10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the Fiscal Year Ended June 30, 2019

OR

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

For the Transition Period From __________________ To __________________

Commission File Number 1-35593

HOMETRUST BANCSHARES, INC.

(Exact Name of Registrant as Specified in its Charter)

Maryland	45-5055422
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
10 Woodfin Street, Asheville, North Carolina	28801
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (828) 259-3939

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	HTBI	The NASDAQ Stock Market LLC

Securities Registered Pursuant to Section 12(g) of the Act:

Preferred Share Purchase Rights

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [   ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [   ].

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer [   ]	Accelerated Filer [X]
Non-Accelerated Filer [   ]	Smaller reporting company [   ]
Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [  ] No [X].

As of September 10, 2019, there were issued and outstanding 17,860,045 shares of the Registrant’s Common Stock. The aggregate market value of the voting stock held by non-affiliates of the Registrant computed by reference to the closing price of such stock as of December 31, 2018, was $468.0 million. (The exclusion from such amount of the market value of the shares owned by any person shall not be deemed an admission by the Registrant that such person is an affiliate of the Registrant).

Documents Incorporated By Reference

Part III of Form 10-K - Portions of the Proxy Statement for the 2019 Annual Meeting of Stockholder.

HOMETRUST BANCSHARES, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED JUNE 30, 2019

TABLE OF CONTENTS

		Page
PART I
Item 1	Business	4
Item 1A.	Risk Factors	37
Item 1B.	Unresolved Staff Comments	49
Item 2	Properties	49
Item 3	Legal Proceedings	49
Item 4	Mine Safety Disclosures	49
PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	49
Item 6	Selected Financial Data	52
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	53
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	69
Item 8	Financial Statements and Supplementary Data	70
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	120
Item 9A.	Control and Procedures	120
Item 9B.	Other Information	120
PART III
Item 10	Directors, Executive Officers and Corporate Governance	121
Item 11	Executive Compensation	121
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	121
Item 13	Certain Relationships and Related Transactions, and Director Independence	122
Item 14	Principal Accountant Fees and Services	122
PART IV
Item 15	Exhibits and Financial Statement Schedules	123
Item 16	Form 10-K Summary	126
	Signatures	126

2

Forward-Looking Statements

Certain matters in this Form 10-K constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. Forward-looking statements are not statements of historical fact, are based on certain assumptions and are generally identified by use of the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions, and statements about future economic performance and projections of financial items. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated or implied by our forward-looking statements, including, but not limited to: the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write offs and changes in our allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, our net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas; decreases in the secondary market for the sale of loans that we originate; results of examinations of us by the Board of Governors of the Federal Reserve System (“Federal Reserve”), the North Carolina Office of the Commissioner of Banks (“NCCOB”), or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings; legislative or regulatory changes that adversely affect our business including the effect of Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), changes in laws or regulations, changes in regulatory policies and principles or the application or interpretation of laws and regulations by regulatory agencies and tax authorities, including changes in deferred tax asset and liability activity, or the interpretation of regulatory capital or other rules, including as a result of Basel III; our ability to attract and retain deposits; management's assumptions in determining the adequacy of the allowance for loan losses; our ability to control operating costs and expenses, especially costs associated with our operation as a public company; the use of estimates in determining fair value of certain assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risks associated with the loans on our balance sheet; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may in the future acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting principles, policies or guidelines and practices, as may be adopted by the financial institution regulatory agencies, the Public Company Accounting Oversight Board or the Financial Accounting Standards Board; and other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and the other risks detailed from time to time in our filings with the Securities and Exchange Commission ("SEC"), including this report on Form 10-K.

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

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

3

PART I

Item 1. Business

General

HomeTrust Bancshares, Inc., a Maryland corporation, was formed for the purpose of becoming the holding company for HomeTrust Bank in connection with HomeTrust Bank’s conversion from mutual to stock form, which was completed on July 10, 2012 (the “Conversion”). As a bank holding company and financial holding company, HomeTrust Bancshares, Inc. is regulated by the Federal Reserve. At June 30, 2019, the Company had consolidated total assets of $3.5 billion, total deposits of $2.3 billion and stockholders’ equity of $408.9 million. The Company has not engaged in any significant activity other than holding the stock of the Bank. Accordingly, the information set forth in this Annual Report on Form 10-K (“Form 10-K”), including the audited consolidated financial statements and related data, relates primarily to the Bank and its subsidiary. As a North Carolina state-chartered bank, and member of the Federal Reserve System, the Bank's primary regulators are the NCCOB and the Federal Reserve. The Bank's deposits are federally insured up to applicable limits by the Federal Deposit Insurance Corporation ("FDIC"). The Bank is a member of the Federal Home Loan Bank of Atlanta (“FHLB” or “FHLB of Atlanta”), which is one of the 12 regional banks in the Federal Home Loan Bank System (“FHLB System”). Our headquarters is located in Asheville, North Carolina.

The Bank was originally formed in 1926. Between fiscal years 1996 and 2011, HomeTrust Bank's board of directors and executive management expanded the Bank beyond its historical Asheville market and created a unique partnership through mergers between six established banks and one de novo bank located in Tryon, Shelby, Eden, Lexington, Cherryville and Forest City, North Carolina, through which hometown community banks could combine their financial resources to achieve a shared vision.

Starting in 2013, we entered seven attractive markets through various acquisitions and new office openings, as well as expanded our product lines. These included:

• BankGreenville Financial Corporation (“BankGreenville”) - one office in Greenville, South Carolina (acquired in July 2013)

• Jefferson Bancshares, Inc. (“Jefferson”) - nine offices across East Tennessee (acquired in May 2014)

• Commercial loan production office ("LPO") in Roanoke, Virginia (opened in July 2014)

• Bank of Commerce - one office in Charlotte, North Carolina (acquired in July 2014)

• Ten Bank of America Branch Offices - nine in southwest Virginia, one in Eden, North Carolina (acquired in November 2014)

• Commercial LPO in Raleigh, North Carolina (opened in November 2014) and later converted into full service branch (converted in April 2017)

• United Financial of North Carolina, Inc. ("United Financial") - municipal lease company headquartered in Fletcher, North Carolina (acquired in December 2016)

• TriSummit Bancorp, Inc. ("TriSummit") - six offices in East Tennessee (acquired in January 2017)

• Commercial LPO Greensboro, North Carolina (opened in August 2017)

• Began origination and sales of U.S. Small Business Administration ("SBA") loans through our new SBA line of business (September 2017)

• De novo branch in Cary, North Carolina (Opened in March 2018)

• Began equipment finance line of business (May 2018)

By expanding our geographic footprint and hiring local experienced talent, we have built a foundation that allows us to focus on organic growth, while maintaining "Our Commitment to the Customer Experience" that has differentiated our brand and characterized our success to date.

Our mission is to create stockholder value by building relationships with our employees, customers, and communities. By building a platform that supports growth and profitability, we are continuing our transition toward becoming a high-performing community bank and helping our customers every day to be "Ready For What's Next."

Our principal business consists of attracting deposits from the general public and investing those funds, along with borrowed funds, in loans secured by first and second mortgages on one-to-four family residences including home equity loans, construction and land/lot loans, commercial real estate loans, construction and development loans, commercial and industrial loans, U.S. Small Business Administration ("SBA") loans, equipment finance leases, indirect automobile loans, and municipal leases. We also work with a third party to originate home equity lines of credit ("HELOCs") which are pooled and sold. In addition, we purchase investment securities consisting primarily of securities issued by United States Government agencies and government-sponsored enterprises, as well as, commercial paper and certificates of deposit insured by the FDIC.

We offer a variety of deposit accounts for individuals, businesses, and nonprofit organizations. Deposits and borrowings are our primary source of funds for our lending and investing activities.

4

Market Areas

HomeTrust Bank operates in nine metropolitan statistical areas ("MSAs"): Asheville, NC, with a population of 460,000 as of June 2018; Charlotte-Concord-Gastonia, NC-SC, with a population of 2.6 million as of June 2018; Greensboro, NC, with a population of 768,000 as of June 2018; Greenville-Anderson-Mauldin, SC, with a population of 907,000 as of June 2018; Johnson City, TN, with a population of 203,000 as of June 2018; Kingsport-Bristol-Bristol, TN-VA, with a population of 307,000 as of June 2018; Knoxville, TN, with a population of 883,000 as of June 2018; Morristown, TN, with a population of 119,000 as of June 2018; Roanoke, VA, with a population of 314,000 as of June 2018; and Raleigh, NC, with a population of 1.4 million as of June 2018 according to the United State Census Bureau.

Asheville is known for its natural beauty, scenic surroundings, and its vibrant cultural and arts community that parallels that of many larger cities in the United States. It is home to a number of historical attractions, the most prominent of which is the Biltmore Estate, a historic mansion with gardens and a winery that draws approximately one million tourists each year. Due to its scenic location and diverse cultural and historical offerings, the Asheville metropolitan area is a popular destination for tourists, which continues to positively impact our local economy. In addition, affordable housing prices, compared to many bigger cities, combined with the region’s favorable climate have also made the Asheville metropolitan area an increasingly attractive destination for retirees seeking to relocate from other parts of the United States. The area has several major employers which include: Buncombe County Public Schools, City of Asheville, Mission Health System and Hospital, The Biltmore Company, Ingles Markets, Inc., and the VA Medical Center. Also supporting the economy is the Asheville Regional Airport that transports over one million passengers a year as well as numerous colleges and universities, medical centers, and arts and entertainment facilities. HomeTrust Bank is the only community bank headquartered in this vibrant and growing market.

The Charlotte-Concord-Gastonia, NC-SC metropolitan area is located in both North and South Carolina, within and surrounding the city of Charlotte. Located in the Piedmont region of the Southeastern United States, the Charlotte metropolitan area is well known for its lower cost of living, diversified economy, national sports teams, and thriving arts community that has led it to be one of the highest in-migration cities in the country according to the Charlotte Chamber. The region is headquarters to several Fortune 500 companies, including Bank of America, Duke Energy, Sealed Air, Nucor Steel, Sonic Automotive, Honeywell, and Lowe's Home Improvement Stores. The Charlotte MSA is the largest in the Carolinas.

The Raleigh, NC metropolitan area is located in the northeast central region of North Carolina and routinely ranks among the nation's highest in places to do business and obtain an education. Raleigh is the capital of North Carolina, home to North Carolina State University and central to one of the fastest growing areas in the country - the Research Triangle Park. With its proximity to the Research Triangle Park and several major universities, including the University of North Carolina at Chapel Hill and Duke University, Raleigh has become known for its strengths in technology and innovation.

The Greensboro, NC metropolitan area is centrally located in North Carolina. Major employment sectors for the MSA include services, manufacturing, government, financial activities, and retail trade. Major employers for the MSA include Guilford County Schools, Guilford County, Cone Health, and the City of Greensboro.

The Greenville-Anderson-Mauldin, SC metropolitan area is located in upstate South Carolina, in the foothills of the Blue Ridge Mountains. Major employment sectors for the MSA include services, manufacturing, and retail trade including major facilities for BMW, Michelin, Walgreens, and Lockheed Martin. Additional employers include Greenville Health System, Greenville County School District, and Bon Secours St. Francis Health System.

The Johnson City, TN metropolitan area is an economic hub largely fueled by East Tennessee State University and the medical "Med-Tech" corridor, anchored by the Johnson City Medical Center, Franklin Woods Community Hospital and affiliated facilities. The city’s museums and historical sites include the Hands On! Museum and the Tipton-Haynes State Historic Site, which hosts the annual Bluegrass and Sorghum Making Festival, as well as other seasonal events.

The Kingsport-Bristol-Bristol, TN-VA MSA is home to the headquarters of Eastman Chemical Company as well as a diverse mix of manufacturing firms, technology companies, and small businesses. The major economic components in Kingsport are healthcare, manufacturing and educational services.

The Knoxville, TN metropolitan area is located where the French Broad and Holston Rivers converge to form the Tennessee River. It is the largest city in East Tennessee and ranks third largest in the state. It is located in a broad valley between the Cumberland Mountains to the northwest and the Great Smoky Mountains to the southeast. The University of Tennessee calls Knoxville home, with over 28,000 students, making an array of educational and cultural opportunities available to area residents. Affordable housing, health care costs below the national average, a low crime rate, and a pleasant climate and location with nearby lakes and mountains are factors which make Knoxville an attractive place to settle. Major employment sectors in the Knoxville area include government, education, and healthcare.

The Morristown, TN metropolitan area includes facilities for numerous Fortune 500 companies including General Electric, International Paper, Alcoa (Howmet), Coca-Cola, Lear Corporation, Pepsi Bottling, NCR Corporation and Colgate-Palmolive. Morristown also includes the facilities of a number of international companies from countries such as Germany, Japan, Sweden, United Kingdom, Italy, Canada and France. Local industries include furniture manufacturing, poultry processing, aircraft parts, healthcare products, and automotive parts. Agriculture including soybeans, corn, livestock and dairy are also significant economic components. Morristown's major job providing segments are healthcare, manufacturing, educational services, furniture and related products, transportation equipment, educational services, and accommodation and food services.

5

The Roanoke, VA metropolitan area is located in the Roanoke Valley of western Virginia in the midst of the Blue Ridge and Alleghany Mountains. This 1,874-square mile region is bordered on the west by West Virginia and along the east by the Blue Ridge Mountains. The area is strategically accessible to both the East Coast and Mid-West markets with Interstate 81 passing through the region, Interstate 64 directly north, and Interstate 77 nearby to the south. The Roanoke MSA is the transportation hub of the area with an integrated interstate highway, rail, and air transportation network. Roanoke has the most diverse economy in Virginia according to Virginia Business and is the cultural and business hub for western Virginia. The Roanoke MSA is home to several large regional banking offices, headquarters of the Fortune 500 retailer Advance Auto, and to several large advanced manufacturing operations, such as those owned by ITT Exelis, Dynax America, and Optical Cable Corporation, among others. The Roanoke, VA MSA’s major employment sectors include government, health care and social assistance, retail trade, and manufacturing.

Unemployment data remains one of the most informative indicators of our local economies. Based on information from the U.S. Bureau of Labor Statistics we have set forth below information regarding the unemployment rates nationally and in our market areas.

	As of June 30,
Location	2019	2018
U.S. National	3.8%	4.2%
North Carolina	4.2%	4.2%
Asheville MSA	3.6%	3.4%
Charlotte/Concord/Gastonia	4.1%	3.9%
Greensboro	4.8%	4.5%
Raleigh	4.0%	3.7%
South Carolina	3.4%	3.8%
Greenville	3.3%	3.3%
Tennessee	3.5%	3.5%
Morristown	4.5%	4.4%
Johnson City	4.4%	4.5%
Kingsport-Bristol	4.2%	4.2%
Knoxville	3.9%	3.9%
Virginia	2.9%	4.2%
Roanoke	3.0%	3.4%

The Bank has built a strong foundation in the communities we serve and takes pride in the role we play. The directors and market presidents of each region work with their management team and employees to support local nonprofit and community organizations. Each location helps provide critical services to meet the financial needs of its customers and improve the quality of life for individuals and businesses in its community. Initiatives supporting our communities include affordable housing, education and financial education, and the arts. We support these initiatives through both financial and people resources in all of our communities. Collectively, bank employees volunteer thousands of hours annually in their local communities; from helping to build homes to teaching grade school youth how to start healthy savings habits, bank employees are making a positive difference in the lives of others every day.

Competition

We face strong competition in originating loans and in attracting deposits. Competition in originating real estate loans comes primarily from other commercial banks, savings institutions, credit unions, life insurance companies, and mortgage bankers. Other commercial banks, credit unions, and finance companies provide vigorous competition in consumer lending. In addition, in indirect auto financings, we also compete with specialty consumer finance companies, including automobile manufacturers’ captive finance companies. Commercial and industrial loan competition is primarily from local and regional commercial banks. We believe that we compete effectively because we consistently deliver high-quality, personal service to our customers that results in a high level of customer satisfaction. We also maintain a significant commitment to technological resources, which has expanded our customer service capabilities and increased efficiencies in our lending process.

6

We attract our deposits through our branch office system. Competition for deposits is principally from other commercial banks, savings institutions, and credit unions located in the same communities, as well as mutual funds and other alternative investments. We believe that we compete for deposits by offering superior service and a variety of deposit accounts at competitive rates. We also have a highly competitive suite of cash management services, online/mobile banking, and internal support expertise specific to the needs of small to mid-sized commercial business customers. Based on the most recent branch deposit data, HomeTrust Bank's deposit market share was:

Location	Rank(1)	Deposit Market Share(1)
North Carolina	18th	0.36%
Asheville MSA	3rd	8.35%
Charlotte/Gastonia	18th	0.05%
Raleigh	23rd	0.09%
South Carolina	63rd	0.07%
Greenville	20th	0.53%
Tennessee	46th	0.32%
Morristown	2nd	20.21%
Johnson City	4th	8.72%
Kingsport-Bristol	8th	2.94%
Knoxville	20th	0.42%
Virginia	62nd	0.11%
Roanoke	5th	4.14%
Bristol	5th	6.55%

___________________________________________________________________

(1) Source: FDIC data as of June 30, 2018

Overall, we distinguish ourselves from larger, national banks operating in our market areas by providing local decision-making and competitive customer-driven products with excellent service, responsiveness, and execution. In addition, our larger capital base and product mix enable us to compete effectively against smaller banks. Our bankers believe that strong relationships lead to great things and strive everyday to ensure our customers are "ready for what's next" in their financial future.

In addition, the way we create differentiation from our competition to fuel organic growth is by focusing on “HOW” we deliver our products and services. Many of our employees have been a part of HomeTrust Bank for decades, while a significant number of employees have more recently brought their industry knowledge and expertise to us through internal growth and acquisitions, reflecting their desire to be a part of a high performing team that works well together to make a difference for customers. We strive to create organizational clarity by adhering to our core values of caring and teamwork while continuing to reach for our aspirational values of customer satisfaction, accountability, continuous improvement, and humility. This “culture model” includes four key principles:

• making a difference for customers every day is both fun and personally rewarding;

• success is built on relationships;

• we must continually add value to relationships with our customers and with each other; and

• we need to grow ourselves and our ability to make a difference.

In implementing these principles, the directors, management team, and employees work together as a team to meet the financial needs of our customers while supporting local nonprofit and community organizations to improve the quality of life for individuals and businesses in our communities. We support affordable housing and education initiatives to help build healthy communities through both financial assistance and employees volunteering thousands of hours annually in their local markets. We believe the opportunity to stay close to our customers gives us a unique position in the banking industry as compared to our larger competitors and we are committed to continuing to build strong relationships with our employees, customers, and communities for generations to come.

7

Lending Activities

The following table presents information concerning the composition of our loan portfolio in dollar amounts and in percentages (before deductions for deferred fees and allowances for losses) at the dates indicated.

	At June 30,
	2019					2018					2017					2016					2015
	Amount			Percent		Amount			Percent		Amount			Percent		Amount			Percent		Amount			Percent
	(Dollars in thousands)
Retail consumer loans:
One-to-four family	$	660,591		24.42	%	$	664,289		26.29	%	$	684,089		29.08	%	$	623,701		34.04	%	$	650,750		38.61	%
Home equity - originated	131,095			4.85		137,564			5.44		157,068			6.68		163,293			8.91		161,204			9.56
Home equity - purchased	116,972			4.32		166,276			6.58		162,407			6.90		144,377			7.88		72,010			4.27
Construction and land/lots	80,602			2.98		65,601			2.60		50,136			2.13		38,102			2.08		45,931			2.73
Indirect auto finance	153,448			5.67		173,095			6.85		140,879			5.99		108,478			5.92		52,494			3.11
Consumer	19,756			0.73		12,379			0.49		7,900			0.34		4,635			0.25		3,708			0.22
Total retail consumer loans	1,162,464			42.97	%	1,219,204			48.25	%	1,202,479			51.12	%	1,082,586			59.08	%	986,097			58.50	%
Commercial loans:
Commercial real estate	927,261			34.28	%	857,315			33.92	%	730,408			31.04	%	486,561			26.55	%	441,620			26.20	%
Construction and development	210,916			7.80		192,102			7.60		197,966			8.42		86,840			4.74		64,573			3.83
Commercial and industrial	160,471			5.93		135,336			5.36		120,387			5.12		73,289			4.00		84,820			5.03
Equipment finance (1)	132,058			4.88		13,487			0.53		—			—		—			—		—			—
Municipal leases	112,016			4.14		109,172			4.32		101,175			4.30		103,183			5.63		108,574			6.44
Total commercial loans	1,542,722			57.03	%	1,307,412			51.75	%	1,149,936			48.88	%	749,873			40.92	%	699,587			41.50	%
Total loans	2,705,186			100.00	%	2,526,616			100.00	%	2,352,415			100.00	%	1,832,459			100.00	%	1,685,684			100.00	%
Less:
Deferred costs (fees), net	4					(764		)			(945		)			372					23
Allowance for losses	(21,429		)			(21,060		)			(21,151		)			(21,292		)			(22,374		)
Total loans receivable, net	$	2,683,761				$	2,504,792				$	2,330,319				$	1,811,539				$	1,663,333

_____________________________________________

(1)    Equipment finance line of business began operations in May 2018.

8

The following table shows the fixed- and variable-rate composition of our loan portfolio in dollar amounts and in percentages (before deductions for deferred fees and allowances for loan losses) at the dates indicated.

	At June 30,
	2019					2018					2017
	Amount			Percent		Amount			Percent		Amount			Percent
Fixed-rate loans:	(Dollars in thousands)
Retail consumer loans:
One-to-four family	$	293,537		10.8	%	$	333,986		13.2	%	$	365,566		15.5	%
Home equity - originated	446			—		163			—		1,664			0.1
Construction and land/lots	74,989			2.8		59,283			2.3		42,149			1.8
Indirect auto finance	153,448			5.7		173,095			6.9		140,879			6.0
Consumer	12,583			0.5		6,457			0.3		7,887			0.3
Commercial loans:
Commercial real estate	491,683			18.2		441,796			17.5		444,055			18.9
Construction and development	34,837			1.3		55,682			2.2		50,231			2.1
Commercial and industrial	81,238			3.0		74,081			3.0		73,600			3.1
Equipment finance	132,058			4.9		13,487			0.5		—			—
Municipal leases	112,016			4.1		109,172			4.3		101,175			4.4
Total fixed-rate loans	1,386,835			51.3	%	1,267,202			50.2	%	1,227,206			52.2	%
Adjustable-rate loans:
Retail consumer loans:
One-to-four family	367,054			13.6	%	330,303			13.1	%	318,523			13.5	%
Home equity - originated	130,649			4.8		137,401			5.4		155,404			6.6
Home equity - purchased	116,972			4.3		166,276			6.6		162,407			6.9
Construction and land/lots	5,613			0.2		6,318			0.3		7,987			0.3
Consumer	7,173			0.3		5,922			0.2		13			—
Commercial loans:
Commercial real estate	435,578			16.1		415,519			16.4		286,353			12.2
Construction and development	176,079			6.5		136,420			5.4		147,735			6.3
Commercial and industrial	79,233			2.9		61,255			2.4		46,787			2.0
Total adjustable-rate loans	1,318,351			48.7	%	1,259,414			49.8	%	1,125,209			47.8	%
Total loans	2,705,186			100.0	%	2,526,616			100.0	%	2,352,415			100.0	%
Less:
Deferred costs (fees), net	4					(764		)			(945		)
Allowance for losses	(21,429		)			(21,060		)			(21,151		)
Total loans receivable, net	$	2,683,761				$	2,504,792				$	2,330,319

For further discussion, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of this report.

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Loan Maturity.  The following table sets forth certain information at June 30, 2019 regarding the dollar amount of loans maturing in our portfolio based on their contractual terms to maturity, but does not include scheduled payments or potential prepayments. Loan balances do not include undisbursed loan proceeds, unearned discounts, unearned income and allowance for loan losses.

	Retail Consumer
	Due During Years Ending June 30,
	2020			2021		2022		2023 to 2024		2025 to 2026		2027 to 2031		2032 and following		Total
	(Dollars in thousands)
One-to-four family
Amount	$	9,593		14,763		15,746		39,837		49,721		142,927		388,004		$	660,591
Weighted Average Rate	5.44		%	4.58	%	431.00	%	4.75	%	3.99	%	3.63	%	4.18	%	4.11		%
Home equity - originated
Amount	$	4,919		4,383		7,271		20,383		11,275		7,046		75,818		$	131,095
Weighted Average Rate	5.50		%	5.75	%	5.64	%	5.38	%	5.61	%	5.78	%	5.85	%	5.72		%
Home equity - purchased
Amount	$	—		—		—		—		—		—		116,972		$	116,972
Weighted Average Rate	—		%	—	%	—	%	—	%	—	%	—	%	5.21	%	5.21		%
Construction and land/lots
Amount	$	408		133		210		706		4,653		3,407		71,085		$	80,602
Weighted Average Rate	6.15		%	5.61	%	5.89	%	6.60	%	5.87	%	5.53	%	4.18	%	4.38		%
Indirect auto finance
Amount	$	587		4,881		17,192		78,448		52,340		—		—		$	153,448
Weighted Average Rate	3.61		%	3.19	%	3.18	%	3.87	%	4.90	%	—	%	—	%	4.12		%
Consumer
Amount	$	414		639		828		8,205		1,483		4,994		3,193		$	19,756
Weighted Average Rate	4.61		%	5.04	%	4.89	%	5.91	%	5.23	%	5.56	%	7.98	%	6.01		%

	Commercial Loans
	Due During Years Ending June 30,
	2020		2021		2022		2023 to 2024		2025 to 2026		2027 to 2031		2032 and following		Total
	(Dollars in thousands)
Commercial real estate
Amount	60,864		129,971		139,337		320,615		176,098		61,299		39,077		$	927,261
Weighted Average Rate	4.28	%	4.23	%	4.27	%	4.49	%	4.38	%	4.48	%	5.59	%	4.43		%
Construction and development
Amount	63,354		26,669		26,029		45,020		43,095		3,861		2,888		$	210,916
Weighted Average Rate	5.69	%	5.65	%	4.97	%	4.60	%	4.87	%	4.04	%	3.85	%	5.14		%
Commercial and industrial
Amount	29,946		31,133		25,394		36,653		26,826		2,642		7,877		$	160,471
Weighted Average Rate	5.09	%	5.09	%	4.24	%	4.63	%	4.47	%	6.03	%	5.53	%	4.88		%
Equipment finance
Amount	—		2,507		12,564		93,201		23,786		—		—		132,058
Weighted Average Rate	—	%	5.00	%	5.36	%	5.77	%	6.02	%	—	%	—	%	5.76		%
Municipal leases(1)
Amount	434		5,115		3,342		14,123		20,754		40,618		27,630		$	112,016
Weighted Average Rate	3.83	%	3.74	%	3.40	%	3.62	%	4.81	%	4.70	%	4.66	%	4.49		%

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	Total
	Amount		Weighted Average Rate
	(Dollars in thousands)
Due During Years Ending June 30,
2020	$	170,519	5.05	%
2021	220,194		4.57
2022	247,913		4.43
2023 to 2024	657,191		4.78
2025 to 2026	410,031		4.75
2027 to 2031	266,794		4.22
2032 and following	732,544		4.63
Total	$	2,705,186	4.65	%

_________________________________________________________

(1) The weighted average rate of municipal loans is adjusted for a 24% combined federal and state tax rate since the interest income from these leases is tax exempt.

The total amount of loans due after June 30, 2020, which have predetermined interest rates is $1.31 billion, while the total amount of loans which have adjustable interest rates is $1.22 billion.

Lending Authority. Loan credit authority is granted to various officers of the Bank and approved at least annually by the Credit Risk Committee, which is made up of the Chief Operating Officer, Chief Credit Officer, and Chief Risk Officer. Generally, total credit exposure that exceeds the loan credit authority of each officer must be approved by the Senior Credit Officer or Chief Credit Officer. In the absence of the Chief Credit Officer, another Senior Credit Officer not directly involved with the borrower may approve the credit instead of the Chief Credit Officer.

Loan relationships in excess of $7.5 million in total credit exposure must be approved by our Senior Loan Committee, which is comprised of the Chief Credit Officer, the Commercial Banking Group Executive, and/or the Chief Operating Officer. Any loan submitted for Senior Loan Committee approval must have the prior approval of the Relationship Manager, the Market President and their assigned Senior Credit Officer. Loans in excess of $15.0 million in total credit exposure must be approved by the Executive Loan Committee comprised of the Chief Executive Officer, Chief Operating Officer, Commercial Banking Group Executive, Chief Credit Officer and another Senior Credit Officer not involved with the credit. A quorum consists of at least three members, one of whom must be either the Chief Credit Officer or the Senior Credit Officer. A 70% vote is required for approval. Total credit exposure in a single loan or group of loans to related borrowers exceeding 60% of the Bank’s legal lending limit must be approved by the Bank's board of directors.

At June 30, 2019, the maximum amount under federal regulation that we could lend to any one borrower and the borrower’s related entities was approximately $56.6 million. Our five largest lending relationships are with commercial borrowers and totaled $108.1 million in the aggregate, or 4.0% of our $2.7 billion loan portfolio at June 30, 2019. As of June 30, 2019, all loans to these borrowers were performing in accordance with their original repayment terms.

The largest lending relationship at June 30, 2019 consisted of ten loans totaling approximately $24.5 million to nine borrowers based in Florida. The largest loan in this relationship had an outstanding balance of $5.7 million as of June 30, 2019 and was secured by a non-owner-occupied industrial flex space property located in Greensboro, NC. The remaining relationship exposure consisted of eight loans secured by non-owner-occupied industrial, retail, and medical office properties. The properties are located in the Tennessee cities of Bristol, Clarksville, Columbia, and Johnson City, as well as in Rocky Mount, NC, Dublin, VA, and Rome, GA.

The second largest lending relationship at June 30, 2019 was approximately $24.1 million consisting of three loans to three borrowers in Louisiana, North Carolina, and Georgia. The largest loan in this relationship at June 30, 2019 had an outstanding balance of $11.6 million and was secured by a non-owner occupied medical office property located in Covington, LA. The remaining relationship exposure consisted of two loans secured by non-owner occupied office properties located in Gastonia, NC, and Rome, GA.

The third largest lending relationship at June 30, 2019 was $20.7 million consisting of five loans to four borrowers in North Carolina. The largest loan in the relationship at June 30, 2019 had an outstanding balance of $6.8 million and was secured by a hotel property located in Greensboro, NC. The remaining exposure consisted of loans secured by hotel properties in Fayetteville, NC, Wake Forest, NC, and Clinton, SC.

The fourth largest lending relationship at June 30, 2019 was $19.7 million consisting of six loans to two borrowers in Virginia. The largest loan in the relationship at June 30, 2019 had an outstanding balance of approximately $4.8 million and was secured by a non-owner occupied industrial property in Roanoke, VA. The remaining relationship exposure was secured by non-owner-occupied industrial and flex-space properties, as well as self-storage properties, all of which were located throughout southwest Virginia.

The fifth largest lending relationship at June 30, 2019 was approximately $19.1 million consisting of two loans to two borrowers in Virginia. The largest loan in the relationship at June 30, 2019 had an outstanding balance of $16.4 million and was secured by an assisted living property in Savannah, GA. The other loan was secured by a lien on all business assets of the borrowers.

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Retail Consumer Loans

One-to-Four Family Real Estate Lending. 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 generally originate one-to-four family residential mortgage loans through referrals from real estate agents, builders, and from existing customers. Walk-in customers are also important sources of loan originations. At June 30, 2019, $660.6 million, or 24.4%, of our loan portfolio consisted of loans secured by one-to-four family residences. Subsequent to June 30, 2019, the Company decided to sell between $200.0 million and $300.0 million of our one-to-four family loans to a third party. Once specifically identified, these loans will be moved from total loans to loans held for sale at the lower of cost or market. The transaction is anticipated to close during the second quarter of fiscal 2020 at a gain. See Note 24 "Subsequent Events" in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.

We originate both fixed-rate loans and adjustable-rate loans. We generally originate mortgage loans in amounts up to 80% of the lesser of the appraised value or purchase price of a mortgaged property, but will also permit loan-to-value ratios of up to 95%. For loans exceeding an 80% loan-to-value ratio we generally require the borrower to obtain private mortgage insurance covering us for any loss on the amount of the loan in excess of 80% in the event of foreclosure.

The majority of our one-to-four family residential loans are originated with fixed rates and have terms of ten to 30 years. At June 30, 2019 our one-to-four family residential loan portfolio included $293.5 million in fixed rate loans. We generally originate fixed rate mortgage loans with terms greater than 15 years for sale to various secondary market investors on a servicing released basis. We also originate adjustable-rate mortgage, or ARM, loans which have interest rates that adjust annually to the yield on U.S. Treasury securities adjusted to a constant one-year maturity plus a margin. Most of our ARM loans are hybrid loans, which after an initial fixed rate period of one, five, seven, or ten 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. Our pricing strategy for mortgage loans includes setting interest rates that are competitive with other local financial institutions and consistent with our asset/liability management objectives. Our ARM loans generally have a floor interest rate set at the initial interest rate, and a cap of two percentage points on rate adjustments during any one year and six percentage points over the life of the loan. As a consequence of using caps, the interest rates on these loans may not be as rate sensitive as is our cost of funds.

We generally retain ARM loans that we originate in our loan portfolio rather than selling them in the secondary market. The retention of ARM loans in our loan portfolio helps us reduce our exposure to changes in interest rates. There are, however, unquantifiable credit risks resulting from the potential of increased interest to be paid by the customer as a result of increases in interest rates. It is possible that during periods of rising interest rates the risk of default on ARM loans may increase as a result of repricing and the increased costs to the borrower. We attempt to reduce the potential for delinquencies and defaults on ARM loans by qualifying the borrower based on the borrower’s ability to repay the ARM loan assuming that the maximum interest rate that could be charged at the first adjustment period remains constant during the loan term. Another consideration is that although ARM loans allow us to increase the sensitivity of our asset base due to changes in the interest rates, the extent of this interest sensitivity is limited by the periodic and lifetime interest rate adjustment limits. Because of these considerations, we have no assurance that yield increases on ARM loans will be sufficient to offset increases in our cost of funds.

Most of our loans are written using generally accepted underwriting guidelines, and are readily saleable to Freddie Mac, Fannie Mae, or other private investors. Our real estate loans generally contain a “due on sale” clause allowing us to declare the unpaid principal balance due and payable upon the sale of the security property. The average size of our one-to-four family residential loans was $131,107 at June 30, 2019.

A majority of our loans are “non-conforming” because they are adjustable rate mortgages which contain interest rate floors or do not satisfy credit or other requirements due to personal and financial reasons (i.e. divorce, bankruptcy, length of time employed, etc.), conforming loan limits (i.e. jumbo mortgages), and other requirements, imposed by secondary market purchasers. Some of these borrowers have higher debt-to-income ratios, or the loans are secured by unique properties in rural markets for which there are no sales of comparable properties to support the value according to secondary market requirements. We may require additional collateral or lower loan-to-value ratios to reduce the risk of these loans. We believe that these loans satisfy a need in our local market areas. As a result, subject to market conditions, we intend to continue to originate these types of loans. Total non-conforming loans were $416.6 million at June 30, 2019, including $149.0 million of jumbo one- to four-family residential loans which may also expose us to increased risk because of their larger balances.

Property appraisals on real estate securing our one-to-four family loans in excess of $250,000 that are not originated for sale are made by a state-licensed or state-certified independent appraiser approved by the board of directors. Appraisals are performed in accordance with applicable regulations and policies. For loans that are less than $250,000, we may use the tax assessed value, broker price opinions, and/or a property inspection in lieu of an appraisal. We generally require title insurance policies on all first mortgage real estate loans originated. Homeowners, liability, fire and, if required, flood insurance policies are also required for one-to-four family loans. We do not originate permanent one-to-four family mortgage loans with a negatively amortizing payment schedule, and currently do not offer interest-only mortgage loans. We have not typically originated stated income or low or no documentation one-to-four family loans. At June 30, 2019, $2.9 million of our one-to-four family loans were interest-only of which $2.8 million served as collateral for commercial purpose loans. In connection with the new rules issued by the Consumer Financial Protection Bureau ("CFPB"), which includes a definition for “qualified mortgage” loans based on the borrower’s ability to repay the loan, we believe that substantially all of the mortgage loans approved by us meet this standard.

At June 30, 2019, $85.3 million of our one-to-four family loan portfolio consisted of loans secured by non-owner occupied residential properties. Loans secured by residential rental properties represent a unique credit risk to us and, as a result, we adhere to specific underwriting guidelines for such loans. Additionally, we have established specific loan portfolio concentration limits for loans secured by residential rental property to prevent excessive credit risk that could result from an elevated concentration of these loans. A primary risk factor in non-owner occupied residential

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real estate lending is the consistency of rental income of the property. Payments on loans secured by rental properties often depend on the successful operation and management of the properties, as well as the ability of tenants to pay rent. As a result, repayment of such loans may be subject to adverse economic conditions and unemployment trends, and may be sensitive to changes in the supply and demand for such properties. We consider and review a rental income cash flow analysis of the borrower and consider the net operating income of the property, the borrower’s expertise, credit history and profitability, and the value of the underlying property. We generally require collateral on these loans to be a first mortgage along with an assignment of rents and leases. We periodically monitor the performance and cash flow sufficiency of certain residential rental property borrowers based on a number of factors such as loan performance, loan size, total borrower credit exposure, and risk grade.

Home Equity Lines of Credit.  Our originated home equity lines of credit ("HELOCs") consist primarily of adjustable-rate lines of credit. At June 30, 2019, HELOCs-originated totaled $131.1 million or 4.8% of our loan portfolio of which $67.4 million was secured by a first lien on owner-occupied residential property. 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 of interest based on The Wall Street Journal prime rate plus a margin. Currently, our home equity line of credit floor interest rate is dependent on the overall loan to value, and has a cap of 16% above the floor rate over the life of the loan. Originated HELOCs generally have up to a ten-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. At June 30, 2019, unfunded commitments on these lines of credit totaled $201.4 million.

Our underwriting standards for originated HELOCs are similar to our one-to-four family loan underwriting standards and include a determination of the applicant’s credit history and an assessment of the applicant’s ability to meet existing obligations and payments on the proposed loan. The stability of the applicant’s monthly income may be determined by verification of gross monthly income from primary employment, and additionally from any verifiable secondary income.

In December 2014, the Company began purchasing HELOCs originated by other financial institutions. At June 30, 2019, HELOCs-purchased totaled $117.0 million, or 4.3% of our loan portfolio. Unfunded commitments on these lines of credit were $31.6 million at June 30, 2019. The credit risk characteristics are different for these loans since they were not originated by the Company and the collateral is located outside the Company’s market area, primarily in several western states. All of these loans were originated in 2012 or later, had an average FICO score of 740, and loan to values of less than 90% at origination. Loan charge-offs in this portfolio since December 2014 totaled $48,000. The Company will continue to monitor the performance of these loans and adjust the allowance for loan losses as necessary.

HELOCs generally entail greater risk than do one-to-four family residential mortgage loans where we are in the first lien position. For those home equity lines secured by a second mortgage, it is unlikely that we will be successful in recovering all or a portion of our loan proceeds in the event of default unless we are prepared to repay the first mortgage loan and such repayment and the costs associated with a foreclosure are justified by the value of the property.

Construction and Land/Lots.We have been an active originator of 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.

At June 30, 2019, our construction and land/lot loan portfolio was $80.6 million compared to $65.6 million at June 30, 2018. At June 30, 2019, unfunded loan commitments totaled $65.4 million, compared to $58.9 million at June 30, 2018. 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. We do not originate construction phase only or junior lien construction-to-permanent loans. The permanent loan is generally underwritten to the same standards as our one-to-four family residential loans and may be held by us for portfolio investment or sold in the secondary market. At June 30, 2019, our construction-to-permanent loans totaled$70.3 million and the average loan size was $226,650. During the construction phase, which typically lasts for 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. Prior to making a commitment to fund a construction loan, we require an appraisal of the property by an independent appraiser. Construction loans may be originated up to 95% of the cost or of the appraised value upon completion, whichever is less; however, we generally do not originate construction loans which exceed the lower of 80% loan to cost or appraised value without securing adequate private mortgage insurance or other form of credit enhancement such as the Federal Housing Administration or other governmental guarantee. We also require general liability, builder’s risk hazard insurance, title insurance, and flood insurance (as applicable, for properties located or to be built in a designated flood hazard area) on all construction loans. At June 30, 2019, the largest construction to permanent loan had an outstanding balance of $2.6 million and was performing according to the original repayment terms.

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 from the date of origination. 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 from the date of loan origination.

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 rate of interest on terms similar to our

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one-to-four family residential mortgage loans. At June 30, 2019, our land/lot loans totaled $10.3 million and the average land/lot loan size was$48,000. At June 30, 2019, the largest land/lot loan had an outstanding balance of $401,000 and was performing according to the original repayment terms.

Construction and land/lot lending affords us the opportunity to achieve higher interest rates and fees with shorter terms to maturity than the rates and fees generated by our one-to-four family permanent mortgage lending. Construction/permanent loans, however, generally involve a higher degree of risk than our one-to-four family permanent mortgage lending. If our appraisal of the value of the completed residence proves to be overstated, we may have inadequate security for the repayment of the loan upon completion of construction and may incur a loss. Land/lot loans also pose additional risk because of the lack of income being produced by the property and the potential illiquid nature of the collateral. These risks can also be significantly impacted by supply and demand conditions.

Indirect Auto Finance. As of June 30, 2019, our indirect auto finance installment contracts totaled $153.4 million, or 5.7% of our total loan portfolio. Going forward, the Company expects to maintain the size of this portfolio at approximately the same current percentage of the total loan portfolio. As an indirect lender, we market to automobile dealerships, both manufacturer franchised dealerships and independent dealerships, who utilize our origination platform to provide automotive financing through installment contracts on new and used vehicles. As of June 30, 2019, we worked with 69 auto dealerships located in western North Carolina and upstate South Carolina. Working with strong dealerships within our market area provides us with the opportunity to actively deepen customer relationships through cross-selling opportunities, as 83.0% of our indirect auto finance loans are originated to noncustomers.

The dealers are compensated via an industry standard commission, known as dealer reserve, on marked-up interest rates or from flat rate commission amounts. Our auto finance sales team uses purchased industry data to provide quantitative analysis of dealer sales history to target strong dealerships as the starting point of building long lasting, successful relationships. Local, quick decisions, broad hour coverage, personalized customer service, and prompt contract funding are keys to our success in this competitive line of business. Additionally, our process has been designed to integrate with existing dealership practices, utilizing an industry leading decision engine, which provides our internal underwriters with the tools needed to respond quickly to loans meeting our credit policy criteria.

Our underwriting guidelines for indirect auto loans allow for financing the entire cost of the vehicle and therefore focuses on the ability of the borrower to repay the loan rather than the value of the underlying collateral. Our underwriting procedures for indirect auto loans include an evaluation of an applicant's credit profile along with certain applicant specific characteristics to arrive at an estimate of the associated credit risk. Additionally, internal underwriters may also verify an applicant's employment income and/or residency or where appropriate, verify an applicant's payment history directly with the applicant's creditors. We will also generally verify receipt of the automobile and other information directly with the borrower.

Indirect auto finance customers receive a fixed rate loan in an amount and at an interest rate that is commensurate to their FICO credit score, consumer payment credit history, loan term, and based on our underwriting procedures. The amount financed by us will generally be up to the full sales price of the vehicle plus sales tax, dealer preparation fees, license fees and title fees, plus the cost of service and warranty contracts and "GAP" insurance coverage obtained in connection with the vehicle or the financing (such amounts in addition to the sales price, collectively the "Additional Vehicle Costs"). Accordingly, the amount financed by us generally may exceed, depending on the credit score and applicant’s profile, in the case of new vehicles, the manufacturer's suggested retail price of the financed vehicle and the Additional Vehicle Costs. In the case of used vehicles, if the applicant meets our creditworthiness criteria, the amount financed may exceed the vehicle's value as assigned by the NADA Official Used Car Guide, our primary reference source of used cars and the Additional Vehicle Costs.

Our indirect auto portfolio at June 30, 2019, consisted of 9,872 installment loan contracts with a weighted-average contract rate of 5.12%, an average FICO credit score of 732, and an average loan to value ratio of 106.4% based on wholesale dealer invoice on new cars and the NADA Official Used Car Guide for used cars. Approximately 85% were originated through manufacturer franchised dealerships and approximately 15% were originated through independent dealerships; 40% were contracts on new vehicles and 60% were contracts on used vehicles. The loan term is averaging 66 months which is comparable to national auto industry data.

Because our primary focus for indirect auto loans is on the credit quality of the customer rather than the value of the collateral, the collectability of an indirect auto loan is more likely than a single-family first mortgage loan to be affected by adverse personal circumstances. We rely on the borrower's continuing financial stability, rather than on the value of the vehicle, for the repayment of an indirect auto loan. Because automobiles usually rapidly depreciate in value, it is unlikely that a repossessed vehicle will cover repayment of the outstanding loan balance.

Consumer Lending.  Our consumer loans consist of loans secured by deposits accounts or personal property such as automobiles, boats, and motorcycles, as well as unsecured consumer debt. At June 30, 2019, our consumer loans totaled $19.8 million, or 0.7% of our loan portfolio. We originate our consumer loans primarily in our market areas.

Consumer loans generally have shorter terms to maturity, which reduces our exposure to changes in interest rates. In addition, management believes that offering consumer loan products helps to expand and create stronger ties to our existing customer base by increasing the number of customer relationships and providing cross-marketing opportunities.

Our underwriting standards for consumer loans include a determination of the applicant’s credit history and an assessment of the applicant’s ability to meet existing obligations and payments on the proposed loan. The stability of the applicant’s monthly income may be determined by verification of gross monthly income from primary employment, and additionally from any verifiable secondary income.

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Consumer loans generally entail greater risk than do one-to-four family residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by rapidly depreciable assets, such as automobiles. In these cases, any repossessed collateral for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance. As a result, consumer loan collections are dependent on the borrower’s continuing financial stability and thus are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy.

Commercial Loans

Commercial Real Estate Lending. We originate commercial real estate loans, including loans secured by office buildings, retail/wholesale facilities, hotels, industrial facilities, medical and professional buildings, churches, and multifamily residential properties located primarily in our market areas. As of June 30, 2019, $927.3 million or 34.3% of our total loan portfolio was secured by commercial real estate property, including multifamily loans totaling $105.6 million, or 3.91% of our total loan portfolio. Of the remaining amount, $259.6 million was identified as owner occupied commercial real estate, and $562.1 million was secured by income producing, or non-owner-occupied commercial real estate. Commercial real estate loans generally are priced at a higher rate of interest than one-to-four family residential loans. Typically, these loans have higher loan balances, are more difficult to evaluate and monitor, and involve a greater degree of risk than one-to-four family residential loans. Often payments on loans secured by commercial or multi-family properties are dependent on the successful operation and management of the property; therefore, repayment of these loans may be affected by adverse conditions in the real estate market or the economy. We generally require and obtain loan guarantees from financially capable parties based upon the review of personal financial statements. If the borrower is a corporation, we generally require and obtain personal guarantees from the corporate principals based upon a review of their personal financial statements and individual credit reports.

The average outstanding loan size in our commercial real estate portfolio was $726,000 as of June 30, 2019. The Bank’s commercial focus is on developing and fostering strong banking relationships with small to mid-size clients within our market area. At June 30, 2019, the largest commercial real estate loan in our portfolio was to a local borrower in Asheville, NC for $12.6 million, secured by a hotel. Our largest multi-family loan as of June 30, 2019 was a 76.74% interest in a 91 unit apartment property in Charlotte, NC with an outstanding balance of $9.7 million. Both of these loans were performing according to their original repayment terms as of June 30, 2019.

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 limited to 20 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 London Interbank Offered Rate ("LIBOR"), 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 80% on purchases and refinances. We require appraisals of all non-owner occupied commercial real estate securing loans in excess of $250,000, and all owner-occupied commercial real estate securing loans in excess of $500,000, performed by independent appraisers. For loans less than these amounts, we may use the tax assessed value, broker price opinions, and/or a property inspection in lieu of an appraisal.

If we foreclose on a commercial real estate loan, our holding period for the collateral typically is longer than for one-to-four family residential mortgage loans because there are fewer potential purchasers of the collateral. Further, our commercial real estate loans generally have relatively large balances to single borrowers or related groups of borrowers. Accordingly, if we make any errors in judgment in the collectability of our commercial real estate loans, any resulting charge-offs may be larger on a per loan basis than those incurred with our retail loan portfolios.

Construction and Development Lending.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 multi-family, 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 speculative one-to-four family or commercial real estate.

