30, 2019.
The Company grants construction and permanent loans collateralized primarily by residential and commercial real estate to customers throughout its primary market areas. In addition, the Company grants equipment financing throughout the eastern United States and municipal financing to customers throughout North and South Carolina. The Company’s loan portfolio can be affected by the general economic conditions within these market areas. Management believes that the Company has no significant concentration of credit in the loan portfolio.
Restrictions on Cash – In response to COVID-19, the FRB reduced the reserve requirements to zero on March 15, 2020. Prior to this change the Bank was required by regulation to maintain a varying cash reserve balance with the FRB. The daily average calculated cash reserve required as of March 31, 2020 and June 30, 2019 was $0, and $2,633, respectively, which was satisfied by vault cash and balances held at the FRB.
Guarantees – Standby letters of credit obligate the Company to meet certain financial obligations of its customers, if, under the contractual terms of the agreement, the customers are unable to do so. The financial standby letters of credit issued by the Company are irrevocable and payment is only guaranteed upon the borrower's failure to perform its obligations to the beneficiary. Total commitments under standby letters of credit as of March 31, 2020 and June 30, 2019 were $6,833 and $9,460, respectively. There was no liability recorded for these letters of credit at March 31, 2020 or June 30, 2019, respectively.
Litigation From time to time, the Company is involved in litigation matters in the ordinary course of business. These proceedings and the associated legal claims are often contested, and the outcome of individual matters is not always predictable. These claims and counter claims typically arise during the course of collection efforts on problem loans or with respect to actions to enforce liens on properties in which the Company holds a security interest. The Company is not a party to any pending legal proceedings that management believes would have a material adverse effect on the Company’s financial condition or results of operations.
10.
Fair Value of Financial Instruments
The Company utilizes fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. The fair value of financial instruments presented in this note are based on the same methodology as presented in Note 21 of the Notes to Consolidated Financial Statements contained in the Company’s 2019 Form 10-K.
Fair Value Hierarchy
The Company groups assets at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:
Level 1:
Valuation is based upon quoted prices for identical instruments traded in active markets.
Level 2:
Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

29

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

Level 3:
Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.
Following is a description of valuation methodologies used for assets recorded at fair value. The Company does not have any liabilities recorded at fair value.
Investment Securities Available for Sale
Securities available for sale are valued on a recurring basis at quoted market prices where available. If quoted market prices are not available, fair values are based on quoted prices of comparable securities. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange or U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities and debentures issued by government sponsored enterprises, municipal bonds, and corporate debt securities. The Company has no Level 3 securities.
Impaired Loans
The Company does not record loans at fair value on a recurring basis. From time to time, however, a loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. The Company reviews all impaired loans each quarter to determine if an allowance is necessary. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans.
Once a loan is identified as individually impaired, the fair value is estimated using one of two methods, which include collateral value and discounted cash flows. Loans are considered collateral dependent if repayment is expected solely from the collateral. For these collateral dependent impaired loans, the Company obtains updated appraisals at least annually. These appraisals are reviewed for appropriateness and then discounted for estimated closing costs to determine if an allowance is necessary. As part of the quarterly review of impaired loans, the Company reviews these appraisals to determine if any additional discounts to the fair value are necessary. If a current appraisal is not obtained, the Company determines whether a discount is needed to the value from the original appraisal based on the decline in value of similar properties with recent appraisals. For loans that are not collateral dependent, estimated fair value is based on the present value of expected future cash flows using the interest rate implicit in the original agreement. Impaired loans where a charge-off has occurred or an allowance is established during the period being reported require classification in the fair value hierarchy. The Company records such impaired loans as nonrecurring Level 3 in the fair value hierarchy. 
Loans Held for Sale
Loans held for sale are adjusted to lower of cost or fair value.  Fair value is based on commitments on hand from investors or, if commitments have not yet been obtained, what investors are currently offering for loans with similar characteristics. The Company considers all loans held for sale carried at fair value as nonrecurring Level 3.
Real Estate Owned
REO is considered held for sale and is adjusted to fair value less estimated selling costs upon transfer of the loan to foreclosed assets.  Fair value is based upon independent market prices, appraised value of the collateral or management's estimation of the value of the collateral. The Company considers all REO that has been charged off or received an allowance during the period as nonrecurring Level 3.

30

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

Financial Assets Recorded at Fair Value on a Recurring Basis
The following table presents financial assets measured at fair value on a recurring basis at the dates indicated:
 
March 31, 2020
Description
Total
 
Level 1
 
Level 2
 
Level 3
U.S Government Agencies
$
6,842

 
$

 
$
6,842

 
$

Residential MBS of U.S. Government Agencies and GSEs
51,752

 

 
51,752

 

Municipal Bonds
21,703

 

 
21,703

 

Corporate Bonds
78,324

 

 
78,324

 

Total
$
158,621

 
$

 
$
158,621

 
$

 
June 30, 2019
Description
Total
 
Level 1
 
Level 2
 
Level 3
U.S Government Agencies
$
15,210

 
$

 
$
15,210

 
$

Residential MBS of U.S. Government Agencies and GSEs
75,180

 

 
75,180

 

Municipal Bonds
25,312

 

 
25,312

 

Corporate Bonds
6,084

 

 
6,084

 

Total
$
121,786

 
$

 
$
121,786

 
$

There were no transfers between levels during the nine months ended March 31, 2020.
The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated:
 
March 31, 2020
Description
Total
 
Level 1
 
Level 2
 
Level 3
Impaired loans
$
6,099

 
$

 
$

 
$
6,099

REO
493

 

 

 
493

Total
$
6,592

 
$

 
$

 
$
6,592

 
June 30, 2019
Description
Total
 
Level 1
 
Level 2
 
Level 3
Impaired loans
$
9,071

 
$

 
$

 
$
9,071

REO
1,804

 

 

 
1,804

Total
$
10,875

 
$

 
$

 
$
10,875

Quantitative information about Level 3 fair value measurements during the period ended March 31, 2020 is shown in the table below:
 
Fair Value at March 31, 2020
 
Valuation
Techniques
 
Unobservable
Input
 
Range
 
Weighted
Average
Nonrecurring measurements:
 
 
 
 
 
 
 
 
 
Impaired loans, net
$
6,099

 
Discounted appraisals and discounted cash flows
 
Collateral discounts
and discount spread
 
0% - 63% 0% - 3%
 
20%
REO
$
493

 
Discounted appraisals
 
Collateral discounts
 
8% - 25%
 
12%

31

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The stated carrying value and estimated fair value amounts of financial instruments as of March 31, 2020 and June 30, 2019, are summarized below:
 
March 31, 2020
 
Carrying
Value
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
 
Cash and interest-bearing deposits
$
82,061

 
$
82,061

 
$
82,061

 
$

 
$

Commercial paper
281,955

 
281,955

 
281,955

 

 

Certificates of deposit in other banks
57,544

 
57,544

 

 
57,544

 

Securities available for sale
158,621

 
158,621

 

 
158,621

 

Loans, net
2,636,674

 
2,637,208

 

 

 
2,637,208

Loans held for sale
38,682

 
39,359

 

 

 
39,359

FHLB stock
25,859

 
25,859

 
25,859

 

 

FRB stock
7,353

 
7,353

 
7,353

 

 

SBIC investments
7,989

 
7,989

 

 

 
7,989

Accrued interest receivable
9,501

 
9,501

 

 
1,002

 
8,499

Liabilities:
 
 
 
 
 
 
 
 
 
Noninterest-bearing and NOW deposits
819,373

 
819,373

 

 
819,373

 

Money market accounts
801,424

 
801,424

 

 
801,424

 

Savings accounts
169,792

 
169,792

 

 
169,792

 

Certificates of deposit
764,198

 
771,440

 

 
771,440

 

Borrowings
535,000

 
569,850

 

 
569,850

 

Accrued interest payable
1,308

 
1,308

 

 
1,308

 

 
June 30, 2019
 
Carrying
Value
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
 
Cash and interest-bearing deposits
$
71,043

 
$
71,043

 
$
71,043

 
$

 
$

Commercial paper
241,446

 
241,446

 
241,446

 

 

Certificates of deposit in other banks
52,005

 
52,005

 

 
52,005

 

Securities available for sale
121,786

 
121,786

 

 
121,786

 

Loans, net
2,683,761

 
2,604,827

 

 

 
2,604,827

Loans held for sale
18,175

 
18,591

 

 

 
18,591

FHLB stock
31,969

 
31,969

 
31,969

 

 

FRB stock
7,335

 
7,335

 
7,335

 

 

SBIC investments
6,074

 
6,074

 

 

 
6,074

Accrued interest receivable
10,533

 
10,533

 
350

 
750

 
9,433

Liabilities:
 
 
 
 
 
 
 
 
 
Noninterest-bearing and NOW deposits
746,617

 
746,617

 

 
746,617

 

Money market accounts
691,172

 
691,172

 

 
691,172

 

Savings accounts
177,278

 
177,278

 

 
177,278

 

Certificates of deposit
712,190

 
712,485

 

 
712,485

 

Borrowings
680,000

 
688,418

 

 
688,418

 

Accrued interest payable
2,252

 
2,252

 

 
2,252

 

The Company had off-balance sheet financial commitments, which included approximately $590,940 and $628,572 of commitments to originate loans, undisbursed portions of interim construction loans, and unused lines of credit at March 31, 2020 and June 30, 2019, respectively (see Note 9). Since these commitments are based on current rates, the carrying amount approximates the fair value.
Estimated fair values were determined using the following methods and assumptions:
Cash and interest-bearing deposits – The stated amounts approximate fair values as maturities are less than 90 days.

32

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

Commercial paper – The stated amounts approximate fair value due to the short-term nature of these investments.
Certificates of deposit in other banks – The stated amounts approximate fair values.
Securities available for sale – Fair values are based on quoted market prices where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.
Loans held for sale – The fair value of mortgage loans held for sale is determined by outstanding commitments from investors on a "best efforts" basis or current investor yield requirements, calculated on the aggregate loan basis. The fair value of SBA loans held for sale is based on what investors are currently offering for loans with similar characteristics.
Loans, net – Fair values for loans are estimated by segregating the portfolio by type of loan and discounting scheduled cash flows using current market interest rates for loans with similar terms and credit quality. A prepayment assumption is used as an estimate of the portion of loans that will be repaid prior to their scheduled maturity. A liquidity premium assumption is used as an estimate for the additional return required by an investor of assets that are potentially considered illiquid.
FHLB and FRB stock – No ready market exists for these stocks and they have no quoted market value. However, redemptions of these securities have historically been at par value. Accordingly, cost is deemed to be a reasonable estimate of fair value.
SBIC investments – No ready market exists for these investments and they have no quoted market value. SBIC investments are valued at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions of identical or similar investments. Accordingly, cost is deemed to be a reasonable estimate of fair value.
Deposits Fair values for demand deposits, money market accounts, and savings accounts are the amounts payable on demand. The fair value of certificates of deposit is estimated by discounting the contractual cash flows using current market interest rates for accounts with similar maturities.
Borrowings – The fair value of advances from the FHLB is estimated based on current rates for borrowings with similar terms.
Accrued interest receivable and payable – The stated amounts of accrued interest receivable and payable approximate the fair value.
Limitations – Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Fair value estimates are based on existing on-and-off balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, a significant asset not considered a financial asset is premises and equipment. In addition, tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.
11.
Leases
As Lessee - Operating Leases
Company operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at our sole discretion. When it is reasonably certain that we will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. At March 31, 2020, we did not have any leases that had not yet commenced for which we had created a ROU asset and a lease liability. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of our lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expenses for these leases over the lease term.

33

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

The following tables present supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.
Supplemental Balance Sheet Information:
March 31, 2020
ROU assets
$
4,585

Lease liabilities
4,576

Weighted-average remaining lease terms
5.09

Weighted-average discount rate
2.68
%
The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
336

2021
1,130

2022
1,034

2023
997

2022
526

Thereafter
896

Total of future minimum payments
$
4,919

The following table presents components of operating lease expense for the three and nine months ended March 31, 2020:
 
Three Months Ended March 31, 2020
 
Nine Months Ended March 31, 2020
Operating lease cost (included in occupancy expense)
$
436

 
$
1,368

Sublease income (included in other, net noninterest income)
(61
)
 
(181
)
Total operating lease expense, net
375

 
1,187

As Lessee - Finance Lease
The Company currently leases land for one of its branch office locations under a finance lease. The ROU asset for the finance lease totaled $2,052 at March 31, 2020 and is included in other assets. The amount was previously recorded in premises and equipment, net. The corresponding lease liability totaled $1,852 at March 31, 2020 and is included in other liabilities. For the three and nine months ended March 31, 2020, interest expense on the lease liability totaled $24 and $73, respectively. The finance lease has a maturity date of July 2028 and a discount rate of 5.18%. Upon adoption of ASC 842, the capital lease obligation for June 30, 2019 was also reclassified to other liabilities.
The following schedule summarizes aggregate future minimum lease payments under this finance lease obligation at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
34

2021
134

2022
134

2023
134

2023
145

Thereafter
1,993

Total minimum lease payments
2,574

Less: amount representing interest
(722
)
Present value of net minimum lease payments
$
1,852

Supplemental lease cash flow information for the nine months ended March 31, 2020:
ROU assets - noncash additions (operating leases)
$
5,296

ROU assets - noncash addition (finance lease)
2,052

Cash paid for amounts included in the measurement of lease liabilities (operating leases)
1,609

Cash paid for amounts included in the measurement of lease liabilities (finance leases)
67


34

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

As Lessor - General
The Company leases equipment to commercial end users under operating and finance lease arrangements. Our equipment finance leases consist mainly of transportation, medical, and agricultural equipment. Many of our operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a nominal fixed purchase option; and most of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. Our leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease.
As Lessor - Operating Leases
Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from 1 to 5 years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. Leased assets totaled $19,403 with a residual value of $10,971 as of March 31, 2020. For the three and nine months ended March 31, 2020, total equipment finance operating lease income totaled $989 and $2,215, respectively. For the three and nine months ended March 31, 2020, depreciation expense totaled $746 and $1,554, respectively.
The following schedule summarizes aggregate future minimum operating lease payments to be received at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
1,136

2021
7,729

2022
7,172

2023
2,865

2022
2,187

Thereafter
135

Total of future minimum payments
$
21,224

As Lessor - Finance Leases
Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment. For the three and nine months ended March 31, 2020, total interest income on equipment finance leases totaled $420 and 1,121, respectively.
The following table presents components of finance lease net investment included within equipment finance class of financing receivables:
 
March 31, 2020
Lease receivables
$
34,282

The following schedule summarizes aggregate future minimum finance lease payments to be received at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
1,928

2021
9,374

2022
8,340

2023
8,195

2024
7,237

Thereafter
2,990

Total minimum payments
38,064

Less: amount representing interest
(3,782
)
Total
$
34,282


35

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)

12.
Subsequent Event
On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic. The COVID-19 pandemic has adversely affected, and continues to adversely affect, economic activity globally, nationally and locally. Actions taken around the world to help mitigate the spread of COVID-19 include restrictions on travel, quarantines in certain areas, and forced closures for certain types of public places and businesses. COVID-19 and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the U.S. and the geographical area in which the Company operates. Due to the COVID-19 pandemic, market interest rates have declined significantly, with the 10-year Treasury bond falling below 1.00 percent on March 3, 2020 for the first time as well as the targeted federal funds interest rate being reduced to 0 percent to 0.25 percent on March 16, 2020. These reductions in interest rates and other effects of the COVID-19 pandemic may adversely affect the Company's financial condition and results of operations in future periods. It is unknown how long the adverse conditions associated with the COVID-19 pandemic will last and what the complete financial effect will be to the Company. It is reasonably possible that estimates made in the financial statements could be materially and adversely impacted in the near term as a result of these conditions, including expected credit losses on loans and the fair value of financial instruments that are carried at fair value.
The recently enacted CARES Act, among other things, temporarily added the PPP product SBA 7(a) Loan Program. The CARES Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the PPP. The PPP and loan forgiveness are intended to provide economic relief to small businesses nationwide adversely impacted by the COVID-19 pandemic. As a result, subsequent to March 31, 2020 the Company generated over 318 PPP loan applications for a total loan amount of approximately $93.3 million in the SBA system through May 5, 2020. In addition, in an effort to provide relief to Bank customers affected by the COVID-19, the Company began offering various mitigation efforts, including a loan payment deferral program. The standard program offers a 90-day payment deferral. As of May 5, 2020, the Company has approved or processed loan deferrals for a total loan book balance, before loan discounts or premiums, of approximately $526.9 million. These modifications were not classified as TDRs in accordance with the guidance of the CARES Act.
  

36



Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations
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, 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, including, but not limited to: the effect of the COVID-19 pandemic, including on the Company’ credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write offs and changes in our allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets; changes in general economic conditions, either nationally or in our market areas; 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; uncertainty regarding the future of the London Interbank Offered Rate ("LIBOR"), and the potential transition away from LIBOR toward new interest rate benchmarks; 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; results of examinations of us by the Board of Governors of the Federal Reserve System (“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 allowance for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings; legislative or regulatory changes that adversely affect our business including the effect of Dodd-Frank Wall Street Reform and Consumer Protection Act, 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, or the interpretation of regulatory capital or other rules, including as a result of Basel III; our ability to attract and retain deposits; management's assumptions in determining the adequacy of the allowance for loan losses; our ability to control operating costs and expenses, especially costs associated with our operation as a public company; the use of estimates in determining 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; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may in the future acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; 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 Financial Accounting Standards Board; and other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services including the CARES Act; and the other risks detailed from time to time in our filings with the SEC, including our 2019 Form 10-K.
Many of the 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 subsidiary, including HomeTrust Bank (the "Bank") unless the context indicates otherwise.
Overview
HomeTrust Bancshares, Inc., a Maryland corporation, was formed for the purpose of becoming the holding company for HomeTrust Bank in connection with HomeTrust Bank’s conversion from mutual to stock form, which was completed on July 10, 2012 (the “Conversion”). As a bank holding company and financial holding company, HomeTrust Bancshares, Inc. is regulated by the Federal Reserve. As a North Carolina state-chartered bank, and member of the FRB, the Bank's primary regulators are the NCCOB and the Federal Reserve. The Bank's deposits are federally insured up to applicable limits by the FDIC. The Bank is a member of the FHLB of Atlanta, which is one of the 12 regional banks in the FHLB System. Our headquarters is located in Asheville, North Carolina.
Our principal business consists of attracting deposits from the general public and investing those funds, along with borrowed funds, in loans secured by first and second mortgages on one-to-four family residences, including home equity loans and construction and land/lot loans,

37



commercial real estate loans, construction and development loans, commercial and industrial loans, SBA loans, equipment finance leases, indirect automobile loans, and municipal finance agreements. We also work with a third party to originate HELOCs which are pooled and sold. In addition, we purchase investment securities consisting primarily of securities issued by United States Government agencies and government-sponsored enterprises, as well as, corporate bonds, commercial paper and FDIC insured certificates of deposit.
We offer a variety of deposit accounts for individuals, businesses, and nonprofit organizations. Deposits and borrowings are our primary source of funds for our lending and investing activities.
We are significantly affected by prevailing economic conditions, as well as government policies and regulations concerning, among other things, monetary and fiscal affairs, housing and financial institutions. Deposit flows are influenced by a number of factors, including interest rates paid on competing time deposits, other investments, account maturities, and the overall level of personal income and savings. Lending activities are influenced by the demand for funds, the number and quality of lenders, and regional economic cycles.
Our primary source of pre-tax income is net interest income. Net interest income is the difference between interest income, which is the income that we earn on our loans and investments, and interest expense, which is the interest that we pay on our deposits and borrowings. Changes in levels of interest rates affect our net interest income. Because the length of the COVID-19 pandemic and the efficacy of the extraordinary measures being put in place to address its economic consequences are unknown, including the recent 150 basis point reductions in the targeted federal funds rate, until the pandemic subsides, the Company expects its net interest income and net interest margin will be adversely affected in 2020 and possibly longer.
A secondary source of income is noninterest income, which includes revenue we receive from providing products and services, including service charges on deposit accounts, loan income and fees, lease income, gain on sale of loans, and gains and losses from sales of securities.
An offset to net interest income is the provision for loan losses which is required to establish the allowance for loan losses at a level that adequately provides for probable losses inherent in our loan portfolio. As a loan's risk rating improves, property values increase, or recoveries of amounts previously charged off are received, a recapture of previously recognized provision for loan losses may be added to net interest income.
Our noninterest expenses consist primarily of salaries and employee benefits, expenses for occupancy, marketing and computer services, and FDIC deposit insurance premiums. Salaries and benefits consist primarily of the salaries and wages paid to our employees, payroll taxes, expenses for retirement and other employee benefits. Occupancy expenses, which are the fixed and variable costs of buildings and equipment, consist primarily of lease payments, property taxes, depreciation charges, maintenance and costs of utilities.
In recent years, we have expanded our geographic footprint into seven additional markets through strategic acquisitions as well as two de novo commercial loan offices and one de novo branch office. Looking forward, we believe opportunities currently exist within our market areas to grow our franchise. We anticipate organic growth as the local economies and loan demand strengthen, through our marketing efforts and as a result of the opportunities being created as a result of the consolidation of financial institutions occurring in our market areas. We may also seek to expand our franchise through the selective acquisition of individual branches, loan purchases and, to a lesser degree, whole bank transactions that meet our investment and market objectives. We will continue to be disciplined as it pertains to future expansion focusing primarily on organic growth in our current market areas.
At March 31, 2020, we had 41 locations in North Carolina (including the Asheville metropolitan area, the "Piedmont" region, Charlotte, and Raleigh/Cary), Upstate South Carolina (Greenville), East Tennessee (including Kingsport/Johnson City/Bristol, Knoxville, and Morristown) and Southwest Virginia (including the Roanoke Valley).
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. Facts and circumstances which could affect these judgments 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. These policies relate to (i) the determination of the provision and the allowance for loan losses, (ii) the valuation of goodwill and other intangible assets, and (iii) the valuation of or recognition of deferred tax assets and liabilities. These policies and estimates are described in further detail in Part II, Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 1, Summary of Significant Accounting Policies in the Company's 2019 Form 10-K. There have not been any material changes in the Company's critical accounting policies and estimates during the nine months ended March 31, 2020 as compared to the disclosure contained in the Company's 2019 Form 10-K.
Reclassifications and corrections. To maintain consistency and comparability, certain amounts from prior periods have been reclassified to conform to current period presentation with no effect on net income, shareholders’ equity, or cash flows as previously reported.
Recent Accounting Pronouncements. See Note 2 of Notes to Consolidated Financial Statements under Item 1 of this report for a description of recent accounting pronouncements including the respective dates of adoption and effects on results of operations and financial condition.

38



Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this report contains certain non-GAAP financial measures, which include: tangible book value; tangible book value per share, tangible equity to tangible assets ratio; and the ratio of the allowance for loan losses to total loans excluding acquired loans. Management has presented the non-GAAP financial measures in this discussion and analysis because it believes including these items is more indicative of and provides useful and comparative information to assess trends in our core operations while facilitating comparison of the quality and composition of the Company’s earnings over time and in comparison to its competitors. However, these non-GAAP financial measures are supplemental, are not audited and are not a substitute for operating results or any analysis determined in accordance with GAAP. Where applicable, we have also presented comparable earnings information using GAAP financial measures. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. See “Comparison of Results of Operations for the Three and Nine Months Ended March 31, 2020 and 2019” for more detailed information about our financial performance.

Set forth below is a reconciliation to GAAP of tangible book value and tangible book value per share:
 
 
As of
 
 
March 31,
 
June 30,
 
March 31,
(Dollars in thousands, except per share data)
 
2020
 
2019
 
2019
Total stockholders' equity
 
$
405,440

 
$
408,896

 
$
407,230

Less: goodwill, core deposit intangibles, net of taxes
 
26,701

 
27,562

 
27,908

Tangible book value (1)
 
$
378,739

 
$
381,334

 
$
379,322

Common shares outstanding
 
17,101,954

 
17,984,105

 
18,265,535

Tangible book value per share
 
$
22.15

 
$
21.20

 
$
20.77

Book value per share
 
$
23.71

 
$
22.74

 
$
22.29


Set forth below is a reconciliation to GAAP of tangible equity to tangible assets:
 
 
As of
 
 
March 31,
 
June 30,
 
March 31,
(Dollars in thousands)
 
2020
 
2019
 
2019
Tangible book value (1)
 
$
378,739

 
$
381,334

 
$
379,322

Total assets
 
3,548,033

 
3,476,178

 
3,457,737

Less: goodwill, core deposit intangibles, net of taxes
 
26,701

 
27,562

 
27,908

Total tangible assets(2)
 
$
3,521,332

 
$
3,448,616

 
$
3,429,829

Tangible equity to tangible assets
 
10.76
%
 
11.06
%
 
11.06
%
_________________________________________________________________
(1)
Tangible book value is equal to total stockholders' equity less goodwill and core deposit intangibles, net of related deferred tax liabilities.
(2)
Total tangible assets is equal to total assets less goodwill and core deposit intangibles, net of related deferred tax liabilities.
 
 
 
 
 
 
 
 
 

Set forth below is a reconciliation to GAAP of the allowance for loan losses to total loans and the allowance for loan losses as adjusted to exclude acquired loans:
 
As of
(Dollars in thousands)
March 31,
 
June 30,
 
March 31,
 
2020
 
2019
 
2019
Total gross loans receivable (GAAP)
$
2,662,503

 
$
2,705,186

 
$
2,661,019

Less: acquired loans
176,971

 
214,046

 
223,101

Adjusted gross loans (non-GAAP)
$
2,485,532

 
$
2,491,140

 
$
2,437,918

 
 
 
 
 
 
Allowance for loan losses (GAAP)
$
26,850

 
$
21,429

 
$
24,416

Less: allowance for loan losses on acquired loans
182

 
201

 
201

Adjusted allowance for loan losses (non-GAAP)
$
26,668

 
$
21,228

 
$
24,215

Adjusted allowance for loan losses / Adjusted gross loans (non-GAAP)
1.07
%
 
0.85
%
 
0.99
%


39



Recent Developments: COVID-19, the CARES Act, and Our Response
The COVID-19 pandemic has caused economic and social disruption on an unprecedented scale. While some industries have been impacted more severely than others, all businesses have been impacted to some degree. This disruption has resulted in business closures across the country, significant job loss, and aggressive measures by the federal government.
Congress, the President, and the Federal Reserve have taken several actions designed to cushion the economic fallout. Most notably, the CARES Act was signed into law on March 27, 2020 as a $2.2 trillion legislative package. The goal of the CARES Act is to prevent a severe economic downturn through various measures, including direct financial aid to families and economic stimulus to significantly impacted industry sectors. The package also includes extensive emergency funding for hospitals and healthcare providers. In addition to the general impact of COVID-19, certain provisions of the CARES Act as well as other recent legislative and regulatory relief efforts are expected to have a material impact on our operations. While it is not possible to know the full extent of these impacts as of the date of this filing, we are disclosing potentially material items of which we are aware.
In response to the COVID-19 pandemic, the Company is offering a variety of relief options designed to support our customers and communities we serve.
Paycheck Protection Program Participation. The CARES Act authorized the SBA to temporarily guarantee loans under the new PPP loan program. The goal of the PPP is to avoid as many layoffs as possible, and to encourage small businesses to maintain payrolls. As a qualified SBA lender, the Company was automatically authorized to originate PPP loans upon commencement of the program in April 2020. PPP loans have: (a) an interest rate of 1.0%, (b) a two-year loan term to maturity; and (c) principal and interest payments deferred for six months from the date of disbursement. The SBA guarantees 100% of the PPP loans made to eligible borrowers. The entire principal amount of the borrower’s PPP loan, including any accrued interest, is eligible to be forgiven and repaid by the SBA so long as employee and compensation levels of the business are maintained and 75% of the loan proceeds are used for payroll expenses, with the remaining 25% of the loan proceeds used for other qualifying expenses.
As of May 5, 2020, we had received PPP applications totaling $93.3 million with confirmed allocation from the SBA for 284 applications totaling $86.7 million. Net origination fees on these loans are approximately $2.2 million which will be deferred and amortized into interest income as the loans are repaid or forgiven. Due to demand exceeding our capacity, on April 9, 2020 we partnered with a third party to process and fund additional PPP applications for our customers and communities. With the recent approval by Congress of additional funds for this program, applications will continue to be processed through our third party relationship. We intend to utilize the FRB's PPPLF, pursuant to which the Company will pledge its PPP loans as collateral to obtain FRB non-recourse loans. The PPPLF will take the PPP loans as collateral at face value.
Allowance for Loan Losses and Loan Modifications. The Company recorded a provision of $5.4 million for the third quarter of fiscal 2020 due primarily to the impact of COVID-19 on the economy. As of March 31, 2020, HomeTrust Bank had modified 362 loans totaling $176.7 million due to COVID-19 related issues. These modifications were not classified as TDRs at March 31, 2020 in accordance with the guidance of the CARES Act. The CARES Act provided that the short-term modification of loans as a result of the COVID-19 pandemic, made on a good faith basis to borrowers who were current as defined under the CARES Act prior to any relief, are not TDRs. This includes short-term (e.g. six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers are considered current under the CARES Act if they are less than 30 days past due on their contractual payments as of December 31, 2019.
The Company is closely monitoring the effects of COVID-19 on our loan portfolio and will continue to monitor all the associated risks to minimize any potential losses. We have received, and continue to receive, inquiries and requests from borrowers for some type of payment relief due to the COVID 19-pandemic. In response, HomeTrust Bank is offering payment and financial relief programs for borrowers impacted by COVID-19. These programs include loan payment deferrals for up to 90 days, waived late fees, and, suspension of foreclosure proceedings and repossessions.
All loans modified due to COVID-19 will be separately monitored and any request for continuation of relief beyond the initial modification will be reassessed at that time to determine if a further modification should be granted and if a downgrade in risk rating is appropriate.
Payment Deferrals by Loan Types as of May 5, 2020
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
Outstanding Loan Balance
 
Percent of Total Loan Portfolio
Commercial real estate, construction and development, and commercial and industrial
 
$
425,656

 
16.0
%
Equipment finance
 
39,906

 
1.5
%
One-to-four family
 
48,463

 
1.8
%
Other consumer loans
 
12,865

 
0.5
%
Total
 
$
526,890

 
19.8
%

The deferrals are short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current as of December 31, 2019 and are not to be considered TDRs.

40



After the deferral period, normal loan payments will continue, however, payments will be applied first to interest until the deferred interest is repaid and thereafter applied to both principal and interest with any deficiency in amortized principal payments added to the balloon payment due at maturity. We believe the steps we are taking are necessary to effectively manage our portfolio and assist our clients through the ongoing uncertainty surrounding the duration, impact and government response to the COVID-19 pandemic.
See "Risk Factors" under Part II, Item 1A for additional risks related to COVID-19.
Branch Operations and Additional Client Support We have taken various steps to ensure the safety of our customers and our team members by limiting branch activities to appointment only and use of our drive-up facilities, and by encouraging the use of our digital and electronic banking channels, all the while adjusting for evolving State and Federal guidelines. Many of our employees are working remotely or have flexible work schedules, and we have established protective measures within our offices to help ensure the safety of those employees who must work on-site.
For customers that may need access to funds in their certificate of deposits to assist with living expenses during the COVID-19 pandemic, we are waiving early withdrawal penalties for withdrawals up to $25,000. Overdraft and fee reversals are waived on a case-by-case basis.
Comparison of Financial Condition at March 31, 2020 and June 30, 2019
General.  Total assets and liabilities remained relatively level at $3.5 billion and $3.1 billion, respectively, at March 31, 2020 compared to June 30, 2019. As previously reported in the first quarter of the fiscal year, the Company marketed for sale $256.8 million in one-to-four family loans, of which $154.9 million were sold during the second quarter resulting in a $958,000 after-tax gain. The funds received from the $154.9 million in one-to-four family loans sold and deposit growth of $227.5 million, or 9.8% were used to pay down $145.0 million, or 21.3% of borrowings, fund the $114.4 million, or 22.7% net increase in cash and cash equivalents, commercial paper, certificates of deposit in other banks, securities available for sale, and loans held for sale for the first nine months of fiscal 2020.
As of July 1, 2019, the Company adopted the new lease accounting standard, which drove several changes on the balance sheet. Land totaling $2.1 million related to the Company's one finance lease (f/k/a capital lease) was reclassed from premises and equipment, net to other assets as a ROU asset and the corresponding liability was reclassed from a separate line on the balance sheet to other liabilities as a lease liability. The Company's operating leases led to approximately $4.6 million in ROU assets and corresponding lease liabilities, which are maintained in other assets and other liabilities, respectively.
Cash, cash equivalents, and commercial paper.  Total cash and cash equivalents increased $11.0 million, or 15.5%, to $82.1 million at March 31, 2020 from $71.0 million at June 30, 2019. Commercial paper increased $40.5 million, or 16.8% to $282.0 million at March 31, 2020 from $241.4 million at June 30, 2019. Our investments in commercial paper have short-term maturities and limited exposure of $15.0 million or less per each highly-rated company.
Investments.  Debt securities available for sale increased $36.8 million, or 30.2%, to $158.6 million at March 31, 2020 from $121.8 million at June 30, 2019. During the nine months ended March 31, 2020, $75.5 million of securities were purchased (primarily shorter term corporate bonds) partially offset by $27.8 million of securities which matured and $10.9 million of MBS principal payments which were received. The overall increase in shorter-term corporate bonds provides the Company with higher yields compared to MBS and agency securities while remaining within our investment policy. At March 31, 2020, certificates of deposit in other banks increased $5.5 million, or 10.7% to $57.5 million compared to $52.0 million at June 30, 2019. The increase in certificates of deposit in other banks was due to $24.2 million in CD purchases partially offset by $18.7 million in maturities. All certificates of deposit in other banks are fully insured by the FDIC. We evaluate individual investment securities quarterly for other-than-temporary declines in market value. We do not believe that there were any other-than-temporary impairments at March 31, 2020; therefore, no impairment losses were recorded during the first nine months of fiscal 2020. Other investments at cost decreased $4.2 million, or 9.2% to $41.2 million at March 31, 2020 from $45.4 million at June 30, 2019. Other investments at cost included FHLB stock, FRB stock, and SBIC investments totaling $25.9 million, $7.4 million, and $8.0 million, respectively. The overall decrease was driven by a $6.1 million, or 19.1% reduction in FHLB stock as a result of $145.0 million in borrowings paid down during the first nine months of fiscal 2020.
Loans held for sale. Loans held for sale increased to $38.7 million at March 31, 2020 from $18.2 million at June 30, 2019. Approximately $85.6 million one-to-four family loans being marketed for sale at December 31, 2019 were moved from loans held for sale and back into the loan portfolio during the current quarter as market conditions changed management's intent to sell these loans. The $20.5 million increase was primarily from HELOCs originated for sale.
Loans.  Net loans receivable decreased $47.1 million, or 1.8%, at March 31, 2020 to $2.6 billion from June 30, 2019 due to the previously mentioned one-to-four loans moved to held for sale and sold, which was partially offset by $147.9 million, or 7.6% annualized rate of organic loan growth.

41



Retail consumer and commercial loans consist of the following at the dates indicated:
 
As of
 
 
 
 
 
Percent of total
 
March 31,
 
June 30,
 
Change
 
March 31,
 
June 30,
(Dollars in thousands)
2020
 
2019
 
$
 
%
 
2020
 
2019
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
487,777

 
$
660,591

 
$
(172,814
)
 
(26.2
)%
 
18.3
%
 
24.4
%
HELOCs - originated
144,804

 
139,435

 
5,369

 
3.9

 
5.4

 
5.2

HELOCs - purchased
82,232

 
116,972

 
(34,740
)
 
(29.7
)
 
3.1

 
4.3

Construction and land/lots
80,765

 
80,602

 
163

 
0.2

 
3.0

 
3.0

Indirect auto finance
135,449

 
153,448

 
(17,999
)
 
(11.7
)
 
5.1

 
5.7

Consumer
11,576

 
11,416

 
160

 
1.4

 
0.4

 
0.4

Total retail consumer loans
942,603

 
1,162,464

 
(219,861
)
 
(18.9
)
 
35.3

 
43.0

Commercial loans:
 

 
 

 
 
 
 
 
 
 
 
Commercial real estate
990,693

 
927,261

 
63,432

 
6.8

 
37.2

 
34.3

Construction and development
249,714

 
210,916

 
38,798

 
18.4

 
9.4

 
7.8

Commercial and industrial
164,539

 
160,471

 
4,068

 
2.5

 
6.2

 
5.9

Equipment finance
198,962

 
132,058

 
66,904

 
50.7

 
7.5

 
4.9

Municipal leases
115,992

 
112,016

 
3,976

 
3.5

 
4.4

 
4.1

Total commercial loans
1,719,900

 
1,542,722

 
177,178

 
11.5

 
64.7

 
57.0

Total loans
$
2,662,503

 
$
2,705,186

 
$
(42,683
)
 
(1.6
)%
 
100.0
%
 
100.0
%
Total equipment finance loans at March 31, 2019, were $199.0 million, an increase of $66.9 million from June 30, 2019. Our Equipment Finance line of business first began operations in May 2018 and offers companies that are purchasing equipment for their business flexible and customizable repayment terms while managing related tax and accounting issues. These products are primarily made up of commercial finance agreements and commercial loans for transportation, construction, and manufacturing equipment. The loans have terms ranging from 24 to 84 months, with an average of five years and are secured by the financed equipment. Typical transaction sizes range from $25,000 to $1.0 million, with an average size of approximately $200,000.
Asset Quality. Our overall asset quality metrics continue to demonstrate our commitment to growing and maintaining a loan portfolio with a moderate risk profile, however we will remain diligent in our review of the portfolio and overall economy as we continue to maneuver through the uncertainty surrounding COVID-19.
Nonperforming assets increased by $3.4 million, or 25.6% to $16.7 million, or 0.47% of total assets, at March 31, 2020 from $13.3 million, or 0.38% of total assets at June 30, 2019. Nonperforming assets included $15.6 million in nonaccruing loans and $1.1 million in REO at March 31, 2020, compared to $10.4 million and $2.9 million, in nonaccruing loans and REO, respectively, at June 30, 2019. The increase in nonperforming assets was mainly driven by one large commercial real estate loan relationship that was moved to nonaccrual during the second quarter. Included in nonperforming loans at March 31, 2020 are $7.2 million of TDR loans of which $5.8 million were current with respect to their modified payment terms. At March 31, 2020, $7.7 million, or 49.3%, of nonaccruing loans were current on their loan payments. PCI loans aggregating $1.0 million obtained through prior acquisitions were excluded from nonaccruing loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations. Nonperforming loans to total loans was 0.59% at March 31, 2020 and 0.38% at June 30, 2019.
The ratio of classified assets to total assets decreased to 0.86% at March 31, 2020 from 0.89% at June 30, 2019. Classified assets decreased to $30.7 million at March 31, 2020 compared to $30.9 million at June 30, 2019. Delinquent loans (loans delinquent 30 days or more) increased to $11.7 million at March 31, 2020, from $10.1 million at June 30, 2019 which was driven by a $1.0 million increase in equipment finance contracts.
As of March 31, 2020, we had identified $30.6 million of impaired loans compared to $33.0 million at June 30, 2019. Our impaired loans are comprised of loans on nonaccrual status and all TDRs, whether performing or on nonaccrual status under their restructured terms. Impaired loans may be evaluated for reserve purposes using either a specific impairment analysis or on a collective basis as part of homogeneous pools. As of March 31, 2020, there were $12.5 million loans individually evaluated for impairment and $18.1 million were collectively evaluated. For more information on these impaired loans, see Note 5 of the Notes to Consolidated Financial Statements under Item 1 of this report.
Allowance for loan losses.  We establish an allowance for loan losses by charging amounts to the loan loss provision at a level required to reflect estimated credit losses in the loan portfolio. In evaluating the level of the allowance for loan losses, management considers, among other factors, historical loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect borrowers' ability to repay, estimated value of any underlying collateral, prevailing economic conditions and current risk factors specifically related to each loan type.

