Third quarter of the year ending December 31, 2026
Filed Oct 21, 2026Third-quarter net income was $18.0 million, or $1.11 per diluted share, as net interest margin expanded to 4.46% and the Company accelerated share repurchases.
Sequential earnings increased to $18.0 million from $15.6 million, supported by higher net interest income, a lower effective tax rate from purchased renewable energy income tax credits, and a wider net interest margin. The result was tempered by a rise in nonperforming assets, merger-related expense, and higher classified assets.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net income, three months ended September 30, 2026GAAP | $17.96M | 14.9% | – |
| Diluted earnings per common share, three months ended September 30, 2026GAAP | $1.11 | – | – |
| Basic earnings per common share, three months ended September 30, 2026GAAP | $1.11 | – | – |
| Net interest income, three months ended September 30, 2026GAAP | $46.46M | $1.2 million increase | – |
| Total interest and dividend income, three months ended September 30, 2026GAAP | $62.89M | 2.8% | – |
| Total interest expense, three months ended September 30, 2026GAAP | $16.43M | 3.4% | – |
| Provision for credit losses, three months ended September 30, 2026GAAP | $805K | (13) % | – |
| Net interest income after provision for credit losses, three months ended September 30, 2026GAAP | $45.66M | – | – |
| Total noninterest income, three months ended September 30, 2026GAAP | $9.07M | (2) % | – |
| Total noninterest expense, three months ended September 30, 2026GAAP | $34.14M | 0.5% | – |
| Income before income taxes, three months ended September 30, 2026GAAP | $20.59M | – | – |
| Income tax expense, three months ended September 30, 2026GAAP | $2.63M | – | – |
| Effective tax rate, three months ended September 30, 2026GAAP | 12.7% | – | – |
| Return on assets, three months ended September 30, 2026GAAP | 1.65 % | – | – |
| Return on equity, three months ended September 30, 2026GAAP | 12.06 | – | – |
| Net interest margin, three months ended September 30, 2026GAAP | 4.46 % | – | – |
| Efficiency ratio, three months ended September 30, 2026non-GAAP | 61.47 % | – | – |
| Efficiency ratio – adjusted, three months ended September 30, 2026non-GAAP | 59.40 % | – | – |
| Net income, nine months ended September 30, 2026GAAP | $50.37M | – | 4.4% |
| Diluted earnings per common share, nine months ended September 30, 2026GAAP | $3.04 | – | – |
| Basic earnings per common share, nine months ended September 30, 2026GAAP | $3.06 | – | – |
| Net interest income, nine months ended September 30, 2026GAAP | $136.1M | – | $3.5 million increase |
| Provision for credit losses, nine months ended September 30, 2026GAAP | $2.10M | – | (57) % |
| Total noninterest income, nine months ended September 30, 2026GAAP | $28.35M | – | 5.2% |
| Total noninterest expense, nine months ended September 30, 2026GAAP | $101.1M | – | 8.1% |
| Income tax expense, nine months ended September 30, 2026GAAP | $10.86M | – | $2.0 million decline |
| Effective tax rate, nine months ended September 30, 2026GAAP | 17.7% | – | – |
| Return on assets, nine months ended September 30, 2026GAAP | 1.55 % | – | – |
| Return on equity, nine months ended September 30, 2026GAAP | 11.28 | – | – |
| Net interest margin, nine months ended September 30, 2026GAAP | 4.39 % | – | – |
| Total assets, September 30, 2026GAAP | $4.42B | – | decreased by $123.9 million |
| Loans, net of deferred loan fees and costs, September 30, 2026GAAP | $3.63B | – | $50.2 million in loan growth |
| Deposits, September 30, 2026GAAP | $3.58B | – | decline of $126.4 million |
| Total liabilities, September 30, 2026GAAP | $3.85B | – | decreased by $93.3 million |
| Stockholders' equity, September 30, 2026GAAP | $570.1M | – | decreased $30.6 million |
| Allowance for credit losses – loans, September 30, 2026GAAP | $39.50M | – | – |
| Allowance for credit losses to total loans, September 30, 2026other | 1.09 | – | – |
| Nonperforming assets to total assets, September 30, 2026other | 1.59 % | – | – |
| Total classified assets to total assets, September 30, 2026other | 2.08 | – | – |
| Tangible book value per share, September 30, 2026non-GAAP | $33.70 | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Quarterly cash dividends continued at $0.15 per share totaling $2.4 million for the three months ended September 30, 2026.