Our expansion into larger metro markets combined with the hiring of experienced commercial real estate relationship managers, credit officers, and the development of a construction risk management group to better manage construction risk, has led to a significant increase in and conscience effort to grow the construction and development portfolio. At June 30, 2019, our construction and development loans totaled $210.9 million, or 7.8% of our total loan portfolio. At June 30, 2019, $69.1 million or 32.8% of our construction and development loans required interest-only payments. A minimal amount of these construction loans provide for interest payments to be paid out of an interest reserve, which is established in connection with the origination of the loan pursuant to which we will fund the borrower's monthly interest payments and add the payments to the outstanding principal balance of the loan. Unfunded commitments at June 30, 2019 totaled $123.1 million compared to $151.6 million at June 30, 2018. Land acquisition and development loans are included in the construction and development loan portfolio, and represent loans made to developers for the purpose of acquiring raw land and/or 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.) with the aim of making improved lots ready for subsequent sale to consumers or builders for ultimate construction of residential units. The primary source of repayment is generally the cash flow from developer sale of lots or improved parcels of land, secondary sources and personal guarantees, which may provide an additional measure of security for such loans.

Land acquisition and development 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 up to 65% of the lower of the acquisition price or the appraised value of the land and generally have a maximum amortization term of ten years with a balloon maturity of up to three years. We require title insurance and, if applicable, a hazardous waste survey reporting that the land is free of hazardous or toxic waste. At June 30, 2019, our land acquisition and development loans in our commercial construction and development portfolio totaled $67.7 million. The largest land acquisition and development loan had an

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outstanding balance at June 30, 2019 of $4.3 million and was performing according to its repayment terms. The subject loan is secured by a residential lot development. At June 30, 2019, 7 land acquisition and development loans totaling $1.4 million were classified as nonaccruing.

Part of our land acquisition and development portfolio consists of speculative construction loans for homes. These homes typically have an average price ranging from $200,000 to $500,000. 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. The home buyer may be identified either during or after the construction period, with the risk that the builder will have to fund the debt service on the speculative construction loan and finance real estate taxes and other carrying costs of the completed home for a significant period of time after the completion of construction, until a home buyer is identified. Loans to finance the construction of speculative single-family homes and subdivisions are generally offered to experienced builders with proven track records of performance, are qualified using the same standards as other commercial loan credits and require cash reserves to carry projects through construction completions and sale of the project. These loans require payment of interest-only during the construction phase. At June 30, 2019, loans for the speculative construction of single family properties totaled $46.0 million compared to $48.7 million at June 30, 2018. At June 30, 2019, we had four borrowers each with an aggregate outstanding loan balance over $1.0 million which comprise 10.6% of the total balance for the speculative construction of single family properties and secured by properties located in our market areas. At June 30, 2019, no speculative construction loans were classified as nonaccruing. Unfunded commitments were $31.4 million at June 30, 2019 and $30.1 million at June 30, 2018.

Commercial construction and construction to permanent loans are offered on an adjustable interest rate or fixed interest rate basis. 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 is generally limited to 12 to 24 months from the date of origination, and amortization terms are generally limited to 20 years; however, amortization terms of up to 25 years may be available for certain property types based on elevated underwriting and qualification criteria. 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 commensurate with the percentage of completion of work in place, as documented by periodic internal or third-party inspections. The maximum loan-to-value limit applicable to these loans is generally 80% of the appraised post-construction value. Disbursement of funds is at our sole discretion and is based on the progress of construction. At June 30, 2019 we had $97.3 million of non-residential construction loans included in our commercial construction and development loan portfolio.

We require all real estate securing construction and development loans to be appraised by an independent Bank-approved state-licensed or state-certified real estate appraiser. General liability, builder’s risk hazard insurance, title insurance, and flood insurance (as applicable, for properties located or to be built in a designated flood hazard area) are also required on all construction and development loans.

Construction and development lending affords us the opportunity to achieve higher interest rates and fees with shorter terms to maturity than the rates and fees generated by our single-family permanent mortgage lending.

For the reasons set forth below, construction and development lending involves additional risks when compared with permanent residential lending. Our construction and development loans are based upon estimates of costs in relation to values associated with the completed project. Funds are advanced upon the collateral for the project based on an estimate of costs that will produce a future value at completion. Because of the uncertainties inherent in estimating construction costs, as well as the market value of the completed project and the effects of governmental regulation on real property, it is relatively difficult to evaluate accurately the total funds required to complete a project and the completed project loan-to-value ratio. Changes in the demand, such as for new housing, and higher than anticipated building costs may cause actual results to vary significantly from those estimated. This type of lending also typically involves higher loan principal amounts and is often concentrated with a small number of builders. These loans often involve the disbursement of funds with repayment substantially dependent on the success of the ultimate project and the ability of the borrower to sell or lease the property or obtain permanent take-out financing, rather than the ability of the borrower or guarantor to repay principal and interest. If our appraisal of the value of a completed project proves to be overstated, we may have inadequate security for the repayment of the loan upon completion of construction of the project and may incur a loss. Because construction loans require active monitoring of the building process, including cost comparisons and on-site inspections, these loans are more difficult and costly to monitor. Increases in market rates of interest may have a more pronounced effect on construction loans by rapidly increasing the end-purchasers' borrowing costs, thereby reducing the overall demand for the project. Properties under construction are often difficult to sell and typically must be completed in order to be successfully sold which also complicates the process of working out problem construction loans. This may require us to advance additional funds and/or contract with another builder to complete construction and assume the market risk of selling the project at a future market price, which may or may not enable us to fully recover unpaid loan funds and associated construction and liquidation costs. Furthermore, in the case of speculative construction loans, there is the added risk associated with identifying an end-purchaser for the finished project. Land acquisition and development loans also pose additional risk because of the lack of income being produced by the property and the potential illiquid nature of the collateral. These risks can also be significantly influenced by supply and demand conditions.

Commercial and Industrial Loans.  We typically offer commercial and industrial loans to small 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 vary from typically one to five years. The interest rates on such loans are either fixed rate or adjustable rate indexed to The Wall Street Journal prime rateplus a margin. Inherent with our extension of business credit is the business deposit relationship which frequently includes multiple accounts and related services from which we realize low cost deposits plus service and ancillary fee income.

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Commercial and industrial loans typically have shorter maturity terms and higher interest rates than real estate loans, but generally involve more credit risk because of the type and nature of the collateral. We are focusing our efforts on small- to medium-sized, privately-held companies with local or regional businesses that operate in our market areas. At June 30, 2019, commercial and industrial loans totaled $160.5 million, which represented 5.9% of our total loan portfolio. Our commercial and industrial lending policy includes credit file documentation and analysis of the borrower’s background, capacity to repay the loan, the adequacy of the borrower’s capital and collateral, as well as an evaluation of other conditions affecting the borrower. Analysis of the borrower’s past, present and future cash flows is also an important aspect of our credit analysis. We generally obtain personal guarantees on our commercial business loans.

During fiscal 2018, we began commercial business loan originations made under the U.S. Small Business Administration ("SBA") 7(a) and United States Department of Agriculture Business & Industry (“USDA B&I”) programs to small businesses located throughout the Southeast. We originate these loans and utilize a third party service provider that assists with processing and closing services based on the Bank’s underwriting and credit approval criteria. 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). The terms of these loans vary by use of funds. The loans are primarily underwritten on the basis of the borrower’s ability to service the loan from qualifying business income. 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. Typical maturities for this type of loan vary up to twenty-five years and can be thirty years in some circumstances. 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; loan servicing is handled by a third party loan sub-service provider for a fee paid for by the purchaser of the guaranteed loan portion. We generally offer SBA 7(a) loans up to $5.0 million and USDA B&I loans up to $10.0 million. During the year ended June 30, 2019, we originated $61.7 million and sold participating interests of $48.1 million in SBA 7(a) and USDA B&I loans.

Repayment of our commercial and industrial loans is often dependent on the cash flows of the borrower, which may be unpredictable, and the collateral securing these loans may fluctuate in value. Our commercial and industrial loans are originated primarily based on the identified cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. Most often, this collateral consists of equipment, inventory or accounts receivable. Credit support provided by the borrower for most of these loans and the probability of repayment is based on the liquidation of the pledged collateral and enforcement of a personal guarantee, if any. As a result, in the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. The collateral securing other loans may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business.

Equipment Finance. Our Equipment Finance line of business first began operations in May 2018 and offers companies that are purchasing equipment for their business various products to help manage tax and accounting issues, while offering flexible and customizable repayment terms. These products are primarily made up of commercial finance agreements and commercial loans for transportation equipment, construction equipment, and manufacturing. The loans have terms ranging from 24 to 84 months, with an average of five years and are secured by the financed equipment. Typical transaction sizes range from $25,000 to $1.0 million, with an average size of approximately $200,000. At June 30, 2019, equipment finance loans totaled $132.1 million, which represented 4.9% of our total loan portfolio.

Municipal Leases.  We offer ground and equipment lease financing to fire departments located primarily throughout North Carolina and, to a lesser extent, South Carolina. 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. Prior to December 31, 2016, we originated these loans primarily through a third party that assigned the lease to us after we funded the loan. On December 31, 2016, we acquired the third party originator, United Financial of North Carolina, Inc., and now all originations and underwriting is performed directly by us prior to funding. These leases are at a fixed rate of interest and may have a term to maturity of up to 20 years.

At June 30, 2019, municipal leases totaled $112.0 million, which represented 4.1% of our total loan portfolio. At that date, $38.5 million, or 34.4% of our municipal leases were secured by fire trucks, $30.5 million, or 27.3%, were secured by fire stations, $39.4 million or 35.1%, were secured by both, with the remaining $3.6 million or 3.2% secured by miscellaneous firefighting equipment. At June 30, 2019, the average outstanding municipal lease size was $371,000.

Repayment of our municipal leases is often dependent on the tax revenues collected by the county/municipality on behalf of the fire department. Although a municipal lease does not constitute a general obligation of the county/municipality for which the county/municipality's taxing power is pledged, a municipal lease is ordinarily backed by the county/municipality's covenant to budget for, appropriate and pay the tax revenues to the fire department. However, certain municipal leases contain "non-appropriation" clauses which provide that the municipality has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a yearly basis. In the case of a "non-appropriation" lease, our ability to recover under the lease in the event of non-appropriation or default will be limited solely to the repossession of the leased property, without recourse to the general credit of the lessee, and disposition or releasing of the property might prove difficult. At June 30, 2019, $11.8 million of our municipal leases contained a non-appropriation clause.

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Loan Originations, Purchases, Sales, Repayments and Servicing

We originate both fixed-rate and adjustable-rate loans. Our ability to originate loans, however, is dependent upon customer demand for loans in our market area. Demand is affected by competition and the interest rate environment. During the past few years, we, like many other financial institutions, have experienced significant prepayments on loans due to the low interest rate environment prevailing in the United States. In periods of economic uncertainty, the ability of financial institutions, including us, to originate large dollar volumes of real estate loans may be substantially reduced or restricted, with a resultant decrease in interest income. We do not generally purchase loans or loan participations except for certain HELOCs. We actively sell the majority of our long-term fixed-rate residential first mortgage loans to the secondary market at the time of origination and retain our adjustable-rate residential mortgages and certain fixed-rate mortgages with terms to maturity less than or equal to 15 years and other consumer and commercial loans. In addition, we began selling the guaranteed portion of SBA 7(a) and USDA B&I loans during fiscal 2018. During the years ended June 30, 2019 and 2018 we sold $168.0 million and $139.2 million, respectively, of predominantly one-to-four family loans and SBA 7(a) loans to the secondary market. We generally release the servicing of one-to-four family loans we sell into the secondary market, and retain the servicing on SBA 7(a) loans sold. Loans are generally sold on a non-recourse basis. 

In addition to interest earned on loans and loan origination fees, we receive fees for loan commitments, late payments and other miscellaneous services. The fees vary from time to time, generally depending on the supply of funds and other competitive conditions in the market.

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The following table shows our loan origination, purchase, sale and repayment activities for the periods indicated.

	Years Ended June 30,
	2019		2018		2017
Originations:(1)
Retail consumer:	(In thousands)
One-to-four family	$	182,483	$	189,562	$	233,478
Home equity - originated	70,532		57,018		47,072
Construction and land/lots	106,933		100,421		71,674
Indirect auto finance	55,610		99,558		84,707
Consumer	9,096		3,100		2,722
Commercial loans:
Commercial real estate	186,907		257,494		238,870
Construction and development	173,904		234,102		192,803
Commercial and industrial	78,089		57,643		92,591
Equipment finance	147,225		20,228		—
Municipal leases	22,748		21,038		8,278
Total loans originated	$	1,033,527	$	1,040,164	$	972,195
Purchases:
Retail consumer:
Home equity - purchased	$	—	$	60,371	$	77,000
Commercial loans:
Commercial real estate	1,005		790		930
Municipal leases	—		—		8,973
Loans acquired through business combination	—		—		258,059
Total loans purchased or acquired	$	1,005	$	61,161	$	344,962
Sales and repayments:
Retail consumer:
One-to-four family	$	121,158	$	125,830	$	135,365
Home equity - originated	—		—		—
Consumer	—		—		—
Commercial loans:
Commercial real estate	28,759		—		2,781
Construction and development	—		116		—
Commercial and industrial	18,124		13,244		—
Total sales	168,041		139,190		138,146
Principal repayments	674,851		787,487		660,548
Total reductions	$	842,892	$	926,677	$	798,694
Net increase	$	191,640	$	174,648	$	518,463

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(1) Originations include one-to-four family loans, HELOCs, SBA 7(a) loans, and USDA B&I loans originated for sale of $190.9 million, $143.8 million, and $134.3 million for years ended June 30, 2019, 2018, and 2017, respectively.

Asset Quality

Loan Delinquencies and Collection Procedure.  When a borrower fails to make a required payment on a residential real estate loan, we attempt to cure the delinquency by contacting the borrower. A late notice is sent 15 days after the due date, and the borrower may also be contacted by phone at this time. If the delinquency continues, subsequent efforts are made to contact the delinquent borrower and additional collection notices and letters are sent. When a loan is 90 days delinquent, we may commence repossession or a foreclosure action. Reasonable attempts are made to collect from borrowers prior to referral to an attorney for collection. In certain instances, we may modify the loan or grant a limited moratorium on loan payments to enable the borrower to reorganize their financial affairs, and we attempt to work with the borrower to establish a repayment schedule to cure the delinquency.

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Delinquent consumer loans are handled in a similar manner, except that late notices are sent within 30 days after the due date. Our procedures for repossession and sale of consumer collateral are subject to various requirements under the applicable consumer protection laws, as well as other applicable laws, and the determination by us that it would be beneficial from a cost basis.

Delinquent commercial loans are initially handled by the relationship manager of the loan, who is responsible for contacting the borrower. Larger problem commercial loans are transferred to the Bank's Special Assets Department for resolution or collection activities. The Special Assets Department may work with the commercial relationship managers to see that the necessary steps are taken to collect delinquent loans, while ensuring that standard default notices and letters are mailed to the borrower. If a commercial loan becomes more problematic, or goes 90 days past the due date, a Special Assets officer will take over the loan for further collection activities including any legal action that may be necessary. If an acceptable workout or disposition plan of a delinquent commercial loan cannot be reached, we generally initiate foreclosure or repossession proceedings on any collateral securing the loan.

The following table sets forth our loan delinquencies by type, by amount and by percentage of type at June 30, 2019.

	Loans Delinquent For:
											Total Loans Delinquent
	30-89 Days					90 Days and Over					30 Days or More
	Number	Amount		Percent of Loan Category		Number	Amount		Percent of Loan Category		Number	Amount		Percent of Loan Category
	(Dollars in thousands)
Retail consumer loans:
One-to-four family	30	$	1,615	0.24	%	34	$	1,389	0.21	%	64	$	3,004	0.45	%
Home equity - originated	6	226		0.17		4	208		0.16		10	434		0.33
Home equity - purchased	—	—		—		2	485		—		2	485		—
Construction and land/lots	1	138		0.17		2	6		0.01		3	144		0.18
Indirect auto finance	28	459		0.30		19	237		0.15		47	696		0.45
Consumer	5	6		0.03		6	31		0.16		11	37		0.19
Commercial loans:
Commercial real estate	4	2,279		0.25		10	516		0.05		14	2,795		0.30
Construction and development	—	—		—		9	1,133		0.54		9	1,133		0.54
Commercial and industrial	4	207		0.13		31	99		0.06		35	306		0.19
Equipment finance	4	649		0.49		3	384		0.29		7	1,033		0.78
Total	82	$	5,579	0.21	%	120	$	4,488	0.17	%	202	$	10,067	0.37	%

Nonperforming Assets.  Nonperforming assets were $13.3 million, or 0.38% of total assets at June 30, 2019, compared to $14.6 million, or 0.44%, at June 30, 2018.

Over the past several years we have significantly improved our risk profile by aggressively managing and reducing our problem assets. We continue to believe our level of nonperforming assets is manageable, and we believe that we have sufficient capital and human resources to manage the collection of our nonperforming assets in an orderly fashion. However, our operating results could be adversely impacted if we are unable to effectively manage our nonperforming 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. Troubled debt restructurings are loans which have renegotiated loan terms to assist borrowers who are unable to meet the original terms of their loans. Such modifications to loan terms may include a lower interest rate, a reduction in principal, or a longer term to maturity. During the fiscal year ended June 30, 2019, 29 loans for $7.3 million were modified from their original terms and were classified as a troubled debt restructuring. This compares to 31 loans for $4.2 million that were modified in the fiscal year ended June 30, 2018. As of June 30, 2019, the outstanding balance of troubled debt restructured loans was $27.9 million, comprised of 303 loans as compared to $26.2 million comprised of 329 loans at June 30, 2018.

Once a nonaccruing troubled debt restructuring has performed according to its modified terms for six months and the collection of principal and interest under the revised terms is deemed probable, the troubled debt restructuring is removed from nonaccrual status. At June 30, 2019, $4.5 million of troubled debt restructurings were classified as nonaccrual, including $1.2 million of construction and development loans. As of June 30, 2019, $23.1 million, or 82.8% of the restructured loans have a current payment status as compared to $21.2 million, or 81.3% at June 30, 2018. Performing troubled debt restructurings increased $1.9 million, or 8.8%, from June 30, 2018 to June 30, 2019. The table below sets forth the amounts and categories of nonperforming assets.

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	At June 30,
	2019			2018			2017			2016			2015
Nonaccruing loans:(1) Retail consumer loans:	(In thousands)
One-to-four family	$	3,223		$	4,308		$	6,453		$	9,192		$	10,523
Home equity - originated	348			656			1,291			1,026			1,856
Home equity - purchased	666			187			192			—			—
Construction and land/lots	6			165			245			188			465
Indirect auto finance	463			255			1			20			—
Consumer	45			321			29			15			49
Commercial loans:
Commercial real estate	3,559			2,863			2,756			3,222			5,103
Construction and development	1,357			2,045			1,766			1,417			3,461
Commercial and industrial	307			114			827			3,019			3,081
Equipment finance	384			—			—			—			—
Municipal leases	—			—			106			419			316
Total nonaccruing loans	10,358			10,914			13,666			18,518			24,854
Real Estate Owned assets:
Retail consumer loans:
One-to-four family	756			801			990			794			1,613
Home equity - originated	281			197			45			30			20
Construction and land/lots	358			498			690			846			1,096
Commercial loans:
Commercial real estate	1,237			1,730			2,736			1,211			978
Construction and development	297			458			1,857			3,075			3,317
Total foreclosed assets	2,929			3,684			6,318			5,956			7,024
Total nonperforming assets	$	13,287		$	14,598		$	19,984		$	24,474		$	31,878
Total nonperforming assets as a percentage of total assets	0.38		%	0.44		%	0.62		%	0.90		%	1.15		%
Performing Troubled Debt Restructurings	$	23,116		$	21,251		$	27,043		$	28,263		$	21,891

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(1) Purchased-credit impaired ("PCI") loans totaling $1,344 at June 30, 2019, $3,353 at June 30, 2018, $6,664 at June 30, 2017, $6,607 at June 30, 2016, and $8,158 at June 30, 2015 are excluded from nonaccruing loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations.

For the years ended June 30, 2019 and 2018, gross interest income which would have been recorded had the nonaccruing loans been current in accordance with their original terms amounted to $578,000 and $668,000, respectively. The amount that was included in interest income on such loans was $679,000and $702,000, respectively. At June 30, 2019, $15.7 million in impaired loans were individually evaluated for impairment; $120,000 of the allowance for loan losses was allocated to these individually impaired loans at period-end. A loan is impaired when it is probable, based on current information and events, that we will be unable to collect all contractual principal and interest payments due in accordance with the terms of the loan agreements. Troubled debt restructurings are also considered impaired. Impaired loans are measured on an individual basis for individually significant loans based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. The amount of impairment, if any, and any subsequent changes are included in the allowance for loan losses.

We record real estate owned ("REO") (property acquired through a lending relationship) at fair value less cost to sell on a non-recurring basis. All REO properties are recorded at amounts which are equal to the fair value of the properties based on independent appraisals (reduced by estimated selling costs) upon transfer of the loans to REO. From time to time, non-recurring fair value adjustments to REO are recorded to reflect partial write-downs based on an observable market price or current appraised value of property. The individual carrying values of these assets are reviewed for impairment at least annually and any additional impairment charges are expensed to operations. For the years ended June 30, 2019 and 2018, we recognized $295,000 and $539,000, respectively, of REO impairment charges.

Within our nonaccruing loans, as of June 30, 2019 we had one nonaccrual lending relationship with aggregate loan exposure in excess of $1.0 million, or 20.6% of our total nonaccruing loans. This lending relationship consists of two loans totaling $2.1 million as of June 30, 2019. These two loans are secured by commercial land and a stand alone retail property under a long-term lease with a national tenant. The collateral for both loans is located in Buncombe County, NC. At June 30, 2019, we had $2.9 million of REO, the largest of which had a book value of $477,500 and is related to commercial real estate located in Boiling Springs, NC. The second and third largest REO properties at June 30, 2019 consist of multifamily properties located in Bristol, VA with book values of $390,000 and $312,000, respectively. At June 30, 2019 all other REO properties

21

have individual book values of less than $228,000.

REO decreased $755,000, to $2.9 million at June 30, 2019 primarily due to the $903,000 in sales of REO and $439,000 in writedowns and losses on the sale of REO, which were partially offset by $731,000 in transfers from loans. The total balance of REO included $655,000 in land, construction and development projects (both residential and commercial), $1.2 million in commercial real estate, and $1.0 in single-family homes at June 30, 2019.

In fiscal 2019, we liquidated $1.6 million in REO based on contractual loan values at the time of foreclosure, realizing $1.0 million in net proceeds, or 64.2%, of the foreclosed contractual loan balances. As of June 30, 2019, the book value of our REO, expressed as a percentage of the related contractual loan balances at the time the properties were transferred to REO was 37.8%.

Other Loans of Concern.  In addition to the nonperforming assets set forth in the table above, as of June 30, 2019, there were 355 accruing loans totaling $33.3 million with respect to which known information about the possible credit problems of the borrowers have caused management to have concerns as to the ability of the borrowers to comply with present loan repayment terms and which may result in the future inclusion of such items in the nonperforming asset categories. These loans have been considered in management’s determination of our allowance for loan losses.

Classified Assets.  Loans and other assets, such as debt and equity securities considered to be of lesser quality, are classified as “substandard,” “doubtful” or “loss.” An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses in those classified “substandard,” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.

When we classify a problem asset as either substandard or doubtful, we may establish a specific allowance for loan losses in an amount deemed prudent by management. When we classify problem assets as “loss,” we either establish a specific allowance for losses equal to 100% of that portion of the asset so classified or charge off such amount. Our determination as to the classification of our assets and the amount of our valuation allowances is subject to review by our bank regulators, which may order the establishment of additional general or specific loss allowances. Assets which do not currently expose us to sufficient risk to warrant classification in one of the aforementioned categories but possess weakness are designated by us as “special mention.”

We regularly review the problem assets in our portfolio to determine whether any assets require classification in accordance with applicable regulations. On the basis of management's review of our assets, at June 30, 2019, our classified assets (consisting of $28.0 million of loans and $2.9 million of REO) totaled $30.9 million, or 1.00%, of our assets, of which $10.4 million was included in nonaccruing loans. The aggregate amounts of our classified assets and special mention loans at the dates indicated (as determined by management), were as follows:

		At June 30,
		2019		2018
Classified Assets:		(In thousands)
Loss		$	35	$	31
Doubtful		388		952
Substandard	– performing	17,443		18,042
	– nonaccruing	10,129		10,349
Total classified loans		27,995		29,374
REO		2,929		3,684
Total classified assets		30,924		33,058
Special mention loans		15,119		14,359
Total classified assets and special mention loans		$	46,043	$	47,417

Allowance for Loan Losses.  The allowance for loan losses is a valuation account that reflects our estimation of the losses in our loan portfolio to the extent they are reasonable to estimate. The allowance is maintained through provisions for loan losses that are charged to earnings in the period they are established. We charge losses on loans against the allowance for loan losses when we believe the collection of loan principal is unlikely. Recoveries on loans previously charged off are added back to the allowance.

In recent years, home and lot sales activity and real estate values have improved along with general economic conditions in our market areas resulting in materially lower loan charge-offs and nonaccruing loans than in prior fiscal years. Proactively managing our loan portfolio and aggressively resolving troubled assets has been and will continue to be a primary focus for us. As a result, our nonperforming assets continue to decline. At June 30, 2019, our nonaccruing loans decreased to $10.4 million as compared to $10.9 million at June 30, 2018, and $13.7 million at June 30, 2017. At June 30, 2019, $4.1 million, or 39.6%, of our total nonaccruing loans were current on their loan payments as compared to $5.6 million, or 51.6%, of total nonaccruing loans at June 30, 2018. During fiscal 2019 classified assets decreased $2.1 million, or 6.5%, to $30.9

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million and delinquent loans (loans delinquent 30 days or more) increased $254,000, or 2.6%, to $10.1 million at June 30, 2019. There were $5.3 million and $91,000 in net loan charge-offs during the fiscal years ended June 30, 2019 and 2018, respectively. There was a $5.7 million provision for loan losses during fiscal 2019 compared to no provision in 2018. The provision and increase in charge-offs was primarily related to a $6.0 million commercial lending relationship, which was fully charged off in the third and fourth quarters this fiscal year, as a result of the Company becoming aware at the end of March 2019, that a commercial borrower operating as a heavy equipment contractor with $6.0 million of outstanding borrowings from the Bank had unexpectedly ceased operations. For more information on this loan relationship, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Allowance for loan losses."

At June 30, 2019, our allowance for loan losses was $21.4 million, or 0.79%, of our total loan portfolio, and 206.9% of total nonaccruing loans.Excluding loans acquired, which have been recorded at fair value with an appropriate credit discount, the allowance for loan losses was 0.85% of total loans at June 30, 2019. Management’s estimation of an appropriate allowance for loan losses is inherently subjective as it requires estimates and assumptions that are susceptible to significant revisions as more information becomes available or as future events change. The level of allowance is based on estimates and the ultimate losses may vary from these estimates. Large groups of smaller balance homogeneous loans, such as residential real estate, small commercial real estate, home equity and consumer loans, are evaluated in the aggregate using historical loss factors adjusted for current economic conditions. Assessing the allowance for loan losses is inherently subjective as it requires making material estimates, including the amount and timing of future cash flows expected to be received. In the opinion of management, the allowance, when taken as a whole, reflects estimated loan losses in our loan portfolio.

A loan is considered impaired when, based on current information and events, it is probable that we will be unable to collect the scheduled payments of principal or interest when due. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Future additions to the allowance for loan losses may be necessary if economic and other conditions in the future differ substantially from the current operating environment. In addition, the Federal Reserve and the NCCOB as an integral part of their examination process periodically review our loan and REO portfolios and the related allowance for loan losses and valuation allowance for foreclosed real estate. The regulators may require the allowance for loan losses or the valuation allowance for foreclosed real estate to be increased based on their review of information available at the time of the examination, which would negatively affect our earnings.

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The following table summarizes the distribution of the allowance for loan losses by loan category at the dates indicated.

	At June 30,
	2019				2018				2017				2016				2015
	Amount		Percent of loans in each category to total loans		Amount		Percent of loans in each category to total loans		Amount		Percent of loans in each category to total loans		Amount		Percent of loans in each category to total loans		Amount		Percent of loans in each category to total loans
	(Dollars in thousands)
Allocated at end of period to:
Retail consumer loans:
One-to-four family	$	2,511	24.42	%	$	3,360	26.29	%	$	4,476	29.08	%	$	6,595	34.04	%	$	7,990	38.61	%
Home equity - originated	1,030		4.85		1,123		5.44		1,384		6.68		1,997		8.91		1,777		9.56
Home equity - purchased	518		4.32		795		6.58		838		6.90		558		7.88		432		4.27
Construction and land/lots	1,265		2.98		1,153		2.60		977		2.13		1,344		2.08		1,822		2.73
Indirect auto finance	927		5.67		1,126		6.85		881		5.99		1,016		5.92		464		3.11
Consumer	230		0.73		68		0.49		57		0.34		61		0.25		128		0.22
Commercial loans:
Commercial real estate	8,036		34.28		8,195		33.92		7,351		31.04		6,430		26.55		6,339		26.20
Construction and development	3,196		7.80		3,346		7.60		3,166		8.42		1,908		4.74		1,581		3.83
Commercial and industrial	1,976		5.93		1,476		5.36		1,524		5.12		721		4.00		1,104		5.03
Equipment finance	1,305		4.88		—		—		—		—		—		—		—		—
Municipal leases	435		4.14		418		4.32		497		4.30		662		5.63		737		6.44
Total loans	$	21,429	100.00	%	$	21,060	100.00	%	$	21,151	100.00	%	$	21,292	100.00	%	$	22,374	100.00	%

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The following table sets forth an analysis of our allowance for loan losses at the dates and for the periods indicated.

	Years Ended June 30,
	2019			2018			2017			2016			2015
	(Dollars in thousands)
Balance at beginning of period:	$	21,060		$	21,151		$	21,292		$	22,374		$	23,429
Provision for loan losses	5,700			—			—			—			150
Charge-offs:
Retail consumer loans:
One-to-four family	99			538			439			799			1,878
Home equity - originated	499			9			18			94			551
Home equity - purchased	—			—			48			—			—
Construction and land/lots	1			2			165			321			483
Indirect auto finance	509			578			531			281			107
Consumer	28			15			18			168			274
Total retail consumer loans	1,136			1,142			1,219			1,663			3,293
Commercial loans:
Commercial real estate	—			282			139			200			704
Construction and development	50			381			21			259			368
Commercial and industrial	6,037			842			1,171			1,582			495
Equipment finance	186			—			—			—			—
Municipal leases	—			—			—			—			—
Total commercial loans	6,273			1,505			1,331			2,041			1,567
Total charge-offs	7,409			2,647			2,550			3,704			4,860
Recoveries:
Retail consumer loans:
One-to-four family	555			411			181			683			758
Home equity - originated	556			307			231			157			231
Construction and land/lots	57			173			487			44			95
Indirect auto finance	54			39			122			58			34
Consumer	50			60			63			292			91
Total retail consumer loans	1,272			990			1,084			1,234			1,209
Commercial loans:
Commercial real estate	74			107			58			883			479
Construction and development	226			81			539			265			1,311
Commercial and industrial	506			1,378			728			240			656
Municipal leases	—			—			—			—			—
Total commercial loans	806			1,566			1,325			1,388			2,446
Total recoveries	2,078			2,556			2,409			2,622			3,655
Net charge-offs	5,331			91			141			1,082			1,205
Balance at end of period	$	21,429		$	21,060		$	21,151		$	21,292		$	22,374
Net charge-offs during the period to average loans outstanding during the period	0.20		%	—		%	0.01		%	0.06		%	0.07		%
Net charge-offs during the period to average non-performing assets	50.00		%	0.53		%	0.67		%	3.77		%	2.89		%
Allowance as a percentage of nonperforming assets	161.28		%	144.27		%	105.84		%	87.00		%	70.19		%
Allowance as a percentage of total loans(1)	0.79		%	0.83		%	0.90		%	1.16		%	1.33		%

______________

(1)  Excluding loans acquired, which have been recorded at fair value with an appropriate credit discount, the allowance for loan losses was 0.85%, 0.91%, 1.03%, 1.32%, and 1.58% of total loans at June 30, 2019, 2018, 2017, 2016, and 2015, respectively.

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Investment Activities

The Bank invests in various securities based on investment policies that have been approved by our board of directors and adhere to bank regulations. These securities include: United States Treasury obligations, securities of various federal agencies, including mortgage-backed securities, callable agency securities, certain certificates of deposit of insured banks and savings institutions, municipal bonds, investment grade corporate bonds and commercial paper, and federal funds. See “How We Are Regulated - HomeTrust Bank” for a discussion of additional restrictions on our investment activities.

Our chief executive officer and chief financial officer have the basic responsibility for the management of our investment portfolio, subject to the direction and guidance of the board of directors. These officers consider various factors when making decisions, including the marketability, maturity, and tax consequences of the proposed investment. The maturity structure of investments will be affected by various market conditions, including the current and anticipated slope of the yield curve, the level of interest rates, the trend of new deposit inflows, and the anticipated demand for funds via deposit withdrawals and loan originations and purchases.

The general objectives of our investment portfolio are to provide liquidity when loan demand is high, to assist in maintaining earnings when loan demand is low and to optimize earnings while satisfactorily managing risk, including credit risk, reinvestment risk, liquidity risk, and interest rate risk. At June 30, 2019, our $121.8 million securities portfolio consisted primarily of U.S. government agency securities and mortgage-backed securities, all held as available for sale. We currently do not have any investments held to maturity or for trading.

These securities are of high quality, possess minimal credit risk, and have an aggregate market value which is $952,000 more than total amortized cost as of June 30, 2019. For more information, please see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Asset/Liability Management” and Note 3 of the Notes to Consolidated Financial Statements contained in Item 8 in this report.

The Company also purchases commercial paper to take advantage of higher short-term returns with relatively low credit risk, yet remaining highly liquid. The commercial paper balance at June 30, 2019 was $241.4 million. For more information, please see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Financial Condition at June 30, 2019 and June 30, 2018.”

We do not currently participate in hedging programs, stand-alone contracts for interest rate caps, floors or swaps, or other activities involving the use of off-balance sheet derivative financial instruments and have no present intention to do so. Further, we do not invest in securities which are not rated investment grade.

As a member of the FHLB of Atlanta, we had $32.0 million in stock of the FHLB of Atlanta at June 30, 2019. For the years ended June 30, 2019 and 2018, we received $2.0 million and $1.6 million, respectively, in dividends from the FHLB of Atlanta. As a member bank of the Federal Reserve, the Bank is required to maintain stock in the Federal Reserve Bank of Richmond ("FRB"). At June 30, 2019 we had $7.3 million in FRB stock. For the years ended June 30, 2019 and 2018, we received $439,000 and $438,000, respectively, in dividends from the FRB.

The Company also maintains equity investments in Small Business Investment Companies ("SBIC"), which are considered equity securities without a readily determinable fair value. At June 30, 2019, we had $6.1 million in SBIC investments. For the years ended June 30, 2019 and 2018, we received $1.1 million and $700,000, respectively, in earnings from the SBIC investments.

The following table sets forth the composition of our securities portfolio and other investments at the dates indicated. All securities at the dates indicated have been classified as available for sale. At June 30, 2019, our securities portfolio did not contain securities of any issuer with an aggregate book value in excess of 10% of our equity capital, excluding those issued by the United States government or its agencies or United States government sponsored entities.

	At June 30,
	2019				2018				2017
	Book Value		Fair Value		Book Value		Fair Value		Book Value		Fair Value
	(In thousands)
Securities available for sale:
U.S. government agencies	$	15,099	$	15,210	$	48,025	$	47,542	$	65,947	$	65,830
Mortgage-backed securities	74,778		75,180		71,949		70,599		92,841		92,971
Municipal bonds	24,896		25,312		30,865		30,766		34,135		34,510
Corporate bonds	6,061		6,084		6,166		6,023		6,267		$	6,293
Equity securities	—		—		63		63		63		63
Total debt securities available for sale	120,834		121,786		157,068		154,993		199,253		199,667
FHLB stock	31,969		31,969		29,907		29,907		32,071		32,071
FRB stock	7,335		7,335		7,307		7,307		7,284		7,284
SBIC investments (1)	6,074		6,074		4,717		4,717		—		—
Total securities	$	166,212	$	167,164	$	198,999	$	196,924	$	238,608	$	239,022

(1) Prior to the adoption of Accounting Standards Update 2016-01, SBIC Investments were maintained in other assets.

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The composition and contractual maturities of our investment securities portfolio as of June 30, 2019, excluding equity securities, FHLB stock, and FRB stock, are 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.

	June 30, 2019
	1 year or less			Over 1 year to 5 years			Over 5 to 10 years			Over 10 years			Total
Securities available for sale:	(Dollars in thousands)
U.S. government agencies:
Amortized cost	$	2,686		$	12,413		$	—		$	—		$	15,099
Fair value	2,691			12,519			—			—			15,210
Weighted average yield	2.27		%	2.02		%	—		%	—		%	2.08		%
Mortgage-backed securities
Amortized cost	1			21,534			24,013			29,230			74,778
Fair value	1			21,595			24,170			29,414			75,180
Weighted average yield	1.72		%	2.46		%	2.21		%	2.93		%	2.56		%
Municipal bonds
Amortized cost	2,664			12,052			5,538			4,641			24,895
Fair value	2,668			12,181			5,798			4,665			25,312
Weighted average yield	2.44		%	2.96		%	3.40		%	3.20		%	2.95		%
Corporate bonds
Amortized cost	—			6,061			—			—			6,061
Fair value	—			6,084			—			—			6,084
Weighted average yield	—		%	2.88		%	—		%	—		%	2.96		%
Total securities
Amortized cost	$	5,351		$	52,060		$	29,551		$	33,871		$	120,833
Fair value	$	5,360		$	52,379		$	29,968		$	34,079		$	121,786
Weighted average yield	2.36		%	2.52		%	2.43		%	2.96		%	2.60		%

Sources of Funds

General.  Our sources of funds are primarily deposits, borrowings, payments of principal and interest on loans, and funds provided from operations. Deposits increased $131.0 million, or 6.0%, to $2.3 billion at June 30, 2019 as compared to $2.2 billion at June 30, 2018.

Deposits.  We offer a variety of deposit accounts with a wide range of interest rates and terms to both consumers and businesses. Our deposits consist of savings, money market and demand accounts, and certificates of deposit ("CDs"). We solicit deposits primarily in our market areas. At June 30, 2019, 2018 and 2017, we had $176.8 million, $108.9 million, and $16.8 million in brokered deposits, respectively. As of June 30, 2019, core deposits, which we define as our non-certificate or non-time deposit accounts, represented approximately 69.4% of total deposits.

We primarily rely on competitive pricing policies, marketing, and customer service to attract and retain deposits. The flow of deposits is influenced significantly by general economic conditions, changes in money market and prevailing interest rates and competition. The variety of deposit accounts we offer has allowed us to be competitive in obtaining funds and to respond with flexibility to changes in consumer demand. We have become more susceptible to short-term fluctuations in deposit flows as customers have become more interest rate conscious. We try to manage the pricing of our deposits in keeping with our asset/liability management, liquidity and profitability objectives, subject to competitive factors. Based on our experience, we believe that our deposits are relatively stable sources of funds. Despite this stability, our ability to attract and maintain these deposits and the rates paid on them has been and will continue to be significantly affected by market conditions.

Approximately 30.6% of our total deposits are comprised of CDs. Our liquidity could be reduced if a significant amount of CDs, maturing within a short period of time, were not renewed. Historically, a significant portion of our CDs remain with us after they mature and we believe that this will continue. However, the need to retain these time deposits could result in an increase in our cost of funds.

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The following table sets forth our deposit flows during the periods indicated.

	Years Ended June 30,
(Dollars in thousands)	2019			2018			2017
Beginning balance	$	2,196,253		$	2,048,451		$	1,802,696
Deposits acquired from business combination	—			—			280,234
Net deposit increase (decrease)	115,322			141,048			(39,067		)
Interest credited	15,682			6,754			4,588
Ending balance	$	2,327,257		$	2,196,253		$	2,048,451
Net increase	$	131,004		$	147,802		$	245,755
Percent increase	5.96		%	7.22		%	13.63		%

The following table sets forth the dollar amount of deposits in the various types of deposit programs offered by us at the dates indicated.

	2019				2018				2017
	Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total
(Dollars in thousands)
Transaction and Savings Deposits:
Interest-bearing checking	$	452,295	19.43	%	$	471,364	21.46	%	$	469,377	22.91	%
Noninterest-bearing checking	294,322		12.65		317,822		14.47		310,172		15.14
Savings	177,278		7.62		213,250		9.71		237,149		11.58
Money market	691,172		29.70		677,665		30.86		569,607		27.81
Total non-certificates	$	1,615,067	69.40	%	$	1,680,101	76.50	%	$	1,586,305	77.44	%
Certificates:
0.00-0.99%	$	134,813	5.79	%	$	273,087	12.43	%	$	360,449	17.60	%
1.00-1.99%	122,803		5.28		197,875		9.01		89,279		4.36
2.00-2.99%	441,911		18.99		35,707		1.63		2,755		0.13
3.00-3.99%	8,246		0.35		5,066		0.23		5,234		0.26
4.00-4.99%	4,415		0.19		4,415		0.20		4,427		0.22
5.00% and over	2		—		2		—		2		—
Total certificates	$	712,190	30.60	%	$	516,152	23.50	%	$	462,146	22.56	%
Total deposits	$	2,327,257	100.00	%	$	2,196,253	100.00	%	$	2,048,451	100.00	%

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The following table shows rate and maturity information for our CDs at June 30, 2019.

	0.00- 0.99%			1.00- 1.99%			2.00- 2.99%			3.00- 3.99%			4.00- 4.99%			5.00% or greater			Total			Percent of Total
	(In thousands)
Quarter ending:
September 30, 2019	$	39,791		$	54,080		$	71,664		$	2,792		$	69		$	—		$	168,396		23.7	%
December 31, 2019	25,567			45,928			111,887			1,402			—			—			184,784			26.0
March 31, 2020	15,324			7,025			74,365			749			—			—			97,463			13.7
June 30, 2020	15,025			3,856			45,995			—			—			—			64,876			9.1
September 30, 2020	8,648			1,767			29,800			—			—			2			40,217			5.6
December 31, 2020	6,282			2,006			18,045			18			—			—			26,351			3.7
March 31, 2021	4,341			855			15,339			—			—			—			20,535			2.9
June 30, 2021	3,603			938			23,283			—			—			—			27,824			3.9
September 30, 2021	3,541			403			7,799			—			2,018			—			13,761			1.9
December 31, 2021	2,224			544			16,932			347			—			—			20,047			2.8
March 31, 2022	2,069			490			8,697			30			—			—			11,286			1.6
June 30, 2022	1,945			344			5,522			—			—			—			7,811			1.1
Thereafter	6,453			4,567			12,583			2,908			2,328			—			28,839			4.0
Total	$	134,813		$	122,803		$	441,911		$	8,246		$	4,415		$	2		$	712,190		100.0	%
Percent of total	18.9		%	17.2		%	62.1		%	1.2		%	0.6		%	—		%	100.0		%

The following table indicates the amount of our CDs by time remaining until maturity as of June 30, 2019.

	Maturity
	3 Months or Less		Over 3 to 6 Months		Over 6 to 12 Months		Over 12 Months		Total
	(In thousands)
CDs less than $100,000	$	37,185	$	38,018	$	49,169	$	94,678	$	219,050
CDs of $100,000 or more	116,780		138,179		100,238		98,712		453,909
Public funds(1)	14,431		8,587		12,932		3,281		39,231
Total certificates of deposit	$	168,396	$	184,784	$	162,339	$	196,671	$	712,190

_______________________________

(1) Deposits from government and other public entities.

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 when they can be invested at a positive interest rate spread for additional capacity to fund loan demand according to our asset/liability management goals. Our borrowings consist of advances from the FHLB of Atlanta.

We may obtain advances from the FHLB of Atlanta upon the security of certain of our mortgage loans and mortgage-backed and other securities. 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, and all long-term advances are required to provide funds for residential home financing. As of June 30, 2019, we had $680.0 million in FHLB advances outstanding and the ability to borrow an additional $84.5 million. In addition to FHLB advances, at June 30, 2019 we had a $130.0 million line of credit with the FRB, subject to qualifying collateral, and $70.0 million available through lines of credit with three unaffiliated banks, none of which was outstanding at June 30, 2019. See Note 11 of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for more information about our borrowings.

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

	Year ended June 30,
	2019			2018			2017
	(Dollars in thousands)
Maximum balance:
Federal Home Loan Bank advances	$	720,000		$	699,000		$	696,500
Average balances:
Federal Home Loan Bank advances	$	672,186		$	658,240		$	577,848
Weighted average interest rate:
Federal Home Loan Bank advances	2.18		%	1.41		%	0.63		%

	At June 30,
	2019			2018			2017
	(Dollars in thousands)
Balance outstanding at end of period:
Federal Home Loan Bank advances	$	680,000		$	635,000		$	696,500
Weighted average interest rate:
Federal Home Loan Bank advances	2.10		%	1.95		%	1.13		%

Subsidiary and Other Activities

HomeTrust Bank has one operating subsidiary, Western North Carolina Service Corporation (“WNCSC”), whose primary purpose is to own several office buildings in Asheville, North Carolina which are leased to HomeTrust Bank. Our capital investment in WNCSC as of June 30, 2019 was $895,000.

Employees

At June 30, 2019, we had a total of 505 full-time employees and 77 part-time employees. Our employees are not represented by any collective bargaining group. Management considers its employee relations to be good. Management also considers our employees to be a great team of highly engaged, competent and caring people who ensure every day that our customers are "Ready For What's Next" in their financial life. Their performance creates word-of-mouth referrals that result in the growth of new customers and expanded customer relationships.

Internet Website

We maintain a website with the address www.htb.com. The information contained on our website is not included as a part of, or incorporated by reference into, this Annual Report on Form 10-K. Other than an investor’s own Internet access charges, we make available free of charge through our website our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to these reports, as soon as reasonably practicable after we have electronically filed such material with, or furnished such material to, the SEC.

HOW WE ARE REGULATED

General. HomeTrust Bancshares, Inc. is subject to examination and supervision by, and is required to file certain reports with, the Federal Reserve. HomeTrust Bancshares, Inc. is also subject to the rules and regulations of the SEC under the federal securities laws.

The Bank is subject to examination and regulation primarily by the NCCOB and the Federal Reserve. This system of regulation and supervision establishes a comprehensive framework of activities in which the Bank may engage and is intended primarily for the protection of depositors and the FDIC deposit insurance fund. The Bank is periodically examined by the NCCOB and the Federal Reserve to ensure that it satisfies applicable standards with respect to its capital adequacy, assets, management, earnings, liquidity and sensitivity to market interest rates. The NCCOB and the Federal Reserve also regulate the branching authority of the Bank. The Bank’s relationship with its depositors and borrowers is regulated by federal consumer protection laws. The CFPB issues regulations under those laws that the Bank must comply with. The Bank’s relationship with its depositors and borrowers is also regulated by state laws with respect to certain matters, including the enforceability of loan documents.

On August 25, 2014, the Bank converted from a federal savings bank to a national bank. In connection with this conversion of the Bank, HomeTrust Bancshares, Inc. changed from a savings and loan holding company to a bank holding company, regulated under the Bank Holding Company Act ("BHCA"). On December 31, 2015, the Bank converted from a national bank to a North Carolina state-chartered bank and remained a member of the Federal Reserve System. Prior to December 31, 2015, the Bank was regulated by the Office of the Comptroller of the Currency. In connection with the charter change, the Company elected to be treated as a financial holding company by the Federal Reserve.

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The following is a brief description of certain laws and regulations applicable to HomeTrust Bancshares, Inc. and the Bank. Descriptions of laws and regulations here and elsewhere in this report do not purport to be complete and are qualified in their entirety by reference to the actual laws and regulations. Legislation is introduced from time to time in the United States Congress and the North Carolina legislature that may affect the operations of HomeTrust Bancshares and the Bank. In addition, the regulations that govern us may be amended from time to time. Any such legislation or regulatory changes in the future could adversely affect our operations and financial condition.

Financial Regulatory Reform.The Dodd-Frank Act, which was enacted in July 2010, imposed various restrictions and an expanded framework of regulatory oversight for financial entities, including depository institutions and their holding companies.

