HomeTrust Bancshares, Inc. (HTB)

CIK: 0001538263. SIC: 6035 Savings Institution, Federally Chartered. Latest 10-K as of: 2026-03-13.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6035 Savings Institution, Federally Chartered

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1538263. Latest filing source: 0001538263-26-000030.

Selected Fundamentals

Metric	Value	Unit	FY	Filed
Revenue	256,138,000	USD	2025	2026-03-13
Net income	64,364,000	USD	2025	2026-03-13
Assets	4,545,635,000	USD	2025	2026-03-13

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001538263.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Revenue	87,747,000	99,436,000	117,402,000	137,214,000	136,254,000	118,733,000	116,114,000	187,126,000	261,616,000	256,138,000
Net income	11,456,000	11,847,000	8,235,000	27,146,000	22,783,000	15,675,000	35,653,000	44,604,000	54,805,000	64,364,000
Diluted EPS	0.65	0.65	0.44	1.46	1.30	0.94	2.23	2.80	3.20	3.72
Operating cash flow	28,921,000	15,115,000	31,319,000	7,628,000	-39,090,000	9,559,000	39,109,000	-32,888,000	45,436,000	49,490,000
Capital expenditures	801,000	2,821,000	3,458,000	2,124,000	2,925,000	16,081,000	6,608,000	3,420,000	3,036,000	4,166,000
Dividends paid		0.00	0.00	3,176,000	4,552,000	5,018,000	5,452,000	6,229,000	7,665,000	8,381,000
Share buybacks	27,734,000	0.00	0.00	30,638,000	24,484,000	16,155,000	43,348,000	0.00	645,000	13,612,000
Assets	2,717,677,000	3,206,533,000	3,304,169,000	3,476,178,000	3,722,852,000	3,524,723,000	3,549,204,000	4,672,633,000	4,595,430,000	4,545,635,000
Liabilities	2,357,701,000	2,808,886,000	2,894,927,000	3,067,282,000	3,314,589,000	3,128,204,000	3,160,359,000	4,172,740,000	4,043,672,000	3,944,945,000
Stockholders' equity	359,976,000	397,647,000	409,242,000	408,896,000	408,263,000	396,519,000	388,845,000	499,893,000	551,758,000	600,690,000
Cash and cash equivalents	52,596,000	86,985,000	70,746,000	71,043,000	121,622,000	50,990,000	105,119,000	347,140,000	279,219,000	324,692,000
Free cash flow	28,120,000	12,294,000	27,861,000	5,504,000	-42,015,000	-6,522,000	32,501,000	-36,308,000	42,400,000	45,324,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Net margin	13.06%	11.91%	7.01%	19.78%	16.72%	13.20%	30.71%	23.84%	20.95%	25.13%
Return on equity	3.18%	2.98%	2.01%	6.64%	5.58%	3.95%	9.17%	8.92%	9.93%	10.72%
Return on assets	0.42%	0.37%	0.25%	0.78%	0.61%	0.44%	1.00%	0.95%	1.19%	1.42%
Liabilities / equity	6.55	7.06	7.07	7.50	8.12	7.89	8.13	8.35	7.33	6.57

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001538263.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarter	End Date	Revenue	Net Income	Diluted EPS	Method
2020-Q3	2020-03-31			0.07	reported discrete quarter
2022-Q1	2021-09-30	29,305,000	10,527,000	0.65	reported discrete quarter
2022-Q2	2021-12-31	28,488,000	11,078,000	0.68	reported discrete quarter
2022-Q3	2022-03-31	28,195,000	8,023,000	0.51	reported discrete quarter
2022-Q4	2022-06-30	30,126,000	6,025,000		derived Q4 = FY annual - nine-month YTD
2023-Q1	2022-09-30	35,927,000	9,199,000	0.60	reported discrete quarter
2023-Q2	2023-03-31	50,666,000	6,734,000	0.40	reported discrete quarter
2024-Q2	2024-06-30	65,414,000	12,418,000	0.73	reported discrete quarter
2024-Q1	2024-09-30	66,649,000	13,112,000	0.76	reported discrete quarter
2025-Q1	2025-03-31	63,635,000	14,539,000	0.84	reported discrete quarter
2025-Q2	2025-06-30	63,641,000	17,210,000	1.00	reported discrete quarter
2025-Q3	2025-09-30	65,395,000	16,491,000	0.95	reported discrete quarter
2026-Q1	2026-03-31	61,497,000	16,772,000	0.99	reported discrete quarter

Quarterly Charts

Macro Cross-References

CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
UNRATE - Unemployment Rate
FEDFUNDS - Federal Funds Effective Rate
CES0500000003 - Average Hourly Earnings of All Employees, Total Private
DFEDTARU - Federal Funds Target Range - Upper Limit
DFEDTARL - Federal Funds Target Range - Lower Limit
DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
PCEPI - Personal Consumption Expenditures: Chain-type Price Index
PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
PPIACO - Producer Price Index by Commodity: All Commodities
T10YIE - 10-Year Breakeven Inflation Rate
U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
PAYEMS - All Employees, Total Nonfarm
CIVPART - Labor Force Participation Rate
EMRATIO - Employment-Population Ratio
UNEMPLOY - Unemployed
CE16OV - Employment Level
ICSA - Initial Claims
JTSJOL - Job Openings: Total Nonfarm
JTSQUR - Quits: Total Nonfarm
GDPC1 - Real Gross Domestic Product
A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
INDPRO - Industrial Production: Total Index
TCU - Capacity Utilization: Total Index
HOUST - New Privately-Owned Housing Units Started: Total Units
PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
RSAFS - Advance Retail Sales: Retail Trade
PCE - Personal Consumption Expenditures
DSPIC96 - Real Disposable Personal Income
PSAVERT - Personal Saving Rate
M2SL - M2
BOPGSTB - U.S. International Trade in Goods and Services: Balance
MSPUS - Median Sales Price of Houses Sold for the United States
HSN1F - New One Family Houses Sold: United States
RHORUSQ156N - Homeownership Rate in the United States
TTLCONS - Total Construction Spending: Total Construction in the United States
RRVRUSQ156N - Rental Vacancy Rate in the United States
TOTALSL - Total Consumer Credit Owned and Securitized
REVOLSL - Revolving Consumer Credit Owned and Securitized
DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
GDP - Gross Domestic Product
GPDI - Gross Private Domestic Investment
GCE - Government Consumption Expenditures and Gross Investment
PCEC - Personal Consumption Expenditures
NETEXP - Net Exports of Goods and Services
GFDEBTN - Federal Debt: Total Public Debt
GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
FYFSD - Federal Surplus or Deficit
FGRECPT - Federal Government Current Receipts
FGEXPND - Federal Government: Current Expenditures
MANEMP - All Employees, Manufacturing
USCONS - All Employees, Construction
USTRADE - All Employees, Retail Trade
USFIRE - All Employees, Financial Activities
USGOVT - All Employees, Government
AWHAETP - Average Weekly Hours of All Employees, Total Private
DGORDER - Manufacturers' New Orders: Durable Goods
NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
BUSINV - Total Business Inventories
EXPGS - Exports of Goods and Services
IMPGS - Imports of Goods and Services
IR - Import Price Index (End Use): All Commodities
PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001538263-26-000046.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-06. Report date: 2026-03-31.

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, but instead are based on certain assumptions and are generally identified by use of the words "believes," "expects," "anticipates," "estimates," "forecasts," "intends," "plans," "targets," "potentially," "probably," "projects," "outlook" or similar expressions or future or conditional verbs such as "may," "will," "should," "would" and "could." Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about future economic performance and projections of financial items. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated or implied by our forward-looking statements.

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

•the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write offs and changes in our ACL and provision for credit losses that may be impacted by deterioration in the housing and commercial real estate markets;

•changes in general economic conditions, both nationally and in our market areas;

•the impact of geopolitical instability and trade policies on our operations including the imposition of tariffs and retaliatory tariffs;

•effects of natural disasters, other severe weather events, epidemics and other public health issues, and other external events;

•changes in interest rate levels and the duration of such changes, whether or not through actions by the Federal Reserve, which could materially affect our net interest margin, funding costs, asset values, and access to capital and liquidity;

•the impact of inflation or a potential recession, including monetary and fiscal policy responses thereto, and the impact on consumer and business behavior;

•the effects of a Federal government shutdown, a debt ceiling standoff, or other fiscal policy uncertainty;

•fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas;

•decreases in the secondary market for the sale of loans that we originate;

•expected revenues, cost savings, synergies and other benefits from our merger and acquisition activities might not be realized to the extent anticipated, within the anticipated time frames, or at all, costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected, and goodwill impairment charges might be incurred;

•results of examinations of us by the Federal Reserve, the NCCOB or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our ACL, write-down assets, increase our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings;

•changes in laws or regulations, changes in regulatory policies and principles or the application or interpretation of laws and regulations by regulatory agencies and tax authorities, including changes in deferred tax asset and liability activity, and the interpretation of regulatory capital or other rules;

•the availability of resources to address changes in laws, rules or regulations, or to respond to regulatory actions;

•our ability to attract and retain deposits;

•our ability to access cost-effective funding and maintain sufficient liquidity;

•management's assumptions in determining the adequacy of the ACL;

•our ability to control operating costs and expenses, including costs associated with our operation as a public company;

•the use of estimates in determining the fair value of certain assets, which estimates may prove to be incorrect and result in significant declines in valuation;

•difficulties in reducing risks associated with the loans on our balance sheet;

•staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges;

•the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking and cybersecurity;

•disruptions, security breaches or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions;

•our ability to retain key members of our senior management team;

•costs and effects of litigation, including settlements and judgments;

•the impact of bank failures or adverse developments involving other banks and related negative press about the banking industry in general on investor and depositor sentiment;

•increased competitive pressures among financial services companies;

•changes in consumer spending, borrowing and savings habits;

•adverse changes in the securities markets;

•inability of key third-party providers to perform their obligations to us;

•changes in accounting principles, policies or guidelines and practices, as may be adopted by the financial institution regulatory agencies, the Public Company Accounting Oversight Board or the FASB;

•other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services; and

•other risks detailed from time to time in documents we file with or furnish to the SEC, including this Form 10-Q.