- 1,610,743 shares of Company common stock were repurchased at an average price of $46.15 for the nine months ended September 30, 2026.
- 923,897 shares of Company common stock were repurchased during the current quarter at an average price of $48.03.
- Stock repurchases totaled $75.0 million for the nine months ended September 30, 2026.
- The Board declared a quarterly cash dividend of $0.15 per common share payable on November 25, 2026 to shareholders of record as of the close of business on November 12, 2026.
- The Company announced the completion of the stock repurchase program initiated in August 2026 and authorized the repurchase of an additional 5% of its outstanding shares.
What drove it
- Net income increased sequentially due to a $1.2 million increase in net interest income and a $1.4 million decrease in income tax expense.
- Total interest and dividend income increased $1.7 million, or 2.8%, sequentially, primarily from a $1.0 million increase in accretion income and the impact of an additional day in the current quarter.
- Deposit interest expense increased $729,000, or 4.7%, sequentially as both average balances and rates paid on money market and certificate accounts increased.
- The $1.9 million benefit from utilization of purchased renewable energy income tax credits reduced the quarterly effective tax rate to 12.7%.
- Nine-month net interest income increased $3.5 million, and the provision for credit losses declined $2.8 million versus the prior-year period.
- Nine-month noninterest income increased $1.4 million, including a $1.5 million increase in gain on sale of premises and equipment and a $378,000 increase in gain on sale of loans held for sale.
- Nine-month salaries and employee benefits increased $5.8 million, primarily because of new hires and increases in pay, incentive compensation and medical premiums.
Concerns
- Total nonperforming assets increased to $70,397 at September 30, 2026 from $54,651 at June 30, 2026.
- One $18.0 million commercial loan relationship was newly classified as nonperforming during the quarter ended September 30, 2026, although the Company stated that no loss is anticipated.
- Classified assets increased by $21.4 million, or 30.2%, to $92.1 million, or 2.08% of total assets, as of September 30, 2026 compared with June 30, 2026.
- Net charge-offs were concentrated within the equipment finance portfolio, primarily related to over-the-road truck loans.
- Merger-related expense was $904 for the three months ended September 30, 2026.
- The proposed Blue Ridge transaction remains subject to regulatory and shareholder approvals and customary closing conditions.
What to watch
- The Company expects the Blue Ridge transaction to close early in the first quarter of 2027, subject to all regulatory and shareholder approvals and customary closing conditions.
- At closing, each Blue Ridge common share is expected to be converted into the right to receive 0.086 of a share of Company common stock, plus cash in lieu of any fractional shares.
- Blue Ridge shareholders are expected to own approximately 35% of the Company following completion of the transaction.
- Future net interest margin performance, following a 4.46% third-quarter margin and increases in money market and certificate-account costs.
- Asset-quality trends in owner-occupied commercial real estate, equipment finance, HELOCs, 1-4 family residential real estate, commercial and industrial loans, and SBA loans.
- The impact of the additional authorization to repurchase 5% of outstanding shares on capital and common shares outstanding.
Balance sheet and cash flow
- Cash and cash equivalents were $246,466 at September 30, 2026, compared with $324,692 at December 31, 2025.
- Borrowings were $214,000 at September 30, 2026, compared with $165,000 at December 31, 2025.
- The use of existing liquidity and proceeds from loan sales funded $50.2 million in loan growth, offset a $126.4 million decline in deposits and funded stock repurchases.
- Core deposits were $2,867,906 at September 30, 2026, compared with $2,800,225 at December 31, 2025.