In May 2018, the Economic Growth, Regulatory Relief and Consumer Protection Act (the “Regulatory Relief Act”), was enacted to modify or remove certain financial reform rules and regulations, including some of those implemented under the Dodd-Frank Act. While the Act maintains most of the regulatory structure established by the Dodd-Frank Act, it amends certain aspects of the regulatory framework for small depository institutions with assets of less than $10 billion and for large banks with assets of more than $50 billion. Many of these changes could result in meaningful regulatory changes for community banks such as HomeTrust Bank, and their holding companies.

The Regulatory Relief Act, among other matters, expands the definition of qualified mortgages which may be held by a financial institution and simplifies the regulatory capital rules for financial institutions and their holding companies with total consolidated assets of less than $10 billion by instructing the federal banking regulators to establish a single “Community Bank Leverage Ratio” of between 8 and 10 percent. Any qualifying depository institution or its holding company that exceeds the “community bank leverage ratio” will be considered to have met generally applicable leverage and risk-based regulatory capital requirements and any qualifying depository institution that exceeds the new ratio will be considered to be “well capitalized” under the prompt corrective action rules. Regulations to implement the Community Bank Leverage Ratio have been proposed, but not yet adopted in final form. In addition, the Regulatory Relief Act includes certain regulatory relief regarding such matters as call reports, the Volcker Rule (proprietary trading prohibitions), mortgage disclosures and risk weights for certain high-risk commercial real estate loans.

It is difficult at this time to predict when or how any new standards under the Regulatory Relief Act will ultimately be applied to us or what specific impact the Act and the yet-to-be-written implementing rules and regulations will have on community banks.

Regulation of HomeTrust Bank

The Bank is subject to regulation and oversight by the NCCOB and the Federal Reserve extending to all aspects of its operations, including but not limited to requirements concerning an allowance for loan losses, lending and mortgage operations, interest rates received on loans and paid on deposits, the payment of dividends to the Company, loans to officers and directors, mergers and acquisitions, capital, and the opening and closing of branches. See "- Current Capital Requirements for HomeTrust Bank," "-Limitations on Dividends and Other Capital Distributions" and “-New Capital Rules” for additional details.

As a state-chartered institution, the Bank is subject to periodic examinations by the NCCOB and the Federal Reserve. During these examinations, the examiners assess compliance with state and federal banking regulations and the safety and soundness standards on such matters as loan underwriting and documentation, asset quality, earnings standards, internal controls and audit systems, interest rate risk exposure, and employee compensation and benefits. Any institution that fails to comply with these standards must submit a compliance plan.

The Bank is subject to a statutory lending limit on aggregate loans to one person or a group of persons combined because of certain relationships and common interests. That limit is generally equal to 15% of unimpaired capital and surplus, which was $56.6 million as of June 30, 2019. The limit is increased to 25% for loans fully secured by readily marketable collateral. The Bank has no lending relationships in excess of its lending limit.

The NCCOB and the Federal Reserve have enforcement responsibility over the Bank and the authority to bring actions against the Bank and certain institution-affiliated parties, including officers, directors, and employees, for violations of laws or regulations and for engaging in unsafe and unsound practices. Formal enforcement actions include the issuance of a capital directive or cease and desist order, civil money penalties, removal of officers and/or directors, and receivership or conservatorship of the institution.

Pursuant to the Dodd-Frank Act, federal banking and securities regulators issued final rules to implement Section 619 of the Dodd-Frank Act (the “Volcker Rule”). These rules became effective April 15, 2014, but the Federal Reserve extended the conformance period for certain features to July 21, 2017. Generally, subject to a transition period and certain exceptions, the Volcker Rule restricts insured depository institutions and their affiliates from engaging in short-term proprietary trading of certain securities, investing in funds not registered with the SEC with collateral not entirely comprised of loans, and from engaging in hedging activities that do not hedge a specific identified risk. Banks with total consolidated assets of $10 billion or less and total consolidated trading assets and liabilities equal to 5% or less of total consolidated assets are not subject to the Volcker Rule.

Insurance of Accounts and Regulation by the FDIC.  The deposit insurance fund of the FDIC insures deposit accounts in HomeTrust Bank up to $250,000 per separately insured deposit ownership right or category.

Under the FDIC’s risk-based assessment system, insured institutions are assessed based on supervisory ratings and in general, stronger institutions pay lower rates while riskier institutions pay higher rates. Currently, assessment rates (inclusive of certain possible adjustments) range from 1.5 to 40.0 basis points of each institution’s total average consolidated assets less average tangible equity (subject to upward adjustment for certain

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debt). The FDIC has authority to increase insurance assessments, and any significant increases would have an adverse effect on the operating expenses and results of operations of the Company. Management cannot predict what assessment rates will be in the future.

Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC. We do not currently know of any practice, condition, or violation that may lead to termination of our deposit insurance.

Transactions with Related Parties.  Federal laws strictly limit the ability of banks to engage in certain transactions with their affiliates, including their bank holding companies.Transactions between the Bank and its affiliates are required to be on terms as favorable to the Bank as transactions with non-affiliates. Certain of these transactions, such as loans to an affiliate, are restricted to a percentage of the Bank's capital, and loans to affiliates require eligible collateral in specified amounts. HomeTrust Bancshares, Inc. is an affiliate of the Bank.

Federal law generally prohibits loans by HomeTrust Bancshares to its executive officers and directors, but there is a specific exception for loans made by HomeTrust Bank to its executive officers and directors in compliance with federal banking laws. However, HomeTrust Bank’s authority to extend credit to its executive officers, directors and 10% shareholders (“insiders”), as well as entities those insiders control, is limited. The individual and aggregate amounts of loans that HomeTrust Bank may make to insiders are based, in part, on HomeTrust Bank’s capital level and require that certain board approval procedures be followed. Such loans are required to be made on terms substantially the same as those offered to unaffiliated individuals and not involve more than the normal risk of repayment. There is an exception for loans made pursuant to a benefit or compensation program that is widely available to all employees of the institution and does not give preference to insiders over other employees. Loans to executive officers are subject to additional limitations based on the type of loan involved.

Current Capital Requirements for HomeTrust Bank.  The Bank is required to maintain specified levels of regulatory capital under federal banking regulations. The capital adequacy requirements are quantitative measures established by regulation that require the Bank to maintain minimum amounts and ratios of capital. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by bank regulators that, if undertaken, could have a direct material effect onthe Company'sfinancial statements.

Effective January 1, 2015 (with some changes transitioned into full effectiveness on January 1, 2019), the Bank became subject to capital regulations, which created a new required ratio for common equity Tier 1 (“CET1”) capital, increased the minimum leverage and Tier 1 capital ratios, changed the risk-weightings of certain assets for purposes of the risk-based capital ratios, mandated an additional capital conservation buffer over the minimum capital ratios, and changed what qualifies as capital for purposes of meeting the capital requirements. These regulations implement the regulatory capital reforms required by the Dodd Frank Act and the “Basel III” requirements.

Under the capital regulations, the minimum required capital ratios for the Company and the Bank are (i) a CETI capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6.0%; (iii) a total capital ratio of 8.0%; and (iv) a leverage ratio (the ratio of Tier 1 capital to average total consolidated assets) of 4.0% for all financial institutions. CET1 generally consists of common stock and retained earnings. Tier 1 capital generally consists of CET1 and noncumulative perpetual preferred stock. Tier 2 capital generally consists of other preferred stock and subordinated debt meeting certain conditions plus an amount of the allowance for loan and lease losses up to 1.25% of assets. Total capital is the sum of Tier 1 and Tier 2 capital. The CET1 capital ratio, the Tier 1 capital ratio and the total capital ratio are sometimes referred to as the risk-based capital ratios and are determined based on risk-weightings of assets and certain off-balance sheet items that range from 0% to 1,250%.

In addition to the capital requirements, there were a number of changes in what constitutes regulatory capital, subject to a certain transition period. These changes include the phasing-out of certain instruments as qualifying capital. At June 30, 2019 the Bank did not have any of these instruments. Mortgage servicing and deferred tax assets over designated percentages of CET1 are deducted from capital, subject to a transition period ending December 31, 2017. Because of our asset size, we were eligible to elect and have elected to permanently opt-out of the inclusion of unrealized gains and losses on available for sale debt and equity securities in our capital calculations.

As noted above, in addition to the risk-based capital ratios, the Bank must maintain a capital conservation buffer consisting of additional CET1 capital greater than 2.5% of risk-weighted assets above the minimum levels for such ratios in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. The capital conservation buffer requirement began to be phased in starting in January 2016 at an amount more than 0.625% of risk-weighted assets and increased each year until fully implemented to an amount more than 2.5% of risk-weighted assets on January 1, 2019. To meet the minimum capital ratios and the capital conservation buffer requirements, the capital ratios applicable to the Company and the Bank are (i) a CETI capital ratio greater than 7.0%; (ii) a Tier 1 capital ratio greater than 8.5%; (iii) a total capital ratio greater than 10.5%; and (iv) a Tier 1 leverage ratio greater than 4.0%. As of June 30, 2019, the conservation buffer for HomeTrust Bank was 4.3%.

To be consider “well capitalized,” a depository institution must have a Tier 1 capital ratio of at least 8%, a total capital ratio of at least 10%, a CET1 capital ratio of at least 6.5% and a leverage ratio of at least 5% and not be subject to an individualized order, directive or agreement under which its primary federal banking regulator requires it to maintain a specific capital level. Institutions that are not well capitalized are subject to certain restrictions on brokered deposits and interest rates on deposits. Under certain circumstances, regulators are required to take certain actions against banks that fail to meet the minimum required capital ratios. Any such institution must submit a capital restoration plan and, until such plan is approved may not increase its assets, acquire another depository institution, establish a branch or engage in any new activities, or make capital distributions. As of June 30, 2019, HomeTrust Bank met the requirements to be “well capitalized” and met the fully phased-in capital conservation buffer requirement. For additional information regarding the Bank’s required and actual capital levels at June 30, 2019, see Note 19 of the Notes to Consolidated Financial Statements included in Item 8 in this report.

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Federal Home Loan Bank System. HomeTrust Bank is a member of the FHLB of Atlanta, one of 11 regional Federal Home Loan Banks that administer the home financing credit function of financial institutions. The Federal Home Loan Banks are subject to the oversight of the Federal Housing Finance Agency (“FHFA”) and each FHLB serves as a reserve or central bank for its members within its assigned region. The Federal Home Loan Banks are funded primarily from proceeds derived from the sale of consolidated obligations of the Federal Home Loan Bank System and makes loans or advances to members in accordance with policies and procedures established by the Board of Directors of the FHLB, which are subject to the oversight of the FHFA. All advances from the FHLB are required to be fully secured by sufficient collateral as determined by the FHLB. In addition, all long-term advances are required to provide funds for residential home financing. See “Business -Sources of Funds - Borrowings.”

At June 30, 2019, the Bank held $32.0 million in FHLB stock that was in compliance with the holding requirements. The FHLB pays dividends quarterly, and HomeTrust Bank received $2.0 million in dividends during the year ended June 30, 2019.

The FHLBs continue to contribute to low- and moderately-priced housing programs through direct loans or interest subsidies on advances targeted for community investment and low- and moderate-income housing projects. These contributions have adversely affected the level of FHLB dividends paid and could continue to do so in the future. These contributions could also have an adverse effect on the value of FHLB stock in the future. A reduction in value of the Bank’s FHLB stock may result in a decrease in net income and possibly capital.

Commercial Real Estate Lending Concentrations. The federal banking agencies have issued guidance on sound risk management practices for concentrations in commercial real estate lending. The particular focus is on exposure to commercial real estate loans that are dependent on the cash flow from the real estate held as collateral and that are likely to be sensitive to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or as an abundance of caution). The purpose of the guidance is not to limit a bank’s commercial real estate lending but to guide banks in developing risk management practices and capital levels commensurate with the level and nature of real estate concentrations. The guidance directs the Federal Reserve and other bank regulatory agencies to focus their supervisory resources on institutions that may have significant commercial real estate loan concentration risk. A bank that has experienced rapid growth in commercial real estate lending, has notable exposure to a specific type of commercial real estate loan, or is approaching or exceeding the following supervisory criteria may be identified for further supervisory analysis with respect to real estate concentration risk:

• Total reported loans for construction, land development and other landrepresent 100% or more of the bank’s total regulatory capital; or

• Total commercial real estate loans (as defined in the guidance) represent 300% or more of the bank’s total regulatory capital and the outstanding balance of the bank’s commercial real estate loan portfolio has increased 50% or more during the prior 36 months.

The guidance provides that the strength of an institution’s lending and risk management practices with respect to such concentrations will be taken into account in supervisory guidance on evaluation of capital adequacy. As of June 30, 2019, HomeTrust Bank’s aggregate recorded loan balances for construction, land development and land loans were 58.7% of regulatory capital. In addition, at June 30, 2019, HomeTrust Bank’s commercial real estate loans, as defined by the guidance, were 252.6% of regulatory capital.

Community Reinvestment and Consumer Protection Laws.  In connection with its deposit-taking, lending and other activities, the Bank is subject to a number of federal laws designed to protect consumers and promote lending for various purposes. The CFPB issues regulations and standards under these federal consumer protection laws, which include the Equal Credit Opportunity Act, the Truth-in-Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act and others. The CFPB has promulgated a number of proposed and final regulations under these laws that will affect our consumer businesses. Among these regulatory initiatives, are final regulations setting “ability to repay” and “qualified mortgage” standards for residential mortgage loans and establishing new mortgage loan servicing and loan originator compensation standards. In addition, customer privacy regulations limit the ability of the Bank to disclose nonpublic consumer information to non-affiliated third parties. These regulations require disclosure of privacy policies and allow consumers to prevent certain personal information from being shared with non-affiliated parties.

The Community Reinvestment Act ("CRA") requires that the Federal Reserve assess the Bank's record in meeting the credit needs of the communities it serves, especially low and moderate income neighborhoods. Under the CRA, institutions are assigned a rating of "outstanding," "satisfactory," "needs to improve," or "substantial non-compliance." The Bank received a "satisfactory" rating in its most recent CRA evaluation.

Bank Secrecy Act / Anti-Money Laundering Laws.  The Bank is subject to the Bank Secrecy Act and other anti-money laundering laws and regulations, including the USA PATRIOT Act of 2001. These laws and regulations require the Bank to implement policies, procedures, and controls to detect, prevent, and report money laundering and terrorist financing and to verify the identity of their customers. Violations of these requirements can result in substantial civil and criminal sanctions. In addition, provisions of the USA PATRIOT Act require the federal financial institution regulatory agencies to consider the effectiveness of a financial institution's anti-money laundering activities when reviewing mergers and acquisitions.

Limitations on Dividends.  NCCOB and Federal Reserve regulations impose various restrictions on the ability of the Bank to pay dividends. The Bank generally may pay dividends during any calendar year in an amount up to 100% of net income for the year-to-date plus retained net income for the two preceding years, without the approval of the Federal Reserve. If the Bank proposes to pay a dividend that will exceed this limitation, it must obtain the Federal Reserve's prior approval. The Federal Reserve may object to a proposed dividend based on safety and soundness concerns. No insured depository institution may pay a dividend if, after paying the dividend, the institution would be undercapitalized. In addition, as noted above, if the Bank does not have the required capital conservation buffer, its ability to pay dividends to HomeTrust Bancshares, Inc. will be limited.

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Holding Company Regulation

As a bank holding company under the BHCA, HomeTrust Bancshares, Inc. is subject to regulation, supervision, and examination by the Federal Reserve. The Federal Reserve has enforcement authority with respect to HomeTrust Bancshares, Inc. similar to its enforcement authority over the Bank. We are required to file quarterly reports with the Federal Reserve and provide additional information as the Federal Reserve may require. The Federal Reserve may examine us, and any of our subsidiaries, and charge us for the cost of the examination. The Federal Reserve also has extensive enforcement authority over bank holding companies, including, among other things, the ability to assess civil money penalties, to issue cease and desist or removal orders and to require that a holding company divest subsidiaries (including its bank subsidiaries). In general, enforcement actions may be initiated for violations of law and regulations and unsafe or unsound practices. HomeTrust Bancshares, Inc. is also required to file certain reports with, and otherwise comply with the rules and regulations of the SEC.

The Bank Holding Company Act. Under the BHCA, we are supervised by the Federal Reserve. The Federal Reserve has a policy that a bank holding company is required to serve as a source of financial and managerial strength to its subsidiary banks and may not conduct its operations in an unsafe or unsound manner. In addition, the Dodd-Frank Act and earlier Federal Reserve policy provide that a bank holding company should serve as a source of strength to its subsidiary banks by having the ability to provide financial assistance to its subsidiary banks during periods of financial distress to the banks. A bank holding company's failure to meet its obligation to serve as a source of strength to its subsidiary banks will generally be considered by the Federal Reserve to be an unsafe and unsound banking practice or a violation of the Federal Reserve's regulations or both. No regulations have yet been proposed by the Federal Reserve to implement the source of strength doctrine required by the Dodd-Frank Act. HomeTrust Bancshares, Inc. and any subsidiaries that it may control are considered “affiliates” within the meaning of the Federal Reserve Act, and transactions between HomeTrust Bancshares, Inc. and affiliates are subject to numerous restrictions. With some exceptions, HomeTrust Bancshares, Inc. and its subsidiaries are prohibited from tying the provision of various services, such as extensions of credit, to other services offered by HomeTrust Bancshares, Inc. or by its affiliates.

Permissible Activities.  The business activities of HomeTrust Bancshares, Inc. are generally limited to those activities permissible for bank holding companies under Section 4(c)(8) of the BHCA, those permitted for a financial holding company under Section 4(f) of the BHCA, and certain additional activities authorized by regulation. The BHCA generally prohibits a financial holding company from acquiring direct or indirect ownership or control of more than 5% of the voting shares of any company which is not a bank or bank holding company. A bank holding company must obtain Federal Reserve approval before acquiring directly or indirectly, ownership or control of any voting shares of another bank or bank holding company if, after such acquisition, it would own or control more than 5% of such shares (unless it already owns or controls the majority of such shares).

Capital Requirements for HomeTrust Bancshares.  As a bank holding company, HomeTrust Bancshares, Inc. is subject to the minimum regulatory capital requirements established by the Federal Reserve regulation, which generally are the same as the capital requirements for the Bank. These capital requirements include provisions that might impact the ability of the Company to pay dividends to its stockholders or repurchase its shares. For a description of the capital regulations, see " Regulation of HomeTrust Bank-Current Capital Requirements for HomeTrust Bank" and Note 19 of the Notes to Consolidated Financial Statements included in Item 8 in this report.

At June 30, 2019, the HomeTrust Bancshares, Inc. exceeded its minimum regulatory capital requirements under Federal Reserve regulations.

Federal Securities Law.  The stock of HomeTrust Bancshares, Inc. is registered with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). HomeTrust Bancshares, Inc. is subject to the information, proxy solicitation, insider trading restrictions, and other requirements of the SEC under the Exchange Act.

The SEC has adopted regulations and policies applicable to a registered company under the Exchange Act that seek to increase corporate responsibility, provide for enhanced penalties for accounting and auditing improprieties and protect investors by improving the accuracy and reliability of corporate disclosures in SEC filings. These regulations and policies include very specific additional disclosure requirements and mandate corporate governance practices.

On October 28, 2015, the Auditing Standards Board of the American Institute of Certified Public Accountants ("AICPA") issued Statement on Auditing Standards ("SAS") No. 130 - An Audit of Internal Control Over Financial Reporting That Is Integrated With an Audit of Financial Statement. Under SAS 130, our auditors are required to opine on the effectiveness of internal controls over financial reporting for the current fiscal year.

Sarbanes-Oxley Act. The Sarbanes-Oxley Act (“SOX Act”) of 2002 addresses a broad range of corporate governance, auditing and accounting, executive compensation, and disclosure requirements for public companies and their directors and officers. The SOX Act requires our Chief Executive Officer and Chief Financial Officer to certify the accuracy of certain information included in our quarterly and annual reports. The rules require these officers to certify that they are responsible for establishing, maintaining, and regularly evaluating the effectiveness of our financial reporting and disclosure controls and procedures; that they have made certain disclosures to the auditors and to the Audit Committee of the Board of Directors about our controls and procedures; and that they have included information in their quarterly and annual filings about their evaluation and whether there have been significant changes to the controls and procedures or other factors which would significantly impact these controls subsequent to their evaluation. Section 404 of the SOX Act requires management to undertake an assessment of the adequacy and effectiveness of our internal controls over financial reporting and requires our auditors to attest to and report on the effectiveness of these controls.

Dividends. The Federal Reserve has issued a policy statement on the payment of cash dividends by bank holding companies, which expresses its view that although there are no specific regulations restricting dividend payments by bank holding companies other than state corporate laws, a bank holding company must maintain an adequate capital position and generally should not pay cash dividends unless the company's net income

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for the past year is sufficient to fully fund the cash dividends and that the prospective rate of earnings appears consistent with the company's capital needs, asset quality, and overall financial condition. The Federal Reserve policy statement also indicates that it would be inappropriate for a company experiencing serious financial problems to borrow funds to pay dividends. As described above under “Regulation of HomeTrust Bank-Current Capital Requirements for HomeTrust Bank," the capital conservation buffer requirement can also restrict the ability of HomeTrust Bancshares, Inc. and the Bank to pay dividends.

Stock Repurchases. A bank holding company, except for certain “well-capitalized” and highly rated bank holding companies, is required to give the Federal Reserve prior written notice of any purchase or redemption of its outstanding equity securities if the gross consideration for the purchase or redemption, when combined with the net consideration paid for all such purchases or redemptions during the preceding twelve months, is equal to 10% or more of its consolidated net worth. The Federal Reserve may disapprove such a purchase or redemption if it determines that the proposal would constitute an unsafe or unsound practice or would violate any law, regulation, Federal Reserve order or any condition imposed by, or written agreement with, the Federal Reserve.

Legislative and Regulatory Proposals. Any changes in the extensive regulatory scheme to which HomeTrust Bancshares, Inc. or the Bank is and will be subject, whether by any of the federal banking agencies or Congress, or the North Carolina legislature or NCCOB, could have a material effect on the Company or HomeTrust Bank, and HomeTrust Bancshares, Inc. and the Bank cannot predict what, if any, future actions may be taken by legislative or regulatory authorities or what impact such actions may have.

Federal Taxation

General.  HomeTrust Bancshares Inc. and the Bank are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. The following discussion of federal taxation is intended only to summarize material federal income tax matters and is not a comprehensive description of the tax rules applicable to HomeTrust Bancshares and HomeTrust.

On December 22, 2017, the U.S. Government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. For businesses, the Tax Act reduced the corporate federal income tax rate from a maximum of 35% to a flat 21%. The corporate federal income tax rate reduction was effective January 1, 2018. Since the Company has a fiscal year end of June 30th, the reduced federal corporate income tax rate for fiscal year 2018 was the result of the application of a blended federal statutory tax rate of 27.5%, which was based on the applicable tax rates before and after the Tax Act and corresponding number of days in the fiscal year before and after enactment, and then became a flat 21% corporate income tax rate for fiscal 2019 and thereafter. The Tax Act also required a revaluation the Company’s deferred tax assets and liabilities to account for the future impact of lower corporate income tax rates and other provisions of the legislation. As a result of the Company’s revaluation in fiscal 2018, the net deferred tax asset (“DTA”) was reduced through an increase to the provision for income tax. The revaluation of our DTA balance resulted in a one-time increase for the fiscal year ended June 30, 2018 to federal income tax of $17.6 million. See Note 13 "Income Taxes" in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.

Method of Accounting.  For federal income tax purposes, the Company currently reports its income and expenses on the accrual method of accounting and uses a fiscal year ending on June 30th for filing its federal income tax return.

Minimum Tax. Prior to the enactment of the Tax Act, the Internal Revenue Code ("IRC") imposed an alternative minimum tax at a rate of 20% on a base of regular taxable income plus certain tax preferences, called alternative minimum taxable income. The alternative minimum tax was payable to the extent such alternative minimum taxable income was in excess of the regular tax. Net operating losses could offset no more than 90% of alternative minimum taxable income. Certain payments of alternative minimum tax could be used as credits against regular tax liabilities in future years. Upon enactment of the Tax Act, the alternative minimum tax was repealed.

Net Operating Loss Carryovers.  A financial institution may carryback net operating losses to the preceding two taxable years and forward to the succeeding 20 taxable years. This provision applies to losses incurred in taxable years beginning after August 6, 1997. In 2009, IRC 172 (b) (1) was amended to allow businesses to carry back losses incurred in 2008 and 2009 for up to five years to offset 50% of the available income from the fifth year and 100% of the available income for the other four years. At June 30, 2019, we had $24.2 million of net operating loss carryforwards for federal income tax purposes.

Corporate Dividends-Received Deduction.  HomeTrust Bancshares, Inc. files a consolidated return with the Bank. As a result, any dividends HomeTrust Bancshares, Inc. receives from the Bank will not be included as income to HomeTrust Bancshares, Inc. The corporate dividends-received deduction is 100%, or 80% in the case of dividends received from corporations with which a corporate recipient does not file a consolidated tax return, depending on the level of stock ownership of the payer of the dividend.

State Taxation

North Carolina.  On July 24, 2013, The Tax Simplification and Reduction Act of 2013 was signed into law. With this act, corporate income tax rates in North Carolina were reduced as net General Fund tax collection revenues goals were met. For tax years beginning on or after January 1, 2017, 2016, and 2015 the tax rate was 3%, 4%, and 5%, respectively. In June 2017, the state announced an additional reduction in the tax rate to 2.5% beginning on January 1, 2019. This rate reduction is not contingent on any revenue goals. The decrease in the North Carolina corporate tax rate will continue to decrease the deferred tax assets currently recorded on our balance sheet with a corresponding increase to our income tax provision, as temporary tax differences are reversed at lower state tax rates.

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If a corporation in North Carolina does business in North Carolina and in one or more other states, North Carolina taxes a fraction of the corporation’s income based on the amount of sales, payroll, and property it maintains within North Carolina. North Carolina franchise tax is levied on business corporations at the rate of $1.50 per $1,000 of the largest of the following three alternate bases: (i) the amount of the corporation’s capital stock, surplus, and undivided profits apportionable to the state; (ii) 55% of the appraised value of the corporation’s property in the state subject to local taxation; or (iii) the book value of the corporation’s real and tangible personal property in the state less any outstanding debt that was created to acquire or improve real property in the state.

Any cash dividends, in excess of a certain exempt amount, that would be paid with respect to HomeTrust Bancshares common stock to a shareholder (including a partnership and certain other entities) who is a resident of North Carolina will be subject to the North Carolina income tax. Any distribution by a corporation from earnings according to percentage ownership is considered a dividend, and the definition of a dividend for North Carolina income tax purposes may not be the same as the definition of a dividend for federal income tax purposes. A corporate distribution may be treated as a dividend for North Carolina income tax purposes if it is paid from funds that exceed the corporation’s earned surplus and profits under certain circumstances.

South Carolina. The state ofSouth Carolina requires banks to file a bank tax return. As a multi-state bank, we pay taxes on the portion of revenue generated within the state. In 2019 and 2018 the tax rate was 5.0%.

Tennessee. The state of Tennessee requires banks to file a franchise and excise tax form for financial institutions. The franchise tax is based on the portion of revenue generated in the state, the net worth of the Bank, and the applicable franchise tax, which was $0.25 per $100 in 2019 and 2018. The excise tax is based on the taxable income (as defined by the state), the portion of revenue generated in the state, and the applicable excise tax, which was 6.5% in 2019 and 2018.

Virginia. The state of Virginia requires banks to file a bank franchise tax. The tax is based on the portion of capital deployed within the state and county level (as defined by the state) and taxed at $1 per $100 of taxable value.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The following individuals are executive officers of HomeTrust Bancshares and HomeTrust Bank and hold the offices set forth below opposite their names.

Name	Age(1)	Position
Dana L. Stonestreet	65	Chairman, President and Chief Executive Officer
C. Hunter Westbrook	56	Senior Executive Vice President and Chief Operating Officer
Tony J. VunCannon	54	Executive Vice President, Chief Financial Officer, Corporate Secretary, and Treasurer
Marty Caywood	47	Executive Vice President and Chief Information Officer
Keith Houghton	57	Executive Vice President and Chief Credit Officer
Paula C. Labian	61	Executive Vice President and Chief Human Resources Officer
Parrish Little	51	Executive Vice President and Chief Risk Officer

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(1) As of June 30, 2019.

Biographical Information. Set forth below is certain information regarding the executive officers of HomeTrust Bancshares and HomeTrust Bank. There are no family relationships among or between the executive officers.

Dana L. Stonestreet, Chairman and Chief Executive Officer.  In his 30 years of service, Mr. Stonestreet has overseen ten acquisitions and the growth of the Bank from $300 million to $3.5 billion in assets at June 30, 2019. As part of the CEO succession plan for HomeTrust Bancshares, Inc. and the Bank, Mr. Stonestreet, who had been serving as President and Chief Operating Officer and as a director of HomeTrust Bank since 2008 and as President and Chief Operating Officer of HomeTrust Bancshares, Inc. since HomeTrust Bank’s mutual-to-stock conversion, became co-Chief Executive Officer of HomeTrust Bancshares, Inc. and the Bank in July 2013. Mr. Stonestreet became President, Chairman and Chief Executive Officer of HomeTrust Bancshares, Inc. and the Bank effective at the annual meeting in November 2013. Mr. Stonestreet joined HomeTrust Bank in 1989 as its Chief Financial Officer and was promoted to Chief Operating Officer in 2003. Mr. Stonestreet began his career with Hurdman & Cranston (an accounting firm that was later merged into KPMG) as a certified public accountant. Mr. Stonestreet has served as Chairman of the Asheville Chamber of Commerce and as a director for RiverLink, the YMCA, United Way, the North Carolina Bankers Association and other community organizations. In July 2017, Mr. Stonestreet was appointed to the North Carolina Banking Commission for a four-year term. Mr. Stonestreet’s 30 years of service with HomeTrust Bank gives him in-depth knowledge of nearly all aspects of its operations. Mr. Stonestreet’s accounting background and prior service as HomeTrust Bank’s Chief Financial Officer also provide him with a strong understanding of the various financial matters brought before the Board.

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C. Hunter Westbrook, Senior Executive Vice President and Chief Operating Officer.  Mr. Westbrook joined HomeTrust Bank in June 2012 as our Chief Banking Officer and was promoted to Chief Operating Officer in October 2018. He began his career in banking with TCF Bank in Minneapolis and later joined TCF National Bank Illinois as Senior Vice President of Finance. In 2004 he was promoted to Executive Vice President of Retail Banking for Illinois, Wisconsin and Indiana markets that included 250 branches and $4 billion in deposits. He also served as President and Chief Executive Officer of First Community Bancshares in Texas, from 2006 to 2008, where he was responsible for repositioning the bank’s retail operating model and implemented the bank’s retail and corporate lending product offerings. In his most recent role prior to joining HomeTrust Bank, Mr. Westbrook served as President and Chief Executive Officer of Second Federal Savings and Loan Association of Chicago, from 2010 to 2012, where he significantly grew core operating revenue, net checking account balances, and repositioned the bank’s entire product line.

Tony J. VunCannon, Executive Vice President, Chief Financial Officer, Corporate Secretary, and Treasurer.  Mr. VunCannon has served as HomeTrust Bank's Chief Financial Officer since July 2006. Mr. VunCannon joined the Bank in April 1992 as Controller; later becoming the Treasurer in March 1997 until July 2006 when he was also named Chief Financial Officer. In 2018, he was named Corporate Secretary. Prior to joining the Bank, Mr. VunCannon worked as an auditor in KPMG’s Charlotte office where his focus was in the community banking sector. Mr. VunCannon is a graduate of the University of North Carolina at Chapel Hill with a Bachelor of Science Degree in Business Administration/Accounting. He is also a Certified Public Accountant.

Marty Caywood, Executive Vice President and Chief Information Officer.  Mr. Caywood joined HomeTrust Bank in 1995 as the Bank’s first Network Administrator and worked in various roles including Information Security Officer and most recently as Senior Vice President and Director of Information Technology. Mr. Caywood was promoted to Executive Vice President and Chief Information Officer in April 2019.

Keith Houghton, Executive Vice President and Chief Credit Officer. Mr. Houghton joined HomeTrust Bank in March of 2014 as our Chief Credit Officer. Mr. Houghton has more than 30 years of experience in the banking industry. For nearly 17 years, he held a variety of senior positions in the credit and lending areas with StellarOne Corporation, a Charlottesville, VA-based bank holding company with approximately $3 billion in assets, and its predecessors, until the sale of StellarOne to another bank in January 2014. The most recent of those positions was Chief Credit Risk Officer, which Mr. Houghton held since 2007.

Paula C.Labian, Executive Vice President and Chief Human Resources Officer. Ms. Labian joined HomeTrust Bank in January 2019 as Executive Vice President and Chief Human Resources Officer. Ms. Labian brings more than 25 years of broad based industry experience in human resource development, strategy, and leadership. She began her career in financial services in Southern California with Bank of Coronado and Guild Mortgage Company, managing human resources and administering loan officer compensation as well as training. Ms. Labian has served in numerous senior level positions with brand name companies such as Blue Cross Blue Shield of Florida, Whole Foods Market, Alterra Mountain Company, and CoBiz Bank. She has significant expertise in employee relations, total rewards, benefit administration, executive compensation, talent acquisition and development, and mergers and acquisitions.

Parrish Little, Executive Vice President and Chief Risk Officer. Mr. Little joined HomeTrust Bank in March 2015 as our Chief Risk Officer. Prior to joining HomeTrust Bank, Mr. Little served as Senior Vice President, Director of Risk Management from 2008 to 2013 and Chief Audit Executive in 2014 for First Citizens Bank and Trust, Columbia, South Carolina. From 1997 to 2007, he served in several leadership roles with Bank of America in the areas of internal audit and risk management.

Item 1A. Risk Factors

An investment in our common stock is subject to risks inherent in our business. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included in this report. In addition to the risks and uncertainties described below, otherrisks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and results of operations.The value or market price of our common stock could decline due to any of these identified or other risks, and you could lose all or part of your investment.

Risks Related to Our Business

Adverse economic conditions in the market areas we serve could adversely impact our earnings and could increase the credit risk associated with our loan portfolio.

Our primary market areas are concentrated in North Carolina (including the Asheville metropolitan area, Greensboro / “Piedmont” region, Charlotte, and Raleigh/Cary), South Carolina (Greenville), East Tennessee (including Kingsport/Johnson City/Bristol, Knoxville, and Morristown) and the Roanoke Valley area of Virginia. Adverse economic conditions in our market areas can reduce our rate of growth, affect our customers’ ability to repay loans and adversely impact our financial condition and earnings. General economic conditions, including inflation, unemployment and money supply fluctuations, also may affect our profitability adversely.

While real estate values and unemployment rates have recently improved, deterioration in economic conditions, particularly within our primary market areas could result in the following consequences, among others, any of which could materially hurt our business:

• loan delinquencies, problem assets and foreclosures may increase;

• we may increase our allowance for loan losses;

• the slowing of sales of foreclosed assets;

• demand for our products and services may decline, possibly resulting in a decrease in our total loans or assets;

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• collateral for loans made may decline further in value, exposing us to increased risk of loss on existing loans and reducing customers’ borrowing power;

• the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; and

• the amount of our deposits may decrease and the composition of our deposits may be adversely affected.

At June 30, 2019, the most significant portion of our loans located outside of our primary market areas was HELOCs-purchased totaling $117.0 million, or 4.3% of our loan portfolio, secured by one-to-four family properties located primarily in several western states. As a result, our financial condition and results of operations will be subject to general economic conditions and the real estate conditions prevailing in the markets in which the underlying properties securing these loans are located, as well as the conditions in our primary market areas. If economic conditions or if the real estate market declines in the areas in which these properties are located, we may suffer decreased net income or losses associated with higher default rates and decreased collateral values on our existing portfolio. Further, because of their geographical diversity, these loans can be more difficult to oversee than loans in our market areas in the event of delinquency.

A decline in economic conditions may have a greater effect on our earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are more geographically diverse. Many of the loans in our portfolio are secured by real estate. Deterioration in the real estate markets where collateral for a mortgage loan is located could negatively affect the borrower’s ability to repay the loan and the value of the collateral securing the loan. Real estate values are affected by various other factors, including changes in general or regional economic conditions, governmental rules or policies and natural disasters. If we are required to liquidate a significant amount of collateral during a period of reduced real estate values, our financial condition and profitability could be adversely affected.

Our business may be adversely affected by credit risk associated with residential property.

At June 30, 2019, $660.6 million, or 24.4% of our total loan portfolio, was secured by first liens on one-to-four family residential loans. In addition, at June 30, 2019, our home equity lines of credit totaled $248.1 million or 9.2% of our total loan portfolio, including $67.4 million secured by a first lien on the residential property. These types of loans are generally sensitive to regional and local economic conditions that significantly impact the ability of borrowers to meet their loan payment obligations, making loss levels difficult to predict. A decline in residential real estate values resulting from a downturn in the housing market may reduce the value of the real estate collateral securing these types of loans and increase our risk of loss if borrowers default on their loans. Recessionary conditions or declines in the volume of real estate sales and/or the sales prices coupled with elevated unemployment rates may result in higher than expected loan delinquencies or problem assets, and a decline in demand for our products and services. These potential negative events may cause us to incur losses, adversely affect our capital and liquidity, and damage our financial condition and business operations. Further, the Tax Act enacted in December 2017 could negatively impact our customers because it lowers the existing caps on mortgage interest deductions and limits the state and local tax deductions. These changes could make it more difficult for borrowers to make their loan payments, and could also negatively impact the housing market, which could adversely affect our business and loan growth.

A majority of our residential loans are “non-conforming” because they are adjustable rate mortgages which contain interest rate floors or do not satisfy credit or other requirements due to personal and financial reasons (i.e. divorce, bankruptcy, length of time employed, etc.), conforming loan limits (i.e. jumbo mortgages), and other requirements, imposed by secondary market purchasers. Some of these borrowers have higher debt-to-income ratios, or the loans are secured by unique properties in rural markets for which there are no sales of comparable properties to support the value according to secondary market requirements. We may require additional collateral or lower loan-to-value ratios to reduce the risk of these loans. We believe that these loans satisfy a need in our local market areas. As a result, subject to market conditions, we intend to continue to originate these types of loans. Total non-conforming loans were $416.6 million at June 30, 2019, including $149.0 million of jumbo one- to four-family residential loans which may also expose us to increased risk because of their larger balances.

High loan-to-value ratios on a portion of our residential mortgage loan portfolio exposes us to greater risk of loss.

Many of our one-to-four family loans and home equity lines of credit are secured by liens on mortgage properties in which the borrowers have little or no equity because of declines in prior years in home values in our market areas. Residential loans with high combined loan-to-value ratios will be more sensitive to declining property values than those with lower combined loan-to-value ratios and therefore may experience a higher incidence of default and severity of losses. In addition, if the borrowers sell their homes, they may be unable to repay their loans in full from the sale. Further, the majority of our home equity lines of credit consist of second mortgage loans. For those home equity lines secured by a second mortgage, it is unlikely that we will be successful in recovering all or a portion of our loan proceeds in the event of default unless we are prepared to repay the first mortgage loan and such repayment and the costs associated with a foreclosure are justified by the value of the property. For these reasons, we may experience higher rates of delinquencies, defaults and losses.

Our non-owner-occupied real estate loans may expose us to increased credit risk.

At June 30, 2019, $85.3 million, or 12.9%, of our one-to-four family loans and 3.2% of our total loan portfolio, consisted of loans secured by non-owner-occupied residential properties. Loans secured by non-owner-occupied properties generally expose a lender to greater risk of non-payment and loss than loans secured by owner-occupied properties because repayment of such loans depends primarily on the tenant’s continuing ability to pay rent to the property owner, who is our borrower, or, if the property owner is unable to find a tenant, the property owner’s ability to repay the loan without the benefit of a rental income stream. In addition, the physical condition of non-owner-occupied properties is often below that of owner-occupied properties due to lax property maintenance standards, which has a negative impact on the value of the collateral properties. Furthermore, some of our non-owner-occupied residential loan borrowers have more than one loan outstanding with HomeTrust Bank which may expose us to a greater risk of loss compared to an adverse development with respect to an owner-occupied residential mortgage loan.

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Our construction and development loans and construction and land/lot loans have a higher risk of loss than residential or commercial real estate loans.

At June 30, 2019, construction and land/lot loans in our retail consumer loan portfolio was $80.6 million, or 3.0%, of our total loan portfolio, and consists primarily of construction to permanent loans to homeowners building a residence or developing lots in residential subdivisions intending to construct a residence within one year. Construction and development loans in our commercial loan portfolio at June 30, 2019, totaled $210.9 million, or 7.8%, of our total loan portfolio, and consists of loans to contractors and builders primarily to finance the construction of single and multi-family homes, subdivisions, as well as commercial properties. We originate these loans whether or not the collateral property underlying the loan is under contract for sale.

Construction and development lending generally involves additional risks because funds are advanced upon estimates of costs in relation to values associated with the completed project. Construction and development lending involves additional risks when compared with permanent residential lending because funds are advanced upon the collateral for the project based on an estimate of costs that will produce a future value at completion. Because of the uncertainties inherent in estimating construction costs, as well as the market value of the complete project and the effects of governmental regulation on real property, it is relatively difficult to evaluate accurately the total funds required to complete a project and the completed project loan-to-value ratio. Changes in demand for new housing and higher than anticipated building costs, may cause actual results to vary significantly from those estimated. For these reasons, this type of lending also typically involves higher loan principal amounts and is often concentrated with a small number of builders. A downturn in housing, or the real estate market, could increase loan delinquencies, defaults and foreclosures, and significantly impair the value of our collateral and our ability to sell the collateral upon foreclosure. Some of the builders we deal with have more than one loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss.

In addition, during the term of some of our construction and development loans, no payment from the borrower is required since the accumulated interest is added to the principal of the loan through an interest reserve. As a result, these loans often involve the disbursement of funds with repayment substantially dependent on the success of the ultimate project and the ability of the borrower to sell or lease the property or obtain permanent take-out financing, rather than the ability of the borrower or guarantor to repay principal and interest. If our appraisal of the value of a completed project proves to be overstated, we may have inadequate security for the repayment of the loan upon completion of construction of the project and may incur a loss. Because construction loans require active monitoring of the building process, including cost comparisons and on-site inspections, these loans are more difficult and costly to monitor. Increases in market rates of interest may have a more pronounced effect on construction loans by rapidly increasing the end-purchasers' borrowing costs, thereby reducing the overall demand for the project. Properties under construction are often difficult to sell and typically must be completed in order to be successfully sold which also complicates the process of working out problem construction loans. This may require us to advance additional funds and/or contract with another builder to complete construction and assume the market risk of selling the project at a future market price, which may or may not enable us to fully recover unpaid loan funds and associated construction and liquidation costs. Furthermore, in the case of speculative construction loans, there is the added risk associated with identifying an end-purchaser for the finished project. At June 30, 2019, $45.9 million of our construction and development loans were for speculative construction loans and none were classified as nonaccruing.

Loans on land under development or held for future construction as well as lot loans made to individuals for the future construction of a residence also pose additional risk because the length of time from financing to completion of a development project is significantly longer than for a traditional construction loan, which makes them more susceptible to declines in real estate values, declines in overall economic conditions which may delay the development of the land and changes in the political landscape that could affect the permitted and intended use of the land being financed, and the potential illiquid nature of the collateral. In addition, during this long period of time from financing to completion, the collateral often does not generate any cash flow to support the debt service.

Our commercial real estate loans involve higher principal amounts than other loans and repayment of these loans may be dependent on factors outside our control or the control of our borrowers.

While commercial real estate lending may potentially be more profitable than single-family residential lending, it is generally more sensitive to regional and local economic conditions, making loss levels more difficult to predict. Collateral evaluation and financial statement analysis in these types of loans require a more detailed analysis at the time of loan underwriting and on an ongoing basis. At June 30, 2019, commercial real estate loans were $927.3 million, or 34.3% of our total loan portfolio, including multifamily loans totaling $105.6 million or 3.9% of our total loan portfolio. These loans typically involve higher principal amounts than other types of loans and some of our commercial borrowers have more than one loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a one-to-four family residential mortgage loan. Repayment of these loans is dependent upon income being generated from the property securing the loan in amounts sufficient to cover operating expenses and debt service, which may be adversely affected by changes in the economy or local market conditions. Commercial real estate loans also expose a lender to greater credit risk than loans secured by one-to-four family residential real estate because the collateral securing these loans typically cannot be sold as easily as residential real estate. In addition, many of our commercial real estate loans are not fully amortizing and contain large balloon payments upon maturity. Such balloon payments may require the borrower to either sell or refinance the underlying property in order to make the payment, which may increase the risk of default or non-payment. At June 30, 2019, commercial real estate loans that were nonperforming totaled $3.6 million, or 34.4% of our total nonperforming loans.

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A secondary market for most types of commercial real estate loans is not readily available, so we have less opportunity to mitigate credit risk by selling part or all of our interest in these loans. As a result of these characteristics, if we foreclose on a commercial real estate loan, our holding period for the collateral typically is longer than for one-to-four family residential loans because there are fewer potential purchasers of the collateral. Accordingly, charge-offs on commercial real estate loans may be larger on a per loan basis than those incurred with our residential and consumer loan portfolios.

The level of our commercial real estate loan portfolio may subject us to additional regulatory scrutiny.

The FDIC, the Federal Reserve Board and the Office of the Comptroller of the Currency have promulgated joint guidance on sound risk management practices for financial institutions with concentrations in commercial real estate lending. Under this guidance, a financial institution that, like us, is actively involved in commercial real estate lending should perform a risk assessment to identify concentrations. A financial institution may have a concentration in commercial real estate lending if, among other factors (i) total reported loans for construction, land development, and other land represent 100% or more of total capital, or (ii) total reported loans secured by multifamily and non-farm/non-residential properties, loans for construction, land development and other land, and loans otherwise sensitive to the general commercial real estate market, including loans to commercial real estate related entities, represent 300% or more of total capital. Based on the criteria, the Bank has a concentration in commercial real estate lending as total loans for multifamily, non-farm/non-residential, construction, land development and other land represented 252.6% of total risk-based capital at June 30, 2019. The particular focus of the guidance is on exposure to commercial real estate loans that are dependent on the cash flow from the real estate held as collateral and that are likely to be at greater risk to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or as an abundance of caution). The purpose of the guidance is to guide banks in developing risk management practices and capital levels commensurate with the level and nature of real estate concentrations. The guidance states that management should employ heightened risk management practices including board and management oversight and strategic planning, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing. While we believe we have implemented policies and procedures with respect to our loan portfolio consistent with this guidance, bank regulators could require us to implement additional policies and procedures consistent with their interpretation of the guidance that may result in additional costs to us.

Our auto finance lending increases our exposure to lending risks.

At June 30, 2019, $153.4 million, or 5.7%, of our total loan portfolio consisted of indirect auto finance loans originated by us. Indirect auto finance loans are inherently risky as they are secured by assets that depreciate rapidly. In some cases, repossessed collateral for a defaulted automobile loan may not provide an adequate source of repayment for the outstanding loan and the remaining deficiency may not warrant further substantial collection efforts against the borrower. Automobile loan collections depend on the borrower’s continuing financial stability, and therefore, are more likely to be adversely affected by job loss, divorce, illness, or personal bankruptcy.In addition, our ability to originate loans is reliant on our relationships with automotive dealers. In particular, our automotive finance operations depend in large part upon our ability to establish and maintain relationships with reputable automotive dealers that direct customers to our offices or originate loans at the point-of-sale. Although we have relationships with certain automotive dealers, none of our relationships are exclusive and any may be terminated at any time. If our existing dealer base experiences decreased sales we may experience decreased loan volume in the future, which may have an adverse effect on our business, results of operations, and financial condition.

Repayment of our municipal leases is dependent on the fire department receiving tax revenues from the county/municipality.

At June 30, 2019, municipal leases were $112.0 million, or 4.1%, of our total loan portfolio. We offer ground and equipment lease financing to fire departments located throughout North Carolina and, to a lesser extent, South Carolina. Repayment of our municipal leases is often dependent on the tax revenues collected by the county/municipality on behalf of the fire department. Although a municipal lease does not constitute a general obligation of the county/municipality for which the county/municipality's taxing power is pledged, a municipal lease is ordinarily backed by the county/municipality's covenant to budget for, appropriate and pay the tax revenues to the fire department. However, certain municipal leases contain "non-appropriation" clauses which provide that the municipality has no obligation to make lease or installment purchase payments in future years unless money is appropriated for that purpose on a yearly basis. In the case of a "non-appropriation" lease, our ability to recover under the lease in the event of non-appropriation or default will be limited solely to the repossession of the leased property, without recourse to the general credit of the lessee, and disposition or releasing of the property might prove difficult. At June 30, 2019, $11.8 million of our municipal leases contained a non-appropriation clause.