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

31

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

Overview

For the quarter ended March 31, 2026 compared to the quarter ended December 31, 2025:

•net income was $16.8 million compared to $16.1 million;

•diluted EPS were $0.99 compared to $0.93;

•annualized ROA was 1.55% compared to 1.44%;

•annualized ROE was 11.35% compared to 10.63%;

•net interest margin was 4.31% compared to 4.20%;

•provision for credit losses was $370,000 compared to $2.1 million;

•quarterly cash dividends continued at $0.13 per share totaling $2.2 million for both periods; and

•533,240 shares of Company common stock were repurchased during the current quarter at an average price of $42.85 compared to 241,201 shares repurchased at an average price of $42.19 in the prior quarter.

Three Months Ended

(Dollars in thousands)

March 31, 2026

December 31, 2025

Interest and dividend income

$

61,497 

$

63,467 

Interest expense

17,192 

19,254 

Net interest income

44,305 

44,213 

Provision for credit losses

370 

2,080 

Net interest income after provision for credit losses

43,935 

42,133 

Noninterest income

10,031 

9,396 

Noninterest expense

32,975 

31,694 

Income before income taxes

20,991 

19,835 

Income tax expense

4,219 

3,711 

Net income

$

16,772 

$

16,124 

Net income per common share(1)

Basic

$

1.00 

$

0.94 

Diluted

0.99 

0.93 

Cash dividends declared per common share

0.13 

0.13 

Book value per share at end of period

35.26 

34.75 

Tangible book value per share at end of period(2)

33.02 

32.56 

Market price per share at end of period

42.65 

42.94 

(1)Basic and diluted net income per common share have been prepared in accordance with the two-class method.

(2)See Non-GAAP reconciliations below for adjustments.

Critical Accounting Policies and Estimates

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

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

GAAP Reconciliation of Non-GAAP Financial Measures

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

32

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

As of

(Dollars in thousands, except per share data)

March 31, 2026

December 31, 2025

March 31, 2025

Total stockholders' equity

$

592,407 

$

600,690 

$

565,449 

Less: goodwill, core deposit intangibles, net of taxes

37,556 

37,844 

38,793 

Tangible book value

$

554,851 

$

562,846 

$

526,656 

Common shares outstanding

16,803,185 

17,286,289 

17,552,626 

Book value per share

$

35.26 

$

34.75 

$

32.21 

Tangible book value per share

$

33.02 

$

32.56 

$

30.00 

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

As of

(Dollars in thousands)

March 31, 2026

December 31, 2025

March 31, 2025

Tangible equity(1)

$

554,851 

$

562,846 

$

526,656 

Total assets

4,386,341 

4,545,635 

4,558,060 

Less: goodwill, core deposit intangibles, net of taxes

37,556 

37,844 

38,793 

Total tangible assets

$

4,348,785 

$

4,507,791 

$

4,519,267 

Tangible equit

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-03-13. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion and analysis reviews our consolidated financial statements and other relevant statistical data and is intended to enhance your understanding of our financial condition and results of operations. The information in this section has been derived from the Consolidated Financial Statements and notes thereto which are included in Item 8 of this Form 10-K. You should read the information in this section in conjunction with the business and financial information regarding us as provided in this Form 10-K.

Financial Highlights

(Dollars in thousands)

December 31, 2025

December 31, 2024

December 31, 2023

June 30, 2023

Selected financial condition data

Total assets

$

4,545,635 

$

4,595,430 

$

4,672,633 

$

4,607,487 

Cash and cash equivalents

324,692 

279,219 

347,140 

303,497 

Certificates of deposit in other banks

18,841 

28,538 

34,722 

33,152 

Debt securities available for sale, at fair value

142,540 

152,011 

126,950 

151,926 

Loans, net of ACL and deferred loan fees and costs

3,536,675 

3,603,014 

3,591,381 

3,611,630 

Deposits

3,709,997 

3,779,203 

3,661,373 

3,601,168 

Junior subordinated debt

10,220 

10,120 

10,021 

9,971 

Borrowings

165,000 

188,000 

433,763 

457,263 

Stockholders’ equity

600,690 

551,758 

499,893 

471,186 

Year Ended December 31,

Six Months Ended December 31, 2023

Year Ended June 30, 2023

(Dollars in thousands, except per share data)

2025

2024

Selected operations data

Total interest and dividend income

$

256,138 

$

261,616 

$

124,684 

$

187,126 

Total interest expense

79,400 

92,112 

40,144 

29,711 

Net interest income

176,738 

169,504 

84,540 

157,415 

Provision for credit losses

6,938 

7,545 

5,930 

15,392 

Net interest income after provision for credit losses

169,800 

161,959 

78,610 

142,023 

Service charges and fees on deposit accounts

9,807 

9,165 

4,686 

9,510 

Loan income and fees

2,772 

2,737 

982 

2,571 

Gain on sale of loans held for sale

7,668 

6,253 

2,330 

5,608 

BOLI income

3,552 

4,312 

3,901 

2,116 

Operating lease income

7,064 

7,346 

3,377 

5,471 

Gain on sale of branches

1,448 

— 

— 

— 

Gain (loss) on sale of premises and equipment

93 

(9)

(248)

2,097 

Other

3,927 

3,645 

1,847 

3,677 

Total noninterest income

36,331 

33,449 

16,875 

31,050 

Total noninterest expense

125,176 

125,497 

59,802 

115,909 

Income before income taxes

80,955 

69,911 

35,683 

57,164 

Income tax expense

16,591 

15,106 

7,386 

12,560 

Net income

$

64,364 

$

54,805 

$

28,297 

$

44,604 

Net income per common share – basic

$

3.75 

$

3.21 

$

1.67 

$

2.82 

Net income per common share – diluted

$

3.72 

$

3.20 

$

1.67 

$

2.80 

26

At or For the Year Ended December 31,

At or For the Six Months Ended December 31, 2023

At or For the Year Ended

June 30, 2023

2025

2024

Performance ratios

Return on assets (ratio of net income to average total assets)(1)

1.46 

%

1.23 

%

1.27 

%

1.16 

%

Return on equity (ratio of net income to average equity)(1)

11.06 

10.37 

11.51 

10.43 

Yield on earning assets(1)

6.16 

6.28 

5.96 

5.20 

Rate paid on interest-bearing liabilities(1)

2.62 

2.98 

2.63 

1.17 

Average interest rate spread(1)

3.54 

3.30 

3.33 

4.03 

Net interest margin(1)(2)

4.25 

4.07 

4.04 

4.38 

Average interest-earning assets to average interest-bearing liabilities

137.29 

134.60 

136.76 

141.23 

Noninterest expense to average total assets(1)

2.84 

2.83 

2.68 

3.01 

Efficiency ratio

58.75 

61.84 

58.97 

61.50 

Efficiency ratio – adjusted(3)

58.72 

60.28 

60.00 

59.12 

At or For the Year Ended December 31,

At or For the Six Months Ended December 31, 2023

At or For the Year Ended

June 30, 2023

2025

2024

Asset quality ratios

Nonperforming assets to total assets(4)

0.98 

%

0.63 

%

0.41 

%

0.18 

%

Nonperforming loans to total loans(4)

1.22 

0.76 

0.53 

0.23 

Total classified assets to total assets

1.46 

1.06 

0.90 

0.53 

Allowance for credit losses to nonperforming loans(4)

94.75 

163.68 

251.60 

567.56 

Allowance for credit losses to total loans

1.16 

1.24 

1.34 

1.29 

Net charge-offs to average loans(1)

0.24 

0.28 

0.28 

0.10 

Capital ratios

Equity to total assets at end of period

13.21 

%

12.01 

%

10.70 

%

10.23 

%

Tangible equity to total tangible assets(3)

12.49 

11.25 

9.91 

9.39 

Average equity to average assets

13.19 

11.90 

11.03 

11.11 

Dividend payout ratio

13.02 

13.99 

12.53 

13.97 

Dividends declared per common share

$

0.49 

$

0.45 

$

0.21 

$

0.39 

(1)Ratio is annualized for the six months ended December 31, 2023.

(2)Net interest income divided by average interest-earning assets.

(3)See "GAAP Reconciliation of Non-GAAP Financial Measures" section below for additional details.

(4)Nonperforming assets and loans include nonaccruing loans and repossessed assets. There were no accruing loans more than 90 days past due at the dates indicated. At December 31, 2025, $10.1 million, or 23.2%, of nonaccruing loans were current on their loan payments.