42



The allowance for loan losses was $26.9 million, or 1.01% of total loans, at March 31, 2020 compared to $21.4 million, or 0.79% of total loans, at June 30, 2019. The allowance for loan losses to gross loans excluding acquired loans was 1.07% at March 31, 2020, compared to 0.85% at June 30, 2019. The overall increase was primarily driven by additional allowance stemming from our initial assessment of COVID-19 on the loan portfolio. The allowance for our acquired loans at March 31, 2020 was $182,000 compared to $201,000 at June 30, 2019.
There was a $5.8 million provision for loan losses for the nine months ended March 31, 2020, compared to $5.5 million for the corresponding period in fiscal year 2019. The current year provision included significant adjustments relating to COVID-19 as a result of changes in qualitative factors based on our perceived increase in at risk loan sub-categories, which include: lodging, restaurants, shopping centers, other retail businesses, and equipment finance. The provision in the corresponding period in the prior year related to one commercial loan relationship. Net loan charge offs totaled $379,000 for the nine months ended March 31, 2020, compared to $2.1 million for the same period in fiscal year 2019. Net charge offs as a percentage of average loans were 0.02% and 0.11% for the nine months ended March 31, 2020 and 2019, respectively.
The allowance as a percentage of nonaccruing loans decreased to 171.40% at March 31, 2020 from 206.90% at June 30, 2019.
We believe that the allowance for loan losses as of March 31, 2020 was adequate to absorb the known and inherent risks of loss in the loan portfolio at that date. While we believe the estimates and assumptions used in our determination of the adequacy of the allowance are reasonable, there can be no assurance that such estimates and assumptions will not be proven incorrect in the future, or that the actual amount of future provisions will not exceed the amount of past provisions or that any increased provisions that may be required will not adversely impact our financial condition and results of operations. In addition, the determination of the amount of the allowance for loan losses is subject to review by bank regulators as part of the routine examination process, which may result in the establishment of additional reserves based upon their judgment of information available to them at the time of their examination. The adoption of ASU 2016-03, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" will significantly change the Company's accounting for the allowance for loan losses. For more information on this ASU, See Note 2 - Recent Accounting Pronouncements of the Notes to Consolidated Financial Statements under Item 1 of this report. Lastly, a further decline in national and local economic conditions, as a result of the COVID-19 pandemic or other factors, could result in a material increase in the allowance for loan losses and may adversely affect the Company’s financial condition and results of operations.
Real estate owned. REO decreased $1.9 million, or 63.3% to $1.1 million at March 31, 2020 due to $1.8 million in REO sales during the nine months ended March 31, 2020. The total balance of REO at March 31, 2020 included $205,000 in single-family homes, $435,000 in commercial real estate,and $435,000 in unimproved land.
Deferred income taxes. Deferred income taxes decreased $4.8 million, or 18.0%, to $21.8 million at March 31, 2020 from $26.5 million at June 30, 2019. The decrease was primarily driven by the realization of net operating losses through increases in taxable income.
Goodwill. Goodwill remained unchanged at $25.6 million at both March 31, 2020 and June 30, 2019.
Other assets. Other assets increased $18.4 million, or 79.6%, to $41.6 million at March 31, 2020 from $23.2 million at June 30, 2019. The increase was driven by the previously mentioned ROU assets on our finance and operating leases and a $9.4 million increase in operating leases from our newer equipment finance line of business.
Deposits.  Deposits increased $227.5 million, or 9.8% during the nine months ended March 31, 2020 to $2.6 billion from $2.3 billion at June 30, 2019 primarily due to deposit growth initiatives which led to a $175.5 million increase in core deposits as well as a $52.0 million increase in certificates of deposit.
The following table sets forth our deposits by type of deposit account as of the dates indicated:
 
As of
 
 
 
Percent of total
 
March 31,
 
June 30,
 
Change
 
March 31,
 
June 30,
(Dollars in thousands)
2020
 
2019
 
$
 
%
 
2020
 
2019
Core deposits:
 
 
 
 
 
 
 
 
 
 
 
     Noninterest-bearing accounts
$
322,812

 
$
294,322

 
$
28,490

 
9.7
 %
 
12.6
%
 
12.6
%
     NOW accounts
496,561

 
452,295

 
44,266

 
9.8
 %
 
19.4
%
 
19.4
%
     Money market accounts
801,424

 
691,172

 
110,252

 
16.0
 %
 
31.4
%
 
29.7
%
     Savings accounts
169,792

 
177,278

 
(7,486
)
 
(4.2
)%
 
6.7
%
 
7.6
%
Core deposits
1,790,589

 
1,615,067

 
175,522

 
10.9
 %
 
70.1
%
 
69.4
%
Certificates of deposit
764,198

 
712,190

 
52,008

 
7.3
 %
 
29.9
%
 
30.6
%
Total
$
2,554,787

 
$
2,327,257

 
$
227,530

 
9.8
 %
 
100.0
%
 
100.0
%
Borrowings.  Borrowings decreased to $535.0 million at March 31, 2020 from $680.0 million at June 30, 2019. A total of $60.0 million of these FHLB advances have maturities of less than 30 days and $475.0 million consist of convertible FHLB advances with maturities greater than nine years; together with a weighted average interest rate of 1.30% at March 31, 2020.

43



Equity.  Stockholders' equity at March 31, 2020 decreased $3.5 million, or 0.8% to $405.4 million from $408.9 million at June 30, 2019. Changes within stockholders' equity included $19.2 million in net income and $2.3 million in stock-based compensation, offset by 1,032,221 shares of common stock repurchased at an average cost of $22.50, or approximately $23.2 million in total, and $3.4 million related to cash dividends declared.

44



Average Balances, Interest and Average Yields/Cost
The following table sets forth for the periods indicated, information regarding average balances of assets and liabilities as well as the total dollar amounts of interest income from average interest-earning assets and interest expense on average interest-bearing liabilities, resultant yields, interest rate spread, net interest margin (otherwise known as net yield on interest-earning assets), and the ratio of average interest-earning assets to 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.
 
For the Three Months Ended March 31,
 
2020
 
2019
 
Average
Balance
Outstanding
 
Interest
Earned/
Paid(2)
 
Yield/
Rate(2)
 
Average
Balance
Outstanding
 
Interest
Earned/
Paid(2)
 
Yield/
Rate(2)
 
(Dollars in thousands)
Assets:
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Loans receivable(1)
$
2,669,796

 
$
30,086

 
4.51
%
 
$
2,650,155

 
$
31,083

 
4.69
%
Commercial paper and deposits in other banks
378,296

 
1,794

 
1.90
%
 
337,522

 
2,283

 
2.71
%
Securities available for sale
154,108

 
912

 
2.37
%
 
139,898

 
850

 
2.43
%
Other interest-earning assets(3)
37,877

 
550

 
5.81
%
 
46,756

 
811

 
6.94
%
Total interest-earning assets
3,240,077

 
33,342

 
4.12
%
 
3,174,331

 
35,027

 
4.42
%
Other assets
265,139

 
 
 
 
 
246,858

 
 
 
 
Total assets
3,505,216

 
 
 
 
 
3,421,189

 
 
 
 
Liabilities and equity:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing checking accounts
451,335

 
412

 
0.36
%
 
463,807

 
332

 
0.29
%
Money market accounts
792,313

 
1,916

 
0.97
%
 
701,692

 
1,408

 
0.80
%
Savings accounts
159,641

 
50

 
0.12
%
 
188,848

 
58

 
0.12
%
Certificate accounts
783,758

 
3,593

 
1.83
%
 
627,444

 
2,606

 
1.66
%
Total interest-bearing deposits
2,187,047

 
5,971

 
1.09
%
 
1,981,791

 
4,404

 
0.89
%
Borrowings
473,319

 
1,757

 
1.48
%
 
670,142

 
3,741

 
2.23
%
  Total interest-bearing liabilities
2,660,366

 
7,728

 
1.16
%
 
2,651,933

 
8,145

 
1.23
%
Noninterest-bearing deposits
342,581

 
 
 
 
 
298,118

 
 
 
 
Other liabilities
88,725

 
 
 
 
 
63,015

 
 
 
 
Total liabilities
3,091,672

 
 
 
 
 
3,013,066

 
 
 
 
Stockholders' equity
413,544

 
 
 
 
 
408,123

 
 
 
 
Total liabilities and stockholders' equity
$
3,505,216

 
 
 
 
 
$
3,421,189

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earning assets
$
579,711

 
 

 
 
 
$
522,398

 
 
 
 
Average interest-earning assets to
 
 
 
 
 
 
 
 
 
 
 
average interest-bearing liabilities
121.79
%
 
 
 
 
 
119.70
%
 
 
 
 
Tax-equivalent:
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
 
$
25,614

 
 
 
 
 
$
26,882

 
 
Interest rate spread
 
 
 
 
2.96
%
 
 
 
 
 
3.19
%
Net interest margin(4)
 
 
 
 
3.16
%
 
 
 
 
 
3.39
%
Non-tax-equivalent:
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
 
$
25,309

 
 
 
 
 
$
26,569

 
 
Interest rate spread
 
 
 
 
2.92
%
 
 
 
 
 
3.14
%
Net interest margin(4)
 
 
 
 
3.12
%
 
 
 
 
 
3.35
%
(1) The average loans receivable, net balances include loans held for sale and nonaccruing loans.
(2) Interest income used in the average interest earned and yield calculation includes the tax equivalent adjustment of $305 and $313 for the three months ended March 31, 2020
and 2019, respectively, calculated based on a combined federal and state tax rate of 24%.
(3) The average other interest-earning assets consist of FRB stock, FHLB stock, and SBIC investments.
(4) Net interest income divided by average interest-earning assets.

45




 
For the Nine Months Ended March 31,
 
2020
 
2019
(Dollars in thousands)
Average
Balance
Outstanding
 
Interest
Earned/
Paid(2)
 
Yield/
Rate(2)
 
Average
Balance
Outstanding
 
Interest
Earned/
Paid(2)
 
Yield/
Rate(2)
Assets:
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Loans receivable(1)
$
2,734,249

 
$
95,045

 
4.63
%
 
$
2,608,485

 
$
90,918

 
4.65
%
Commercial paper and deposits in other banks
362,598

 
5,959

 
2.19
%
 
323,966

 
6,106

 
2.51
%
Securities available for sale
152,798

 
2,901

 
2.53
%
 
148,645

 
2,582

 
2.32
%
Other interest-earning assets(3)
42,662

 
2,154

 
6.73
%
 
44,453

 
2,664

 
8.02
%
Total interest-earning assets
3,292,307

 
106,059

 
4.30
%
 
3,125,549

 
102,270

 
4.36
%
Other assets
266,097

 
 
 
 
 
245,360

 
 
 
 
Total assets
$
3,558,404

 
 
 
 
 
$
3,370,909

 
 
 
 
Liabilities and equity:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing checking accounts
449,560

 
1,105

 
0.33
%
 
463,035

 
903

 
0.26
%
Money market accounts
765,492

 
5,760

 
1.00
%
 
689,363

 
3,630

 
0.70
%
Savings accounts
166,711

 
153

 
0.12
%
 
197,929

 
189

 
0.13
%
Certificate accounts
769,073

 
11,127

 
1.93
%
 
573,647

 
6,039

 
1.40
%
Total interest-bearing deposits
2,150,836

 
18,145

 
1.12
%
 
1,923,974

 
10,761

 
0.89
%
Borrowings
587,822

 
7,619

 
1.73
%
 
663,156

 
10,691

 
2.15
%
Total interest-bearing liabilities
2,738,658

 
25,764

 
1.25
%
 
2,587,130

 
21,452

 
1.11
%
Noninterest-bearing deposits
336,496

 
 
 
 
 
310,304

 
 
 
 
Other liabilities
70,175

 
 
 
 
 
62,830

 
 
 
 
Total liabilities
3,145,329

 
 
 
 
 
2,960,264

 
 
 
 
Stockholders' equity
413,075

 
 
 
 
 
410,645

 
 
 
 
Total liabilities and stockholders' equity
$
3,558,404

 
 
 
 
 
$
3,370,909

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earning assets
$
553,649

 
 
 
 
 
$
538,419

 
 
 
 
Average interest-earning assets to
 
 
 
 
 
 
 
 
 
 
 
average interest-bearing liabilities
120.22
%
 
 
 
 
 
120.81
%
 
 
 
 
Tax-equivalent:
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
 
$
80,295

 
 
 
 
 
$
80,818

 
 
Interest rate spread
 
 
 
 
3.05
%
 
 
 
 
 
3.25
%
Net interest margin(4)
 
 
 
 
3.25
%
 
 
 
 
 
3.45
%
Non-tax-equivalent:
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
 
$
79,416

 
 
 
 
 
$
79,942

 
 
Interest rate spread
 
 
 

 
3.01
%
 
 
 
 
 
3.22
%
Net interest margin(4)
 
 
 
 
3.22
%
 
 
 
 
 
3.41
%
(1) The average loans receivable, net balances include loans held for sale and nonaccruing loans.
(2) Interest income used in the average interest earned and yield calculation includes the tax equivalent adjustment of $879 and $876 for the nine months ended March 31, 2020 and 2019, respectively, calculated based on a combined federal and state tax rate of 24%.
(3) The average other interest-earning assets consist of FRB stock, FHLB stock, and SBIC investments.
(4) Net interest income divided by average interest-earning assets.

46



Rate/Volume Analysis
The following table presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. It distinguishes between the changes related to outstanding balances and that due to the changes in interest rates. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume (i.e., changes in volume multiplied by old rate) and (ii) changes in rate (i.e., changes in rate multiplied by old volume). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to the change due to volume and the change due to rate.
 
Three Months Ended March 31, 2020
 
Compared to
 
Three Months Ended March 31, 2019
 
Increase/
(decrease)
due to
 
Total
increase/(decrease)
(Dollars in thousands)
Volume
 
Rate
 
Interest-earning assets:
 
 
 
 
 
 Loans receivable(1)
$
229

 
$
(1,226
)
 
$
(997
)
Commercial paper and deposits in other banks
276

 
(765
)
 
(489
)
Securities available for sale
87

 
(25
)
 
62

 Other interest-earning assets
(154
)
 
(107
)
 
(261
)
    Total interest-earning assets
$
438

 
$
(2,123
)
 
$
(1,685
)
Interest-bearing liabilities:
 
 
 
 
 
 Interest-bearing checking accounts
$
(8
)
 
$
88

 
$
80

 Money market accounts
182

 
326

 
508

 Savings accounts 
(9
)
 
1

 
(8
)
 Certificate accounts
649

 
338

 
987

 Borrowings
(1,099
)
 
(885
)
 
(1,984
)
    Total interest-bearing liabilities
(285
)
 
(132
)
 
(417
)
Net increase (decrease) in tax equivalent interest income
$
723

 
$
(1,991
)
 
$
(1,268
)
 
Nine Months Ended March 31, 2020
 
Compared to
 
Nine Months Ended March 31, 2019
 
Increase/
(decrease)
due to
 
Total
increase/(decrease)
(Dollars in thousands)
Volume
 
Rate
 
Interest-earning assets:
 
 
 
 
 
 Loans receivable(1)
$
4,383

 
$
(256
)
 
$
4,127

Commercial paper and deposits in other banks
728

 
(875
)
 
(147
)
Securities available for sale
72

 
247

 
319

 Other interest-earning assets
(108
)
 
(402
)
 
(510
)
    Total interest-earning assets
5,075

 
(1,286
)
 
3,789

Interest-bearing liabilities:
 
 
 
 
 
 Interest-bearing checking accounts 
$
(26
)
 
$
228

 
$
202

 Money market accounts
401

 
1,729

 
2,130

 Savings accounts
(29
)
 
(7
)
 
(36
)
 Certificate accounts
2,057

 
3,031

 
5,088

 Borrowings
(1,214
)
 
(1,858
)
 
(3,072
)
    Total interest-bearing liabilities
1,189

 
3,123

 
4,312

Net increase (decrease) in tax equivalent interest income
$
3,886

 
$
(4,409
)
 
$
(523
)
_____________
(1) Interest income used in the average interest earned and yield calculation includes the tax equivalent adjustment of $305 and $313 for the three months ended March 31, 2020 and 2019, respectively, calculated based on a combined federal and state income tax rate of 24%. Interest income used in the average interest earned and yield calculation includes the tax equivalent adjustment of $879 and $876 for the nine months ended March 31, 2020 and 2019, respectively, calculated based on a combined federal and state income tax rate of 24%.

47



Comparison of Results of Operation for the Three Months Ended March 31, 2020 and 2019
General.  During the three months ended March 31, 2020, net income decreased 63.9% to $1.2 million compared to $3.3 million for the three months ended March 31, 2019. The Company's diluted earnings per share decreased to $0.07 for the three months ended March 31, 2020 compared to $0.18 for the same period in fiscal 2019. As previously discussed, earnings for the three months ended March 31, 2020 and 2019 included a significant provision for loan losses of $5.4 million and $5.5 million, respectively.
Net Interest Income. Net interest income decreased by $1.3 million, or 4.7% to $25.3 million for the quarter ended March 31, 2020 compared to $26.6 million for the corresponding period in fiscal 2019. The decrease in net interest income for the quarter ended March 31, 2020 was primarily due to a $1.7 million decrease in interest and dividend income primarily driven by lower rates on loans and commercial paper as a result of lower federal funds and other market interest rates, which was partially offset by a $417,000 decrease in interest expense.
Average interest-earning assets increased $65.7 million, or 2.1% to $3.2 billion for the quarter ended March 31, 2020. The average balance of total loans receivable increased by $19.6 million, or 0.7% compared to the same quarter last year due to organic loan growth offset by the previously disclosed one-to-four family loans sold in December 2019. The average balance of commercial paper and deposits in other banks increased $40.8 million, or 12.1% between the periods driven by increases in commercial paper investments. Our investments in commercial paper have short-term maturities and limited exposure of $15.0 million or less per each highly-rated company. The average balance in securities available for sale increased $14.2 million, or 10.2%, which was primarily driven by the purchase of shorter-term corporate bonds. These increases were partially funded by a cumulative $52.9 million, or 1.8% increase in average interest-bearing liabilities and noninterest bearing deposits and the $8.9 million, or 19.0% decrease in other interest earning assets as compared to the same quarter last year. Net interest margin (on a fully taxable-equivalent basis) for the three months ended March 31, 2020 decreased to 3.16% from 3.39% for the same period a year ago.
Total interest and dividend income decreased $1.7 million, or 4.8% for the three months ended March 31, 2020 as compared to the same period last year, which was primarily driven by a $1.0 million, or 3.2% decrease in loan interest income, a $489,000, or 21.4% decrease in interest income from commercial paper and deposits in other banks, and a $261,000, or 32.2% decrease in other investment income which was partially offset by a $62,000, or 7.3% increase in interest income from securities available for sale. The lower interest income from loans and commercial paper and deposits in other banks was primarily driven by the decrease in yields. Average loan yields decreased 18 basis points to 4.51% for the quarter ended March 31, 2020 from 4.69% in the corresponding quarter last year. Accretable income on acquired loans stems from the discount established at the time these loan portfolios were acquired and the related impact of prepayments on purchased loans. Each quarter the Company analyzes the cash flow assumptions on the acquired loan pools and, at least semi-annually, the Company updates loss estimates, prepayment speeds and other variables when analyzing cash flows. In addition to this accretion income, which is recognized over the estimated life of the loan pools, if a loan is removed from a pool due to payoff or foreclosure, the unaccreted discount in excess of losses is recognized as an accretion gain in interest income. As a result, income from acquired loan pools can be volatile from quarter to quarter, however the incremental accretion is expected to decrease over time as the balance of the purchase discount for acquired loans decreases. For the quarters ended March 31, 2020 and 2019, average loan yields included six and seven basis points, respectively, from the accretion of purchase discounts on acquired loans. The total purchase discount for acquired loans was $5.5 million at March 31, 2020, compared to $6.7 million at June 30, 2019, and $7.1 million at March 31, 2019.
Total interest expense decreased $417,000, or 5.1% for the quarter ended March 31, 2020 compared to the same period last year. The decrease was driven by a $2.0 million, or 53.0% decrease in interest expense on borrowings partially offset by a $1.6 million, or 35.6% increase in interest expense on deposits. The additional deposit interest expense was a result of our continued focus on increasing deposits as the average balance of interest-bearing deposits increased $205.3 million, or 10.4% along with a 20 basis point increase in the average cost of interest-bearing deposits for the quarter ended March 31, 2020 compared to the same quarter last year. Average borrowings for the quarter ended March 31, 2020 decreased $196.8 million, or 29.4% along with a 75 basis point decrease in the average cost of borrowings compared to the same period last year. The decrease in the average cost of borrowing was driven by the lower federal funds rate during the current quarter compared to the prior year. The overall average cost of funds decreased seven basis points to 1.16% for the current quarter compared to 1.23% in the same quarter last year due primarily to the impact of the lower amount of borrowings and lower interest rates.
Provision for Loan Losses. During the three months ended March 31, 2020 there was a $5.4 million provision for loan losses compared to a $5.5 million provision for the corresponding quarter of fiscal 2019. The current year provision included significant adjustments relating to COVID-19 compared to prior year's provision which was primarily driven by one commercial loan relationship. Net loan charge-offs totaled $581,000 for the three months ended March 31, 2020 compared to $2.5 million for the same period in fiscal 2019. Annualized net charge-offs as a percentage of average loans was 0.09% for the three months ended March 31, 2020, compared to 0.38% for the same period in fiscal 2019.
See "Comparison of Financial Condition - Asset Quality" for additional details.
Noninterest Income.  Noninterest income increased $1.0 million, or 18.1% to $6.4 million for the three months ended March 31, 2020 from $5.4 million for the same period in the previous year primarily due a $160,000, or 119.4% increase in loan income and fees and a $749,000, or 74.4% increase in other noninterest income. The $160,000 increase for the quarter in loan income and fees is primarily a result of our adjustable rate conversion program and prepayment fees on equipment finance loans. The $749,000 increase in other noninterest income primarily related to operating lease income from the new equipment finance line of business. There were $32.2 million of residential mortgage loans originated for sale which were sold with gains of $852,000 compared to $24.7 million sold and gains of $628,000 in the corresponding quarter in the prior year. During the quarter ended March 31, 2020, $6.8 million of the guaranteed portion of SBA commercial loans were sold with gains of $469,000 compared to $11.5 million sold and gains of $843,000 in the corresponding quarter in the prior year. In addition, $18.0 million of home equity loans were sold during the quarter for a gain of $183,000.

48



Noninterest Expense.  Noninterest expense for the three months ended March 31, 2020 increased $1.9 million, or 8.4% to $24.9 million compared to $23.0 million for the three months ended March 31, 2019. The increase was primarily due to a $1.0 million, or 7.4% increase in salaries and employee benefits as a result of new positions and annual salary increases; a $1.0 million, or 34.6% increase in other expenses, mainly driven by depreciation from our equipment finance line of business and expenses related to our recent core system conversion; a $164,000, or 23.5% increase in telephone, postage, and supplies as a result of our core conversion; and a $142,000, or 44.4% increase in deposit insurance premiums as a result of our growth and changing loan portfolio mix. Partially offsetting these increases was a cumulative decrease of $365,000, or 39.1% in REO-related expenses and core deposit intangible amortization for the three months ended March 31, 2020 compared to the same period last year as a result of gains on the sale of REO during the current quarter compared to a loss in the corresponding quarter in fiscal 2019.
Income Taxes. The Company's income tax expense for the three months ended March 31, 2020 increased $3,000, or 1.6% to $188,000 from $185,000. The effective tax rate for the three months ended March 31, 2020 and 2019 was 13.6% and 5.3%, respectively. These lower rates were due to the effects of $1.0 million in each quarter of tax-free income from municipal leases in the Company's loan portfolio and a $325,000 valuation adjustment in 2019 related to the Tax Cut and Jobs Act.
Comparison of Results of Operation for the Nine Months Ended March 31, 2020 and 2019
General.  During the nine months ended March 31, 2020, net income increased by $55,000, or 0.3% to $19.2 million from $19.1 million for the nine months ended March 31, 2019. Diluted earnings per share increased 5.9% to $1.08 for the first nine months of fiscal year 2020, compared to $1.02 in the same period in fiscal 2019 primarily as a result of continued stock buybacks.
Net Interest Income. Net interest income decreased $526,000, or 0.7% to $79.4 million for the nine months ended March 31, 2020 compared to $79.9 million for the nine months ended March 31, 2019. This decrease in net interest income was driven by a $3.8 million increase in interest and dividend income primarily driven by an increase in average interest-earning assets, which was offset by a $4.3 million increase in interest expense.
Average interest-earning assets increased $166.8 million, or 5.3% to $3.3 billion for the nine months ended March 31, 2020 compared to $3.1 billion for the corresponding period in fiscal 2019. For the nine months ended March 31, 2020, the average balance of total loans receivable increased $125.8 million, or 4.8% compared to the same period last year primarily due to organic loan growth. The average balance of commercial paper and deposits in other banks increased $38.6 million, or 11.9% between the periods driven by increases in commercial paper investments. These increases were primarily funded by the $151.5 million, or 5.9% increase in average interest-bearing liabilities, as compared to the same nine-month period last year. Net interest margin (on a fully taxable-equivalent basis) for the nine months ended March 31, 2020 decreased to 3.25% from 3.45% for the same period a year ago.
Total interest and dividend income increased $3.8 million, or 3.7% for the nine months ended March 31, 2020 as compared to the same period last year, which was primarily driven by a $4.1 million, or 4.6% increase in loan interest income, and a $319,000, or 12.4% increase in interest income from securities available for sale, which was partially offset by a $147,000, or 2.4% decrease in interest income from commercial paper and interest-bearing deposits and a $510,000, or 19.1% decrease in other investment income. The additional loan interest income was driven by the increase in the average balance of loans receivable compared to the prior year. Average loan yields decreased by two basis points to 4.63% for the nine months ended March 31, 2020 from 4.65% in the corresponding period last year. For the nine months ended March 31, 2020 and 2019, average loan yields included six and eight basis points, respectively, from the accretion of purchase discounts on acquired loans.
Total interest expense increased $4.3 million, or 20.1% for the nine months ended March 31, 2020 compared to the same period last year. The increase was driven by a $7.4 million, or 68.6% increase in deposit interest expense partially offset by a $3.1 million, or 28.7% decrease in interest expense on borrowings. The additional deposit interest expense was a result of a $226.9 million, or 11.8% increase in the average balance of interest-bearing deposits along with a 37 basis point increase in the average cost of those deposits for the nine months ended March 31, 2020 as compared to the same period last year. Average borrowings for the nine months ended March 31, 2020 decreased $75.3 million, or 11.4% along with a 42 basis point decrease in the average cost of borrowings compared to the same period last year. The overall cost of funds increased 14 basis points to 1.25% for the nine months ended March 31, 2020 compared to 1.11% in the corresponding period last year.

Provision for Loan Losses.  There was a $5.8 million provision for loan losses for the nine months ended March 31, 2020 compared to $5.5 million for the corresponding period in fiscal 2019. The fiscal 2020 and 2019 provisions for loan losses relate primarily to the previously discussed COVID-19 and commercial lending relationship, respectively. Net loan charge-offs totaled $379,000 for the nine months ended March 31, 2020, compared to $2.1 million for the same period in fiscal 2019. Annualized net charge-offs as a percentage of average loans were 0.02% for the nine months ended March 31, 2020 compared to 0.11% for the same period last fiscal year.
See "Comparison of Financial Condition - Asset Quality" for additional details.
Noninterest Income.  Noninterest income increased $7.0 million, or 43.6%, to $23.1 million for the nine months ended March 31, 2020 from $16.1 million for the nine months ended March 31, 2019, primarily due to a $3.5 million, or 85.4% increase in the gain on sale of loans held for sale, a $1.3 million, or 170.4% increase in loan income and fees, and a $2.0 million, or 81.1% increase in other noninterest income. The increase in the gain on sale of loans held for sale was a result of the previously discussed one-to-four family loans sold during the period which resulted in a non-recurring $1.3 million gain. In addition to this non-recurring gain, $135.4 million of residential mortgage loans sold with gains of $3.6 million for the nine months ended March 31, 2020, compared to $81.3 million sold and gains of $2.0 million in the corresponding period in the prior year. During the nine months ended March 31, 2020, $36.0 million of SBA commercial loans were sold with recorded gains of $2.5 million compared to $28.7 million sold and gains of $2.0 million in the corresponding period in the prior year. The increase in loan income and fees is

49



primarily a result of our adjustable rate conversion program and prepayment fees on equipment finance loans. The $2.0 million increase in other noninterest income primarily related to operating lease income from the equipment finance line of business.
Noninterest Expense.  Noninterest expense for the nine months ended March 31, 2020 increased $5.8 million, or 8.6%, to $72.5 million compared to $66.7 million for the nine months ended March 31, 2019. The increase was primarily due to a $3.5 million, or 9.1% increase in salaries and employee benefits; a $2.4 million, or 30.3% increase in other expenses, mainly driven by depreciation from our equipment finance line of business and expenses related to our core conversion; a $497,000, or 40.8% increase in marketing and advertising expense; a $308,000, or 5.4% increase in computer services; and a $252,000, or 11.4% increase in telephone, postage, and supplies. Partially offsetting these increases was a decrease of $485,000, or 50.6% in deposit insurance premiums related to credit from the Federal Deposit Insurance Corporation in the first and second quarter; a $462,000, or 29.2% decrease in core deposit intangible amortization; and a $214,000, or 20.4% decrease in REO related expenses for the nine months ended March 31, 2020 compared to the same period last year.
Income Taxes.  For the nine months ended March 31, 2020, the Company's income tax expense increased $376,000, or 8.0% to $5.1 million from $4.7 million for the nine months ended March 31, 2019 as a result of higher pretax income. The effective tax rate for the nine months ended March 31, 2020 and 2019 was 20.9% and 19.7%, respectively.
Liquidity
Management maintains a liquidity position that it believes will adequately provide funding for 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, cash flows from loan payments, commercial paper, and the securities portfolio.
In addition to these primary sources of funds, management has several secondary sources available to meet potential funding requirements. As of March 31, 2020, the Bank had an available borrowing capacity of $109.9 million with the FHLB of Atlanta, a $112.3 million line of credit with the FRB and a line of credit with each of three unaffiliated banks totaling $70.0 million. At March 31, 2020, we had $535.0 million in FHLB advances outstanding and nothing outstanding under our other lines of credit. Additionally, the Company classifies its securities portfolio as available for sale, providing an additional source of liquidity. Management believes that our security portfolio is of high quality and the securities would therefore be marketable. In addition, we have historically sold longer term fixed-rate mortgage loans in the secondary market to reduce interest rate risk and to create still another source of liquidity. From time to time we also utilize brokered time deposits to supplement our other sources of funds. Brokered time deposits are obtained by utilizing an outside broker that is paid a fee. This funding requires advance notification to structure the type of deposit desired by us. Brokered deposits can vary in term from one month to several years and have the benefit of being a source of longer-term funding. We also utilize brokered deposits to help manage interest rate risk by extending the term to repricing of our liabilities, enhance our liquidity and fund asset growth. Brokered deposits are typically from outside our primary market areas, and our brokered deposit levels may vary from time to time depending on competitive interest rate conditions and other factors. At March 31, 2020 brokered deposits totaled $151.7 million, or 5.9% of total deposits compared to $176.8 million, or 7.6% of total deposits at June 30, 2019. We also intend to utilize the FRB's PPPLF to supplement our liquidity pursuant to which the Company will pledge its PPP loans as collateral to obtain FRB non-recourse loans. The PPPLF will take the PPP loans as collateral at face value.
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, federal funds, and commercial paper. On a longer term basis, we maintain a strategy of investing in various lending products and investment securities, including mortgage-backed securities. HomeTrust Bancshares on a stand-alone level is a separate legal entity from the Bank and must provide for its own liquidity and pay its own operating expenses. The Company's primary source of funds consists of the net proceeds retained from the Conversion. The Company also has the ability to receive dividends or capital distributions from the Bank, although there are regulatory restrictions on the ability of the Bank to pay dividends. At March 31, 2020, the Company (on an unconsolidated basis) had liquid assets of $2.0 million.
We use our sources of funds primarily to meet our ongoing commitments, pay maturing deposits and fund withdrawals, and to fund loan commitments. At March 31, 2020, the total approved loan commitments and unused lines of credit outstanding amounted to $216.5 million and $374.4 million, respectively, as compared to $274.9 million and $353.7 million, respectively, as of June 30, 2019. Certificates of deposit scheduled to mature in one year or less at March 31, 2020, totaled $588.2 million. It is management's policy to manage deposit rates that are competitive with other local financial institutions. Based on this management strategy, we believe that a majority of maturing deposits will remain with us.
During the first nine months of fiscal 2020, cash and cash equivalents increased $11.0 million, or 15.5%, to $82.1 million as of March 31, 2020 from $71.0 million as of June 30, 2019. Cash provided by financing activities was $57.2 million while cash used in operating activities and investing activities was $16.7 million and $29.6 million, respectively. Primary sources of cash for the nine months ended March 31, 2020 included a $227.5 million increase in deposits, $154.9 million in loans not initially originated for sale were sold, $27.8 million in maturing securities available for sale, $10.9 million in principal repayments from mortgage-backed securities, and $4.2 million in net redemptions of other investments. Primary uses of cash during the period included a $145.0 million decrease in borrowings, an increase in loans of $99.1 million, a net increase in commercial paper of $35.9 million, $75.5 million of purchases of debt securities available for sale, $5.5 million in purchases of certificates of deposit in other banks, net of maturities, $11.0 million in purchases of operating lease equipment, $3.4 million in cash dividends, and $23.2 million in common stock repurchases. All sources and uses of cash reflect our cash management strategy to increase our higher yielding investments and loans by increasing lower costing borrowings and reducing our holdings of lower yielding investments.

50



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. These transactions involve varying degrees of off-balance sheet credit, interest rate and liquidity risks. These transactions are used primarily to manage customers' requests for funding and take the form of loan commitments and lines of credit. For the nine months ended March 31, 2020, we engaged in no off-balance sheet transactions likely to have a material effect on our financial condition, results of operations or cash flows.
A summary of our off-balance sheet commitments to extend credit at March 31, 2020, is as follows (in thousands):
Undisbursed portion of construction loans
$
161,655

Commitments to make loans
54,884

Unused lines of credit
374,401

Unused letters of credit
6,833

Total loan commitments
$
597,773

Capital Resources
At March 31, 2020, stockholders' equity totaled $405.4 million. HomeTrust Bancshares, Inc. is a bank holding company and a financial 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. Our subsidiary, the Bank, an FDIC-insured, North Carolina state-chartered bank and a member of the Federal Reserve, 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.
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.
HomeTrust Bancshares, Inc. and the Bank each exceeded all regulatory capital requirements as of March 31, 2020. Consistent with our goals to operate a sound and profitable organization, our 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 March 31, 2020 under applicable regulatory requirements.