Our allowance for loan losses may prove to be insufficient to absorb losses in our loan portfolio.

Lending money is a substantial part of our business and each loan carries a certain risk that it will not be repaid in accordance with its terms, or that any underlying collateral will not be sufficient to assure repayment. This risk is affected by, among other things:

• cash flow of the borrower and/or the project being financed;

• the changes and uncertainties as to the future value of the collateral, in the case of a collateralized loan;

• the duration of the loan;

• the character and creditworthiness of a particular borrower; and

• changes in economic and industry conditions.

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We maintain an allowance for loan losses, which we believe is an appropriate reserve to provide for probable losses in our loan portfolio. The allowance is funded by provisions for loan losses charged to expense.  The amount of this allowance is determined by our management through periodic reviews and consideration of several factors, including, but not limited to:

• our general reserve, based on our historical default and loss experience, certain macroeconomic factors, and management’s expectations of future events;

• our specific reserve, based on our evaluation of nonaccruing loans and their underlying collateral; and

• an unallocated reserve to provide for other credit losses inherent in our portfolio that may not have been contemplated in the other loss factors.

We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. In determining the amount of the allowance for loan losses, we review our loans and our loss and delinquency experience, and we evaluate economic conditions. If our assumptions are incorrect, our allowance for loan losses may not be sufficient to cover probable incurred losses in our loan portfolio, resulting in additions to our allowance for loan losses through the provision for losses on loans which is charged against income.

Additionally, pursuant to our growth strategy, management recognizes that significant new growth in loan portfolios, new loan products and the refinancing of existing loans can result in portfolios comprised of unseasoned loans that may not perform in a historical or projected manner and will increase the risk that our allowance may be insufficient to absorb losses without significant additional provisions. Further, the Financial Accounting Standards Board has adopted a new accounting standard that will be effective for our fiscal year beginning July 1, 2020. This standard, referred to as Current Expected Credit Loss ("CECL") will require financial institutions to determine periodic estimates of lifetime expected credit losses on loans, and recognize the expected credit losses as allowances for credit losses. This will change the current method of providing allowances for credit losses that are probable, which may require us to increase our allowance for loan losses, and may greatly increase the types of data we would need to collect and review to determine the appropriate level of the allowance for credit losses. In addition, bank regulatory agencies periodically review our allowance for loan losses and may require an increase in the provision for possible loan losses or the recognition of further loan charge-offs, based on judgments different than those of management.  If charge-offs in future periods exceed the allowance for loan losses, we will need additional provisions to replenish the allowance for loan losses.  Any additional provisions will result in a decrease in net income and possibly capital, and may have a material adverse effect on our financial condition and results of operations.

If our nonperforming assets increase, our earnings will be adversely affected.

Our nonperforming assets (which consist of nonaccruing loans and REO) were $13.3 million, or 0.38%, of total assets at June 30, 2019, compared to $14.6 million, or 0.44% of total assets, and $20.0 million, or 0.62% of total assets, at June 30, 2018 and 2017, respectively. Our nonperforming assets adversely affect our net income in various ways:

• we record interest income only on a cash basis for nonaccrual loans and any nonperforming investment securities; and do not record interest income for REO;

• we must provide for probable loan losses through a current period charge to the provision for loan losses;

• noninterest expense increases when we write down the value of properties in our REO portfolio to reflect changing market values or recognize other-than-temporary impairment (“OTTI”) on nonperforming investment securities;

• there are legal fees associated with the resolution of problem assets, as well as, carrying costs, such as taxes, insurance, and maintenance fees related to our REO; and

• the resolution of nonperforming assets requires the active involvement of management, which can distract them from more profitable activity.

If additional borrowers become delinquent and do not pay their loans and we are unable to successfully manage our nonperforming assets, our losses and troubled assets could increase significantly, which could have a material adverse effect on our financial condition and results of operations. We have also classified $23.1 million in loans as performing troubled debt restructurings at June 30, 2019.

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To meet our growth objectives we may originate or purchase loans outside of our market areas which could affect the level of our net interest margin and nonperforming loans.

In order to achieve our desired loan portfolio growth, we opportunistically purchase loans outside of our primary market areas either individually, through participations, or in bulk or “pools”. We perform certain due diligence procedures and may re-underwrite these loans to our underwriting standards prior to purchase, and anticipate acquiring loans subject to customary limited indemnities, however, we may be exposed to a greater risk of loss as we acquire loans of a type or in geographic areas where management may not have substantial prior experience and which may be more difficult for us to monitor. During the years ended June 30, 2019, 2018 and 2017 we purchased $1.0 million, $61.2 million and $345.0 million of loans, respectively. Management has made a strategic decision to scale back the purchase of these loans and redistribute capital to our new equipment finance line of business. Loan pools purchased in the past three years consisted primarily of home equity loans secured by single family residential properties located in several western states. When determining the purchase price we are willing to pay to acquire loans, management will make certain assumptions about, among other things, if and how much borrowers will prepay their loans, the real estate market and our ability to collect loans successfully and, if necessary, when and how to dispose of any real estate that may be acquired through foreclosure. To the extent that our underlying assumptions prove to be inaccurate or the basis for those assumptions change (such as an unanticipated decline in the real estate market), the purchase price paid may prove to have been excessive, resulting in a lower yield or a loss of some or all of the loan principal. Our success in increasing our loan portfolio through loan purchases will depend on our ability to price the loans properly and on general economic conditions in the geographic areas where the underlying properties or collateral for the loans acquired are located. Inaccurate estimates or declines in economic conditions or real estate values in the markets where we purchase loans could significantly adversely affect the level of our nonperforming loans and our results of operations.

If our REO is not properly valued or sufficiently reserved to cover actual losses, or if we are required to increase our valuation reserves, our earnings could be reduced.

We obtain updated valuations in the form of appraisals and broker price opinions when a loan has been foreclosed and the property taken in as REO and at certain other times during the asset’s holding period. Our net book value (“NBV”) in the loan at the time of foreclosure and thereafter is compared to the updated market value of the foreclosed property less estimated selling costs (fair value). A charge-off is recorded for any excess in the asset’s NBV over its fair value. If our valuation process is incorrect, or if property values decline, the fair value of our REO may not be sufficient to recover our carrying value in such assets, resulting in the need for additional charge-offs.

Significant charge-offs to our REO could have a material adverse effect on our financial condition and results of operations.

In addition, bank regulators periodically review our REO and may require us to recognize further charge-offs. Any increase in our charge-offs may have a material adverse effect on our financial condition and results of operations.

Our securities portfolio may be negatively impacted by fluctuations in market value and interest rates.

Our securities portfolio may be impacted by fluctuations in market value, potentially reducing accumulated other comprehensive income and/or earnings. Fluctuations in market value may be caused by changes in market interest rates, lower market prices for securities and limited investor demand. Our securities portfolio is evaluated for OTTI. If this evaluation shows impairment to the actual or projected cash flows associated with one or more securities, a potential loss to earnings may occur. Changes in interest rates can also have an adverse effect on our financial condition, as our available-for-sale securities are reported at their estimated fair value, and therefore are impacted by fluctuations in interest rates. Our shareholders' equity adjusts by the amount of change in the estimated fair value of the available-for-sale securities, net of taxes. There can be no assurance that declines in market value will not result in other-than-temporary impairments of these assets, which would lead to accounting charges that could have a material adverse effect on our net income and capital levels.

An increase in interest rates, change in the programs offered by governmental sponsored entities (“GSE”) or our ability to qualify for such programs may reduce our mortgage revenues, which would negatively impact our noninterest income.

Our mortgage banking operations provide a significant portion of our noninterest income. We generate mortgage revenues primarily from gains on the sale of single-family residential loans pursuant to programs currently offered by Fannie Mae, Freddie Mac, Ginnie Mae and other investors on a servicing released basis. These entities account for a substantial portion of the secondary market in residential mortgage loans. Any future changes in these programs, significant impairment of our eligibility to participate in such programs, the criteria for loans to be accepted or laws that significantly affect the activity of such entities could, in turn, result in a lower volume of corresponding loan originations or increase other administrative costs which may materially adversely affect our results of operations. Our commercial business loan originations made under SBA and USDA B&I programs are also subject to these risks.

Mortgage production, especially refinancing, generally declines in rising interest rate environments resulting in fewer loans that are available to be sold to investors. When interest rates rise, or even if they do not, there can be no assurance that our mortgage production will continue at current levels. The profitability of our mortgage banking operations depends in large part upon our ability to aggregate a high volume of loans and sell them in the secondary market at a gain. Thus, in addition to the interest rate environment, our mortgage business is dependent upon (i) the existence of an active secondary market and (ii) our ability to profitably sell loans into that market. The loans in our held for sale portfolio are carried at the lower of cost or fair market value less estimated costs to sell with changes recognized in our statement of operations. Carrying the loans at fair value may also increase the volatility in our earnings.

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In addition, our results of operations are affected by the amount of noninterest expense associated with mortgage banking activities, such as salaries and employee benefits, occupancy, equipment and data processing expense and other operating costs. During periods of reduced loan demand, our results of operations may be adversely affected to the extent that we are unable to reduce expenses commensurate with the decline in loan originations. In addition, although we sell loans into the secondary market without recourse, we are required to give customary representations and warranties about the loans to the buyers. If we breach those representations and warranties, the buyers may require us to repurchase the loans and we may incur a loss on the repurchase.

Fluctuating interest rates can adversely affect our profitability.

Our earnings and cash flows are largely dependent upon our net interest income. Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies and, in particular, the Federal Reserve. In an attempt to help the overall economy, the Federal Reserve has kept interest rates low through its targeted Fed Funds rate. The Federal Reserve has steadily increased the targeted federal funds rate over the last three fiscal years to a range of 2.25% to 2.50% at June 30, 2019. Subsequent to our year end the targeted federal funds rate range was lowered to 2.00% to 2.25% and the Fed Funds Futures suggests additional decreases, subject to economic conditions.

We principally manage interest rate risk by managing our volume and mix of our earning assets and funding liabilities. Changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and investments and the amount of interest we pay on deposits and borrowings, but these changes could also affect (i) our ability to originate loans and obtain deposits, (ii) the fair value of our financial assets and liabilities, which could negatively impact shareholders' equity, and our ability to realize gains from the sale of such assets; (iii) our ability to obtain and retain deposits in competition with other available investment alternatives; (iv) the ability of our borrowers to repay adjustable or variable rate loans; and (v) the average duration of our investment securities portfolio and other interest-earning assets. If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore earnings, could be adversely affected. In a changing interest rate environment, we may not be able to manage this risk effectively. If we are unable to manage interest rate risk effectively, our business, financial condition and results of operations could be materially affected.

Changes in interest rates could also have a negative impact on our results of operations by reducing the ability of borrowers to repay their current loan obligations or by reducing our margins and profitability. Our net interest margin is the difference between the yield we earn on our assets and the interest rate we pay for deposits and our other sources of funding. Changes in interest rates-up or down-could adversely affect our net interest margin and, as a result, our net interest income. Although the yield we earn on our assets and our funding costs tend to move in the same direction in response to changes in interest rates, one can rise or fall faster than the other, causing our net interest margin to expand or contract. Our liabilities tend to be shorter in duration than our assets, so they may adjust faster in response to changes in interest rates. As a result, when interest rates rise, our funding costs may rise faster than the yield we earn on our assets, causing our net interest margin to contract until the yields on interest-earning assets catch up. Changes in the slope of the “yield curve”, or the spread between short-term and long-term interest rates could also reduce our net interest margin. Normally, the yield curve is upward sloping, meaning short-term rates are lower than long-term rates. Because our liabilities tend to be shorter in duration than our assets, when the yield curve flattens or even inverts, we will experience pressure on our net interest margin as our cost of funds increases relative to the yield we can earn on our assets. Also, interest rate decreases can lead to increased prepayments of loans and mortgage-backed securities as borrowers refinance their loans to reduce borrowing costs. Under these circumstances, we are subject to reinvestment risk as we may have to redeploy such repayment proceeds into lower yielding investments, which would likely hurt our income.

A sustained increase in market interest rates could adversely affect our earnings. As a result of the exceptionally low interest rate environment, an increasing percentage of our deposits have been comprised of deposits bearing no or a relatively low rate of interest and having a shorter duration than our assets. At June 30, 2019, we had $515.5 million in certificates of deposit that mature within one year and $1.6 billion in checking, savings, and money market accounts. If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore earnings, could be adversely affected.

In addition, a substantial amount of our loans have adjustable interest rates. As a result, these loans may experience a higher rate of default in a rising interest rate environment. Further, a significant portion of our adjustable rate loans have interest rate floors below which the loan’s contractual interest rate may not adjust. As of June 30, 2019, our loans with interest rate floors totaled approximately $651.2 million or 24.1%of our total loan portfolio and had a weighted average floor rate of 4.04%. At that date, $74.7 million of these loans were at their floor rate, ofwhich $56.2 million, or 75.2%, had yields that would begin floating again once prime rates increase at least 200 basis points. The inability of our loans to adjust downward can contribute to increased income in periods of declining interest rates, although this result is subject to the risks that borrowers may refinance these loans during periods of declining interest rates. Also, when loans are at their floors, there is a further risk that our interest income may not increase as rapidly as our cost of funds during periods of increasing interest rates which could have a material adverse effect on our results of operations.

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Changes in interest rates also affect the value of our interest-earning assets and in particular our securities portfolio. Generally, the fair value of fixed-rate securities fluctuates inversely with changes in interest rates. Unrealized gains and losses on securities available for sale are reported as a separate component of equity, net of tax. Decreases in the fair value of securities available for sale resulting from increases in interest rates could have an adverse effect on stockholders’ equity.

Although management believes it has implemented effective asset and liability management strategies to reduce the potential effects of changes in interest rates on our results of operations, any substantial, unexpected or prolonged change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations. Also, our interest rate risk modeling techniques and assumptions likely may not fully predict or capture the impact of actual interest rate changes on our consolidated balance sheet or projected operating results. For further discussion of how changes in interest rates could impact us, see "Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk" for additional information about our interest rate risk management.

Uncertainty relating to the LIBOR calculation process and potential phasing out of LIBOR may adversely affect our results of operations.

On July 27, 2017, the Chief Executive of the United Kingdom Financial Conduct Authority, which regulates LIBOR, announced that it intends to stop persuading or compelling banks to submit rates for the calibration of LIBOR to the administrator of LIBOR after 2021. The announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021. It is impossible to predict whether and to what extent banks will continue to provide LIBOR submissions to the administrator of LIBOR or whether any additional reforms to LIBOR may be enacted in the United Kingdom or elsewhere. At this time, no consensus exists as to what rate or rates may become acceptable alternatives to LIBOR and it is impossible to predict the effect of any such alternatives on the value of LIBOR-based securities and variable rate loans, subordinated debentures, or other securities or financial arrangements, given LIBOR's role in determining market interest rates globally. Uncertainty as to the nature of alternative reference rates and as to potential changes or other reforms to LIBOR may adversely affect LIBOR rates and the value of LIBOR-based loans and securities in our portfolio, and may impact the availability and cost of hedging instruments and borrowings. If LIBOR rates are no longer available, and we are required to implement substitute indices for the calculation of interest rates under our loan agreements with our borrowers, we may incur significant expenses in effecting the transition, and may be subject to disputes or litigation with customers over the appropriateness or comparability to LIBOR of the substitute indices, which could have an adverse effect on our results of operations.

If limitations arise in our ability to utilize the national brokered deposit market or to replace short-term deposits, our ability to replace maturing deposits on acceptable terms could be adversely impacted.

HomeTrust Bank utilizes the national brokered deposit market for a portion of our funding needs. At June 30, 2019, brokered deposits totaled $176.9 million or 7.60% of total deposits, with remaining maturities of one month to three years. Under FDIC regulations, in the event we are deemed to be less than well-capitalized, we would be subject to restrictions on our use of brokered deposits and the interest rate we can offer on our deposits. If this happens, our use of brokered deposits and the rates we would be allowed to pay on deposits may significantly limit our ability to use deposits as a funding source. If we are unable to participate in this market for any reason in the future, our ability to replace these deposits at maturity could be adversely impacted.

Further, there may be competitive pressures to pay higher interest rates on deposits, which would increase our funding costs. If deposit clients move money out of our Bank deposit products and into other investments (or into similar products at other institutions that may provide a higher rate of return), we could lose a relatively low cost source of funds, increasing our funding costs and reducing our net interest income and net income. Additionally, any such loss of funds could result in reduced loan originations, which could materially negatively impact our growth strategy and results of operations.

Conditions in the financial markets may limit our access to additional funding to meet our liquidity needs.

Liquidity is essential to our business. We rely on a number of different sources in order to meet our potential liquidity demands. Our primary sources of liquidity are increases in deposit accounts, cash flows from loan payments and our securities portfolio. Borrowings also provide us with a source of funds to meet liquidity demands. An inability to raise funds through deposits, borrowings, the sale of loans or investment securities and other sources could have a substantial negative effect on our liquidity. Our access to funding sources in amounts adequate to finance our activities or on terms which are acceptable to us could be impaired by factors that affect us specifically, or the financial services industry or economy in general. Factors that could detrimentally impact our access to liquidity sources include a decrease in the level of our business activity as a result of a downturn in the North Carolina, South Carolina, Virginia, and/or Tennessee markets in which our loans are concentrated or adverse regulatory action against us. Our ability to borrow could also be impaired by factors that are not specific to us, such as a disruption in the financial markets or negative views and expectations about the prospects for the financial services industry or deterioration in credit markets. In particular, our liquidity position could be significantly constrained if we are unable to access funds from the FHLB Atlanta or other wholesale funding sources, or if adequate financing is not available at acceptable interest rates. Finally, if we are required to rely more heavily on more expensive funding sources, our revenues may not increase proportionately to cover our costs. Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet our expenses, or fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could, in turn, have a material adverse effect on our business, financial condition and results of operations.

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Our strategy of pursuing acquisitions exposes us to financial, execution and operational risks that could adversely affect us.

We have implemented a strategy of supplementing organic growth by acquiring other financial institutions or other businesses that we believe will help us fulfill our strategic objectives and enhance our earnings. There are risks associated with this strategy, however, including the following:

• We may be exposed to potential asset quality issues or unknown or contingent liabilities of the banks, businesses, assets and liabilities we acquire. If these issues or liabilities exceed our estimates, our results of operations and financial condition may be materially negatively affected;

• Prices at which future acquisitions can be made may not be acceptable to us;

• Our growth initiatives may require us to recruit experienced personnel to assist in such initiatives. The failure to identify and retain such personnel would place significant limitations on our ability to execute our growth strategy;

• Our strategic efforts may divert resources or management’s attention from ongoing business operations and may subject us to additional regulatory scrutiny;

• The acquisition of other entities generally requires integration of systems, procedures and personnel of the acquired entity into our company to make the transaction economically successful. This integration process is complicated and time consuming and can also be disruptive to the customers of the acquired business. If the integration process is not conducted successfully and with minimal effect on the acquired business and its customers, we may not realize the anticipated economic benefits of particular acquisitions within the expected time frame, and we may lose customers or employees of the acquired business. We may also experience greater than anticipated customer losses even if the integration process is successful;

• To finance a future acquisition, we may borrow funds, thereby increasing our leverage and diminishing our liquidity, or raise additional capital, which could dilute the interests of our existing shareholders;

• We have completed five acquisitions during the past six fiscal years that enhanced our rate of growth. We may not be able to continue to sustain our past rate of growth or to grow at all in the future; and

• We expect our net income will increase following our acquisitions, however, we also expect our general and administrative expenses and consequently our efficiency rates will also increase. Ultimately, we would expect our efficiency ratio to improve; however, if we are not successful in our integration process, this may not occur, and our acquisitions or branching activities may not be accretive to earnings in the short or long-term.

The required accounting treatment of loans we acquire through acquisitions, including purchase credit impaired loans, could result in higher net interest margins and interest income in current periods and lower net interest margins and interest income in future periods.

Under U.S. Generally Accepted Accounting Principles ("GAAP"), we are required to record loans acquired through acquisitions, including purchase credit impaired loans, at fair value. Estimating the fair value of such loans requires management to make estimates based on available information and facts and circumstances as of the acquisition date. Actual performance could differ from management's initial estimates. If these loans outperform our original fair value estimates, the difference between our original estimate and the actual performance of the loan (the “discount”) is accreted into net interest income. Thus, our net interest margins may initially increase due to the discount. We expect the yields on our loans to decline as our acquired loan portfolio pays down or matures and the discount decreases, and we expect downward pressure on our interest income to the extent that the runoff on our acquired loan portfolio is not replaced with comparable high-yielding loans. This could result in higher net interest margins and interest income in current periods and lower net interest rate margins and lower interest income in future periods.

The financial services market is undergoing rapid technological changes, and if we are unable to stay current with those changes, we will not be able to effectively compete.

The financial services market, including banking services, is undergoing rapid changes with frequent introductions of new technology-driven products and services. Our future success will depend, in part, on our ability to keep pace with the technological changes and to use technology to satisfy and grow customer demand for our products and services and to create additional efficiencies in our operations. We expect that we will need to make substantial investments in our technology and information systems to compete effectively and to stay current with technological changes. Some of our competitors have substantially greater resources to invest in technological improvements and will be able to invest more heavily in developing and adopting new technologies, which may put us at a competitive disadvantage. We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers. As a result, our ability to effectively competeto retain or acquire new business may be impaired, and our business, financial condition or results of operations may be adversely affected.

We operate in a highly regulated environment and may be adversely affected by changes in federal and state laws and regulations.

The financial services industry is extensively regulated. Federal and state banking regulations are designed primarily to protect the deposit insurance funds and consumers, not to benefit a company’s shareholders. These regulations may sometimes impose significant limitations on operations. The significant federal and state banking regulations that affect us are described under the heading "Business-How We Are Regulated”

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in Item I of this Form 10-K. These regulations, along with the currently existing tax, accounting, securities, insurance, and monetary laws, regulations, rules, standards, policies, and interpretations control the methods by which financial institutions conduct business, implement strategic initiatives and tax compliance, and govern financial reporting and disclosures. New proposals for legislation continue to be introduced in the U.S. Congress that could further alter the regulation of the bank and non-bank financial services industries and the manner in which firms within the industry conduct business. In this regard, in May 2018 the Economic Growth, Regulatory Relief and Consumer Protection Act (the “Act”), was enacted to reduce the application of certain financial reform regulations, including the Dodd-Frank Act, on community banks such as us. The Act, among other matters, expands the definition of qualified mortgages which may be held by a financial institution and simplifies the regulatory capital rules for financial institutions and their holding companies with total consolidated assets of less than $10 billion by instructing the federal banking regulators to establish a single “Community Bank Leverage Ratio” of between 8 and 10 percent to replace the leverage and risk-based regulatory capital ratios. It is difficult at this time to predict when or how any new standards under the Act will ultimately be applied to us or what specific impact the Act and the yet to be written implementing rules and regulations will have on community banks. However, it is expected that they may impact the profitability of our business activities and enhance our ability to originate residential loans while reducing our operating and compliance costs. In addition to this new legislation, federal and state regulatory agencies also frequently adopt changes to their regulations or change the manner in which existing regulations are applied. Future changes in federal policy and at regulatory agencies are expected to occur over time through policy and personnel changes, which could lead to changes involving the level of oversight and focus on the financial services industry. These changes may require us to invest significant management attention and resources to make any necessary changes to operations to comply and could have an adverse effect on our business, financial condition and results of operations. Further, changes in accounting standards can be both difficult to predict and involve judgment and discretion in their interpretation by us and our independent registered public accounting firm. These accounting changes could materially impact, potentially even retroactively, how we report our financial condition and results of our operations as could our interpretation of those changes.

Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions.

The USA PATRIOT and Bank Secrecy Acts require financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities. If such activities are detected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury’s Office of Financial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Failure to comply with these regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions. Recently several banking institutions have received large fines for non-compliance with these laws and regulations. While we have developed policies and procedures designed to assist in compliance with these laws and regulations, no assurance can be given that these policies and procedures will be effective in preventing violations of these laws and regulations.

Our growth or future losses may require us to raise additional capital in the future, but that capital may not be available when it is needed or the cost of that capital may be very high.

We are required by federal regulatory authorities to maintain adequate levels of capital to support our operations. Currently, we believe our capital resources satisfy our capital requirements for the foreseeable future. However, we may at some point need to raise additional capital to support our growth.

Our ability to raise additional capital, if needed, will depend on conditions in the capital markets at that time, which are outside of our control, and on our financial condition and performance. Accordingly, we cannot make assurances that we will be able to raise additional capital if needed on terms that are acceptable to us, or at all. If we cannot raise additional capital when needed, our ability to further expand our operations could be materially impaired and our financial condition and liquidity could be materially and adversely affected. In addition, any additional capital we obtain may result in the dilution of the interests of existing holders of our common stock. Further, if we are unable to raise additional capital when required by our bank regulators, we may be subject to adverse regulatory action.

We are subject to certain risks in connection with our use of technology.

Our security measures may not be sufficient to mitigate the risk of a cyber attack. Communications and information systems are essential to the conduct of our business, as we use such systems to manage our customer relationships, our general ledger and virtually all other aspects of our business. Our operations rely on the secure processing, storage, and transmission of confidential and other information in our computer systems and networks. Although we take protective measures and endeavor to modify them as circumstances warrant, the security of our computer systems, software, and networks may be vulnerable to breaches, fraudulent or unauthorized access, denial or degradation of service attacks, misuse, computer viruses, malware or other malicious code and cyber-attacks that could have a security impact. If one or more of these events occur, this could jeopardize our or our customers' confidential and other information processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our operations or the operations of our customers or counterparties. We may be required to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are either not insured against or not fully covered through any insurance maintained by us. We could also suffer significant reputational damage.

Further, our cardholders use their debit and credit cards to make purchases from third parties or through third party processing services. As such, we are subject to risk from data breaches of such third party’s information systems or their payment processors. Such a data security breach could compromise our account information. The payment methods that we offer also subject us to potential fraud and theft by criminals, who are becoming increasingly more sophisticated, seeking to obtain unauthorized access to or exploit weaknesses that may exist in the payment systems.

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If we fail to comply with applicable rules or requirements for the payment methods we accept, or if payment-related data is compromised due to a breach or misuse of data, we may be liable for losses associated with reimbursing our clients for such fraudulent transactions on clients’ card accounts, as well as costs incurred by payment card issuing banks and other third parties or may be subject to fines and higher transaction fees, or our ability to accept or facilitate certain types of payments may be impaired. We may also incur other costs related to data security breaches, such as replacing cards associated with compromised card accounts. In addition, our customers could lose confidence in certain payment types, which may result in a shift to other payment types or potential changes to our payment systems that may result in higher costs.

Breaches of information security also may occur through intentional or unintentional acts by those having access to our systems or our clients’ or counterparties’ confidential information, including employees. The Corporation is continuously working to install new and upgrade its existing information technology systems and provide employee awareness training around phishing, malware, and other cyber risks to further protect the Company against cyber risks and security breaches.

There continues to be a rise in electronic fraudulent activity, security breaches and cyber-attacks within the financial services industry, especially in the commercial banking sector due to cyber criminals targeting commercial bank accounts. We are regularly the target of attempted cyber and other security threats and must continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact. Insider or employee cyber and security threats are increasingly a concern for companies, including ours. We are not aware that we have experienced any material misappropriation, loss or other unauthorized disclosure of confidential or personally identifiable information as a result of a cyber-security breach or other act, however, some of our clients may have been affected by these breaches, which could increase their risks of identity theft, credit card fraud and other fraudulent activity that could involve their accounts with us.

Security breaches in our internet banking activities could further expose us to possible liability and damage our reputation. Increases in criminal activity levels and sophistication, advances in computer capabilities, new discoveries, vulnerabilities in third party technologies (including browsers and operating systems) or other developments could result in a compromise or breach of the technology, processes and controls that we use to prevent fraudulent transactions and to protect data about us, our clients and underlying transactions. Any compromise of our security could deter customers from using our internet banking services that involve the transmission of confidential information. We rely on standard internet security systems to provide the security and authentication necessary to effect secure transmission of data. Although we have developed and continue to invest in systems and processes that are designed to detect and prevent security breaches and cyber-attacks and periodically test our security, these precautions may not protect our systems from compromises or breaches of our security measures, and could result in losses to us or our customers, our loss of business and/or customers, damage to our reputation, the incurrence of additional expenses, disruption to our business, our inability to grow our online services or other businesses, additional regulatory scrutiny or penalties, or our exposure to civil litigation and possible financial liability, any of which could have a material adverse effect on our business, financial condition and results of operations.

Our security measures may not protect us from system failures or interruptions. While we have established policies and procedures to prevent or limit the impact of systems failures and interruptions, there can be no assurance that such events will not occur or that they will be adequately addressed if they do. In addition, we outsource certain aspects of our data processing and other operational functions to certain third-party providers. While the Corporation selects third-party vendors carefully, it does not control their actions. If our third-party providers encounter difficulties including those resulting from breakdowns or other disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher transaction volumes, cyber-attacks and security breaches or if we otherwise have difficulty in communicating with them, our ability to adequately process and account for transactions could be affected, and our ability to deliver products and services to our customers and otherwise conduct business operations could be adversely impacted. Replacing these third-party vendors could also entail significant delay and expense. Threats to information security also exist in the processing of customer information through various other vendors and their personnel. We cannot assure you that such breaches, failures or interruptions will not occur or, if they do occur, that they will be adequately addressed by us or the third parties on which we rely. We may not be insured against all types of losses as a result of third party failures and insurance coverage may be inadequate to cover all losses resulting from breaches, system failures or other disruptions. If any of our third-party service providers experience financial, operational or technological difficulties, or if there is any other disruption in our relationships with them, we may be required to identify alternative sources of such services, and we cannot assure you that we could negotiate terms that are as favorable to us, or could obtain services with similar functionality as found in our existing systems without the need to expend substantial resources, if at all. Further, the occurrence of any systems failure or interruption could damage our reputation and result in a loss of customers and business, could subject us to additional regulatory scrutiny, or could expose us to legal liability. Any of these occurrences could have a material adverse effect on our financial condition and results of operations.

The board of directors oversees the risk management process, including the risk of cybersecurity, and engages with management on cybersecurity issues.

Our operations rely on numerous external vendors.

We rely on numerous external vendors to provide us with products and services necessary to maintain our day-to-day operations. Accordingly, our operations are exposed to risk that these vendors will not perform in accordance with the contracted arrangements under service level agreements. The failure of an external vendor to perform in accordance with the contracted arrangements under service level agreements because of changes in the vendor’s organizational structure, financial condition, support for existing products and services or strategic focus or for any other reason, could be disruptive to our operations, which in turn could have a material negative impact on our financial condition and results of operations. We also could be adversely affected to the extent such an agreement is not renewed by a third party vendor or is renewed on terms less favorable to us. Additionally, the bank regulatory agencies expect financial institutions to be responsible for all aspects of our vendors’ performance, including aspects which they delegate to third parties. Disruptions or failures in the physical infrastructure or operating systems

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that support our business and clients, or cyber-attacks or security breaches of the networks, systems or devices that our clients use to access our products and services could result in client attrition, regulatory fines, penalties or intervention, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs, any of which could materially adversely affect our results of operations or financial condition.

Our framework for managing risks may not be effective in mitigating risk and loss to us.

We have established processes and procedures intended to identify, measure, monitor, report, analyze and control the types of risk to which we are subject. These risks include liquidity risk, credit risk, market risk, interest rate risk, operational risk, legal and compliance risk, and reputational risk, among others. We also maintain a compliance program to identify, measure, assess, and report on our adherence to applicable laws, policies and procedures. While we assess and improve these programs on an ongoing basis, there can be no assurance that our risk management or compliance programs, along with other related controls, will effectively mitigate all risk and limit losses in our business. As with any risk management framework, there are inherent limitations to our risk management strategies as there may exist, or develop in the future, risks that we have not appropriately anticipated or identified. If our risk management framework proves ineffective, we could suffer unexpected losses which could have a material adverse effect on our financial condition and results of operations.

Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes.

As a bank, we are susceptible to fraudulent activity that may be committed against us or our clients, which may result in financial losses or increased costs to us or our clients, disclosure or misuse of our information or our client information, misappropriation of assets, privacy breaches against our clients, litigation or damage to our reputation. Such fraudulent activity may take many forms, including check fraud, electronic fraud, wire fraud, phishing, social engineering and other dishonest acts. Nationally, reported incidents of fraud and other financial crimes have increased. We have also experienced losses due to apparent fraud and other financial crimes. While we have policies and procedures designed to prevent such losses, there can be no assurance that such losses will not occur.

Managing reputational risk is important to attracting and maintaining customers, investors and employees.

Threats to our reputation can come from many sources, including adverse sentiment about financial institutions generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality, compliance deficiencies, and questionable or fraudulent activities of our customers. We have policies and procedures in place to protect our reputation and promote ethical conduct, but these policies and procedures may not be fully effective. Negative publicity regarding our business, employees, or customers, with or without merit, may result in the loss of customers, investors and employees, costly litigation, a decline in revenues and increased governmental regulation.

We may experience future goodwill impairment.

In accordance with GAAP, we record assets acquired and liabilities assumed at their fair value, and, as such, acquisitions typically result in recording goodwill. We perform a goodwill evaluation at least annually to test for goodwill impairment. As part of its testing, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines the fair value of a reporting unit is less than its carrying amount using these qualitative factors, the Company then compares the fair value of goodwill with its carrying amount, and then measures impairment loss by comparing the implied fair value of goodwill with the carrying amount of that goodwill. Adverse conditions in our business climate, including a significant decline in future operating cash flows, a significant change in our stock price or market capitalization, or a deviation from our expected growth rate and performance may significantly affect the fair value of our goodwill and may trigger additional impairment losses, which could be materially adverse to our operating results and financial position.

We cannot provide assurance that we will not be required to take an impairment charge in the future. Any impairment charge has an adverse effect on our results of shareholders’ equity and financial results and could cause a decline in our stock price.

Our net operating loss carryforwards could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code.

As of June 30, 2019, we had approximately $24.2 million of federal net operating losses (“NOLs”). The majority of these NOLs will expire for federal tax purposes from 2024 through 2036. Our ability to use our NOLs and other pre-ownership change losses (collectively, “Pre-Change Losses”) to offset future taxable income will be limited if we experience an “ownership change” as defined in Section 382 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”). In general, an ownership change occurs if, among other things, the shareholders (or specified groups of shareholders) who own or have owned, directly or indirectly, 5% or more of a corporation’s common stock or are otherwise treated as 5% shareholders under Section 382 and U.S. Treasury regulations promulgated thereunder increase their aggregate percentage ownership of that corporation’s stock by more than 50 percentage points over the lowest percentage of the stock owned by these shareholders over a rolling three-year period. If we experience an ownership change our Pre-Change Losses will be subject to an annual limitation on their use, which is generally equal to the fair market value of our outstanding stock immediately before the ownership change multiplied by the long-term tax-exempt rate, which was 2.19% for ownership changes occurring in June 2019. Depending on the size of the annual limitation (which is in part a function of our market capitalization at the time of the ownership change) and the remaining carryforward period for our Pre-Change Losses (U.S. federal net operating losses generally may be carried forward for a period of 20 years), we could realize a permanent loss of some or all of our Pre-Change Losses, which could have a material adverse effect on our results of operations and financial condition.

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In September 2012, we adopted a shareholder rights plan (the “Rights Plan”), which provides an economic disincentive for any person or group to become an owner, for relevant tax purposes, of 4.99% or more of our stock. While adoption of the Rights Plan should reduce the likelihood that future transactions in our stock will result in an ownership change under Section 382, there can be no assurance that the Rights Plan will be effective to deter a shareholder from increasing its ownership interests beyond the limits set by the Rights Plan or that an ownership change will not occur in the future.

We rely on dividends from the Bank for substantially all of our revenue at the holding company level.

We are an entity separate and distinct from our principal subsidiary, HomeTrust Bank, and derive substantially all of our revenue at the holding company level in the form of dividends from that subsidiary. Accordingly, we are, and will be, dependent upon dividends from the Bank to pay the principal of and interest on our indebtedness, to satisfy our other cash needs and to pay dividends on our common stock. HomeTrust Bank’s ability to pay dividends is subject to its ability to earn net income and to meet certain regulatory requirements. In the event the Bank is unable to pay dividends to us, we may not be able to pay dividends on our common stock or continue stock repurchases. Also, our right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We maintain our administrative office, which is owned by us, in Asheville, North Carolina. In total, as of June 30, 2019, we have 43 locations, which include: North Carolina (including the Asheville metropolitan area, Greensboro / "Piedmont" region, Charlotte, and Raleigh/Cary), Upstate South Carolina (Greenville), East Tennessee (including Kingsport/Johnson City/Bristol, Knoxville, and Morristown) and Southwest Virginia (including the Roanoke Valley).

Of those offices, 11 are leased facilities. We also own an operations center located in Asheville, North Carolina. We lease additional space, which is adjacent to the facility we own, for administrative and operations personnel. The lease terms for our branch offices, operations center and other offices are not individually material. Lease expirations range from one to five years. In the opinion of management, all properties are adequately covered by insurance, are in a good state of repair and are appropriately designed for their present and future use. See Notes 6 and 12 in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.

We maintain depositor and borrower customer files on an online basis, utilizing a telecommunications network, portions of which are leased. Management has a disaster recovery plan in place with respect to the data processing system, as well as our operations as a whole.

Item 3. Legal Proceedings

The "Litigation" section of Note 18 to the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K is incorporated herein by reference.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

The Company’s common stock is listed on the Nasdaq Global Market under the symbol “HTBI.” As of the close of business on September 10, 2019, there were 17,860,045 shares of common stock outstanding held by 1,208 holders of record. Certain shares are held in “nominee” or “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.

The Company began paying its first cash dividends during the second fiscal quarter of 2019. We did not declare any dividends on our common stock during the fiscal year ended June 30, 2018. The timing and amount of cash dividends paid depends on our earnings, capital requirements, financial condition and other relevant factors. We also have the ability to receive dividends or capital distributions from HomeTrust Bank, our wholly owned subsidiary. There are regulatory restrictions on the ability of HomeTrust Bank to pay dividends. See Item 1, “Business—How We Are Regulated,” for more information regarding the restrictions on the Company’s and the Bank’s abilities to pay dividends.

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Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table provides information about repurchases of common stock by the Company during the quarter ended June 30, 2019:

Period	Total Number Of Shares Purchased	Average Price Paid per Share		Total Number Of Shares Purchased as Part of Publicly Announced Plans	Maximum Number of Shares that May Yet Be Purchased Under Publicly Announced Plans
April 1 - April 30, 2019	—	$	—	—	517,601
May 1 - May 31, 2019	133,730	25.35		133,730	383,871
June 1 - June 30, 2019	158,900	24.72		158,900	224,971
Total	292,630	$	25.01	292,630	224,971

On December 6, 2018, the Company announced that its Board of Directors had authorized the repurchase of up to 931,601 shares of the Company's common stock, representing 5% of the Company's outstanding shares at the time of the announcement. The shares may be purchased in the open market or in privately negotiated transactions, from time to time depending upon market conditions and other factors. As of June 30, 2019, 706,630 of the shares approved on December 6, 2018 had been purchased at an average price of $25.69.

Equity Compensation Plans

The equity compensation plan information presented under Part III, Item 12 of this report is incorporated herein by reference.

Shareholder Return Performance Graph Presentation

The performance graph below compares the Company’s cumulative shareholder return on its common stock since June 30, 2014 to the cumulative total return of the Nasdaq Composite, and the Nasdaq Bank Index for the periods indicated. The information presented below assumes $100 was invested on June 30, 2014, in the Company’s common stock and in each of the indices and assumes the reinvestment of all dividends. Historical stock price performance is not necessarily indicative of future stock price performance. Total return assumes the reinvestment of all dividends and that the value of common stock and each index was $100 on June 30, 2014.

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	Year Ended June 30,
	2014	2015	2016	2017	2018	2019
HomeTrust Bancshares, Inc.	100.00	106.28	117.31	154.72	178.50	159.42
NASDAQ Bank Index	100.00	110.64	104.92	144.13	158.62	134.61
NASDAQ Composite	100.00	113.13	109.86	139.30	170.37	181.62

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Item 6. Selected Financial and Other Data.

The summary information presented below under “Selected Financial Condition Data” and “Selected Operations Data” for the years ended June 30, 2019, 2018 and 2017 are derived in part from the audited consolidated financial statements that appear in this annual report. The following information is only a summary and you should read it in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Item 7 of this report and “Financial Statements and Supplementary Data” under Item 8 of this report below.

	At June 30,
	2019		2018		2017		2016		2015
	(In thousands)
Selected Financial Condition Data:
Total assets	$	3,476,178	$	3,304,169	$	3,206,533	$	2,717,677	$	2,783,114
Loans receivable, net(1)	2,683,761		2,504,792		2,330,319		1,811,539		1,663,333
Allowance for loan losses	21,429		21,060		21,151		21,292		22,374
Commercial paper	241,446		229,070		149,863		229,859		256,152
Certificates of deposit in other banks	52,005		66,937		132,274		161,512		210,629
Securities available for sale, at fair value	121,786		154,993		199,667		200,652		257,606
Other investments, at cost	45,378		41,931		39,355		29,486		28,711
Deposits	2,327,257		2,196,253		2,048,451		1,802,696		1,872,126
Borrowings	680,000		635,000		696,500		491,000		475,000
Stockholders’ equity	408,896		409,242		397,647		359,976		371,050

	Years Ended June 30,
	2019		2018		2017		2016		2015
	(In thousands)
Selected Operations Data:
Total interest and dividend income	$	137,259	$	117,402	$	99,436	$	87,747	$	85,156
Total interest expense	30,383		16,072		8,245		6,040		5,390
Net interest income	106,876		101,330		91,191		81,707		79,766
Provision for loan losses	5,700		—		—		—		150
Net interest income after provision for loan losses	101,176		101,330		91,191		81,707		79,616
Service charges and fees on deposit accounts	9,611		8,802		7,709		7,469		5,930
Loan income and fees	1,422		1,176		971		1,426		1,338
Gain on sale of loans held for sale	6,218		4,276		2,674		1,643		1,651
Bank owned life insurance income	2,103		2,117		2,088		1,874		1,911
Gain on sale of securities	—		—		22		—		61
Gain on sale of fixed assets	—		164		385		10		—
Other noninterest income	3,541		2,437		2,258		1,869		1,628
Total noninterest income	22,895		18,972		16,107		14,291		12,519
Total noninterest expense	90,134		85,331		90,259		79,641		81,552
Income before provision for income taxes	33,937		34,971		17,039		16,357		10,583
Income tax expense	6,791		26,736		5,192		4,901		2,558
Net income	$	27,146	$	8,235	$	11,847	$	11,456	$	8,025
Per Share Data:
Net income per common share:
Basic	$	1.52	$	0.45	$	0.66	$	0.65	$	0.42
Diluted	$	1.46	$	0.44	$	0.65	$	0.65	$	0.42

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	At or For the Years Ended June 30,
	2019			2018		2017		2016		2015
Selected Financial Ratios and Other Data:
Performance ratios:
Return on assets (ratio of net income to average total assets)	0.80		%	0.25	%	0.40	%	0.42	%	0.32	%
Return on equity (ratio of net income to average equity)	6.62			2.05		3.14		3.16		2.12
Tax equivalent yield on earning assets(2)	4.39			4.00		3.79		3.62		3.88
Rate paid on interest-bearing liabilities	1.16			0.65		0.37		0.29		0.29
Tax equivalent average interest rate spread(2)	3.23			3.35		3.42		3.33		3.59
Tax equivalent net interest margin(2)(3)	3.43			3.46		3.49		3.37		3.64
Noninterest expense to average total assets	2.65			2.63		3.04		2.88		3.25
Average interest-earning assets to average interest-bearing liabilities	120.39			120.77		120.26		119.25		120.61
Efficiency ratio	69.46			70.93		84.12		82.96		88.37
Efficiency ratio - adjusted(4)	68.83			70.12		75.48		80.43		79.78
Asset quality ratios:
Nonperforming assets to total assets(5)	0.38		%	0.44	%	0.62	%	0.90	%	1.15	%
Nonaccruing loans to total loans(5)	0.38			0.43		0.58		1.01		1.47
Total classified assets to total assets	0.89			1.00		1.57		2.17		2.92
Allowance for loan losses to nonaccruing loans(5)	206.90			192.96		154.77		114.98		90.02
Allowance for loan losses to total loans	0.79			0.83		0.90		1.16		1.33
Net charge-offs (recoveries) to average loans	0.20			—		0.01		0.06		0.07
Capital ratios:
Equity to total assets at end of period	11.76		%	12.39	%	12.40	%	13.25	%	13.33	%
Average equity to average assets	12.06			12.41		12.80		13.24		15.11
Dividend payout ratio	11.70			—		—		—		—
Dividends declared per common share	$	0.18		—		—		—		—

_____________________

(1) Net of allowances for loan losses, loans in process and deferred loan fees.

(2) For the years ended June 30, 2019 and 2018 the weighted average rate for municipal leases is adjusted for a 24%, and 30%, respectively, combined federal and state tax rate since the interest from these leases is tax exempt. All other years were at 37%.

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

(4) See Part II, Item 7 - "Non-GAAP Financial Measures" for additional details.

(5) Nonperforming assets include nonaccruing loans including certain restructured loans and real estate owned. At June 30, 2019, there were $4.5 million of restructured loans included in nonaccruing loans and $4.1 million, or 39.6%, of nonaccruing loans were current on their loan payments.

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.

Overview

Our principal business consists of attracting deposits from the general public and investing those funds, along with borrowed funds, in loans secured by first and second mortgages on one-to-four family residences, including home equity loans and construction and land/lot loans, commercial real estate loans, construction and development loans, commercial and industrial loans, U.S. Small Business Administration ("SBA") loans, equipment finance leases, indirect automobile loans, and municipal leases. We also work with a third party to originate HELOCs which are pooled and sold. In addition, we purchase investment securities consisting primarily of securities issued by United States Government agencies and government-sponsored enterprises, as well as, commercial paper and certificates of deposit insured by the FDIC.

We offer a variety of deposit accounts for individuals, businesses, and nonprofit organizations. Deposits and borrowings are our primary source of funds for our lending and investing activities.

We are significantly affected by prevailing economic conditions, as well as, government policies and regulations concerning, among other things, monetary and fiscal affairs, housing and financial institutions. Deposit flows are influenced by a number of factors, including interest rates paid on competing time deposits, other investments, account maturities, and the overall level of personal income and savings. Lending activities are influenced by the demand for funds, the number and quality of lenders, and regional economic cycles.

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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 on deposit accounts, loan income and fees, gains on the sale of loans held for sale, and gains and losses from sales of securities.

An offset to net interest income is the provision for loan losses which is required to establish the allowance for loan losses at a level that adequately provides for probable losses inherent in our loan portfolio. As a loan's risk rating improves, property values increase, or recoveries of amounts previously charged off are received, a recapture of previously recognized provision for loan losses may be added to net interest income.

Our noninterest expenses consist primarily of salaries and employee benefits, expenses for occupancy, marketing and computer services, and FDIC deposit insurance premiums. Salaries and benefits consist primarily of the salaries and wages paid to our employees, payroll taxes, expenses for retirement and other employee benefits. Occupancy expenses, which are the fixed and variable costs of buildings and equipment, consist primarily of lease payments, property taxes, depreciation charges, maintenance and costs of utilities.

In recent years, we have expanded our geographic footprint into seven additional markets through strategic acquisitions as well as three de novo commercial loan offices. Looking forward, we believe opportunities currently exist within our market areas to grow our franchise. We anticipate organic growth as the local economy and loan demand strengthens, through our marketing efforts and as a result of the opportunities being created as a result of the consolidation of financial institutions occurring in our market areas. We may also seek to expand our franchise through the selective acquisition of individual branches, loan purchases and, to a lesser degree, whole bank transactions that meet our investment and market objectives. We will continue to be disciplined as it pertains to future expansion focusing primarily on organic growth in our current market areas.

At June 30, 2019, we had 43 locations in North Carolina (including the Asheville metropolitan area, Greensboro/"Piedmont" region, Charlotte, and Raleigh/Cary), Upstate South Carolina (Greenville), East Tennessee (including Kingsport/Johnson City/Bristol, Knoxville, and Morristown) and Southwest Virginia (including the Roanoke Valley).