27

GAAP Reconciliation of Non-GAAP Financial Measures

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

Set forth below is a reconciliation to US GAAP of our efficiency ratio:

Year Ended December 31,

Six Months Ended December 31, 2023

Year Ended June 30, 2023

(Dollars in thousands)

2025

2024

Noninterest expense

$

125,176 

$

125,497 

$

59,802 

$

115,909 

Less: merger-related expenses

— 

— 

— 

5,465 

Less: contract renewal consulting fee

— 

2,965 

— 

— 

Noninterest expense – adjusted

$

125,176 

$

122,532 

$

59,802 

$

110,444 

Net interest income

$

176,738 

$

169,504 

$

84,540 

$

157,415 

Plus: tax equivalent adjustment

1,737 

1,460 

656 

1,163 

Plus: noninterest income

36,331 

33,449 

16,875 

31,050 

Less: BOLI death benefit proceeds in excess of cash surrender value

92 

1,143 

2,646 

— 

Less: gain on sale of branches

1,448 

— 

— 

— 

Less: gain on sale of available for sale and equity securities

— 

— 

— 

721 

Less: gain (loss) on sale of premises and equipment

93 

(9)

(248)

2,097 

Net interest income plus noninterest income – adjusted

$

213,173 

$

203,279 

$

99,673 

$

186,810 

Efficiency ratio

58.75 

%

61.84 

%

58.97 

%

61.50 

%

Efficiency ratio – adjusted

58.72 

%

60.28 

%

60.00 

%

59.12 

%

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

(Dollars in thousands, except per share data)

December 31, 2025

December 31, 2024

December 31, 2023

June 30, 2023

Total stockholders' equity

$

600,690 

$

551,758 

$

499,893 

$

471,186 

Less: goodwill, core deposit intangibles, net of taxes

37,844 

39,189 

41,086 

42,410 

Tangible book value

$

562,846 

$

512,569 

$

458,807 

$

428,776 

Common shares outstanding

17,286,289 

17,527,709 

17,387,069 

17,366,673 

Book value per share

$

34.75 

$

31.48 

$

28.75 

$

27.13 

Tangible book value per share

$

32.56 

$

29.24 

$

26.39 

$

24.69 

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

(Dollars in thousands)

December 31, 2025

December 31, 2024

December 31, 2023

June 30, 2023

Tangible equity(1)

$

562,846 

$

512,569 

$

458,807 

$

428,776 

Total assets

4,545,635 

4,595,430 

4,672,633 

4,607,487 

Less: goodwill, core deposit intangibles, net of taxes

37,844 

39,189 

41,086 

42,410 

Total tangible assets

$

4,507,791 

$

4,556,241 

$

4,631,547 

$

4,565,077 

Tangible equity to tangible assets

12.49 

%

11.25 

%

9.91 

%

9.39 

%

(1)    Tangible equity (or tangible book value) is equal to total stockholders' equity less goodwill and core deposit intangibles, net of related deferred tax liabilities.

Overview

The following discussion and analysis presents the more significant factors that affected our financial condition as of December 31, 2025 and 2024 and results of operations for the years ended December 31, 2025 and 2024. Refer to "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K filed with the SEC on March 13, 2025 (the “2024 Form 10-K") for a discussion and analysis of the more significant factors that affected periods prior to the year ended December 31, 2025.

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. A secondary source of income is noninterest income, which includes revenue we receive from providing products and services including service charges and fees on deposit accounts, loan income and fees, gains on sale of loans held for sale, BOLI income and operating lease income.

An offset to net interest income is the provision for credit losses to establish the ACL at a level that provides for ECLs inherent in our loan portfolio, off balance sheet commitments and available for sale debt securities. See "Note 1 – Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for further discussion.

28

Our noninterest expenses consist primarily of salaries and employee benefits, occupancy expenses, computer services, operating lease depreciation, marketing 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.

Critical Accounting Policies and Estimates

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

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

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see “Note 1 – Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements in Item 8 of this report on Form 10-K for further discussion.

Item(s) of Note – Year Ended December 31, 2025

On May 23, 2025, the Company completed the sale of the Bank's two branches located in Knoxville, Tennessee, to a third party financial institution. Through the transaction, the Company sold $34.3 million of deposits along with $6.3 million in branch premises and equipment, while HomeTrust retained all loans associated with the branches. The Company recorded a $1.4 million pre-tax gain associated with the transaction. The transaction aligns with the Company's strategic plan to tighten its geographic footprint, improve branch efficiencies, and allocate capital to support long-term growth in other core markets.

As noted in the "Item(s) of Note – Year Ended December 31, 2024" section which follows, in an effort to assist customers in their post-Hurricane Helene recovery and clean-up efforts, at the end of the prior calendar year we granted payment deferrals of up to six months to provide short-term relief to impacted customers. The outstanding balance of these deferrals declined from $136.0 million at December 31, 2024 to $318,000 at December 31, 2025. To date, $165,000 in charge-offs have been recognized which were directly related to Hurricane Helene.

Item(s) of Note – Year Ended December 31, 2024

In January 2024, the Company announced the decision to cease indirect auto originations and right-size our mortgage banking line of business. These changes are expected to result in annual cost savings of $800,000.

On September 26, 2024, Hurricane Helene made landfall causing significant property damage across certain parts of the Company's market areas, particularly in Western North Carolina. In an effort to assist customers in their post-Hurricane Helene recovery and clean-up efforts, in the fourth quarter we granted payment deferrals of up to six months to provide short-term relief to impacted customers. The outstanding balance of these deferrals was $136.0 million at December 31, 2024. As of this same date, we retained a $2.2 million qualitative allocation in our ACL for the potential impact of the storm upon our loan portfolio which had been established in the third quarter.

In December 2024, the Company paid a $3.0 million fee to a consulting firm who assisted in negotiating the multiyear renewal of our largest core IT processing contract. The renewal will result both in future cost savings and the expansion of our technology solutions, supporting the Company's growth initiatives and digital strategies all with the goal of enhancing the customer experience.

Comparison of Results of Operations for the Years Ended December 31, 2025 and December 31, 2024

Net Income.  Net income totaled $64.4 million, or $3.72 per diluted share, for the year ended December 31, 2025 compared to $54.8 million, or $3.20 per diluted share, for the year ended December 31, 2024, an increase of $9.6 million, or 17.4%. The results for the year ended December 31, 2025 compared to the prior year were positively impacted by a $7.2 million increase in net interest income, a $2.9 million increase in noninterest income, a $607,000 decrease in the provision for credit losses and a $321,000 decrease in noninterest expense. Details of the changes in the various components of net income are further discussed below.

29

Net Interest Income.  The following table presents the distribution of average assets, liabilities and equity, as well as interest income earned on average interest-earning assets and interest expense paid on average interest-bearing liabilities. All average balances are daily average balances. Nonaccruing loans have been included in the table as loans carrying a zero yield.

Years Ended December 31,

2025

2024

(Dollars in thousands)

Average

Balance

Outstanding

Interest

Earned /

Paid

Yield /

Rate

Average

Balance

Outstanding

Interest

Earned /

Paid

Yield /

Rate

Assets

Interest-earning assets

Loans receivable(1)

$

3,823,319

$

240,399

6.29 

%

$

3,884,984

$

247,642

6.37 

%

Debt securities available for sale

148,951

6,706

4.50 

137,108

6,045

4.41 

Other interest-earning assets(2)

182,666

9,033

4.95 

144,262

7,929

5.50 

Total interest-earning assets

4,154,936

256,138

6.16 

4,166,354

261,616

6.28 

Other assets

260,395

273,307

Total assets

$

4,415,331

$

4,439,661

Liabilities and equity

Interest-bearing liabilities

Interest-bearing checking accounts

$

555,443

$

4,669

0.84 

%

$

570,952

$

5,420

0.95 

%

Money market accounts

1,342,019

36,648

2.73 

1,314,867

39,851

3.03 

Savings accounts

178,503

136

0.08 

185,712

164

0.09 

Certificate accounts

919,734

36,149

3.93 

952,602

42,003

4.41 

Total interest-bearing deposits

2,995,699

77,602

2.59 

3,024,133

87,438

2.89 

Junior subordinated debt

10,167

817

8.04 

10,067

928

9.22 

Borrowings

20,597

981

4.76 

61,205

3,746

6.12 

Total interest-bearing liabilities

3,026,463

79,400

2.62 

3,095,405

92,112

2.98 

Noninterest-bearing deposits

743,578

757,472

Other liabilities

63,109

58,496

Total liabilities

3,833,150

3,911,373

Stockholders' equity

582,181

528,288

Total liabilities and stockholders' equity

$

4,415,331

$

4,439,661

Net earning assets

$

1,128,473

$

1,070,949

Average interest-earning assets to average interest-bearing liabilities

137.29 

%

134.60 

%

Non-tax-equivalent

Net interest income

$

176,738

$

169,504

Interest rate spread

3.54 

%

3.30 

%

Net interest margin(3)

4.25 

%

4.07 

%

Tax-equivalent(4)

Net interest income

$

178,475

$

170,964

Interest rate spread

3.58 

%

3.34 

%

Net interest margin(3)

4.30 

%

4.10 

%

(1)Average loans receivable balances include loans held for sale and nonaccruing loans.

(2)Average other interest-earning assets consist of FRB stock, FHLB stock, SBIC investments and deposits in other banks.

(3)Net interest income divided by average interest-earning assets.

(4)Tax-equivalent results include adjustments to interest income of $1,737 and $1,460 for the years ended December 31, 2025 and 2024, respectively, calculated based on a combined federal and state tax rate of 24%.

Total interest and dividend income for the year ended December 31, 2025 decreased $5.5 million, or 2.1%, compared to the year ended December 31, 2024. Regarding the components of this income, loan interest income decreased $7.2 million, or 2.9%, primarily due to an overall decrease in average loan balances and the impact of decreases in the federal funds rate upon loan yields, partially offset by a $1.1 million increase in interest income on other investments and interest-bearing accounts, and a $661,000 increase in interest income on debt securities available for sale. Accretion income on acquired loans of $2.2 million and $3.2 million was recognized during the same periods, respectively, and was included in loan interest income.

