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Jun 30, 2022
Hometrust Q4 2022 Earnings Report
HomeTrust's financial performance improved with increased net income and EPS, driven by higher net interest income and strategic partnerships.
Key Takeaways
HomeTrust Bancshares reported a net income of $6.0 million, a significant improvement from the net loss of $7.4 million in the same quarter of the previous year. EPS also saw a positive shift, reaching $0.39 compared to a loss per share of ($0.46). The company's growth was fueled by diversified loan growth and a strategic focus on increasing net interest margin.
Net income increased to $6.0 million, a substantial recovery from the previous year's net loss of $7.4 million.
Earnings per share (EPS) rose to $0.39, contrasting with a loss per share of ($0.46) in the prior year.
Net interest income grew to $28.9 million, up from $26.0 million, driven by rising interest rates and strategic asset management.
The company repurchased 387,196 shares of its common stock at an average price of $28.49 per share, reflecting confidence in its valuation.
Hometrust
Hometrust
Forward Guidance
HomeTrust anticipates continued growth in net interest margin due to asset sensitivity and expected rate increases by the Federal Reserve. The company also plans to prudently grow fintech portfolios and explore relationships with other fintechs. The acquisition of Quantum Capital Corporation is expected to expand the company's franchise and enhance profitability.
Positive Outlook
- Anticipated growth in net interest margin due to asset sensitivity.
- Further rate increases expected by the Federal Reserve should drive increases in net interest margin.
- Partnership with a fintech contributing to growth in the commercial and industrial loan segment.
- Opportunity to expand origination sources and enhance understanding of credit modeling approaches.
- Acquisition of Quantum Capital Corporation expected to expand franchise and enhance profitability.
Challenges Ahead
- Decline in the volume of residential mortgage sales due to upward movement in interest rates.
- Increased provision for credit losses due to fintech portfolios' riskier credit profile.
- Economic forecast projecting a worsening of the national unemployment rate.
- Provision to fully reserve a single individually evaluated commercial loan relationship where the borrower's financial performance deteriorated.
- Decrease in gain on sale of loans held for sale due to decrease in volume of residential mortgage loans and SBA commercial loans sold during the period as a result of rising interest rates.