51



HomeTrust Bancshares, Inc. and the Bank's actual and required minimum capital amounts and ratios are as follows (dollars in thousands):
 
 
 
Regulatory Requirements
 
Actual
 
Minimum for Capital
Adequacy Purposes
 
Minimum to Be
Well Capitalized
 
Amount
 
Ratio
 
Amount
 
Ratio
 
Amount
 
Ratio
HomeTrust Bancshares, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
Common Equity Tier I Capital to Risk-Weighted Assets
$
372,175

 
11.42
%
 
$
146,656

 
4.50
%
 
$
211,837

 
6.50
%
Tier I Capital (to Total Adjusted Assets)
$
372,175

 
10.72
%
 
$
138,853

 
4.00
%
 
$
173,566

 
5.00
%
Tier I Capital (to Risk-weighted Assets)
$
372,175

 
11.42
%
 
$
195,542

 
6.00
%
 
$
260,723

 
8.00
%
Total Risk-based Capital (to Risk-weighted Assets)
$
399,480

 
12.26
%
 
$
260,723

 
8.00
%
 
$
325,903

 
10.00
%
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2019
 

 
 

 
 

 
 

 
 

 
 

Common Equity Tier I Capital to Risk-Weighted Assets
$
374,729

 
12.20
%
 
$
138,226

 
4.50
%
 
$
199,659

 
6.50
%
Tier I Capital (to Total Adjusted Assets)
$
374,729

 
10.89
%
 
$
137,649

 
4.00
%
 
$
172,062

 
5.00
%
Tier I Capital (to Risk-weighted Assets)
$
374,729

 
12.20
%
 
$
184,301

 
6.00
%
 
$
245,734

 
8.00
%
Total Risk-based Capital (to Risk-weighted Assets)
$
396,613

 
12.91
%
 
$
245,734

 
8.00
%
 
$
307,168

 
10.00
%
 
 
 
 
 
 
 
 
 
 
 
 
HomeTrust Bank:
 

 
 

 
 

 
 

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2020
 

 
 

 
 

 
 

 
 

 
 

Common Equity Tier I Capital to Risk-Weighted Assets
$
361,674

 
11.10
%
 
$
146,636

 
4.50
%
 
$
211,807

 
6.50
%
Tier I Capital (to Total Adjusted Assets)
$
361,674

 
10.42
%
 
$
138,881

 
4.00
%
 
$
173,601

 
5.00
%
Tier I Capital (to Risk-weighted Assets)
$
361,674

 
11.10
%
 
$
195,514

 
6.00
%
 
$
260,686

 
8.00
%
Total Risk-based Capital (to Risk-weighted Assets)
$
388,976

 
11.94
%
 
$
260,686

 
8.00
%
 
$
325,857

 
10.00
%
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2019
 

 
 

 
 

 
 

 
 

 
 

Common Equity Tier I Capital to Risk-Weighted Assets
$
355,759

 
11.59
%
 
$
138,153

 
4.50
%
 
$
199,555

 
6.50
%
Tier I Capital (to Total Adjusted Assets)
$
355,759

 
10.34
%
 
$
137,590

 
4.00
%
 
$
171,988

 
5.00
%
Tier I Capital (to Risk-weighted Assets)
$
355,759

 
11.59
%
 
$
184,204

 
6.00
%
 
$
245,606

 
8.00
%
Total Risk-based Capital (to Risk-weighted Assets)
$
377,639

 
12.30
%
 
$
245,606

 
8.00
%
 
$
307,007

 
10.00
%
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 2.5% 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. At March 31, 2020, the conservation buffer was 4.26% and 3.94% for HomeTrust Bancshares, Inc. and the Bank, respectively.
Impact of Inflation
The effects of price changes and inflation can vary substantially for most financial institutions. While management believes that inflation affects the growth of total assets, it believes that it is difficult to assess the overall impact. Management believes this to be the case due to the fact that generally neither the timing nor the magnitude of the inflationary changes in the CPI coincides with changes in interest rates. The price of one or more of the components of the CPI may fluctuate considerably and thereby influence the overall CPI without having a corresponding effect on interest rates or upon the cost of those goods and services normally purchased by the Company. In years of high inflation and high interest rates, intermediate and long-term interest rates tend to increase, thereby adversely impacting the market values of investment securities, mortgage loans and other long-term fixed rate loans. In addition, higher short-term interest rates caused by inflation tend to increase the cost of funds. In other years, the opposite may occur.

52



Item 3.      Quantitative and Qualitative Disclosure About Market Risk
There has not been any material change in the market risk disclosures contained in our 2019 Form 10-K.
Item 4.      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 March 31, 2020, 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 March 31, 2020, 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. In addition, there have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Act) that occurred during the quarter ended March 31, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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.
PART II.  OTHER INFORMATION
Item 1.    Legal Proceedings
The "Litigation" section of Note 9 to the Consolidated Financial Statements included in Part I, Item 1 is incorporated herein by reference.
Item 1A.
Risk Factors
In light of recent developments relating to COVID-19, the Company is supplementing its risk factors contained in Item 1A of its Annual Report on Form 10-K for the year ended June 30, 2019, as filed with the Securities and Exchange Commission on September 13, 2019. The following risk factor should be read in conjunction with the risk factors described in the 2019 Form 10-K.
The COVID-19 pandemic has adversely impacted our ability to conduct business and is expected to adversely impact our financial results and those of our customers. The ultimate impact will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities in response to the pandemic.
The COVID-19 pandemic has significantly adversely affected our operations and the way we provide banking services to businesses and individuals, most of whom are currently under government issued stay-at-home orders. As an essential business, we continue to provide banking and financial services to our customers with drive-thru access available at the majority of our branch locations and in-person services available by appointment. In addition, we continue to provide access to banking and financial services through online banking, ATMs and by telephone. If the COVID-19 pandemic worsens it could limit or disrupt our ability to provide banking and financial services to our customers.
In response to the stay-at-home orders, many of our employees currently are working remotely to enable us to continue to provide banking services to our customers. Heightened cybersecurity, information security and operational risks may result from these remote work-from-home arrangements. We also could be adversely affected if key personnel or a significant number of employees were to become unavailable due to the effects and restrictions of the COVID-19 pandemic. We also rely upon our third-party vendors to conduct business and to process, record and monitor transactions. If any of these vendors are unable to continue to provide us with these services, it could negatively impact our ability to serve our customers. Although we have business continuity plans and other safeguards in place, there is no assurance that such plans and safeguards will be effective.


53



There is pervasive uncertainty surrounding the future economic conditions that will emerge in the months and years following the start of the pandemic. As a result, management is confronted with a significant and unfamiliar degree of uncertainty in estimating the impact of the pandemic on credit quality, revenues and asset values. To date, the COVID-19 pandemic has resulted in declines in loan demand and loan originations (other than through government sponsored programs such as the Payroll Protection Program), deposit availability, market interest rates and negatively impacted many of our business and consumer borrower’s ability to make their loan payments. Because the length of the pandemic and the efficacy of the extraordinary measures being put in place to address its economic consequences are unknown, including recent reductions in the targeted federal funds rate, until the pandemic subsides, we expect our net interest income and net interest margin will be adversely affected in the near term, if not longer. Many of our borrowers have become unemployed or may face unemployment, and certain businesses are at risk of insolvency as their revenues decline precipitously, especially in businesses related to travel, hospitality, leisure and physical personal services. Businesses may ultimately not reopen as there is a significant level of uncertainty regarding the level of economic activity that will return to our markets over time, the impact of governmental assistance, the speed of economic recovery, the resurgence of COVID-19 in subsequent seasons and changes to demographic and social norms that will take place.
The impact of the pandemic is expected to continue to adversely affect us during 2020 and possibly longer as the ability of many of our customers to make loan payments has been significantly affected. Although the Company makes estimates of loan losses related to the pandemic as part of its evaluation of the allowance for loan losses, such estimates involve significant judgment and are made in the context of significant uncertainty as to the impact the pandemic will have on the credit quality of our loan portfolio. It is likely that increased loan delinquencies, adversely classified loans and loan charge-offs will increase in the future as a result of the pandemic. Consistent with guidance provided by banking regulators, we have modified loans by providing various loan payment deferral options to our borrowers affected by the COVID-19 pandemic. Notwithstanding these modifications, these borrowers may not be able to resume making full payments on their loans once the COVID-19 pandemic is resolved. Any increases in the allowance for credit losses will result in a decrease in net income and, most likely, capital, and may have a material negative effect on our financial condition and results of operations.
The PPP loans made by the Bank are guaranteed by the SBA and, if used by the borrower for authorized purposes, may be fully forgiven. However, in the event of a loss resulting from a default on a PPP loan and a determination by the SBA that there was a deficiency in the manner in which the PPP loan was originated, funded or serviced by the Bank, the SBA may deny its liability under the guaranty, reduce the amount of the guaranty or, if it has already made payment under the guaranty, seek recovery of any loss related to the deficiency from the Bank. In addition, since the commencement of the PPP, several larger banks have been subject to litigation regarding their processing of PPP loan applications. The Bank may be exposed to the risk of similar litigation, from both customers and non-customers that approached the Bank seeking PPP loans. PPP lenders, including the Bank, may also be subject to the risk of litigation in connection with other aspects of the PPP, including but not limited to borrowers seeking forgiveness of their loans. If any such litigation is filed against the Bank, it may result in significant financial or reputational harm to us.
In accordance with GAAP, we record assets acquired and liabilities assumed at their fair value with the excess of the purchase consideration over the net assets acquired resulting in the recognition of goodwill. If adverse economic conditions or the recent decrease in our stock price and market capitalization as a result of the pandemic were to be deemed sustained rather than temporary, it may significantly affect the fair value of our goodwill and may trigger impairment charges. Any impairment charge could have a material adverse effect on our results of operations and financial condition.
Even after the COVID-19 pandemic subsides, the U.S. economy will likely require some time to recover from its effects, the length of which is unknown, and during which we may experience a recession. As a result, we anticipate our business may be materially and adversely affected during this recovery. To the extent the effects of the COVID-19 pandemic adversely impact our business, financial condition, liquidity or results of operations, it may also have the effect of heightening many of the other risks described in the section entitled "Risk Factors" in our 2019 Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q.

54



Item 2.
Unregistered Sales of Equity Securities and use of Proceeds
(a) Not applicable
(b) Not applicable
(c) The following table provides information about repurchases of common stock by the Company during the quarter ended March 31, 2020:
Period
Total Number
Of Shares Purchased
 
Average
Price Paid per Share
 
Total Number Of Shares Purchased as Part of Publicly Announced Plans
 
Maximum
Number of
Shares that May
Yet Be Purchased Under Publicly Announced Plans
January 1 - January 31, 2020
134,400

 
$
26.55

 
134,400

 
583,273

February 1 - February 29, 2020
78,200

 
26.57

 
78,200

 
505,073

March 1 - March 31, 2020
423,200

 
17.38

 
423,200

 
81,873

Total
635,800

 
$
20.45

 
635,800

 
81,873

Subsequent to March 31, 2020, the remaining shares under the Company's then-outstanding plan were repurchased and on April 2, 2020, the Company announced that its Board of Directors had authorized the repurchase of up to an additional 889,123 shares of the Company's common stock, representing 5% of the Company's outstanding shares at the time of the announcement. 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.

55



Item 3.
Defaults Upon Senior Securities
Nothing to report.
Item 4.
Mine Safety Disclosures
Not applicable.
Item 5.
Other Information
Nothing to report.
Item 6.
Exhibits
Regulation S-K Exhibit Number
Document
Reference to Prior Filing or Exhibit Number Attached Hereto
 
 
 
3.1
(b)
3.2
(c)
3.3
(p)
4.1
(c)
4.2
(l)
4.3

(o)
10.1
(v)
10.2
(q)
10.3

(q)
10.3A
(s)
10.4

(q)
10.5
(q)
10.6
(b)
10.7
(b)
10.7A
(b)
10.7B
(b)
10.7C
(b)
10.7D
(b)
10.7E

(b)
10.7F
(b)
10.7G
(b)
10.7H
(b)
10.7I
(f)
10.8
(b)
10.8A
(b)
10.8B
(b)
10.8C
(b)

56



10.8D
(b)
10.8E
(b)
10.8F
(b)
10.8G
(b)
10.9
(b)
10.10
(b)
10.11
(b)
10.12
(g)
10.13
(h)
10.14
(h)
10.15
(h)
10.16
(h)
10.17
(h)
10.18
Reserved
 
10.19
Reserved
 
10.20
(k)
10.21
(k)
10.22
(k)
10.23
(k)
10.24
(k)
10.25
(k)
10.26

(m)
10.27
(i)
10.28
(q)
10.29
(r)
10.30
(u)
31.1
31.1
31.2
31.2
32
32.0
101
The following materials from HomeTrust Bancshares' Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in Extensible Business Reporting Language (XBRL): (a) Consolidated Balance Sheets; (b) Consolidated Statements of Income; (c) Consolidated Statements of Comprehensive Income; (d) Consolidated Statements of Changes in Stockholders' Equity; (e) Consolidated Statements of Cash Flows; and (f) Notes to Consolidated Financial Statements.
101
(a)
Reserved
(b)
Filed as an exhibit to HomeTrust Bancshares's Registration Statement on Form S-1 (File No. 333-178817) filed on December 29, 2011.
(c)
Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on September 25, 2012 (File No. 001-35593).
(d)
Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on November 27, 2013 (File No. 001-35593).
(e)
Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2012 (File No. 001-35593).
(f)
Filed as an exhibit to Amendment No. One to HomeTrust Bancshares's Registration Statement on Form S-1 (File No. 333-178817) filed on March 9, 2012.
(g)
Attached as Appendix A to HomeTrust Bancshares's definitive proxy statement filed on December 5, 2012 (File No. 001-35593).
(h)
Filed as an exhibit to HomeTrust Bancshares's Registration Statement on Form S-8 (File No. 333-186666) filed on February 13, 2013.

57



(i)
Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 (File No. 001-35593).
(j)
Filed as an exhibit to Jefferson Bancshares, Inc.'s Quarterly Report on Form 10-Q for the quarter ended December 31, 2008 (File No. 000-50347).
(k)
Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2014 (File No. 001-35593).
(l)
Reserved.
(m)
Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2015 (File No. 001-35593).
(n)
Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on January 29, 2016 (File No. 001-35593).
(o)
Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on August 21, 2018 (File No. 001-35593).
(p)
Filed as an exhibit to HomeTrust Bancshares's Current Report on Form 8-K filed on May 1, 2018 (File No. 001-35593).
(q)
Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on September 11, 2018 (File No. 001-35593).
(r)
Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2018 (File No. 001-35593).
(s)
Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on September 25, 2018 (File No. 001-35593.
(t)
Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 001-35593).
(u)
Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended December 31, 2018 (File No. 001-35593).
(v)
Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 (File No. 001-35593).

58



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
HomeTrust Bancshares, Inc.
 
 
 
 
 
 
Date: May 8, 2020
By:
/s/ Dana L. Stonestreet
 
 
Dana L. Stonestreet
 
 
Chairman, President and CEO
 
 
(Duly Authorized Officer)
 
 
 
Date: May 8, 2020
By:
/s/ Tony J. VunCannon
 
 
Tony J. VunCannon
 
 
Executive Vice President, CFO, Corporate Secretary and Treasurer
 
 
(Principal Financial and Accounting Officer)
 
 
 
 
 
 

59
Exhibit


Exhibit 31.1
RULE 13a-14(a) CERTIFICATION
I, Dana L. Stonestreet, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of HomeTrust Bancshares, Inc. (the "Company");
2.
Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
4.
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and have:
(a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluations; and
(d)
disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
5.
The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
(a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
(b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
May 8, 2020
By:
/s/ Dana L. Stonestreet
 
 
Dana L. Stonestreet
 
 
Chairman, President, and CEO


Exhibit


Exhibit 31.2
RULE 13a-14(a) CERTIFICATION
I, Tony J. VunCannon, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of HomeTrust Bancshares, Inc. (the "Company");
2.
Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
4.
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and have:
(a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluations; and
(d)
disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
5.
The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
(a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
(b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
May 8, 2020
By:
/s/ Tony J. VunCannon
 
 
Tony J. VunCannon
 
 
Executive Vice President, CFO, and Treasurer


Exhibit


Exhibit 32
SECTION 1350 CERTIFICATION
Each of the undersigned hereby certifies in his capacity as an officer of HomeTrust Bancshares, Inc. (the "Company") that the Quarterly Report of the Company on Form 10-Q for the period ended March 31, 2020, fully complies with the requirements of Section 13(a) of the Securities and Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and periods presented in the financial statements included in such report.
May 8, 2020
By:
/s/ Dana L. Stonestreet              
 
 
Dana L. Stonestreet
 
 
Chairman, President, and CEO
 
 
 
 
 
 
May 8, 2020
By:
/s/ Tony J. VunCannon
 
 
Tony J. VunCannon
 
 
Executive Vice President, CFO, and Treasurer
 
 
 


v3.20.1
Fair Value of Financial Instruments - Narrative (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Fair Value Disclosures [Abstract]    
Fair Value off-balance sheet risks, amount, liability $ 590,940 $ 628,572
v3.20.1
Leases - Supplemental Cash Flow Information (Details)
$ in Thousands
9 Months Ended
Mar. 31, 2020
USD ($)
Leases [Abstract]  
ROU assets - noncash additions (operating leases) $ 5,296
ROU assets - noncash addition (finance lease) 2,052
Cash paid for amounts included in the measurement of lease liabilities (operating leases) 1,609
Cash paid for amounts included in the measurement of lease liabilities (finance leases) $ 67
v3.20.1
Consolidated Statements of Changes in Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid In Capital
Retained Earnings
Unearned ESOP Shares
Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period (in shares) at Jun. 30, 2018   19,041,668        
Balance at beginning of period at Jun. 30, 2018 $ 409,242 $ 191 $ 217,480 $ 200,575 $ (7,406) $ (1,598)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 19,133     19,133    
Cash dividends declared on common stock, $0.20/common share (2,218)     (2,218)    
Shares repurchased (in shares)   (857,155)        
Stock repurchased (23,321) $ (8) (23,313)      
Forfeited restricted stock (in shares)   (4,300)        
Retired stock (in shares)   (7,414)        
Retired stock $ (205)   (205)      
Granted restricted stock (in shares)   23,625        
Exercised stock options (in shares) 69,111 69,111        
Exercised stock options $ 1,004   1,004      
Stock option expense 540   540      
Restricted stock expense 625   625      
ESOP shares allocated 1,090   693   397  
Other comprehensive income 1,340         1,340
Balance at end of period (in shares) at Mar. 31, 2019   18,265,535        
Balance at end of period at Mar. 31, 2019 407,230 $ 183 196,824 217,490 (7,009) (258)
Balance at beginning of period (in shares) at Dec. 31, 2018   18,520,825        
Balance at beginning of period at Dec. 31, 2018 410,970 $ 185 203,660 215,289 (7,142) (1,022)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 3,302     3,302    
Cash dividends declared on common stock, $0.20/common share (1,101)     (1,101)    
Shares repurchased (in shares)   (297,400)        
Stock repurchased (7,675) $ (2) (7,673)      
Forfeited restricted stock (in shares)   (1,600)        
Retired stock (in shares)   (6,826)        
Retired stock (188)   (188)      
Exercised stock options (in shares)   26,911        
Exercised stock options 396   396      
Stock option expense 181   181      
Restricted stock expense 228   228      
ESOP shares allocated 353   220   133  
Other comprehensive income 764         764
Balance at end of period (in shares) at Mar. 31, 2019   18,265,535        
Balance at end of period at Mar. 31, 2019 $ 407,230 $ 183 196,824 217,490 (7,009) (258)
Balance at beginning of period (in shares) at Jun. 30, 2019 17,984,105 17,984,105        
Balance at beginning of period at Jun. 30, 2019 $ 408,896 $ 180 190,315 224,545 (6,877) 733
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 19,188     19,188    
Cash dividends declared on common stock, $0.20/common share (3,408)     (3,408)    
Shares repurchased (in shares)   (1,032,221)        
Stock repurchased (23,222) $ (11) (23,211)      
Forfeited restricted stock (in shares)   (3,200)        
Retired stock (in shares)   (7,950)        
Retired stock $ (215)   (215)      
Granted restricted stock (in shares) 54,306          
Exercised stock options (in shares) 106,914 106,914        
Exercised stock options $ 1,541 $ 2 1,539      
Stock option expense 556   556      
Restricted stock expense 785   785      
ESOP shares allocated 996   599   397  
Other comprehensive income $ 323         323
Balance at end of period (in shares) at Mar. 31, 2020 17,101,954 17,101,954        
Balance at end of period at Mar. 31, 2020 $ 405,440 $ 171 170,368 240,325 (6,480) 1,056
Balance at beginning of period (in shares) at Dec. 31, 2019   17,664,384        
Balance at beginning of period at Dec. 31, 2019 416,995 $ 177 182,366 240,312 (6,612) 752
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 1,193     1,193    
Cash dividends declared on common stock, $0.20/common share (1,180)     (1,180)    
Shares repurchased (in shares)   (635,800)        
Stock repurchased (13,003) $ (7) (12,996)      
Retired stock (in shares)   (7,950)        
Retired stock $ (215)   (215)      
Granted restricted stock (in shares) 41,306          
Exercised stock options (in shares)   40,014        
Exercised stock options $ 578 $ 1 577      
Stock option expense 168   168      
Restricted stock expense 290   290      
ESOP shares allocated 310   178   132  
Other comprehensive income $ 304         304
Balance at end of period (in shares) at Mar. 31, 2020 17,101,954 17,101,954        
Balance at end of period at Mar. 31, 2020 $ 405,440 $ 171 $ 170,368 $ 240,325 $ (6,480) $ 1,056
v3.20.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Assets    
Cash $ 41,206 $ 40,909
Interest-bearing deposits 40,855 30,134
Cash and cash equivalents 82,061 71,043
Commercial paper 281,955 241,446
Certificates of deposit in other banks 57,544 52,005
Debt securities available for sale, at fair value 158,621 121,786
Other investments, at cost 41,201 45,378
Loans held for sale 38,682 18,175
Total loans, net of deferred loan costs 2,663,524 2,705,190
Allowance for loan losses (26,850) (21,429)
Net loans 2,636,674 2,683,761
Premises and equipment, net 58,738 61,051
Accrued interest receivable 9,501 10,533
REO 1,075 2,929
Deferred income taxes 21,750 26,523
BOLI 91,612 90,254
Goodwill 25,638 25,638
Core deposit intangibles 1,381 2,499
Other assets 41,600 23,157
Total assets acquired 3,548,033 3,476,178
Liabilities    
Deposits 2,554,787 2,327,257
Borrowings 535,000 680,000
Other liabilities 52,806 60,025
Total liabilities assumed 3,142,593 3,067,282
Stockholders' Equity    
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued or outstanding 0 0
Common stock, $0.01 par value, 60,000,000 shares authorized, 17,101,954 shares issued and outstanding at March 31, 2020; 17,984,105 at June 30, 2019 171 180
Additional paid in capital 170,368 190,315
Retained earnings 240,325 224,545
Unearned ESOP shares (6,480) (6,877)
Accumulated other comprehensive income 1,056 733
Total stockholders' equity 405,440 408,896
Total Liabilities and Stockholders' Equity $ 3,548,033 $ 3,476,178
v3.20.1
Loans - Schedule of Impaired Loans and Related Allowance by Segment and Class (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Financing Receivable, Impaired    
Unpaid principal balance $ 45,970 $ 47,611
Recorded investment with a recorded allowance 22,724 22,070
Recorded investment with no recorded allowance 7,848 10,885
Total 30,572 32,955
Related recorded allowance 1,270 601
Impaired loans not individually evaluated 18,083 17,212
Recorded allowance of impaired loans not individually evaluated 487 481
Retail Consumer Loans | One to four family loans    
Financing Receivable, Impaired    
Unpaid principal balance 18,211 18,302
Recorded investment with a recorded allowance 10,914 12,461
Recorded investment with no recorded allowance 3,975 3,152
Total 14,889 15,613
Related recorded allowance 383 472
Retail Consumer Loans | HELOCs - originated    
Financing Receivable, Impaired    
Unpaid principal balance 1,724 2,410
Recorded investment with a recorded allowance 1,636 564
Recorded investment with no recorded allowance 52 1,219
Total 1,688 1,783
Related recorded allowance 42 46
Retail Consumer Loans | HELOCs - purchased    
Financing Receivable, Impaired    
Unpaid principal balance 474 666
Recorded investment with a recorded allowance 474 0
Recorded investment with no recorded allowance 0 666
Total 474 666
Related recorded allowance 2 0
Retail Consumer Loans | Construction and land/lots    
Financing Receivable, Impaired    
Unpaid principal balance 1,547 1,917
Recorded investment with a recorded allowance 756 957
Recorded investment with no recorded allowance 303 323
Total 1,059 1,280
Related recorded allowance 22 26
Retail Consumer Loans | Indirect auto finance    
Financing Receivable, Impaired    
Unpaid principal balance 1,003 601
Recorded investment with a recorded allowance 392 353
Recorded investment with no recorded allowance 299 137
Total 691 490
Related recorded allowance 4 2
Retail Consumer Loans | Consumer loans    
Financing Receivable, Impaired    
Unpaid principal balance 53 379
Recorded investment with a recorded allowance 16 7
Recorded investment with no recorded allowance 28 41
Total 44 48
Related recorded allowance 2 6
Commercial Loans | Commercial real estate    
Financing Receivable, Impaired    
Unpaid principal balance 10,078 10,127
Recorded investment with a recorded allowance 7,669 6,434
Recorded investment with no recorded allowance 1,847 3,404
Total 9,516 9,838
Related recorded allowance 803 36
Commercial Loans | Construction and development loans    
Financing Receivable, Impaired    
Unpaid principal balance 1,591 2,574
Recorded investment with a recorded allowance 621 940
Recorded investment with no recorded allowance 80 791
Total 701 1,731
Related recorded allowance 8 7
Commercial Loans | Commercial and industrial    
Financing Receivable, Impaired    
Unpaid principal balance 9,823 10,173
Recorded investment with a recorded allowance 246 354
Recorded investment with no recorded allowance 853 768
Total 1,099 1,122
Related recorded allowance 4 6
Commercial Loans | Equipment Finance    
Financing Receivable, Impaired    
Unpaid principal balance 1,466 462
Recorded investment with a recorded allowance 0 0
Recorded investment with no recorded allowance 411 384
Total 411 384
Related recorded allowance $ 0 $ 0
v3.20.1
Loans - Schedule of Past Due Loans Still Accruing and Nonaccruing Interest (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Accounts, Notes, Loans and Financing Receivable    
Nonaccruing $ 15,665 $ 10,358
90 Days & still accruing 0 0
Purchased Credit Impaired (PCI) Loans    
Accounts, Notes, Loans and Financing Receivable    
Nonaccruing 1,018 1,344
Retail Consumer Loans | One to four family loans    
Accounts, Notes, Loans and Financing Receivable    
Nonaccruing 3,863 3,223
90 Days & still accruing 0 0
Retail Consumer Loans | HELOCs - originated    
Accounts, Notes, Loans and Financing Receivable    
Nonaccruing 431 372
90 Days & still accruing 0 0
Retail Consumer Loans | HELOCs - purchased    
Accounts, Notes, Loans and Financing Receivable    
Nonaccruing 520 666
90 Days & still accruing 0 0
Retail Consumer Loans | Construction and land/lots    
Accounts, Notes, Loans and Financing Receivable    
Nonaccruing 19 6
90 Days & still accruing 0 0
Retail Consumer Loans | Indirect auto finance    
Accounts, Notes, Loans and Financing Receivable    
Nonaccruing 623 463
90 Days & still accruing 0 0
Retail Consumer Loans | Consumer loans    
Accounts, Notes, Loans and Financing Receivable    
Nonaccruing 27 21
90 Days & still accruing 0 0
Commercial Loans | Commercial real estate    
Accounts, Notes, Loans and Financing Receivable    
Nonaccruing 9,253 3,559
90 Days & still accruing 0 0
Commercial Loans | Construction and development loans    
Accounts, Notes, Loans and Financing Receivable    
Nonaccruing 250 1,357
90 Days & still accruing 0 0
Commercial Loans | Commercial and industrial    
Accounts, Notes, Loans and Financing Receivable    
Nonaccruing 269 307
90 Days & still accruing 0 0
Commercial Loans | Equipment Finance    
Accounts, Notes, Loans and Financing Receivable    
Nonaccruing 410 384
90 Days & still accruing $ 0 $ 0
v3.20.1
Loans - Schedule of Troubled Debt Restructurings With Payment Default (Details)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 31, 2020
USD ($)
loan
Mar. 31, 2019
USD ($)
loan
Mar. 31, 2020
USD ($)
loan
Mar. 31, 2019
USD ($)
loan
Financing Receivable, Modifications        
Number of loans | loan 0 3 2 3
Recorded investment | $ $ 0 $ 186 $ 49 $ 186
Other TDR        
Financing Receivable, Modifications        
Number of loans | loan 0 3 2 3
Recorded investment | $ $ 0 $ 186 $ 49 $ 186
Retail Consumer Loans | Other TDR | One to four family loans        
Financing Receivable, Modifications        
Number of loans | loan 0 2 2 2
Recorded investment | $ $ 0 $ 184 $ 49 $ 184
Retail Consumer Loans | Other TDR | Consumer loans        
Financing Receivable, Modifications        
Number of loans | loan 0 1 0 1
Recorded investment | $ $ 0 $ 2 $ 0 $ 2
v3.20.1
Leases (Tables)
9 Months Ended
Mar. 31, 2020
Leases [Abstract]  
Assets and Liabilities, Lessee
The following tables present supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.
Supplemental Balance Sheet Information:
March 31, 2020
ROU assets
$
4,585

Lease liabilities
4,576

Weighted-average remaining lease terms
5.09

Weighted-average discount rate
2.68
%
Lessee, Operating Lease, Liability, Maturity
The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
336

2021
1,130

2022
1,034

2023
997

2022
526

Thereafter
896

Total of future minimum payments
$
4,919

Lease, Cost
Supplemental lease cash flow information for the nine months ended March 31, 2020:
ROU assets - noncash additions (operating leases)
$
5,296

ROU assets - noncash addition (finance lease)
2,052

Cash paid for amounts included in the measurement of lease liabilities (operating leases)
1,609

Cash paid for amounts included in the measurement of lease liabilities (finance leases)
67

The following table presents components of operating lease expense for the three and nine months ended March 31, 2020:
 
Three Months Ended March 31, 2020
 
Nine Months Ended March 31, 2020
Operating lease cost (included in occupancy expense)
$
436

 
$
1,368

Sublease income (included in other, net noninterest income)
(61
)
 
(181
)
Total operating lease expense, net
375

 
1,187

Finance Lease, Liability, Maturity
The following schedule summarizes aggregate future minimum lease payments under this finance lease obligation at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
34

2021
134

2022
134

2023
134

2023
145

Thereafter
1,993

Total minimum lease payments
2,574

Less: amount representing interest
(722
)
Present value of net minimum lease payments
$
1,852

Lessor, Operating Lease, Payments to be Received, Maturity
The following schedule summarizes aggregate future minimum operating lease payments to be received at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
1,136

2021
7,729

2022
7,172

2023
2,865

2022
2,187

Thereafter
135

Total of future minimum payments
$
21,224

Sales-type and Direct Financing Leases, Lease Receivable, Maturity
The following table presents components of finance lease net investment included within equipment finance class of financing receivables:
 
March 31, 2020
Lease receivables
$
34,282

The following schedule summarizes aggregate future minimum finance lease payments to be received at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
1,928

2021
9,374

2022
8,340

2023
8,195

2024
7,237

Thereafter
2,990

Total minimum payments
38,064

Less: amount representing interest
(3,782
)
Total
$
34,282

v3.20.1
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Basis of Accounting
The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the SEC. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. It is recommended that these unaudited interim consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended June 30, 2019 ("2019 Form 10-K") filed with the SEC on September 13, 2019. The results of operations for the three and nine months ended March 31, 2020 are not necessarily indicative of results that may be expected for the entire fiscal year ending June 30, 2020.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Various elements of the Company's accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions, and other subjective assessments. In particular, management has identified several accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Company's financial statements. These policies relate to (i) the determination of the provision and the allowance for loan losses, (ii) the valuation of goodwill and other intangible assets, and (iii) the valuation of or recognition of deferred tax assets and liabilities. These policies and judgments, estimates and assumptions are described in greater detail in notes to the Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations (Critical Accounting Policies) in our 2019 Form 10-K. Management believes that the judgments, estimates and assumptions used in the preparation of the financial statements are appropriate based on the factual circumstances at the time. However, given the sensitivity of the financial statements to these critical accounting policies, the use of other judgments, estimates and assumptions could result in material differences in the Company's results of operations or financial condition. Further, subsequent changes in economic or market conditions could have a material impact on these estimates and the Company's financial condition and operating results in future periods.
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The ASU significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted for all entities beginning after December 15, 2018, including interim periods within those fiscal years. The Company has selected a third-party vendor to provide ongoing support under the new methodology. The Bank's project team is evaluating our current expected loss methodology of its loan and investment portfolios to identify the necessary modifications in accordance with this standard and expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Bank has compiled and uploaded all historical data that will be used to calculate expected credit losses on its loan portfolio and intends to run parallel models during the fourth quarter of 2020 to ensure it is fully compliant with the ASU at the adoption date. The team continues to work with the third-party vendor and is finalizing documentation on the methodologies utilized as well as the controls, processes, policies, and disclosures in preparation for performing the full end-to-end parallel run. A valuation adjustment to our allowance for loan losses or investment portfolio that is identified in this process will be reflected as a one-time adjustment in equity rather than earnings. Once adopted, the Company expects its allowance for loan losses to increase; however, until its evaluation is complete the magnitude of the increase will be unknown.
In August 2017, FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." This ASU improves the transparency and understandability of disclosures in the financial statements regarding the entities risk management activities and reduces the complexity of hedge accounting. The amendments in this ASU permit hedge accounting for hedging relationships involving nonfinancial risk and interest rate risk by removing certain limitations in cash flow and fair value hedging relationships. In addition, the ASU requires an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and early adoption is permitted. The Company adopted this ASU on July 1, 2019. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement." The amendments in this ASU remove, modify, and add certain disclosure requirements related to fair value measurements in ASC 820. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The adoption of ASU No. 2018-13 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In November 2018, the FASB issued ASU 2018-19, "Codification Improvements to Topic 326, Financial Instruments—Credit Losses." This update clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. The effective date and transition requirements for this ASU are the same as ASU 2016-13. The adoption of ASU No. 2018-19 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In December 2018, the FASB issued ASU 2018-20, "Leases (Topic 842): Narrow-Scope Improvements for Lessors." The amendments in this update permit lessors, as an accounting policy election, to not evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs. Instead, those lessors will account for those costs as if they are lessee costs. A lessor making this election will exclude from the consideration in the contract and from variable payments not included in the consideration in the contract all collections from lessees of taxes within the scope of the election and will provide certain disclosures. For certain lessor costs, the lessor must exclude from variable payments, and therefore revenue, lessor costs paid by lessees directly to third parties from variable payments. In addition, the lessor must account for costs excluded from the consideration of a contract that are paid by the lessor and reimbursed by the lessee as variable payments. A lessor will record those reimbursed costs as revenue. The amendments in this ASU related to recognizing variable payments for contracts with lease and nonlease components require lessors to allocate (rather than recognize as currently required) certain variable payments to the lease and nonlease components when the changes in facts and circumstances on which the variable payment is based occur. After the allocation, the amount of variable payments allocated to the lease components will be recognized as income in profit or loss in accordance with Topic 842, while the amount of variable payments allocated to nonlease components will be recognized in accordance with other Topics, such as Topic 606. The Company adopted this ASU on July 1, 2019. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In March 2019, the FASB issued ASU 2019-01, "Leases (Topic 842): Codification Improvements." The amendments in this update include the following items: i) determining the fair value of the underlying asset by lessors that are not manufacturers or dealers; ii) requiring cash received from lessors from sales-type and direct financing leases to be presented in the cash flow statement within investing activities; and iii) clarifying interim disclosure requirements. The Company adopted this ASU on July 1, 2019. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In April 2019, the FASB issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments." The amendments in this update are part of the FASB's ongoing project to improve codification and correcting unintended application. The items within this ASU are not expected to have a significant effect on current accounting practice. The effective date and transition requirements for the amendments to Financial Instruments (ASU 2016-01) are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The effective date and transition requirements for the amendments to Financial Instruments-Credit Losses (ASU 2016-13) are the same as ASU 2016-13 noted above. The effective date and transition requirements for the amendments to Derivatives and Hedging (ASU 2017-12) are the same as ASU 2017-12 noted above.The adoption of ASU No. 2019-04 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In May 2019, the FASB issued ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief." The amendments in this update allow companies to irrevocably elect, upon the adoption of ASU 2016-13, the fair value option for financial instruments that i) were previously recorded at amortized cost and ii) are within the scope of the credit losses guidance in ASC 326-20, iii) are eligible for the fair value option under ASC 825-10, and iv) are not held-to-maturity debt securities. The effective date and transition requirements for this ASU is the same as ASU 2016-13. The adoption of ASU No. 2019-05 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In July 2019, the FASB issued ASU 2019-07, "Codification Updates to SEC Sections." This ASU amends certain paragraphs in the ASC to reflect the issuance of SEC final rules on Disclosure Update and Simplification and Investment Company Reporting Modernization and other miscellaneous updates. The amendments became effective upon issuance. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In November 2019, the FASB issued ASU 2019-11, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses." This ASU clarifies certain aspects of the amendments in ASU 2016-13 and is part of the FASB's ongoing project to improve codification and correcting unintended application. The items within this ASU are not expected to have a significant effect on current accounting practice. The effective date and transition requirements for this ASU is the same as ASU 2016-13. The adoption of ASU No. 2019-11 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU is part of the FASB's simplification initiative to reduce complexity in accounting standards. The items within this ASU are not expected to have a significant effect on current accounting practice. The effective date and transition requirements for the first and second items of this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2020 and early adoption is permitted. The adoption of ASU No. 2019-12 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In January 2020, the FASB issued ASU 2020-01, "Investment—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815." This ASU clarified the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2021 and early adoption is permitted. The adoption of ASU No. 2020-01 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In March 2020, the FASB issued ASU 2020-03, "Codification Improvements to Financial Instruments." This ASU makes certain narrow-scope amendments to the following: i) clarified that all entities are required to provide fair value option disclosures; ii) clarified the applicability of the portfolio exception in ASC 820 to nonfinancial items; iii) aligned disclosures for depository and lending institutions (Topic 942) with guidance in Topic 320; iv) added cross-references to guidance in ASC 470-50 on line-of-credit or revolving-debt arrangements; v) added cross-references to net asset value practical expedient in ASC 820-10; vi) clarified the interaction between ASC 842 and ASC 326; and vii) clarified the interaction between ASC 326 and ASC 860-20. The amendments for issues i, ii, iv, and v became effective upon issuance and did not have a material effect on the Company's Consolidated Financial Statements. The amendment related to issue iii has the same effective date and transition requirements as ASU 2019-04 and is not expected to have a material impact on the Company's Consolidated Financial Statements. The amendments related to issues vi and vii have the same effective date and transition requirements as ASU 2016-13 and is not expected to have a material impact on the Company's Consolidated Financial Statements.
v3.20.1
Real Estate Owned (Tables)
9 Months Ended
Mar. 31, 2020
Real Estate Owned [Abstract]  
Schedule of Real Estate Properties
The activity within REO for the periods shown is as follows:
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2020
 