Total interest expense for the year ended December 31, 2025 decreased $12.7 million, or 13.8%, compared to the year ended December 31, 2024, the result of a $9.8 million, or 11.2%, decrease in interest expense on deposits and a $2.8 million, or 73.8%, decrease in interest expense on other borrowings. The decrease in interest expense on deposits can primarily be traced to a decrease in the average cost of funds, while the decrease in interest expense on other borrowings was primarily the result of a decline in average borrowings outstanding.

30

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

Increase / (Decrease)

Due to

Total

Increase /

(Decrease)

(Dollars in thousands)

Volume

Rate

Interest-earning assets

Loans receivable

$

(3,931)

$

(3,312)

$

(7,243)

Debt securities available for sale

522 

139 

661 

Other interest-earning assets

2,111 

(1,007)

1,104 

Total interest-earning assets

(1,298)

(4,180)

(5,478)

Interest-bearing liabilities

Interest-bearing checking accounts

(147)

(604)

(751)

Money market accounts

823 

(4,026)

(3,203)

Savings accounts

(6)

(22)

(28)

Certificate accounts

(1,449)

(4,405)

(5,854)

Junior subordinated debt

9 

(120)

(111)

Borrowings

(2,485)

(280)

(2,765)

Total interest-bearing liabilities

(3,255)

(9,457)

(12,712)

Increase in net interest income

$

7,234 

Provision for Credit Losses. The provision for credit losses is the amount of expense that, based on our judgment, is required to maintain the ACL at an appropriate level under the CECL model. The determination of the ACL is complex and involves a high degree of judgment and subjectivity. Refer to "Note 1 – Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for detailed discussion regarding ACL methodologies for available for sale debt securities, loans held for investment and unfunded commitments. The following table presents a breakdown of the components of the provision for credit losses:

Years Ended December 31,

(Dollars in thousands)

2025

2024

$ Change

% Change

Provision for credit losses

Loans

$

5,465 

$

7,460 

$

(1,995)

(27)

%

Off-balance sheet credit exposure

1,473 

85 

1,388 

1,633 

Total provision for credit losses

$

6,938 

$

7,545 

$

(607)

(8)

%

For the year ended December 31, 2025, the "loans" portion of the provision for credit losses was the result of the following, offset by net charge-offs of $9.3 million during the period:

•$2.5 million benefit driven by changes in the loan mix.

•$1.5 million benefit due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments. Of note, in the quarter ended June 30, 2025, we released the $2.2 million qualitative allocation previously established in the prior year for the potential impact of Hurricane Helene on our loan portfolio. Any residual impact of the Hurricane is believed to have now been reflected elsewhere within the ACL calculation.

•$0.2 million increase in specific reserves on individually evaluated credits.

For the year ended December 31, 2024, the "loans" portion of the provision for credit losses was the result of the following, offset by net charge-offs of $10.8 million during the period:

•$1.6 million benefit driven by changes in the loan mix.

•$0.7 million benefit due to changes in the projected economic forecast, specifically the national unemployment rate, and changes in qualitative adjustments. Included in this change was the addition of a $2.2 million qualitative allocation in the quarter ended September 30, 2024 for the potential impact of Hurricane Helene on our loan portfolio.

•$1.0 million decrease in specific reserves on individually evaluated credits.

For the years ended December 31, 2025 and December 31, 2024, the amounts recorded for off-balance sheet credit exposure were the result of changes in the balance of loan commitments, loan mix and the projected economic forecast as outlined above.

See further discussion in the "Comparison of Financial Condition at December 31, 2025 and December 31, 2024 – Allowance for Credit Losses on Loans" section below.

31

Noninterest Income.  Noninterest income for the year ended December 31, 2025 increased $2.9 million, or 8.6%, when compared to last year. Changes in the components of noninterest income are discussed below:

Years Ended December 31,

(Dollars in thousands)

2025

2024

$ Change

% Change

Noninterest income

Service charges and fees on deposit accounts

$

9,807 

$

9,165 

$

642 

7 

%

Loan income and fees

2,772 

2,737 

35 

1 

Gain on sale of loans held for sale

7,668 

6,253 

1,415 

23 

BOLI income

3,552 

4,312 

(760)

(18)

Operating lease income

7,064 

7,346 

(282)

(4)

Gain on sale of branches

1,448 

— 

1,448 

100 

Gain (loss) on sale of premises and equipment

93 

(9)

102 

1,133 

Other

3,927 

3,645 

282 

8 

Total noninterest income

$

36,331 

$

33,449 

$

2,882 

9 

%

•Gain on sale of loans held for sale: The increase was primarily driven by growth in the volume of HELOCs and residential mortgage loans sold during the current period, partially offset by a reduction in the sales volume of the guaranteed portion of SBA commercial loans. During the year ended December 31, 2025, there were $257.2 million of HELOCs sold with gains of $2.4 million compared to $95.4 million sold with gains of $887,000 in the prior year. There were $113.5 million of residential mortgage loans originated for sale which were sold with gains of $2.4 million compared to $82.0 million sold with gains of $1.4 million in the prior year. There were $40.4 million of sales of the guaranteed portion of SBA commercial loans with gains of $3.0 million compared to $48.7 million sold with gains of $3.9 million during the prior year. Lastly, our hedging of mandatory commitments on the residential mortgage loan pipeline resulted in a net loss of $131,000 for the year ended December 31, 2025 versus a net gain of $81,000 in the prior year.

•BOLI income: The decrease was due to a $1.0 million decrease in tax-free gains on death benefit proceeds in excess of the cash surrender value of the policies year-over-year, partially offset by higher yielding policies as a result of restructuring the portfolio at the end of calendar year 2023.

•Gain on sale of branches: During the current year we completed the sale of our two Knoxville, Tennessee branches, recognizing a gain of $1.4 million in the current year, with no similar activity occurring in the prior year.

Noninterest Expense.  Noninterest expense for the year ended December 31, 2025 decreased $321,000, or 0.3%, when compared to last year. Changes in the components of noninterest expense are discussed below:

Years Ended December 31,

(Dollars in thousands)

2025

2024

$ Change

% Change

Noninterest expense

Salaries and employee benefits

$

72,956 

$

67,900 

$

5,056 

7 

%

Occupancy expense, net

10,021 

9,768 

253 

3 

Computer services

10,653 

12,506 

(1,853)

(15)

Operating lease depreciation expense

7,009 

7,734 

(725)

(9)

Telecom, postage and supplies

2,188 

2,253 

(65)

(3)

Marketing and advertising

1,879 

1,893 

(14)

(1)

Deposit insurance premiums

1,935 

2,230 

(295)

(13)

Core deposit intangible amortization

1,747 

2,463 

(716)

(29)

Contract renewal consulting fee

— 

2,965 

(2,965)

(100)

Other

16,788 

15,785 

1,003 

6 

Total noninterest expense

$

125,176 

$

125,497 

$

(321)

— 

%

•Salaries and employee benefits: The increase was primarily the result of increases in both pay and incentive compensation.

•Computer services: At the end of 2024, we finalized a multiyear renewal of our largest core processing contract. The decrease in expense year-over-year is a reflection of the improved vendor pricing negotiated through this effort.

•Operating lease depreciation expense: The decrease was due to a decline in the population of operating lease contracts (assets being depreciated) year-over-year.

•Deposit insurance premiums: The decrease year-over-year was the result of higher regulatory capital ratios.

•Core deposit intangible amortization: The intangible recorded associated with the Quantum merger is being amortized on an accelerated basis, so the rate of amortization slowed year-over-year.

•Contract renewal consulting fee: In the prior year we paid a fee to a consultant to negotiate the multiyear renewal of our largest core processing contract, with no similar fee being recognized in the current year.

•Other: The change year-over-year was driven by increases of $415,000 in community association banking deposit line of business referral fees, $285,000 in losses on the sale of repossessed equipment, and $226,000 in other consulting fees.

Income Taxes.  The amount of income tax expense is influenced by the amount of pre-tax income, tax-exempt income, changes in the statutory rate and the effect of changes in valuation allowances maintained against deferred tax benefits. The effective tax rate was 20.5% and 21.6% for the years ended December 31, 2025 and 2024, respectively.

32

Comparison of Financial Condition at December 31, 2025 and December 31, 2024

Assets. Total assets were $4.5 billion and $4.6 billion at December 31, 2025 and 2024, respectively, a decrease of $49.8 million, or 1.1%, the components of which are discussed below.

Debt Securities Available for Sale. Debt securities available for sale decreased $9.5 million, or 6.2%, to $142.5 million at December 31, 2025. Outside of changes in value, the changes between years were the result of $36.6 million in proceeds from the maturity, call and paydown of securities, partially offset by $23.0 million in purchases. All purchases were residential MBS and consistent with the composition of the existing securities held in the portfolio. The following table illustrates the changes in the fair value of the portfolio.

(Dollars in thousands)

December 31, 2025

December 31, 2024

$ Change

% Change

MBS, residential

$

136,082 

$

144,147 

$

(8,065)

(6)

%

Municipal bonds

1,826 

3,396 

(1,570)

(46)

Corporate bonds

4,632 

4,468 

164 

4 

Total

$

142,540 

$

152,011 

$

(9,471)

(6)

%

The composition and contractual maturities of our debt securities portfolio as of December 31, 2025 is indicated in the following table. Maturities are based on the final contractual payment dates, and do not reflect the impact of prepayments or early redemptions that may occur. Weighted average yields were calculated using amortized cost on a fully-taxable equivalent basis. The Company did not hold any tax-exempt debt securities as of December 31, 2025.