Recent Merger, Acquisition, and Consolidation Activity

On March 29, 2018, the Company opened a de novo branch office in Cary, North Carolina.

On August 1, 2017, the Company opened a commercial loan production office in Greensboro, North Carolina.

On January 1, 2017, the Company completed its acquisition of TriSummit Bancorp, Inc. ("TriSummit") pursuant to an Agreement and Plan of Merger, dated as of September 20, 2016, under which TriSummit merged with and into HomeTrust with HomeTrust as the surviving corporation in the Merger. Immediately following the Merger, TriSummit's wholly owned subsidiary bank, TriSummit Bank, merged with and into the Bank. TriSummit had seven offices throughout the East Tennessee market. The acquisition added approximately $258.0 million in loans and $280.0 million in deposits.

On December 31, 2016, the Bank acquired United Financial of North Carolina, Inc. ("United Financial"), a municipal lease company headquartered in Fletcher, North Carolina that specializes in providing financing for fire departments and municipalities for the purchase of fire trucks and related equipment as well as the construction of fire stations and other municipal buildings across the Carolinas and other southeastern states. United Financial underwrites and originates these municipal leases and then sells them to HomeTrust and other financial institutions. Beginning January 1, 2017, United Financial has conducted business under the name United Financial, a division of HomeTrust Bank.

Business and Operating Strategy and Goals

Our primary objective is to continue to operate and grow HomeTrust Bank as a well-capitalized, profitable, independent, community banking organization. Our mission is to create stockholder value by building relationships with our employees, customers, and communities in our primary markets in North Carolina (including the Asheville metropolitan area, Greensboro / "Piedmont" region, Charlotte, and Raleigh/Cary), Upstate South Carolina (Greenville), East Tennessee (including Kingsport/Johnson City/Bristol, Knoxville, and Morristown) and Southwest Virginia (including the Roanoke Valley) through exceptional service and helping our customers every day to be "Ready For What’s Next" in their financial lives. We will also need to continue providing our employees with the tools necessary to effectively deliver our products and services to customers in order to compete effectively with other financial institutions operating in our market areas and to fulfill our "Commitment to the Customer Experience."

Continuing to originate residential and commercial real estate loans and municipal leases.  Our primary lending focus has been, and will continue to be, on operating as a residential and commercial mortgage lender. We originate both fixed and adjustable-rate residential and commercial mortgage loans. Most of the long term fixed-rate residential mortgage loans that we originate are sold into the secondary market with servicing released, while most of the residential adjustable rate mortgages and fixed rate mortgages with terms to maturity of 15 years or less, all commercial real estate loans, and all municipal leases that we originate, are retained in our portfolio. We intend to continue to emphasize these lending activities particularly in the larger attractive markets we have added in the past several years.

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Expanding our lines of businesses. In our commitment to sound and profitable organic growth, we continuously focus on enhancing our lines of businesses. During fiscal year 2019, we continued to add commercial and business revenue producers throughout our seven metro markets to further expand our commercial and industrial lending, as well as our knowledge of the growing markets. Fiscal year 2019 marked the first full year of our SBA and equipment finance lines of business. Our SBA loan program generated $3.4 million in noninterest income and our equipment finance line of business originated $147.0 million in loans and leases during the year.

Disciplined franchise expansion. We believe opportunities currently exist within our new market areas to grow our franchise as illustrated by another year of over $1 billion in total originations in fiscal year 2019. We anticipate organic growth as loan demand and new lines of businesses strengthen, through our marketing efforts and as a result of the opportunities being created due to the consolidation of financial institutions occurring in our market areas. We may also seek to expand our franchise through the selective acquisition of individual branches and, to a lesser degree, whole bank transactions that meet our investment and market objectives. We will continue to be disciplined as it pertains to future expansion focusing primarily on organic growth in our current market areas.

Maintaining and improving asset quality. The Company believes that strong asset quality is a key to long-term financial success. The percentage of nonperforming loans to total loans was 0.38% and 0.43% for June 30, 2019 and 2018, respectively. The Company’s percentage of nonperforming assets to total assets at June 30, 2019 was 0.38% compared to 0.44% at June 30, 2018. The Company has actively managed the delinquent loans and nonperforming assets by aggressively pursuing the collection of consumer debts and marketing saleable properties upon foreclosure or repossession, work-outs of classified assets and loan charge-offs. In the past several years, the Company has applied more conservative and stringent underwriting practices to new loans, including, among other things, an increased emphasis on a borrower’s ongoing ability to repay a loan by requiring lower debt to income ratios, higher credit scores and lower loan to value ratios than our previous lending policies had required. Although the Company intends to grow the commercial loan portfolio by expanding commercial real estate and commercial and industrial lending, the Company intends to manage credit exposures through the use of experienced bankers in this area, internal concentration limits, and a conservative approach to lending.

Emphasizing lower cost core deposits to manage the funding costs of our loan growth.  We offer personal checking, savings and money-market accounts, which generally are lower-cost sources of funds than certificates of deposit and are less sensitive to withdrawal when interest rates fluctuate. To build our core deposit base, over the past several years, we have sought to reduce our dependence on traditional higher cost deposits in favor of stable lower cost demand deposits. We have utilized additional product offerings, technology and a focus on customer service in working toward this goal. In addition, we intend to increase demand deposits by growing business banking relationships through expanded product lines tailored to our target business customers’ needs. We continue to implement strategies that include enhancing our online and mobile banking platform, including improvements to online account opening and sales promotions on money market and checking accounts to encourage the growth of lower cost deposits. As a result, deposits have increased 6.0% during fiscal 2019 and core deposits (which we define as our non-certificate or non-time deposit accounts) represent 69.0% of total deposits. In addition, our improvement and additional products has led to a 9.5% increase in the number of "sweet spot" relationships (which we define as households with checking, savings, and credit accounts).

Improving profitability through customer growth and balance sheet management.  We are continuing to focus significant efforts on creating brand awareness, offering competitive products and employing a strong and experienced workforce. In order to deepen the relationships with our customers and increase individual customer profitability, we have continued our cross-marketing program, which allows us to better identify lending opportunities and services for customers when a new account is opened. In addition, we have targeted our direct mail campaigns to take advantage of competitor mergers and/or branch closures to acquire new customer core deposits. We believe these initiatives have positioned us well to implement a strategy focused on improving revenue growth and noninterest income.

Hiring and retaining experienced employees with a customer service focus. We have been successful in attracting and retaining banking professionals with strong community relationships and significant knowledge of our markets, through both individual hires and business combinations, which is central to our business strategy. Exceptional service, local involvement and timely decision-making are integral parts of our business strategy, and we continue to seek additional highly qualified and motivated individuals. We believe that by focusing on experienced bankers who are established in their communities, we enhance our market position and add profitable growth opportunities. Our compensation and incentive systems are aligned with our strategies to grow core deposits and our loan portfolio as the economy improves, while improving asset quality. We have a strong corporate culture based on personal accountability and high ethical standards with an emphasis on "character" and "competence" across all our business lines and locations.

Critical Accounting Policies

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

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The following represent our critical accounting policies:

Allowance for Loan Losses.  The allowance for loan losses is the amount estimated by management as necessary to cover losses inherent in the loan portfolio at the balance sheet date. The allowance is established through the provision for loan losses, which is charged to income. Determining the amount of the allowance for loan losses necessarily involves a high degree of judgment. Among the material estimates required to establish the allowance are: loss exposure at default; the amount and timing of future cash flows on impaired loans; value of collateral; and determination of loss factors to be applied to the various elements of the portfolio. All of these estimates are susceptible to significant change. Management reviews the level of the allowance quarterly and establishes the provision for loan losses based upon an evaluation of the portfolio, past loss experience, current economic conditions, and other factors related to the collectability of the loan portfolio. Although we believe that we use the best information available to establish the allowance for loan losses, future adjustments to the allowance may be necessary if economic or other conditions differ substantially from the assumptions used in making the evaluation. In addition, bank regulators, as an integral part of their examination process, periodically review our allowance for loan losses and may require us to recognize adjustments to the allowance based on their judgments about information available to them at the time of their examination. A large loss could deplete the allowance and require increased provisions to replenish the allowance, which would adversely affect earnings.

Goodwill and Intangibles. Goodwill is reviewed for potential impairment on an annual basis during the fourth quarter, or more often if events or circumstances indicate there may be impairment. In testing goodwill for impairment, we have the option to assess either qualitative or quantitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount. If we elect to perform a qualitative assessment and determine that an impairment is more likely than not, we are then required to perform a quantitative impairment test, otherwise no further analysis is required. Under the quantitative impairment test, the evaluation involves comparing the current fair value of each reporting unit to its carrying value, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is considered not to be impaired. If the carrying value exceeds estimated fair value an impairment charge is recognized for the difference, but limited by the amount of goodwill allocated to that reporting unit. Other identifiable intangible assets are evaluated for impairment if events or changes in circumstances indicate a possible impairment.

Deferred Tax Assets. We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion of the deferred tax asset will not be realized. We exercise significant judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets. These judgments require us to make projections of future taxable income. The judgments and estimates we make in determining our deferred tax assets, which are inherently subjective, are reviewed on a continual basis as regulatory and business factors change. Any reduction in estimated future taxable income may require us to record a valuation allowance against our deferred tax assets. See Note 13 in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.

Non-GAAP Financial Measures

In addition to results presented in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), this Form 10-K contains certain non-GAAP financial measures, which include: efficiency ratio; tangible book value per share; tangible equity to tangible assets ratio; net income, earnings per share ("EPS"), return on assets ("ROA"), and return on equity ("ROE") excluding merger-related expenses, certain state tax expense, adjustments for the change in federal tax law, and gain from the sale of premises and equipment; and the ratio of the allowance for loan losses to total loans excluding acquired loans. The Company believes these measures facilitate comparison of the quality and composition of the Company's capital and earnings ability over time and in comparison to its competitors. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for total stockholders' equity or operating results determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. 

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

	Year Ended
(Dollars in thousands)	June 30,
	2019			2018			2017			2016			2015
Noninterest expense	$	90,134		$	85,331		$	90,259		$	79,641		$	81,552
Less merger-related expenses	—			—			7,805			—			5,417
Less impairment charge for branch consolidations	—			—			—			400			375
Noninterest expense – as adjusted	$	90,134		$	85,331		$	82,454		$	79,241		$	75,760
Net interest income	$	106,876		$	101,330		$	91,191		$	81,647		$	79,830
Plus noninterest income	22,895			18,972			16,107			14,351			12,455
Plus tax equivalent adjustment	1,174			1,559			2,354			2,537			2,736
Less gain on sale of fixed assets	—			164			385			10			—
Less realized gain on securities	—			—			22			—			61
Net interest income plus noninterest income – as adjusted	$	130,945		$	121,697		$	109,245		$	98,525		$	94,960
Efficiency ratio	68.83		%	70.12		%	75.48		%	80.43		%	79.78		%
Efficiency ratio (without adjustments)	69.46		%	70.93		%	84.12		%	82.96		%	88.37		%

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

(Dollars in thousands, except per share data)	At June 30,
	2019		2018		2017		2016		2015
Total stockholders' equity	$	408,896	$	409,242	$	397,647	$	359,976	$	371,050
Less: goodwill, core deposit intangibles, net of taxes	27,562		29,125		30,157		17,169		19,000
Tangible book value (1)	$	381,334	$	380,117	$	367,490	$	342,807	$	352,050
Common shares outstanding	17,984,105		19,041,668		18,967,875		17,998,750		19,488,449
Tangible book value per share	$	21.20	$	19.96	$	19.37	$	19.05	$	18.06
Book value per share	$	22.74	$	21.49	$	20.96	$	20.00	$	19.04

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

	At June 30,
(Dollars in thousands)	2019			2018
Tangible book value(1)	$	381,334		$	380,117
Total assets	3,476,178			3,304,169
Less: goodwill, core deposit intangibles, net of taxes	27,562			29,125
Total tangible assets(2)	$	3,448,616		$	3,275,044
Tangible equity to tangible assets	11.06		%	11.61		%

_________________________________________________________________

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

(2) Total tangible assets is equal to total assets less goodwill and core deposit intangibles, net of related deferred tax liabilities.

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Set forth below is a reconciliation to GAAP net income, ROA, ROE, and EPS as adjusted to exclude merger-related expenses, certain state tax expense, adjustments for the change in federal tax law, gain on sale of premises and equipment, and impairment charges for branch consolidation:

	Year Ended
(Dollars in thousands, except per share data)	June 30,
	2019			2018			2017			2016			2015
Merger-related expenses	$	—		$	—		$	7,805		$	—		$	5,417
State tax expense adjustment (1)	—			(142		)	490			526			—
Change in federal tax law adjustment (2)	(325		)	17,908			—			—			—
Gain on sale of premises and equipment	—			(164		)	(385		)	(10		)	—
Impairment charges for branch consolidation	—			—			—			400			374
Provision/(recovery) of loan losses (3)	N/A			N/A			N/A			N/A			(150		)
Total adjustments	(325		)	17,602			7,910			916			5,641
Tax effect (4)	—			49			(2,646		)	(144		)	(1,882		)
Total adjustments, net of tax	(325		)	17,651			5,264			772			3,759
Net income (GAAP)	27,146			8,235			11,847			11,456			8,025
Net income (non-GAAP)	$	26,821		$	25,886		$	17,111		$	12,228		$	11,784
Per Share Data
Average shares outstanding - basic	17,692,493			18,028,854			17,379,487			17,417,046			19,038,098
Average shares outstanding - diluted	18,393,184			18,726,431			17,956,443			17,606,689			19,117,902
Basic EPS
EPS (GAAP)	$	1.52		$	0.45		$	0.66		$	0.65		$	0.42
Non-GAAP adjustment	—			0.99			0.30			0.05			0.19
EPS (non-GAAP)	$	1.52		$	1.44		$	0.96		$	0.70		$	0.61
Diluted EPS
EPS (GAAP)	$	1.46		$	0.44		$	0.65		$	0.65		$	0.42
Non-GAAP adjustment	—			0.94			0.29			0.05			0.19
EPS (non-GAAP)	$	1.46		$	1.38		$	0.94		$	0.70		$	0.61
Average Balances
Average assets	$	3,396,896		$	3,243,661		$	2,945,365		$	2,741,188		$	2,510,296
Average equity	$	409,820		$	402,605		$	376,970		$	362,916		$	379,316
ROA
ROA (GAAP)	0.80		%	0.25		%	0.40		%	0.42		%	0.32		%
Non-GAAP adjustment	(0.01		)%	0.55		%	0.18		%	0.03		%	0.15		%
ROA (non-GAAP)	0.79		%	0.80		%	0.58		%	0.45		%	0.47		%
ROE
ROE (GAAP)	6.62		%	2.05		%	3.14		%	3.16		%	2.12		%
Non-GAAP adjustment	(0.08		)%	4.38		%	1.40		%	0.21		%	0.99		%
ROE (non-GAAP)	6.54		%	6.43		%	4.54		%	3.37		%	3.11		%

_______________________________________________________

(1)    State tax adjustment is a result of various revaluations of state deferred tax assets.

(2)    Revaluation of net deferred tax assets due to the Tax Cuts and Jobs Act.

(3)    Beginning in fiscal 2016, the Provision/(recovery) of loan losses was no longer included in this calculation.

(4)    Tax amounts have been adjusted for certain nondeductible merger-related expenses.

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Set forth below is a reconciliation to GAAP of the allowance for loan losses to total loans and the allowance for loan losses as adjusted to exclude loans acquired through business combinations:

	As of
(Dollars in thousands)	June 30, 2019			June 30, 2018
Total gross loans receivable (GAAP)	$	2,705,186		$	2,526,616
Less: acquired loans	214,046			271,801
Adjusted loans (non-GAAP)	$	2,491,140		$	2,254,815
Allowance for loan losses (GAAP)	$	21,429		$	21,060
Less: allowance for loan losses on acquired loans	201			483
Adjusted allowance for loan losses	21,228			20,577
Allowance for loan losses / Adjusted loans (non-GAAP)	0.85		%	0.91		%

Comparison of Financial Condition at June 30, 2019 and June 30, 2018

General.  Total assets increased $172.0 million, or 5.2% to $3.5 billion at June 30, 2019 from $3.3 billion at June 30, 2018. Total liabilities increased $172.4 million, or 6.0% to $3.1 billion at June 30, 2019 from $2.9 billion at June 30, 2018. Deposit growth of $131.0 million, or 6.0%; a $45.0 million, or 7.1% increase in borrowings; and the cumulative decrease of $48.1 million, or 21.7% in certificates of deposit in other banks and securities available for sale during the year ended June 30, 2019 were used to partially fund the $179.3 million, or 7.1% increase in total loans receivable, net of deferred loan fees, the $12.4 million, or 5.4% increase in commercial paper, the $12.3 million, or 209.5% increase in loans held for sale, and the $3.4 million, or 8.2% increase in other investments, net during the fiscal year 2019.

Cash, cash equivalents, and commercial paper.  Total cash and cash equivalents increased $297,000, or 0.4%, to $71.0 million at June 30, 2019 from $70.7 million at June 30, 2018. The commercial paper balance increased $12.4 million, or 5.4% to $241.4 million at June 30, 2019 from $229.1 million at June 30, 2019.

Investments.  Securities available for sale decreased $33.2 million, to $121.8 million at June 30, 2019 compared to $155.0 million at June 30, 2018. At June 30, 2019, certificates of deposit in other banks decreased $14.9 million, or 22.3% to $52.0 million at June 30, 2019 compared to $66.9 million at June 30, 2018. All of the certificates of deposit in other banks are fully insured by the FDIC. The Company has reduced its liquidity position in order to fund recent loan growth. We evaluate individual investment securities quarterly for other-than-temporary declines in market value. We do not believe that there are any other-than-temporary impairments at June 30, 2019; therefore, no impairment losses have been recorded for fiscal 2019. Other investments at cost include FHLB stock, FRB stock, and SBIC investments. FHLB stock increased $2.1 million, to $32.0 million over the last fiscal year as a result of required purchases due to increased FHLB borrowings. As a member of the Federal Reserve System, the Bank is required to own FRB stock, which totaled $7.3 million as of June 30, 2019 and 2018. In addition, SBIC equity investments increased $1.3 million to $6.1 million at June 30, 2019.

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Loans.  Net loans receivable increased $179.0 million, or 7.1%, to $2.7 billion at June 30, 2019 compared to $2.5 billion at June 30, 2018, driven by $228.6 million in net organic loan growth.

Retail consumer and commercial loans consist of the following at the dates indicated:

										Percent of total
	June 30,		June 30,		Change					June 30,		June 30,
	2019		2018		$			%		2019		2018
Retail consumer loans:
One-to-four family	$	660,591	$	664,289	$	(3,698	)	(0.6	)%	24.4	%	26.3	%
HELOCs - originated	131,095		137,564		(6,469		)	(4.7	)	4.8		5.4
HELOCs - purchased	116,972		166,276		(49,304		)	(29.7	)	4.3		6.6
Construction and land/lots	80,602		65,601		15,001			22.9		3.0		2.6
Indirect auto finance	153,448		173,095		(19,647		)	(11.4	)	5.7		6.9
Consumer	19,756		12,379		7,377			59.6		0.7		0.5
Total retail consumer loans	1,162,464		1,219,204		(56,740		)	(4.7	)	43.0		48.3
Commercial loans:
Commercial real estate	927,261		857,315		69,946			8.2		34.3		33.9
Construction and development	210,916		192,102		18,814			9.8		7.8		7.6
Commercial and industrial	160,471		135,336		25,135			18.6		5.9		5.4
Equipment finance	132,058		13,487		118,571			879.2		4.9		0.5
Municipal leases	112,016		109,172		2,844			2.6		4.1		4.3
Total commercial loans	1,542,722		1,307,412		235,310			18.0		57.0		51.7
Total loans	$	2,705,186	$	2,526,616	$	178,570		7.1	%	100.0	%	100.0	%

Our expansion into larger metro markets as well as in-market acquisitions combined with improvements in the economy, employment rates, and stronger real estate prices, have led to significant increases in originations of construction and commercial loans located in our market areas as demonstrated by over $1.0 billion in total loan originations in both of the years ended June 30, 2019 and 2018. We will continue to take a disciplined approach in our construction and land development lending by concentrating our efforts on smaller one-to-four family residential loans to builders known to us and developers of commercial real estate and multifamily properties with proven success in this type of construction. At June 30, 2019, construction and land/lots totaled $80.6 million including $70.3 million of one-to-four family construction loans that will roll over to permanent loans upon completion of the construction period. Undisbursed construction and land/lots loan commitments at June 30, 2019 totaled $65.4 million. Total construction and development loans at June 30, 2019, were $210.9 million, excluding unfunded loan commitments of $123.1 million, of which $85.3 million was for non-residential commercial real estate construction, $67.7 million was for land development, $46.0 million was for speculative construction of single family properties, and $11.9 million was for multi-family construction. Undisbursed construction and development loan commitments at June 30, 2019 included $61.0 million of commercial real estate projects, multi-family residential projects of $30.7 million and $31.4 million for the speculative construction of one- to four-family residential properties. Total equipment finance loans at June 30, 2019, were $132.1 million, an increase of $118.6 million as a result of a full year of operations from the new line of business.

Asset Quality. Nonperforming assets decreased 9.0% to $13.3 million, or 0.38% of total assets, at June 30, 2019, compared to $14.6 million, or 0.44% of total assets, at June 30, 2018. Nonperforming assets included $10.4 million in nonaccruing loans and $2.9 million in REO at June 30, 2019, compared to $10.9 million and $3.7 million, in nonaccruing loans and REO, respectively, at June 30, 2018. Included in nonperforming loans are $4.5 million of loans restructured from their original terms of which $1.8 million were current with respect to their modified payment terms. The decrease in nonaccruing loans was primarily due to continued improvements in credit quality throughout the loan portfolio and loans returning to performing status as payment history and the borrower's financial status improved. At June 30, 2019, $4.1 million, or 39.6%, of nonaccruing loans were current on their required loan payments. Purchased impaired loans acquired from prior acquisitions aggregating to $1.3 million are excluded from nonaccruing loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations. Nonperforming loans to total loans decreased to 0.38% at June 30, 2019 from 0.43% at June 30, 2018.

The ratio of classified assets to total assets decreased to 0.89% at June 30, 2019 from 1.0% at June 30, 2018. Classified assets decreased 6.5% to $30.9 million at June 30, 2019 compared to $33.1 million at June 30, 2018. Delinquent loans (loans delinquent 30 days or more) at June 30, 2019 were $10.1 million, or 0.4% of total loans compared to $9.8 million, or 0.4% of total loans at June 30, 2018.

As of June 30, 2019, impaired loans increased to $33.0 million from $31.4 million at June 30, 2018. Our impaired loans are comprised of loans on non-accrual status and all TDRs, whether performing or on non-accrual status under their restructured terms. Impaired loans may be evaluated for reserve purposes using either a specific impairment analysis or on a collective basis as part of homogeneous pools. For more information on these impaired loans, see Note 5 of the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

Allowance for loan losses.  We establish an allowance for loan losses by charging amounts to the loan provision at a level required to reflect estimated credit losses in the loan portfolio. In evaluating the level of the allowance for loans losses, management considers, among other factors,

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historical loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect borrowers’ ability to repay, estimated value of any underlying collateral, prevailing economic conditions and current risk factors specifically related to each loan type. See "Critical Accounting Policies – Allowance for Loan Losses" for a description of the manner in which the provision for loan losses is established.

Our allowance for loan losses at June 30, 2019 was $21.4 million, or 0.79% of total loans, compared to $21.1 million, or 0.83% of total loans at June 30, 2018. The allowance for loan losses was 0.85% of gross loans at June 30, 2019, excluding acquired loans from the allowance for loan losses in accordance with the acquisition method of accounting for business combinations, as compared to 0.91% at June 30, 2018. The Company recorded these loans at fair value, which includes a credit discount, therefore, no allowance for loan losses is established for these loans at the time of acquisition. Any subsequent deterioration in credit quality will result in a provision for loan losses. The allowance for our acquired loans at June 30, 2019 was $201,000 compared to $483,000 at June 30, 2018. There was a $5.7 million provision for loan losses for the year ended June 30, 2019 compared to no provision for the year ended June 30, 2018, which was primarily related to a $6.0 million commercial lending relationship, which was fully charged off in the third and fourth quarters this fiscal year, as a result of the Company becoming aware at the end of March 2019, that a commercial borrower operating as a heavy equipment contractor with $6.0 million of outstanding borrowings from the Bank had unexpectedly ceased operations. Based on further investigation and certain actions taken by the principal of the borrower, the Company believed that the Bank's collateral, consisting primarily of accounts receivable, had substantially deteriorated. As a result of this investigation and further subsequent developments, the Company determined a full charge-off of this relationship was appropriate. The Company is continuing to take action to enforce its rights against the borrower, guarantors and its collateral, including to preserve and recover the borrower’s assets, where appropriate. As a result of this charged off lending relationship, net loan charge-offs increased to $5.3 million for the year ended June 30, 2019 from $91,000 for fiscal 2018. Net charge-offs as a percentage of average loans increased to 0.20% for the year ended June 30, 2019 from 0% for last fiscal year. The allowance as a percentage of nonaccruing loans increased to 206.9% at June 30, 2019, compared to 192.96% a year earlier. While the previously mentioned significant provision for loan losses negatively affected our earnings, we believe our overall asset quality metrics continue to demonstrate our commitment to growing and maintaining a loan portfolio with a moderate risk profile.

We believe that the allowance for loan losses as of June 30, 2019 was adequate to absorb the known and inherent risks of loss in the loan portfolio at that date. While we believe the estimates and assumptions used in our determination of the adequacy of the allowance are reasonable, there can be no assurance that such estimates and assumptions will not be proven incorrect in the future, or that the actual amount of future provisions will not exceed the amount of past provisions or that any increased provisions that may be required will not adversely impact our financial condition and results of operations. In addition, the determination of the amount of the allowance for loan losses is subject to review by bank regulators as part of the routine examination process, which may result in the establishment of additional reserves based upon their judgment of information available to them at the time of their examination.

Real estate owned.  REO decreased $755,000, to $2.9 million at June 30, 2019 primarily due to $1.0 million in sales of REO and $439,000 in writedowns and losses on the sales of REO, which were partially offset by $731,000 in transfers from foreclosed loans. The total balance of REO included $1.2 million in commercial real estate, $1.0 million in single-family homes and $675,000 in land, construction and development projects (both residential and commercial) at June 30, 2019.

Deferred income taxes. Deferred income taxes decreased $6.0 million, or 18.6%, to $26.5 million at June 30, 2019 from $32.6 million at June 30, 2018. The decrease was primarily driven by the realization of net operating losses through increases in taxable income.

Deposits.  Total deposits increased $131.0 million, or 6.0%, to $2.3 billion at June 30, 2019 from $2.2 billion at June 30, 2018. The increase was primarily due to $196.0 million increase in our certificates of deposit, $67.9 million of which related to additional brokered deposits.At June 30, 2019 and 2019, we had $176.8 million and $108.9 million in brokered deposits, respectively.

Borrowings.  Borrowings, comprised of FHLB advances, increased to $680.0 million at June 30, 2019 from $635.0 million at June 30, 2018. At June 30, 2019 there were $380.0 million in FHLB advances with maturities less than 90 days and $300.0 million in convertible FHLB advances with maturities greater than one year; together with a weighted average interest rate of 2.10%.

Equity.  Stockholders’ equity at June 30, 2019 decreased to $408.9 million from $409.2 million at June 30, 2018. Changes within stockholders' equity included $27.1 million in net income, $3.0 million in stock-based compensation, and a $2.3 million increase in other comprehensive income representing a reduction in unrealized losses on investment securities, net of tax, to an unrealized gain of $733,000, partially offset by 1,149,785 shares of common stock repurchased at an average price per share of $26.65, or approximately $30.6 million in total, and $3.2 million related to cash dividends. Tangible book value per share increased $1.24, or 6.2% to $21.20 as of June 30, 2019 compared to $19.96 at June 30, 2018.

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Average Balances, Interest and Average Yields/Cost

The following table sets forth the average balance sheet, interest income and expense, and average yields and costs for the years indicated. All average balances are daily average balances. Nonaccruing loans have been included in the table as loans carrying a zero yield.

	Years Ended June 30,
	2019							2018							2017
(Dollars in thousands)	Average Balance Outstanding			Interest Earned/ Paid(2)		Yield/ Rate(2)		Average Balance Outstanding			Interest Earned/ Paid(2)		Yield/ Rate(2)		Average Balance Outstanding			Interest Earned/ Paid(2)		Yield/ Rate(2)
Assets:
Interest-earning assets:
Loans receivable (1)	$	2,632,127		$	123,076	4.68	%	$	2,418,946		$	106,641	4.41	%	$	2,080,490		$	92,423	4.44	%
Deposits in other banks	89,410			1,726		1.93	%	137,026			1,934		1.41	%	177,753			1,900		1.07	%
Securities available for sale	145,344			3,443		2.37	%	172,461			3,668		2.13	%	202,866			3,983		1.96	%
Other interest-earning assets(3)	282,986			10,187		3.60	%	247,829			6,718		2.71	%	222,847			3,484		1.56	%
Total interest-earning assets	3,149,867			138,432		4.39	%	2,976,262			118,961		4.00	%	2,683,956			101,790		3.79	%
Other assets	247,029							267,399							261,410
Total Assets	3,396,896							3,243,661							2,945,366
Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing checking accounts	462,933			1,251		0.27	%	473,880			970		0.20	%	430,527			772		0.18	%
Money market accounts	689,946			5,102		0.74	%	644,331			2,442		0.38	%	541,030			1,405		0.26	%
Savings accounts	194,635			245		0.13	%	224,582			295		0.13	%	228,360			308		0.13	%
Certificate accounts	596,727			9,159		1.53	%	463,306			3,051		0.66	%	453,994			2,103		0.46	%
Total interest-bearing deposits	1,944,241			15,757		0.81	%	1,806,099			6,758		0.37	%	1,653,911			4,588		0.28	%
Borrowings	672,186			14,626		2.18	%	658,240			9,314		1.41	%	577,848			3,657		0.63	%
Total interest-bearing liabilities	2,616,427			30,383		1.16	%	2,464,339			16,072		0.65	%	2,231,759			8,245		0.37	%
Noninterest-bearing deposits	307,420							311,210							271,477
Other liabilities	63,229							65,489							65,160
Total liabilities	2,987,076							2,841,038							2,568,396
Stockholders' equity	409,820							402,623							376,970
Total liabilities and stockholders' equity	3,396,896							3,243,661							2,945,366
Net earning assets	$	533,440						$	511,923						$	452,197
Average interest-earning assets to average interest-bearing liabilities	120.39		%					120.77		%					120.26		%
Tax-equivalent:
Net interest income				$	108,049						$	102,889						$	93,545
Interest rate spread						3.23	%						3.35	%						3.42	%
Net interest margin(4)						3.43	%						3.46	%						3.49	%
Non-tax-equivalent:
Net interest income				$	106,876						$	101,330						$	91,191
Interest rate spread						3.20	%						3.29	%						3.34	%
Net interest margin(4)						3.39	%						3.40	%						3.40	%

(1) The average loans receivable, net balances include loans held for sale and nonaccruing loans.

(2) Interest income used in the average interest/earned and yield calculation includes the tax equivalent adjustment of $1.2 million, $1.6 million, and $2.4 million for fiscal years ended June 30, 2019, 2018, and 2017, respectively, calculated based on a combined federal and state tax rate of 24%, 30%, and 37%, respectively.

(3) The average other interest-earning assets consists of FRB stock, FHLB stock, SBIC investments, and commercial paper.

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

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Rate/Volume Analysis

The following schedule presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. It distinguishes between the changes related to outstanding balances and that due to the changes in interest rates. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume (i.e., changes in volume multiplied by old rate) and (ii) changes in rate (i.e., changes in rate multiplied by old volume). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to the change due to volume and the change due to rate.

	Years Ended June 30,									Years Ended June 30,
	2019 vs. 2018									2018 vs. 2017
	Increase/ (decrease) due to						Total increase/ (decrease)			Increase/ (decrease) due to						Total increase/ (decrease)
(Dollars in thousands)	Volume			Rate						Volume			Rate
Interest-earning assets:
Loans receivable	$	9,398		$	7,037		$	16,435		$	15,036		$	(818	)	$	14,218
Deposits in other financial institutions	(672		)	464			(208		)	(435		)	469			34
Investment securities	(576		)	351			(225		)	(597		)	282			(315		)
Other	952			2,517			3,469			390			2,844			3,234
Total interest-earning assets	9,102			10,369			19,471			14,394			2,777			17,171
Interest-bearing liabilities:
Interest-bearing checking accounts	$	(22	)	$	303		$	281		$	77		$	121		$	198
Money market accounts	173			2,487			2,660			269			768			1,037
Savings accounts	(39		)	(11		)	(50		)	(6		)	(7		)	(13		)
Certificate accounts	879			5,229			6,108			43			905			948
Borrowings	198			5,114			5,312			508			5,149			5,657
Total interest-bearing liabilities	$	1,189		$	13,122		$	14,311		$	891		$	6,936		$	7,827
Net increase in tax equivalent interest income							$	5,160								$	9,344

Comparison of Results of Operations for the Years Ended June 30, 2019 and June 30, 2018

General.  During 2019, net income totaled $27.1 million, or $1.46 per diluted share for the year ended June 30, 2019, compared to $8.2 million, or $0.44 per diluted share for fiscal year 2018. Earnings during the year ended June 30, 2019 were negatively impacted by a $5.7 million provision for loan losses primarily related to the previously mentioned commercial lending relationship, which was fully charged off. Earnings for the year ended June 30, 2018 included a $17.9 million write-down of deferred tax assets following a deferred tax revaluation resulting from enactment of the Tax Cuts and Jobs Act (“Tax Act”) with no comparable charge in fiscal year 2019.

Net Interest Income.  Net interest income for 2019 was $106.9 million, a $5.5 million, or 5.5% increase from $101.3 million in 2018. The increase in net interest income for the year ended June 30, 2019 reflects a $19.9 million increase in interest and dividend income due primarily to an increase in average interest-earning assets, partially offset by a $14.3 million increase in interest expense.

During 2019, average interest-earning assets increased $173.6 million, or 5.8% to $3.1 billion compared to $3.0 billion for 2018. The $213.2 million, or 8.8% increase in average balance of total loans receivable for the year ended June 30, 2019 was primarily due to organic loan growth. The average balance of other interest-earning assets increased $35.2 million, or 14.2% between the periods primarily due to increases in commercial paper investments and other investments at cost. These increases were mainly funded by the cumulative decrease of $74.7 million, or 24.2% in average interest-earning deposits in other banks and securities available for sale, and an increase in average interest-bearing liabilities of $152.1 million, or 6.2%. Net interest margin (on a fully taxable-equivalent basis) for the year ended June 30, 2019 decreased three basis points to 3.43% from 3.46% for last year.

Interest Income.  Total interest and dividend income for 2019 was $137.3 million, compared to $117.4 million for 2018, an increase of $19.9 million, or 16.9%. The increase was primarily driven by a $16.8 million, or 16.0% increase in loan interest income and a $3.5 million, or 51.6% increase in interest income from other interest-earning assets, partially offset by a $433,000, or 7.7% decrease in interest income from securities available for sale and deposits in other banks. The additional loan interest income was primarily due to the increase in the average balance of loans receivable, which was partially offset by a $1.1 million decrease in the accretion of purchase discounts on acquired loans to $2.1 million for the year ended June 30, 2019 from $3.2 million for fiscal year 2018. Average loan yields increased 27 basis points to 4.68% for the year ended June 30, 2019 from 4.41% last year. For the year ended June 30, 2019 and 2018, average loan yields included eight and 14 basis points, respectively, from the accretion of purchase discounts on acquired loans. The accretion on purchase discounts on acquired loans stems from the discount established at the time these loan portfolios were acquired and the related impact of prepayments on purchased loans. Each quarter, the Company analyzes the cash flow assumptions on loan pools purchased and, at least semi-annually, the Company updates loss estimates, prepayment

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speeds, and other variables when analyzing cash flows. In addition to this accretion income, which is recognized over the estimated life of the loans pools, if a loan is removed from a pool due to payoff or foreclosure, the unaccreted discount in excess of losses is recognized as an accretion gain in interest income. As a result, income from loan pools can be volatile from quarter to quarter as well as year over year.

Interest Expense.  Total interest expense was $30.4 million in 2019, a $14.3 million, or 89.0% increase from $16.1 million in 2018. The increase was primarily related to the the 44 basis point increase in the average cost of deposits and to a lesser extent the $138.1 million, or 7.7% increase in average interest-bearing deposits, resulting in additional deposit interest expense of $9.0 million for the year ended June 30, 2019 as compared to the year ended June 30, 2018. In addition, there was an increase of 77 basis points in the average cost of borrowings and a $13.9 million, or 2.1% increase in average borrowings, resulting in additional interest expense of $5.3 million for the year ended June 30, 2019 as compared to the year ended June 30, 2018. The overall cost of funds increased 51 basis points to 1.16% for the year ended June 30, 2019 compared to 0.65% last year.

Provision for Loan Losses.  During 2019, there was a $5.7 million provision for loan losses, which primarily related to the previously mentioned $6.0 million commercial lending relationship that was fully charged off, compared to no provision for 2018. The provision for loan losses reflects the amount required to maintain the allowance for losses at an appropriate level based upon management's evaluation of the adequacy of general and specific loss reserves, trends in delinquencies and net charge-offs and current economic conditions.

See "Comparison of Financial Condition at June 30, 2019 and 2018 - Asset Quality and Allowance for Loan Losses" for additional details.

Noninterest Income.  Noninterest income was $22.9 million for 2019 compared to $19.0 million for 2018. The $3.9 million, or 20.7% increase was primarily due to a $1.9 million, or 45.4% increase in gain on sale of loans primarily due to originations and sales of SBA commercial loans; a $1.1 million, or 45.3% increase in other noninterest income primarily related to operating lease income; an $809,000, or 9.2% increase in service charges on deposit accounts as a result of an increase in deposit accounts and related fees; and a $246,000, or 20.9% increase in loan income and fees. There was also no gain from the sale of premises and equipment for the year ended June 30, 2019 as compared to $164,000 last year.

Noninterest Expense.  Noninterest expense was $90.1 million in 2019, a $4.8 million, or 5.6% increase from $85.3 million in 2018. The increase was primarily due to a $4.1 million, or 8.6% increase in salaries and employee benefits; a $1.2 million, or 19.0% increase in computer services; a $375,000, or 25.4% increase in marketing and advertising; and a $121,000, or 10.2% increase in REO-related expenses. The $4.1 million increase in salaries and benefits was primarily related to additional personnel in our new SBA and equipment finance lines of business. Partially offsetting these increases was a $616,000, or 23.3% decrease in core deposit intangible amortization; a $235,000, or 2.4% decrease in net occupancy expense; and a $193,000, or 11.9% decrease in deposit insurance premiums as a result of lower nonaccrual loans during the year ended June 30, 2019 compared to last year.

Income Taxes.  The provision for income taxes was $6.8 million for fiscal 2019 as compared to $26.7 million in 2018. The Company’s corporate federal income tax rate for the years ended June 30, 2019 and 2018 was 21% and 27.5%, respectively. In the quarter ended December 31, 2017, following a revaluation of net deferred tax assets due to the Tax Act, the Company wrote down deferred tax assets of $17.9 million, which were reflected as an adjustment through income tax expense. For more information on income taxes and deferred taxes, see Note 13 of the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.

Comparison of Results of Operation for the Year Ended June 30, 2018 and June 30, 2017

General.  During 2018, we had net income of $8.2 million, a $3.6 million or 30.5% decrease compared to net income of $11.8 million earned in 2017. The Company's diluted earnings per share was $0.44 for the year ended June 30, 2018 compared to $0.65 for the year ended June 30, 2017. Earnings for the year ended June 30, 2018 included a $17.9 million write-down of deferred tax assets following a deferred tax revaluation resulting from enactment of the Tax Act with no comparable charge in fiscal year 2017, which was partially offset by the absence of merger-related expenses, which totaled $7.8 million in fiscal year 2017.

For the year ended June 30, 2018 and before the write-down of deferred tax assets from the change in the federal tax rate, merger-related expenses, certain state income tax expenses, and gains from the sale of premises and equipment (non-GAAP) net income was $25.9 million, or $1.38 in diluted earnings per share compared to $17.1 million, or $0.94 in diluted earnings per share for the year ended June 30, 2017.

Net Interest Income.  Net interest income for 2018 was $101.3 million, a $10.1 million, or 11.1% increase from $91.2 million in 2017. The increase in net interest income for the year ended June 30, 2018 reflects a $18.0 million increase in interest and dividend income due primarily to an increase in average interest-earning assets, partially offset by a $7.8 million increase in interest expense.

During 2018, average interest-earning assets increased $292.3 million, or 10.9% to $3.0 billion compared to $2.7 billion for 2017. The $338.5 million, or 16.3% increase in average balance of total loans receivable for the year ended June 30, 2018 was due to a full year's impact of the TriSummit acquisition and increased organic loan growth. This increase was mainly funded by the cumulative decrease of $46.2 million, or 7.6% in all other average interest-earning assets, an increase in average interest-bearing deposits of $152.2 million, or 9.2%, and an $80.4 million, or 13.9% increase in average borrowings, consisting entirely of FHLB advances. Net interest margin (on a fully taxable-equivalent basis) for the year ended June 30, 2018 decreased three basis points to 3.46% from 3.49% for last year primarily as a result of increased cost of funds.

Interest Income.  Total interest and dividend income for 2018 was $117.4 million, compared to $99.4 million for 2017, an increase of $18.0 million, or 18.1%. The increase was primarily driven by a $15.0 million, or 16.7% increase in loan interest income, a $2.2 million, or 59.4% increase in certificates of deposit and other interest-bearing deposits, and a $1.1 million, or 63.5% increase in other investment income partially

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offset by a $315,000, or 7.9% decrease in interest income from securities available for sale. The additional loan interest income was primarily due to the increase in the average balance of loans receivable, which was partially offset by a $3.0 million decrease in the accretion of purchase discounts on acquired loans to $3.2 million for the year ended June 30, 2018 from $6.1 million for fiscal year 2017, resulting from the full repayments of several loans with large discounts in the previous year. This decrease caused average loan yields to decrease three basis points to 4.41% for the year ended June 30, 2018 from 4.44% in fiscal 2017. The accretion on purchase discounts on acquired loans stems from the discount established at the time these loan portfolios were acquired and the related impact of prepayments on purchased loans. Each quarter, the Company analyzes the cash flow assumptions on loan pools purchased and, at least semi-annually, the Company updates loss estimates, prepayment speeds, and other variables when analyzing cash flows. In addition to this accretion income, which is recognized over the estimated life of the loans pools, if a loan is removed from a pool due to payoff or foreclosure, the unaccreted discount in excess of losses is recognized as an accretion gain in interest income. As a result, income from loan pools can be volatile from quarter to quarter as well as year over year. Excluding the effects of the accretion on purchase discounts on acquired loans, loan yields increased 13 basis points to 4.28% for the year ended June 30, 2018 compared to 4.15% in fiscal 2017.

Interest Expense.  Total interest expense was $16.1 million in 2018, a $7.8 million, or 94.9% increase from $8.2 million in 2017. The increase was primarily related to the increase in average interest-bearing deposits and borrowings coupled with the increased cost of nine and 78 basis points for the years ended June 30, 2018 and 2017, respectively. The overall cost of funds increased 28 basis points to 0.65% for the year ended June 30, 2018 compared to 0.37% in the last fiscal year primarily due to the impact of the recent increases in the target federal funds rate on the cost of our borrowings.

Provision for Loan Losses.  During 2018 and 2017, there was no provision for loan losses reflecting the decline in our required provision loan losses due to the continued improvements in our asset quality outpacing the additional provision otherwise required due to our loan growth. The provision for loan losses reflects the amount required to maintain the allowance for losses at an appropriated level based upon management's evaluation of the adequacy of general and specific loss reserves, trends in delinquencies and net charge-offs and current economic conditions.

Noninterest Income.  Noninterest income was $19.0 million for 2018 compared to $16.1 million for 2017. The $2.9 million, or 17.8% increase was primarily due to a $1.1 million, or 14.2% increase in service charges on deposit accounts as a result of the increase in deposit accounts and related fees; a $1.8 million, or 49.6% increase in loan income from the gain on sale of loans and various commercial loan-related fees driven by the commencing of originations and sales of the guaranteed portion of U.S Small Business Administration (“SBA”) commercial loans; and an $179,000, or 7.9% increase in other noninterest income. Partially offsetting these increases was a $221,000, or 57.4% decrease in gains from the sale of premises and equipment for the year ended June 30, 2018 compared to last fiscal year.

Noninterest Expense.  Noninterest expense was $85.3 million in 2018, a $4.9 million, or 5.5% decrease from $90.3 million in 2017. The decrease was primarily driven by the absence of the previously mentioned $7.8 million of merger-related expenses; a $192,000, or 11.5% decrease in marketing and advertising; a $210,000, or 3.2% decrease in computer services; and a $222,000, or 15.7% decrease in real estate owned ("REO") related expenses primarily as a result of fewer REO properties held. Partially offsetting these decreases were the additional expenses related to the TriSummit acquisition, a new commercial loan production office in Greensboro, NC, new SBA and equipment finance lines of business, and the opening of a de novo branch in Cary, NC as shown in the cumulative increase of $3.4 million, or 5.0% in salaries and employee benefits; net occupancy expense; telephone, postage, and supplies; and other expenses for the year ended June 30, 2018 compared to last year. Deposit insurance premiums increased $241,000, or 17.5% as the net asset base has increased.

Income Taxes.  The provision for income taxes was $26.7 million for fiscal 2018 as compared to $5.2 million in 2017. The increase was mainly driven by the Tax Act's reduction in the federal corporate tax rate, which required the Company to revalue net deferred tax assets and establish the tax valuation allowance on a portion of our alternative minimum tax ("AMT") credits in accordance with Internal Revenue Service guidelines, resulting in a $17.9 million adjustment through income tax expense; and to a lesser extent higher pre-tax income. In addition, for the year ended June 30, 2018, the Company had a benefit of $142,000 as compared to a charge of $490,000 for the year ended June 30, 2017 related to the revaluation of various state deferred tax assets. In addition, our June 30 fiscal year end required the use of a blended federal income tax rate as prescribed by the Internal Revenue Code. The blended federal income tax rate of 27.5% was retroactively effective July 1, 2017 and was used for the entire fiscal year ended June 30, 2018.

Asset/Liability Management

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. If interest rates rise, our net interest income could be reduced because interest paid on interest-bearing liabilities, including deposits and borrowings, could increase more quickly than interest received on interest-earning assets, including loans and other investments. In addition, rising interest rates may hurt our income because they may reduce the demand for loans.

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 the Company's 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.

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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 appropriate 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 board of directors at least quarterly.

Among the techniques we use 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 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 present value equity (“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, as well as through 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, we believe that the increased net interest income resulting from a mismatch in the maturity of our assets and liabilities portfolios can, during periods of stable or declining interest rates, 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 June 30, 2019, 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. Given the current targeted federal funds rate is 2.00% to 2.25% making an immediate change of -200, -300 and -400 basis points improbable, a PVE calculation for a decrease of greater than 100 basis points has not been prepared. An increase in rates would slightly increase our PVE because the repricing of nonmaturing deposits tend to lag behind the increase in market rates. This positive impact is partially offset by the negative effect from our loans with interest rate floors which will not adjust until such time as a  loan’s current interest rate adjusts to an increase in market rates which exceeds the interest rate floor. Conversely, in a falling interest rate environment these interest rate floors will assist in maintaining our net interest income. As of June 30, 2019, our loans with interest rate floors totaled approximately $651.2 million or 24.1% of our total loan portfolio and had a weighted average floor rate of 4.04%, $74.7 million of these loans were at their floor rate, of which $56.2 million, or 75.2%, had yields that would begin floating again once prime rates increase at least 200 basis points.

June 30, 2019
Change in Interest Rates in	Present Value Equity							PVE
Basis Points	Amount		$ Change			% Change		Ratio
(Dollars in Thousands)
+ 400	$	634,659	$	17,324		3	%	20	%
+ 300	634,443		17,108			3		19
+ 200	631,452		14,117			2		19
+ 100	625,992		8,657			1		19
Base	617,335		—			—		18
- 100	581,730		(35,605		)	(6	)	17

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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.