2019
 
2020
 
2019
Balance at beginning of period
$
1,451

 
$
2,955

 
$
2,929

 
$
3,684

Transfers from loans

 
482

 
46

 
578

Sales, net of gain or loss
(376
)
 
(397
)
 
(1,722
)
 
(971
)
Writedowns

 
(37
)
 
(178
)
 
(288
)
Balance at end of period
$
1,075

 
$
3,003

 
$
1,075

 
$
3,003

v3.20.1
Debt Securities - Available for Sale Securities Continuous Unrealized Loss Position Fair Value (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Debt Securities, Available-for-sale [Line Items]    
Estimated Fair Value $ 158,621 $ 121,786
Less than 12 Months, Fair Value 68,834 1,537
12 Months or Longer, Fair Value 1,982 39,755
Total, Fair Value 70,816 41,292
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] (Deprecated 2018-01-31)    
12 Months or More, Fair Value (886) (8)
12 Months or More, Unrealized Losses (41) (214)
Total, Unrealized Losses (927) (222)
U.S. Government Agencies    
Debt Securities, Available-for-sale [Line Items]    
Estimated Fair Value 6,842 15,210
Less than 12 Months, Fair Value   0
12 Months or Longer, Fair Value   6,988
Total, Fair Value   6,988
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] (Deprecated 2018-01-31)    
12 Months or More, Fair Value   0
12 Months or More, Unrealized Losses   (11)
Total, Unrealized Losses   (11)
Government Agencies and Government Sponsored Enterprises    
Debt Securities, Available-for-sale [Line Items]    
Estimated Fair Value 51,752 75,180
Less than 12 Months, Fair Value 5,308 1,144
12 Months or Longer, Fair Value 1,982 24,242
Total, Fair Value 7,290 25,386
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] (Deprecated 2018-01-31)    
12 Months or More, Fair Value (58) (3)
12 Months or More, Unrealized Losses (41) (181)
Total, Unrealized Losses (99) (184)
Municipal Bonds    
Debt Securities, Available-for-sale [Line Items]    
Estimated Fair Value 21,703 25,312
Less than 12 Months, Fair Value 1,744 0
12 Months or Longer, Fair Value 0 4,895
Total, Fair Value 1,744 4,895
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] (Deprecated 2018-01-31)    
12 Months or More, Fair Value (8) 0
12 Months or More, Unrealized Losses 0 (7)
Total, Unrealized Losses (8) (7)
Corporate Bonds    
Debt Securities, Available-for-sale [Line Items]    
Estimated Fair Value 78,324 6,084
Less than 12 Months, Fair Value 61,782 393
12 Months or Longer, Fair Value 0 3,630
Total, Fair Value 61,782 4,023
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] (Deprecated 2018-01-31)    
12 Months or More, Fair Value (820) (5)
12 Months or More, Unrealized Losses 0 (15)
Total, Unrealized Losses (820) (20)
Collateral Pledged    
Debt Securities, Available-for-sale [Line Items]    
Estimated Fair Value $ 80,593 $ 94,337
v3.20.1
Summary of Significant Accounting Policies - Narrative (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jul. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Operating lease, Right-of-use asset $ 4,585  
Lease liabilities 4,576  
Finance lease, right-of-use asset 2,052  
Finance lease, liability $ 1,852  
Accounting Standards Update 2016-02    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Operating lease, Right-of-use asset   $ 5,300
Lease liabilities   5,300
Finance lease, right-of-use asset   2,100
Finance lease, liability   $ 1,900
v3.20.1
Loans - Schedule of PCI Loans Credit Quality Indicators (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Financing Receivable, Recorded Investment    
Total loans $ 2,649,283 $ 2,688,405
Pass    
Financing Receivable, Recorded Investment    
Total loans 2,600,110 2,650,959
Special Mention    
Financing Receivable, Recorded Investment    
Total loans 22,042 12,968
Substandard    
Financing Receivable, Recorded Investment    
Total loans 26,841 24,058
Doubtful    
Financing Receivable, Recorded Investment    
Total loans 259 388
Loss    
Financing Receivable, Recorded Investment    
Total loans 31 32
Retail Consumer Loans | One to four family loans    
Financing Receivable, Recorded Investment    
Total loans 482,939 654,723
Retail Consumer Loans | HELOCs - originated    
Financing Receivable, Recorded Investment    
Total loans 144,804 139,210
Retail Consumer Loans | Construction and land/lots    
Financing Receivable, Recorded Investment    
Total loans 80,426 80,230
Retail Consumer Loans | Pass | One to four family loans    
Financing Receivable, Recorded Investment    
Total loans 473,723 644,159
Retail Consumer Loans | Pass | HELOCs - originated    
Financing Receivable, Recorded Investment    
Total loans 142,630 137,001
Retail Consumer Loans | Pass | Construction and land/lots    
Financing Receivable, Recorded Investment    
Total loans 80,276 79,995
Retail Consumer Loans | Special Mention | One to four family loans    
Financing Receivable, Recorded Investment    
Total loans 1,974 2,089
Retail Consumer Loans | Special Mention | HELOCs - originated    
Financing Receivable, Recorded Investment    
Total loans 833 766
Retail Consumer Loans | Special Mention | Construction and land/lots    
Financing Receivable, Recorded Investment    
Total loans 3 71
Retail Consumer Loans | Substandard | One to four family loans    
Financing Receivable, Recorded Investment    
Total loans 6,984 8,072
Retail Consumer Loans | Substandard | HELOCs - originated    
Financing Receivable, Recorded Investment    
Total loans 1,341 1,434
Retail Consumer Loans | Substandard | Construction and land/lots    
Financing Receivable, Recorded Investment    
Total loans 147 164
Retail Consumer Loans | Doubtful | One to four family loans    
Financing Receivable, Recorded Investment    
Total loans 258 384
Retail Consumer Loans | Doubtful | HELOCs - originated    
Financing Receivable, Recorded Investment    
Total loans 0 0
Retail Consumer Loans | Doubtful | Construction and land/lots    
Financing Receivable, Recorded Investment    
Total loans 0 0
Retail Consumer Loans | Loss | One to four family loans    
Financing Receivable, Recorded Investment    
Total loans 0 19
Retail Consumer Loans | Loss | HELOCs - originated    
Financing Receivable, Recorded Investment    
Total loans 0 9
Retail Consumer Loans | Loss | Construction and land/lots    
Financing Receivable, Recorded Investment    
Total loans 0 0
Commercial Loans | Commercial real estate    
Financing Receivable, Recorded Investment    
Total loans 984,805 919,555
Commercial Loans | Construction and development loans    
Financing Receivable, Recorded Investment    
Total loans 249,106 209,975
Commercial Loans | Commercial and industrial    
Financing Receivable, Recorded Investment    
Total loans 162,992 158,802
Commercial Loans | Pass | Commercial real estate    
Financing Receivable, Recorded Investment    
Total loans 963,953 901,183
Commercial Loans | Pass | Construction and development loans    
Financing Receivable, Recorded Investment    
Total loans 244,801 207,827
Commercial Loans | Pass | Commercial and industrial    
Financing Receivable, Recorded Investment    
Total loans 154,215 157,325
Commercial Loans | Special Mention | Commercial real estate    
Financing Receivable, Recorded Investment    
Total loans 8,191 8,066
Commercial Loans | Special Mention | Construction and development loans    
Financing Receivable, Recorded Investment    
Total loans 4,055 790
Commercial Loans | Special Mention | Commercial and industrial    
Financing Receivable, Recorded Investment    
Total loans 6,139 877
Commercial Loans | Substandard | Commercial real estate    
Financing Receivable, Recorded Investment    
Total loans 12,631 10,306
Commercial Loans | Substandard | Construction and development loans    
Financing Receivable, Recorded Investment    
Total loans 249 1,357
Commercial Loans | Substandard | Commercial and industrial    
Financing Receivable, Recorded Investment    
Total loans 2,637 600
Commercial Loans | Doubtful | Commercial real estate    
Financing Receivable, Recorded Investment    
Total loans 0 0
Commercial Loans | Doubtful | Construction and development loans    
Financing Receivable, Recorded Investment    
Total loans 1 1
Commercial Loans | Doubtful | Commercial and industrial    
Financing Receivable, Recorded Investment    
Total loans 0 0
Commercial Loans | Loss | Commercial real estate    
Financing Receivable, Recorded Investment    
Total loans 30 0
Commercial Loans | Loss | Construction and development loans    
Financing Receivable, Recorded Investment    
Total loans 0 0
Commercial Loans | Loss | Commercial and industrial    
Financing Receivable, Recorded Investment    
Total loans 1 0
Purchased Credit Impaired (PCI) Loans    
Financing Receivable, Recorded Investment    
Total loans 13,220 16,781
Purchased Credit Impaired (PCI) Loans | Pass    
Financing Receivable, Recorded Investment    
Total loans 8,488 11,113
Purchased Credit Impaired (PCI) Loans | Special Mention    
Financing Receivable, Recorded Investment    
Total loans 2,253 2,151
Purchased Credit Impaired (PCI) Loans | Substandard    
Financing Receivable, Recorded Investment    
Total loans 2,476 3,514
Purchased Credit Impaired (PCI) Loans | Doubtful    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Loss    
Financing Receivable, Recorded Investment    
Total loans 3 3
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | One to four family loans    
Financing Receivable, Recorded Investment    
Total loans 4,838 5,868
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | HELOCs - originated    
Financing Receivable, Recorded Investment    
Total loans 0 225
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Construction and land/lots    
Financing Receivable, Recorded Investment    
Total loans 339 372
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Pass | One to four family loans    
Financing Receivable, Recorded Investment    
Total loans 3,368 4,124
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Pass | HELOCs - originated    
Financing Receivable, Recorded Investment    
Total loans   225
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Pass | Construction and land/lots    
Financing Receivable, Recorded Investment    
Total loans 108 142
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Special Mention | One to four family loans    
Financing Receivable, Recorded Investment    
Total loans 463 248
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Special Mention | HELOCs - originated    
Financing Receivable, Recorded Investment    
Total loans   0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Special Mention | Construction and land/lots    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Substandard | One to four family loans    
Financing Receivable, Recorded Investment    
Total loans 1,007 1,496
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Substandard | HELOCs - originated    
Financing Receivable, Recorded Investment    
Total loans   0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Substandard | Construction and land/lots    
Financing Receivable, Recorded Investment    
Total loans 231 230
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Doubtful | One to four family loans    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Doubtful | HELOCs - originated    
Financing Receivable, Recorded Investment    
Total loans   0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Doubtful | Construction and land/lots    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Loss | One to four family loans    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Loss | HELOCs - originated    
Financing Receivable, Recorded Investment    
Total loans   0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Loss | Construction and land/lots    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Commercial real estate    
Financing Receivable, Recorded Investment    
Total loans 5,888 7,706
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Construction and development loans    
Financing Receivable, Recorded Investment    
Total loans 608 941
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Commercial and industrial    
Financing Receivable, Recorded Investment    
Total loans 1,547 1,669
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Pass | Commercial real estate    
Financing Receivable, Recorded Investment    
Total loans 3,191 4,503
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Pass | Construction and development loans    
Financing Receivable, Recorded Investment    
Total loans 277 453
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Pass | Commercial and industrial    
Financing Receivable, Recorded Investment    
Total loans 1,544 1,666
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Special Mention | Commercial real estate    
Financing Receivable, Recorded Investment    
Total loans 1,790 1,903
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Special Mention | Construction and development loans    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Special Mention | Commercial and industrial    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Substandard | Commercial real estate    
Financing Receivable, Recorded Investment    
Total loans 907 1,300
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Substandard | Construction and development loans    
Financing Receivable, Recorded Investment    
Total loans 331 488
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Substandard | Commercial and industrial    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Doubtful | Commercial real estate    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Doubtful | Construction and development loans    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Doubtful | Commercial and industrial    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Loss | Commercial real estate    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Loss | Construction and development loans    
Financing Receivable, Recorded Investment    
Total loans 0 0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Loss | Commercial and industrial    
Financing Receivable, Recorded Investment    
Total loans $ 3 $ 3
v3.20.1
Loans
9 Months Ended
Mar. 31, 2020
Receivables [Abstract]  
Loans
Loans
Loans consist of the following at the dates indicated:
 
March 31, 2020
 
June 30, 2019
Retail consumer loans:
 
 
 
One-to-four family
$
487,777

 
$
660,591

HELOCs - originated
144,804

 
139,435

HELOCs - purchased
82,232

 
116,972

Construction and land/lots
80,765

 
80,602

Indirect auto finance
135,449

 
153,448

Consumer
11,576

 
11,416

Total retail consumer loans
942,603

 
1,162,464

Commercial loans:
 
 
 
Commercial real estate
990,693

 
927,261

Construction and development
249,714

 
210,916

Commercial and industrial
164,539

 
160,471

Equipment finance
198,962

 
132,058

Municipal finance
115,992

 
112,016

Total commercial loans
1,719,900

 
1,542,722

Total loans
2,662,503

 
2,705,186

Deferred loan costs, net
1,021

 
4

Total loans, net of deferred loan costs
2,663,524

 
2,705,190

Allowance for loan losses
(26,850
)
 
(21,429
)
Loans, net
$
2,636,674

 
$
2,683,761


All qualifying one-to-four family first mortgage loans, HELOCs, commercial real estate loans, and FHLB Stock are pledged as collateral by a blanket pledge to secure any outstanding FHLB advances.
The Company's total non-purchased and purchased performing loans by segment, class, and risk grade at the dates indicated follows:
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Loss
 
Total
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
473,723

 
$
1,974

 
$
6,984

 
$
258

 
$

 
$
482,939

HELOCs - originated
142,630

 
833

 
1,341

 

 

 
144,804

HELOCs - purchased
81,712

 

 
520

 

 

 
82,232

Construction and land/lots
80,276

 
3

 
147

 

 

 
80,426

Indirect auto finance
134,382

 

 
1,067

 

 

 
135,449

Consumer
11,058

 
5

 
513

 

 

 
11,576

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 
Commercial real estate
963,953

 
8,191

 
12,631

 

 
30

 
984,805

Construction and development
244,801

 
4,055

 
249

 
1

 

 
249,106

Commercial and industrial
154,215

 
6,139

 
2,637

 

 
1

 
162,992

Equipment finance
197,651

 
559

 
752

 

 

 
198,962

Municipal finance
115,709

 
283

 

 

 

 
115,992

Total loans
$
2,600,110

 
$
22,042

 
$
26,841

 
$
259

 
$
31

 
$
2,649,283

 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Loss
 
Total
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
644,159

 
$
2,089

 
$
8,072

 
$
384

 
$
19

 
$
654,723

HELOCs - originated
137,001

 
766

 
1,434

 

 
9

 
139,210

HELOCs - purchased
116,306

 

 
666

 

 

 
116,972

Construction and land/lots
79,995

 
71

 
164

 

 

 
80,230

Indirect auto finance
152,393

 
13

 
1,042

 

 

 
153,448

Consumer
11,375

 
1

 
33

 
3

 
4

 
11,416

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
901,183

 
8,066

 
10,306

 

 

 
919,555

Construction and development
207,827

 
790

 
1,357

 
1

 

 
209,975

Commercial and industrial
157,325

 
877

 
600

 

 

 
158,802

Equipment finance
131,674

 

 
384

 

 

 
132,058

Municipal finance
111,721

 
295

 

 

 

 
112,016

Total loans
$
2,650,959

 
$
12,968

 
$
24,058

 
$
388

 
$
32

 
$
2,688,405

The Company's total purchased credit impaired ("PCI") loans by segment, class, and risk grade at the dates indicated follows:
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Loss
 
Total
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
3,368

 
$
463

 
$
1,007

 
$

 
$

 
$
4,838

Construction and land/lots
108

 

 
231

 

 

 
339

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
3,191

 
1,790

 
907

 

 

 
5,888

Construction and development
277

 

 
331

 

 

 
608

Commercial and industrial
1,544

 

 

 

 
3

 
1,547

Total loans
$
8,488

 
$
2,253

 
$
2,476

 
$

 
$
3

 
$
13,220

 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Loss
 
Total
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
4,124

 
$
248

 
$
1,496

 
$

 
$

 
$
5,868

HELOCs - originated
225

 

 

 

 

 
225

Construction and land/lots
142

 

 
230

 

 

 
372

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
4,503

 
1,903

 
1,300

 

 

 
7,706

Construction and development
453

 

 
488

 

 

 
941

Commercial and industrial
1,666

 

 

 

 
3

 
1,669

Total loans
$
11,113

 
$
2,151

 
$
3,514

 
$

 
$
3

 
$
16,781


The Company's total loans by segment, class, and delinquency status at the dates indicated follows:
 
Past Due
 
 
 
Total
 
30-89 Days
 
90 Days+
 
Total
 
Current
 
Loans
March 31, 2020
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
One-to-four family
$
996

 
$
2,732

 
$
3,728

 
$
484,049

 
$
487,777

HELOCs - originated
438

 
275

 
713

 
144,091

 
144,804

HELOCs - purchased
761

 
47

 
808

 
81,424

 
82,232

Construction and land/lots

 
242

 
242

 
80,523

 
80,765

Indirect auto finance
378

 
284

 
662

 
134,787

 
135,449

Consumer
17

 
21

 
38

 
11,538

 
11,576

Commercial loans:
 
 
 
 
 
 
 
 
 
Commercial real estate
1,854

 
1,160

 
3,014

 
987,679

 
990,693

Construction and development
217

 
125

 
342

 
249,372

 
249,714

Commercial and industrial
65

 
27

 
92

 
164,447

 
164,539

Equipment finance
1,364

 
689

 
2,053

 
196,909

 
198,962

Municipal finance

 

 

 
115,992

 
115,992

Total loans
$
6,090

 
$
5,602

 
$
11,692

 
$
2,650,811

 
$
2,662,503

 
Past Due
 
 
 
Total
 
30-89 Days
 
90 Days+
 
Total
 
Current
 
Loans
June 30, 2019
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
One-to-four family
$
1,615

 
$
1,389

 
$
3,004

 
$
657,587

 
$
660,591

HELOCs - originated
226

 
231

 
457

 
138,978

 
139,435

HELOCs - purchased

 
485

 
485

 
116,487

 
116,972

Construction and land/lots
138

 
6

 
144

 
80,458

 
80,602

Indirect auto finance
459

 
237

 
696

 
152,752

 
153,448

Consumer
6

 
8

 
14

 
11,402

 
11,416

Commercial loans:
 

 
 

 
 

 
 

 
 

Commercial real estate
2,279

 
516

 
2,795

 
924,466

 
927,261

Construction and development

 
1,133

 
1,133

 
209,783

 
210,916

Commercial and industrial
207

 
99

 
306

 
160,165

 
160,471

Equipment finance
649

 
384

 
1,033

 
131,025

 
132,058

Municipal finance

 

 

 
112,016

 
112,016

Total loans
$
5,579

 
$
4,488

 
$
10,067

 
$
2,695,119

 
$
2,705,186



The Company's recorded investment in loans, by segment and class, that are not accruing interest or are 90 days or more past due and still accruing interest at the dates indicated follows:
 
March 31, 2020
 
June 30, 2019
 
Nonaccruing
 
90 Days + &
still accruing
 
Nonaccruing
 
90 Days + &
still accruing
Retail consumer loans:
 
 
 
 
 
 
 
One-to-four family
$
3,863

 
$

 
$
3,223

 
$

HELOCs - originated
431

 

 
372

 

HELOCs - purchased
520

 

 
666

 

Construction and land/lots
19

 

 
6

 

Indirect auto finance
623

 

 
463

 

Consumer
27

 

 
21

 

Commercial loans:
 

 
 

 
 

 
 

Commercial real estate
9,253

 

 
3,559

 

Construction and development
250

 

 
1,357

 

Commercial and industrial
269

 

 
307

 

Equipment finance
410

 

 
384

 

Total loans
$
15,665

 
$

 
$
10,358

 
$


PCI loans totaling $1,018 at March 31, 2020 and $1,344 at June 30, 2019 are excluded from nonaccruing loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations.
TDRs are loans which have renegotiated loan terms to assist borrowers who are unable to meet the original terms of their loans. Such modifications to loan terms may include a lower interest rate, a reduction in principal, or a longer term to maturity. Additionally, all TDRs are considered impaired. The Company had no commitments to lend additional funds on these TDR loans at March 31, 2020.
The Company's loans that were performing under the payment terms of TDRs that were excluded from nonaccruing loans above at the dates indicated follows:
 
March 31, 2020
 
June 30, 2019
Performing TDRs included in impaired loans
$
14,732

 
$
23,116


An analysis of the allowance for loan losses by segment for the periods shown is as follows:
 
Three Months Ended March 31, 2020
 
Three Months Ended March 31, 2019
 
PCI
 
Retail
Consumer
 
Commercial
 
Total
 
PCI
 
Retail
Consumer
 
Commercial
 
Total
Balance at beginning of period
$
152

 
$
5,400

 
$
16,479

 
$
22,031

 
$
199

 
$
7,236

 
$
13,984

 
$
21,419

Provision for (recovery of) loan losses
30

 
1,519

 
3,851

 
5,400

 
2

 
(818
)
 
6,316

 
5,500

Charge-offs

 
(295
)
 
(706
)
 
(1,001
)
 

 
(288
)
 
(2,648
)
 
(2,936
)
Recoveries

 
359

 
61

 
420

 

 
331

 
102

 
433

Balance at end of period
$
182

 
$
6,983

 
$
19,685

 
$
26,850

 
$
201

 
$
6,461

 
$
17,754

 
$
24,416

 
Nine Months Ended March 31, 2020
 
Nine Months Ended March 31, 2019
 
PCI
 
Retail
Consumer
 
Commercial
 
Total
 
PCI
 
Retail
Consumer
 
Commercial
 
Total
Balance at beginning of period
$
201

 
$
6,419

 
$
14,809

 
$
21,429

 
$
483

 
$
7,527

 
$
13,050

 
$
21,060

Provision for (recovery of) loan losses
(19
)
 
(80
)
 
5,899

 
5,800

 
(282
)
 
(1,223
)
 
7,005

 
5,500

Charge-offs

 
(678
)
 
(1,448
)
 
(2,126
)
 

 
(881
)
 
(2,728
)
 
(3,609
)
Recoveries

 
1,322

 
425

 
1,747

 

 
1,038

 
427

 
1,465

Balance at end of period
$
182

 
$
6,983

 
$
19,685

 
$
26,850

 
$
201

 
$
6,461

 
$
17,754

 
$
24,416

The Company's ending balances of loans and the related allowance, by segment and class, at the dates indicated follows:
 
Allowance for Loan Losses
 
Total Loans Receivable
 
PCI
 
Loans
individually
evaluated for
impairment
 
Loans
collectively
evaluated
 
Total
 
PCI
 
Loans
individually
evaluated for
impairment
 
Loans
collectively
evaluated
 
Total
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
17

 
$
5

 
$
2,427

 
$
2,449

 
$
4,838

 
$
4,313

 
$
478,626

 
$
487,777

HELOCs - originated

 

 
1,384

 
1,384

 

 

 
144,804

 
144,804

HELOCs - purchased

 

 
485

 
485

 

 

 
82,232

 
82,232

Construction and land/lots
33

 

 
1,387

 
1,420

 
339

 
303

 
80,123

 
80,765

Indirect auto finance

 

 
1,145

 
1,145

 

 
10

 
135,439

 
135,449

Consumer

 

 
150

 
150

 

 

 
11,576

 
11,576

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 
Commercial real estate
113

 
772

 
9,574

 
10,459

 
5,888

 
7,114

 
977,691

 
990,693

Construction and development
4

 
5

 
4,147

 
4,156

 
608

 
310

 
248,796

 
249,714

Commercial and industrial
15

 
1

 
2,384

 
2,400

 
1,547

 
28

 
162,964

 
164,539

Equipment finance

 

 
2,182

 
2,182

 

 
411

 
198,551

 
198,962

Municipal finance

 

 
620

 
620

 

 

 
115,992

 
115,992

Total
$
182

 
$
783

 
$
25,885

 
$
26,850

 
$
13,220

 
$
12,489

 
$
2,636,794

 
$
2,662,503

June 30, 2019
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Retail consumer loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

One-to-four family
$
62

 
$
74

 
$
2,375

 
$
2,511

 
$
5,868

 
$
5,318

 
$
649,405

 
$
660,591

HELOCs - originated

 
7

 
1,060

 
1,067

 
225

 
7

 
139,203

 
139,435

HELOCs - purchased

 

 
518

 
518

 

 

 
116,972

 
116,972

Construction and land/lots

 

 
1,265

 
1,265

 
372

 
323

 
79,907

 
80,602

Indirect auto finance

 

 
927

 
927

 

 

 
153,448

 
153,448

Consumer

 
4

 
189

 
193

 

 
4

 
11,412

 
11,416

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
118

 
28

 
7,890

 
8,036

 
7,706

 
8,692

 
910,863

 
927,261

Construction and development
4

 
5

 
3,187

 
3,196

 
941

 
1,397

 
208,578

 
210,916

Commercial and industrial
17

 
2

 
1,957

 
1,976

 
1,669

 
2

 
158,800

 
160,471

Equipment finance

 

 
1,305

 
1,305

 

 

 
132,058

 
132,058

Municipal finance

 

 
435

 
435

 

 

 
112,016

 
112,016

Total
$
201

 
$
120

 
$
21,108

 
$
21,429

 
$
16,781

 
$
15,743

 
$
2,672,662

 
$
2,705,186


Loans acquired through acquisitions are initially excluded from the allowance for loan losses in accordance with the acquisition method of accounting for business combinations. The Company records these loans at fair value, which includes a credit discount, therefore, no allowance for loan losses is established for these acquired loans at acquisition. A provision for loan losses is recorded for any further deterioration in these acquired loans subsequent to the acquisition.
The Company's impaired loans and the related allowance, by segment and class, excluding PCI loans, at the dates indicated follows:
 
Total Impaired Loans
 
Unpaid
Principal
Balance
 
Recorded
Investment
With a
Recorded
Allowance
 
Recorded
Investment
With No
Recorded
Allowance
 
Total
 
Related
Recorded
Allowance
March 31, 2020
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
One-to-four family
$
18,211

 
$
10,914

 
$
3,975

 
$
14,889

 
$
383

HELOCs - originated
1,724

 
1,636

 
52

 
1,688

 
42

HELOCs - purchased
474

 
474

 

 
474

 
2

Construction and land/lots
1,547

 
756

 
303

 
1,059

 
22

Indirect auto finance
1,003

 
392

 
299

 
691

 
4

Consumer
53

 
16

 
28

 
44

 
2

Commercial loans:
 

 
 

 
 

 
 

 
 

Commercial real estate
10,078

 
7,669

 
1,847

 
9,516

 
803

Construction and development
1,591

 
621

 
80

 
701

 
8

Commercial and industrial
9,823

 
246

 
853

 
1,099

 
4

Equipment finance
1,466

 

 
411

 
411

 

Total impaired loans
$
45,970

 
$
22,724

 
$
7,848

 
$
30,572

 
$
1,270

June 30, 2019
 

 
 

 
 

 
 

 
 

Retail consumer loans:
 

 
 

 
 

 
 

 
 

One-to-four family
$
18,302

 
$
12,461

 
$
3,152

 
$
15,613

 
$
472

HELOCs - originated
2,410

 
564

 
1,219

 
1,783

 
46

HELOCs - purchased
666

 

 
666

 
666

 

Construction and land/lots
1,917

 
957

 
323

 
1,280

 
26

Indirect auto finance
601

 
353

 
137

 
490

 
2

Consumer
379

 
7

 
41

 
48

 
6

Commercial loans:
 

 
 

 
 

 
 

 
 

Commercial real estate
10,127

 
6,434

 
3,404

 
9,838

 
36

Construction and development
2,574

 
940

 
791

 
1,731

 
7

Commercial and industrial
10,173

 
354

 
768

 
1,122

 
6

Equipment finance
462

 

 
384

 
384

 

Total impaired loans
$
47,611

 
$
22,070

 
$
10,885

 
$
32,955

 
$
601


The table above includes $18,083 and $17,212, of impaired loans that were not individually evaluated at March 31, 2020 and June 30, 2019, respectively, because these loans did not meet the Company's threshold for individual impairment evaluation. The recorded allowance above includes $487 and $481 related to these loans that were not individually evaluated at March 31, 2020 and June 30, 2019, respectively.
The Company's average recorded investment in impaired loans and interest income recognized on impaired loans for the three and nine months ended March 31, 2020 and 2019 follows:
 
Three Months Ended
 
March 31, 2020
 
March 31, 2019
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Retail consumer loans:
 
 
 
 
 
 
 
One-to-four family
$
14,189

 
$
175

 
$
16,499

 
$
237

HELOCs - originated
1,724

 
23

 
957

 
18

HELOC - purchased
474

 
30

 
333

 
3

Construction and land/lots
1,091

 
19

 
1,356

 
24

Indirect auto finance
625

 
8

 
361

 
6

Consumer
53

 
3

 
1,580

 
17

Commercial loans:
 

 
 

 
 

 
 

Commercial real estate
8,728

 
59

 
4,116

 
123

Construction and development
712

 
10

 
1,696

 
16

Commercial and industrial
1,119

 
11

 
188

 
80

Equipment finance
$
727

 
3

 
$

 
$

Total loans
$
29,442

 
$
341

 
$
27,086

 
$
524

 
Nine Months Ended
 
March 31, 2020
 
March 31, 2019
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Retail consumer loans:
 
 
 
 
 
 
 
One-to-four family
$
14,861

 
$
560

 
$
17,878

 
$
699

HELOCs - originated
1,706

 
76

 
1,067

 
52

HELOCs - purchased
524

 
37

 
235

 
10

Construction and land/lots
1,174

 
63

 
1,491

 
75

Indirect auto finance
506

 
42

 
341

 
19

Consumer
229

 
9

 
1,335

 
58

Commercial loans:
 

 
 

 
 

 
 

Commercial real estate
8,496

 
237

 
4,376

 
313

Construction and development
1,323

 
36

 
1,800

 
51

Commercial and industrial
812

 
103

 
201

 
222

Equipment finance
664

 
6

 

 

Total loans
$
30,295

 
$
1,169

 
$
28,724

 
$
1,499


A summary of changes in the accretable yield for PCI loans for the three and nine months ended March 31, 2020 and 2019 follows:
 
Three Months Ended
 
March 31, 2020
 
March 31, 2019
Accretable yield, beginning of period
$
4,355

 
$
5,232

Reclass from nonaccretable yield (1)
171

 
118

Other changes, net (2)
(23
)
 
528

Interest income
(378
)
 
(412
)
Accretable yield, end of period
$
4,125

 
$
5,466

 
Nine Months Ended
 
March 31, 2020
 
March 31, 2019
Accretable yield, beginning of period
$
5,259

 
$
5,734

Reclass from nonaccretable yield (1)
421

 
542

Other changes, net (2)
(332
)
 
863

Interest income
(1,223
)
 
(1,673
)
Accretable yield, end of period
$
4,125

 
$
5,466

______________________________________
(1)
Represents changes attributable to expected loss assumptions.
(2)
Represents changes in cash flows expected to be collected due to the impact of modifications, changes in prepayment assumptions, and changes in interest rates.
For the three and nine months ended March 31, 2020 and 2019, the following tables present a breakdown of the types of concessions made on TDRs by loan class:
 
Three Months Ended March 31, 2020
 
Three Months Ended March 31, 2019
 
Number
of
Loans
 
Pre
Modification
Outstanding
Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
 
Number
of
Loans
 
Pre
Modification
Outstanding
Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
Below market interest rate:
 
 
 
 
 
 
 
 
 
 
 
Retail consumer:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family

 
$

 
$

 
2

 
$
15

 
$
15

Home equity lines of credit

 

 

 
1

 
212

 
212

Total

 
$

 
$

 
3

 
$
227

 
$
227

Other TDRs:
 

 
 

 
 

 
 

 
 

 
 

Retail consumer:
 

 
 

 
 

 
 

 
 

 
 

One-to-four family
2

 
$
319

 
$
317

 
2

 
$
335

 
$
334

Construction and land/lots

 

 

 
1

 
29

 
28

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
1

 
30

 
30

 
2

 
5,424

 
5,423

Construction and development

 

 

 
1

 
182

 
182

Total
3

 
$
349

 
$
347

 
6

 
$
5,970

 
$
5,967

Total
3

 
$
349

 
$
347

 
9

 
$
6,197

 
$
6,194

 
Nine Months Ended March 31, 2020
 
Nine Months Ended March 31, 2019
 
Number
of
Loans
 
Pre
Modification
Outstanding
Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
 
Number
of
Loans
 
Pre
Modification Outstanding Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
Below market interest rate:
 
 
 
 
 
 
 
 
 
 
 
Retail consumer:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family

 
$

 
$

 
1

 
$
85

 
$
84

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
1

 
88

 
87

 

 

 

Total
1

 
$
88

 
$
87

 
1

 
$
85

 
$
84

Extended payment terms:
 

 
 

 
 

 
 

 
 

 
 

Retail consumer:
 

 
 

 
 

 
 

 
 

 
 

One-to-four family
2

 
$
70

 
$
67

 
2

 
$
212

 
$
212

HELOCs - originated

 

 

 
1

 
15

 
15

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
1

 
826

 
826

 

 

 

Total
3

 
$
896

 
$
893

 
3

 
$
227

 
$
227

Other TDRs:
 

 
 

 
 

 
 

 
 

 
 

Retail consumer:
 

 
 

 
 

 
 

 
 

 
 

One-to-four family
4

 
$
353

 
$
348

 
10

 
$
841

 
$
829

Construction and land/lots

 

 

 
1

 
29

 
28

Indirect auto finance
4

 
68

 
57

 
1

 
33

 
29

Consumer

 

 

 
1

 
2

 
2

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
1

 
30

 
30

 
2

 
5,424

 
5,423

Construction and development
1

 
182

 
79

 
1

 
182

 
182

Total
10

 
$
633

 
$
514

 
16

 
$
6,511

 
$
6,493

Total
14

 
$
1,617

 
$
1,494

 
20

 
$
6,823

 
$
6,804


Other TDRs include TDRs that have a below market interest rate and extended payment terms. The Company does not typically forgive principal when restructuring troubled debt.
The following tables present loans that were modified as TDRs within the previous 12 months and for which there was a payment default during the three and nine months ended March 31, 2020 and 2019:
 
Three Months Ended March 31, 2020
 
Three Months Ended March 31, 2019
 
Number of
Loans
 
Recorded
Investment
 
Number of
Loans
 
Recorded
Investment
Retail consumer:
 

 
 

 
 

 
 

One-to-four family

 
$

 
2

 
$
184

Consumer

 

 
1

 
2

Total

 
$

 
3

 
$
186

Total

 
$

 
3

 
$
186

 
Nine Months Ended March 31, 2020
 
Nine Months Ended March 31, 2019
 
Number of
Loans
 
Recorded
Investment
 
Number of
Loans
 
Recorded
Investment
Other TDRs:
 

 
 

 
 

 
 

Retail consumer:
 

 
 

 
 

 
 

One-to-four family
2

 
$
49

 
2

 
$
184

Consumer

 