(Dollars in thousands)

1 year or less

Over 1 to 5 years

Over 5 to 10 years

Over 10 years

Total

MBS, residential

Book value

$

10,174 

$

29,599 

$

26,057 

$

69,120 

$

134,950 

Fair value

10,123 

29,720 

25,932 

70,307 

136,082 

Weighted average yield

2.71 

%

3.33 

%

4.08 

%

4.16 

%

3.85 

%

Municipal bonds

Book value

409 

1,434 

— 

— 

1,843 

Fair value

408 

1,418 

— 

— 

1,826 

Weighted average yield

3.58 

%

3.85 

%

— 

%

— 

%

3.79 

%

Corporate bonds

Book value

— 

— 

5,000 

31315

— 

5,000 

Fair value

— 

— 

4,632 

— 

4,632 

Weighted average yield

— 

%

— 

%

3.38 

%

— 

%

3.38 

%

Total

Book value

$

10,583 

$

31,033 

$

31,057 

$

69,120 

$

141,793 

Fair value

$

10,531 

$

31,138 

$

30,564 

$

70,307 

$

142,540 

Weighted average yield

2.74 

%

3.35 

%

3.97 

%

4.16 

%

3.83 

%

Total Loans, Net of Deferred Loan Fees and Costs. Loans held for investment totaled $3.6 billion at December 31, 2025, a decrease of $70.1 million, or 1.9%, compared to the balance as of December 31, 2024. The following table illustrates the changes within the portfolio.

December 31, 2025

December 31, 2024

Change

% of Total at December 31, 2025

% of Total at December 31, 2024

(Dollars in thousands)

$

%

Commercial real estate loans

Construction and land development

$

277,028 

$

274,356 

$

2,672 

1 

%

8 

%

8 

%

Commercial real estate - owner occupied

562,049 

545,490 

16,559 

3 

16 

15 

Commercial real estate - non-owner occupied

832,502 

866,094 

(33,592)

(4)

23 

24 

Multifamily

110,912 

120,425 

(9,513)

(8)

3 

3 

Total commercial real estate loans

1,782,491 

1,806,365 

(23,874)

(1)

50 

50 

Commercial loans

Commercial and industrial

378,686 

316,159 

62,527 

20 

10 

9 

Equipment finance

311,356 

406,400 

(95,044)

(23)

9 

11 

Municipal leases

166,396 

165,984 

412 

— 

5 

5 

Total commercial loans

856,438 

888,543 

(32,105)

(4)

24 

25 

Residential real estate loans

Construction and land development

45,617 

53,683 

(8,066)

(15)

1 

1 

One-to-four family

633,511 

630,391 

3,120 

— 

18 

17 

HELOCs

217,310 

195,288 

22,022 

11 

6 

5 

Total residential real estate loans

896,438 

879,362 

17,076 

2 

25 

23 

Consumer loans

42,787 

74,029 

(31,242)

(42)

1 

2 

Loans, net of deferred loan fees and costs

$

3,578,154 

$

3,648,299 

$

(70,145)

(2)

%

100 

%

100 

%

33

The principal categories of our loan portfolio are discussed below.

Commercial Real Estate – Construction and Land Development. We originate residential construction and development loans for the construction of single-family residences, condominiums, townhouses and residential developments. Our commercial construction development loans are for the development of business properties, including multifamily, retail, office/warehouse and office buildings. Our land, lots and development loans are predominately for the purchase or refinance of unimproved land held for future residential development, improved residential lots held for speculative investment purposes and for the future construction of one-to-four family (speculative and pre-sold) or commercial real estate. Unfunded commitments totaled $111.9 million and $48.1 million at December 31, 2025 and 2024, respectively.

Land acquisition and development loans are included in the construction and land development loan portfolio and include completed residential lots where the borrower was not the developer, commercial improved and raw land for future development and residential development loans. Residential development loans are made to developers for the purpose of acquiring raw land for the subsequent development and sale of residential lots. Such loans typically finance land purchase and infrastructure development of properties (i.e., roads, utilities, etc.) into residential lots for sale. The end buyer for the majority of these lots are local, regional and national builders for the ultimate construction of residential units. The primary source of repayment is the sale of the lots or improved parcels of land, while personal guarantees may serve as secondary sources. These loans are generally secured by property in our primary market areas. In addition, these loans are secured by a first lien on the property, are generally limited to 65% of the lower of the acquisition price or the appraised value of the unimproved land and 75% of the improved land. Residential acquisition and development loans are generally paid out within three years unless there are multiple phases to the development.

The Bank provides funding to a number of builders for the construction of both speculative and pre-sold 1-4 family homes. Speculative construction loans are made to home builders and are termed “speculative” because the home builder does not have, at the time of loan origination, a signed contract with a home buyer who has a commitment for permanent financing with either us or another lender for the finished home. Loans to finance the construction of speculative single-family homes are generally offered to experienced builders with a proven track record of performance. These loans require interest-only payments during the construction phase. Unfunded commitments on these loans were $75.0 million and $67.6 million at December 31, 2025 and 2024, respectively.

Both adjustable and fixed rates are offered on commercial construction loans. Adjustable interest rate loans typically include a floor and ceiling interest rate and are indexed to The Wall Street Journal prime rate, plus or minus an interest rate margin. The initial construction period for owner occupied loans is generally limited to 12 to 24 months from the date of origination versus a construction and stabilization period for non-owner occupied loans of 24 to 36 months, both with amortization terms up to 25 years. Construction-to-permanent loans generally include a balloon maturity of five years or less; however, balloon maturities of greater than five years are allowed on a limited basis depending on factors such as property type, amortization term, lease terms, pricing or the availability of credit enhancements. Construction loan proceeds are disbursed based on the percent completion of budget as documented by periodic third-party inspections. The maximum loan-to-value limit applicable to these loans is generally 80% of the appraised post-construction value.

Commercial Real Estate Lending, including Multifamily. We originate commercial real estate loans, including loans secured by retail/wholesale facilities, hotels, industrial facilities, medical and professional buildings, office buildings, churches and multifamily residential properties located primarily in our market areas. The average outstanding loan balance was $1.0 million as of December 31, 2025. Specific to our non-owner occupied portfolio, the outstanding balance of loans secured by offices totaled $97.0 million and $93.7 million as of December 31, 2025 and 2024, respectively.

We offer both fixed- and adjustable-rate commercial real estate loans. Our commercial real estate mortgage loans generally include a balloon maturity of five years or less. Amortization terms are generally offered up to 25 years. Adjustable rate-based loans typically include a floor and ceiling interest rate and are indexed to The Wall Street Journal prime rate or the one-month term SOFR, plus or minus an interest rate margin and rates generally adjust daily. The maximum loan-to-value ratio for commercial real estate loans is generally up to 85% on purchases and refinances.

Commercial – Commercial and Industrial Loans. Over the last two years, we have intentionally focused on the growth of commercial and industrial loans to businesses located in our primary market areas. These loans are primarily originated as conventional loans to business borrowers, which include lines of credit, term loans and letters of credit. These loans are typically secured by collateral and are used for general business purposes, including working capital financing, equipment financing, capital investment and general investments. Loan terms typically vary from one to five years. The interest rates on such loans are either fixed rate or adjustable rate indexed to The Wall Street Journal prime rate plus a margin.

We originate commercial business loans made under the SBA 7(a) and USDA B&I programs to small businesses located throughout the country. Loans made by the Bank under the SBA 7(a) and USDA B&I programs generally are made to small businesses to provide working capital needs, to refinance existing debt or to provide funding for the purchase of businesses, real estate, machinery and equipment. These loans generally are secured by a combination of assets that may include receivables, inventory, furniture, fixtures, equipment, business real property, commercial real estate and sometimes additional collateral such as an assignment of life insurance and a lien on personal real estate owned by the guarantor(s). Typical maturities for this type of loan vary up to 25 years and can be 30 years in some circumstances. Under the SBA 7(a) and USDA B&I loan program the loans carry a government guaranty up to 90% of the loan in some cases. SBA 7(a) and USDA B&I loans will normally be adjustable rate loans based upon The Wall Street Journal prime lending rate. Under the loan programs, we will typically sell in the secondary market the guaranteed portion of these loans to generate noninterest income and retain the related unguaranteed portion of these loans.

Commercial – Equipment Finance. Our equipment finance line of business offers companies that are purchasing equipment for their business various products to help manage working capital needs, while offering flexible and customizable repayment terms. These products are primarily made up of commercial finance agreements and commercial loans for transportation, construction, healthcare and manufacturing equipment. The loans have terms ranging from 24 to 96 months, with an average of five years, and are secured by the financed equipment. Typical transaction sizes range from $10,000 to $4.0 million, with an average outstanding loan balance of $134,000.

34

Commercial – Municipal Leases. We offer ground and equipment lease financing to fire departments located primarily throughout North Carolina, South Carolina and, to a lesser extent, Virginia. Municipal leases are secured primarily by a ground lease in our name with a sublease to the borrower for a fire station or an equipment lease for fire trucks and firefighting equipment. We originate and underwrite all leases prior to funding. These leases are at a fixed interest rate and may have a term to maturity of up to 20 years. At December 31, 2025, $105.6 million, or 63.5%, of our municipal leases were secured by fire trucks, $54.3 million, or 32.6%, were secured by fire stations, with the remaining $6.5 million, or 3.9%, secured by miscellaneous firefighting equipment and land. At December 31, 2025, the average outstanding municipal lease balance was $436,000.