Liquidity

Management maintains a liquidity position that it believes will adequately provide funding for loan demand and deposit run-off that may occur in the normal course of business. We rely on a number of different sources in order to meet our potential liquidity demands. The primary sources are increases in deposit accounts 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 of June 30, 2019, HomeTrust Bank had an additional borrowing capacity of $89.5 million with the FHLB of Atlanta, a $130.0 million line of credit with the FRB, and three lines of credit with three unaffiliated banks totaling $70.0 million. At June 30, 2019, we had $680.0 million in FHLB advances outstanding. Additionally, the Company classifies its securities portfolio as available for sale, providing an additional source of liquidity. Management believes that our security portfolio is of high quality and the securities would therefore be marketable. In addition, we have historically sold 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 June 30, 2019, brokered deposits totaled $176.8 million or 7.6% 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 products and investment securities, including mortgage-backed securities. The Company on a stand-alone level is a separate legal entity from HomeTrust Bank and must provide for its own liquidity and pay its own operating expenses. The Company’s primary source of funds consists of the net proceeds retained by the Company from the Conversion. We also have the ability to receive dividends or capital distributions from HomeTrust Bank, although there are regulatory restrictions on the ability of HomeTrust Bank to pay dividends. At June 30, 2019, the Company (on an unconsolidated basis) had liquid assets of $8.5 million.

We use our sources of funds primarily to meet our ongoing commitments, pay maturing deposits and fund withdrawals, and to fund loan commitments. At June 30, 2019, the total approved loan commitments and unused lines of credit outstanding amounted to $274.9 million and $353.7 million, respectively, as compared to $259.7 million and $491.6 million, respectively, as of June 30, 2018. Certificates of deposit scheduled to mature in one year or less at June 30, 2019, totaled $515.5 million. It is management's policy to manage deposit rates that are competitive with other local financial institutions. Based on this management strategy, we believe that a majority of maturing deposits will remain with us.

During fiscal 2019, cash and cash equivalents increased $297,000, or 0.4%, from $70.7 million as of June 30, 2018 to $71.0 million as of June 30, 2019. Cash provided by operating activities of $7.7 million and financing activities of $143.1 million was partially offset by cash used in investing activities of $150.5 million. Primary sources of cash for the year ended June 30, 2019 included proceeds from maturities of investment securities of $38.4 million, maturities of certificates of deposit in other banks, net of purchases, of $14.9 million, principal repayments of mortgage-backed securities of $31.6 million, a $45.0 million increase in borrowings, and a $131.0 million increase in net deposits. Primary uses of cash during the period included an increase in portfolio loans of $173.8 million, a $34.7 million increase in the purchase of investment securities, a $16.6 million increase in operating lease equipment and other assets, $30.6 million in common stock repurchases, the purchase of commercial paper, net of maturities, of $5.8 million, $3.2 million in cash dividends paid on common stock, and a $2.1 million increase in fixed asset purchases. All sources and uses of cash reflect our cash management strategy to increase our amount of higher yielding investments and loans, reducing our holdings in lower yielding investments and increasing our lower costing deposits.

During fiscal 2018, cash and cash equivalents decreased $16.2 million, or 18.7%, from $87.0 million as of June 30, 2017 to $70.7 million as of

June 30, 2018. Cash provided by operating activities of $31.3 million and financing activities of $86.4 million was partially offset by cash used

in investing activities of $134.0 million. Primary sources of cash for the year ended June 30, 2018 included proceeds from maturities of investment

securities of $20.7 million, maturities of certificates of deposit in other banks, net of purchases, of $65.3 million, principal repayments of mortgage-backed securities of $20.5 million, and a $147.8 million increase in net deposits. Primary uses of cash during the period included an increase in

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portfolio loans of $168.6 million, a $3.5 million increase in fixed asset purchases, a decrease in borrowings of $61.5 million, and the purchase of commercial paper, net of maturities, of $75.2 million.

Contractual Obligations

The following table presents the Company's significant contractual obligations at June 30, 2019 (in thousands):

	1 Year or Less		Over 1 to 3 Years		Over 3 to 5 Years		More Than 5 Years		Total
Borrowings	$	380,000	$	—	$	—	$	300,000	$	680,000
Capital lease	134		268		279		1,995		2,676
Operating leases	1,660		2,691		1,934		1,076		7,361
Total contractual obligations	$	381,794	$	2,959	$	2,213	$	303,071	$	690,037

Off-Balance Sheet Activities

In the normal course of operations, we engage in a variety of financial transactions that are not recorded in our financial statements. These transactions involve varying degrees of off-balance sheet credit, interest rate and liquidity risks. These transactions are used primarily to manage customers’ requests for funding and take the form of loan commitments and lines of credit. For the year ended June 30, 2019, we engaged in no off-balance sheet transactions likely to have a material effect on our financial condition, results of operations or cash flows.

A summary of our off-balance sheet commitments to extend credit at June 30, 2019, is as follows (in thousands):

Undisbursed portion of construction loans	$	181,477
Commitments to make loans	93,432
Unused lines of credit	353,663
Unused letters of credit	9,460
Total loan commitments	$	638,032

Capital Resources

At June 30, 2019, stockholders' equity totaled $408.9 million. Management monitors the capital levels of the Company to provide for current and future business opportunities and to ensure HomeTrust Bank meets regulatory guidelines for “well-capitalized” institutions.

HomeTrust Bancshares, Inc. is a bank holding company and a financial holding company subject to regulation by the Board of Governors of the Federal Reserve System (“Federal Reserve”). As a bank holding company, we are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act and the regulations of the Federal Reserve. Our subsidiary, the Bank, an FDIC-insured, North Carolina state-chartered bank and a member of the Federal Reserve System, is supervised and regulated by the Federal Reserve and the North Carolina Office of the Commissioner of Banks and is subject to minimum capital requirements applicable to state member banks established by the Federal Reserve that are calculated in the same manner as those applicable to bank holding companies.

HomeTrust Bancshares, Inc. and the Bank are required to maintain specified levels of regulatory capital under federal banking regulations. The capital adequacy requirements are quantitative measures established by regulation that require HomeTrust Bancshares, Inc. and the Bank to maintain minimum amounts and ratios of capital. HomeTrust Bancshares, Inc.’s and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by bank regulators that, if undertaken, could have a direct material effect on the Company's financial statements. At June 30, 2019, HomeTrust Bancshares, Inc. and the Bank each exceeded all regulatory capital requirements.

Consistent with our goals to operate a sound and profitable organization, our policy is for the Bank to maintain a “well-capitalized” status under the regulatory capital categories of the Federal Reserve. As of June 30, 2019, the Bank was considered "well capitalized" in accordance with its regulatory capital guidelines and exceeded all regulatory capital requirements with Common Equity Tier 1, Tier 1 Risk-Based, Total Risk-Based, and Tier 1 Leverage capital ratios of 11.59%, 11.59%, 12.30%, and 10.34%, respectively. As of June 30, 2018, Common Equity Tier 1, Tier 1 Risk-Based, Total Risk-Based, and Tier 1 Leverage capital ratios were 11.70%, 11.70%, 12.45%, and 10.33%, respectively.

As of June 30, 2019, HomeTrust Bancshares, Inc. exceeded all regulatory capital requirements with Common Equity Tier 1, Tier 1 Risk-Based, Total Risk-Based, and Tier 1 Leverage capital ratios of 12.20%, 12.20%, 12.91%, and 10.89%, respectively. As of June 30, 2018, Common Equity Tier 1, Tier 1 Risk-Based, Total Risk-Based, and Tier 1 Leverage capital ratios were 12.97%, 12.97%, 13.72%, and 11.45%, respectively.

See Item 1, “Business-How We are Regulated,” and Note 19 of the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional details on the Company's capital requirements.

68

Impact of Inflation

The Consolidated Financial Statements and related financial data presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America. These principles generally require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative purchasing power of money over time due to inflation.

Unlike most industrial companies, virtually all the assets and liabilities of a financial institution are monetary in nature. The primary impact of inflation is reflected in the increased cost of our operations. As a result, interest rates generally have a more significant impact on a financial institution’s performance than do general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. In a period of rapidly rising interest rates, the liquidity and maturity structures of our assets and liabilities are critical to the maintenance of acceptable performance levels.

The principal effect of inflation on earnings, as distinct from levels of interest rates, is in the area of noninterest expense. Expense items such as employee compensation, employee benefits, and occupancy and equipment costs may be subject to increases as a result of inflation. An additional effect of inflation is the possible increase in dollar value of the collateral securing loans that we have made. Our management is unable to determine the extent, if any, to which properties securing loans have appreciated in dollar value due to inflation.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see Note 1 of the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional details on the Company's capital requirements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates. Our market risk arises principally from interest rate risk inherent in our lending, investing, deposit and borrowings activities. Management actively monitors and manages its interest rate risk exposure. In addition to other risks that we manage in the normal course of business, such as credit quality and liquidity, management considers interest rate risk to be a significant market risk that could have a potentially material effect on our financial condition and result of operations. The information contained in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Asset Liability Management” in this Form 10-K is incorporated herein by reference.

69

Item 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	71
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting	72
Consolidated Balance Sheets, June 30, 2019 and 2018	73
Consolidated Statements of Income for the Years Ended June 30, 2019, 2018 and 2017	74
Consolidated Statements of Comprehensive Income for the Years Ended June 30, 2019, 2018 and 2017	75
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended June 30, 2019, 2018 and 2017	76
Consolidated Statements of Cash Flows for the Years Ended June 30, 2019, 2018 and 2017	77
Notes to Consolidated Financial Statements for the Years Ended June 30, 2019, 2018 and 2017	79

70

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors

HomeTrust Bancshares, Inc. and Subsidiary

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of HomeTrust Bancshares, Inc. and Subsidiary (the "Company") as of June 30, 2019 and 2018, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended June 30, 2019, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2019 and 2018, and the result of their operations and their cash flows for each of the three years in the period ended June 30, 2019, in conformity with U.S. generally accepted accounting principles.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of June 30, 2019, based on criteria established in Internal Control- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated September 13, 2019 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ DIXON HUGHES GOODMAN LLP

We have served as the Company's auditor since 2005.

Asheville, North Carolina

September 13, 2019

71

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors

HomeTrust Bancshares, Inc. and Subsidiary

Opinion on Internal Control Over Financial Reporting

We have audited HomeTrust Bancshares, Inc. and Subsidiary (the “Company”)’s internal control over financial reporting as of June 30, 2019, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, HomeTrust Bancshares, Inc. and Subsidiary maintained, in all material respects, effective internal control over financial reporting as of June 30, 2019, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of HomeTrust Bancshares, Inc. and Subsidiary as of June 30, 2019 and 2018, and for each of the years in the three years ended June 30, 2019, and our report dated September 13, 2019, expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying management’s report on internal control over financial reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DIXON HUGHES GOODMAN LLP

Asheville, North Carolina

September 13, 2019

72

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Consolidated Balance Sheets

(Dollars in thousands, except per share data)

	June 30,
	2019			2018
Assets
Cash	$	40,909		$	45,222
Interest-bearing deposits	30,134			25,524
Cash and cash equivalents	71,043			70,746
Commercial paper	241,446			229,070
Certificates of deposit in other banks	52,005			66,937
Securities available for sale, at fair value	121,786			154,993
Other investments, at cost	45,378			41,931
Loans held for sale	18,175			5,873
Total loans, net of deferred loan fees	2,705,190			2,525,852
Allowance for loan losses	(21,429		)	(21,060		)
Net loans	2,683,761			2,504,792
Premises and equipment, net	61,051			62,537
Accrued interest receivable	10,533			9,344
Real estate owned (REO)	2,929			3,684
Deferred income taxes	26,523			32,565
Bank owned life insurance (BOLI)	90,254			88,028
Goodwill	25,638			25,638
Core deposit intangibles	2,499			4,528
Other assets	23,157			3,503
Total Assets	$	3,476,178		$	3,304,169
Liabilities and Stockholders’ Equity
Liabilities
Deposits	$	2,327,257		$	2,196,253
Borrowings	680,000			635,000
Capital lease obligations	1,880			1,914
Other liabilities	58,145			61,760
Total liabilities	3,067,282			2,894,927
Stockholders’ Equity
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued or outstanding	—			—
Common stock, $0.01 par value, 60,000,000 shares authorized, 17,984,105 shares issued and outstanding at June 30, 2019; 19,041,668 at June 30, 2018	180			191
Additional paid in capital	190,315			217,480
Retained earnings	224,545			200,575
Unearned Employee Stock Ownership Plan (ESOP) shares	(6,877		)	(7,406		)
Accumulated other comprehensive income (loss)	733			(1,598		)
Total stockholders’ equity	408,896			409,242
Total Liabilities and Stockholders’ Equity	$	3,476,178		$	3,304,169

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

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Income

(Dollars in thousands, except per share data)

	June 30,
	2019		2018		2017
Interest and Dividend Income
Loans	$	121,903	$	105,082	$	90,069
Securities available for sale	3,443		3,668		3,983
Certificates of deposit and other interest-bearing deposits	8,278		5,939		3,725
Other investments	3,635		2,713		1,659
Total interest and dividend income	137,259		117,402		99,436
Interest Expense
Deposits	15,757		6,758		4,588
Borrowings	14,626		9,314		3,657
Total interest expense	30,383		16,072		8,245
Net Interest Income	106,876		101,330		91,191
Provision for Loan Losses	5,700		—		—
Net Interest Income after Provision for Loan Losses	101,176		101,330		91,191
Noninterest Income
Service charges and fees on deposit accounts	9,611		8,802		7,709
Loan income and fees	1,422		1,176		971
Gain on sale of loans held for sale	6,218		4,276		2,674
BOLI income	2,103		2,117		2,088
Gain from sale of premises and equipment	—		164		385
Gain from sales of securities available for sale	—		—		22
Other, net	3,541		2,437		2,258
Total noninterest income	22,895		18,972		16,107
Noninterest Expense
Salaries and employee benefits	52,291		48,170		46,446
Net occupancy expense	9,454		9,689		9,121
Computer services	7,664		6,440		6,650
Telephone, postage, and supplies	3,040		2,958		2,732
Marketing and advertising	1,853		1,478		1,670
Deposit insurance premiums	1,426		1,619		1,378
Loss on sale and impairment of REO	439		127		300
REO expense	874		1,065		1,114
Core deposit intangible amortization	2,029		2,645		2,823
Merger-related expenses	—		—		7,805
Other	11,064		11,140		10,220
Total noninterest expense	90,134		85,331		90,259
Income Before Income Taxes	33,937		34,971		17,039
Income Tax Expense	6,791		26,736		5,192
Net Income	$	27,146	$	8,235	$	11,847
Per Share Data:
Net income per common share:
Basic	$	1.52	$	0.45	$	0.66
Diluted	$	1.46	$	0.44	$	0.65
Average shares outstanding:
Basic	17,692,493		18,028,854		17,379,487
Diluted	18,393,184		18,726,431		17,956,443

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

74

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Comprehensive Income

(Dollars in thousands)

	June 30,
	2019			2018			2017
Net Income	$	27,146		$	8,235		$	11,847
Other Comprehensive Income (Loss)
Unrealized holding gains (losses) on securities available for sale
Gains (losses) arising during the period	$	3,027		$	(2,489	)	$	(3,113	)
Deferred income tax benefit (expense)	(696		)	618			1,058
Reclassification of securities gains recognized in net income	—			—			(22		)
Deferred income tax expense	—			—			7
Total other comprehensive income (loss)	$	2,331		$	(1,871	)	$	(2,070	)
Comprehensive Income	$	29,477		$	6,364		$	9,777

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

75

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Changes in Stockholders’ Equity

(Dollars in thousands)

	Common Stock					Additional Paid In Capital			Retained Earnings			Unearned ESOP Shares			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
	Shares		Amount
Balance at June 30, 2016	17,998,750		$	180		$	186,104		$	179,813		$	(8,464	)	$	2,343		$	359,976
Net income	—		—			—			11,847			—			—			11,847
Granted restricted stock	47,500		—			—			—			—			—			—
Forfeited restricted stock	(6,000	)	—			—			—			—			—			—
Retired stock	(22,794	)	—			(569		)	—			—			—			(569		)
Exercised stock options	185,142		3			3,065			—			—			—			3,068
Shares issued for TriSummit Bancorp, Inc. merger	765,277		7			20,036			—			—			—			20,043
Stock option expense	—		—			2,627			—			—			—			2,627
Restricted stock expense	—		—			1,539			—			—			—			1,539
ESOP shares allocated	—		—			657			—			529			—			1,186
Other comprehensive loss	—		—			—			—			—			(2,070		)	(2,070		)
Balance at June 30, 2017	18,967,875		$	190		$	213,459		$	191,660		$	(7,935	)	$	273		$	397,647
Net income	—		—			—			8,235			—			—			8,235
Cumulative-effect adjustment on the change in accounting for share-based payments	—		—			—			680			—			—			680
Granted restricted stock	55,200		—			—			—			—			—			—
Forfeited restricted stock	(6,600	)	—			—			—			—			—			—
Retired stock	(19,007	)				(494		)										(494		)
Exercised stock options	44,200		1			650			—			—			—			651
Stock option expense	—		—			1,758			—			—			—			1,758
Restricted stock expense	—		—			1,269			—			—			—			1,269
ESOP shares allocated	—		—			838			—			529			—			1,367
Other comprehensive loss	—		—			—			—			—			(1,871		)	(1,871		)
Balance at June 30, 2018	19,041,668		$	191		$	217,480		$	200,575		$	(7,406	)	$	(1,598	)	$	409,242
Net income	—		—			—			27,146			—			—			27,146
Cash dividends declared on common stock, $0.18/common share	—		—			—			(3,176		)	—			—			(3,176		)
Stock repurchased	(1,149,785	)	(11		)	(30,627		)	—			—			—			(30,638		)
Granted restricted stock	23,625		—			—			—			—			—			—
Forfeited restricted stock	(4,300	)	—			—			—			—			—			—
Retired stock	(7,414	)	—			(205		)	—			—			—			(205		)
Exercised stock options	80,311		—			1,173			—			—			—			1,173
Stock option expense	—		—			736			—			—			—			736
Restricted stock expense	—		—			865			—			—			—			865
ESOP shares allocated	—		—			893			—			529			—			1,422
Other comprehensive income	—		—			—			—			—			2,331			2,331
Balance at June 30, 2019	17,984,105		$	180		$	190,315		$	224,545		$	(6,877	)	$	733		$	408,896

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

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

(Dollars in thousands)

	June 30,
	2019			2018			2017
Operating Activities:
Net income	$	27,146		$	8,235		$	11,847
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	5,700			—			—
Depreciation	4,243			3,810			3,816
Deferred income tax expense	5,346			26,121			4,947
Net amortization and accretion	(6,828		)	(5,950		)	(6,658		)
Gain on sale of premises and equipment	—			(164		)	(385		)
Loss on sale and impairment of REO	439			127			300
BOLI income	(2,103		)	(2,117		)	(2,088		)
Gain from sales of securities available for sale	—			—			(22		)
Gain on sale of loans held for sale	(6,218		)	(4,276		)	(2,674		)
Origination of loans held for sale	(190,870		)	(143,755		)	(134,258		)
Proceeds from sales of loans held for sale	174,973			143,350			137,108
Increase (decrease) in deferred loan fees, net	(768		)	181			(1,317		)
Increase in accrued interest receivable and other assets	(4,835		)	(1,246		)	(2,727		)
Core deposit intangible amortization	2,029			2,645			2,823
ESOP compensation expense	1,422			1,367			1,186
Restricted stock and stock option expense	1,601			3,027			4,166
Increase in other liabilities	(3,615		)	(13		)	(949		)
Net cash provided by operating activities	7,662			31,342			15,115
Investing Activities:
Purchase of securities available for sale	(34,675		)	—			(15,082		)
Proceeds from sales of securities available for sale	—			—			19,279
Proceeds from maturities of securities available for sale	38,430			20,675			27,145
Maturities (purchase) of commercial paper, net	(5,824		)	(75,202		)	81,821
Purchase of certificates of deposit in other banks	(18,154		)	(17,201		)	(41,988		)
Maturities of certificates of deposit in other banks	33,086			82,538			71,476
Principal repayments of mortgage-backed securities	31,627			20,471			23,919
Net redemptions (purchases) of other investments	(3,447		)	2,141			(7,255		)
Net increase in loans	(173,754		)	(168,602		)	(255,853		)
Purchase of BOLI	(137		)	(76		)	(273		)
Proceeds from redemption of BOLI	14			146			—
Purchase of equipment for operating leases and other assets	(16,578		)	—			—
Purchase of premises and equipment	(2,124		)	(3,458		)	(2,821		)
Proceeds from sale of premises and equipment	—			923			395
Capital improvements to REO	—			(30		)	(11		)
Proceeds from sale of REO	1,047			3,883			3,277
Acquisition of United Financial of North Carolina, Inc.	—			(225		)	(200		)
Acquisition of TriSummit Bancorp, Inc., net of cash received	—			—			(10,585		)
Net cash used in investing activities	(150,489		)	(134,017		)	(106,756		)

77

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows (continued)

(Dollars in thousands)

	June 30,
	2019			2018			2017
Financing Activities:
Net increase (decrease) in deposits	131,004			147,802			(34,479		)
Net increase (decrease) in borrowings	45,000			(61,500		)	158,031
Common stock repurchased	(30,638		)	—			—
Cash dividends paid	(3,176		)	—			—
Retired stock	(205		)	(494		)	(569		)
Stock options exercised	1,173			651			3,068
Decrease in capital lease obligations	(34		)	(23		)	(21		)
Net cash provided by financing activities	143,124			86,436			126,030
Net Increase (Decrease) in Cash and Cash Equivalents	297			(16,239		)	34,389
Cash and Cash Equivalents at Beginning of Period	70,746			86,985			52,596
Cash and Cash Equivalents at End of Period	$	71,043		$	70,746		$	86,985

	June 30,
	2019		2018			2017
Supplemental Disclosures:
Cash paid during the period for:
Interest	$	28,997	$	15,716		$	7,980
Income taxes	1,549		887			383
Noncash transactions:
Unrealized gain (loss) in value of securities available for sale, net of income taxes	2,331		(1,871		)	(2,070		)
Transfers of loans to REO	731		1,346			2,417
Retained portion of loans sold to the U.S. Small Business Administration ("SBA")	15,607		4,415			—
Transfers of loans to held for sale from loans held for investment	5,794		—			—
Business Combinations:
Assets acquired	—		—			364,504
Liabilities assumed	—		—			328,378
Net assets acquired	—		—			36,126

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

78

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

1. Summary of Significant Accounting Policies

Business

The consolidated financial statements presented in this report include the accounts of HomeTrust Bancshares, Inc., a Maryland corporation (“HomeTrust”), and its wholly-owned subsidiary, HomeTrust Bank (the “Bank”). As used throughout this report, the term the “Company” refers to HomeTrust and its consolidated subsidiary, unless the context otherwise requires. HomeTrust is a bank holding company primarily engaged in the business of planning, directing, and coordinating the business activities of the Bank. The Bank is a North Carolina state chartered bank and provides a wide range of retail and commercial banking products within its geographic footprint, which includes: North Carolina (the Asheville metropolitan area, Greensboro/"Piedmont" region, Charlotte, and Raleigh/Cary), Upstate South Carolina (Greenville), East Tennessee (Kingsport/Johnson City/Bristol, Knoxville, and Morristown) and Southwest Virginia (the Roanoke Valley). The Bank operates under a single set of corporate policies and procedures and is recognized as a single banking segment for financial reporting purposes.

Accounting Principles

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States (“US GAAP”).

Principles of Consolidation and Subsidiary Activities

The accompanying consolidated financial statements include the accounts of HomeTrust, the Bank, and its wholly-owned subsidiary, Western North Carolina Service Corporation (“WNCSC”) at or for the years ended June 30, 2019, 2018, and 2017. WNCSC owns office buildings in Asheville, North Carolina that are leased to the Bank. All intercompany items have been eliminated.

Reclassifications

Certain amounts reported in prior periods’ consolidated financial statements have been reclassified to conform to the current presentation. Such reclassifications had no effect on previously reported cash flows, stockholders’ equity or net income.

Use of Estimates in Financial Statements

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash and interest-bearing deposits with initial terms to maturity of 90 days or less.

Commercial Paper

Commercial paper includes highly liquid short-term debt of investment graded corporations with maturities less than 270 days. These instruments are typically purchased at a discount based on prevailing interest rates and do not exceed $15.0 million per issuer.

Debt Securities

The Company classifies debt securities as trading, available for sale, or held to maturity.

Securities available for sale are carried at fair value. These securities are used to execute asset/liability management strategies, manage liquidity, and leverage capital, and therefore may be sold prior to maturity. Adjustments for unrealized gains or losses, net of the income tax effect, are made to accumulated other comprehensive income, a separate component of total stockholders’ equity.

Securities held to maturity are stated at cost, net of unamortized balances of premiums and discounts. When these securities are purchased, the Company intends to and has the ability to hold such securities until maturity.

Declines in the fair value of individual securities available for sale or held to maturity below their cost that are other-than-temporary result in write-downs of the individual securities to their fair value. The related write-downs are included in earnings as realized losses. In estimating other-than-temporary impairment losses, the Company considers among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery of the unrealized loss, and in the case of debt securities, whether it is more likely than not that the Company will be required to sell the security prior to a recovery.

Premiums and discounts are amortized or accreted over the life of the security as an adjustment to yield. Dividend and interest income are recognized when earned. Gains or losses on the sale of securities are recognized on a specific identification, trade date basis.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

Loans

Portfolio loans are carried at their outstanding principal amount, less unearned income and deferred nonrefundable loan fees, net of certain origination costs. Interest income is recorded as earned on an accrual basis based on the contractual rate and the outstanding balance, except for nonaccruing loans where interest is recorded as earned on a cash basis. Net deferred loan origination fees/costs are deferred and amortized to interest income over the life of the related loan.

Acquired Loans

Purchased loans are recorded at their fair value at the acquisition date. Credit discounts are included in the determination of fair value; therefore, an allowance for loan and lease losses is not recorded at the acquisition date. Acquired loans are evaluated upon acquisition and classified as either purchased impaired or purchased non-impaired. Purchased impaired loans reflect credit deterioration since origination such that it is probable at acquisition that the Company will be unable to collect all contractually required payments.

The cash flows expected to be received over the life of the loans were estimated by management. These cash flows were provided to third party analysts to calculate carrying values of the loans, book yields, effective interest income and impairment, if any, based on actual and projected events. Default rates, loss severity, and prepayment speed assumptions will be periodically reassessed to update our expectation of future cash flows. The excess of the cash flows expected to be collected over a loan's carrying value is considered to be the accretable yield and is recognized as interest income over the estimated life of the loan using the effective yield method. The accretable yield may change due to changes in the timing and amounts of expected cash flows. Changes in the accretable yield are disclosed quarterly.

The excess of the undiscounted contractual balances due over the cash flows expected to be collected is considered to be the nonaccretable difference. The nonaccretable difference represents our estimate of the credit losses expected to occur and was considered in determining the fair value of the loans as of the acquisition date. Subsequent to the acquisition date, any increases in expected cash flows over those expected at purchase date in excess of fair value are adjusted through a change to the accretable yield on a prospective basis. Any subsequent decreases in expected cash flows attributable to credit deterioration are recognized by recording a provision for loan losses. The purchased impaired loans acquired are and will continue to be subject to the Company's internal and external credit review and monitoring.

For purchased non-impaired loans, the difference between the fair value and unpaid principal balance of the loan at the acquisition date is amortized or accreted to interest income over the life of the loans.

Loan Segments and Classes

The Company’s loan portfolio is grouped into two segments (retail consumer loans and commercial loans) and into various classes within each segment. The Company originates, services, and manages its loans based on these segments and classes. The Company’s portfolio segments and classes within those segments are subject to risks that could have an adverse impact on the credit quality of the loan portfolio. Management identified the risks described below as significant risks that are generally similar among the loan segments and classes.

Retail Consumer loan segment

The Company underwrites its retail consumer loans using automated credit scoring and analysis tools. These credit scoring tools take into account factors such as payment history, credit utilization, length of credit history, types of credit currently in use, and recent credit inquiries. To the extent that the loan is secured by collateral, the value of the collateral is also evaluated. Common risks to each class of retail consumer loans include general economic conditions within the Company’s markets, such as unemployment and potential declines in collateral values, and the personal circumstances of the borrowers. In addition to these common risks for the Company’s retail consumer loans, various retail consumer loan classes may also have certain risks specific to them.

One-to-four family and construction and land/lot loans are to individuals and are typically secured by one-to-four family residential property, undeveloped land, and partially developed land in anticipation of pending construction of a personal residence. Significant and rapid declines in real estate values can result in residential mortgage loan borrowers having debt levels in excess of the current market value of the collateral, which can lead to higher levels of foreclosures. Construction and land/lot loans may experience delays in completion and cost overruns that exceed the borrower’s financial ability to complete the project. Such cost overruns can result in foreclosure of partially completed and unmarketable collateral.

Originated home equity lines of credit ("HELOCs") are often secured by second liens on residential real estate, thereby making such loans particularly susceptible to declining collateral values. A substantial decline in collateral value could render the Company’s second lien position to be effectively unsecured. Additional risks include lien perfection inaccuracies and disputes with first lien holders that may further weaken collateral positions. Further, the open-end structure of these loans creates the risk that customers may draw on the lines in excess of the collateral value if there have been significant declines since origination. In addition, the Company purchases certain HELOCs from a third party. The credit risk characteristics are different for these loans since they were not originated by the Company and the collateral is located outside the Company’s market area, primarily in several western states. The Company established an allowance for loan losses based on the historical losses of the portfolio. The Company monitors the performance of these loans and adjusts the allowance for loan losses as necessary.

Indirect auto finance loans are primarily for new and used personal automobiles originated by franchised and independent auto dealers within the Company's geographic footprint. The bank-dealer relationship is governed by contract, which provides warranties and

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

representations, payment schedules, and rights and remedies upon breach. The underwriting process and standards are maintained by the Company and implemented via an automated decision tool, which incorporates the borrower's credit score, loan to value ratio, and terms of the loan to determine the borrower's creditworthiness.

Consumer loans include loans secured by deposit accounts or personal property such as automobiles, boats, and motorcycles, as well as unsecured consumer debt. The value of underlying collateral within this class is especially volatile due to potential rapid depreciation in values since date of loan origination in excess of principal repayment.

Commercial loan segment

The Company’s commercial loans are centrally underwritten based primarily on the customer’s ability to generate the required cash flow to service the debt in accordance with the contractual terms and conditions of the loan agreement. The Company’s commercial lenders and underwriters work to understand the borrower’s businesses and management experiences. The majority of the Company’s commercial loans are secured by collateral, so collateral values are important to the transaction. In commercial loan transactions where the principals or other parties provide personal guarantees, the Company’s commercial lenders and underwriters analyze the relative financial strength and liquidity of each guarantor. Risks that are common to the Company’s commercial loan classes include general economic conditions, demand for the borrowers’ products and services, the personal circumstances of the principals, and reductions in collateral values. In addition to these common risks for the Company’s commercial loans, the various commercial loan classes also have certain risks specific to them.

Construction and development loans are highly dependent on the supply and demand for commercial real estate in the Company’s markets as well as the demand for the newly constructed residential and commercial properties and lots being developed by the Company’s commercial loan customers. Prolonged deterioration in demand could result in significant decreases in the underlying collateral values and make repayment of the outstanding loans more difficult for the Company’s commercial borrowers.

Commercial real estate and commercial and industrial loans are primarily dependent on the ability of the Company’s commercial loan customers to achieve business results consistent with those projected at loan origination resulting in cash flow sufficient to service the debt. To the extent that a borrower’s actual business results significantly underperform the original projections, the ability of that borrower to service the Company’s loan on a basis consistent with the contractual terms may be at risk. While these loans and leases are generally secured by real property, personal property, or business assets such as inventory or accounts receivable, it is possible that the liquidation of the collateral will not fully satisfy the obligation.

Municipal leases are primarily made to volunteer fire departments and depend on the tax revenues received from the county or municipality. These leases are mainly secured by vehicles, fire stations, land, or equipment. The underwriting of the municipal leases is based on the cash flows of the fire department as well as projections of future income.

Equipment finance is primarily made up of commercial finance agreements and commercial loans and leases provided by our new Equipment Finance line of business, and primarily for transportation, construction, and manufacturing equipment. The loans have terms on average of five years or less and are secured by the financed equipment.

Credit Quality Indicators

Loans are monitored for credit quality on a recurring basis and the composition of the loans outstanding by credit quality indicator is provided below. Loan credit quality indicators are developed through review of individual borrowers on an ongoing basis. Generally, loans are monitored for performance on a quarterly basis with the credit quality indicators adjusted as needed. The indicators represent the rating for loans as of the date presented based on the most recent assessment performed. These credit quality indicators are defined as follows:

Pass—A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.

Special Mention—A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.

Substandard—A substandard asset is inadequately protected by the current net worth and paying capacity of the obligor, or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Doubtful—An asset classified doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions, and values.

Loss—Assets classified loss are considered uncollectible and of such little value that their continuing to be carried as an asset is not warranted. This classification is not necessarily equivalent to no potential for recovery or salvage value, but rather that it is not appropriate to defer a full write-off even though partial recovery may be effected in the future.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

Loans Held for Sale

Residential mortgages held for sale are valued at the lower of cost or fair value as determined by outstanding commitments from investors on a “best efforts” basis or current investor yield requirements, calculated on the aggregate loan basis. 

Beginning in fiscal year 2018, the Company began providing loans guaranteed by the SBA for the purchase of businesses, business startups, business expansion, equipment, and working capital. All SBA loans are underwritten and documented as prescribed by the SBA. SBA loans are generally fully amortizing and have maturity dates and amortizations of up to 25 years. SBA loans are classified as held for sale and are carried at the lower of cost or fair value. The guaranteed portion of the loan is sold and the servicing rights are retained. At the time of the sale, an asset is recorded for the value of the servicing rights and is amortized over the remaining life of the loan on the effective interest method. The servicing asset is included in other assets and the corresponding servicing fees are recorded in noninterest income. A gain is recorded for any premium received in excess of the carrying value of the net assets transferred in the sale and is also included in noninterest income. The portion of SBA loans that are retained are adjusted to fair value and reclassified as a loan held to maturity. The net value of the retained loans is included in the appropriate loan classification for disclosure purposes.

Beginning in fiscal year 2019, the Company began originating HELOCs through a third party. These loans are originated in various states outside the Company's geographic footprint, but are underwritten to the Company's underwriting guidelines. The loans are held for sale by the Company over a 90 to 180 day period and are serviced by the third party. The loans are marketed by the third party to investors in pools and once sold the Company recognizes a gain on the sale.

Allowance for Loan Losses

The allowance for loan losses is management’s estimate of probable credit losses that are inherent in the Company’s loan portfolios at the balance sheet date. The allowance increases when the Company provides for loan losses through charges to operating earnings and when the Company recovers amounts from loans previously written down or charged off. The allowance decreases when the Company writes down or charges off loan amounts that are deemed uncollectible.

Management determines the allowance for loan losses based on periodic evaluations that are inherently subjective and require substantial judgment because the evaluations require the use of material estimates that are susceptible to significant change. The Company generally uses two allowance methodologies that are primarily based on management’s determination as to whether or not a loan is considered to be impaired.

All classified loans above a certain threshold meeting certain criteria are evaluated for impairment on a loan-by-loan basis and are considered impaired when it is probable, based on current information, that the borrower will be unable to pay contractual interest or principal as required by the loan agreement. Impaired loans below the threshold are evaluated as a pool with additional adjustments to the allowance for loan losses. Loans that experience insignificant payment delays and payment shortfalls are not necessarily considered impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment history, and the amount of the shortfall relative to the principal and interest owed. Impaired loans are measured at their estimated net realizable value based on either the value of the loan’s expected future cash flows discounted at the loan’s effective interest rate or on the collateral value, net of the estimated costs of disposal, if the loan is collateral dependent. For loans considered impaired, an individual allowance for loan losses is recorded when the loan principal balance exceeds the estimated net realizable value.

For loans not considered impaired, management determines the allowance for loan losses based on estimated loss percentages that are determined by and applied to the various classes of loans that comprise the segments of the Company’s loan portfolio. The estimated loss percentages by loan class are based on a number of factors that include by class (i) average historical losses over the past two years, (ii) levels and trends in delinquencies, impairments, and net charge-offs, (iii) trends in the volume, terms, and concentrations, (iv) trends in interest rates, (v) effects of changes in the Company’s risk tolerance, underwriting standards, lending policies, procedures, and practices, and (vi) national and local business and economic conditions.

Future material adjustments to the allowance for loan losses may be necessary due to changing economic conditions or declining collateral values. In addition, bank regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to make adjustments to the allowance for loan losses based upon judgments that differ significantly from those of management.

Nonperforming Assets

Nonperforming assets can include loans that are past due 90 days or more based on the loan’s contractual terms and continue to accrue interest, loans on which interest is not being accrued, and REO.

Loans Past Due 90 Days or More, Nonaccruing, Impaired, or Restructured

The Company’s policies related to when loans are placed on nonaccruing status conform to guidelines prescribed by bank regulatory authorities. Generally, the Company suspends the accrual of interest on loans (i) that are maintained on a cash basis because of the deterioration of the financial condition of the borrower, (ii) for which payment in full of principal or interest is not expected (impaired loans), or (iii) on which principal or interest has been in default for a period of 90 days or more, unless the loan is both well secured and in the process of collection. Under the Company’s cost recovery method, interest income is subsequently recognized only to the extent cash payments are received in excess

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

of principal due. Loans are returned to accruing status when all principal and interest amounts contractually due are brought current and concern no longer exists as to the future collectability of principal and interest, which is generally confirmed when the loan demonstrates performance for six consecutive months or payment cycles.

Restructured loans to borrowers who are experiencing financial difficulty, and on which the Company has granted concessions that modify the terms of the loan, are accounted for as troubled debt restructurings (“TDRs”). These loans remain as TDRs until the loan has been paid in full, modified to its original terms, or charged off. The Company may place these loans on accrual or nonaccrual status depending on the individual facts and circumstances of the borrower. Generally, these loans are put on nonaccrual status until there is adequate performance that evidences the ability of the borrower to make the contractual payments. This period of performance is normally at least six months, and may include performance immediately prior to or after the modification, depending on the specific facts and circumstances of the borrower.

Loan Charge-offs

The Company charges off loan balances, in whole or in part to net realizable value or fair value less costs to sell, when available, verifiable, and documentable information confirms that specific loans, or portions of specific loans, are uncollectible or unrecoverable. For unsecured loans, losses are confirmed when it can be determined that the borrower, or any guarantors, are unwilling or unable to pay the amounts as agreed. When the borrower, or any guarantor, is unwilling or unable to pay the amounts as agreed on a loan secured by collateral and any recovery will be realized upon the sale of the collateral, the loan is deemed to be collateral dependent. Repayments or recoveries for collateral dependent loans are directly affected by the value of the collateral at liquidation. As such, loan repayment can be affected by factors that influence the amount recoverable, the timing of the recovery, or a combination of the two. Such factors include economic conditions that affect the markets in which the loan or its collateral is sold, bankruptcy, repossession and foreclosure laws, and consumer banking regulations. Losses are also confirmed when the loan, or a portion of the loan, is classified as loss resulting from loan reviews conducted by the Company or its bank regulatory examiners.

Charge-offs of loans in the commercial loan segment are recognized when the uncollectibility of the loan balance and the inability to recover sufficient value from the sale of any collateral securing the loan is confirmed. The uncollectibility of the loan balance is evidenced by the inability of the commercial borrower to generate cash flows sufficient to repay the loan as agreed causing the loan to become delinquent. For collateral dependent commercial loans, the Company determines the net realizable value of the collateral based on appraisals, current market conditions, and estimated costs to sell the collateral. For collateral dependent commercial loans where the loan balance, including any accrued interest, net deferred fees or costs, and unamortized premiums or discounts, exceeds the net realizable value of the collateral securing the loan, the deficiency is identified as unrecoverable, is deemed to be a confirmed loss, and is charged off.

Charge-offs of loans in the retail consumer loan segment are generally confirmed and recognized in a manner similar to charge-offs of loans in the commercial loan segment. Secured retail consumer loans that are identified as uncollectible and are deemed to be collateral dependent are confirmed as loss to the extent the net realizable value of the collateral is insufficient to recover the loan balance. Consumer loans not secured by real estate that become 90 days past due are charged off to the extent that the fair value of any collateral, less estimated costs to sell the collateral, is insufficient to recover the loan balance. Consumer loans secured by real estate that become 120 days past due are charged off to the extent that the fair value of the real estate securing the loan, less estimated costs to sell the collateral, is insufficient to recover the loan balance. Loans to borrowers in bankruptcy are subject to modification by the bankruptcy court and are charged off to the extent that the fair value of any collateral securing the loan, less estimated costs to sell the collateral, is insufficient to recover the loan balance, unless the Company expects repayment is likely to occur. Such loans are charged off within 60 days of the receipt of notification from a bankruptcy court or when the loans become 120 days past due, whichever is shorter.

Real Estate Owned

REO consists of real estate acquired as a result of customers’ loan defaults. REO is stated at the fair value of the property net of the estimated costs of disposal with a charge to the allowance for loan losses upon foreclosure, if necessary. Any write-downs subsequent to foreclosure are charged against operating earnings. To the extent recoverable, costs relating to the development and improvement of property are capitalized, whereas those costs relating to holding the property are charged to expense.

Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives. Leasehold improvements are amortized over the lives of the respective leases or the estimated useful life of the leasehold improvement, whichever is less. Maintenance and repair costs are expensed as incurred. Capitalized leases are amortized using the same methods as premises and equipment over the estimated useful lives or lease terms, whichever is less. Obligations under capital leases are amortized using the interest method to allocate payments between principal reduction and interest expense.

Other Investments, at cost

As a requirement for membership, the Bank invests in stock of the Federal Home Loan Bank of Atlanta ("FHLB") and the Federal Reserve Bank of Richmond ("Federal Reserve Bank" or "FRB"). These investments are carried at cost due to the redemption provisions of these entities and the restricted nature of the securities. Small Business Investment Companies ("SBIC") are considered equity securities without a readily determinable fair value. Prior to the adoption of ASU 2016-01 in the first quarter of fiscal 2019, SBICs were maintained in other assets. Beginning July 1, 2018, the SBIC investments are accounted for at cost less impairment, plus or minus changes resulting from observable price changes. Management reviews for impairment based on the ultimate recoverability of the cost basis of these investments.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

Business Combinations

The Company uses the acquisition method of accounting for all business combinations. An acquirer must be identified for each business combination, and the acquisition date is the date the acquirer achieves control. The acquisition method of accounting requires the Company as acquirer to recognize the fair value of assets acquired and liabilities assumed at the acquisition date as well as recognize goodwill or a gain from a bargain purchase, if appropriate. Any acquisition-related costs and restructuring costs are recognized as period expenses as incurred.

Goodwill

Goodwill represents the excess of the purchase price over the sum of the estimated fair values of the tangible and identifiable intangible assets acquired less the estimated fair value of the liabilities assumed in a business combination. Goodwill has an indefinite useful life and is evaluated for impairment annually in the fourth quarter or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value.

In testing goodwill for impairment, we have the option to assess either qualitative or quantitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount. If we elect to perform a qualitative assessment and determine that an impairment is more likely than not, we are then required to perform a quantitative impairment test, otherwise no further analysis is required.

Under the quantitative impairment test, the evaluation involves comparing the current fair value of each reporting unit to its carrying value, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is considered not to be impaired. If the carrying value exceeds estimated fair value an impairment charge is recognized for the difference, but limited by the amount of goodwill allocated to that reporting unit. The Company uses a combination of the market and income approaches to estimate the fair value of its reporting unit. All inputs are evaluated by management at the evaluation date of April 1st and reviewed again at year end to ensure no significant changes occurred that could indicate impairment. Subsequent reversal of goodwill impairment losses is not permitted.

Core Deposit Intangibles

Core deposit intangibles represent the estimated value of long-term deposit relationships acquired in business combinations. These core deposit premiums are amortized using an accelerated method over the estimated useful lives of the related deposits typically between five and ten years. The estimated useful lives are periodically reviewed for reasonableness.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced, if necessary, by the amount of such benefits that are not expected to be realized based upon available evidence. See Note 13 for additional information.

The Company recognizes interest and penalties accrued relative to unrecognized tax benefits in its respective federal or state income taxes accounts. As of June 30, 2019 and 2018, there were no accruals for uncertain tax positions and no accruals for interest and penalties. The Company is no longer subject to examination for federal and state purposes for tax years prior to 2015.

Employee Benefit Plans

The HomeTrust Bank KSOP Plan ("KSOP") is comprised of two components, the 401(k) Plan and the ESOP. The KSOP benefits employees with at least 1000 hours of service during a 12-month period and who have attained age 21.

Under the 401(k), the Company matches employee contributions at 50% of employee deferrals up to 6% of each employee’s compensation. The Company may also make discretionary profit sharing contributions for the benefit of all eligible participants as long as total contributions do not exceed applicable limitations. Employees become fully vested in the Company’s contributions after six years of service.

Under the ESOP, the amount of the Bank's annual contribution is discretionary, however it must be sufficient to pay the annual loan payment to the Company. Shares released are allocated to each eligible participant based on the ratio of each participant’s compensation, as defined in the ESOP, to the total compensation of all eligible plan participants. Forfeited shares are reallocated among other participants in the Plan. At the discretion of the Bank, cash dividends, when paid on allocated shares, are distributed to participants’ accounts, paid in cash to the participants, or used to repay the principal and interest on the ESOP loan used to acquire Company stock on which dividends were paid. Cash dividends on unallocated shares are used to repay the outstanding debt of the ESOP. It is anticipated that the Bank will make contributions to the ESOP in amounts necessary to amortize the ESOP loan payable to the Company over a 20-year period. Unearned ESOP shares are shown as a reduction of stockholders’ equity. The Company recognizes compensation expense equal to the fair value of the Company’s ESOP shares during the periods in which they become committed to be released. To the extent that the fair value of the Company’s ESOP shares differs from the cost of such shares, the differential is recognized as additional paid in capital. The Company recognizes a tax deduction equal to the cost of the shares released. Because the ESOP is internally leveraged through a loan from the Company to the ESOP, the loan receivable by the Company from the ESOP is not reported as an asset nor is the debt of the ESOP shown as a liability in the consolidated financial statements.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

See Note 14 for additional information.

Equity Incentive Plan

The Company issues restricted stock, restricted stock units, and stock options under the HomeTrust Bancshares, Inc. 2013 Omnibus Incentive Plan (“2013 Omnibus Incentive Plan”) to key officers and outside directors. In accordance with the requirements of the Financial Accounting Standards Board (the "FASB") Accounting Standards Codification (“ASC”) 718, Compensation – Stock Compensation, the Company has adopted a fair value based method of accounting for employee stock compensation plans, whereby compensation cost is measured based on the fair value of the award as of the grant date and recognized over the vesting period. The Company accounts for forfeitures as they occur.

Comprehensive Income

Comprehensive income consists of net income and net unrealized gains (losses) on securities available for sale and is presented in the consolidated statements of comprehensive income.

Derivative Instruments and Hedging

The Company recognizes all derivatives as either assets or liabilities in the balance sheet, and measures those instruments at fair value. Changes in the fair value of those derivatives are reported in current earnings or other comprehensive income depending on the purpose for which the derivative is held and whether the derivative qualifies for hedge accounting. Loan commitments related to the origination or acquisition of mortgage loans that will be held for sale must be accounted for as derivative instruments. The Company enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (rate lock commitments). The Company also enters into forward sales commitments for the mortgage loans underlying the rate lock commitments. The fair values of these two derivative financial instruments are collectively insignificant to the consolidated financial statements.

Net Income Per Share

Per the provisions of ASC 260, Earnings Per Share, basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding for the year, less the average number of nonvested restricted stock awards. Diluted earnings per share reflect the potential dilution from the issuance of additional shares of common stock caused by the exercise of stock options and restricted stock awards. In addition, nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities and are included in the computation of earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. ESOP shares are considered outstanding for basic and diluted earnings per share when the shares are committed to be released.

Net income is allocated between the common stock and participating securities pursuant to the two-class method, based on their rights to receive dividends, participate in earnings, or absorb losses. See Note 16 for further discussion on the Company’s earnings per share.