 
1

 
2

Total
2

 
$
49

 
3

 
$
186

Total
2

 
$
49

 
3

 
$
186


In the determination of the allowance for loan losses, management considers TDRs for all loan classes, and the subsequent nonperformance in accordance with their modified terms, by measuring impairment on a loan-by-loan basis based on either the value of the loan's expected future cash flows discounted at the loan's original effective interest rate or on the collateral value, net of the estimated costs of disposal, if the loan is collateral dependent.
Modifications in response to COVID-19
The Company began offering short-term loan modifications to assist borrowers during the COVID-19 pandemic. The CARES Act along with a joint agency statement issued by banking agencies and confirmed by FASB staff that short-term modifications made in response to COVID-19 are not TDRs. Accordingly, the Company does not account for such loan modifications as TDRs. As of March 31, 2020, modifications totaling $14.3 million and $162.4 million had been granted in retail consumer loans and commercial loans, respectively. See Note 1 Summary of Significant Accounting Policies and Note 12 Subsequent Events for more information.
v3.20.1
Commitments and Contingencies
9 Months Ended
Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Commitments and Contingencies
Loan Commitments – Legally binding commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. In the normal course of business, there are various outstanding commitments to extend credit that are not reflected in the consolidated financial statements. At March 31, 2020 and June 30, 2019, respectively, loan commitments (excluding $161,655 and $181,477 of undisbursed portions of construction loans) totaled $54,884 and $93,432 of which $13,013 and $34,631 were variable rate commitments and $41,871 and $58,801 were fixed rate commitments. The fixed rate loans had interest rates ranging from 1.69% to 8.53% at March 31, 2020 and 2.69% to 8.59% at June 30, 2019, and terms ranging from three to 30 years. Pre-approved but unused lines of credit (principally second mortgage home equity loans and overdraft protection loans) totaled $374,401 and $353,663 at March 31, 2020 and June 30, 2019, respectively. These amounts represent the Company's exposure to credit risk, and in the opinion of management have no more than the normal lending risk that the Company commits to its borrowers. The Company has two types of commitments related to certain one-to-four family loans held for sale: rate lock commitments and forward loan commitments. Rate lock commitments are commitments to extend credit to a customer that has an interest rate lock and are considered derivative instruments. The rate lock commitments do not qualify for hedge accounting. In order to mitigate the risk from interest rate fluctuations, we enter into forward loan sale commitments on a “best efforts” basis, which do not meet the definition of a derivative instrument. The fair value of these interest rate lock commitments was not material at March 31, 2020 or June 30, 2019.
The Company grants construction and permanent loans collateralized primarily by residential and commercial real estate to customers throughout its primary market areas. In addition, the Company grants equipment financing throughout the eastern United States and municipal financing to customers throughout North and South Carolina. The Company’s loan portfolio can be affected by the general economic conditions within these market areas. Management believes that the Company has no significant concentration of credit in the loan portfolio.
Restrictions on Cash – In response to COVID-19, the FRB reduced the reserve requirements to zero on March 15, 2020. Prior to this change the Bank was required by regulation to maintain a varying cash reserve balance with the FRB. The daily average calculated cash reserve required as of March 31, 2020 and June 30, 2019 was $0, and $2,633, respectively, which was satisfied by vault cash and balances held at the FRB.
Guarantees – Standby letters of credit obligate the Company to meet certain financial obligations of its customers, if, under the contractual terms of the agreement, the customers are unable to do so. The financial standby letters of credit issued by the Company are irrevocable and payment is only guaranteed upon the borrower's failure to perform its obligations to the beneficiary. Total commitments under standby letters of credit as of March 31, 2020 and June 30, 2019 were $6,833 and $9,460, respectively. There was no liability recorded for these letters of credit at March 31, 2020 or June 30, 2019, respectively.
Litigation From time to time, the Company is involved in litigation matters in the ordinary course of business. These proceedings and the associated legal claims are often contested, and the outcome of individual matters is not always predictable. These claims and counter claims typically arise during the course of collection efforts on problem loans or with respect to actions to enforce liens on properties in which the Company holds a security interest. The Company is not a party to any pending legal proceedings that management believes would have a material adverse effect on the Company’s financial condition or results of operations.
v3.20.1
Fair Value of Financial Instruments - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis $ 158,621 $ 121,786
Fair Value, Inputs, Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
Fair Value, Inputs, Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 158,621 121,786
Fair Value, Inputs, Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
US Government Agencies    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 6,842 15,210
US Government Agencies | Fair Value, Inputs, Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
US Government Agencies | Fair Value, Inputs, Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 6,842 15,210
US Government Agencies | Fair Value, Inputs, Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
Government Agencies and Government Sponsored Enterprises    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 51,752 75,180
Government Agencies and Government Sponsored Enterprises | Fair Value, Inputs, Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
Government Agencies and Government Sponsored Enterprises | Fair Value, Inputs, Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 51,752 75,180
Government Agencies and Government Sponsored Enterprises | Fair Value, Inputs, Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
Municipal Bonds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 21,703 25,312
Municipal Bonds | Fair Value, Inputs, Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
Municipal Bonds | Fair Value, Inputs, Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 21,703 25,312
Municipal Bonds | Fair Value, Inputs, Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
Corporate Bonds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 78,324 6,084
Corporate Bonds | Fair Value, Inputs, Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
Corporate Bonds | Fair Value, Inputs, Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 78,324 6,084
Corporate Bonds | Fair Value, Inputs, Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis $ 0 $ 0
v3.20.1
Net Income per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 9 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2020
Mar. 31, 2019
Numerator:        
Net income $ 1,193 $ 3,302 $ 19,188 $ 19,133
Allocation of earnings to participating securities (11) (23) (167) (132)
Numerator for basic EPS - Net income available to common stockholders 1,182 3,279 19,021 19,001
Dilutive effect to participating securities 2 3 6 5
Numerator for diluted EPS $ 1,184 $ 3,282 $ 19,027 $ 19,006
Denominator:        
Weighted-average common shares outstanding - basic 16,688,646 17,506,018 16,898,391 17,811,962
Effect of dilutive shares 569,782 691,411 625,861 716,199
Weighted-average common shares outstanding - diluted 17,258,428 18,197,429 17,524,252 18,528,161
Net income per share - basic (in dollars per share) $ 0.07 $ 0.19 $ 1.12 $ 1.07
Net income per share - diluted (in dollars per share) $ 0.07 $ 0.18 $ 1.08 $ 1.02
v3.20.1
Equity Incentive Plan - Stock Option Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
9 Months Ended 12 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Jun. 30, 2019
Jun. 30, 2018
Options        
Options Outstanding, Beginning of Period (in shares) 1,657,214 1,718,270 1,718,270  
Granted (in shares) 61,000 40,500    
Exercised (in shares) 106,914 69,111    
Forfeited (in shares) 800 20,300    
Options Outstanding, End of period (in shares) 1,610,500 1,668,414 1,657,214 1,718,270
Exercisable (in shares) 1,298,000 1,290,814    
Weighted- average exercise price        
Options Outstanding, Beginning of Period (in usd per share) $ 17.59 $ 17.29 $ 17.29  
Granted (in usd per share) 26.40 27.51    
Exercised (in usd per share) 14.41 14.53    
Forfeited (in usd per share) 17.35 23.39    
Options Outstanding, End of Period (in usd per share) 18.13 17.57 $ 17.59 $ 17.29
Exercisable (in usd per share) $ 15.45 $ 15.39    
Remaining contractual life (years) 4 years 7 months 6 days 5 years 3 months 18 days 5 years 5 years 10 months 31 days
Exercisable (in years) 3 years 8 months 12 days 4 years 4 months 24 days    
Aggregate intrinsic value $ 1,617 $ 13,098 $ 12,909 $ 18,664
Aggregate intrinsic value $ 1,617 $ 12,733    
Non-vested Options        
Nonvested, number of shares (in shares) 312,500 377,600    
Nonvested, weighted average grant date fair value (in dollars per share) $ 25.86 $ 25.04    
Nonvested, contractual term (in years) 8 years 2 months 12 days 8 years 6 months    
Nonvested, intrinsic value $ 0 $ 365    
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period   945    
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price   $ 23.82    
v3.20.1
Loans - Schedule of Past Due Financing Receivables (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Financing Receivable, Past Due [Line Items]    
Past Due $ 11,692 $ 10,067
Current 2,650,811 2,695,119
Total Loans Receivable 2,662,503 2,705,186
30-89 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 6,090 5,579
90 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 5,602 4,488
Retail Consumer Loans    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 942,603 1,162,464
Retail Consumer Loans | One-to-four family    
Financing Receivable, Past Due [Line Items]    
Past Due 3,728 3,004
Current 484,049 657,587
Total Loans Receivable 487,777 660,591
Retail Consumer Loans | One-to-four family | 30-89 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 996 1,615
Retail Consumer Loans | One-to-four family | 90 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 2,732 1,389
Retail Consumer Loans | HELOCs - originated    
Financing Receivable, Past Due [Line Items]    
Past Due 713 457
Current 144,091 138,978
Total Loans Receivable 144,804 139,435
Retail Consumer Loans | HELOCs - originated | 30-89 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 438 226
Retail Consumer Loans | HELOCs - originated | 90 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 275 231
Retail Consumer Loans | HELOCs - purchased    
Financing Receivable, Past Due [Line Items]    
Past Due 808 485
Current 81,424 116,487
Total Loans Receivable 82,232 116,972
Retail Consumer Loans | HELOCs - purchased | 30-89 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 761 0
Retail Consumer Loans | HELOCs - purchased | 90 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 47 485
Retail Consumer Loans | Construction and land/lots    
Financing Receivable, Past Due [Line Items]    
Past Due 242 144
Current 80,523 80,458
Total Loans Receivable 80,765 80,602
Retail Consumer Loans | Construction and land/lots | 30-89 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 0 138
Retail Consumer Loans | Construction and land/lots | 90 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 242 6
Retail Consumer Loans | Indirect auto finance    
Financing Receivable, Past Due [Line Items]    
Past Due 662 696
Current 134,787 152,752
Total Loans Receivable 135,449 153,448
Retail Consumer Loans | Indirect auto finance | 30-89 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 378 459
Retail Consumer Loans | Indirect auto finance | 90 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 284 237
Retail Consumer Loans | Consumer loans    
Financing Receivable, Past Due [Line Items]    
Past Due 38 14
Current 11,538 11,402
Total Loans Receivable 11,576 11,416
Retail Consumer Loans | Consumer loans | 30-89 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 17 6
Retail Consumer Loans | Consumer loans | 90 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 21 8
Commercial Loans    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 1,719,900 1,542,722
Commercial Loans | Commercial real estate    
Financing Receivable, Past Due [Line Items]    
Past Due 3,014 2,795
Current 987,679 924,466
Total Loans Receivable 990,693 927,261
Commercial Loans | Commercial real estate | 30-89 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 1,854 2,279
Commercial Loans | Commercial real estate | 90 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 1,160 516
Commercial Loans | Construction and development loans    
Financing Receivable, Past Due [Line Items]    
Past Due 342 1,133
Current 249,372 209,783
Total Loans Receivable 249,714 210,916
Commercial Loans | Construction and development loans | 30-89 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 217 0
Commercial Loans | Construction and development loans | 90 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 125 1,133
Commercial Loans | Commercial and industrial    
Financing Receivable, Past Due [Line Items]    
Past Due 92 306
Current 164,447 160,165
Total Loans Receivable 164,539 160,471
Commercial Loans | Commercial and industrial | 30-89 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 65 207
Commercial Loans | Commercial and industrial | 90 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 27 99
Commercial Loans | Equipment Finance    
Financing Receivable, Past Due [Line Items]    
Past Due 2,053 1,033
Current 196,909 131,025
Total Loans Receivable 198,962 132,058
Commercial Loans | Equipment Finance | 30-89 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 1,364 649
Commercial Loans | Equipment Finance | 90 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 689 384
Commercial Loans | Municipal leases    
Financing Receivable, Past Due [Line Items]    
Past Due 0 0
Current 115,992 112,016
Total Loans Receivable 115,992 112,016
Commercial Loans | Municipal leases | 30-89 Days    
Financing Receivable, Past Due [Line Items]    
Past Due 0 0
Commercial Loans | Municipal leases | 90 Days    
Financing Receivable, Past Due [Line Items]    
Past Due $ 0 $ 0
v3.20.1
Other Investments (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Other Investment Not Readily Marketable [Line Items]    
FHLB of Atlanta $ 25,859 $ 31,969
Federal Reserve Bank of Richmond (FRB) 7,353 7,335
Other investments, at cost 41,201 45,378
Small Business Investment Companies (SBIC)    
Other Investment Not Readily Marketable [Line Items]    
Nonmarketable Investment Securities $ 7,989 $ 6,074
v3.20.1
Debt Securities - Available for Sale Securities Table (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost $ 157,250 $ 120,834
Gross Unrealized Gains 2,298 1,174
Gross Unrealized Losses (927) (222)
Estimated Fair Value 158,621 121,786
U.S. Government Agencies    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 6,645 15,099
Gross Unrealized Gains 197 122
Gross Unrealized Losses 0 (11)
Estimated Fair Value 6,842 15,210
Residential MBS of U.S. Government Agencies and GSEs    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 50,290 74,778
Gross Unrealized Gains 1,561 586
Gross Unrealized Losses (99) (184)
Estimated Fair Value 51,752 75,180
Municipal Bonds    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 21,208 24,896
Gross Unrealized Gains 503 423
Gross Unrealized Losses (8) (7)
Estimated Fair Value 21,703 25,312
Corporate Bonds    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 79,107 6,061
Gross Unrealized Gains 37 43
Gross Unrealized Losses (820) (20)
Estimated Fair Value $ 78,324 $ 6,084
v3.20.1
Other Investments
9 Months Ended
Mar. 31, 2020
Investments, All Other Investments [Abstract]  
Other Investments
Other Investments
Other investments, at cost consist of the following at the dates indicated:
 
March 31, 2020
 
June 30, 2019
FHLB of Atlanta stock
$
25,859

 
$
31,969

FRB stock
7,353

 
7,335

SBIC investments
7,989

 
6,074

Total
$
41,201

 
$
45,378


As a requirement for membership, the Bank invests in the stock of both the FHLB of Atlanta and the FRB. No ready market exists for these securities so carrying value approximates their fair value based on the redemption provisions of the FHLB of Atlanta and the FRB, respectively. SBIC investments are equity securities without a readily determinable fair value.
v3.20.1
Equity Incentive Plan
9 Months Ended
Mar. 31, 2020
Share-based Payment Arrangement [Abstract]  
Equity Incentive Plan
Equity Incentive Plan
The Company provides stock-based awards through the 2013 Omnibus Incentive Plan, which provides for awards of restricted stock, restricted stock units, stock options, stock appreciation rights and cash awards to directors, directors emeritus, officers, employees and advisory directors. The cost of equity-based awards under the 2013 Omnibus Incentive Plan generally is based on the fair value of the awards on their grant date. The maximum number of shares that may be utilized for awards under the plan is 2,962,400, including 2,116,000 for stock options and stock appreciation rights and 846,400 for awards of restricted stock and restricted stock units.
Shares of common stock issued under the 2013 Omnibus Incentive Plan may be authorized but unissued shares or, in the case of restricted stock awards, may be repurchased shares.
The table below presents share-based compensation expense and the estimated related tax benefit for stock options and restricted stock for the three and nine months ended March 31, 2020 and 2019, respectively:
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2020
 
2019
 
2020
 
2019
Share-based compensation expense
$
458

 
$
409

 
$
1,341

 
$
1,165

Tax benefit
$
108

 
$
96

 
$
315

 
$
274


The table below presents stock option activity for the nine months ended March 31, 2020 and 2019:
 
Options
 
Weighted-
average
exercise
price
 
Remaining
contractual
life
(years)
 
Aggregate
Intrinsic
Value
Options outstanding at June 30, 2018
1,718,270

 
$
17.29

 
5.9

 
$
18,664

Granted
40,500

 
27.51

 

 

Exercised
69,111

 
14.53

 

 

Forfeited
20,300

 
23.39

 

 

Expired
945

 
23.82

 

 

Options outstanding at March 31, 2019
1,668,414

 
$
17.57

 
5.3

 
$
13,098

Exercisable at March 31, 2019
1,290,814

 
$
15.39

 
4.4

 
$
12,733

Non-vested at March 31, 2019
377,600

 
$
25.04

 
8.5

 
$
365

 
 
 
 
 
 
 
 
Options outstanding at June 30, 2019
1,657,214

 
$
17.59

 
5.0

 
$
12,909

Granted
61,000

 
26.40

 

 

Exercised
106,914

 
14.41

 

 

Forfeited
800

 
17.35

 

 

Options outstanding at March 31, 2020
1,610,500

 
$
18.13

 
4.6

 
$
1,617

Exercisable at March 31, 2020
1,298,000

 
$
15.45

 
3.7

 
$
1,617

Non-vested at March 31, 2020
312,500

 
$
25.86

 
8.2

 
$


Assumptions used in estimating the fair value of options granted during the nine months ended March 31, 2020 and 2019 are presented below:
 
March 31,
 
March 31,
 
2020
 
2019
Weighted-average volatility
17.77
%
 
17.84
%
Expected dividend yield
0.98
%
 
0.87
%
Risk-free interest rate
1.50
%
 
2.54
%
Expected life (years)
6.5

 
6.5

Weighted-average fair value of options granted
$
4.79

 
$
5.88


At March 31, 2020, the Company had $1,853 of unrecognized compensation expense related to 312,500 stock options originally scheduled to vest over a five-year vesting period. The weighted average period over which compensation cost related to non-vested awards expected to be recognized was 2.0 years at March 31, 2020. At March 31, 2019, the Company had $2,326 of unrecognized compensation expense related to 377,600 stock options originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards expected to be recognized was 2.1 years at March 31, 2019.
The table below presents restricted stock award activity for the nine months ended March 31, 2020 and 2019:
 
Restricted
stock awards
 
Weighted-
average grant
date fair value
 
Aggregate
Intrinsic
Value
Non-vested at June 30, 2018
133,410

 
$
22.85

 
$
3,755

Granted
34,000

 
27.51

 

Vested
39,310

 
21.64

 

Forfeited
4,300

 
19.22

 

Non-vested at March 31, 2019
123,800

 
$
24.64

 
$
2,263

 
 
 
 
 
 
Non-vested at June 30, 2019
123,800

 
$
24.65

 
$
3,322

Granted
65,556

 
26.76

 

Vested
37,425

 
22.90

 

Forfeited
3,200

 
20.62

 

Non-vested at March 31, 2020
148,731

 
$
26.11

 
$
2,638


The table above includes nonvested performance-based restrictive stock units totaling 21,625 and 10,375 at March 31, 2020 and 2019, respectively. Each issuance of these stock units are scheduled to vest over 3.0 years assuming certain performance metrics are met.
At March 31, 2020, unrecognized compensation expense was $3,736 related to 148,731 shares of restricted stock originally scheduled to vest over three- and five-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 2.0 years at March 31, 2020. At March 31, 2019, unrecognized compensation expense was $2,790 related to 123,800 shares of restricted stock originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 2.1 years at March 31, 2019.
v3.20.1
Real Estate Owned (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2020
Mar. 31, 2019
Jun. 30, 2019
Real Estate Properties [Line Items]          
Balance at beginning of period $ 1,451 $ 2,955 $ 2,929 $ 3,684  
Transfers from loans 0 482 46 578  
Sales, net of gain or loss (376) (397) (1,722) (971)  
Writedowns 0 (37) (178) (288)  
Balance at end of period 1,075 $ 3,003 1,075 $ 3,003  
Consumer loans | Retail Consumer Loans          
Real Estate Properties [Line Items]          
Balance at beginning of period     1,018    
Balance at end of period 205   205    
Residential real estate in the process of foreclosure $ 61   $ 61   $ 243
v3.20.1
Equity Incentive Plan Equity Incentive Plan - Share Based Compensation Expense (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2020
Mar. 31, 2019
Share-based Payment Arrangement [Abstract]        
Share-based compensation expense $ 458 $ 409 $ 1,341 $ 1,165
Share-based compensation expense, tax related benefit $ 108 $ 96 $ 315 $ 274
v3.20.1
Commitments and Contingencies - Narrative (Details) - USD ($)
$ in Thousands
9 Months Ended 12 Months Ended
Mar. 31, 2020
Jun. 30, 2019
Other Commitments    
Unused commitments to extend credit $ 54,884 $ 93,432
Variable rate commitments 13,013 34,631
Fixed rate commitments 41,871 58,801
Remaining borrowing capacity 374,401 353,663
Required cash reserve 0 2,633
Letters of credit outstanding $ 6,833 $ 9,460
Minimum    
Other Commitments    
Fixed interest rate (as a percent) 1.69% 2.69%
Loan Commitments Terms   3 years
Maximum    
Other Commitments    
Fixed interest rate (as a percent) 8.53% 8.59%
Loan Commitments Terms   30 years
Construction and development    
Other Commitments    
Unused commitments to extend credit $ 161,655 $ 181,477
v3.20.1
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares
3 Months Ended 9 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2020
Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]        
Common stock, dividends, declared (in dollars per share) $ 70.00 $ 60.00 $ 130.00 $ 120.00
v3.20.1
Consolidated Balance Sheets (Parentheticals) - $ / shares
Mar. 31, 2020
Jun. 30, 2019
Statement of Financial Position [Abstract]    
Preferred stock par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock authorized shares 10,000,000 10,000,000
Preferred stock issued shares 0 0
Preferred stock shares outstanding 0 0
Common stock par value (in dollars per share) $ 0.01 $ 0.01
Common stock shares authorized 60,000,000 60,000,000
Common stock shares issued 17,101,954 17,984,105
Common stock shares outstanding 17,101,954 17,984,105
v3.20.1
Fair Value of Financial Instruments - Schedule of Fair Value, by Balance Sheet Grouping (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Fair Value, Inputs, Level 1 | Cash and interest-bearing deposits    
Financial Instruments Owned $ 82,061 $ 71,043
Fair Value, Inputs, Level 1 | Commercial paper    
Financial Instruments Owned 281,955 241,446
Fair Value, Inputs, Level 1 | Certificates of deposit in other banks    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 1 | Securities available for sale    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 1 | Loans, net    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 1 | Loans held for sale    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 1 | FHLB Stock    
Financial Instruments Owned 25,859 31,969
Fair Value, Inputs, Level 1 | FRB Stock    
Financial Instruments Owned 7,353 7,335
Fair Value, Inputs, Level 1 | Small Business Investment Company Funds    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 1 | Accrued interest receivable    
Financial Instruments Owned 0 350
Fair Value, Inputs, Level 1 | Noninterest-bearing and NOW deposits    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 1 | Money market accounts    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 1 | Savings accounts    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 1 | Certificates of deposit    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 1 | Other borrowings    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 1 | Accrued interest payable    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 2 | Cash and interest-bearing deposits    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 2 | Commercial paper    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 2 | Certificates of deposit in other banks    
Financial Instruments Owned 57,544 52,005
Fair Value, Inputs, Level 2 | Securities available for sale    
Financial Instruments Owned 158,621 121,786
Fair Value, Inputs, Level 2 | Loans, net    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 2 | Loans held for sale    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 2 | FHLB Stock    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 2 | FRB Stock    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 2 | Small Business Investment Company Funds    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 2 | Accrued interest receivable    
Financial Instruments Owned 1,002 750
Fair Value, Inputs, Level 2 | Noninterest-bearing and NOW deposits    
Financial Instruments Owned 819,373 746,617
Fair Value, Inputs, Level 2 | Money market accounts    
Financial Instruments Owned 801,424 691,172
Fair Value, Inputs, Level 2 | Savings accounts    
Financial Instruments Owned 169,792 177,278
Fair Value, Inputs, Level 2 | Certificates of deposit    
Financial Instruments Owned 771,440 712,485
Fair Value, Inputs, Level 2 | Other borrowings    
Financial Instruments Owned 569,850 688,418
Fair Value, Inputs, Level 2 | Accrued interest payable    
Financial Instruments Owned 1,308 2,252
Fair Value, Inputs, Level 3 | Cash and interest-bearing deposits    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 3 | Commercial paper    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 3 | Certificates of deposit in other banks    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 3 | Securities available for sale    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 3 | Loans, net    
Financial Instruments Owned 2,637,208 2,604,827
Fair Value, Inputs, Level 3 | Loans held for sale    
Financial Instruments Owned 39,359 18,591
Fair Value, Inputs, Level 3 | FHLB Stock    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 3 | FRB Stock    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 3 | Small Business Investment Company Funds    
Financial Instruments Owned 7,989 6,074
Fair Value, Inputs, Level 3 | Accrued interest receivable    
Financial Instruments Owned 8,499 9,433
Fair Value, Inputs, Level 3 | Noninterest-bearing and NOW deposits    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 3 | Money market accounts    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 3 | Savings accounts    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 3 | Certificates of deposit    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 3 | Other borrowings    
Financial Instruments Owned 0 0
Fair Value, Inputs, Level 3 | Accrued interest payable    
Financial Instruments Owned 0 0
Carrying Value | Cash and interest-bearing deposits    
Financial Instruments Owned 82,061 71,043
Carrying Value | Commercial paper    
Financial Instruments Owned 281,955 241,446
Carrying Value | Certificates of deposit in other banks    
Financial Instruments Owned 57,544 52,005
Carrying Value | Securities available for sale    
Financial Instruments Owned 158,621 121,786
Carrying Value | Loans, net    
Financial Instruments Owned 2,636,674 2,683,761
Carrying Value | Loans held for sale    
Financial Instruments Owned 38,682 18,175
Carrying Value | FHLB Stock    
Financial Instruments Owned 25,859 31,969
Carrying Value | FRB Stock    
Financial Instruments Owned 7,353 7,335
Carrying Value | Small Business Investment Company Funds    
Financial Instruments Owned 7,989 6,074
Carrying Value | Accrued interest receivable    
Financial Instruments Owned 9,501 10,533
Carrying Value | Noninterest-bearing and NOW deposits    
Financial Instruments Owned 819,373 746,617
Carrying Value | Money market accounts    
Financial Instruments Owned 801,424 691,172
Carrying Value | Savings accounts    
Financial Instruments Owned 169,792 177,278
Carrying Value | Certificates of deposit    
Financial Instruments Owned 764,198 712,190
Carrying Value | Other borrowings    
Financial Instruments Owned 535,000 680,000
Carrying Value | Accrued interest payable    
Financial Instruments Owned 1,308 2,252
Fair Value | Cash and interest-bearing deposits    
Financial Instruments Owned 82,061 71,043
Fair Value | Commercial paper    
Financial Instruments Owned 281,955 241,446
Fair Value | Certificates of deposit in other banks    
Financial Instruments Owned 57,544 52,005
Fair Value | Securities available for sale    
Financial Instruments Owned 158,621 121,786
Fair Value | Loans, net    
Financial Instruments Owned 2,637,208 2,604,827
Fair Value | Loans held for sale    
Financial Instruments Owned 39,359 18,591
Fair Value | FHLB Stock    
Financial Instruments Owned 25,859 31,969
Fair Value | FRB Stock    
Financial Instruments Owned 7,353 7,335
Fair Value | Small Business Investment Company Funds    
Financial Instruments Owned 7,989 6,074
Fair Value | Accrued interest receivable    
Financial Instruments Owned 9,501 10,533
Fair Value | Noninterest-bearing and NOW deposits    
Financial Instruments Owned 819,373 746,617
Fair Value | Money market accounts    
Financial Instruments Owned 801,424 691,172
Fair Value | Savings accounts    
Financial Instruments Owned 169,792 177,278
Fair Value | Certificates of deposit    
Financial Instruments Owned 771,440 712,485
Fair Value | Other borrowings    
Financial Instruments Owned 569,850 688,418
Fair Value | Accrued interest payable    
Financial Instruments Owned $ 1,308 $ 2,252
v3.20.1
Leases - Schedule of Lease Cost (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 31, 2020
Mar. 31, 2020
Leases [Abstract]    
Operating lease cost (included in occupancy expense) $ 436 $ 1,368
Total operating lease expense, net (61) (181)
Total operating lease expense, net $ 375 $ 1,187
v3.20.1
Loans Loans - Narrative (Details) - Coronavirus Aid, Relief, And Economic Securities Act, Short-Term Modifications
$ in Millions
Mar. 31, 2020
USD ($)
Retail Consumer Loans  
Accounts, Notes, Loans and Financing Receivable  
Total modifications $ 14.3
Commercial Loans  
Accounts, Notes, Loans and Financing Receivable  
Total modifications $ 162.4
v3.20.1
Loans - Schedule of Average Recorded Investment in Loans, Interest Income Recognized (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2020
Mar. 31, 2019
Financing Receivable, Impaired        
Average recorded investment $ 29,442 $ 27,086 $ 30,295 $ 28,724
Interest income recognized 341 524 1,169 1,499
Retail Consumer Loans | One to four family loans        
Financing Receivable, Impaired        
Average recorded investment 14,189 16,499 14,861 17,878
Interest income recognized 175 237 560 699
Retail Consumer Loans | HELOCs - originated        
Financing Receivable, Impaired        
Average recorded investment 1,724 957 1,706 1,067
Interest income recognized 23 18 76 52
Retail Consumer Loans | HELOCs - purchased        
Financing Receivable, Impaired        
Average recorded investment 474 333 524 235
Interest income recognized 30 3 37 10
Retail Consumer Loans | Construction and land/lots        
Financing Receivable, Impaired        
Average recorded investment 1,091 1,356 1,174 1,491
Interest income recognized 19 24 63 75
Retail Consumer Loans | Indirect auto finance        
Financing Receivable, Impaired        
Average recorded investment 625 361 506 341
Interest income recognized 8 6 42 19
Retail Consumer Loans | Consumer loans        
Financing Receivable, Impaired        
Average recorded investment 53 1,580 229 1,335
Interest income recognized 3 17 9 58
Commercial Loans | Commercial real estate        
Financing Receivable, Impaired        
Average recorded investment 8,728 4,116 8,496 4,376
Interest income recognized 59 123 237 313
Commercial Loans | Construction and development loans        
Financing Receivable, Impaired        
Average recorded investment 712 1,696 1,323 1,800
Interest income recognized 10 16 36 51
Commercial Loans | Commercial and industrial        
Financing Receivable, Impaired        
Average recorded investment 1,119 188 812 201
Interest income recognized 11 80 103 222
Commercial Loans | Equipment Finance        
Financing Receivable, Impaired        
Average recorded investment 727 0 664 0
Interest income recognized $ 3 $ 0 $ 6 $ 0
v3.20.1
Loans - Schedule of Troubled Debt Restructurings Performing and Excluded from Nonaccruing Loans (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Performing financing receivable    
Financing Receivable, Modifications    
Performing TDRs included in impaired loans $ 14,732 $ 23,116
v3.20.1
Subsequent Event
9 Months Ended
Mar. 31, 2020
Subsequent Events [Abstract]  
Subsequent Event
Subsequent Event
On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic. The COVID-19 pandemic has adversely affected, and continues to adversely affect, economic activity globally, nationally and locally. Actions taken around the world to help mitigate the spread of COVID-19 include restrictions on travel, quarantines in certain areas, and forced closures for certain types of public places and businesses. COVID-19 and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the U.S. and the geographical area in which the Company operates. Due to the COVID-19 pandemic, market interest rates have declined significantly, with the 10-year Treasury bond falling below 1.00 percent on March 3, 2020 for the first time as well as the targeted federal funds interest rate being reduced to 0 percent to 0.25 percent on March 16, 2020. These reductions in interest rates and other effects of the COVID-19 pandemic may adversely affect the Company's financial condition and results of operations in future periods. It is unknown how long the adverse conditions associated with the COVID-19 pandemic will last and what the complete financial effect will be to the Company. It is reasonably possible that estimates made in the financial statements could be materially and adversely impacted in the near term as a result of these conditions, including expected credit losses on loans and the fair value of financial instruments that are carried at fair value.
The recently enacted CARES Act, among other things, temporarily added the PPP product SBA 7(a) Loan Program. The CARES Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the PPP. The PPP and loan forgiveness are intended to provide economic relief to small businesses nationwide adversely impacted by the COVID-19 pandemic. As a result, subsequent to March 31, 2020 the Company generated over 318 PPP loan applications for a total loan amount of approximately $93.3 million in the SBA system through May 5, 2020. In addition, in an effort to provide relief to Bank customers affected by the COVID-19, the Company began offering various mitigation efforts, including a loan payment deferral program. The standard program offers a 90-day payment deferral. As of May 5, 2020, the Company has approved or processed loan deferrals for a total loan book balance, before loan discounts or premiums, of approximately $526.9 million. These modifications were not classified as TDRs in accordance with the guidance of the CARES Act.
v3.20.1
Loans (Tables)
9 Months Ended
Mar. 31, 2020
Receivables [Abstract]  
Schedule of Accounts, Notes, Loans and Financing Receivable
Loans consist of the following at the dates indicated:
 
March 31, 2020
 
June 30, 2019
Retail consumer loans:
 
 
 
One-to-four family
$
487,777

 
$
660,591

HELOCs - originated
144,804

 
139,435

HELOCs - purchased
82,232

 
116,972

Construction and land/lots
80,765

 
80,602

Indirect auto finance
135,449

 
153,448

Consumer
11,576

 
11,416

Total retail consumer loans
942,603

 
1,162,464

Commercial loans:
 
 
 
Commercial real estate
990,693

 
927,261

Construction and development
249,714

 
210,916

Commercial and industrial
164,539

 
160,471

Equipment finance
198,962

 
132,058

Municipal finance
115,992

 
112,016

Total commercial loans
1,719,900

 
1,542,722

Total loans
2,662,503

 
2,705,186

Deferred loan costs, net
1,021

 
4

Total loans, net of deferred loan costs
2,663,524

 
2,705,190

Allowance for loan losses
(26,850
)
 
(21,429
)
Loans, net
$
2,636,674

 
$
2,683,761

Financing Receivable Credit Quality Indicators
The Company's total non-purchased and purchased performing loans by segment, class, and risk grade at the dates indicated follows:
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Loss
 
Total
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
473,723

 
$
1,974

 
$
6,984

 
$
258

 
$

 
$
482,939

HELOCs - originated
142,630

 
833

 
1,341

 

 

 
144,804

HELOCs - purchased
81,712

 

 
520

 

 

 
82,232

Construction and land/lots
80,276

 
3

 
147

 

 

 
80,426

Indirect auto finance
134,382

 

 
1,067

 

 

 
135,449

Consumer
11,058

 
5

 
513

 

 

 
11,576

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 
Commercial real estate
963,953

 
8,191

 
12,631

 

 
30

 
984,805

Construction and development
244,801

 
4,055

 
249

 
1

 

 
249,106

Commercial and industrial
154,215

 
6,139

 
2,637

 

 
1

 
162,992

Equipment finance
197,651

 
559

 
752

 

 

 
198,962

Municipal finance
115,709

 
283

 

 

 

 
115,992

Total loans
$
2,600,110

 
$
22,042

 
$
26,841

 
$
259

 
$
31

 
$
2,649,283

 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Loss
 
Total
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
644,159

 
$
2,089

 
$
8,072

 
$
384

 
$
19

 
$
654,723

HELOCs - originated
137,001

 
766

 
1,434

 

 
9

 
139,210

HELOCs - purchased
116,306

 

 
666

 

 

 
116,972

Construction and land/lots
79,995

 
71

 
164

 

 

 
80,230

Indirect auto finance
152,393

 
13

 
1,042

 

 

 
153,448

Consumer
11,375

 
1

 
33

 
3

 
4

 
11,416

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
901,183

 
8,066

 
10,306

 

 

 
919,555

Construction and development
207,827

 
790

 
1,357

 
1

 

 
209,975

Commercial and industrial
157,325

 
877

 
600

 

 

 
158,802

Equipment finance
131,674

 

 
384

 

 

 
132,058

Municipal finance
111,721

 
295

 

 

 

 
112,016

Total loans
$
2,650,959

 
$
12,968

 
$
24,058

 
$
388

 
$
32

 
$
2,688,405

The Company's total purchased credit impaired ("PCI") loans by segment, class, and risk grade at the dates indicated follows:
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Loss
 
Total
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
3,368

 
$
463

 
$
1,007

 
$

 
$

 
$
4,838

Construction and land/lots
108

 

 
231

 

 

 
339

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
3,191

 
1,790

 
907

 

 

 
5,888

Construction and development
277

 

 
331

 

 

 
608

Commercial and industrial
1,544

 

 

 

 
3

 
1,547

Total loans
$
8,488

 
$
2,253

 
$
2,476

 
$

 
$
3

 
$
13,220

 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Loss
 
Total
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
4,124

 
$
248

 
$
1,496

 
$

 
$

 
$
5,868

HELOCs - originated
225

 

 

 

 

 
225

Construction and land/lots
142

 

 
230

 

 

 
372

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
4,503

 
1,903

 
1,300

 

 

 
7,706

Construction and development
453

 

 
488

 

 

 
941

Commercial and industrial
1,666

 

 

 

 
3

 
1,669

Total loans
$
11,113

 
$
2,151

 
$
3,514

 
$

 
$
3

 
$
16,781

Past Due Financing Receivables
The Company's total loans by segment, class, and delinquency status at the dates indicated follows:
 
Past Due
 
 
 
Total
 
30-89 Days
 
90 Days+
 
Total
 
Current
 
Loans
March 31, 2020
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
One-to-four family
$
996

 
$
2,732

 
$
3,728

 
$
484,049

 
$
487,777

HELOCs - originated
438

 
275

 
713

 
144,091

 
144,804

HELOCs - purchased
761

 
47

 
808

 
81,424

 
82,232

Construction and land/lots

 
242

 
242

 
80,523

 
80,765

Indirect auto finance
378

 
284

 
662

 
134,787

 
135,449

Consumer
17

 
21

 
38

 
11,538

 
11,576

Commercial loans:
 
 
 
 
 
 
 
 
 
Commercial real estate
1,854

 
1,160

 
3,014

 
987,679

 
990,693

Construction and development
217

 
125

 
342

 
249,372

 
249,714

Commercial and industrial
65

 
27

 
92

 
164,447

 
164,539

Equipment finance
1,364

 
689

 
2,053

 
196,909

 
198,962

Municipal finance

 

 

 
115,992

 
115,992

Total loans
$
6,090

 
$
5,602

 
$
11,692

 
$
2,650,811

 
$
2,662,503

 
Past Due
 
 
 
Total
 
30-89 Days
 
90 Days+
 
Total
 
Current
 
Loans
June 30, 2019
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
One-to-four family
$
1,615

 
$
1,389

 
$
3,004

 
$
657,587

 
$
660,591

HELOCs - originated
226

 
231

 
457

 
138,978

 
139,435

HELOCs - purchased

 
485

 
485

 
116,487

 
116,972

Construction and land/lots
138

 
6

 
144

 
80,458

 
80,602

Indirect auto finance
459

 
237

 
696

 
152,752

 
153,448

Consumer
6

 
8

 
14

 
11,402

 
11,416

Commercial loans:
 

 
 

 
 

 
 

 
 

Commercial real estate
2,279

 
516

 
2,795

 
924,466

 
927,261

Construction and development

 
1,133

 
1,133

 
209,783

 
210,916

Commercial and industrial
207

 
99

 
306

 
160,165

 
160,471

Equipment finance
649

 
384

 
1,033

 
131,025

 
132,058

Municipal finance

 

 

 
112,016

 
112,016

Total loans
$
5,579

 
$
4,488

 
$
10,067

 
$
2,695,119

 
$
2,705,186

Schedule of Past Due Loans Still Accruing and Nonaccruing Interest
The Company's recorded investment in loans, by segment and class, that are not accruing interest or are 90 days or more past due and still accruing interest at the dates indicated follows:
 
March 31, 2020
 
June 30, 2019
 
Nonaccruing
 
90 Days + &
still accruing
 
Nonaccruing
 
90 Days + &
still accruing
Retail consumer loans:
 
 
 
 
 
 
 
One-to-four family
$
3,863

 
$

 
$
3,223

 
$

HELOCs - originated
431

 

 
372

 

HELOCs - purchased
520

 

 
666

 

Construction and land/lots
19

 

 
6

 

Indirect auto finance
623

 

 
463

 

Consumer
27

 

 
21

 

Commercial loans:
 

 
 

 
 

 
 

Commercial real estate
9,253

 

 
3,559

 

Construction and development
250

 

 
1,357

 

Commercial and industrial
269

 

 
307

 

Equipment finance
410

 

 
384

 

Total loans
$
15,665

 
$

 
$
10,358

 
$

Schedule of Troubled Debt Restructurings Performing and Excluded from Nonaccruing Loans
The Company's loans that were performing under the payment terms of TDRs that were excluded from nonaccruing loans above at the dates indicated follows:
 