Residential Real Estate – Construction and Land Development. We originate construction-to-permanent loans to homeowners building a residence. In addition, we originate land/lot loans predominately for the purchase or refinance of an improved lot for the construction of a residence to be occupied by the borrower. All of our construction and land/lot loans were made on properties located within our market area. Unfunded loan commitments totaled $38.7 million and $29.8 million at December 31, 2025 and 2024, respectively.

Construction-to-permanent loans are made for the construction of a one-to-four family property which is intended to be occupied by the borrower as either a primary or secondary residence. Construction-to-permanent loans are originated to the homeowner rather than the homebuilder and are structured to be converted to a first lien fixed- or adjustable-rate permanent loan at the completion of the construction phase. During the construction phase, which typically lasts six to 12 months, we make periodic inspections of the construction site and loan proceeds are disbursed directly to the contractors or borrowers as construction progresses. Typically, disbursements are made in monthly draws during the construction period. Loan proceeds are disbursed based on a percentage of completion. Construction-to-permanent loans require payment of interest only during the construction phase. Construction loans may be originated up to 90% of the cost or of the appraised value upon completion, whichever is less; however, we generally do not originate conforming construction loans which exceed an 80% loan-to-value without securing adequate private mortgage insurance.

Included in our construction and land/lot loan portfolio are land/lot loans, which are typically loans secured by developed lots in residential subdivisions located in our market areas. We originate these loans to individuals intending to construct their primary or secondary residence on the lot within one year of the origination date. This portfolio may also include loans for the purchase or refinance of unimproved land that is generally less than or equal to five acres and for which the purpose is to commence the improvement of the land and construction of an owner occupied primary or secondary residence within one year of the origination date.

Land/lot loans are typically originated in an amount up to 70% of the lower of the purchase price or appraisal, are secured by a first lien on the property, for up to a 20-year term, require payments of interest only and are structured with an adjustable interest rate on terms similar to our one-to-four family residential mortgage loans.

Residential Real Estate – One-to-Four Family. We originate loans secured by first mortgages on one-to-four family residences typically for the purchase or refinance of owner occupied primary or secondary residences located primarily in our market areas. We originate both fixed-rate loans and adjustable-rate loans. We generally originate fixed rate mortgage loans with terms greater than 10 years for sale to various secondary market investors, currently on a servicing retained basis. We also originate adjustable-rate mortgage, or ARM, loans which have interest rates that adjust to the average 30-day yield on the SOFR plus a margin. Most of our ARM loans are hybrid loans, which after an initial fixed rate period of one, five, seven or 10 years will convert to an annual adjustable interest rate for the remaining term of the loan. Our ARM loans have terms up to 30 years.

Residential Real Estate – Home Equity Lines of Credit. Our HELOCs consist primarily of adjustable-rate lines of credit. The lines of credit may be originated in amounts, together with the amount of the existing first mortgage, typically up to 85% of the value of the property securing the loan (less any prior mortgage loans) with an adjustable-rate based on The Wall Street Journal prime rate plus a margin. HELOCs generally have up to a 10-year draw period and amounts may be reborrowed after payment at any time during the draw period. Once the draw period has lapsed, the payment is amortized over a 15-year period based on the loan balance at that time. Unfunded commitments on these lines of credit, including loans held for sale, totaled $491.2 million and $436.0 million at December 31, 2025 and 2024, respectively.

Consumer Lending. Our consumer loans consist of loans secured by deposit accounts or personal property such as automobiles, boats and motorcycles, as well as unsecured consumer debt. This portfolio includes indirect auto finance installment contracts on new and used vehicles sourced through our relationships with automobile dealerships, both manufacturer franchised dealerships and independent dealerships. As a result of our decision to cease indirect auto finance loan originations as of March 31, 2024, the outstanding balance of the indirect auto portfolio declined to $38.3 million at December 31, 2025, a $30.8 million, or 44.5%, decrease compared to the prior year end.

35

The following table details the contractual maturity ranges of our loan portfolio without factoring in scheduled payments or potential prepayments. Loan balances do not include undisbursed loan proceeds, unearned discounts, unearned income or the ACL. In addition, we have disclosed those loans with predetermined (fixed) and floating interest rates at December 31, 2025.

(Dollars in thousands)

1 Year or Less

After 1 but Within 5 Years

After 5 but Within 15 Years

Over 15 Years

Total

Commercial real estate loans

Construction and land development

$

141,728 

$

109,738 

$

25,562 

$

— 

$

277,028 

Commercial real estate - owner occupied

86,696 

288,061 

147,296 

39,996 

562,049 

Commercial real estate - non-owner occupied

159,113 

552,562 

95,177 

25,650 

832,502 

Multifamily

15,989 

71,996 

20,938 

1,989 

110,912 

Total commercial real estate loans

403,526 

1,022,357 

288,973 

67,635 

1,782,491 

Commercial loans

Commercial and industrial

105,493 

202,213 

69,848 

1,132 

378,686 

Equipment finance

14,241 

257,503 

39,612 

— 

311,356 

Municipal leases

2,143 

31,860 

83,990 

48,403 

166,396 

Total commercial loans

121,877 

491,576 

193,450 

49,535 

856,438 

Residential real estate loans

Construction and land development

26 

134 

349 

45,108 

45,617 

One-to-four family

40,466 

92,728 

60,075 

440,242 

633,511 

HELOCs

716 

2,291 

6,744 

207,559 

217,310 

Total residential real estate loans

41,208 

95,153 

67,168 

692,909 

896,438 

Consumer loans

1,688 

39,856 

952 

291 

42,787 

Loans, net of deferred loan fees and costs

$

568,299 

$

1,648,942 

$

550,543 

$

810,370 

$

3,578,154 

Commercial real estate loans

Fixed rate loans

$

225,512 

$

566,621 

$

39,542 

$

4,437 

$

836,112 

Adjustable rate loans

178,014 

455,736 

249,431 

63,198 

946,379 

Commercial loans

Fixed rate loans

22,275 

386,949 

148,275 

48,822 

606,321 

Adjustable rate loans

99,602 

104,627 

45,175 

713 

250,117 

Residential real estate loans

Fixed rate loans

28,720 

76,862 

35,579 

134,151 

275,312 

Adjustable rate loans

12,488 

18,291 

31,589 

558,758 

621,126 

Consumer loans

Fixed rate loans

1,688 

39,856 

952 

291 

42,787 

Adjustable rate loans

— 

— 

— 

— 

— 

Total fixed rate loans

$

278,195 

$

1,070,288 

$

224,348 

$

187,701 

$

1,760,532 

Total adjustable rate loans

$

290,104 

$

578,654 

$

326,195 

$

622,669 

$

1,817,622 

36

Nonperforming Assets. Nonperforming assets include nonaccrual loans and repossessed assets. Loans are placed on nonaccrual status when the collection of principal and/or interest becomes doubtful or other factors involving the loan warrant placing the loan on nonaccrual status. Total nonperforming assets were $44.4 million, or 0.98% of total assets, at December 31, 2025, compared to $28.8 milion, or 0.63% of total assets, at December 31, 2024. The following table sets forth the composition of our nonperforming assets among our different asset categories.

(Dollars in thousands)

December 31, 2025

December 31, 2024

Nonaccruing loans

Commercial real estate

Construction and land development

$

381 

$

— 

Commercial real estate - owner occupied

10,467 

8,471 

Commercial real estate - non-owner occupied

6,566 

3,551 

Multifamily

— 

47 

Total commercial real estate

17,414 

12,069 

Commercial

Commercial and industrial

9,786 

3,487 

Equipment finance

6,690 

4,666 

Municipal leases

— 

— 

Total commercial

16,476 

8,153 

Residential real estate

Construction and land development

— 

132 

One-to-four family

2,961 

2,916 

HELOCs

6,523 

3,990 

Total residential real estate

9,484 

7,038 

Consumer

402 

407 

Total nonaccruing loans

$

43,776 

$

27,667 

Total repossessed assets

657 

1,103 

Total nonperforming assets

$

44,433 

$

28,770 

Total nonperforming assets as a percentage of total assets

0.98 

%

0.63 

%

Total SBA loans included in nonaccrual loans

$

20,647 

$

6,619 

Portion of SBA loans fully guaranteed by the SBA

14,885 

3,462 

Total nonaccruing loans, excluding the balance fully guaranteed by the SBA

28,891 

24,205 

Total repossessed assets

657 

1,103 

Total nonperforming assets, excluding the balance fully guaranteed by the SBA

$

29,548 

$

25,308 

Total nonperforming assets, excluding the balance fully guaranteed by the SBA, as a percentage of total assets

0.65 

%

0.55 

%

SBA loans made up the largest portion of nonperforming assets at $20.6 million and $6.6 million at December 31, 2025 and 2024, respectively. The year-over-year increase of $14.0 million was primarily the result of a management decision to accelerate the repurchase of the sold portion of nonperforming SBA loans (fully guaranteed portion) to simplify the workout process. Of the remaining nonperforming assets, equipment finance loans (concentrated in the transportation sector) made up $6.6 million and $4.6 million, respectively, and HELOCs totaled $6.5 million and $4.0 million, respectively, both at these same dates.

The ratio of nonperforming loans to total loans was 1.22% at December 31, 2025 compared to 0.76% at December 31, 2024. When adjusted for the fully guaranteed portion of SBA loans, the ratio of nonperforming loans to total loans was 0.81% at December 31, 2025 compared to 0.67% at December 31, 2024.

Allowance for Credit Losses on Loans. The ACL on loans held for investment is a valuation account that reflects our estimation of the credit losses that will result from the inability of our borrowers to make required loan payments. The ACL is maintained through provisions for credit losses that are charged to earnings in the period they are established. We charge losses on loans against the ACL when we believe the collection of loan principal is unlikely. Recoveries on loans previously charged off are added back to the ACL. See "Note 1 – Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for discussion of our ACL methodology on loans.