- Certificates of deposit were $715,703 at September 30, 2026, compared with $909,772 at December 31, 2025.
- The Bank was considered "well capitalized" as of September 30, 2026 and exceeded all regulatory capital requirements.
Analysis
HomeTrust reported third-quarter net income of $18.0 million and diluted EPS of $1.11, compared with $15.6 million and $0.94 in the preceding quarter. Net interest income increased to $46.463 million from $45.294 million, while net interest margin expanded to 4.46% from 4.41%. Management attributed the income increase primarily to a $1.0 million increase in accretion income, as well as an additional day in the quarter. Deposit interest expense rose $729,000, or 4.7%, as average balances and rates paid on money market and certificate accounts increased.
The quarterly bottom line also benefited from tax credits. The effective tax rate fell to 12.7% from 20.4%, driven by a $1.9 million benefit from purchased renewable energy income tax credits. Provision for credit losses declined to $805,000 from $920,000. Noninterest income decreased $178,000, or 1.9%, as a $1.080 million decline in gain on sale of premises and equipment outweighed higher loan income and fees and operating lease income. Noninterest expense increased $158,000, with $904,000 of Blue Ridge transaction-related costs partially offset by the absence of the prior quarter's $1.079 million loss on redemption of junior subordinated debt securities.
For the nine months ended September 30, 2026, net income was $50.4 million, compared with $48.2 million in the prior-year period, and diluted EPS was $3.04 compared with $2.79. Net interest income increased $3.5 million, provision expense declined $2.8 million, and noninterest income increased $1.4 million. These factors were partially offset by a $7.6 million increase in noninterest expense. The nine-month margin was 4.39%, compared with 4.27%, while the effective tax rate was 17.7%, compared with 21.1%.
Balance-sheet activity reflects a reduction in brokered deposits and sizable capital deployment. Total assets were $4.4 billion and deposits were $3.6 billion at September 30, 2026. The Company stated that loan growth of $50.2 million, a $126.4 million deposit decline, and stock repurchases were funded with existing liquidity and loan-sale proceeds. Stockholders' equity declined to $570.1 million from $600.7 million at December 31, 2025, with $75.0 million in stock repurchases and $7.1 million of cash dividends declared offsetting net income and share-based compensation and stock option exercises.
Credit metrics warrant attention. Nonperforming assets rose to $70.397 million, or 1.59% of total assets, from $54.651 million, or 1.23%, at June 30, 2026. Classified assets rose to $92.1 million, or 2.08% of total assets, and the allowance for credit losses was $39.5 million, or 1.09% of total loans. Management cited accelerated repurchases of the sold, fully guaranteed portion of nonperforming SBA loans and the addition of one $18.0 million commercial loan relationship to nonperforming status, while stating that no loss is anticipated on that relationship. The proposed Blue Ridge merger is expected to close early in the first quarter of 2027, subject to approvals and customary conditions, and Blue Ridge shareholders are expected to own approximately 35% of the combined company.
Management, verbatim
Our third-quarter financial results continued the momentum established in the first half of the year, as our top-quartile net interest margin expanded to 4.46%.
Hunter Westbrook, President and Chief Executive Officer
We also accelerated the pace of share repurchases as part of our ongoing and prudent capital management strategy.
Hunter Westbrook, President and Chief Executive Officer
This transaction represents a compelling opportunity to further strengthen our presence in the attractive Virginia market and accelerate our growth and profitability strategies.
Hunter Westbrook, President and Chief Executive Officer
Not in the filing
stated, not guessed- Revenue is not reported because the filing is for a bank and does not provide a total revenue line item.
- Gross margin is not reported.
- Operating income is not reported.
- Operating cash flow is not reported.
- Free cash flow is not reported.
- Third-quarter prior-year net income, EPS, net interest income, noninterest income, noninterest expense, and tax-rate comparisons are not reported.
- Forward financial guidance is not reported.
- Previous-release outlook was not provided.
- Company business-segment revenue is not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.