March 31, 2020
 
June 30, 2019
Performing TDRs included in impaired loans
$
14,732

 
$
23,116

Allowance for Credit Losses on Financing Receivables
An analysis of the allowance for loan losses by segment for the periods shown is as follows:
 
Three Months Ended March 31, 2020
 
Three Months Ended March 31, 2019
 
PCI
 
Retail
Consumer
 
Commercial
 
Total
 
PCI
 
Retail
Consumer
 
Commercial
 
Total
Balance at beginning of period
$
152

 
$
5,400

 
$
16,479

 
$
22,031

 
$
199

 
$
7,236

 
$
13,984

 
$
21,419

Provision for (recovery of) loan losses
30

 
1,519

 
3,851

 
5,400

 
2

 
(818
)
 
6,316

 
5,500

Charge-offs

 
(295
)
 
(706
)
 
(1,001
)
 

 
(288
)
 
(2,648
)
 
(2,936
)
Recoveries

 
359

 
61

 
420

 

 
331

 
102

 
433

Balance at end of period
$
182

 
$
6,983

 
$
19,685

 
$
26,850

 
$
201

 
$
6,461

 
$
17,754

 
$
24,416

 
Nine Months Ended March 31, 2020
 
Nine Months Ended March 31, 2019
 
PCI
 
Retail
Consumer
 
Commercial
 
Total
 
PCI
 
Retail
Consumer
 
Commercial
 
Total
Balance at beginning of period
$
201

 
$
6,419

 
$
14,809

 
$
21,429

 
$
483

 
$
7,527

 
$
13,050

 
$
21,060

Provision for (recovery of) loan losses
(19
)
 
(80
)
 
5,899

 
5,800

 
(282
)
 
(1,223
)
 
7,005

 
5,500

Charge-offs

 
(678
)
 
(1,448
)
 
(2,126
)
 

 
(881
)
 
(2,728
)
 
(3,609
)
Recoveries

 
1,322

 
425

 
1,747

 

 
1,038

 
427

 
1,465

Balance at end of period
$
182

 
$
6,983

 
$
19,685

 
$
26,850

 
$
201

 
$
6,461

 
$
17,754

 
$
24,416

Schedule of Ending Balances of Loans and the Related Allowance by Segment and Class
The Company's ending balances of loans and the related allowance, by segment and class, at the dates indicated follows:
 
Allowance for Loan Losses
 
Total Loans Receivable
 
PCI
 
Loans
individually
evaluated for
impairment
 
Loans
collectively
evaluated
 
Total
 
PCI
 
Loans
individually
evaluated for
impairment
 
Loans
collectively
evaluated
 
Total
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family
$
17

 
$
5

 
$
2,427

 
$
2,449

 
$
4,838

 
$
4,313

 
$
478,626

 
$
487,777

HELOCs - originated

 

 
1,384

 
1,384

 

 

 
144,804

 
144,804

HELOCs - purchased

 

 
485

 
485

 

 

 
82,232

 
82,232

Construction and land/lots
33

 

 
1,387

 
1,420

 
339

 
303

 
80,123

 
80,765

Indirect auto finance

 

 
1,145

 
1,145

 

 
10

 
135,439

 
135,449

Consumer

 

 
150

 
150

 

 

 
11,576

 
11,576

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 
Commercial real estate
113

 
772

 
9,574

 
10,459

 
5,888

 
7,114

 
977,691

 
990,693

Construction and development
4

 
5

 
4,147

 
4,156

 
608

 
310

 
248,796

 
249,714

Commercial and industrial
15

 
1

 
2,384

 
2,400

 
1,547

 
28

 
162,964

 
164,539

Equipment finance

 

 
2,182

 
2,182

 

 
411

 
198,551

 
198,962

Municipal finance

 

 
620

 
620

 

 

 
115,992

 
115,992

Total
$
182

 
$
783

 
$
25,885

 
$
26,850

 
$
13,220

 
$
12,489

 
$
2,636,794

 
$
2,662,503

June 30, 2019
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Retail consumer loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

One-to-four family
$
62

 
$
74

 
$
2,375

 
$
2,511

 
$
5,868

 
$
5,318

 
$
649,405

 
$
660,591

HELOCs - originated

 
7

 
1,060

 
1,067

 
225

 
7

 
139,203

 
139,435

HELOCs - purchased

 

 
518

 
518

 

 

 
116,972

 
116,972

Construction and land/lots

 

 
1,265

 
1,265

 
372

 
323

 
79,907

 
80,602

Indirect auto finance

 

 
927

 
927

 

 

 
153,448

 
153,448

Consumer

 
4

 
189

 
193

 

 
4

 
11,412

 
11,416

Commercial loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
118

 
28

 
7,890

 
8,036

 
7,706

 
8,692

 
910,863

 
927,261

Construction and development
4

 
5

 
3,187

 
3,196

 
941

 
1,397

 
208,578

 
210,916

Commercial and industrial
17

 
2

 
1,957

 
1,976

 
1,669

 
2

 
158,800

 
160,471

Equipment finance

 

 
1,305

 
1,305

 

 

 
132,058

 
132,058

Municipal finance

 

 
435

 
435

 

 

 
112,016

 
112,016

Total
$
201

 
$
120

 
$
21,108

 
$
21,429

 
$
16,781

 
$
15,743

 
$
2,672,662

 
$
2,705,186

Schedule of Impaired Loans and Related Allowance by Segment and Class
The Company's impaired loans and the related allowance, by segment and class, excluding PCI loans, at the dates indicated follows:
 
Total Impaired Loans
 
Unpaid
Principal
Balance
 
Recorded
Investment
With a
Recorded
Allowance
 
Recorded
Investment
With No
Recorded
Allowance
 
Total
 
Related
Recorded
Allowance
March 31, 2020
 
 
 
 
 
 
 
 
 
Retail consumer loans:
 
 
 
 
 
 
 
 
 
One-to-four family
$
18,211

 
$
10,914

 
$
3,975

 
$
14,889

 
$
383

HELOCs - originated
1,724

 
1,636

 
52

 
1,688

 
42

HELOCs - purchased
474

 
474

 

 
474

 
2

Construction and land/lots
1,547

 
756

 
303

 
1,059

 
22

Indirect auto finance
1,003

 
392

 
299

 
691

 
4

Consumer
53

 
16

 
28

 
44

 
2

Commercial loans:
 

 
 

 
 

 
 

 
 

Commercial real estate
10,078

 
7,669

 
1,847

 
9,516

 
803

Construction and development
1,591

 
621

 
80

 
701

 
8

Commercial and industrial
9,823

 
246

 
853

 
1,099

 
4

Equipment finance
1,466

 

 
411

 
411

 

Total impaired loans
$
45,970

 
$
22,724

 
$
7,848

 
$
30,572

 
$
1,270

June 30, 2019
 

 
 

 
 

 
 

 
 

Retail consumer loans:
 

 
 

 
 

 
 

 
 

One-to-four family
$
18,302

 
$
12,461

 
$
3,152

 
$
15,613

 
$
472

HELOCs - originated
2,410

 
564

 
1,219

 
1,783

 
46

HELOCs - purchased
666

 

 
666

 
666

 

Construction and land/lots
1,917

 
957

 
323

 
1,280

 
26

Indirect auto finance
601

 
353

 
137

 
490

 
2

Consumer
379

 
7

 
41

 
48

 
6

Commercial loans:
 

 
 

 
 

 
 

 
 

Commercial real estate
10,127

 
6,434

 
3,404

 
9,838

 
36

Construction and development
2,574

 
940

 
791

 
1,731

 
7

Commercial and industrial
10,173

 
354

 
768

 
1,122

 
6

Equipment finance
462

 

 
384

 
384

 

Total impaired loans
$
47,611

 
$
22,070

 
$
10,885

 
$
32,955

 
$
601

Schedule of Average Recorded Investment in Loans, Unpaid Principal Balance and Interest Income Recognized
The Company's average recorded investment in impaired loans and interest income recognized on impaired loans for the three and nine months ended March 31, 2020 and 2019 follows:
 
Three Months Ended
 
March 31, 2020
 
March 31, 2019
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Retail consumer loans:
 
 
 
 
 
 
 
One-to-four family
$
14,189

 
$
175

 
$
16,499

 
$
237

HELOCs - originated
1,724

 
23

 
957

 
18

HELOC - purchased
474

 
30

 
333

 
3

Construction and land/lots
1,091

 
19

 
1,356

 
24

Indirect auto finance
625

 
8

 
361

 
6

Consumer
53

 
3

 
1,580

 
17

Commercial loans:
 

 
 

 
 

 
 

Commercial real estate
8,728

 
59

 
4,116

 
123

Construction and development
712

 
10

 
1,696

 
16

Commercial and industrial
1,119

 
11

 
188

 
80

Equipment finance
$
727

 
3

 
$

 
$

Total loans
$
29,442

 
$
341

 
$
27,086

 
$
524

 
Nine Months Ended
 
March 31, 2020
 
March 31, 2019
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Retail consumer loans:
 
 
 
 
 
 
 
One-to-four family
$
14,861

 
$
560

 
$
17,878

 
$
699

HELOCs - originated
1,706

 
76

 
1,067

 
52

HELOCs - purchased
524

 
37

 
235

 
10

Construction and land/lots
1,174

 
63

 
1,491

 
75

Indirect auto finance
506

 
42

 
341

 
19

Consumer
229

 
9

 
1,335

 
58

Commercial loans:
 

 
 

 
 

 
 

Commercial real estate
8,496

 
237

 
4,376

 
313

Construction and development
1,323

 
36

 
1,800

 
51

Commercial and industrial
812

 
103

 
201

 
222

Equipment finance
664

 
6

 

 

Total loans
$
30,295

 
$
1,169

 
$
28,724

 
$
1,499

Impaired Financing Receivable
A summary of changes in the accretable yield for PCI loans for the three and nine months ended March 31, 2020 and 2019 follows:
 
Three Months Ended
 
March 31, 2020
 
March 31, 2019
Accretable yield, beginning of period
$
4,355

 
$
5,232

Reclass from nonaccretable yield (1)
171

 
118

Other changes, net (2)
(23
)
 
528

Interest income
(378
)
 
(412
)
Accretable yield, end of period
$
4,125

 
$
5,466

 
Nine Months Ended
 
March 31, 2020
 
March 31, 2019
Accretable yield, beginning of period
$
5,259

 
$
5,734

Reclass from nonaccretable yield (1)
421

 
542

Other changes, net (2)
(332
)
 
863

Interest income
(1,223
)
 
(1,673
)
Accretable yield, end of period
$
4,125

 
$
5,466

______________________________________
(1)
Represents changes attributable to expected loss assumptions.
(2)
Represents changes in cash flows expected to be collected due to the impact of modifications, changes in prepayment assumptions, and changes in interest rates.
Troubled Debt Restructurings on Financing Receivables
For the three and nine months ended March 31, 2020 and 2019, the following tables present a breakdown of the types of concessions made on TDRs by loan class:
 
Three Months Ended March 31, 2020
 
Three Months Ended March 31, 2019
 
Number
of
Loans
 
Pre
Modification
Outstanding
Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
 
Number
of
Loans
 
Pre
Modification
Outstanding
Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
Below market interest rate:
 
 
 
 
 
 
 
 
 
 
 
Retail consumer:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family

 
$

 
$

 
2

 
$
15

 
$
15

Home equity lines of credit

 

 

 
1

 
212

 
212

Total

 
$

 
$

 
3

 
$
227

 
$
227

Other TDRs:
 

 
 

 
 

 
 

 
 

 
 

Retail consumer:
 

 
 

 
 

 
 

 
 

 
 

One-to-four family
2

 
$
319

 
$
317

 
2

 
$
335

 
$
334

Construction and land/lots

 

 

 
1

 
29

 
28

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
1

 
30

 
30

 
2

 
5,424

 
5,423

Construction and development

 

 

 
1

 
182

 
182

Total
3

 
$
349

 
$
347

 
6

 
$
5,970

 
$
5,967

Total
3

 
$
349

 
$
347

 
9

 
$
6,197

 
$
6,194

 
Nine Months Ended March 31, 2020
 
Nine Months Ended March 31, 2019
 
Number
of
Loans
 
Pre
Modification
Outstanding
Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
 
Number
of
Loans
 
Pre
Modification Outstanding Recorded
Investment
 
Post
Modification
Outstanding
Recorded
Investment
Below market interest rate:
 
 
 
 
 
 
 
 
 
 
 
Retail consumer:
 
 
 
 
 
 
 
 
 
 
 
One-to-four family

 
$

 
$

 
1

 
$
85

 
$
84

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
1

 
88

 
87

 

 

 

Total
1

 
$
88

 
$
87

 
1

 
$
85

 
$
84

Extended payment terms:
 

 
 

 
 

 
 

 
 

 
 

Retail consumer:
 

 
 

 
 

 
 

 
 

 
 

One-to-four family
2

 
$
70

 
$
67

 
2

 
$
212

 
$
212

HELOCs - originated

 

 

 
1

 
15

 
15

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
1

 
826

 
826

 

 

 

Total
3

 
$
896

 
$
893

 
3

 
$
227

 
$
227

Other TDRs:
 

 
 

 
 

 
 

 
 

 
 

Retail consumer:
 

 
 

 
 

 
 

 
 

 
 

One-to-four family
4

 
$
353

 
$
348

 
10

 
$
841

 
$
829

Construction and land/lots

 

 

 
1

 
29

 
28

Indirect auto finance
4

 
68

 
57

 
1

 
33

 
29

Consumer

 

 

 
1

 
2

 
2

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
1

 
30

 
30

 
2

 
5,424

 
5,423

Construction and development
1

 
182

 
79

 
1

 
182

 
182

Total
10

 
$
633

 
$
514

 
16

 
$
6,511

 
$
6,493

Total
14

 
$
1,617

 
$
1,494

 
20

 
$
6,823

 
$
6,804

Schedule of Trouble Debt Restructurings With Payment Default
The following tables present loans that were modified as TDRs within the previous 12 months and for which there was a payment default during the three and nine months ended March 31, 2020 and 2019:
 
Three Months Ended March 31, 2020
 
Three Months Ended March 31, 2019
 
Number of
Loans
 
Recorded
Investment
 
Number of
Loans
 
Recorded
Investment
Retail consumer:
 

 
 

 
 

 
 

One-to-four family

 
$

 
2

 
$
184

Consumer

 

 
1

 
2

Total

 
$

 
3

 
$
186

Total

 
$

 
3

 
$
186

 
Nine Months Ended March 31, 2020
 
Nine Months Ended March 31, 2019
 
Number of
Loans
 
Recorded
Investment
 
Number of
Loans
 
Recorded
Investment
Other TDRs:
 

 
 

 
 

 
 

Retail consumer:
 

 
 

 
 

 
 

One-to-four family
2

 
$
49

 
2

 
$
184

Consumer

 

 
1

 
2

Total
2

 
$
49

 
3

 
$
186

Total
2

 
$
49

 
3

 
$
186

v3.20.1
Fair Value of Financial Instruments (Tables)
9 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following table presents financial assets measured at fair value on a recurring basis at the dates indicated:
 
March 31, 2020
Description
Total
 
Level 1
 
Level 2
 
Level 3
U.S Government Agencies
$
6,842

 
$

 
$
6,842

 
$

Residential MBS of U.S. Government Agencies and GSEs
51,752

 

 
51,752

 

Municipal Bonds
21,703

 

 
21,703

 

Corporate Bonds
78,324

 

 
78,324

 

Total
$
158,621

 
$

 
$
158,621

 
$

 
June 30, 2019
Description
Total
 
Level 1
 
Level 2
 
Level 3
U.S Government Agencies
$
15,210

 
$

 
$
15,210

 
$

Residential MBS of U.S. Government Agencies and GSEs
75,180

 

 
75,180

 

Municipal Bonds
25,312

 

 
25,312

 

Corporate Bonds
6,084

 

 
6,084

 

Total
$
121,786

 
$

 
$
121,786

 
$

Fair Value Measurements, Nonrecurring
The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated:
 
March 31, 2020
Description
Total
 
Level 1
 
Level 2
 
Level 3
Impaired loans
$
6,099

 
$

 
$

 
$
6,099

REO
493

 

 

 
493

Total
$
6,592

 
$

 
$

 
$
6,592

 
June 30, 2019
Description
Total
 
Level 1
 
Level 2
 
Level 3
Impaired loans
$
9,071

 
$

 
$

 
$
9,071

REO
1,804

 

 

 
1,804

Total
$
10,875

 
$

 
$

 
$
10,875

Schedule of Quantitative Information About Level 3 Fair Value Measurements
Quantitative information about Level 3 fair value measurements during the period ended March 31, 2020 is shown in the table below:
 
Fair Value at March 31, 2020
 
Valuation
Techniques
 
Unobservable
Input
 
Range
 
Weighted
Average
Nonrecurring measurements:
 
 
 
 
 
 
 
 
 
Impaired loans, net
$
6,099

 
Discounted appraisals and discounted cash flows
 
Collateral discounts
and discount spread
 
0% - 63% 0% - 3%
 
20%
REO
$
493

 
Discounted appraisals
 
Collateral discounts
 
8% - 25%
 
12%
Fair Value, by Balance Sheet Grouping
The stated carrying value and estimated fair value amounts of financial instruments as of March 31, 2020 and June 30, 2019, are summarized below:
 
March 31, 2020
 
Carrying
Value
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
 
Cash and interest-bearing deposits
$
82,061

 
$
82,061

 
$
82,061

 
$

 
$

Commercial paper
281,955

 
281,955

 
281,955

 

 

Certificates of deposit in other banks
57,544

 
57,544

 

 
57,544

 

Securities available for sale
158,621

 
158,621

 

 
158,621

 

Loans, net
2,636,674

 
2,637,208

 

 

 
2,637,208

Loans held for sale
38,682

 
39,359

 

 

 
39,359

FHLB stock
25,859

 
25,859

 
25,859

 

 

FRB stock
7,353

 
7,353

 
7,353

 

 

SBIC investments
7,989

 
7,989

 

 

 
7,989

Accrued interest receivable
9,501

 
9,501

 

 
1,002

 
8,499

Liabilities:
 
 
 
 
 
 
 
 
 
Noninterest-bearing and NOW deposits
819,373

 
819,373

 

 
819,373

 

Money market accounts
801,424

 
801,424

 

 
801,424

 

Savings accounts
169,792

 
169,792

 

 
169,792

 

Certificates of deposit
764,198

 
771,440

 

 
771,440

 

Borrowings
535,000

 
569,850

 

 
569,850

 

Accrued interest payable
1,308

 
1,308

 

 
1,308

 

 
June 30, 2019
 
Carrying
Value
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
 
Cash and interest-bearing deposits
$
71,043

 
$
71,043

 
$
71,043

 
$

 
$

Commercial paper
241,446

 
241,446

 
241,446

 

 

Certificates of deposit in other banks
52,005

 
52,005

 

 
52,005

 

Securities available for sale
121,786

 
121,786

 

 
121,786

 

Loans, net
2,683,761

 
2,604,827

 

 

 
2,604,827

Loans held for sale
18,175

 
18,591

 

 

 
18,591

FHLB stock
31,969

 
31,969

 
31,969

 

 

FRB stock
7,335

 
7,335

 
7,335

 

 

SBIC investments
6,074

 
6,074

 

 

 
6,074

Accrued interest receivable
10,533

 
10,533

 
350

 
750

 
9,433

Liabilities:
 
 
 
 
 
 
 
 
 
Noninterest-bearing and NOW deposits
746,617

 
746,617

 

 
746,617

 

Money market accounts
691,172

 
691,172

 

 
691,172

 

Savings accounts
177,278

 
177,278

 

 
177,278

 

Certificates of deposit
712,190

 
712,485

 

 
712,485

 

Borrowings
680,000

 
688,418

 

 
688,418

 

Accrued interest payable
2,252

 
2,252

 

 
2,252

 

v3.20.1
Fair Value of Financial Instruments
9 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments
Fair Value of Financial Instruments
The Company utilizes fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. The fair value of financial instruments presented in this note are based on the same methodology as presented in Note 21 of the Notes to Consolidated Financial Statements contained in the Company’s 2019 Form 10-K.
Fair Value Hierarchy
The Company groups assets at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:
Level 1:
Valuation is based upon quoted prices for identical instruments traded in active markets.
Level 2:
Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3:
Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.
Following is a description of valuation methodologies used for assets recorded at fair value. The Company does not have any liabilities recorded at fair value.
Investment Securities Available for Sale
Securities available for sale are valued on a recurring basis at quoted market prices where available. If quoted market prices are not available, fair values are based on quoted prices of comparable securities. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange or U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities and debentures issued by government sponsored enterprises, municipal bonds, and corporate debt securities. The Company has no Level 3 securities.
Impaired Loans
The Company does not record loans at fair value on a recurring basis. From time to time, however, a loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. The Company reviews all impaired loans each quarter to determine if an allowance is necessary. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans.
Once a loan is identified as individually impaired, the fair value is estimated using one of two methods, which include collateral value and discounted cash flows. Loans are considered collateral dependent if repayment is expected solely from the collateral. For these collateral dependent impaired loans, the Company obtains updated appraisals at least annually. These appraisals are reviewed for appropriateness and then discounted for estimated closing costs to determine if an allowance is necessary. As part of the quarterly review of impaired loans, the Company reviews these appraisals to determine if any additional discounts to the fair value are necessary. If a current appraisal is not obtained, the Company determines whether a discount is needed to the value from the original appraisal based on the decline in value of similar properties with recent appraisals. For loans that are not collateral dependent, estimated fair value is based on the present value of expected future cash flows using the interest rate implicit in the original agreement. Impaired loans where a charge-off has occurred or an allowance is established during the period being reported require classification in the fair value hierarchy. The Company records such impaired loans as nonrecurring Level 3 in the fair value hierarchy. 
Loans Held for Sale
Loans held for sale are adjusted to lower of cost or fair value.  Fair value is based on commitments on hand from investors or, if commitments have not yet been obtained, what investors are currently offering for loans with similar characteristics. The Company considers all loans held for sale carried at fair value as nonrecurring Level 3.
Real Estate Owned
REO is considered held for sale and is adjusted to fair value less estimated selling costs upon transfer of the loan to foreclosed assets.  Fair value is based upon independent market prices, appraised value of the collateral or management's estimation of the value of the collateral. The Company considers all REO that has been charged off or received an allowance during the period as nonrecurring Level 3.
Financial Assets Recorded at Fair Value on a Recurring Basis
The following table presents financial assets measured at fair value on a recurring basis at the dates indicated:
 
March 31, 2020
Description
Total
 
Level 1
 
Level 2
 
Level 3
U.S Government Agencies
$
6,842

 
$

 
$
6,842

 
$

Residential MBS of U.S. Government Agencies and GSEs
51,752

 

 
51,752

 

Municipal Bonds
21,703

 

 
21,703

 

Corporate Bonds
78,324

 

 
78,324

 

Total
$
158,621

 
$

 
$
158,621

 
$

 
June 30, 2019
Description
Total
 
Level 1
 
Level 2
 
Level 3
U.S Government Agencies
$
15,210

 
$

 
$
15,210

 
$

Residential MBS of U.S. Government Agencies and GSEs
75,180

 

 
75,180

 

Municipal Bonds
25,312

 

 
25,312

 

Corporate Bonds
6,084

 

 
6,084

 

Total
$
121,786

 
$

 
$
121,786

 
$


There were no transfers between levels during the nine months ended March 31, 2020.
The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated:
 
March 31, 2020
Description
Total
 
Level 1
 
Level 2
 
Level 3
Impaired loans
$
6,099

 
$

 
$

 
$
6,099

REO
493

 

 

 
493

Total
$
6,592

 
$

 
$

 
$
6,592

 
June 30, 2019
Description
Total
 
Level 1
 
Level 2
 
Level 3
Impaired loans
$
9,071

 
$

 
$

 
$
9,071

REO
1,804

 

 

 
1,804

Total
$
10,875

 
$

 
$

 
$
10,875


Quantitative information about Level 3 fair value measurements during the period ended March 31, 2020 is shown in the table below:
 
Fair Value at March 31, 2020
 
Valuation
Techniques
 
Unobservable
Input
 
Range
 
Weighted
Average
Nonrecurring measurements:
 
 
 
 
 
 
 
 
 
Impaired loans, net
$
6,099

 
Discounted appraisals and discounted cash flows
 
Collateral discounts
and discount spread
 
0% - 63% 0% - 3%
 
20%
REO
$
493

 
Discounted appraisals
 
Collateral discounts
 
8% - 25%
 
12%

The stated carrying value and estimated fair value amounts of financial instruments as of March 31, 2020 and June 30, 2019, are summarized below:
 
March 31, 2020
 
Carrying
Value
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
 
Cash and interest-bearing deposits
$
82,061

 
$
82,061

 
$
82,061

 
$

 
$

Commercial paper
281,955

 
281,955

 
281,955

 

 

Certificates of deposit in other banks
57,544

 
57,544

 

 
57,544

 

Securities available for sale
158,621

 
158,621

 

 
158,621

 

Loans, net
2,636,674

 
2,637,208

 

 

 
2,637,208

Loans held for sale
38,682

 
39,359

 

 

 
39,359

FHLB stock
25,859

 
25,859

 
25,859

 

 

FRB stock
7,353

 
7,353

 
7,353

 

 

SBIC investments
7,989

 
7,989

 

 

 
7,989

Accrued interest receivable
9,501

 
9,501

 

 
1,002

 
8,499

Liabilities:
 
 
 
 
 
 
 
 
 
Noninterest-bearing and NOW deposits
819,373

 
819,373

 

 
819,373

 

Money market accounts
801,424

 
801,424

 

 
801,424

 

Savings accounts
169,792

 
169,792

 

 
169,792

 

Certificates of deposit
764,198

 
771,440

 

 
771,440

 

Borrowings
535,000

 
569,850

 

 
569,850

 

Accrued interest payable
1,308

 
1,308

 

 
1,308

 

 
June 30, 2019
 
Carrying
Value
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
 
Cash and interest-bearing deposits
$
71,043

 
$
71,043

 
$
71,043

 
$

 
$

Commercial paper
241,446

 
241,446

 
241,446

 

 

Certificates of deposit in other banks
52,005

 
52,005

 

 
52,005

 

Securities available for sale
121,786

 
121,786

 

 
121,786

 

Loans, net
2,683,761

 
2,604,827

 

 

 
2,604,827

Loans held for sale
18,175

 
18,591

 

 

 
18,591

FHLB stock
31,969

 
31,969

 
31,969

 

 

FRB stock
7,335

 
7,335

 
7,335

 

 

SBIC investments
6,074

 
6,074

 

 

 
6,074

Accrued interest receivable
10,533

 
10,533

 
350

 
750

 
9,433

Liabilities:
 
 
 
 
 
 
 
 
 
Noninterest-bearing and NOW deposits
746,617

 
746,617

 

 
746,617

 

Money market accounts
691,172

 
691,172

 

 
691,172

 

Savings accounts
177,278

 
177,278

 

 
177,278

 

Certificates of deposit
712,190

 
712,485

 

 
712,485

 

Borrowings
680,000

 
688,418

 

 
688,418

 

Accrued interest payable
2,252

 
2,252

 

 
2,252

 


The Company had off-balance sheet financial commitments, which included approximately $590,940 and $628,572 of commitments to originate loans, undisbursed portions of interim construction loans, and unused lines of credit at March 31, 2020 and June 30, 2019, respectively (see Note 9). Since these commitments are based on current rates, the carrying amount approximates the fair value.
Estimated fair values were determined using the following methods and assumptions:
Cash and interest-bearing deposits – The stated amounts approximate fair values as maturities are less than 90 days.
Commercial paper – The stated amounts approximate fair value due to the short-term nature of these investments.
Certificates of deposit in other banks – The stated amounts approximate fair values.
Securities available for sale – Fair values are based on quoted market prices where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.
Loans held for sale – The fair value of mortgage loans held for sale is determined by outstanding commitments from investors on a "best efforts" basis or current investor yield requirements, calculated on the aggregate loan basis. The fair value of SBA loans held for sale is based on what investors are currently offering for loans with similar characteristics.
Loans, net – Fair values for loans are estimated by segregating the portfolio by type of loan and discounting scheduled cash flows using current market interest rates for loans with similar terms and credit quality. A prepayment assumption is used as an estimate of the portion of loans that will be repaid prior to their scheduled maturity. A liquidity premium assumption is used as an estimate for the additional return required by an investor of assets that are potentially considered illiquid.
FHLB and FRB stock – No ready market exists for these stocks and they have no quoted market value. However, redemptions of these securities have historically been at par value. Accordingly, cost is deemed to be a reasonable estimate of fair value.
SBIC investments – No ready market exists for these investments and they have no quoted market value. SBIC investments are valued at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions of identical or similar investments. Accordingly, cost is deemed to be a reasonable estimate of fair value.
Deposits Fair values for demand deposits, money market accounts, and savings accounts are the amounts payable on demand. The fair value of certificates of deposit is estimated by discounting the contractual cash flows using current market interest rates for accounts with similar maturities.
Borrowings – The fair value of advances from the FHLB is estimated based on current rates for borrowings with similar terms.
Accrued interest receivable and payable – The stated amounts of accrued interest receivable and payable approximate the fair value.
Limitations – Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Fair value estimates are based on existing on-and-off balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, a significant asset not considered a financial asset is premises and equipment. In addition, tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.
v3.20.1
Recent Accounting Pronouncements
9 Months Ended
Mar. 31, 2020
Accounting Changes and Error Corrections [Abstract]  
Recent Accounting Pronouncements
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The ASU significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted for all entities beginning after December 15, 2018, including interim periods within those fiscal years. The Company has selected a third-party vendor to provide ongoing support under the new methodology. The Bank's project team is evaluating our current expected loss methodology of its loan and investment portfolios to identify the necessary modifications in accordance with this standard and expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Bank has compiled and uploaded all historical data that will be used to calculate expected credit losses on its loan portfolio and intends to run parallel models during the fourth quarter of 2020 to ensure it is fully compliant with the ASU at the adoption date. The team continues to work with the third-party vendor and is finalizing documentation on the methodologies utilized as well as the controls, processes, policies, and disclosures in preparation for performing the full end-to-end parallel run. A valuation adjustment to our allowance for loan losses or investment portfolio that is identified in this process will be reflected as a one-time adjustment in equity rather than earnings. Once adopted, the Company expects its allowance for loan losses to increase; however, until its evaluation is complete the magnitude of the increase will be unknown.
In August 2017, FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." This ASU improves the transparency and understandability of disclosures in the financial statements regarding the entities risk management activities and reduces the complexity of hedge accounting. The amendments in this ASU permit hedge accounting for hedging relationships involving nonfinancial risk and interest rate risk by removing certain limitations in cash flow and fair value hedging relationships. In addition, the ASU requires an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and early adoption is permitted. The Company adopted this ASU on July 1, 2019. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement." The amendments in this ASU remove, modify, and add certain disclosure requirements related to fair value measurements in ASC 820. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The adoption of ASU No. 2018-13 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In November 2018, the FASB issued ASU 2018-19, "Codification Improvements to Topic 326, Financial Instruments—Credit Losses." This update clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. The effective date and transition requirements for this ASU are the same as ASU 2016-13. The adoption of ASU No. 2018-19 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In December 2018, the FASB issued ASU 2018-20, "Leases (Topic 842): Narrow-Scope Improvements for Lessors." The amendments in this update permit lessors, as an accounting policy election, to not evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs. Instead, those lessors will account for those costs as if they are lessee costs. A lessor making this election will exclude from the consideration in the contract and from variable payments not included in the consideration in the contract all collections from lessees of taxes within the scope of the election and will provide certain disclosures. For certain lessor costs, the lessor must exclude from variable payments, and therefore revenue, lessor costs paid by lessees directly to third parties from variable payments. In addition, the lessor must account for costs excluded from the consideration of a contract that are paid by the lessor and reimbursed by the lessee as variable payments. A lessor will record those reimbursed costs as revenue. The amendments in this ASU related to recognizing variable payments for contracts with lease and nonlease components require lessors to allocate (rather than recognize as currently required) certain variable payments to the lease and nonlease components when the changes in facts and circumstances on which the variable payment is based occur. After the allocation, the amount of variable payments allocated to the lease components will be recognized as income in profit or loss in accordance with Topic 842, while the amount of variable payments allocated to nonlease components will be recognized in accordance with other Topics, such as Topic 606. The Company adopted this ASU on July 1, 2019. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In March 2019, the FASB issued ASU 2019-01, "Leases (Topic 842): Codification Improvements." The amendments in this update include the following items: i) determining the fair value of the underlying asset by lessors that are not manufacturers or dealers; ii) requiring cash received from lessors from sales-type and direct financing leases to be presented in the cash flow statement within investing activities; and iii) clarifying interim disclosure requirements. The Company adopted this ASU on July 1, 2019. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In April 2019, the FASB issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments." The amendments in this update are part of the FASB's ongoing project to improve codification and correcting unintended application. The items within this ASU are not expected to have a significant effect on current accounting practice. The effective date and transition requirements for the amendments to Financial Instruments (ASU 2016-01) are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The effective date and transition requirements for the amendments to Financial Instruments-Credit Losses (ASU 2016-13) are the same as ASU 2016-13 noted above. The effective date and transition requirements for the amendments to Derivatives and Hedging (ASU 2017-12) are the same as ASU 2017-12 noted above.The adoption of ASU No. 2019-04 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In May 2019, the FASB issued ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief." The amendments in this update allow companies to irrevocably elect, upon the adoption of ASU 2016-13, the fair value option for financial instruments that i) were previously recorded at amortized cost and ii) are within the scope of the credit losses guidance in ASC 326-20, iii) are eligible for the fair value option under ASC 825-10, and iv) are not held-to-maturity debt securities. The effective date and transition requirements for this ASU is the same as ASU 2016-13. The adoption of ASU No. 2019-05 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In July 2019, the FASB issued ASU 2019-07, "Codification Updates to SEC Sections." This ASU amends certain paragraphs in the ASC to reflect the issuance of SEC final rules on Disclosure Update and Simplification and Investment Company Reporting Modernization and other miscellaneous updates. The amendments became effective upon issuance. The adoption did not have a material effect on the Company's Consolidated Financial Statements.
In November 2019, the FASB issued ASU 2019-11, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses." This ASU clarifies certain aspects of the amendments in ASU 2016-13 and is part of the FASB's ongoing project to improve codification and correcting unintended application. The items within this ASU are not expected to have a significant effect on current accounting practice. The effective date and transition requirements for this ASU is the same as ASU 2016-13. The adoption of ASU No. 2019-11 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU is part of the FASB's simplification initiative to reduce complexity in accounting standards. The items within this ASU are not expected to have a significant effect on current accounting practice. The effective date and transition requirements for the first and second items of this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2020 and early adoption is permitted. The adoption of ASU No. 2019-12 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In January 2020, the FASB issued ASU 2020-01, "Investment—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815." This ASU clarified the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2021 and early adoption is permitted. The adoption of ASU No. 2020-01 is not expected to have a material impact on the Company's Consolidated Financial Statements.
In March 2020, the FASB issued ASU 2020-03, "Codification Improvements to Financial Instruments." This ASU makes certain narrow-scope amendments to the following: i) clarified that all entities are required to provide fair value option disclosures; ii) clarified the applicability of the portfolio exception in ASC 820 to nonfinancial items; iii) aligned disclosures for depository and lending institutions (Topic 942) with guidance in Topic 320; iv) added cross-references to guidance in ASC 470-50 on line-of-credit or revolving-debt arrangements; v) added cross-references to net asset value practical expedient in ASC 820-10; vi) clarified the interaction between ASC 842 and ASC 326; and vii) clarified the interaction between ASC 326 and ASC 860-20. The amendments for issues i, ii, iv, and v became effective upon issuance and did not have a material effect on the Company's Consolidated Financial Statements. The amendment related to issue iii has the same effective date and transition requirements as ASU 2019-04 and is not expected to have a material impact on the Company's Consolidated Financial Statements. The amendments related to issues vi and vii have the same effective date and transition requirements as ASU 2016-13 and is not expected to have a material impact on the Company's Consolidated Financial Statements.
v3.20.1
Real Estate Owned
9 Months Ended
Mar. 31, 2020
Real Estate Owned [Abstract]  
Real Estate Owned
Real Estate Owned
The activity within REO for the periods shown is as follows:
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2020
 
2019
 
2020
 
2019
Balance at beginning of period
$
1,451

 
$
2,955

 
$
2,929

 
$
3,684

Transfers from loans

 
482

 
46

 
578

Sales, net of gain or loss
(376
)
 
(397
)
 
(1,722
)
 
(971
)
Writedowns

 
(37
)
 
(178
)
 