37

The following table summarizes the distribution of the ACL by loan category at the dates indicated.

December 31, 2025

December 31, 2024

(Dollars in thousands)

Allocated Allowance

% of Loan Portfolio

ACL to Loans

Allocated Allowance

% of Loan Portfolio

ACL to Loans

Commercial real estate

Construction and land development

$

3,948 

8 

%

0.11 

%

$

3,541 

8 

%

0.10 

%

Commercial real estate - owner occupied

5,404 

16 

0.15 

5,465 

15 

0.15 

Commercial real estate - non-owner occupied

8,908 

23 

0.25 

9,074 

24 

0.25 

Multifamily

1,038 

3 

0.03 

1,204 

3 

0.03 

Total commercial real estate

19,298 

50 

0.54 

19,284 

50 

0.53 

Commercial

Commercial and industrial

4,894 

10 

0.14 

4,837 

9 

0.13 

Equipment finance

8,110 

9 

0.22 

10,090 

11 

0.28 

Municipal leases

327 

5 

0.01 

340 

5 

0.01 

Total commercial

13,331 

24 

0.37 

15,267 

25 

0.42 

Residential real estate

Construction and land development

307 

1 

0.01 

465 

1 

0.01 

One-to-four family

6,342 

18 

0.18 

7,441 

17 

0.20 

HELOCs

1,843 

6 

0.05 

1,758 

5 

0.05 

Total residential real estate

8,492 

25 

0.24 

9,664 

23 

0.26 

Consumer

358 

1 

0.01 

1,070 

2 

0.03 

Total loans

$

41,479 

100 

%

1.16 

%

$

45,285 

100 

%

1.24 

%

December 31, 2025

December 31, 2024

(Dollars in thousands)

Allocated Allowance

ACL to Loans

Allocated Allowance

ACL to Loans

ACL composition

Quantitative allocation

$

22,832 

0.64 

%

$

22,330 

0.61 

%

Qualitative allocation

17,359 

0.50 

21,880 

0.60 

Individual allocation

1,288 

0.02 

1,075 

0.03 

Total ACL

$

41,479 

1.16 

%

$

45,285 

1.24 

%

At or For the Year Ended December 31,

2025

2024

Asset quality ratios

ACL to nonaccruing loans(1)

94.75 

%

163.68 

%

Net charge-offs to average loans

0.24 

0.28 

(1)    At December 31, 2025, $10.1 million, or 23.2%, of nonaccruing loans were current on their loan payments. At December 31, 2024, $13.0 million, or 47.1%, of nonaccruing loans were current on their loan payments.

The ACL on loans decreased $3.8 million, or 8.4%, during the year ended December 31, 2025. See further discussion of the drivers of the change in the "Comparison of Results of Operations for the Years Ended December 31, 2025 and December 31, 2024 – Provision for Credit Losses" section above.

In an effort to assist customers in their post-Hurricane Helene recovery and clean-up efforts, in the fourth quarter of 2024 we granted payment deferrals of up to six months to provide short-term relief to impacted customers, the outstanding balance of which was $136.0 million at December 31, 2024. In the same year we established a $2.2 million qualitative allocation to address the potential impact of the Hurricane upon our loan portfolio. As of December 31, 2025, the outstanding balance of loans where payment deferrals had been granted declined to $318,000, while $165,000 in charge-offs were recognized which were directly related to Hurricane Helene. As any residual impact of the Hurricane was believed to have now been reflected elsewhere within the ACL, in 2025 we released the $2.2 million qualitative allocation previously established.

Our individually evaluated loans are comprised of loans meeting certain thresholds including those on nonaccrual status. Individually evaluated loans may be evaluated for ACL purposes using either the cash flow or the collateral valuation method. As of December 31, 2025, there were $11.5 million of loans individually evaluated compared to $13.8 million at December 31, 2024.

38

The following table summarizes net charge-offs (recoveries) to average loans outstanding by loan category for the years indicated.

Year Ended December 31, 2025

Year Ended December 31, 2024

(Dollars in thousands)

Net Charge-Offs (Recoveries)

Average Loans Outstanding

Net Charge-Off (Recovery) Ratio

Net Charge-Offs (Recoveries)

Average Loans Outstanding

Net Charge-Off (Recovery) Ratio

Commercial real estate

$

190 

$

1,890,942 

0.01 

%

$

343 

$

1,910,402 

0.02 

%

Commercial

8,567 

933,373 

0.92 

9,667 

919,564 

1.05 

Residential real estate

106 

943,292 

0.01 

(119)

921,207 

(0.01)

Consumer

408 

55,712 

0.73 

925 

93,811 

0.99 

Total

$

9,271 

$

3,823,319 

0.24 

%

$

10,816 

$

3,844,984 

0.28 

%

Liabilities. Total liabilities were $3.9 billion at December 31, 2025, compared to $4.0 billion at December 31, 2024, a decrease of $98.7 million, or 2.4%, the components of which are discussed below.

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

(Dollars in thousands)

December 31, 2025

December 31, 2024

$ Change

% Change

Core deposits

Noninterest-bearing deposits

$

707,748 

$

680,926 

$

26,822 

4 

%

NOW accounts

546,387 

575,238 

(28,851)

(5)

Money market accounts

1,374,635 

1,341,995 

32,640 

2 

Savings accounts

171,455 

181,317 

(9,862)

(5)

Total core deposits

2,800,225 

2,779,476 

20,749 

1 

Certificates of deposit

909,772 

999,727 

(89,955)

(9)

Total

$

3,709,997 

$

3,779,203 

$

(69,206)

(2)

%

The following bullet points provide further information regarding the composition of our deposit portfolio as of December 31, 2025:

•The balance of uninsured deposits was $971.5 million, or 26.2% of total deposits, which included $262.0 million of collateralized deposits to municipalities.

•The balance of brokered deposits was $271.3 million, or 7.3% of total deposits.

•Commercial and consumer depositors represented 56% and 44% of total deposits, respectively.

•The average balance of our deposit accounts was $36,000.

•Our largest 25 depositors made up $534.8 million, or 14.4% of total deposits.

Specific to time deposits, we held approximately $198.5 million in uninsured CDs as of December 31, 2025. The uninsured amount is an estimate consistent with the methodology used for the Company's regulatory reporting disclosures.

The following table indicates the amount of our CDs, both within and in excess of the $250,000 FDIC insurance limit, by time remaining until maturity as of December 31, 2025.

(Dollars in thousands)

3 Months

or Less

Over 3 to 6

Months

Over 6 to 12 Months

Over

12 Months

Total

CDs less than $250,000

$

322,923 

$

250,026 

$

116,819 

$

21,531 

$

711,299 

CDs of $250,000 or more

112,942 

52,354 

27,090 

6,087 

198,473 

Total certificates of deposit

$

435,865 

$

302,380 

$

143,909 

$

27,618 

$

909,772 

Borrowings. Although deposits are our primary source of funds, we may utilize borrowings to manage interest rate risk or as a cost-effective source of funds. Our borrowings typically consist of advances from the FHLB of Atlanta and FRB. We may obtain advances from the FHLB of Atlanta upon the security of certain of our commercial and residential real estate loans and/or securities as well as obtain advances from the FRB upon the security of certain of our commercial and consumer loans. These advances may be made pursuant to several different credit programs, each of which has its own interest rate, range of maturities and call features.

In addition to borrowings deemed necessary to address funding needs, as a result of our merger with Quantum, we assumed $11.3 million of junior subordinated debentures, which carried a purchase accounting discount of $1.1 million as of December 31, 2025. See "Note 10 – Borrowings" of the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for discussion of the origin and terms of the debt.

39

The following tables set forth information regarding our borrowings at the end of and during the periods indicated.

Year Ended December 31,

(Dollars in thousands)

2025

2024

Average balances

Junior subordinated debentures

$

10,167 

$

10,067 

FHLB advances

903 

24,784 

FRB advances

20,145 

25,635 

Revolving lines of credit

— 

10,785 

Weighted average interest rate

Junior subordinated debentures

8.04 

%

9.22 

%

FHLB advances

4.57 

5.55 

FRB advances

4.66 

5.41 

Revolving lines of credit

— 

9.12 

(Dollars in thousands)

December 31, 2025

December 31, 2024

Balance outstanding at end of period

Junior subordinated debentures

$

10,220 

$

10,120 

FHLB advances

— 

— 

FRB advances

165,000 

188,000 

Revolving lines of credit

— 

— 

Weighted average interest rate

Junior subordinated debentures

5.85 

%

6.51 

%

FHLB advances

— 

— 

FRB advances

3.75 

4.50 

Revolving lines of credit

— 

— 

All qualifying one-to-four family loans, HELOCs, commercial real estate loans, multifamily loans and FHLB of Atlanta stock are pledged as collateral to secure outstanding FHLB advances while commercial construction loans, indirect auto loans, and equipment and municipal leases are pledged as collateral to secure outstanding FRB advances. At December 31, 2025 and 2024, the Company had the ability to borrow $355.3 million and $315.5 million, respectively, through FHLB advances and $66.3 million and $106.6 million, respectively, through the unused portion of a line of credit with the FRB.

At both December 31, 2025 and 2024, the Company maintained revolving lines of credit with four unaffiliated banks, the unused portion of which totaled $165.0 million.