Recent Accounting Pronouncements

In August 2015, the FASB issued Accounting Standard Update ("ASU") No. 2015-14, “Revenue from Contracts with Customers (Topic 606)”, which defers the effective date of ASU No. 2014-09 one year. ASU No. 2014-09 created Topic 606 and supersedes Topic 605, Revenue Recognition. The core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In general, the new guidance requires companies to use more judgment and make more estimates than under current guidance, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which provides clarifying guidance in certain narrow areas and adds some practical expedients, but does not change the core revenue recognition principle in Topic 606. For financial reporting purposes, the standard allows for either full retrospective adoption, meaning the standard is applied to all of the periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period presented in the financial statements with the cumulative effect of initially applying the standard recognized at the date of initial application. A significant amount of the Company’s revenues are derived from net interest income on financial assets and liabilities, which are excluded from the scope of the amended guidance. The Company adopted this ASU on July 1, 2018. The adoption did not have a material effect on the Company's Consolidated Financial Statements. However, additional disclosures required by this ASU have been included in “Note 22 - Revenue” to the Company’s consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, "Financial Instruments (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities." The ASU amends the guidance in GAAP on the classification and measurement of financial instruments. The ASU includes the following changes: i) equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (ii) requires the use of exit price notion when measuring the fair value of financial instruments for disclosure purposes; (iii) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e. securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; (iv) allows an equity investment that does not have readily determinable fair values, to be measured at cost minus impairment (if any), plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer; (v) eliminates the requirement to disclose the method(s) and significant assumptions used to estimate

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Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, and requires a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e. securities or loans and receivables) on the balance sheet or in the accompanying notes to the financial statements; and (vii) clarifies that a valuation allowance on a deferred tax asset related to available-for-sale securities should be evaluated in combination with the organization’s other deferred tax assets. Exit price is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company adopted this ASU on July 1, 2018. The adoption did not have a material effect on the Company's Consolidated Financial Statements. The disclosures to the Company’s consolidated financial statements have been updated appropriately using the exit price notion in “Note 21 - Fair Value of Financial Instruments."

In February 2016, the FASB issued ASU 2016-02, "Leases (ASC 842)." The guidance in this ASU requires most leases to be recognized on the balance sheet as a right-of-use asset and a lease liability. It will be critical to identify leases embedded in a contract to avoid misstating the lessee’s balance sheet. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. In July 2018, the FASB issued ASU 2018-10, "Codification Improvements to Topic 842, Leases" and ASU 2018-11 "Leases (Topic 842): Targeted Improvements." ASU 2018-10 made 16 narrow-scope amendments to ASC 842. The amendments in ASU 2018-11 are intended to provide entities with relief from the costs of implementing certain aspects of the the new lease accounting standard. Specifically, an entity can elect not to recast the comparative periods presented when transitioning to ASC 842 and provides a lessor with the option to not separate lease and nonlease components when certain conditions are met. This ASU also provides a new transition method in addition to the existing transition method contained in ASU No. 2016-02 to allow entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. These amendments have the same effective date as ASU 2016-02. The effect of the adoption of these ASUs will depend on leases at time of adoption. We expect to report between $4.0 million and $6.0 million higher assets and liabilities on our Consolidated Balance Sheets as a result of including right-of-use assets and lease liabilities related to certain banking offices and certain equipment under noncancelable operating lease agreements, which currently are not reflected in our Consolidated Balance Sheets. We do not expect the guidance to have a material impact on the Consolidated Statements of Income or the Consolidated Statements of Changes in Stockholders' Equity.

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The ASU significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for all entities beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating our current expected loss methodology of our loan and investment portfolios to identify the necessary modifications in accordance with this standard and expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. A valuation adjustment to our allowance for loan losses or investment portfolio that is identified in this process will be reflected as a one-time adjustment in equity rather than earnings. The Company is in the process of compiling historical data that will be used to calculate expected credit losses on its loan portfolio to ensure it is fully compliant with the ASU at the adoption date and is evaluating the potential impact adoption of this ASU will have on its consolidated financial statements. Once adopted, the Company expects its allowance for loan losses to increase, however, until its evaluation is complete the magnitude of the increase will be unknown.

In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." The ASU amends the guidance on the classification of certain cash receipts and payments in the statement of cash flows and is intended to reduce the diversity in practice. The Company adopted this ASU on July 1, 2018. The adoption did not have a material effect on the Company's Consolidated Financial Statements.

In March 2017, FASB issued ASU 2017-08, "Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities." The ASU requires entities to amortize the premium on certain purchased callable debt securities to the earliest call date, which more closely aligns the amortization period of premiums and discounts to expectations incorporated in the market prices. Entities no longer recognize a loss in earnings upon the debtor's exercise of a call on a purchased debt security held at a premium. The ASU does not require any accounting change for debt securities held at a discount, therefore the discount will continue to be amortized as an adjustment of yield over the contractual life of the investment. The Company adopted this ASU on January 1, 2019. The adoption did not have a material effect on the Company's Consolidated Financial Statements.

In May 2017, the FASB issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting." This ASU provides clarity on the guidance related to stock compensation when there have been changes to the terms or conditions of a share-based payment award to which an entity would be required to apply modification accounting under ASC 718. The ASU provides the three following criteria must be met in order to not account for the effect of the modification of terms or conditions: the fair value, the vesting conditions and the classification as an equity or liability instrument of the modified award is the same as the original award immediately before the original award is modified. The Company adopted this ASU on July 1, 2018. The adoption did not have a material effect on the Company's Consolidated Financial Statements.

In August 2017, FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." This ASU improves the transparency and understandability of disclosures in the financial statements regarding the entities risk

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

management activities and reduces the complexity of hedge accounting. The amendments in this ASU permit hedge accounting for hedging relationships involving nonfinancial risk and interest rate risk by removing certain limitations in cash flow and fair value hedging relationships. In addition, the ASU requires an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and early adoption is permitted. The adoption of ASU No. 2017-12 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In June 2018, the FASB issued ASU No. 2018-07, "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." This ASU was issued to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Previously, these awards were recorded at the fair value of consideration received or the fair value of the equity instruments issued and was measured at the earlier of the commitment date or the date performance was completed. The amendments in this ASU require nonemployee share-based payment awards to be measured at the grant-date fair value of the equity instrument. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, but no earlier than an entity's adoption of Topic 606. The adoption of ASU No. 2018-07 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement." The amendments in this ASU removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC 820. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The adoption of ASU No. 2018-13 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In November 2018, the FASB issued ASU 2018-19, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses." This update clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. The effective date and transition requirements for this ASU are the same as ASU 2016-13. The adoption of ASU No. 2018-19 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In December 2018, the FASB issued ASU 2018-20, "Leases (Topic 842): Narrow-Scope Improvements for Lessors." The amendments in this update permit lessors, as an accounting policy election, to not evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs. Instead, those lessors will account for those costs as if they are lessee costs. A lessor making this election will exclude from the consideration in the contract and from variable payments not included in the consideration in the contract all collections from lessees of taxes within the scope of the election and will provide certain disclosures. For certain lessor costs, the lessor must exclude from variable payments, and therefore revenue, lessor costs paid by lessees directly to third parties from variable payments. In addition, the lessor must account for costs excluded from the consideration of a contract that are paid by the lessor and reimbursed by the lessee as variable payments. A lessor will record those reimbursed costs as revenue. The amendments in this ASU related to recognizing variable payments for contracts with lease and nonlease components require lessors to allocate (rather than recognize as currently required) certain variable payments to the lease and nonlease components when the changes in facts and circumstances on which the variable payment is based occur. After the allocation, the amount of variable payments allocated to the lease components will be recognized as income in profit or loss in accordance with Topic 842, while the amount of variable payments allocated to nonlease components will be recognized in accordance with other Topics, such as Topic 606. The effective date and transition requirements for this ASU are the same as ASU 2016-02. The adoption of ASU No. 2018-20 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In March 2019, the FASB issued ASU 2019-01, "Leases (Topic 842): Codification Improvements." The amendments in this update include the following items: i) determining the fair value of the underlying asset by lessors that are not manufacturers or dealers; ii) requiring cash received from lessors from sales-type and direct financing leases to be presented in the cash flow statement within investing activities; and iii) clarifying interim disclosure requirements. The effective date and transition requirements for the first and second items of this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The effective date and transition requirements for the third item of this ASU is the same as ASU 2016-02. The adoption of ASU No. 2019-01 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In April 2019, the FASB issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments." The amendments in this update are part of the FASB's ongoing project to improve codification and correcting unintended application. The items within this ASU are not expected to have significant effect on current accounting practice. The effective date and transition requirements for the amendments to Financial Instruments (ASU 2016-01) are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The effective date and transition requirements for the amendments to Financial Instruments-Credit Losses (ASU 2016-13) are the same as ASU 2016-13 noted above. The effective date and transition requirements for the amendments to Derivatives and Hedging (ASU 2017-12) are the same as ASU 2017-12 noted above.The adoption of ASU No. 2019-04 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In May 2019, the FASB issued ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief." The amendments in this update allow companies to irrevocably elect, upon the adoption of ASU 2016-13, the fair value option for financial instruments that i) were previously recorded at amortized cost and ii) are within the scope of the credit losses guidance in ASC 326-20, iii) are eligible for the fair value option under ASC 825-10, and iv) are not held-to-maturity debt securities. The effective date and transition requirements for this ASU is

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

the same as ASU 2016-13. The adoption of ASU No. 2019-05 is not expected to have a material impact on the Company's Consolidated Financial Statements.

2. Business Combinations

All business combinations are accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at acquisition date fair values. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding the closing date fair values becomes available.

United Financial of North Carolina, Inc.

On December 31, 2016, the Bank acquired United Financial of North Carolina, Inc. ("United Financial"), a municipal lease company headquartered in Fletcher, North Carolina that specializes in providing financing for fire departments and municipalities for the purchase of fire trucks and related equipment as well as the construction of fire stations and other municipal buildings across the Carolinas and other southeastern states. United Financial underwrites and originates these municipal leases and then sells them to HomeTrust and other financial institutions. Beginning January 1, 2017, United Financial has conducted business under the name United Financial, a division of HomeTrust Bank.

The total consideration paid by the Bank in the United Financial acquisition was $425. Per the merger agreement, a cash payment of $200 was paid on the acquisition date with an additional $225 paid in the third quarter of fiscal 2018; all of which was allocated to goodwill.

TriSummit Bancorp. Inc.

On January 1, 2017, HomeTrust completed its acquisition of TriSummit Bancorp, Inc., (“TriSummit”) pursuant to an Agreement and Plan of Merger, dated as of September 20, 2016, under which TriSummit merged with and into HomeTrust (the “Merger”) with HomeTrust as the surviving corporation in the Merger. Immediately following the Merger, TriSummit's wholly owned subsidiary bank, TriSummit Bank, merged with and into the Bank (together with the Merger, the “TriSummit Merger”).

Pursuant to the Merger Agreement, each share of the common stock of TriSummit and each share of Series A Preferred Stock of TriSummit issued and outstanding immediately prior to the Merger (on an as converted basis to a share of TriSummit common stock) was converted into the right to receive $4.40 in cash and .2099 shares of HomeTrust common stock, with cash paid in lieu of fractional share interests. At the Merger date, 50% of outstanding options granted by TriSummit were canceled. The remaining options were assumed by HomeTrust and converted into options to purchase 86,185 shares of HomeTrust Common Stock. In addition, TriSummit’s $7,222 Series B, Series C and Series D TARP preferred stock (all held by private shareholders) was redeemed in connection with the closing of the merger.

The total consideration paid by HomeTrust in the TriSummit Merger approximates $36,126. The total number of HomeTrust shares issued was 765,277 shares. HomeTrust paid aggregate cash consideration of approximately $16,083.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

The following table presents the consideration paid by the Company in the acquisition of TriSummit and the assets acquired and liabilities assumed as of January 1, 2017:

	As Recorded by TriSummit		Fair Value and Other Merger Related Adjustments			As Recorded by the Company
Consideration Paid:
Cash paid including cash in lieu of fractional shares						$	16,083
Fair value of HomeTrust common stock at $25.90 per share						20,043
Total consideration						$	36,126
Assets:
Cash and cash equivalents	$	5,498	$	—		$	5,498
Certificates of deposit in other banks	250		—			250
Investment securities	58,728		(203		)	58,525
Other investments, at cost	2,614		—			2,614
Loans, net	261,926		(3,867		)	258,059
Premises and equipment, net	12,841		(2,419		)	10,422
REO	1,633		(122		)	1,511
Deferred income taxes	2,653		4,462			7,115
Bank owned life insurance	3,762		—			3,762
Core deposit intangibles	1,285		1,575			2,860
Other assets	1,453		(105		)	1,348
Total assets acquired	$	352,643	$	(679	)	$	351,964
Liabilities:
Deposits	$	279,647	$	587		280,234
Borrowings	47,453		16			47,469
Other liabilities	675		—			675
Total liabilities assumed	$	327,775	$	603		$	328,378
Net identifiable assets acquired over liabilities assumed	$	24,868	$	(1,282	)	$	23,586
Goodwill						$	12,540

The carrying amount of acquired loans from TriSummit as of January1, 2017 consisted of purchased performing loans and Purchase Credit Impaired ("PCI") loans as detailed in the following table:

	Purchased Performing		PCI		Total Loans
Retail Consumer Loans:
One-to-four family	$	75,179	$	3,753	$	78,932
HELOCs	6,479		2		6,481
Construction and land/lots	15,591		—		15,591
Consumer	1,686		17		1,703
Commercial:
Commercial real estate	107,880		3,494		111,374
Construction and development	15,253		142		15,395
Commercial and industrial	28,295		288		28,583
Total	$	250,363	$	7,696	$	258,059

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

The following table presents the performing loans receivable purchased from TriSummit at January 1, 2017, the acquisition date:

Contractually required principal payments receivable	$	255,852
Adjustment for credit, interest rate, and liquidity	5,489
Balance of purchased loans receivable	$	250,363

The following table presents the PCI loans acquired from TriSummit at January 1, 2017, the acquisition date:

Contractually required principal and interest payments receivable	$	11,474
Amounts not expected to be collected - nonaccretable difference	2,490
Estimated payments expected to be received	8,984
Accretable yield	1,288
Fair value of PCI loans	$	7,696

3. Debt Securities

Securities available for sale consist of the following at the dates indicated:

	June 30, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Government Agencies	$	15,099	$	122	$	(11	)	$	15,210
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises	74,778		586		(184		)	75,180
Municipal Bonds	24,896		423		(7		)	25,312
Corporate Bonds	6,061		43		(20		)	6,084
Total	$	120,834	$	1,174	$	(222	)	$	121,786

	June 30, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Government Agencies	$	48,025	$	1	$	(484	)	$	47,542
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises	71,949		88		(1,438		)	70,599
Municipal Bonds	30,865		127		(226		)	30,766
Corporate Bonds	6,166		25		(168		)	6,023
Equity Securities	63		—					$	63
Total	$	157,068	$	241	$	(2,316	)	$	154,993

Debt securities available for sale by contractual maturity at the dates indicated are shown below. Mortgage-backed securities are not included in the maturity categories because the borrowers in the underlying pools may prepay without penalty; therefore, it is unlikely that the securities will pay at their stated maturity schedule.

	June 30, 2019
	Amortized Cost		Estimated Fair Value
Due within one year	$	5,350	$	5,359
Due after one year through five years	30,526		30,784
Due after five years through ten years	5,538		5,798
Due after ten years	4,642		4,665
Mortgage-backed securities	74,778		75,180
Total	$	120,834	$	121,786

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

	June 30, 2018
	Amortized Cost		Estimated Fair Value
Due within one year	$	28,728	$	28,573
Due after one year through five years	41,273		40,663
Due after five years through ten years	5,749		5,829
Due after ten years	9,306		9,266
Mortgage-backed securities	71,949		70,599
Total	$	157,005	$	154,930

Gross proceeds and gross realized gains and losses from sales of securities recognized in net income follow:

	June 30,
	2019		2018		2017
Gross proceeds from sales of securities	$	—	$	—	$	19,279
Gross realized gains from sales of securities	—		—		70
Gross realized losses from sales of securities	—		—		(48		)

Securities available for sale with amortized costs totaling $94,337 and $136,914 and market values of $94,876 and $135,313 at June 30, 2019 and June 30, 2018, respectively, were pledged as collateral to secure various public deposits and borrowings.

The gross unrealized losses and the fair value for securities available for sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2019 and June 30, 2018 were as follows:

	June 30, 2019
	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Government Agencies	$	—	$	—		$	6,988	$	(11	)	$	6,988	$	(11	)
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises	1,144		(3		)	24,242		(181		)	25,386		(184		)
Municipal Bonds	—		—			4,895		(7		)	4,895		(7		)
Corporate Bonds	393		(5		)	3,630		(15		)	4,023		(20		)
Total	$	1,537	$	(8	)	$	39,755	$	(214	)	$	41,292	$	(222	)

	June 30, 2018
	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Government Agencies	$	10,962	$	(93	)	$	35,605	$	(391	)	$	46,567	$	(484	)
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises	39,238		(827		)	21,297		(611		)	60,535		(1,438		)
Municipal Bonds	19,795		(208		)	1,446		(18		)	21,241		(226		)
Corporate Bonds	$	—	$	—		$	3,566	$	(168	)	$	3,566	$	(168	)
Total	$	69,995	$	(1,128	)	$	61,914	$	(1,188	)	$	131,909	$	(2,316	)

The total number of securities with unrealized losses at June 30, 2019, and June 30, 2018 were 100 and 218, respectively. Unrealized losses on securities have not been recognized in income because management has the intent and ability to hold the securities for the foreseeable future, and has determined that it is not more likely than not that the Company will be required to sell the securities prior to a recovery in value. The decline in fair value was largely due to increases in market interest rates. The Company had no other than temporary impairment losses during the years ended June 2019, 2018 or 2017.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

4. Other Investments

Other investments, at cost consist of the following at the dates indicated:

	June 30, 2019		June 30, 2018
FHLB of Atlanta stock	$	31,969	$	29,907
FRB stock	7,335		7,307
Small Business Investment Companies ("SBIC") investments	6,074		4,717
Total	$	45,378	$	41,931

As a requirement for membership, the Bank invests in the stock of both the FHLB of Atlanta and the FRB. No ready market exists for these securities so carrying value approximates their fair value based on the redemption provisions of the FHLB of Atlanta and the FRB, respectively. SBIC investments are equity securities without a readily determinable fair value. Prior to the adoption of ASU 2016-01, SBIC investments were maintained in other assets.

5. Loans

Loans consist of the following at the dates indicated:

	June 30, 2019			June 30, 2018
Retail consumer loans:
One-to-four family	$	660,591		$	664,289
HELOCs - originated	131,095			137,564
HELOCs - purchased	116,972			166,276
Construction and land/lots	80,602			65,601
Indirect auto finance	153,448			173,095
Consumer	19,756			12,379
Total retail consumer loans	1,162,464			1,219,204
Commercial loans:
Commercial real estate	927,261			857,315
Construction and development	210,916			192,102
Commercial and industrial	160,471			135,336
Equipment finance	132,058			13,487
Municipal leases	112,016			109,172
Total commercial loans	1,542,722			1,307,412
Total loans	2,705,186			2,526,616
Deferred loan costs (fees), net	4			(764		)
Total loans, net of deferred loan fees	2,705,190			2,525,852
Allowance for loan and lease losses	(21,429		)	(21,060		)
Net loans	$	2,683,761		$	2,504,792

All qualifying one-to-four family first mortgage loans, HELOCs, commercial real estate loans, and FHLB Stock are pledged as collateral by a blanket pledge to secure outstanding FHLB advances.

Loans are made to the Company's executive officers and directors and their associates during the ordinary course of business. The aggregate amount of loans to related parties totaled approximately $1,800 and $409 at June 30, 2019 and 2018, respectively. In relation to these loans are unfunded commitments that totaled approximately $118 and $287 at June 30, 2019 and 2018, respectively.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

The Company’s total non-purchased and purchased performing loans by segment, class, and risk grade at the dates indicated follows:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2019
Retail consumer loans:
One-to-four family	$	644,159	$	2,089	$	8,072	$	384	$	19	$	654,723
HELOCs - originated	129,775		111		976		—		8		130,870
HELOCs - purchased	116,306		—		666		—		—		116,972
Construction and land/lots	79,995		71		164		—		—		80,230
Indirect auto finance	152,393		13		1,042				—		153,448
Consumer	18,601		656		491		3		5		19,756
Commercial loans:
Commercial real estate	901,214		8,066		10,306		—		—		919,586
Construction and development	207,827		790		1,357		1		—		209,975
Commercial and industrial	157,325		877		600		—		—		158,802
Equipment finance	131,674		—		384		—		—		132,058
Municipal leases	111,721		295		—		—		—		112,016
Total loans	$	2,650,990	$	12,968	$	24,058	$	388	$	32	$	2,688,436

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2018
Retail consumer loans:
One-to-four family	$	643,077	$	3,576	$	10,059	$	746	$	14	$	657,472
HELOCs - originated	135,336		113		1,735		150		6		137,340
HELOCs - purchased	166,089		—		187		—		—		166,276
Construction and land/lots	64,823		23		257		54		—		65,157
Indirect auto finance	172,675		—		420		—		—		173,095
Consumer	11,723		85		558		2		11		12,379
Commercial loans:
Commercial real estate	835,485		5,804		6,787		—		—		848,076
Construction and development	187,187		621		2,067		—		—		189,875
Commercial and industrial	131,690		1,279		414		—		—		133,383
Equipment finance	13,487		—		—		—		—		13,487
Municipal leases	108,864		308		—		—		—		109,172
Total loans	$	2,470,436	$	11,809	$	22,484	$	952	$	31	$	2,505,712

The Company’s total PCI loans by segment, class, and risk grade at the dates indicated follows:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2019
Retail consumer loans:
One-to-four family	$	4,124	$	248	$	1,496	$	—	$	—	$	5,868
HELOCs - originated	225		—		—		—		—		225
Construction and land/lots	142		—		230		—		—		372
Commercial loans:
Commercial real estate	4,503		1,903		1,300		—		—		7,706
Construction and development	453		—		488		—		—		941
Commercial and industrial	1,666		—		—		—		3		1,669
Total loans	$	11,113	$	2,151	$	3,514	$	—	$	3	$	16,781

93

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2018
Retail consumer loans:
One-to-four family	$	4,620	$	388	$	1,809	$	—	$	—	$	6,817
HELOCs - originated	224		—		—		—		—		224
Construction and land/lots	444		—		—		—		—		444
Commercial loans:
Commercial real estate	4,718		2,162		2,359		—		—		9,239
Construction and development	547		—		1,680		—		—		2,227
Commercial and industrial	1,894		—		59		—		—		1,953
Total loans	$	12,447	$	2,550	$	5,907	$	—	$	—	$	20,904

The Company’s total loans by segment, class, and delinquency status at the dates indicated follows:

	Past Due								Total
	30-89 Days		90 Days+		Total		Current		Loans
June 30, 2019
Retail consumer loans:
One-to-four family	$	1,615	$	1,389	$	3,004	$	657,587	$	660,591
HELOCs - originated	226		208		434		130,661		131,095
HELOCs - purchased	—		485		485		116,487		116,972
Construction and land/lots	138		6		144		80,458		80,602
Indirect auto finance	459		237		696		152,752		153,448
Consumer	6		31		37		19,719		19,756
Commercial loans:
Commercial real estate	2,279		516		2,795		924,466		927,261
Construction and development	—		1,133		1,133		209,783		210,916
Commercial and industrial	207		99		306		160,165		160,471
Equipment finance	649		384		1,033		131,025		132,058
Municipal leases	—		—		—		112,016		112,016
Total loans	$	5,579	$	4,488	$	10,067	$	2,695,119	$	2,705,186

	Past Due								Total
	30-89 Days		90 Days+		Total		Current		Loans
June 30, 2018
Retail consumer loans:
One-to-four family	$	3,001	$	1,756	$	4,757	$	659,532	$	664,289
HELOCs - originated	98		268		366		137,198		137,564
HELOCs - purchased	—		—		—		166,276		166,276
Construction and land/lots	44		54		98		65,503		65,601
Indirect auto finance	335		127		462		172,633		173,095
Consumer	238		39		277		12,102		12,379
Commercial loans:
Commercial real estate	169		1,412		1,581		855,734		857,315
Construction and development	260		1,928		2,188		189,914		192,102
Commercial and industrial	15		69		84		135,252		135,336
Equipment finance	—		—		—		13,487		13,487
Municipal leases	—		—		—		109,172		109,172
Total loans	$	4,160	$	5,653	$	9,813	$	2,516,803	$	2,526,616

94

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

The Company’s recorded investment in loans, by segment and class that are not accruing interest or are 90 days or more past due and still accruing interest at the dates indicated follow:

	June 30, 2019				June 30, 2018
	Nonaccruing		90 Days + & still accruing		Nonaccruing		90 Days + & still accruing
Retail consumer loans:
One-to-four family	$	3,223	$	—	$	4,308	$	—
HELOCs - originated	348		—		656		—
HELOCs - purchased	666		—		187		—
Construction and land/lots	6		—		165		—
Indirect auto finance	463		—		255		—
Consumer	45		—		321		—
Commercial loans:
Commercial real estate	3,559		—		2,863		—
Construction and development	1,357		—		2,045		—
Commercial and industrial	307		—		114		—
Equipment finance	384		—		—		—
Municipal leases	—		—		—		—
Total loans	$	10,358	$	—	$	10,914	$	—

PCI loans totaling $1,344at June 30, 2019 and $3,353 at June 30, 2018 are excluded from nonaccruing loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations.

TDRs are loans which have renegotiated loan terms to assist borrowers who are unable to meet the original terms of their loans. Such modifications to loan terms may include a lower interest rate, a reduction in principal, or a longer term to maturity. Additionally, all TDRs are considered impaired.

The Company’s loans that were performing under the payment terms of TDRs that were excluded from nonaccruing loans above at the dates indicated follows:

	June 30, 2019		June 30, 2018
Performing TDRs	$	23,116	$	21,251

An analysis of the allowance for loan losses by segment for the periods shown is as follows:

	June 30, 2019
	PCI			Retail Consumer			Commercial			Total
Balance at beginning of period	$	483		$	7,527		$	13,050		$	21,060
Provision for (recovery of) loan losses	(282		)	(1,244		)	7,226			5,700
Charge-offs	—			(1,136		)	(6,273		)	(7,409		)
Recoveries	—			1,272			806			2,078
Balance at end of period	$	201		$	6,419		$	14,809		$	21,429

	June 30, 2018
	PCI			Retail Consumer			Commercial			Total
Balance at beginning of period	$	727		$	8,585		$	11,839		$	21,151
Provision for (recovery of) loan losses	228			(906		)	678			—
Charge-offs	(472		)	(1,142		)	(1,033		)	(2,647		)
Recoveries	—			990			1,566			2,556
Balance at end of period	$	483		$	7,527		$	13,050		$	21,060

95

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

	June 30, 2017
	PCI		Retail Consumer			Commercial			Total
Balance at beginning of period	$	361	$	11,549		$	9,382		$	21,292
Provision for (recovery of) loan losses	366		(2,829		)	2,463			—
Charge-offs	—		(1,219		)	(1,331		)	(2,550		)
Recoveries	—		1,084			1,325			2,409
Balance at end of period	$	727	$	8,585		$	11,839		$	21,151

The Company’s ending balances of loans and the related allowance, by segment and class, at the dates indicated follows:

	Allowance for Loan Losses								Total Loans Receivable
	PCI		Loans individually evaluated for impairment		Loans Collectively Evaluated		Total		PCI		Loans individually evaluated for impairment		Loans Collectively Evaluated		Total
June 30, 2019
Retail consumer loans:
One-to-four family	$	62	$	74	$	2,375	$	2,511	$	5,868	$	5,318	$	649,405	$	660,591
HELOCs - originated	—		7		1,023		1,030		225		7		130,863		131,095
HELOCs - purchased	—		—		518		518		—		—		116,972		116,972
Construction and land/lots	—		—		1,265		1,265		372		323		79,907		80,602
Indirect auto finance	—		—		927		927		—		—		153,448		153,448
Consumer	—		4		226		230		—		4		19,752		19,756
Commercial loans:
Commercial real estate	118		28		7,890		8,036		7,706		8,692		910,863		927,261
Construction and development	4		5		3,187		3,196		941		1,397		208,578		210,916
Commercial and industrial	17		2		1,957		1,976		1,669		2		158,800		160,471
Equipment finance	—		—		1,305		1,305		—		—		132,058		132,058
Municipal leases	—		—		435		435		—		—		112,016		112,016
Total	$	201	$	120	$	21,108	$	21,429	$	16,781	$	15,743	$	2,672,662	$	2,705,186
June 30, 2018
Retail consumer loans:
One-to-four family	$	98	$	125	$	3,137	$	3,360	$	6,817	$	7,104	$	650,368	$	664,289
HELOCs - originated	—		6		1,117		1,123		224		452		136,888		137,564
HELOCs - purchased	—		—		795		795		—		—		166,276		166,276
Construction and land/lots	—		19		1,134		1,153		444		583		64,574		65,601
Indirect auto finance	—		—		1,126		1,126		—		—		173,095		173,095
Consumer	—		11		57		68		—		11		12,368		12,379
Commercial loans:
Commercial real estate	138		28		8,029		8,195		9,239		3,511		844,565		857,315
Construction and development	229		8		3,109		3,346		2,227		2,223		187,652		192,102
Commercial and industrial	18		—		1,458		1,476		1,953		—		133,383		135,336
Equipment finance	—		—		—		—		—		—		13,487		13,487
Municipal leases	—		—		418		418		—		—		109,172		109,172
Total	$	483	$	197	$	20,380	$	21,060	$	20,904	$	13,884	$	2,491,828	$	2,526,616

Loans acquired from acquisitions are initially excluded from the allowance for loan losses in accordance with the acquisition method of accounting for business combinations. The Company records these loans at fair value, which includes a credit discount, therefore, no allowance for loan

96

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

losses is established for these acquired loans at acquisition. A provision for loan losses is recorded for any further deterioration in these acquired loans subsequent to the acquisition.

The Company’s impaired loans and the related allowance, by segment and class, excluding PCI loans, at the dates indicated follows:

	Total Impaired Loans
	Unpaid Principal Balance		Recorded Investment						Related Recorded Allowance
			With a Recorded Allowance		With No Recorded Allowance		Total
June 30, 2019
Retail consumer loans:
One-to-four family	$	18,302	$	12,461	$	3,152	$	15,613	$	472
HELOCs - originated	1,262		564		130		694		9
HELOCs - purchased	666		—		666		666		—
Construction and land/lots	1,917		957		323		1,280		26
Indirect auto finance	601		353		137		490		2
Consumer	1,527		7		1,130		1,137		43
Commercial loans:
Commercial real estate	10,127		6,434		3,404		9,838		36
Construction and development	2,574		940		791		1,731		7
Commercial and industrial	10,173		354		768		1,122		6
Equipment finance	462		—		384		384		—
Total impaired loans	$	47,611	$	22,070	$	10,885	$	32,955	$	601
June 30, 2018
Retail consumer loans:
One-to-four family	$	23,295	$	16,035	$	4,140	$	20,175	$	554
HELOCs - originated	2,544		1,017		737		1,754		9
HELOCs - purchased	187		—		187		187		—
Construction and land/lots	2,348		1,098		446		1,544		53
Indirect auto finance	395		122		133		255		1
Consumer	501		12		46		58		11
Commercial loans:
Commercial real estate	5,343		2,862		2,246		5,108		42
Construction and development	3,166		828		1,217		2,045		14
Commercial and industrial	4,898		235		—		235		3
Total impaired loans	$	42,677	$	22,209	$	9,152	$	31,361	$	687

The table above includes $17,212 and $17,477 of impaired loans that were not individually evaluated at June 30, 2019 and June 30, 2018, respectively, because these loans did not meet the Company’s threshold for individual impairment evaluation. The recorded allowance above includes $481 and $490 related to these loans that were not individually evaluated at June 30, 2019 and June 30, 2018, respectively.

97

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

The Company’s average recorded investment and interest income recognized on impaired loans as of the dates indicated follows:

	Year Ended
	June 30, 2019				June 30, 2018				June 30, 2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Retail consumer loans:
One-to-four family	$	17,319	$	950	$	23,257	$	1,170	$	25,256	$	1,147
HELOCs - originated	1,005		63		2,304		104		2,548		152
HELOCs - purchased	320		13		189		15		48		12
Construction and land/lots	1,441		94		1,575		109		1,734		139
Indirect auto finance	373		29		256		23		106		2
Consumer	1,328		67		43		17		35		20
Commercial loans:
Commercial real estate	5,026		466		6,496		209		7,771		272
Construction and development	1,779		65		2,703		56		2,450		58
Commercial and industrial	315		249		1,205		60		2,737		125
Equipment finance	192		37		—		—		—		—
Municipal leases	—		—		75		—		406		18
Total loans	$	29,098	$	2,033	$	38,103	$	1,763	$	43,091	$	1,945

A summary of changes in the accretable yield for PCI loans for the periods indicated follows:

	Year Ended June 30, 2019			Year Ended June 30, 2018
Accretable yield, beginning of period	$	5,734		$	7,080
Reclass from nonaccretable yield (1)	576			513
Other changes, net (2)	1,018			393
Interest income	(2,069		)	(2,252		)
Accretable yield, end of period	$	5,259		$	5,734

______________________________

(1) Represents changes attributable to expected losses assumptions.

(2) Represents changes in cash flows expected to be collected due to the impact of modifications, changes in prepayment assumptions, and changes in interest rates.

The following table presents carrying values and unpaid principal balances for PCI loans at the dates indicated below:

	June 30, 2019		June 30, 2018
Carrying value of PCI loans	$	16,750	$	20,904
Unpaid principal balance of PCI loans	$	20,141	$	25,746

98

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

The following table presents a breakdown of the types of concessions made on TDRs by loan class for the periods indicated below:

	Year Ended June 30, 2019					Year Ended June 30, 2018					Year Ended June 30, 2017
	Number of Loans	Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment		Number of Loans	Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment		Number of Loans	Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment
Below market interest rate:
Retail consumer:
One-to-four family	1	$	85	$	84	—	$	—	$	—	3	$	288	$	285
Construction and land/lots	—	—		—		—	—		—		2	80		79
Commercial:
Total	1	$	85	$	84	—	$	—	$	—	5	$	368	$	364
Extended payment terms:
Retail consumer:
One-to-four family	1	$	34	$	34	4	$	514	$	502	5	$	186	$	179
HELOCs - originated	—	—		—		—	—		—		1	37		37
Construction and land/lots	—	—		—		1	36		32		1	280		264
Consumer	2	34		33		—	—		—		2	11		11
Commercial:
Construction and development	—	—		—		—	—		—		1	439		439
Commercial and industrial	—	—		—		—	—		$	—	2	52		$	50
Total	3	$	68	$	67	5	$	550	$	534	12	$	1,005	$	980
Other TDRs:
Retail consumer:
One-to-four family	18	$	1,452	$	1,433	25	$	3,646	$	3,747	13	$	525	$	517
HELOCs - originated	—	—		—		—	—		—		2	33		31
Construction and land/lots	1	29		28		—	—		—		4	404		318
Indirect auto finance	1	33		26		—	—		—		—	—		—
Consumer	1	2		2		1	2		2		—	—		—
Commercial:
Commercial real estate	3	5,440		5,427		—	—		—		3	2,349		2,035
Construction and development	1	182		182		—	—		—		—	—		—
Commercial and industrial	—	—		—		—	—		—		2	231		227
Total	25	$	7,138	$	7,098	26	$	3,648	$	3,749	24	$	3,542	$	3,128
Total	29	$	7,291	$	7,249	31	$	4,198	$	4,283	41	$	4,915	$	4,472

99

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

The following table presents loans that were modified as TDRs within the previous 12 months and for which there was a payment default during the periods indicated below:

	Year Ended June 30, 2019			Year Ended June 30, 2018			Year Ended June 30, 2017
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Other TDRs:
Retail consumer:
One-to-four family	1	$	72	5	$	277	2	$	27
Construction and land/lots	—	—		—	—		1	19
Consumer	1	2		—	—		—	—
Total Other TDRs	2	$	74	5	$	277	3	$	46
Total	2	$	74	5	$	277	3	$	46

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

In the determination of the allowance for loan losses, management considers TDRs for all loan classes, and the subsequent nonperformance in accordance with their modified terms, by measuring impairment on a loan-by-loan basis based on either the value of the loan’s expected future cash flows discounted at the loan’s original effective interest rate or on the collateral value, net of the estimated costs of disposal, if the loan is collateral dependent.

6. Premises and Equipment

Premises and equipment as of the dates indicated consist of the following:

	June 30,
	2019			2018
Land	$	19,730		$	19,934
Land held under capital lease	2,052			2,052
Office buildings	58,952			57,873
Furniture, fixtures and equipment	15,918			15,582
Total	96,652			95,441
Less accumulated depreciation	(35,601		)	(32,904		)
Premises and equipment, net	$	61,051		$	62,537

7. Accrued Interest Receivable

Accrued interest receivable as of the dates indicated consists of the following:

	June 30,
	2019		2018
Loans	$	9,433	$	8,164
Securities available for sale	690		776
Other	410		404
Total	$	10,533	$	9,344

100

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

8. Real Estate Owned

The activity within REO for the periods shown is as follows:

	Year Ended
	June 30,
	2019			2018
Balance at beginning of period	$	3,684		$	6,318
Transfers from loans	731			1,346
Sales, net of gain/loss	(1,191		)	(3,471		)
Writedowns	(295		)	(539		)
Capital improvements	—			30
Balance at end of period	$	2,929		$	3,684

At June 30, 2019 and 2018, the Bank had $1,018 and $998, respectively, of foreclosed residential real estate property in REO. The recorded investment in consumer mortgage loans collateralized by residential real estate in the process of foreclosure totaled $243 and $395 for June 30, 2019 and 2018, respectively.

9. Goodwill and Core Deposit Intangibles

The carrying amount of the Company's goodwill was $25,638 as of June 30, 2019 and 2018.

Amortization expense related to core deposit intangibles was $2,029, $2,645, and $2,823 for the years ended June 30, 2019, 2018, and 2017, respectively.

As of June 30, 2019, estimated amortization expense for each of the next five years is as follows:

2020	$	1,414
2021	741
2022	251
2023	90
2024	3
Total	$	2,499

10. Deposit Accounts

Deposit accounts at the dates indicated consist of the following:

					Weighted Average Interest Rates
	June 30,				June 30,
	2019		2018		2019		2018
Noninterest-bearing accounts	$	294,322	$	317,822	—	%	—	%
NOW accounts	452,295		471,364		0.15	%	0.11	%
Money market accounts	691,172		677,665		0.89	%	0.48	%
Savings accounts	177,278		213,250		0.12	%	0.13	%
Certificates of deposit	712,190		516,152		1.99	%	1.01	%
Total	$	2,327,257	$	2,196,253	0.91	%	0.42	%

Deposits received from executive officers and directors and their associates totaled approximately $4,448 and $5,692 at June 30, 2019 and 2018, respectively.

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Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

As of June 30, 2019, maturities of certificates of deposit are as follows:

2020	$	515,519
2021	114,927
2022	52,905
2023	17,868
2024	10,971
Thereafter	—
Total	$	712,190

Certificates of deposit with balances of $250 or greater totaled $93,654 and $70,553 at June 30, 2019 and 2018, respectively. Generally, deposit amounts in excess of $250 are not federally insured.

Interest expense on deposits at the dates indicated consists of the following:

	June 30,
	2019		2018		2017
NOW accounts	$	1,251	$	970	$	772
Money market accounts	5,102		2,442		1,405
Savings accounts	245		295		308
Certificates of deposit	9,159		3,051		2,103
Total	$	15,757	$	6,758	$	4,588

11. Borrowings

Borrowings consist of the following at the dates indicated:

	June 30,
	2019				2018
	Balance		Weighted Average Rate		Balance		Weighted Average Rate
FHLB Advances	$	680,000	2.10	%	$	635,000	1.95	%

The scheduled maturity dates, call dates, and related interest rates on FHLB advances at June 30, 2019:

Maturity Date	Interest Rate	Call Date	Outstanding Amount
7/1/2019	2.47%	—	$	15,000
7/8/2019	2.40%	—	45,000
7/8/2019	2.44%	—	135,000
7/10/2019	2.40%	—	10,000
7/10/2019	2.42%	—	40,000
7/15/2019	2.33%	—	130,000
7/29/2019	2.33%	—	5,000
9/20/2019	0.86%	9/20/2019	25,000
3/6/2028	1.72%	9/6/2019	100,000
3/22/2028	1.82%	9/23/2019	50,000
6/5/2028	1.87%	9/5/2019	50,000
9/13/2028	1.76%	9/13/2019	25,000
11/24/2028	2.07%	11/26/2019	25,000
11/24/2028	1.79%	8/26/2019	25,000
			$	680,000

All qualifying one-to-four family first mortgage loans, HELOCs, commercial real estate loans, FHLB stock, and certain investment securities were pledged as collateral to secure the FHLB advances.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

At June 30, 2019 and 2018, the Company had the ability to borrow $89,499 and $79,226, respectively, in additional FHLB advances. At June 30, 2019 and 2018, the Company had an unused line of credit with the FRB for $130,036 and $132,349, respectively. At June 30, 2019 and 2018, the Company had unused lines of credit with three unaffiliated banks for $70,000 and $60,000, respectively.

12. Leases

As Lessee

The Company leases certain real property under long-term operating lease agreements. Rent expense under operating leases was $1,847, $1,829, and $1,583 for the years ended June 30, 2019, 2018, and 2017, respectively.

The following schedule summarizes aggregate future minimum lease payments under these operating leases at June 30, 2019:

Fiscal year ending June 30:
2020	$	1,660
2021	1,395
2022	1,296
2023	1,291
2022	643
Thereafter	1,076
Total of future minimum payments	$	7,361

The Company currently leases land for one of its retail office locations under a capital lease. Leases that meet the criteria for capitalization are recorded as assets and the related obligations are reflected as capital lease obligations on the accompanying balance sheets, because the lease has been deemed to have a bargain purchase option. Included in premises and equipment at June 30, 2019 and June 30, 2018 is $2,052 as the capitalized cost of the leased land.

Aggregate future minimum lease payments due under this capital lease obligation as of June 30, 2019 are as follows:

Fiscal year ending June 30, 2019:
2020	$	134
2021	134
2022	134
2023	134
2023	145
Thereafter	1,995
Total minimum lease payments	2,676
Less: amount representing interest	(796		)
Present value of net minimum lease payments	$	1,880

As Lessor

The Company's new Equipment Finance line of business first began in May 2018 and offers operating leases as a financing option. Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of noninterest expense. Leased assets totaled $10.0 million with a residual value of $5.8 million as of June 30, 2019. For the year ended June 30, 2019, total operating lease income totaled $936.

The following schedule summarizes aggregate future minimum lease payments to be received at June 30, 2019:

Fiscal year ending June 30:
2020	$	2,066
2021	4,499
2022	3,011
2023	175
2022	244
Thereafter	—
Total of future minimum payments	$	9,995

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

13. Income Taxes

Income tax expense as of the dates indicated consists of:

	June 30,
	2019			2018		2017
Current:
Federal	$	755		$	291	$	191
State	690			324		54
Total current expense	1,445			615		245
Deferred:
Federal	5,404			7,909		4,561
State	267			625		386
Adjustment due to the Tax Cuts and Jobs Act (“Tax Act”)	(325		)	17,587		—
Total deferred expense	5,346			26,121		4,947
Total income tax expense	$	6,791		$	26,736	$	5,192

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to income before income taxes as a result of the following differences for the periods indicated:

	Year Ended June 30,
	2019					2018					2017
	$			Rate		$			Rate		$			Rate
Tax at federal income tax rate	$	7,127		21	%	$	9,617		28	%	$	5,793		34	%
Increase (decrease) resulting from:
Tax exempt income	(855		)	(2	)%	(1,075		)	(3	)%	(1,391		)	(8	)%
Nondeductible merger expenses	—			—	%	—			—	%	91			1	%
Change in valuation allowance for deferred tax assets, allocated to income tax expense	(325		)	(1	)%	87			—	%	(327		)	(2	)%
State tax, net of federal benefit	756			2	%	688			2	%	290			2	%
Change in deferred tax assets due to the Tax Act	—			—	%	17,587			50	%	—			—	%
Other	88			—	%	(168		)	(1	)%	736			4	%
Total	$	6,791		20	%	$	26,736		76	%	$	5,192		31	%

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

The sources and tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at June 30, 2019 and 2018 are presented below:

	June 30,
	2019			2018
Deferred tax assets:
Alternative minimum tax credit	$	4,799		$	4,920
Allowance for loan losses	4,685			4,637
Deferred compensation and post-retirement benefits	8,988			9,400
Accrued vacation and sick leave	18			18
Impairments on real estate owned	461			495
Other than temporary impairment on investments	2,232			2,254
Net operating loss carryforward	5,092			8,635
Discount from business combination	2,373			2,605
Unrealized loss on securities held for sale	—			477
Stock compensation plans	2,162			2,271
Other	1,140			1,562
Total gross deferred tax assets	31,950			37,274
Less valuation allowance	—			(325		)
Deferred tax assets	31,950			36,949
Deferred tax (liabilities):
Depreciable basis of fixed assets	(1,089		)	(566		)
Deferred loan fees	(520		)	(453		)
FHLB stock, book basis in excess of tax	(89		)	(89		)
Unrealized gain on securities available for sale	(219		)	—
Other	(3,510		)	(3,276		)
Total gross deferred tax liabilities	(5,427		)	(4,384		)
Net deferred tax assets	$	26,523		$	32,565

The enactment of the Tax Act and subsequent Internal Revenue Service guidelines reduced the statutory federal corporate income tax rate to 21% effective January 1, 2018, requiring the Company to revalue its DTA. The resulting $17.6 million in adjustments were reflected as an increase to the Company's income tax expense with an additional $325,000 in income tax expense during the fiscal year ended June 30, 2018 to establish a tax valuation allowance on our alternative minimum tax ("AMT") credits. In addition, our June 30, 2018 fiscal year end required the use of a blended federal income tax rate as prescribed by the Internal Revenue Code. The blended federal income tax rate of 27.5% was retroactively effective July 1, 2017 and was used for the entire fiscal year ended June 30, 2018.

The Company had federal net operating loss ("NOL") carry forwards of $24,248 and $40,780 as of June 30, 2019 and June 30, 2018, respectively, with a recorded tax benefit of $5,092 and $8,635 included in deferred tax assets. The majority of these NOLs will expire for federal tax purposes from 2024 through 2036.

The valuation allowance for deferred tax assets as of June 30, 2019 and 2018 was $0 and $325, respectively. The valuation allowance of $325 was reversed during the year ended June 30, 2019 based on clarifying guidance released by the Internal Revenue Service related to the treatment of AMT credits under the Tax Act. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management performed a robust evaluation of the Company’s deferred tax assets at June 30, 2019 and June 30, 2018. Management considered all available positive and negative evidence including the possibility of future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and recent financial performance in making this assessment. Based upon this evaluation, management believes there is more positive evidence than negative evidence and it is more likely than not the Company will realize the benefits of these deductible differences, net of the existing valuation allowances at June 30, 2019 and June 30, 2018. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if negative trends occur with credit quality and earnings during the carryforward period.

Retained earnings at June 30, 2019 and 2018 include $19,570 representing pre-1988 tax bad debt reserve base year amounts for which no deferred tax liability has been provided since these reserves are not expected to reverse and may never reverse. Circumstances that would require an accrual of a portion or all of this unrecorded tax liability are a failure to meet the definition of a bank, dividend payments in excess of current year or accumulated earnings and profits, or other distributions in dissolution or liquidation of the Bank. The Company is no longer subject to examination for federal and state purposes for tax years prior to 2015.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

14. Employee Benefit Plans

The HomeTrust Bank KSOP Plan ("KSOP") is comprised of two components, the 401(k) Plan and the ESOP. The KSOP benefits employees with at least 1000 hours of service during a 12-month period and who have attained age 21. Under the 401(k), the Company matches employee contributions at 50% of employee deferrals up to 6% of each employee’s compensation. The Company may also make discretionary profit sharing contributions for the benefit of all eligible participants as long as total contributions do not exceed applicable limitations. Employees become fully vested in the Company’s contributions after six years of service. Under the ESOP, the amount of the Bank's annual contribution is discretionary, however it must be sufficient to pay the annual loan payment to the Company.

The Company’s expense for 401(k) contributions to this plan was $810, $737, and $450 for the years ended June 30, 2019, 2018, and 2017, respectively. The Company's expense related to the ESOP for the fiscal year ended June 30, 2019, 2018, and 2017 was $1,422, $1,367, and $1,186, respectively. 