(288
)
Balance at end of period
$
1,075

 
$
3,003

 
$
1,075

 
$
3,003


At March 31, 2020 and June 30, 2019, the Bank had $205 and $1,018, respectively, of foreclosed residential real estate property in REO. The recorded investment in consumer mortgage loans collateralized by residential real estate in the process of foreclosure totaled $61 and $243 at March 31, 2020 and June 30, 2019, respectively.
v3.20.1
Loans - Financing Receivable Credit Quality Indicators (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans $ 2,649,283 $ 2,688,405
Pass    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 2,600,110 2,650,959
Special Mention    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 22,042 12,968
Substandard    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 26,841 24,058
Doubtful    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 259 388
Loss    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 31 32
Retail Consumer Loans | One to four family loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 482,939 654,723
Retail Consumer Loans | HELOCs - originated    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 144,804 139,210
Retail Consumer Loans | HELOCs - purchased    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 82,232 116,972
Retail Consumer Loans | Construction and land/lots    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 80,426 80,230
Retail Consumer Loans | Indirect auto finance    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 135,449 153,448
Retail Consumer Loans | Consumer loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 11,576 11,416
Retail Consumer Loans | Pass | One to four family loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 473,723 644,159
Retail Consumer Loans | Pass | HELOCs - originated    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 142,630 137,001
Retail Consumer Loans | Pass | HELOCs - purchased    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 81,712 116,306
Retail Consumer Loans | Pass | Construction and land/lots    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 80,276 79,995
Retail Consumer Loans | Pass | Indirect auto finance    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 134,382 152,393
Retail Consumer Loans | Pass | Consumer loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 11,058 11,375
Retail Consumer Loans | Special Mention | One to four family loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 1,974 2,089
Retail Consumer Loans | Special Mention | HELOCs - originated    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 833 766
Retail Consumer Loans | Special Mention | HELOCs - purchased    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Retail Consumer Loans | Special Mention | Construction and land/lots    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 3 71
Retail Consumer Loans | Special Mention | Indirect auto finance    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 13
Retail Consumer Loans | Special Mention | Consumer loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 5 1
Retail Consumer Loans | Substandard | One to four family loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 6,984 8,072
Retail Consumer Loans | Substandard | HELOCs - originated    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 1,341 1,434
Retail Consumer Loans | Substandard | HELOCs - purchased    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 520 666
Retail Consumer Loans | Substandard | Construction and land/lots    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 147 164
Retail Consumer Loans | Substandard | Indirect auto finance    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 1,067 1,042
Retail Consumer Loans | Substandard | Consumer loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 513 33
Retail Consumer Loans | Doubtful | One to four family loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 258 384
Retail Consumer Loans | Doubtful | HELOCs - originated    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Retail Consumer Loans | Doubtful | HELOCs - purchased    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Retail Consumer Loans | Doubtful | Construction and land/lots    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Retail Consumer Loans | Doubtful | Indirect auto finance    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Retail Consumer Loans | Doubtful | Consumer loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 3
Retail Consumer Loans | Loss | One to four family loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 19
Retail Consumer Loans | Loss | HELOCs - originated    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 9
Retail Consumer Loans | Loss | HELOCs - purchased    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Retail Consumer Loans | Loss | Construction and land/lots    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Retail Consumer Loans | Loss | Indirect auto finance    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Retail Consumer Loans | Loss | Consumer loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 4
Commercial Loans | Commercial real estate    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 984,805 919,555
Commercial Loans | Construction and development loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 249,106 209,975
Commercial Loans | Commercial and industrial    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 162,992 158,802
Commercial Loans | Equipment Finance    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 198,962 132,058
Commercial Loans | Municipal leases    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 115,992 112,016
Commercial Loans | Pass | Commercial real estate    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 963,953 901,183
Commercial Loans | Pass | Construction and development loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 244,801 207,827
Commercial Loans | Pass | Commercial and industrial    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 154,215 157,325
Commercial Loans | Pass | Equipment Finance    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 197,651 131,674
Commercial Loans | Pass | Municipal leases    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 115,709 111,721
Commercial Loans | Special Mention | Commercial real estate    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 8,191 8,066
Commercial Loans | Special Mention | Construction and development loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 4,055 790
Commercial Loans | Special Mention | Commercial and industrial    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 6,139 877
Commercial Loans | Special Mention | Equipment Finance    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 559 0
Commercial Loans | Special Mention | Municipal leases    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 283 295
Commercial Loans | Substandard | Commercial real estate    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 12,631 10,306
Commercial Loans | Substandard | Construction and development loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 249 1,357
Commercial Loans | Substandard | Commercial and industrial    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 2,637 600
Commercial Loans | Substandard | Equipment Finance    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 752 384
Commercial Loans | Substandard | Municipal leases    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Commercial Loans | Doubtful | Commercial real estate    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Commercial Loans | Doubtful | Construction and development loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 1 1
Commercial Loans | Doubtful | Commercial and industrial    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Commercial Loans | Doubtful | Equipment Finance    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Commercial Loans | Doubtful | Municipal leases    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Commercial Loans | Loss | Commercial real estate    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 30 0
Commercial Loans | Loss | Construction and development loans    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Commercial Loans | Loss | Commercial and industrial    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 1 0
Commercial Loans | Loss | Equipment Finance    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans 0 0
Commercial Loans | Loss | Municipal leases    
Financing Receivable, Recorded Investment    
Non-purchased and purchased performing loans $ 0 $ 0
v3.20.1
Debt Securities - Narrative (Details)
3 Months Ended 9 Months Ended
Mar. 31, 2020
USD ($)
security
Mar. 31, 2019
USD ($)
Mar. 31, 2020
USD ($)
security
Mar. 31, 2019
USD ($)
Jun. 30, 2019
USD ($)
security
Debt Securities, Available-for-sale [Line Items]          
Estimated Fair Value $ 158,621,000   $ 158,621,000   $ 121,786,000
Proceeds from sale of securities available for sale 0 $ 0 0 $ 0  
Gross realized gain (loss) 0 $ 0 0 $ 0  
Securities available for sale pledged as collateral market value $ 82,028,000   $ 82,028,000   $ 94,876,000
Number of securities with unrealized losses | security 48   48   100
Other than temporary impairment losses     $ 0    
Collateral Pledged          
Debt Securities, Available-for-sale [Line Items]          
Estimated Fair Value $ 80,593,000   $ 80,593,000   $ 94,337,000
v3.20.1
Net Income per Share - Antidilutive Stock Options (Details) - shares
3 Months Ended 9 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2020
Mar. 31, 2019
Earnings Per Share [Abstract]        
Antidilutive securities excluded from computation of earnings per share (in shares) 506,800 434,400 506,800 445,800
v3.20.1
Equity Incentive Plan - Assumptions Used in Estimating Fair Value (Details) - $ / shares
9 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Share-based Payment Arrangement [Abstract]    
Weighted-average volatility 17.77% 17.84%
Expected dividend yield 0.98% 0.87%
Risk-free interest rate 1.50% 2.54%
Expected life (years) 6 years 6 months 6 years 6 months
Weighted-average fair value of options granted (in dollars per share) $ 4.79 $ 5.88
v3.20.1
Loans - Schedule of Debt Restructurings on Financing Receivables (Details)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 31, 2020
USD ($)
loan
Mar. 31, 2019
USD ($)
loan
Mar. 31, 2020
USD ($)
loan
Mar. 31, 2019
USD ($)
loan
Financing Receivable, Modifications        
Number of loans | loan 3 9 14 20
Pre-modification outstanding recorded investment $ 349 $ 6,197 $ 1,617 $ 6,823
Post-modification outstanding recorded investment $ 347 $ 6,194 $ 1,494 $ 6,804
Interest Rate Below Market Reduction [Member]        
Financing Receivable, Modifications        
Number of loans | loan     1 1
Pre-modification outstanding recorded investment     $ 88 $ 85
Post-modification outstanding recorded investment     $ 87 $ 84
Extended Maturity        
Financing Receivable, Modifications        
Number of loans | loan     3 3
Pre-modification outstanding recorded investment     $ 896 $ 227
Post-modification outstanding recorded investment     $ 893 $ 227
Other TDR        
Financing Receivable, Modifications        
Number of loans | loan     10 16
Pre-modification outstanding recorded investment     $ 633 $ 6,511
Post-modification outstanding recorded investment     $ 514 $ 6,493
Retail Consumer Loans | Interest Rate Below Market Reduction [Member]        
Financing Receivable, Modifications        
Number of loans | loan 0 3    
Pre-modification outstanding recorded investment $ 0 $ 227    
Post-modification outstanding recorded investment $ 0 $ 227    
Retail Consumer Loans | Interest Rate Below Market Reduction [Member] | One to four family loans        
Financing Receivable, Modifications        
Number of loans | loan 0 2 0 1
Pre-modification outstanding recorded investment $ 0 $ 15 $ 0 $ 85
Post-modification outstanding recorded investment $ 0 $ 15 $ 0 $ 84
Retail Consumer Loans | Interest Rate Below Market Reduction [Member] | HELOCs - originated        
Financing Receivable, Modifications        
Number of loans | loan 0     1
Pre-modification outstanding recorded investment $ 0     $ 212
Post-modification outstanding recorded investment $ 0     $ 212
Retail Consumer Loans | Extended Maturity | One to four family loans        
Financing Receivable, Modifications        
Number of loans | loan     2 2
Pre-modification outstanding recorded investment     $ 70 $ 212
Post-modification outstanding recorded investment     $ 67 $ 212
Retail Consumer Loans | Extended Maturity | HELOCs - originated        
Financing Receivable, Modifications        
Number of loans | loan     0 1
Pre-modification outstanding recorded investment     $ 0 $ 15
Post-modification outstanding recorded investment     $ 0 $ 15
Retail Consumer Loans | Other TDR        
Financing Receivable, Modifications        
Number of loans | loan 3 6    
Pre-modification outstanding recorded investment $ 349 $ 5,970    
Post-modification outstanding recorded investment $ 347 $ 5,967    
Retail Consumer Loans | Other TDR | One to four family loans        
Financing Receivable, Modifications        
Number of loans | loan 2 2 4 10
Pre-modification outstanding recorded investment $ 319 $ 335 $ 353 $ 841
Post-modification outstanding recorded investment $ 317 $ 334 $ 348 $ 829
Retail Consumer Loans | Other TDR | Indirect Auto Finance [Member]        
Financing Receivable, Modifications        
Number of loans | loan     4 1
Pre-modification outstanding recorded investment     $ 68 $ 33
Post-modification outstanding recorded investment     $ 57 $ 29
Retail Consumer Loans | Other TDR | Consumer loans        
Financing Receivable, Modifications        
Number of loans | loan     0 1
Pre-modification outstanding recorded investment     $ 0 $ 2
Post-modification outstanding recorded investment     $ 0 $ 2
Retail Consumer Loans | Other TDR | Construction and land/lots        
Financing Receivable, Modifications        
Number of loans | loan 0 1 0 1
Pre-modification outstanding recorded investment $ 0 $ 29 $ 0 $ 29
Post-modification outstanding recorded investment $ 0 $ 28 $ 0 $ 28
Commercial Loans | Interest Rate Below Market Reduction [Member] | Commercial real estate        
Financing Receivable, Modifications        
Number of loans | loan     1 0
Pre-modification outstanding recorded investment     $ 88 $ 0
Post-modification outstanding recorded investment     $ 87 $ 0
Commercial Loans | Extended Maturity | Commercial and industrial        
Financing Receivable, Modifications        
Number of loans | loan     1 0
Pre-modification outstanding recorded investment     $ 826 $ 0
Post-modification outstanding recorded investment     $ 826 $ 0
Commercial Loans | Other TDR | Commercial real estate        
Financing Receivable, Modifications        
Number of loans | loan 1 2 1 2
Pre-modification outstanding recorded investment $ 30 $ 5,424 $ 30 $ 5,424
Post-modification outstanding recorded investment $ 30 $ 5,423 $ 30 $ 5,423
Commercial Loans | Other TDR | Construction and development loans        
Financing Receivable, Modifications        
Number of loans | loan 0 1 1 1
Pre-modification outstanding recorded investment $ 0 $ 182 $ 182 $ 182
Post-modification outstanding recorded investment $ 0 $ 182 $ 79 $ 182
v3.20.1
Loans - Schedule of Ending Balances of Loans and the Related Allowance by Segment and Class (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Dec. 31, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Jun. 30, 2018
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI $ 26,850 $ 22,031 $ 21,429 $ 24,416 $ 21,419 $ 21,060
Allowance for loan losses, Loans individually evaluated for impairment 783   120      
Allowance for loan losses, Loans collectively evaluated 25,885   21,108      
Allowance for loan losses, Total 26,850   21,429      
Total loans receivable, PCI 2,649,283   2,688,405      
Total loans receivable, Loans individually evaluated for impairment 12,489   15,743      
Total loans receivable, Loans collectively evaluated 2,636,794   2,672,662      
Total loans 2,662,503   2,705,186      
Purchased Credit Impaired (PCI) Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 182 152 201 201 199 483
Total loans receivable, PCI 13,220   16,781      
Retail Consumer Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 6,983 5,400 6,419 6,461 7,236 7,527
Total loans 942,603   1,162,464      
Retail Consumer Loans | One to four family loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, Loans individually evaluated for impairment 5   74      
Allowance for loan losses, Loans collectively evaluated 2,427   2,375      
Allowance for loan losses, Total 2,449   2,511      
Total loans receivable, PCI 482,939   654,723      
Total loans receivable, Loans individually evaluated for impairment 4,313   5,318      
Total loans receivable, Loans collectively evaluated 478,626   649,405      
Total loans 487,777   660,591      
Retail Consumer Loans | One to four family loans | Purchased Credit Impaired (PCI) Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 17   62      
Total loans receivable, PCI 4,838   5,868      
Retail Consumer Loans | HELOCs - originated            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, Loans individually evaluated for impairment 0   7      
Allowance for loan losses, Loans collectively evaluated 1,384   1,060      
Allowance for loan losses, Total 1,384   1,067      
Total loans receivable, PCI 144,804   139,210      
Total loans receivable, Loans individually evaluated for impairment 0   7      
Total loans receivable, Loans collectively evaluated 144,804   139,203      
Total loans 144,804   139,435      
Retail Consumer Loans | HELOCs - originated | Purchased Credit Impaired (PCI) Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 0   0      
Total loans receivable, PCI 0   225      
Retail Consumer Loans | HELOCs - purchased            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, Loans individually evaluated for impairment 0   0      
Allowance for loan losses, Loans collectively evaluated 485   518      
Allowance for loan losses, Total 485   518      
Total loans receivable, PCI 82,232   116,972      
Total loans receivable, Loans individually evaluated for impairment 0   0      
Total loans receivable, Loans collectively evaluated 82,232   116,972      
Total loans 82,232   116,972      
Retail Consumer Loans | HELOCs - purchased | Purchased Credit Impaired (PCI) Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 0   0      
Total loans receivable, PCI 0   0      
Retail Consumer Loans | Construction and land/lots            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, Loans individually evaluated for impairment 0   0      
Allowance for loan losses, Loans collectively evaluated 1,387   1,265      
Allowance for loan losses, Total 1,420   1,265      
Total loans receivable, PCI 80,426   80,230      
Total loans receivable, Loans individually evaluated for impairment 303   323      
Total loans receivable, Loans collectively evaluated 80,123   79,907      
Total loans 80,765   80,602      
Retail Consumer Loans | Construction and land/lots | Purchased Credit Impaired (PCI) Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 33   0      
Total loans receivable, PCI 339   372      
Retail Consumer Loans | Indirect auto finance            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, Loans individually evaluated for impairment 0   0      
Allowance for loan losses, Loans collectively evaluated 1,145   927      
Allowance for loan losses, Total 1,145   927      
Total loans receivable, PCI 135,449   153,448      
Total loans receivable, Loans individually evaluated for impairment 10   0      
Total loans receivable, Loans collectively evaluated 135,439   153,448      
Total loans 135,449   153,448      
Retail Consumer Loans | Indirect auto finance | Purchased Credit Impaired (PCI) Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 0   0      
Total loans receivable, PCI 0   0      
Retail Consumer Loans | Consumer loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, Loans individually evaluated for impairment 0   4      
Allowance for loan losses, Loans collectively evaluated 150   189      
Allowance for loan losses, Total 150   193      
Total loans receivable, PCI 11,576   11,416      
Total loans receivable, Loans individually evaluated for impairment 0   4      
Total loans receivable, Loans collectively evaluated 11,576   11,412      
Total loans 11,576   11,416      
Retail Consumer Loans | Consumer loans | Purchased Credit Impaired (PCI) Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 0   0      
Total loans receivable, PCI 0   0      
Commercial Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 19,685 $ 16,479 14,809 $ 17,754 $ 13,984 $ 13,050
Total loans 1,719,900   1,542,722      
Commercial Loans | Commercial real estate            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, Loans individually evaluated for impairment 772   28      
Allowance for loan losses, Loans collectively evaluated 9,574   7,890      
Allowance for loan losses, Total 10,459   8,036      
Total loans receivable, PCI 984,805   919,555      
Total loans receivable, Loans individually evaluated for impairment 7,114   8,692      
Total loans receivable, Loans collectively evaluated 977,691   910,863      
Total loans 990,693   927,261      
Commercial Loans | Commercial real estate | Purchased Credit Impaired (PCI) Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 113   118      
Total loans receivable, PCI 5,888   7,706      
Commercial Loans | Construction and development loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, Loans individually evaluated for impairment 5   5      
Allowance for loan losses, Loans collectively evaluated 4,147   3,187      
Allowance for loan losses, Total 4,156   3,196      
Total loans receivable, PCI 249,106   209,975      
Total loans receivable, Loans individually evaluated for impairment 310   1,397      
Total loans receivable, Loans collectively evaluated 248,796   208,578      
Total loans 249,714   210,916      
Commercial Loans | Construction and development loans | Purchased Credit Impaired (PCI) Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 4   4      
Total loans receivable, PCI 608   941      
Commercial Loans | Commercial and industrial            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, Loans individually evaluated for impairment 1   2      
Allowance for loan losses, Loans collectively evaluated 2,384   1,957      
Allowance for loan losses, Total 2,400   1,976      
Total loans receivable, PCI 162,992   158,802      
Total loans receivable, Loans individually evaluated for impairment 28   2      
Total loans receivable, Loans collectively evaluated 162,964   158,800      
Total loans 164,539   160,471      
Commercial Loans | Commercial and industrial | Purchased Credit Impaired (PCI) Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 15   17      
Total loans receivable, PCI 1,547   1,669      
Commercial Loans | Equipment Finance            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, Loans individually evaluated for impairment 0   0      
Allowance for loan losses, Loans collectively evaluated 2,182   1,305      
Allowance for loan losses, Total 2,182   1,305      
Total loans receivable, PCI 198,962   132,058      
Total loans receivable, Loans individually evaluated for impairment 411   0      
Total loans receivable, Loans collectively evaluated 198,551   132,058      
Total loans 198,962   132,058      
Commercial Loans | Equipment Finance | Purchased Credit Impaired (PCI) Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 0   0      
Total loans receivable, PCI 0   0      
Commercial Loans | Municipal leases            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, Loans individually evaluated for impairment 0   0      
Allowance for loan losses, Loans collectively evaluated 620   435      
Allowance for loan losses, Total 620   435      
Total loans receivable, PCI 115,992   112,016      
Total loans receivable, Loans individually evaluated for impairment 0   0      
Total loans receivable, Loans collectively evaluated 115,992   112,016      
Total loans 115,992   112,016      
Commercial Loans | Municipal leases | Purchased Credit Impaired (PCI) Loans            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Allowance for loan losses, PCI 0   0      
Total loans receivable, PCI $ 0   $ 0      
v3.20.1
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2020
Mar. 31, 2019
Statement of Comprehensive Income [Abstract]        
Net Income $ 1,193 $ 3,302 $ 19,188 $ 19,133
Other Comprehensive Income        
Gains arising during the period 395 992 419 1,740
Deferred income tax expense (91) (228) (96) (400)
Total other comprehensive income 304 764 323 1,340
Comprehensive Income $ 1,497 $ 4,066 $ 19,511 $ 20,473
v3.20.1
Leases - Lessor, Lease Income (Details)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 31, 2020
USD ($)
Mar. 31, 2020
USD ($)
Lessor, Lease, Description [Line Items]    
Leased asset $ 19,403 $ 19,403
Operating lease, residual value of leased asset 10,971 10,971
Operating lease, lease income 989 2,215
Depreciation expense 746 1,554
Direct financing lease, interest income 420 1,121
Lease receivables $ 34,282 $ 34,282
Minimum    
Lessor, Lease, Description [Line Items]    
Term of contract 1 year 1 year
Maximum    
Lessor, Lease, Description [Line Items]    
Term of contract 5 years 5 years
v3.20.1
Document and Entity Information - shares
9 Months Ended
Mar. 31, 2020
May 06, 2020
Document and Entity Information:    
Entity Registrant Name HomeTrust Bancshares, Inc.  
Entity Central Index Key 0001538263  
Current Fiscal Year End Date --06-30  
Entity Filer Category Accelerated Filer  
Document Type 10-Q  
Document Period End Date Mar. 31, 2020  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q3  
Amendment Flag false  
Entity Common Stock, Shares Outstanding   17,020,081
Entity Interactive Data Current Yes  
Entity Emerging Growth Company false  
Entity Small Business false  
Entity Shell Company false  
v3.20.1
Summary of Significant Accounting Policies
9 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
The consolidated financial statements presented in this report include the accounts of HomeTrust Bancshares, Inc., a Maryland corporation ("HomeTrust"), and its wholly-owned subsidiary, HomeTrust Bank (the "Bank"). As used throughout this report, the term the "Company" refers to HomeTrust and the Bank, its consolidated subsidiary, unless the context otherwise requires.
The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the SEC. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. It is recommended that these unaudited interim consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended June 30, 2019 ("2019 Form 10-K") filed with the SEC on September 13, 2019. The results of operations for the three and nine months ended March 31, 2020 are not necessarily indicative of results that may be expected for the entire fiscal year ending June 30, 2020.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Various elements of the Company's accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions, and other subjective assessments. In particular, management has identified several accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Company's financial statements. These policies relate to (i) the determination of the provision and the allowance for loan losses, (ii) the valuation of goodwill and other intangible assets, and (iii) the valuation of or recognition of deferred tax assets and liabilities. These policies and judgments, estimates and assumptions are described in greater detail in notes to the Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations (Critical Accounting Policies) in our 2019 Form 10-K. Management believes that the judgments, estimates and assumptions used in the preparation of the financial statements are appropriate based on the factual circumstances at the time. However, given the sensitivity of the financial statements to these critical accounting policies, the use of other judgments, estimates and assumptions could result in material differences in the Company's results of operations or financial condition. Further, subsequent changes in economic or market conditions could have a material impact on these estimates and the Company's financial condition and operating results in future periods.
Certain amounts reported in prior periods' consolidated financial statements have been reclassified to conform to the current presentation. Such reclassifications had no effect on previously reported cash flows, stockholders' equity or net income.
Operating, Accounting and Reporting Considerations related to COVID-19
The COVID-19 pandemic has negatively impacted the global economy. In response to this crisis, the CARES Act was passed by Congress and signed into law on March 27, 2020. The CARES Act provides an estimated $2.2 trillion to fight the COVID-19 pandemic and stimulate the economy by supporting individuals and businesses through loans, grants, tax changes, and other types of relief. Some of the provisions applicable to the Company include, but are not limited to:
• Accounting for Loan Modifications - The CARES Act provides that a financial institution may elect to suspend (1) the requirements under GAAP for certain loan modifications that would otherwise be categorized as a TDR and (2) any determination that such loan modifications would be considered a TDR, including the related impairment for accounting purposes. The Bank has elected this as a policy change.
• Paycheck Protection Program - The CARES Act established the Paycheck Protection Program, an expansion of the SBA's 7(a) loan program and the Economic Injury Disaster Loan Program, administered directly by the SBA.
Also in response to the COVID-19 pandemic, the Board of Governors of the Federal Reserve System, the FDIC, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Consumer Financial Protection Bureau, in consultation with the state financial regulators (collectively, the “agencies”) issued a joint interagency statement (issued March 22, 2020; revised statement issued April 7, 2020). Some of the provisions applicable to the Company include, but are not limited to:
• Accounting for Loan Modifications - Loan modifications that do not meet the conditions of the CARES Act may still qualify as a modification that does not need to be accounted for as a TDR. The agencies confirmed with FASB staff that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or insignificant delays in payment.
• Past Due Reporting - With regard to loans not otherwise reportable as past due, financial institutions are not expected to designate loans with deferrals granted due to COVID-19 as past due because of the deferral. A loan’s payment date is governed by the due date stipulated in the legal agreement. If a financial institution agrees to a payment deferral, these loans would not be considered past due during the period of the deferral.
• Nonaccrual Status and Charge-offs - While short-term COVID-19 modifications are in effect, these loans generally should not be reported as nonaccrual or as classified.
Adoption of Lease Accounting Standard
On July 1, 2019, the Company adopted ASU 2016-02, Leases (“Topic 842”), and subsequent related ASUs. The new leasing standard modifies the accounting, presentation, and disclosures for both lessees and lessors. The Company elected the modified retrospective transition option which allows for application of the Topic 842 guidance at the adoption date. Therefore, comparative prior period financial information was not adjusted and will continue to be reported under the previous accounting guidance of ASC 840, Leases (“ASC 840”). No cumulative-effect adjustment to retained earnings as of July 1, 2019 was necessary as a result of adopting the new standard. The Company elected the “package of practical expedients” permitted under the transition guidance which allows the Company not to reassess its prior conclusions regarding lease identification, classification of existing leases, and treatment of initial direct costs on existing leases. Any lease arrangements and significant modifications entered into subsequent to the adoption date are accounted for in accordance with the new standard.
Lessee Topic 842 Accounting
The new leasing standard requires recognition of operating leases on the consolidated balance sheets as ROU assets and lease liabilities. ROU assets represent our right to use underlying assets for the lease terms and lease liabilities represent our obligation to make lease payments arising from the leases. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. We use our estimated incremental borrowing rate in determining the present value of lease payments for operating leases and the implicit rate in the lease for our one finance lease.
For operating leases, the Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months as of July 1, 2019. The ROU assets were adjusted per Topic 842 transition guidance for existing lease-related balances of accrued and prepaid rent, and unamortized lease incentives provided by lessors. As a result, the Company recognized ROU assets of approximately $5.3 million in other assets and corresponding lease liabilities of approximately $5.3 million in other liabilities as of July 1, 2019. The July 1, 2019 incremental borrowing rates determined on a collateralized basis for the remaining lease terms were utilized when determining the present value of lease payments at the date of initial adoption.
For our finance lease, the Company leases land for one of its retail locations. Upon adoption of Topic 842, the Company reclassed $2.1 million from land to ROU assets in other assets. In addition, the corresponding liability of $1.9 million, which was disclosed separately on the balance sheet was reclassified to other liabilities.
The Company elected the lessee practical expedient to not separate lease and non-lease components. The Company also elected the short-term lease recognition exemption and will not recognize ROU assets or lease liabilities for leases with a term less than 12 months.
Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in net occupancy expense. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur.
Finance lease cost is recognized as a single lease cost using the effective interest method and is recorded in net occupancy expense.
Lessee Accounting Prior to Adoption of Topic 842
Prior to the adoption of ASC 842, the Company applied the guidance of ASC 840. Under ASC 840, operating lease arrangements were off-balance sheet and ROU assets and lease liabilities were not recognized. Operating lease rent expense was recognized on a straight-line basis over the lease term and recorded in net occupancy expense. Common area maintenance, property taxes, and other operating expenses related to leased premises were also recognized in net occupancy expenses, consistent with similar costs for owned locations.
Lessor Topic 842 Accounting
Prior to the adoption of Topic 842, we determined the lease classification at commencement date. Leases not classified as sales-type or direct financing leases are classified as operating leases. The primary accounting criteria we use for  lease classification are (i) review to determine if the lease transfers ownership of the underlying asset to the lessee by the end of the lease term, ii) review to determine if the lease grants the lessee a purchase option that the lessee is reasonably certain to exercise, (iii) determine if the lease term is for a major part of the remaining economic life of the underlying asset and (iv) determine if the present value of the sum of the lease payments and any residual value guarantees equals or exceeds substantially all of the fair value of the underlying asset. We do not lease equipment of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.
The Company elected a lessor accounting policy to exclude from revenue and expenses sales taxes and other similar taxes assessed by a governmental authority on lease revenue-producing transactions and collected by the lessor from a lessee.
Operating Leases - Assets leased under an operating lease are carried at cost less accumulated depreciation. These assets are depreciated to their estimated residual value using the straight-line method over the lesser of the lease term or estimated useful life of the asset. Assets received at the end of the lease, which are intended to be sold, are marked to the lower of cost or fair value less selling costs with the adjustment recorded in other noninterest income.
At the inception of each operating lease, we record a residual value for the leased equipment based on our estimate of the future value of the equipment at the end of the lease term or end of the equipment’s estimated useful life as indicated by industry data. Operating leases have higher risk because a smaller percentage of the equipment's value is covered by contractual cash flows over the term of the lease. If the market value of leased equipment under operating leases decreases at a rate greater than we projected, whether due to rapid technological or economic obsolescence, unusual wear and tear on the equipment, excessive use of the equipment, recession or other adverse economic conditions, or other factors, it could adversely affect the current values or the residual values of such equipment. The Company seeks to mitigate these risks by maintaining a relatively young fleet of leased assets with wide operator bases, which can facilitate attractive lease and utilization rates. The Company manages and evaluates residual values by performing periodic reviews of estimated residual values and monitoring levels of residual realizations. A change in estimated operating lease residual values would result in a change in future depreciation expense. Any impairments are recognized at the time a change is identified.
Rental revenue on operating leases is recognized on a straight-line basis over the lease term and is included in other noninterest income.
Finance Leases - The Company’s finance leases are classified as direct financing leases under ASC 842. The Company’s finance lease activity primarily relates to leasing of new equipment with the equipment purchase price equal to fair value and therefore there is no selling profit or loss at lease commencement. When there is no selling profit or loss, initial direct costs are deferred at the commencement date and included in the measurement of the net investment in the lease.  
A lease receivable is recorded for finance leases at present value discounted using the rate implicit in the lease. The lease receivable includes lease payments not yet paid and the guarantee of the residual value by the lessee or unrelated third party, as applicable. Interest income is recognized over the lease term at a constant periodic discount rate on the remaining balance of the lease net investment using the rate implicit in the lease. After the commencement date, lease payments collected are applied to reduce net investment and recognize interest income.
The recognition of interest income is suspended, and an account is placed on non-accrual status when, in the opinion of management, full collection of all principal and interest due is doubtful. All future interest income accruals, as well as amortization of deferred fees, costs, and purchase premiums or discounts are suspended. Subsequent lease payments received are applied to the outstanding net investment balance until such time as the account is collected, charged-off or returned to accrual status. Finance leases that are nonaccrual do not accrue interest income; however, payments designated by the borrower as interest payments may be recorded as interest income. To qualify for this treatment, the remaining recorded investment in the lease must be deemed fully collectible.
The recognition of interest income on finance leases is suspended, and all previously accrued but uncollected revenue is reversed, when lease payments are contractually delinquent for 90 days or more. Accounts, including accounts that have been modified, are returned to accrual status when, in the opinion of management, collection of remaining lease receivables are reasonably assured, and there is a sustained period of repayment performance, generally for a minimum of six months.
Certain finance leases also have residual values at the inception of the lease which are based on our estimate of the future value of the equipment at the end of the lease term or end of the equipment’s estimated useful life as indicated by industry data. Finance leases bear the least risk because contractual payments usually cover approximately 90% of the equipment's cost at the inception of the lease. A change in estimated finance lease residual values during the lease term may impact the loss allowance as a decrease in the residual value may cause an impairment to be recorded on the finance lease.
Lessor Accounting Prior to Adoption of Topic 842
Lessor accounting was not fundamentally changed by Topic 842 and remains similar to the prior accounting model, with updates to align with certain changes to the lessee model (e.g., certain definitions, such as initial direct costs, have been updated) and the new revenue recognition standard. The new rules did not have a significant impact on our classification of leases as finance or operating. The new lease guidance has a narrower definition of initial direct costs that may be capitalized and allocated internal costs and professional fees to negotiate and arrange the lease agreement that would have been incurred regardless of lease execution no longer qualify as initial direct cost.
v3.20.1
Fair Value of Financial Instruments - Schedule of Fair Value Measurements, Nonrecurring (Details) - Fair Value, Measurements, Nonrecurring - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis $ 6,592 $ 10,875
Impaired loans    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 6,099 9,071
Other real estate owned    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 493 1,804
Fair Value, Inputs, Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
Fair Value, Inputs, Level 1 | Impaired loans    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
Fair Value, Inputs, Level 1 | Other real estate owned    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
Fair Value, Inputs, Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
Fair Value, Inputs, Level 2 | Impaired loans    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
Fair Value, Inputs, Level 2 | Other real estate owned    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 0 0
Fair Value, Inputs, Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 6,592 10,875
Fair Value, Inputs, Level 3 | Impaired loans    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis 6,099 9,071
Fair Value, Inputs, Level 3 | Other real estate owned    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial assets measured at fair value on a non-recurring basis $ 493 $ 1,804
v3.20.1
Leases - Supplement Balance Sheet (Details)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 31, 2020
USD ($)
Mar. 31, 2020
USD ($)
Leases [Abstract]    
Renewal term (in years) 15 years 15 years
ROU assets $ 4,585 $ 4,585
Lease liabilities $ 4,576 $ 4,576
Weighted-average remaining lease terms 5 years 33 days 5 years 33 days
Weighted-average discount rate 2.68% 2.68%
Finance lease, right-of-use asset $ 2,052 $ 2,052
Finance lease, liability 1,852 1,852
Finance lease, interest expense $ 24 $ 73
Finance lease, discount rate 5.18% 5.18%
v3.20.1
Debt Securities (Tables)
9 Months Ended
Mar. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
Schedule of Available-for-sale Securities Reconciliation
Securities available for sale consist of the following at the dates indicated:
 
March 31, 2020
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
U.S. Government Agencies
$
6,645

 
$
197

 
$

 
$
6,842

Residential MBS of U.S. Government Agencies and GSEs
50,290

 
1,561

 
(99
)
 
51,752

Municipal Bonds
21,208

 
503

 
(8
)
 
21,703

Corporate Bonds
79,107

 
37

 
(820
)
 
78,324

Total
$
157,250

 
$
2,298

 
$
(927
)
 
$
158,621

 
June 30, 2019
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
U.S. Government Agencies
$
15,099

 
$
122

 
$
(11
)
 
$
15,210

Residential MBS of U.S. Government Agencies and GSEs
74,778

 
586

 
(184
)
 
75,180

Municipal Bonds
24,896

 
423

 
(7
)
 
25,312

Corporate Bonds
6,061

 
43

 
(20
)
 
6,084

Total
$
120,834

 
$
1,174

 
$
(222
)
 
$
121,786

Investments Classified by Contractual Maturity Date
Debt securities available for sale by contractual maturity at March 31, 2020 are shown below. MBS are not included in the maturity categories because the borrowers in the underlying pools may prepay without penalty; therefore, it is unlikely that the securities will pay at their stated maturity schedule.
 