Capital Resources

Stockholders' equity increased $48.9 million, or 8.9%, to $600.7 million at December 31, 2025 as compared to December 31, 2024. Activity within stockholders' equity included $64.4 million in net income and $5.6 million in share-based compensation and stock option exercises, partially offset by $8.4 million in cash dividends declared and $13.6 million in stock repurchases. In addition, accumulated other comprehensive income improved by $2.3 million due to a reduction in the unrealized loss on available for sale securities due to lower market interest rates.

As of December 31, 2025, the Bank was considered "well capitalized" in accordance with its regulatory capital guidelines and exceeded all regulatory capital requirements. See “Business – How We are Regulated” included in Item 1 and “Note 18 – Regulatory Capital Matters” of the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional details on our capital requirements.

Liquidity Management

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

In addition to these primary sources of funds, management has several secondary sources available to meet potential funding requirements as outlined in the "Comparison of Financial Condition at December 31, 2025 and December 31, 2024 – Borrowings" section above. Additionally, we classify our securities portfolio as available for sale, providing an additional source of liquidity. Management believes that our securities portfolio is of high quality, of short duration, and the securities would therefore be readily marketable. In addition, we have historically sold fixed-rate mortgage loans in the secondary market to reduce interest rate risk and to create still another source of liquidity. From time to time we also utilize brokered time deposits to supplement our other sources of funds. Brokered time deposits are obtained by utilizing an outside broker that is paid a fee. This funding requires advance notification to structure the type of deposit desired by us. Brokered deposits can vary in term from one month to several years and have the benefit of being a source of longer-term funding. We also utilize brokered deposits to help manage interest rate risk by extending the term to repricing of our liabilities, enhance our liquidity and fund asset growth. Brokered deposits are typically from outside our primary market areas, and our brokered deposit levels may vary from time to time depending on competitive interest rate conditions and other factors. At December 31, 2025, brokered deposits totaled $271.3 million, or 7.3% of total deposits.

Liquidity management is both a daily and long-term function of business management. Excess liquidity is generally invested in short-term investments, such as overnight deposits and federal funds. On a longer term basis, we maintain a strategy of investing in various lending

40

products and debt securities, including MBS. On a stand-alone level we are a separate legal entity from the Bank and must provide for our own liquidity and pay our own operating expenses. Our primary source of funds consists of dividends or capital distributions from the Bank, although there are regulatory restrictions on the ability of the Bank to pay dividends. At December 31, 2025, we (on an unconsolidated basis) had liquid assets of $8.3 million.

At the Bank level, we use our sources of funds primarily to meet our ongoing commitments, pay maturing deposits and fund withdrawals and to fund loan commitments. At December 31, 2025, the total approved loan commitments and unused lines of credit outstanding amounted to $347.6 million and $831.3 million, respectively, as compared to $230.5 million and $712.3 million as of December 31, 2024. Certificates of deposit scheduled to mature in one year or less at December 31, 2025 totaled $882.2 million. It is management's policy to manage deposit rates that are competitive with other local financial institutions. Based on this strategy, we believe that a majority of maturing deposits will be retained.

Off-Balance Sheet Activities

In the normal course of operations, we engage in a variety of financial transactions that are not recorded in our financial statements, mainly to manage customers' requests for funding. These transactions primarily take the form of loan commitments and lines of credit and involve varying degrees of off-balance sheet credit, interest rate and liquidity risks. For further information, see “Note 17 – Commitments and Contingencies” of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

Asset/Liability Management and Interest Rate Risk

Our Risk When Interest Rates Change. The rates of interest we earn on assets and pay on liabilities generally are established contractually for a period of time. Market interest rates change over time. Our loans generally have longer maturities than our deposits. Accordingly, our results of operations, like those of other financial institutions, are impacted by changes in interest rates and the interest rate sensitivity of our assets and liabilities. The risk associated with changes in interest rates and our ability to adapt to these changes is known as interest rate risk and is our most significant market risk.

How We Measure Our Risk of Interest Rate Changes. As part of our process to manage our exposure to changes in interest rates and comply with applicable regulations, we monitor our interest rate risk. In monitoring interest rate risk we continually analyze and manage assets and liabilities based on market conditions, their payment streams and interest rates, the timing of their maturities, their sensitivity to actual or potential changes in market interest rates and interest rate sensitivities of our non-maturity deposits with respect to interest rates paid and the level of balances. The Board of Directors sets the asset and liability policy of HomeTrust Bank, which is implemented by management and an asset/liability committee whose members include certain members of senior management.

The purpose of this committee is to communicate, coordinate and control asset/liability management consistent with our business plan and Board approved policies. The committee establishes and monitors the volume and mix of assets and funding sources taking into account relative costs and spreads, interest rate sensitivity and liquidity needs. The objectives are to manage assets and funding sources to produce results that are consistent with liquidity, capital adequacy, growth, risk and profitability goals.

The committee generally meets on a quarterly basis to review, among other things, economic conditions and interest rate outlook, current and projected liquidity needs and capital position, anticipated changes in the volume and mix of assets and liabilities and interest rate risk exposure limits versus current projections pursuant to net present value of portfolio equity analysis and income simulations. The committee recommends strategy changes based on this review. The committee is responsible for reviewing and reporting on the effects of the policy implementations and strategies to the Asset/Liability Committee of the Board of Directors at least quarterly.

Among the techniques we have used at various times to manage interest rate risk are: (i) increasing our portfolio of hybrid and adjustable-rate one-to-four family residential loans and commercial loans; (ii) maintaining a strong capital position, which provides for a favorable level of interest-earning assets relative to interest-bearing liabilities; and (iii) emphasizing less interest rate sensitive and lower-costing “core deposits.” We also maintain a portfolio of short-term or adjustable-rate assets and use fixed-rate FHLB advances and brokered deposits to extend the term to repricing of our liabilities.

We consider the relatively short duration of our loans and deposits in our overall asset/liability management process. As short-term rates increase, we have assets and liabilities that increase with the market. This is reflected in the change in our PVE when rates increase (see the table below). PVE is defined as the net present value of our existing assets and liabilities. In addition, we have historically demonstrated an ability to maintain retail deposits through various interest rate cycles. If local retail deposit rates increase dramatically, we also have access to wholesale funding through our lines of credit with the FHLB and FRB and the brokered deposit market to replace retail deposits, as needed.

Depending on the level of general interest rates, the relationship between long- and short-term interest rates, market conditions and competitive factors, the committee may in the future determine to increase our interest rate risk position somewhat in order to maintain or increase our net interest margin. In particular, during certain periods of stable or declining interest rates, we believe that the increased net interest income resulting from a mismatch in the maturity of our assets and liabilities portfolios may provide high enough returns to justify increased exposure to sudden and unexpected increases in interest rates. As a result of this philosophy, our results of operations and the economic value of our equity will remain vulnerable to increases in interest rates and to declines due to differences between long- and short-term interest rates.

The committee regularly reviews interest rate risk by forecasting the impact of alternative interest rate environments on net interest income and our PVE. The committee also evaluates these impacts against the potential changes in net interest income and market value of our portfolio equity that are monitored by the Board of Directors of HomeTrust Bank generally on a quarterly basis.

Our asset/liability management strategy sets limits on the change in PVE given certain changes in interest rates. The table presented here, as of December 31, 2025, is forward-looking information about our sensitivity to changes in interest rates. The table incorporates data from an independent service, as it relates to maturity repricing and repayment/withdrawal of interest-earning assets and interest-bearing liabilities. Interest rate risk is measured by changes in PVE for instantaneous parallel shifts in the yield curve up and down 400 basis points. Overall, our interest rate sensitivity is very low with minimal changes to our PVE with rate increases or smaller rate decreases. Loans with interest rate

41

floors assist in maintaining our net interest income when rates decrease. If larger rate decreases occur, our PVE decreases more as lower rate deposit accounts will not reprice lower than zero, causing our net interest margin to shrink. As of December 31, 2025, our loans with interest rate floors totaled approximately $744.9 million, or 20.8% of our total loan portfolio, and had a weighted average floor rate of 5.03%, of which $155.1 million were at their floor rate.

December 31, 2025

Change in Interest

Rates in Basis Points

Present Value Equity (Dollars in Thousands)

Amount

$ Change

% Change

PVE Ratio

+ 400

$

1,161,148 

$

99,426 

9 

%

27 

%

+ 300

1,146,589 

84,867 

8 

26 

+ 200

1,126,005 

64,283 

6 

25 

+ 100

1,098,347 

36,625 

3 

25 

Base

1,061,722 

— 

— 

23 

- 100

1,013,695 

(48,027)

(5)

22 

- 200

950,660 

(111,062)

(10)

20 

- 300

853,786 

(207,936)

(20)

18 

- 400

758,572 

(303,150)

(29)

16 

In evaluating our exposure to interest rate movements, certain shortcomings inherent in the method of analysis presented in the foregoing table must be considered. For example, although certain assets and liabilities may have similar maturities or repricing periods, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in interest rates. Additionally, certain assets, such as adjustable rate mortgages, have features which restrict changes in interest rates on a short-term basis and over the life of the asset. Further, in the event of a significant change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed above. Finally, the ability of many borrowers to service their debt may decrease in the event of an interest rate increase. We consider all of these factors in monitoring our exposure to interest rate risk.

The Board of Directors and management of HomeTrust Bank believe that certain factors afford HomeTrust Bank the ability to operate successfully despite its exposure to interest rate risk. HomeTrust Bank may manage its interest rate risk by originating and retaining adjustable rate loans in its portfolio, by borrowing from the FHLB to match the duration of our funding to the duration of originated fixed rate one-to-four family and commercial loans held in portfolio and by selling on an ongoing basis certain currently originated longer term fixed rate one-to-four family real estate loans.