March 31, 2020
 
Amortized
Cost
 
Estimated
Fair Value
Due within one year
$
41,056

 
$
40,883

Due after one year through five years
59,538

 
59,464

Due after five years through ten years
4,292

 
4,445

Due after ten years
2,074

 
2,077

Mortgage-backed securities
50,290

 
51,752

Total
$
157,250

 
$
158,621

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
The gross unrealized losses and the fair value for securities available for sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2020 and June 30, 2019 were as follows:
 
March 31, 2020
 
Less than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Residential MBS of U.S. Government Agencies and GSEs
$
5,308

 
$
(58
)
 
$
1,982

 
$
(41
)
 
$
7,290

 
$
(99
)
Municipal Bonds
1,744

 
(8
)
 

 

 
1,744

 
(8
)
Corporate Bonds
61,782

 
(820
)
 

 

 
61,782

 
(820
)
Total
$
68,834

 
$
(886
)
 
$
1,982

 
$
(41
)
 
$
70,816

 
$
(927
)
 
June 30, 2019
 
Less than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
U.S. Government Agencies
$

 
$

 
$
6,988

 
$
(11
)
 
$
6,988

 
$
(11
)
Residential MBS of U.S. Government Agencies and GSEs
1,144

 
(3
)
 
24,242

 
(181
)
 
25,386

 
(184
)
Municipal Bonds

 

 
4,895

 
(7
)
 
4,895

 
(7
)
Corporate Bonds
393

 
(5
)
 
3,630

 
(15
)
 
4,023

 
(20
)
Total
$
1,537

 
$
(8
)
 
$
39,755

 
$
(214
)
 
$
41,292

 
$
(222
)
v3.20.1
Net Income per Share (Tables)
9 Months Ended
Mar. 31, 2020
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted
The following is a reconciliation of the numerator and denominator of basic and diluted net income per share of common stock as of the dates indicated:
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2020
 
2019
 
2020
 
2019
Numerator:
 
 
 
 
 
 
 
Net income
$
1,193

 
$
3,302

 
$
19,188

 
$
19,133

Allocation of earnings to participating securities
(11
)
 
(23
)
 
(167
)
 
(132
)
Numerator for basic EPS - Net income available to common stockholders
$
1,182

 
$
3,279

 
$
19,021

 
$
19,001

Effect of dilutive securities:
 
 
 
 
 
 
 
Dilutive effect to participating securities
2

 
3

 
6

 
5

Numerator for diluted EPS
$
1,184

 
$
3,282

 
$
19,027

 
$
19,006

Denominator:
 

 
 

 
 

 
 

Weighted-average common shares outstanding - basic
16,688,646

 
17,506,018

 
16,898,391

 
17,811,962

Effect of dilutive shares
569,782

 
691,411

 
625,861

 
716,199

Weighted-average common shares outstanding - diluted
17,258,428

 
18,197,429

 
17,524,252

 
18,528,161

Net income per share - basic
$
0.07

 
$
0.19

 
$
1.12

 
$
1.07

Net income per share - diluted
$
0.07

 
$
0.18

 
$
1.08

 
$
1.02

v3.20.1
Loans - Schedule of Changes in Accretable Yield for Purchased Impaired Loans (Details) - Purchased Credit Impaired (PCI) Loans - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2020
Mar. 31, 2019
Changes in Accretable Yield [Roll Forward]        
Accretable yield, beginning of period $ 4,355 $ 5,232 $ 5,259 $ 5,734
Reclass from nonaccretable yield 171 118 421 542
Other changes, net (23) 528 (332) 863
Interest income (378) (412) (1,223) (1,673)
Accretable yield, end of period $ 4,125 $ 5,466 $ 4,125 $ 5,466
v3.20.1
Loans - Schedule of Allowance for Credit Losses on Financing Receivables Table (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2020
Mar. 31, 2019
Financing Receivable, Allowance for Credit Loss [Roll Forward]        
Balance at beginning of period $ 22,031 $ 21,419 $ 21,429 $ 21,060
Provision for (recovery of) loan losses 5,400 5,500 5,800 5,500
Charge-offs (1,001) (2,936) (2,126) (3,609)
Recoveries 420 433 1,747 1,465
Balance at end of period 26,850 24,416 26,850 24,416
Retail Consumer Loans        
Financing Receivable, Allowance for Credit Loss [Roll Forward]        
Balance at beginning of period 5,400 7,236 6,419 7,527
Provision for (recovery of) loan losses 1,519 (818) (80) (1,223)
Charge-offs (295) (288) (678) (881)
Recoveries 359 331 1,322 1,038
Balance at end of period 6,983 6,461 6,983 6,461
Commercial Loans        
Financing Receivable, Allowance for Credit Loss [Roll Forward]        
Balance at beginning of period 16,479 13,984 14,809 13,050
Provision for (recovery of) loan losses 3,851 6,316 5,899 7,005
Charge-offs (706) (2,648) (1,448) (2,728)
Recoveries 61 102 425 427
Balance at end of period 19,685 17,754 19,685 17,754
Purchased Credit Impaired (PCI) Loans        
Financing Receivable, Allowance for Credit Loss [Roll Forward]        
Balance at beginning of period 152 199 201 483
Provision for (recovery of) loan losses 30 2 (19) (282)
Charge-offs 0 0 0 0
Recoveries 0 0 0 0
Balance at end of period $ 182 $ 201 $ 182 $ 201
v3.20.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
9 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Operating Activities:    
Net income $ 19,188 $ 19,133
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Provision for loan losses 5,800 5,500
Depreciation 4,137 3,046
Deferred income tax expense 4,677 3,333
Net amortization and accretion (4,275) (5,648)
Loss (gain) on sale and impairment of REO 88 500
Gain on sale of loans held for sale (7,577) (4,086)
Origination of loans held for sale (226,834) (122,763)
Proceeds from sales of loans held for sale 200,512 114,010
Increase in deferred loan costs, net (1,017) (389)
Decrease in accrued interest receivable and other assets (571) (4,127)
Amortization of core deposit intangibles 1,118 1,580
BOLI income (1,724) (1,574)
ESOP compensation expense 996 1,090
Restricted stock and stock option expense 1,341 1,165
Decrease in other liabilities (12,515) (1,562)
Net cash provided by (used in) operating activities (16,656) 9,208
Investing Activities:    
Purchase of securities available for sale (75,530) (31,675)
Proceeds from maturities of securities available for sale 27,823 21,400
Net purchases of commercial paper (35,949) (12,986)
Purchase of certificates of deposit in other banks (24,200) (15,664)
Maturities of certificates of deposit in other banks 18,661 26,392
Principal repayments of mortgage-backed securities 10,902 27,144
Net redemptions (purchases) of other investments 4,177 (9,191)
Proceeds from sale of loans not originated for sale 154,870 0
Net increase in loans (99,116) (131,671)
Purchase of BOLI (111) (75)
Proceeds from redemption of BOLI 477 14
Purchase of premises and equipment (2,321) (1,068)
Purchase of operating lease equipment (11,047) (7,424)
Proceeds from sale of REO 1,812 759
Net cash used in investing activities (29,552) (134,045)
Financing Activities:    
Net increase in deposits 227,530 112,142
Net increase (decrease) in other borrowings (145,000) 45,000
Common stock repurchased (23,222) (23,321)
Cash dividends paid (3,408) (2,218)
Retired stock (215) (205)
Exercised stock options 1,541 1,004
Net cash provided by financing activities 57,226 132,402
Net Increase in Cash and Cash Equivalents 11,018 7,565
Cash and Cash Equivalents at Beginning of Period 71,043 70,746
Cash and Cash Equivalents at End of Period 82,061 78,311
Cash paid during the period for:    
Interest 26,708 19,907
Income taxes 1,300 455
Noncash transactions:    
Unrealized gain in value of securities available for sale, net of income taxes 323 1,340
Transfer of loans to REO 46 578
Transfer of loans held for sale to total loans 96,962 5,794
Transfer of one-to-four family loans to held for sale 240,453 $ 9,761
Transfer of land from property and equipment to other assets for new finance lease accounting 2,052  
New ROU asset and lease liabilities from adoption of new lease accounting standard $ 5,296  
v3.20.1
Fair Value of Financial Instruments - Schedule of Quantitative Information About Level 3 Fair Value Measurements (Details) - USD ($)
$ in Thousands
9 Months Ended
Mar. 31, 2020
Jun. 30, 2019
Fair Value, Inputs, Level 3 | Nonrecurring measurements | Impaired loans, net    
Weighted Average 20.00%  
Fair Value, Inputs, Level 3 | Nonrecurring measurements | Other real estate owned    
Weighted Average 12.00%  
Fair Value, Measurements, Nonrecurring    
March 31, 2020 $ 6,592 $ 10,875
Fair Value, Measurements, Nonrecurring | Other real estate owned    
March 31, 2020 493 1,804
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3    
March 31, 2020 6,592 10,875
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | Other real estate owned    
March 31, 2020 493 $ 1,804
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | Nonrecurring measurements | Impaired loans, net    
March 31, 2020 6,099  
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | Nonrecurring measurements | Other real estate owned    
March 31, 2020 $ 493  
Fair Value, Measurements, Nonrecurring | Minimum | Impaired loans, net    
Weighted Average 0.00%  
Fair Value, Measurements, Nonrecurring | Minimum | Foreclosed real estate    
Weighted Average 8.00%  
Fair Value, Measurements, Nonrecurring | Maximum | Impaired loans, net    
Weighted Average 63.00%  
Fair Value, Measurements, Nonrecurring | Maximum | Foreclosed real estate    
Weighted Average 25.00%  
Valuation Technique, Discounted Cash Flow | Fair Value, Measurements, Nonrecurring | Minimum | Impaired loans, net    
Weighted Average 0.00%  
Valuation Technique, Discounted Cash Flow | Fair Value, Measurements, Nonrecurring | Maximum | Impaired loans, net    
Weighted Average 3.00%  
v3.20.1
Leases - Maturity Schedule for Finance and Operating Leases (Details)
$ in Thousands
Mar. 31, 2020
USD ($)
Operating Leases  
Remaining 2020 $ 336
2021 1,130
2022 1,034
2023 997
2024 526
Thereafter 896
Total of future minimum payments 4,919
Finance Leases  
Remaining 2020 34
2021 134
2022 134
2023 134
2024 145
Thereafter 1,993
Total minimum lease payments 2,574
Less: amount representing interest (722)
Present value of net minimum lease payments $ 1,852
v3.20.1
Consolidated Statements of Income - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2020
Mar. 31, 2019
Interest and Dividend Income        
Loans $ 29,781 $ 30,770 $ 94,166 $ 90,042
Commercial paper and interest-bearing deposits in other banks 1,794 2,283 5,959 6,106
Securities available for sale 912 850 2,901 2,582
Other investments 550 811 2,154 2,664
Total interest and dividend income 33,037 34,714 105,180 101,394
Interest Expense        
Deposits 5,971 4,404 18,145 10,761
Borrowings 1,757 3,741 7,619 10,691
Total interest expense 7,728 8,145 25,764 21,452
Net Interest Income 25,309 26,569 79,416 79,942
Provision for loan losses 5,400 5,500 5,800 5,500
Net Interest Income after Provision for Loan Losses 19,909 21,069 73,616 74,442
Noninterest Income        
Service charges and fees on deposit accounts 2,304 2,265 7,352 7,243
Loan income and fees 294 134 2,047 757
Gain on sale of loans held for sale 1,503 1,472 7,577 4,086
BOLI income 518 518 1,724 1,574
Other, net 1,756 1,007 4,409 2,434
Total noninterest income 6,375 5,396 23,109 16,094
Noninterest Expense        
Salaries and employee benefits 14,455 13,463 42,537 39,005
Net occupancy expense 2,246 2,294 6,972 7,046
Computer services 2,023 1,980 6,032 5,724
Telephone, postage, and supplies 862 698 2,462 2,210
Marketing and advertising 396 400 1,716 1,219
Deposit insurance premiums 462 320 474 959
Loss (gain) on sale and impairment of REO (15) 246 88 500
REO expense 250 200 746 548
Core deposit intangible amortization 334 488 1,118 1,580
Other 3,890 2,889 10,332 7,928
Total noninterest expense 24,903 22,978 72,477 66,719
Income Before Income Taxes 1,381 3,487 24,248 23,817
Income Tax Expense 188 185 5,060 4,684
Net Income $ 1,193 $ 3,302 $ 19,188 $ 19,133
Net income per common share:        
Basic (in dollars per share) $ 0.07 $ 0.19 $ 1.12 $ 1.07
Diluted (in dollars per share) $ 0.07 $ 0.18 $ 1.08 $ 1.02
Average shares outstanding:        
Basic (in shares) 16,688,646 17,506,018 16,898,391 17,811,962
Diluted (in shares) 17,258,428 18,197,429 17,524,252 18,528,161
v3.20.1
Leases - Lessor, Fiscal Year Maturity Schedule (Details)
$ in Thousands
Mar. 31, 2020
USD ($)
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract]  
Remaining 2020 $ 1,136
2021 7,729
2022 7,172
2023 2,865
2024 2,187
Thereafter 135
Total of future minimum payments 21,224
Financing Leases  
Remaining 2020 1,928
2021 9,374
2022 8,340
2023 8,195
2024 7,237
Thereafter 2,990
Total minimum payments 38,064
Less: amount representing interest (3,782)
Total $ 34,282
v3.20.1
Other Investments (Tables)
9 Months Ended
Mar. 31, 2020
Investments, All Other Investments [Abstract]  
Investment
Other investments, at cost consist of the following at the dates indicated:
 
March 31, 2020
 
June 30, 2019
FHLB of Atlanta stock
$
25,859

 
$
31,969

FRB stock
7,353

 
7,335

SBIC investments
7,989

 
6,074

Total
$
41,201

 
$
45,378

v3.20.1
Equity Incentive Plan (Tables)
9 Months Ended
Mar. 31, 2020
Share-based Payment Arrangement [Abstract]  
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs
The table below presents share-based compensation expense and the estimated related tax benefit for stock options and restricted stock for the three and nine months ended March 31, 2020 and 2019, respectively:
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2020
 
2019
 
2020
 
2019
Share-based compensation expense
$
458

 
$
409

 
$
1,341

 
$
1,165

Tax benefit
$
108

 
$
96

 
$
315

 
$
274

Equity Incentive Plan Stock Option Activity
The table below presents stock option activity for the nine months ended March 31, 2020 and 2019:
 
Options
 
Weighted-
average
exercise
price
 
Remaining
contractual
life
(years)
 
Aggregate
Intrinsic
Value
Options outstanding at June 30, 2018
1,718,270

 
$
17.29

 
5.9

 
$
18,664

Granted
40,500

 
27.51

 

 

Exercised
69,111

 
14.53

 

 

Forfeited
20,300

 
23.39

 

 

Expired
945

 
23.82

 

 

Options outstanding at March 31, 2019
1,668,414

 
$
17.57

 
5.3

 
$
13,098

Exercisable at March 31, 2019
1,290,814

 
$
15.39

 
4.4

 
$
12,733

Non-vested at March 31, 2019
377,600

 
$
25.04

 
8.5

 
$
365

 
 
 
 
 
 
 
 
Options outstanding at June 30, 2019
1,657,214

 
$
17.59

 
5.0

 
$
12,909

Granted
61,000

 
26.40

 

 

Exercised
106,914

 
14.41

 

 

Forfeited
800

 
17.35

 

 

Options outstanding at March 31, 2020
1,610,500

 
$
18.13

 
4.6

 
$
1,617

Exercisable at March 31, 2020
1,298,000

 
$
15.45

 
3.7

 
$
1,617

Non-vested at March 31, 2020
312,500

 
$
25.86

 
8.2

 
$

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions
Assumptions used in estimating the fair value of options granted during the nine months ended March 31, 2020 and 2019 are presented below:
 
March 31,
 
March 31,
 
2020
 
2019
Weighted-average volatility
17.77
%
 
17.84
%
Expected dividend yield
0.98
%
 
0.87
%
Risk-free interest rate
1.50
%
 
2.54
%
Expected life (years)
6.5

 
6.5

Weighted-average fair value of options granted
$
4.79

 
$
5.88

Schedule of Nonvested Restricted Stock Units Activity
The table below presents restricted stock award activity for the nine months ended March 31, 2020 and 2019:
 
Restricted
stock awards
 
Weighted-
average grant
date fair value
 
Aggregate
Intrinsic
Value
Non-vested at June 30, 2018
133,410

 
$
22.85

 
$
3,755

Granted
34,000

 
27.51

 

Vested
39,310

 
21.64

 

Forfeited
4,300

 
19.22

 

Non-vested at March 31, 2019
123,800

 
$
24.64

 
$
2,263

 
 
 
 
 
 
Non-vested at June 30, 2019
123,800

 
$
24.65

 
$
3,322

Granted
65,556

 
26.76

 

Vested
37,425

 
22.90

 

Forfeited
3,200

 
20.62

 

Non-vested at March 31, 2020
148,731

 
$
26.11

 
$
2,638

v3.20.1
Debt Securities
9 Months Ended
Mar. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
Debt Securities
Debt Securities
Securities available for sale consist of the following at the dates indicated:
 
March 31, 2020
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
U.S. Government Agencies
$
6,645

 
$
197

 
$

 
$
6,842

Residential MBS of U.S. Government Agencies and GSEs
50,290

 
1,561

 
(99
)
 
51,752

Municipal Bonds
21,208

 
503

 
(8
)
 
21,703

Corporate Bonds
79,107

 
37

 
(820
)
 
78,324

Total
$
157,250

 
$
2,298

 
$
(927
)
 
$
158,621

 
June 30, 2019
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
U.S. Government Agencies
$
15,099

 
$
122

 
$
(11
)
 
$
15,210

Residential MBS of U.S. Government Agencies and GSEs
74,778

 
586

 
(184
)
 
75,180

Municipal Bonds
24,896

 
423

 
(7
)
 
25,312

Corporate Bonds
6,061

 
43

 
(20
)
 
6,084

Total
$
120,834

 
$
1,174

 
$
(222
)
 
$
121,786


Debt securities available for sale by contractual maturity at March 31, 2020 are shown below. MBS are not included in the maturity categories because the borrowers in the underlying pools may prepay without penalty; therefore, it is unlikely that the securities will pay at their stated maturity schedule.
 
March 31, 2020
 
Amortized
Cost
 
Estimated
Fair Value
Due within one year
$
41,056

 
$
40,883

Due after one year through five years
59,538

 
59,464

Due after five years through ten years
4,292

 
4,445

Due after ten years
2,074

 
2,077

Mortgage-backed securities
50,290

 
51,752

Total
$
157,250

 
$
158,621


The Company had no sales of securities available for sale during the three and nine months ended March 31, 2020 and 2019. There were no gross realized gains or losses for the three and nine months ended March 31, 2020 and 2019.

Securities available for sale with costs totaling $80,593 and $94,337 and market values of $82,028 and $94,876 at March 31, 2020 and June 30, 2019, respectively, were pledged as collateral to secure various public deposits and other borrowings.
The gross unrealized losses and the fair value for securities available for sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2020 and June 30, 2019 were as follows:
 
March 31, 2020
 
Less than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Residential MBS of U.S. Government Agencies and GSEs
$
5,308

 
$
(58
)
 
$
1,982

 
$
(41
)
 
$
7,290

 
$
(99
)
Municipal Bonds
1,744

 
(8
)
 

 

 
1,744

 
(8
)
Corporate Bonds
61,782

 
(820
)
 

 

 
61,782

 
(820
)
Total
$
68,834

 
$
(886
)
 
$
1,982

 
$
(41
)
 
$
70,816

 
$
(927
)
 
June 30, 2019
 
Less than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
U.S. Government Agencies
$

 
$

 
$
6,988

 
$
(11
)
 
$
6,988

 
$
(11
)
Residential MBS of U.S. Government Agencies and GSEs
1,144

 
(3
)
 
24,242

 
(181
)
 
25,386

 
(184
)
Municipal Bonds

 

 
4,895

 
(7
)
 
4,895

 
(7
)
Corporate Bonds
393

 
(5
)
 
3,630

 
(15
)
 
4,023

 
(20
)
Total
$
1,537

 
$
(8
)
 
$
39,755

 
$
(214
)
 
$
41,292

 
$
(222
)

The total number of securities with unrealized losses at March 31, 2020, and June 30, 2019 were 48 and 100, respectively. Unrealized losses on securities have not been recognized in income because management has the intent and ability to hold the securities for the foreseeable future, and has determined that it is not more likely than not that the Company will be required to sell the securities prior to a recovery in value. The decline in fair value was largely due to increases in market interest rates subsequent to the purchase dates of the securities. The Company had no other-than-temporary impairment losses during the nine months ended March 31, 2020.
v3.20.1
Net Income per Share
9 Months Ended
Mar. 31, 2020
Earnings Per Share [Abstract]  
Net Income per Share
Net Income per Share
The following is a reconciliation of the numerator and denominator of basic and diluted net income per share of common stock as of the dates indicated:
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2020
 
2019
 
2020
 
2019
Numerator:
 
 
 
 
 
 
 
Net income
$
1,193

 
$
3,302

 
$
19,188

 
$
19,133

Allocation of earnings to participating securities
(11
)
 
(23
)
 
(167
)
 
(132
)
Numerator for basic EPS - Net income available to common stockholders
$
1,182

 
$
3,279

 
$
19,021

 
$
19,001

Effect of dilutive securities:
 
 
 
 
 
 
 
Dilutive effect to participating securities
2

 
3

 
6

 
5

Numerator for diluted EPS
$
1,184

 
$
3,282

 
$
19,027

 
$
19,006

Denominator:
 

 
 

 
 

 
 

Weighted-average common shares outstanding - basic
16,688,646

 
17,506,018

 
16,898,391

 
17,811,962

Effect of dilutive shares
569,782

 
691,411

 
625,861

 
716,199

Weighted-average common shares outstanding - diluted
17,258,428

 
18,197,429

 
17,524,252

 
18,528,161

Net income per share - basic
$
0.07

 
$
0.19

 
$
1.12

 
$
1.07

Net income per share - diluted
$
0.07

 
$
0.18

 
$
1.08

 
$
1.02


Potential dilutive shares are excluded from the computation of earnings per share if their effect is anti-dilutive. There were 506,800 stock options that were anti-dilutive for the three and nine months ended March 31, 2020. There were 434,400 and 445,800 stock options that were anti-dilutive for the three and nine months ended March 31, 2019, respectively.
v3.20.1
Leases
9 Months Ended
Mar. 31, 2020
Leases [Abstract]  
Leases
Leases
As Lessee - Operating Leases
Company operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at our sole discretion. When it is reasonably certain that we will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. At March 31, 2020, we did not have any leases that had not yet commenced for which we had created a ROU asset and a lease liability. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of our lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expenses for these leases over the lease term.
The following tables present supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.
Supplemental Balance Sheet Information:
March 31, 2020
ROU assets
$
4,585

Lease liabilities
4,576

Weighted-average remaining lease terms
5.09

Weighted-average discount rate
2.68
%

The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
336

2021
1,130

2022
1,034

2023
997

2022
526

Thereafter
896

Total of future minimum payments
$
4,919


The following table presents components of operating lease expense for the three and nine months ended March 31, 2020:
 
Three Months Ended March 31, 2020
 
Nine Months Ended March 31, 2020
Operating lease cost (included in occupancy expense)
$
436

 
$
1,368

Sublease income (included in other, net noninterest income)
(61
)
 
(181
)
Total operating lease expense, net
375

 
1,187


As Lessee - Finance Lease
The Company currently leases land for one of its branch office locations under a finance lease. The ROU asset for the finance lease totaled $2,052 at March 31, 2020 and is included in other assets. The amount was previously recorded in premises and equipment, net. The corresponding lease liability totaled $1,852 at March 31, 2020 and is included in other liabilities. For the three and nine months ended March 31, 2020, interest expense on the lease liability totaled $24 and $73, respectively. The finance lease has a maturity date of July 2028 and a discount rate of 5.18%. Upon adoption of ASC 842, the capital lease obligation for June 30, 2019 was also reclassified to other liabilities.
The following schedule summarizes aggregate future minimum lease payments under this finance lease obligation at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
34

2021
134

2022
134

2023
134

2023
145

Thereafter
1,993

Total minimum lease payments
2,574

Less: amount representing interest
(722
)
Present value of net minimum lease payments
$
1,852


Supplemental lease cash flow information for the nine months ended March 31, 2020:
ROU assets - noncash additions (operating leases)
$
5,296

ROU assets - noncash addition (finance lease)
2,052

Cash paid for amounts included in the measurement of lease liabilities (operating leases)
1,609

Cash paid for amounts included in the measurement of lease liabilities (finance leases)
67


As Lessor - General
The Company leases equipment to commercial end users under operating and finance lease arrangements. Our equipment finance leases consist mainly of transportation, medical, and agricultural equipment. Many of our operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a nominal fixed purchase option; and most of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. Our leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease.
As Lessor - Operating Leases
Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from 1 to 5 years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. Leased assets totaled $19,403 with a residual value of $10,971 as of March 31, 2020. For the three and nine months ended March 31, 2020, total equipment finance operating lease income totaled $989 and $2,215, respectively. For the three and nine months ended March 31, 2020, depreciation expense totaled $746 and $1,554, respectively.
The following schedule summarizes aggregate future minimum operating lease payments to be received at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
1,136

2021
7,729

2022
7,172

2023
2,865

2022
2,187

Thereafter
135

Total of future minimum payments
$
21,224


As Lessor - Finance Leases
Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment. For the three and nine months ended March 31, 2020, total interest income on equipment finance leases totaled $420 and 1,121, respectively.
The following table presents components of finance lease net investment included within equipment finance class of financing receivables:
 
March 31, 2020
Lease receivables
$
34,282

The following schedule summarizes aggregate future minimum finance lease payments to be received at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
1,928

2021
9,374

2022
8,340

2023
8,195

2024
7,237

Thereafter
2,990

Total minimum payments
38,064

Less: amount representing interest
(3,782
)
Total
$
34,282

Leases
Leases
As Lessee - Operating Leases
Company operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at our sole discretion. When it is reasonably certain that we will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. At March 31, 2020, we did not have any leases that had not yet commenced for which we had created a ROU asset and a lease liability. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of our lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expenses for these leases over the lease term.
The following tables present supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.
Supplemental Balance Sheet Information:
March 31, 2020
ROU assets
$
4,585

Lease liabilities
4,576

Weighted-average remaining lease terms
5.09

Weighted-average discount rate
2.68
%

The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
336

2021
1,130

2022
1,034

2023
997

2022
526

Thereafter
896

Total of future minimum payments
$
4,919


The following table presents components of operating lease expense for the three and nine months ended March 31, 2020:
 
Three Months Ended March 31, 2020
 
Nine Months Ended March 31, 2020
Operating lease cost (included in occupancy expense)
$
436

 
$
1,368

Sublease income (included in other, net noninterest income)
(61
)
 
(181
)
Total operating lease expense, net
375

 
1,187


As Lessee - Finance Lease
The Company currently leases land for one of its branch office locations under a finance lease. The ROU asset for the finance lease totaled $2,052 at March 31, 2020 and is included in other assets. The amount was previously recorded in premises and equipment, net. The corresponding lease liability totaled $1,852 at March 31, 2020 and is included in other liabilities. For the three and nine months ended March 31, 2020, interest expense on the lease liability totaled $24 and $73, respectively. The finance lease has a maturity date of July 2028 and a discount rate of 5.18%. Upon adoption of ASC 842, the capital lease obligation for June 30, 2019 was also reclassified to other liabilities.
The following schedule summarizes aggregate future minimum lease payments under this finance lease obligation at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
34

2021
134

2022
134

2023
134

2023
145

Thereafter
1,993

Total minimum lease payments
2,574

Less: amount representing interest
(722
)
Present value of net minimum lease payments
$
1,852


Supplemental lease cash flow information for the nine months ended March 31, 2020:
ROU assets - noncash additions (operating leases)
$
5,296

ROU assets - noncash addition (finance lease)
2,052

Cash paid for amounts included in the measurement of lease liabilities (operating leases)
1,609

Cash paid for amounts included in the measurement of lease liabilities (finance leases)
67


As Lessor - General
The Company leases equipment to commercial end users under operating and finance lease arrangements. Our equipment finance leases consist mainly of transportation, medical, and agricultural equipment. Many of our operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a nominal fixed purchase option; and most of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. Our leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease.
As Lessor - Operating Leases
Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from 1 to 5 years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. Leased assets totaled $19,403 with a residual value of $10,971 as of March 31, 2020. For the three and nine months ended March 31, 2020, total equipment finance operating lease income totaled $989 and $2,215, respectively. For the three and nine months ended March 31, 2020, depreciation expense totaled $746 and $1,554, respectively.
The following schedule summarizes aggregate future minimum operating lease payments to be received at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
1,136

2021
7,729

2022
7,172

2023
2,865

2022
2,187

Thereafter
135

Total of future minimum payments
$
21,224


As Lessor - Finance Leases
Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment. For the three and nine months ended March 31, 2020, total interest income on equipment finance leases totaled $420 and 1,121, respectively.
The following table presents components of finance lease net investment included within equipment finance class of financing receivables:
 
March 31, 2020
Lease receivables
$
34,282

The following schedule summarizes aggregate future minimum finance lease payments to be received at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
1,928

2021
9,374

2022
8,340

2023
8,195

2024
7,237

Thereafter
2,990

Total minimum payments
38,064

Less: amount representing interest
(3,782
)
Total
$
34,282

Leases
Leases
As Lessee - Operating Leases
Company operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at our sole discretion. When it is reasonably certain that we will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. At March 31, 2020, we did not have any leases that had not yet commenced for which we had created a ROU asset and a lease liability. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of our lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expenses for these leases over the lease term.
The following tables present supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.
Supplemental Balance Sheet Information:
March 31, 2020
ROU assets
$
4,585

Lease liabilities
4,576

Weighted-average remaining lease terms
5.09

Weighted-average discount rate
2.68
%

The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
336

2021
1,130

2022
1,034

2023
997

2022
526

Thereafter
896

Total of future minimum payments
$
4,919


The following table presents components of operating lease expense for the three and nine months ended March 31, 2020:
 
Three Months Ended March 31, 2020
 
Nine Months Ended March 31, 2020
Operating lease cost (included in occupancy expense)
$
436

 
$
1,368

Sublease income (included in other, net noninterest income)
(61
)
 
(181
)
Total operating lease expense, net
375

 
1,187


As Lessee - Finance Lease
The Company currently leases land for one of its branch office locations under a finance lease. The ROU asset for the finance lease totaled $2,052 at March 31, 2020 and is included in other assets. The amount was previously recorded in premises and equipment, net. The corresponding lease liability totaled $1,852 at March 31, 2020 and is included in other liabilities. For the three and nine months ended March 31, 2020, interest expense on the lease liability totaled $24 and $73, respectively. The finance lease has a maturity date of July 2028 and a discount rate of 5.18%. Upon adoption of ASC 842, the capital lease obligation for June 30, 2019 was also reclassified to other liabilities.
The following schedule summarizes aggregate future minimum lease payments under this finance lease obligation at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
34

2021
134

2022
134

2023
134

2023
145

Thereafter
1,993

Total minimum lease payments
2,574

Less: amount representing interest
(722
)
Present value of net minimum lease payments
$
1,852


Supplemental lease cash flow information for the nine months ended March 31, 2020:
ROU assets - noncash additions (operating leases)
$
5,296

ROU assets - noncash addition (finance lease)
2,052

Cash paid for amounts included in the measurement of lease liabilities (operating leases)
1,609

Cash paid for amounts included in the measurement of lease liabilities (finance leases)
67


As Lessor - General
The Company leases equipment to commercial end users under operating and finance lease arrangements. Our equipment finance leases consist mainly of transportation, medical, and agricultural equipment. Many of our operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a nominal fixed purchase option; and most of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. Our leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease.
As Lessor - Operating Leases
Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from 1 to 5 years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. Leased assets totaled $19,403 with a residual value of $10,971 as of March 31, 2020. For the three and nine months ended March 31, 2020, total equipment finance operating lease income totaled $989 and $2,215, respectively. For the three and nine months ended March 31, 2020, depreciation expense totaled $746 and $1,554, respectively.
The following schedule summarizes aggregate future minimum operating lease payments to be received at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
1,136

2021
7,729

2022
7,172

2023
2,865

2022
2,187

Thereafter
135

Total of future minimum payments
$
21,224


As Lessor - Finance Leases
Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment. For the three and nine months ended March 31, 2020, total interest income on equipment finance leases totaled $420 and 1,121, respectively.
The following table presents components of finance lease net investment included within equipment finance class of financing receivables:
 
March 31, 2020
Lease receivables
$
34,282

The following schedule summarizes aggregate future minimum finance lease payments to be received at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
1,928

2021
9,374

2022
8,340

2023
8,195

2024
7,237

Thereafter
2,990

Total minimum payments
38,064

Less: amount representing interest
(3,782
)
Total
$
34,282

Leases
Leases
As Lessee - Operating Leases
Company operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at our sole discretion. When it is reasonably certain that we will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. At March 31, 2020, we did not have any leases that had not yet commenced for which we had created a ROU asset and a lease liability. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of our lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expenses for these leases over the lease term.
The following tables present supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.
Supplemental Balance Sheet Information:
March 31, 2020
ROU assets
$
4,585

Lease liabilities
4,576

Weighted-average remaining lease terms
5.09

Weighted-average discount rate
2.68
%

The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
336

2021
1,130

2022
1,034

2023
997

2022
526

Thereafter
896

Total of future minimum payments
$
4,919


The following table presents components of operating lease expense for the three and nine months ended March 31, 2020:
 
Three Months Ended March 31, 2020
 
Nine Months Ended March 31, 2020
Operating lease cost (included in occupancy expense)
$
436

 
$
1,368

Sublease income (included in other, net noninterest income)
(61
)
 
(181
)
Total operating lease expense, net
375

 
1,187


As Lessee - Finance Lease
The Company currently leases land for one of its branch office locations under a finance lease. The ROU asset for the finance lease totaled $2,052 at March 31, 2020 and is included in other assets. The amount was previously recorded in premises and equipment, net. The corresponding lease liability totaled $1,852 at March 31, 2020 and is included in other liabilities. For the three and nine months ended March 31, 2020, interest expense on the lease liability totaled $24 and $73, respectively. The finance lease has a maturity date of July 2028 and a discount rate of 5.18%. Upon adoption of ASC 842, the capital lease obligation for June 30, 2019 was also reclassified to other liabilities.
The following schedule summarizes aggregate future minimum lease payments under this finance lease obligation at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
34

2021
134

2022
134

2023
134

2023
145

Thereafter
1,993

Total minimum lease payments
2,574

Less: amount representing interest
(722
)
Present value of net minimum lease payments
$
1,852


Supplemental lease cash flow information for the nine months ended March 31, 2020:
ROU assets - noncash additions (operating leases)
$
5,296

ROU assets - noncash addition (finance lease)
2,052

Cash paid for amounts included in the measurement of lease liabilities (operating leases)
1,609

Cash paid for amounts included in the measurement of lease liabilities (finance leases)
67


As Lessor - General
The Company leases equipment to commercial end users under operating and finance lease arrangements. Our equipment finance leases consist mainly of transportation, medical, and agricultural equipment. Many of our operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a nominal fixed purchase option; and most of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. Our leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease.
As Lessor - Operating Leases
Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from 1 to 5 years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. Leased assets totaled $19,403 with a residual value of $10,971 as of March 31, 2020. For the three and nine months ended March 31, 2020, total equipment finance operating lease income totaled $989 and $2,215, respectively. For the three and nine months ended March 31, 2020, depreciation expense totaled $746 and $1,554, respectively.
The following schedule summarizes aggregate future minimum operating lease payments to be received at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
1,136

2021
7,729

2022
7,172

2023
2,865

2022
2,187

Thereafter
135

Total of future minimum payments
$
21,224


As Lessor - Finance Leases
Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment. For the three and nine months ended March 31, 2020, total interest income on equipment finance leases totaled $420 and 1,121, respectively.
The following table presents components of finance lease net investment included within equipment finance class of financing receivables:
 
March 31, 2020
Lease receivables
$
34,282

The following schedule summarizes aggregate future minimum finance lease payments to be received at March 31, 2020:
Fiscal year ending June 30:
 
Remaining 2020
$
1,928

2021
9,374

2022
8,340

2023
8,195

2024
7,237

Thereafter
2,990

Total minimum payments
38,064

Less: amount representing interest
(3,782
)
Total
$
34,282

v3.20.1
Loans - Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Accounts, Notes, Loans and Financing Receivable    
Total loans $ 2,662,503 $ 2,705,186
Deferred loan fees, net 1,021 4
Total loans, net of deferred loan costs 2,663,524 2,705,190
Allowance for loan losses (26,850) (21,429)
Net loans 2,636,674 2,683,761
Retail Consumer Loans    
Accounts, Notes, Loans and Financing Receivable    
Total loans 942,603 1,162,464
Retail Consumer Loans | One to four family loans    
Accounts, Notes, Loans and Financing Receivable    
Total loans 487,777 660,591
Retail Consumer Loans | HELOCs - originated    
Accounts, Notes, Loans and Financing Receivable    
Total loans 144,804 139,435
Retail Consumer Loans | HELOCs - purchased    
Accounts, Notes, Loans and Financing Receivable    
Total loans 82,232 116,972
Retail Consumer Loans | Construction and land/lots    
Accounts, Notes, Loans and Financing Receivable    
Total loans 80,765 80,602
Retail Consumer Loans | Indirect auto finance    
Accounts, Notes, Loans and Financing Receivable    
Total loans 135,449 153,448
Retail Consumer Loans | Consumer loans    
Accounts, Notes, Loans and Financing Receivable    
Total loans 11,576 11,416
Commercial Loans    
Accounts, Notes, Loans and Financing Receivable    
Total loans 1,719,900 1,542,722
Commercial Loans | Commercial real estate    
Accounts, Notes, Loans and Financing Receivable    
Total loans 990,693 927,261
Commercial Loans | Construction and development loans    
Accounts, Notes, Loans and Financing Receivable    
Total loans 249,714 210,916
Commercial Loans | Commercial and industrial    
Accounts, Notes, Loans and Financing Receivable    
Total loans 164,539 160,471
Commercial Loans | Equipment Finance    
Accounts, Notes, Loans and Financing Receivable    
Total loans 198,962 132,058
Commercial Loans | Municipal leases    
Accounts, Notes, Loans and Financing Receivable    
Total loans $ 115,992 $ 112,016
v3.20.1
Debt Securities - Schedule of Investments Classified by Contractual Maturity Date (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jun. 30, 2019
Amortized Cost    
Due within one year $ 41,056  
Due after one year through five years 59,538  
Due after five years through ten years 4,292  
Due after ten years 2,074  
Total 157,250  
Estimated Fair Value    
Due within one year 40,883  
Due after one year through five years 59,464  
Due after five years through ten years 4,445  
Due after ten years 2,077  
Estimated Fair Value 158,621 $ 121,786
Government Agencies and Government Sponsored Enterprises    
Amortized Cost    
Total 50,290  
Estimated Fair Value    
Estimated Fair Value $ 51,752 $ 75,180
v3.20.1
Equity Incentive Plan - Narrative (Details) - USD ($)
$ in Thousands
9 Months Ended 12 Months Ended
Jan. 17, 2013
Mar. 31, 2020
Mar. 31, 2019
Jun. 30, 2019
Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Equity incentive plan name 2013 Omnibus Incentive Plan        
Nonvested, number of shares (in shares)   312,500 377,600    
Remaining contractual life (years)   4 years 7 months 6 days 5 years 3 months 18 days 5 years 5 years 10 months 31 days
Options outstanding (in shares)     377,600    
Stock Options          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Compensation cost not yet recognized   $ 1,853 $ 2,326    
Compensation cost not yet recognized, period for recognition (in years)   1 year 11 months 23 days 2 years 1 month 6 days    
Stock Options | Minimum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Remaining contractual life (years)     5 years    
Stock Options | Maximum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Remaining contractual life (years)   5 years 7 years    
Performance Restricted Shares          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Non-vested (in shares)   21,625 10,375    
Vesting period   3 years      
Restricted Stock          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Compensation cost not yet recognized, period for recognition (in years)   2 years 2 years 1 month 6 days    
Compensation not yet recognized, share-based awards other than options   $ 3,736 $ 2,790    
Non-vested (in shares)   148,731 123,800 123,800 133,410
Restricted Stock | Minimum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period   3 years 5 years    
Restricted Stock | Maximum          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period   5 years 7 years    
2013 Omnibus Incentive Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Equity incentive plan description provides for awards of restricted stock, restricted stock units, stock options, stock appreciation rights and cash awards to directors, directors emeritus, officers, employees and advisory directors        
Number of shares authorized (in shares) 2,962,400        
Shares held for awards of stock options and stock appreciation rights (in shares) 2,116,000        
Shares held for awards of restricted stock and restricted stock units (in shares) 846,400        
v3.20.1
Equity Incentive Plan - Schedule of Nonvested Restricted Stock Units Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
9 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Jun. 30, 2019
Jun. 30, 2018
Weighted- average grant date fair value        
Aggregate intrinsic value $ 1,617 $ 12,733    
Restricted Stock        
Restricted stock awards        
Non-vested, Beginning Balance (in shares) 123,800 133,410    
Granted (in shares) 65,556 34,000    
Vested (in shares) 37,425 39,310    
Forfeited (in shares) 3,200 4,300    
Non-vested, Ending Balance (in shares) 148,731 123,800    
Weighted- average grant date fair value        
Non-vested, Beginning Balance (in usd per share) $ 24.65 $ 22.85    
Granted (in usd per share) 26.76 27.51    
Vested (in usd per share) 22.90 21.64    
Forfeitures (in dollars per share) 20.62 19.22    
Non-vested, Ending Balance (in usd per share) $ 26.11 $ 24.64    
Aggregate intrinsic value $ 2,638 $ 2,263 $ 3,322 $ 3,755
v3.20.1
Subsequent Event (Details) - Subsequent Event
$ in Millions
1 Months Ended
May 05, 2020
USD ($)
loan
Subsequent Event [Line Items]  
Number of PPP loan applications | loan 318
PPP loan, total amount $ 93.3
Coronavirus Aid, Relief, And Economic Securities Act, Short-Term Modifications  
Subsequent Event [Line Items]  
Total loan book balance $ 526.9