Shares held by the ESOP at the dates indicated include the following:

	June 30,
	2019		2018
Unallocated ESOP shares	687,700		740,600
Allocated ESOP shares	317,400		264,500
ESOP shares committed to be released	52,900		52,900
Total ESOP shares	1,058,000		1,058,000
Fair value of unallocated ESOP shares	$	17,289	$	20,848

Post-retirement health care benefits are provided to certain key officers under the Company’s Executive Medical Care Plan (“EMCP”). The EMCP is unfunded and is not qualified under the Internal Revenue Code ("IRC"). Plan expense for the years ended June 30, 2019, 2018, and 2017 was $210, $224, and $135, respectively. Total accrued expenses related to this plan included in other liabilities were $5,289 and $5,237, respectively, as of June 30, 2019 and 2018.

15. Deferred Compensation Agreements

The Company’s Director Emeritus Plans (“Plans”) provide certain benefits to Emeritus Directors for providing current advisory services to the Company. The Plans are unfunded and are not qualified under the IRC. Plan benefits vary by participant and are payable to a designated beneficiary in the event of death. The Company records an expense based on the present value of expected future benefits. Plan expenses for the years ended June 30, 2019, 2018, and 2017 were $410, $417, and $419, respectively. Total accrued expenses related to these plans included in other liabilities were $8,268 and $8,542, respectively, as of June 30, 2019 and 2018.

The Company has deferred compensation agreements with certain members of the Company’s Board of Directors. The future payments related to these agreements are to be funded with life insurance contracts which are payable to the Company in the event of the director’s death. For the years ended June 30, 2019, 2018, and 2017 deferred compensation expense was $28, $32, and $34, respectively.

The net cash surrender value of the related life insurance policies and deferred compensation liability as of the dates indicated are detailed below:

	June 30,
	2019		2018
Net cash surrender value of life insurance, related to deferred compensation	$	7,413	$	7,142
Deferred compensation liability, included in other liabilities	$	956	$	1,075

Long term deferred compensation and supplemental retirement plans are provided to certain key current and former officers. These plans are unfunded and are not qualified under the IRC. The benefits will vary by participant and are payable to a designated beneficiary in the event of death.  Plan expenses for the years ended June 30, 2019, 2018, and 2017 were $771, $519, and $1,253, respectively. Total accrued expenses related to these plans included in other liabilities were $19,499 and $20,257, as of June 30, 2019 and 2018, respectively.

In addition, the Company has a deferred compensation plan provided to certain officers and directors. The plan allows the participants to defer any of their annual compensation, including bonus payments, up to the maximum allowed for each participant. The plan is unfunded and is not qualified under the IRC. Plan expenses for the years ended June 30, 2019, 2018, and 2017 were $223, $205, and $197, respectively. The total deferred compensation plan payable included in other liabilities was $4,966 and $5,274, respectively as of June 30, 2019 and 2018.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

16. Net Income per Share

The following is a reconciliation of the numerator and denominator of basic and diluted net income per share of common stock as of the dates indicated:

	June 30,
	2019			2018			2017
Numerator:
Net income	$	27,146		$	8,235		$	11,847
Allocation of earnings to participating securities	(189		)	(60		)	(125		)
Numerator for basic EPS - Net income available to common stockholders	$	26,957		$	8,175		$	11,722
Effect of dilutive securities:
Dilutive effect to participating securities	7			2			4
Numerator for diluted EPS	$	26,964		$	8,177		$	11,726
Denominator:
Weighted-average common shares outstanding - basic	17,692,493			18,028,854			17,379,487
Effect of dilutive shares	700,691			697,577			576,956
Weighted-average common shares outstanding - diluted	18,393,184			18,726,431			17,956,443
Net income per share - basic	$	1.52		$	0.45		$	0.66
Net income per share - diluted	$	1.46		$	0.44		$	0.65

There were 455,800 and 420,800 outstanding stock options that were anti-dilutive as of June 30, 2019 and 2018, respectively.

17. Equity Incentive Plan

The Company provides stock-based awards through the 2013 Omnibus Incentive Plan which provides for awards of restricted stock, restricted stock units, stock options, stock appreciation rights, and cash awards to directors, emeritus directors, officers, employees, and advisory directors. The cost of equity-based awards under the 2013 Omnibus Incentive Plan generally is based on the fair value of the awards on their grant date. The maximum number of shares that may be utilized for awards under the plan is 2,962,400, including 2,116,000 for stock options and stock appreciation rights and 846,400 for awards of restricted stock and restricted stock units.

Shares of common stock issued under the 2013 Omnibus Incentive Plan may be authorized but unissued shares or, in the case of restricted stock awards, may be repurchased shares. As of June 30, 2013, the Company had repurchased all 846,400 shares on the open market for issuance under the 2013 Omnibus Incentive Plan, for $13,297, at an average cost of $15.71 per share.

Share based compensation expense related to stock options and restricted stock recognized for the fiscal year ended June 30, 2019, 2018, and 2017 was $1,601, $3,027, and $4,166, respectively, before the related tax benefit of $376, $908, and $1,541, respectively.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

The table below presents stock option activity and related information:

	Options	Weighted- average exercise price		Remaining contractual life (years)	Aggregate Intrinsic Value
Options outstanding at June 30, 2016	1,529,300	14.50		6.8	$	6,117
Granted	60,500	24.95		—	—
Granted, TriSummit acquisition	86,185	23.82
Exercised	185,142	16.56		—	—
Forfeited	19,000	14.53		—	—
Expired	1,800	14.37		—	—
Options outstanding at June 30, 2017	1,470,043	$	15.22	5.8	$	13,533
Exercisable at June 30, 2017	1,033,943	$	14.82
Granted	360,400	26.01		—	—
Exercised	44,200	14.72		—	—
Forfeited	24,700	14.43		—	—
Expired	43,273	23.82		—	—
Options outstanding at June 30, 2018	1,718,270	$	17.29	5.9	$	18,664
Exercisable at June 30, 2018	1,223,470	$	14.51
Granted	40,500	27.51		—	—
Exercised	80,311	14.62		—	—
Forfeited	20,300	23.30		—	—
Expired	945	23.82		—	—
Options outstanding at June 30, 2019	1,657,214	$	17.59	5.0	$	12,909
Exercisable at June 30, 2019	1,279,614	$	15.39	4.1	$	12,549
Non-vested at June 30, 2019	377,600	$	25.04	8.3	$	360

The fair value of each option is estimated on the date of grant using the Black-Scholes-Merton option pricing model. Assumptions used for grants were as follows:

Assumptions in Estimating Option Values
	2019			2018
Weighted-average volatility	17.84		%	17.69		%
Expected dividend yield (1)	0.87		%	—		%
Risk-free interest rate	2.52		%	2.67		%
Expected life (years)	6.5			6.5
Weighted-average fair value of options granted	$	5.88		$	6.62

(1)    The Company began paying a cash dividend during the second quarter of fiscal 2019.

At June 30, 2019, the Company had $2,133 of unrecognized compensation expense related to 377,600 stock options originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.9 years at June 30, 2019. At June 30, 2018, the Company had $2,705 of unrecognized compensation expense related to 494,800 stock options originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 2.3 years at June 30, 2018. All unexercised options expire ten years after the grant date.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

The table below presents restricted stock award activity and related information:

	Restricted stock awards	Weighted- average grant date fair value		Aggregate Intrinsic Value
Non-vested at June 30, 2016	248,750	$	14.81	$	4,602
Granted	47,500	24.70		—
Vested	104,620	14.58		—
Forfeited	6,000	15.07		—
Non-vested at June 30, 2017	185,630	$	17.46	$	3,419
Granted	55,200	25.89		—
Vested	100,820	15.14		—
Forfeited	6,600	14.37		—
Non-vested at June 30, 2018	133,410	$	22.85	$	3,755
Granted	34,000	27.51		—
Vested	39,310	21.64		—
Forfeited	4,300	19.08		—
Non-vested at June 30, 2019	123,800	$	24.65	$	2,258

The table above includes performance-based restrictive stock units totaling 10,375 which were granted during the year ended June 30, 2019. These stock units are scheduled to vest over 3.0 years assuming certain performance metrics are met.

At June 30, 2019, unrecognized compensation expense was $2,547 related to 123,800 shares of restricted stock originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.9 years at June 30, 2019. At June 30, 2018, unrecognized compensation expense was $2,570 related to 133,410 shares of restricted stock originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 2.1 years at June 30, 2018.

18. Commitments and Contingencies

Loan Commitments

Legally binding commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. In the normal course of business, there are various outstanding commitments to extend credit that are not reflected in the consolidated financial statements. At June 30, 2019 and June 30, 2018, respectively, loan commitments (excluding $181,477 and $209,726 of undisbursed portions of construction loans) totaled $93,432 and $49,949 of which $34,631 and $19,812 were variable rate commitments and $58,801 and $30,137 were fixed rate commitments. The fixed rate loans had interest rates ranging from 2.69% to 8.59% at June 30, 2019 and 2.10% to 6.15% at June 30, 2018, and terms ranging from three to 30 years. Pre-approved but unused lines of credit (principally second mortgage home equity loans and overdraft protection loans) totaled $353,663 and $491,649 at June 30, 2019 and 2018, respectively. These amounts represent the Company’s exposure to credit risk, and in the opinion of management have no more than the normal lending risk that the Company commits to its borrowers. The Company has two types of commitments related to loans held for sale: rate lock commitments and forward loan sale commitments. Rate lock commitments are commitments to extend credit to a customer that has an interest rate lock and are considered derivative instruments. The rate lock commitments do not qualify for hedge accounting. In order to mitigate the risk from interest rate fluctuations, we enter into forward loan sale commitments on a “best efforts” basis, which do not meet the definition of a derivative instrument. The fair value of these commitments was not material at June 30, 2019 or June 30, 2018.

The Company grants construction and permanent loans collateralized primarily by residential and commercial real estate to customers throughout its primary market area. In addition, the Company grants equipment financing throughout the eastern United States and municipal leases to customers throughout North and South Carolina. The Company’s loan portfolio can be affected by the general economic conditions within these market areas. Management believes that the Company has no significant concentration of credit in the loan portfolio.

Restrictions on Cash

The Bank is required by regulation to maintain a varying cash reserve balance with the Federal Reserve System. The daily average calculated cash reserve required as of June 30, 2019 and 2018 was $2,633, and $2,304, respectively, which was satisfied by vault cash and balances held at the Federal Reserve Bank.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

Guarantees

Standby letters of credit obligate the Company to meet certain financial obligations of its customers, if, under the contractual terms of the agreement, the customers are unable to do so. The financial standby letters of credit issued by the Company are irrevocable and payment is only guaranteed upon the borrower’s failure to perform its obligations to the beneficiary. Total commitments under standby letters of credit as of June 30, 2019 and 2018 were $9,460 and $8,227, respectively. There was no liability recorded for these letters of credit at June 30, 2019 or June 30, 2018.

Litigation

The Company is involved in several litigation matters in the ordinary course of business. These proceedings and the associated legal claims are often contested and the outcome of individual matters is not always predictable. These claims and counter claims typically arise during the course of collection efforts on problem loans or with respect to actions to enforce liens on properties in which the Company holds a security interest. There can be no assurance that loan workouts and other activities will not expose the Company to additional legal actions, including lender liability or environmental claims. Therefore, the Company may be exposed to substantial liabilities, which could adversely affect its results of operations and financial condition. Moreover, the expenses of legal proceedings will adversely affect its results of operations until they are resolved. The Company is not a party to any pending legal proceedings that management believes would have a material adverse effect on the Company’s financial condition or results of operations.

19. Capital

At June 30, 2019, stockholder's equity totaled $408,896. HomeTrust Bancshares, Inc. is a bank holding company subject to regulation by the Federal Reserve. As a bank holding company, we are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended and the regulations of the Federal Reserve. Our subsidiary, the Bank, an FDIC-insured, North Carolina state-chartered bank and a member of the Federal Reserve System, is supervised and regulated by the Federal Reserve and the North Carolina Commissioner of Banks ("NCCOB") and is subject to minimum capital requirements applicable to state member banks established by the Federal Reserve that are calculated in a manner similar to those applicable to bank holding companies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by bank regulators that, if undertaken, could have a direct material effect on the Company's financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

At June 30, 2019, HomeTrust Bancshares, Inc. and the Bank each exceeded all regulatory capital requirements as of that date. Consistent with our goals to operate a sound and profitable organization, our policy is for the Bank to maintain a “well-capitalized” status under the regulatory capital categories of the Federal Reserve. The Bank was categorized as "well-capitalized" at June 30, 2019 under applicable regulatory requirements.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

HomeTrust Bancshares, Inc. and the Bank's actual and required minimum capital amounts and ratiosare as follows:

					Regulatory Requirements
	Actual				Minimum for Capital Adequacy Purposes				Minimum to Be Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
HomeTrust Bancshares, Inc.
As of June 30, 2019
Common Equity Tier I Capital (to Risk-weighted Assets)	$	374,729	12.20	%	$	138,226	4.50	%	$	199,659	6.50	%
Tier I Capital (to Total Adjusted Assets)	$	374,729	10.89	%	$	137,649	4.00	%	$	172,062	5.00	%
Tier I Capital (to Risk-weighted Assets)	$	374,729	12.20	%	$	184,301	6.00	%	$	245,734	8.00	%
Total Risk-based Capital (to Risk-weighted Assets)	$	396,613	12.91	%	$	245,734	8.00	%	$	307,168	10.00	%
As of June 30, 2018
Common Equity Tier I Capital (to Risk-weighted Assets)	$	372,188	12.97	%	$	129,109	4.50	%	$	186,491	6.50	%
Tier I Capital (to Total Adjusted Assets)	$	372,188	11.45	%	$	130,032	4.00	%	$	162,539	5.00	%
Tier I Capital (to Risk-weighted Assets)	$	372,188	12.97	%	$	172,145	6.00	%	$	229,527	8.00	%
Total Risk-based Capital (to Risk-weighted Assets)	$	393,703	13.72	%	$	229,527	8.00	%	$	286,909	10.00	%
HomeTrust Bank:
As of June 30, 2019
Common Equity Tier I Capital (to Risk-weighted Assets)	$	355,759	11.59	%	$	138,153	4.50	%	$	199,555	6.50	%
Tier I Capital (to Total Adjusted Assets)	$	355,759	10.34	%	$	137,590	4.00	%	$	171,988	5.00	%
Tier I Capital (to Risk-weighted Assets)	$	355,759	11.59	%	$	184,204	6.00	%	$	245,606	8.00	%
Total Risk-based Capital (to Risk-weighted Assets)	$	377,639	12.30	%	$	245,606	8.00	%	$	307,007	10.00	%
As of June 30, 2018
Common Equity Tier I Capital (to Risk-weighted Assets)	$	335,152	11.70	%	$	128,889	4.50	%	$	186,173	6.50	%
Tier I Capital (to Total Adjusted Assets)	$	335,152	10.33	%	$	129,769	4.00	%	$	162,211	5.00	%
Tier I Capital (to Risk-weighted Assets)	$	335,152	11.70	%	$	171,852	6.00	%	$	229,136	8.00	%
Total Risk-based Capital (to Risk-weighted Assets)	$	356,603	12.45	%	$	229,136	8.00	%	$	286,421	10.00	%

___________________________________

In addition to the minimum common equity Tier 1 ("CET1"), Tier 1 and total risk-based capital ratios, HomeTrust Bancshares, Inc. and the Bank have to maintain a capital conservation buffer consisting of additional CET1 capital or more than 2.50% above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. As of June 30, 2019, the conservation buffer was 4.90%% and 4.30%% for HomeTrust Bancshares, Inc. and the Bank, respectively.

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

A reconciliation of HomeTrust Bancshares, Inc.'s stockholders' equity under US GAAP and regulatory capital amounts as of the dates indicated follows:

	June 30,
	2019			2018
Total stockholders' equity under US GAAP	$	408,896		$	409,242
Accumulated other comprehensive loss (income), net of tax	(733		)	1,598
Investment in nonincludable subsidiary	(780		)	(826		)
Disallowed deferred tax assets	(5,092		)	(8,701		)
Disallowed goodwill and other disallowed intangible assets	(27,562		)	(29,125		)
Tier I Capital	374,729			372,188
Allowable portion of allowance for loan losses and loan commitments	21,884			21,515
Total Risk-based Capital	$	396,613		$	393,703

20. Parent Company Financial Information

The Company’s principal asset is its investment in its subsidiary, the Bank. The following tables present condensed financial information of the Company:

Condensed balance sheet

	June 30, 2019			June 30, 2018
Assets:
Cash and equivalents	$	8,481		$	23,042
Certificates of deposit in other banks	746			994
Other securities	—			63
Total loans	1,243			3,840
Allowance for loan losses	(4		)	(64		)
Net loans	1,239			3,776
REO	621			805
Investment in bank subsidiary	389,926			372,206
ESOP loan receivable	7,412			7,896
Other assets	510			499
Total Assets	$	408,935		$	409,281
Liabilities and Stockholders’ Equity:
Other liabilities	39			39
Stockholders’ Equity	408,896			409,242
Total Liabilities and Stockholders’ Equity	$	408,935		$	409,281

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

Condensed statement of income

	June 30, 2019			June 30, 2018			June 30, 2017
Income:
Interest income	$	329		$	456		$	565
Other income	54			44			1
Equity earnings in Bank subsidiary	27,287			8,427			12,003
Total income	27,670			8,927			12,569
Expense:
Management fee expense	407			385			354
REO expense	11			34			62
Loss on sale and impairment of REO	114			158			39
Provision for (recovery of) loan losses	(259		)	(131		)	90
Other expense	251			246			177
Total expense	524			692			722
Income Before Income Taxes	27,146			8,235			11,847
Income Tax Expense	—			—			—
Net Income	$	27,146		$	8,235		$	11,847

Condensed statement of cash flows

	June 30, 2019			June 30, 2018			June 30, 2017
Operating Activities:
Net income	$	27,146		$	8,235		$	11,847
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for (recovery of) loan losses	(259		)	(131		)	90
Loss on sale and impairment of REO	114			158			39
Decrease (increase) in accrued interest receivable and other assets	52			291			(30		)
Equity in undistributed income of Bank	(27,287		)	(8,427		)	(12,003		)
ESOP compensation expense	1,422			1,367			1,186
Restricted stock and stock option expense	1,601			3,027			4,166
Decrease in other liabilities	—			(48		)	(260		)
Net cash provided by operating activities	2,789			4,472			5,035
Investing Activities:
Maturities of certificates of deposit in other banks	248			6,217			1,245
Repayment of loans	2,796			1,514			2,176
Increase in investment in Bank subsidiary	(1,556		)	(1,367		)	(3,408		)
Dividend from subsidiary	13,454			—			10,291
ESOP principal payments received	484			472			462
Proceeds from sale of REO	70			499			61
Acquisition of TriSummit Bancorp, Inc.	—			—			(13,862		)
Net cash provided by (used in) investing activities	15,496			7,335			(3,035		)
Financing Activities:
Common stock repurchased	(30,638		)	—			—
Cash dividends paid	(3,176		)	—			—
Retired stock	(205		)	(494		)	(569		)
Exercised stock options	1,173			651			3,068
Net cash provided by (used in) financing activities	(32,846		)	157			2,499
Net Increase (Decrease) in Cash and Cash Equivalents	(14,561		)	11,964			4,499
Cash and Cash Equivalents at Beginning of Period	23,042			11,078			6,579
Cash and Cash Equivalents at End of Period	$	8,481		$	23,042		$	11,078

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HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

21. Fair Value of Financial Instruments

The Company utilizes fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. The Company has adopted ASU 2016-01, and therefore is measuring the fair value of loans receivable under the exit price notion rather than the previous method of entry price notion. Under the previous method, the fair value estimate of loans receivable was based on discounted cash flow. At June 30, 2019, the exit price notion used to estimate the fair value of loans receivable was based on similar techniques, with the addition of liquidity premiums. The fair value of nonperforming loans is based on the underlying value of the collateral for periods prior to and after adoption of ASU 2016-01.

Fair Value Hierarchy

The Company groups assets at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1: Valuation is based upon quoted prices for identical instruments traded in active markets.

Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3: Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

Following is a description of valuation methodologies used for assets recorded at fair value. The Company does not have any liabilities recorded at fair value.

Investment Securities Available for Sale

Securities available for sale are valued on a recurring basis at quoted market prices where available. If quoted market prices are not available, fair values are based on quoted prices of comparable securities. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange or U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities and debentures issued by government sponsored enterprises, municipal bonds, and corporate debt securities. The Company has no Level 3 securities.

Impaired Loans

The Company does not record loans at fair value on a recurring basis. From time to time, however, a loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, the fair value is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. The Company reviews all impaired loans each quarter to determine if an allowance is necessary. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans.

The fair value of impaired loans is estimated in one of two ways, which include collateral value and discounted cash flows. Loans are considered collateral dependent if repayment is expected solely from the collateral. For these collateral dependent impaired loans, the Company obtains updated appraisals at least annually. These appraisals are reviewed for appropriateness and then discounted for estimated closing costs to determine if an allowance is necessary. As part of the quarterly review of impaired loans, the Company reviews these appraisals to determine if any additional discounts to the fair value are necessary. If a current appraisal is not obtained, the Company determines whether a discount is needed to the value from the original appraisal based on the decline in value of similar properties with recent appraisals. For loans that are not collateral dependent, estimated fair value is based on the present value of expected future cash flows using the interest rate implicit in the original agreement. Impaired loans where a charge-off has occurred or an allowance is established during the period being reported require classification in the fair value hierarchy. The Company records such impaired loans as a nonrecurring Level 3 in the fair value hierarchy. 

Loans Held for Sale

Loans held for sale are adjusted to lower of cost or fair value. Fair value is based on commitments on hand from investors or, if commitments have not yet been obtained, what investors are currently offering for loans with similar characteristics. The Company considers all loans held for sale carried at fair value as nonrecurring Level 3.

Real Estate Owned

REO is considered held for sale and is adjusted to fair value less estimated selling costs upon transfer of the loan to foreclosed assets. Fair value is based upon independent market prices, appraised value of the collateral or management’s estimation of the value of the collateral. The Company considers all REO that has been charged off or received an allowance during the period as nonrecurring Level 3.

114

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

Financial Assets Recorded at Fair Value on a Recurring Basis

The following table presents financial assets measured at fair value on a recurring basis at the dates indicated:

	June 30, 2019
Description	Total		Level 1		Level 2		Level 3
U.S Government Agencies	$	15,210	$	—	$	15,210	$	—
Residential Mortgage-backed Securities of U.S. Government Agencies and Government sponsored Enterprises	75,180		—		75,180		—
Municipal Bonds	25,312		—		25,312		—
Corporate Bonds	6,084		—		6,084		—
Total	$	121,786	$	—	$	121,786	$	—

	June 30, 2018
Description	Total		Level 1		Level 2		Level 3
U.S Government Agencies	$	47,542	$	—	$	47,542	$	—
Residential Mortgage-backed Securities of U.S. Government Agencies and Government sponsored Enterprises	70,599		—		70,599		—
Municipal Bonds	30,766		—		30,766		—
Corporate Bonds	6,023		—		6,023		—
Equity Securities	63		—		63		—
Total	$	154,993	$	—	$	154,993	$	—

Financial Assets Recorded at Fair Value on a Nonrecurring Basis

The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated:

	June 30, 2019
Description	Total		Level 1		Level 2		Level 3
Impaired loans	$	9,071	$	—	$	—	$	9,071
REO	1,804		—		—		1,804
Total	$	10,875	$	—	$	—	$	10,875

	June 30, 2018
Description	Total		Level 1		Level 2		Level 3
Impaired loans	$	8,423	$	—	$	—	$	8,423
REO	2,104		—		—		2,104
Total	$	10,527	$	—	$	—	$	10,527

Quantitative information about Level 3 fair value measurements during the period ended June 30, 2019 is shown in the table below:

	Fair Value at June 30, 2019		Valuation Techniques	Unobservable Input	Range	Weighted Average
Nonrecurring measurements:
Impaired loans, net	$	9,071	Discounted appraisals and discounted cash flows	Collateral discounts: Discount spread:	0% - 16% 1% - 3%	1%
REO	$	1,804	Discounted Appraisals	Collateral discounts	8% - 41%	12%

115

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

The stated carrying value and estimated fair value amounts of financial instruments as of June 30, 2019 and June 30, 2018, are summarized below:

	June 30, 2019
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and interest-bearing deposits	$	71,043	$	71,043	$	71,043	$	—	$	—
Commercial paper	241,446		241,446		241,446		—		—
Certificates of deposit in other banks	52,005		52,005		—		52,005		—
Securities available for sale	121,786		121,786		—		121,786		—
Loans, net	2,683,761		2,604,827		—		—		2,604,827
Loans held for sale	18,175		18,591		—		—		18,591
FHLB stock	31,969		31,969		31,969		—		—
FRB stock	7,335		7,335		7,335		—		—
SBIC investments	6,074		6,074		—		—		6,074
Accrued interest receivable	10,533		10,533		350		750		9,433
Liabilities:
Noninterest-bearing and NOW deposits	746,617		746,617		—		746,617		—
Money market accounts	691,172		691,172		—		691,172		—
Savings accounts	177,278		177,278		—		177,278		—
Certificates of deposit	712,190		712,485		—		712,485		—
Borrowings	680,000		688,418		—		688,418		—
Accrued interest payable	2,252		2,252		—		2,252		—

	June 30, 2018
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and interest-bearing deposits	$	70,746	$	70,746	$	70,746	$	—	$	—
Commercial paper	229,070		229,070		229,070		—		—
Certificates of deposit in other banks	66,937		66,937		—		66,937		—
Securities available for sale	154,993		154,993		—		154,993		—
Loans, net	2,504,792		2,414,647		—		—		2,414,647
Loans held for sale	5,873		5,990		—		—		5,990
FHLB stock	29,907		29,907		29,907		—		—
FRB stock	7,307		7,307		7,307		—		—
SBIC investments	4,717		4,717		—		—		4,717
Accrued interest receivable	9,344		9,344		297		883		8,164
Liabilities:
Noninterest-bearing and NOW deposits	789,186		789,186		—		789,186		—
Money market accounts	677,665		677,665		—		677,665		—
Savings accounts	213,250		213,250		—		213,250		—
Certificates of deposit	516,152		509,924		—		509,924		—
Borrowings	635,000		635,187		—		635,187		—
Accrued interest payable	805		805		—		805		—

The Company had off-balance sheet financial commitments, which include approximately $628,572 and $751,324 of commitments to originate loans, undisbursed portions of interim construction loans, and unused lines of credit at June 30, 2019 and June 30, 2018 (see Note 18).  Since these commitments are based on current rates, the carrying amount approximates the fair value.

Estimated fair values were determined using the following methods and assumptions:

Cash and interest-bearing deposits – The stated amounts approximate fair values as maturities are less than 90 days.

116

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

Commercial paper – The stated amounts approximate fair value due to the short-term nature of these investments.

Certificates of deposit in other banks – The stated amounts approximate fair values.

Securities available for sale – Fair values are based on quoted market prices where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

Loans, net – Fair values for loans are estimated by segregating the portfolio by type of loan and discounting scheduled cash flows using current market interest rates for loans with similar terms and credit quality. A prepayment assumption is used as an estimate of the portion of loans that will be repaid prior to their scheduled maturity. For the June 30, 2019 fair value, a liquidity premium assumption is used as an estimate for the additional return required by an investor of assets that are potentially considered illiquid.

Loans held for sale – The fair value of mortgage loans held for sale is determined by outstanding commitments from investors on a "best efforts" basis or current investor yield requirements, calculated on the aggregate loan basis. The fair value of U.S. Small Business Administration ("SBA") loans held for sale is based on what investors are currently offering for loans with similar characteristics.

FHLB and FRB stock – No ready market exists for these stocks and they have no quoted market value. However, redemption of these stocks has historically been at par value. Accordingly, cost is deemed to be a reasonable estimate of fair value.

SBIC– No ready market exists for these investments and they have no quoted market value. SBIC investments are valued at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions of identical or similar investments. Accordingly, cost is deemed to be a reasonable estimate of fair value.

Deposits– Fair values for demand deposits, money market accounts, and savings accounts are the amounts payable on demand as of June 30, 2019 and June 30, 2018. The fair value of certificates of deposit is estimated by discounting the contractual cash flows using current market interest rates for accounts with similar maturities.

Borrowings – The fair value of advances from the FHLB is estimated based on current rates for borrowings with similar terms.

Accrued interest receivable and payable – The stated amounts of accrued interest receivable and payable approximate the fair value.

Limitations – Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on-and-off balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, a significant asset not considered a financial asset is premises and equipment.  In addition, tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

22. Revenue

On July 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” and all subsequent ASUs that modified ASC 606. The adoption of the new standard did not have a material impact on the measurement or recognition of revenue. Results for year ended June 30, 2019 are presented under Topic 606, while the years ended June 30, 2018 and 2017 reflects an offset of $660 and $667, respectively, of interchange costs against interchange income.

Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, and certain credit card fees are also not in scope of the new guidance. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, interchange fees, merchant income, and various other service fees. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Substantially all of the Company’s revenue is generated from contracts with customers. The Company has made no significant judgments in applying the revenue guidance prescribed in Topic 606 that affect the determination of the amount and timing of revenue streams with customers.

117

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

The table below presents the Company's sources of noninterest income, segregated by in-scope and out-of-scope revenue streams of Topic 606 for the periods indicated:

	Year Ended June 30,
	2019		2018		2017
In-scope of Topic 606:
Service charges on deposit accounts	$	3,978	$	3,674	$	3,309
Fees, interchange, and other service charges	6,377		5,576		4,747
Other	775		909		943
Noninterest income (in-scope of Topic 606)	11,130		10,159		8,999
Noninterest income (out-of-scope of Topic 606)	11,765		8,813		7,108
Total noninterest income	$	22,895	$	18,972	$	16,107

The following is a description of revenue streams accounted for under Topic 606:

Service charges on deposit accounts

Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, nonsufficient fund fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Nonsufficient fund fees, check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts.

Fees, interchange, and other service charges

Fees, interchange, and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Other service charges include revenue from processing wire transfers, cashier’s checks, and other services. The Company’s performance obligation for fees, interchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month.

Other

Other noninterest income consists of safety deposit box rental fees and other miscellaneous revenue streams. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation.

118

HOMETRUST BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share data)

23. Unaudited Interim Financial Information

The unaudited statements of income for each of the quarters during the fiscal years ended June 30, 2019 and 2018 are summarized below:

	Three months ended
	June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018
Interest and dividend income	$	35,855	$	34,724	$	34,400	$	32,280
Interest expense	8,931		8,145		7,299		6,008
Net interest income	26,924		26,579		27,101		26,272
Provision for loan losses	200		5,500		—		—
Net interest income after provision for loan losses	26,724		21,079		27,101		26,272
Noninterest income	6,811		5,386		5,085		5,613
Noninterest expense	23,415		22,978		21,858		21,883
Net income before provision for income taxes	10,120		3,487		10,328		10,002
Income tax expense	2,107		185		2,287		2,212
Net income	$	8,013	$	3,302	$	8,041	$	7,790
Net income per common share:
Basic	$	0.45	$	0.19	$	0.45	$	0.43
Diluted	$	0.44	$	0.18	$	0.43	$	0.41

	Three months ended
	June 30, 2018		March 31, 2018		December 31, 2017			September 30, 2017
Interest and dividend income	$	30,693	$	29,265	$	28,848		$	27,896
Interest expense	5,103		4,036		3,618			3,315
Net interest income	25,590		25,229		25,230			24,581
Provision for loan losses	—		—		—			—
Net interest income after provision for loan losses	25,590		25,229		25,230			24,581
Noninterest income	5,382		4,926		4,787			4,577
Noninterest expense	21,754		21,321		21,175			21,081
Net income before provision for income taxes	9,218		8,834		8,842			8,077
Income tax expense	2,011		2,707		19,508			2,510
Net income (loss)	$	7,207	$	6,127	$	(10,666	)	$	5,567
Net income (loss) per common share:
Basic	$	0.40	$	0.34	$	(0.59	)	$	0.31
Diluted	$	0.38	$	0.32	$	(0.59	)	$	0.30

24. Subsequent Events

In September 2019, the Company decided to sell between $200 million and $300 million of one-to-four family loans to a third party. Once specifically identified, these loans will be moved from total loans to loans held for sale at the lower of cost or market. The transaction is anticipated to close during the second quarter of fiscal 2020 at a gain.

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Item 9. Changes In and Disagreements With Accountants on Accounting andFinancial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures An evaluation of the Company’s disclosure controls and procedures (as defined in Section 13a-15(e) of the Securities Exchange Act of 1934 (the “Act”)) was carried out under the supervision and with the participation of the Company’s Chief Executive Officer, Chief Financial Officer and several other members of the Company’s senior management as of the end of the period covered by this report. The Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of June 30, 2019 were effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Act is (i) accumulated and communicated to the Company’s management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Report of Management on Internal Control over Financial Reporting The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.

Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of June 30, 2019, utilizing the framework established in Internal Control – Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this assessment, management has determined that the Company’s internal control over financial reporting as of June 30, 2019 was effective.

Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, transactions and dispositions of assets; and provide reasonable assurances that: (1) transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States; (2) receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (3) unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s financial statements are prevented or timely detected.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Dixon Hughes Goodman LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this Annual Report and has issued a report on the effectiveness of our internal control over financial reporting, which report is included in Item 8 of this Form 10-K. The audit report expresses an unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of June 30, 2019.

Changes in Internal Controls There have been no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company intends to continually review and evaluate the design and effectiveness of its disclosure controls and procedures and to improve its controls and procedures over time and to correct any deficiencies that it may discover in the future. The goal is to ensure that senior management has timely access to all material financial and non-financial information concerning the Company's business. While the Company believes the present design of its disclosure controls and procedures is effective to achieve its goal, future events affecting its business may cause the Company to modify its disclosure controls and procedures. The Company does not expect that its disclosure controls and procedures and internal control over financial reporting will prevent every error or instance of fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns in controls or procedures can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any control procedure is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected.

Item 9B. Other Information

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors and Executive Officers The information concerning our directors required by this item is incorporated herein by reference from our definitive proxy statement for our Annual Meeting of Shareholders being held on November 18, 2019, a copy of which will be filed with the Securities and Exchange Commission not later than 120 days after the end of our fiscal year. Information about our executive officers is contained under the caption “Information About Our Executive Officers” in Part I of this Form 10-K, and is incorporated herein by this reference.

Delinquent Section 16(a) Reports The information concerning compliance with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 by our directors, officers and ten percent shareholders required by this item is incorporated herein by reference from our definitive proxy statement for our Annual Meeting of Shareholders being held on November 18, 2019, a copy of which will be filed with the Securities and Exchange Commission not later than 120 days after the end of our fiscal year.

Code of Ethics We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, and persons performing similar functions, and to all of our other employees and our directors. A copy of our code of ethics is available on our Internet website address, http://www.htb.com.

Nominating Procedures There have been no material changes to the procedures by which shareholders may recommend nominees to our Board of Directors since last disclosed to shareholders.

Audit Committee and Audit Committee Financial Experts Information required by this item regarding the audit committee of the Company's Board of Directors, including information regarding the audit committee financial expert serving on the audit committee, is incorporated herein by reference from our definitive proxy statement for our Annual Meeting of Shareholders being held on November 18, 2019, a copy of which will be filed with the Securities and Exchange Commission not later than 120 days after the end of our fiscal year.

Item 11. Executive Compensation

The information concerning compensation required by this item is incorporated herein by reference from our definitive proxy statement for our Annual Meeting of Shareholders being held on November 18, 2019, a copy of which will be filed with the Securities and Exchange Commission not later than 120 days after the end of our fiscal year.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

The information concerning security ownership of certain beneficial owners and management required by this item is incorporated herein by reference from our definitive proxy statement for our Annual Meeting of Shareholders being held on November 18, 2019, a copy of which will be filed with the Securities and Exchange Commission not later than 120 days after the end of our fiscal year. Management is not aware of any arrangements, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company. The information concerning our equity incentive plan required by this item is set forth below.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants, and rights	Weighted-average exercise price of outstanding options, warrants, and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)		(c)
Equity compensation plans approved by security holders	1,657,214	$	17.59	167,630

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Item 13. Certain Relationships and Related Transactions, and Director Independence

The information concerning certain relationships and related transactions and director independence required by this item is incorporated herein by reference from our definitive proxy statement for our Annual Meeting of Shareholders being held on November 18, 2019, a copy of which will be filed with the Securities and Exchange Commission not later than 120 days after the end of our fiscal year.

Item 14. Principal Accountant Fees and Services

The information concerning principal accountant fees and services is incorporated herein by reference from our definitive proxy statement for our Annual Meeting of Shareholders being held on November 18, 2019, a copy of which will be filed with the Securities and Exchange Commission not later than 120 days after the end of our fiscal year.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)(1) Financial Statements: See Part II--Item 8. Financial Statements and Supplementary Data.

(a)(2) Financial Statement Schedules: All financial statement schedules have been omitted as the information is not required under the related instructions or is not applicable.

(a)(3) Exhibits: See Exhibit Index.

(b) Exhibits: The following exhibits are filed as part of this Form 10-K and this list constitutes the Exhibit Index.

Regulation S-K Exhibit Number	Document	Reference to Prior Filing or Exhibit Number Attached Hereto
2.1	Agreement and Plan of Merger, dated as of September 20, 2016, by and between HomeTrust Bancshares, Inc. and TriSummit Bancorp, Inc.	(a)
2.2	Purchase and Assumption Agreement, dated as of June 9, 2014, between Bank of America, National Association and HomeTrust Bank	(b)
2.3	Agreement and Plan of Merger, dated as of January 22, 2014, by and between HomeTrust Bancshares, Inc. and Jefferson Bancshares, Inc.	(c)
3.1	Charter of HomeTrust Bancshares, Inc.	(d)
3.2	Articles Supplementary to the Charter of HomeTrust Bancshares, Inc. for HomeTrust Bancshares, Inc.’s Junior Participating Preferred Stock, Series A	(e)
3.3	Amended and Restated Bylaws of HomeTrust Banchshares, Inc.	(f)
4.1	Tax Benefits Preservation Plan, dated as of September 25, 2012, between HomeTrust Bancshares, Inc. and Computershare Trust Company, N.A., as successor rights agent to Registrar and Transfer Company	(e)
4.2	Amendment No. 1, dated as of August 31, 2015, to Tax Benefits Preservation Plan, dated as of September 25, 2012, between HomeTrust Bancshares, Inc. and Computershare Trust Company, N.A., as successor rights agent to Registrar and Transfer Company	(o)
4.3	Amendment No. 2, dated as of August 21, 2018, to Tax Benefits Preservation Plan, dated as of September 25, 2012, between HomeTrust Bancshares, Inc. and Computershare Trust Company, N.A., as successor rights agent to Registrar and Transfer Company	(t)
4.4	Description of HomeTrust Bancshares, Inc. Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.	4.4
10.1	HomeTrust Bancshares, Inc. Strategic Operating Committee Incentive Plan	(s)
10.2	Amended and Restated Employment Agreement entered into between HomeTrust Bancshares, Inc. and Dana L. Stonestreet	(g)
10.3	Amended and Restated Employment Agreement entered into between HomeTrust Bancshares, Inc. and C. Hunter Westbrook	(g)
10.3A	Amendment No. 1 to Amended and Restated Employment Agreement entered into between HomeTrust Bancshares, Inc. and C. Hunter Westbrook	(u)
10.4	Amended and Restated Employment Agreement entered into between HomeTrust Bancshares, Inc. and Tony J. VunCannon	(g)
10.5	Employment Agreement between HomeTrust Bancshares, Inc. and Howard L. Sellinger	(g)
10.6	Employment Agreement between HomeTrust Bank and Sidney A. Biesecker	(d)
10.7	HomeTrust Bank Executive Supplemental Retirement Income Master Agreement (“SERP”)	(d)
10.7A	SERP Joinder Agreement for F. Edward Broadwell, Jr.	(d)
10.7B	SERP Joinder Agreement for Dana L. Stonestreet	(d)
10.7C	SERP Joinder Agreement for Tony J. VunCannon	(d)
10.7D	SERP Joinder Agreement for Howard L. Sellinger	(d)
10.7E	SERP Joinder Agreement for Stan Allen	(d)
10.7F	SERP Joinder Agreement for Sidney A. Biesecker	(d)
10.7G	SERP Joinder Agreement for Peggy C. Melville	(d)
10.7H	SERP Joinder Agreement for William T. Flynt	(d)

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10.7I	Amended and Restated Supplemental Income Agreement between HomeTrust Bank, as successor to Industrial Federal Savings Bank, and Sidney Biesecker	(i)
10.8	HomeTrust Bank Director Emeritus Plan (“Director Emeritus Plan”)	(d)
10.8A	Director Emeritus Plan Joinder Agreement for William T. Flynt	(d)
10.8B	Director Emeritus Plan Joinder Agreement for J. Steven Goforth	(d)
10.8C	Director Emeritus Plan Joinder Agreement for Craig C. Koontz	(d)
10.8D	Director Emeritus Plan Joinder Agreement for Larry S. McDevitt	(d)
10.8E	Director Emeritus Plan Joinder Agreement for F.K. McFarland, III	(d)
10.8F	Director Emeritus Plan Joinder Agreement for Peggy C. Melville	(d)
10.8G	Director Emeritus Plan Joinder Agreement for Robert E. Shepherd, Sr.	(d)
10.9	HomeTrust Bank Defined Contribution Executive Medical Care Plan	(d)
10.10	HomeTrust Bank 2005 Deferred Compensation Plan	(d)
10.11	HomeTrust Bank Pre-2005 Deferred Compensation Plan	(d)
10.12	HomeTrust Bancshares, Inc. Strategic Operating Committee Incentive Plan	(r)
10.13	HomeTrust Bancshares, Inc. 2013 Omnibus Incentive Plan (“Omnibus Incentive Plan”)	(j)
10.14	Form of Incentive Stock Option Award Agreement under Omnibus Incentive Plan	(k)
10.15	Form of Non-Qualified Stock Option Award Agreement under Omnibus Incentive Plan	(k)
10.16	Form of Stock Appreciation Right Award Agreement under Omnibus Incentive Plan	(k)
10.17	Form of Restricted Stock Award Agreement under Omnibus Incentive Plan	(k)
10.18	Form of Restricted Stock Unit Award Agreement under Omnibus Incentive Plan	(k)
10.19	Reserved
10.20	Reserved
10.21	Money Purchase Deferred Compensation Agreement, dated as of September 1, 1987, between HomeTrust Bank and F. Edward Broadwell, Jr.	(n)
10.22	Retirement Payment Agreement, dated as of September 1, 1987, between HomeTrust Bank and F. Edward Broadwell, Jr., as amended	(n)
10.23	Retirement Payment Agreement, dated as of September 1, 1987, between HomeTrust Bank and Larry S. McDevitt, as amended	(n)
10.24	Retirement Payment Agreement, dated as of September 1, 1987, between HomeTrust Bank and Peggy C. Melville, as amended	(n)
10.25	Retirement Payment Agreement, dated as of August 1, 1988, between HomeTrust Bank and Robert E. Shepherd, Sr., as amended	(n)
10.26	Retirement Payment Agreement, dated as of May 1, 1991, between HomeTrust Bank and William T. Flynt, as amended	(n)
10.27	Offer Letter between HomeTrust Bank and Keith J. Houghton	(p)
10.28	Form of Relocation Repayment Agreement between HomeTrust Bank and Keith J. Houghton	(p)
10.29	Amended and Restated Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and Keith J. Houghton	(g)
10.30	Amended and Restated Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and R. Parrish Little	(v)
10.31	Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and Marty Caywood	(w)
10.32	Change in Control Severance Agreement between HomeTrust Bancshares, Inc. and Paula C. Labian	(x)
21.0	Subsidiaries of the Registrant	21.0
23.0	Consent of Dixon Hughes Goodman LLP	23.0
31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	31.1
31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	31.2
32.0	Certificate of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	32.0

124

101 The following materials from HomeTrust Bancshares’ Annual Report on Form 10-K for the year ended June 30, 2019, formatted in Extensible Business Reporting Language (XBRL): (a) Consolidated Balance Sheets; (b) Consolidated Statements of Income; (c) Consolidated Statements of Comprehensive Income; (d) Consolidated Statements of Changes in Stockholders' Equity; (e) Consolidated Statements of Cash Flows; and (f) Notes to Consolidated Financial Statements. 101

_________________

(a) Attached as Appendix A to the proxy statement/prospectus filed by HomeTrust Bancshares on November 2, 2016 pursuant to Rule 424(b) of the Securities Act of 1933.

(b) Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on June 10, 2014 (File No. 001-35593).

(c) Attached as Appendix A to the joint proxy statement/prospectus filed by HomeTrust Bancshares on April 28, 2014 pursuant to Rule 424(b) of the Securities Act of 1933.

(d) Filed as an exhibit to HomeTrust Bancshares’s Registration Statement on Form S-1 (File No. 333-178817) filed on December 29, 2011.

(e) Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on September 25, 2012 (File No. 001-35593).

(f) Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on May 1, 2018 (File No. 001-35593).

(g) Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on September 11, 2018 (File No. 001-35593).

(h) Reserved

(i) Filed as an exhibit to Amendment No. One to HomeTrust Bancshares’s Registration Statement on Form S-1 (File No. 333-178817) filed on March 9, 2012.

(j) Attached as Appendix A to HomeTrust Bancshares’s definitive proxy statement filed on December 5, 2012 (File No. 001-35593).

(k) Filed as an exhibit to HomeTrust Bancshares’s Registration Statement on Form S-8 (File No. 333-186666) filed on February 13, 2013.

(l) Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on June 3, 2014 (File No. 001-35593).

(m) Filed as an exhibit to Jefferson Bancshares's, Inc.’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2008 (File No. 000-50347).

(n) Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2014 (File No. 001-35593).

(o) Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on August 31, 2015 (File No. 001-35593).

(p) Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2015 (File No. 001-35593).

(q) Reserved

(r) Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (File No. 001-35593).

(s) Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 (File No. 000-50347).

(t) Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on August 21, 2018 (File No. 001-35593).

(u) Filed as an exhibit to HomeTrust Bancshares’s Current Report on Form 8-K filed on September 25, 2018 (File No. 001-35593.

(v) Filed as an exhibit to HomeTrust Bancshares's Annual Report on Form 10-K for the fiscal year ended June 30, 2018 (File No. 001-35593).

(w) Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 (File No. 001-35593).

(x) Filed as an exhibit to HomeTrust Bancshares's Quarterly Report on Form 10-Q for the quarter ended December 31, 2018 (File No. 001-35593.

125

Item 16. Form 10-K Summary

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	HOMETRUST BANCSHARES, INC.
Date: September 13, 2019	By:	/s/ Dana L. Stonestreet
		Dana L. Stonestreet
		Chairman of the Board,
		President, and Chief Executive Officer

126

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Dana L. Stonestreet	Chairman of the Board, President and Chief Executive Officer	September 13, 2019
Dana L. Stonestreet	(Principal Executive Officer)
/s/ Tony J. VunCannon	Executive Vice President, Chief Financial Officer, Corporate Secretary and Treasurer	September 13, 2019
Tony J. VunCannon	(Principal Financial and Accounting Officer)
/s/ Sidney A. Biesecker	Director	September 13, 2019
Sidney A. Biesecker
/s/ Robert G. Dinsmore, Jr.	Director	September 13, 2019
Robert G. Dinsmore, Jr.
/s/ J. Steven Goforth	Director	September 13, 2019
J. Steven Goforth
/s/ Robert E. James	Director	September 13, 2019
Robert E. James
/s/ Laura C. Kendall	Director	September 13, 2019
Laura C. Kendall
/s/ Craig C. Koontz	Director	September 13, 2019
Craig C. Koontz
/s/ F.K. McFarland, III	Director	September 13, 2019
F.K. McFarland, III
/s/ John A. Switzer	Director	September 13, 2019
John A. Switzer
/s/ Richard T. Williams	Director	September 13, 2019
Richard T. Williams

127

EX-4.4

Exhibit 4.4

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

General

The Company’s authorized capital stock currently consists of:

• 60,000,000 shares of common stock, $0.01 par value per share; and

• 10,000,000 shares of preferred stock, $0.01 value per share.

No shares of our preferred stock are currently outstanding. The Company’s common stock is traded on NASDAQ under the symbol “HTBI.”

Common Stock

The following description of our common stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our Charter (the “Charter”) and our Amended and Restated Bylaws (the “Bylaws”), each of which is incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.4 is a part. We encourage you to read our Charter, our Bylaws and the applicable provisions of Maryland General Corporation Law, for additional information.

Each share of our common stock has the same relative rights and is identical in all respects with each other share of our common stock. The Company’s common stock represents non-withdrawable capital, is not of an insurable type and is not insured by the FDIC or any other government agency.

Subject to any prior rights of the holders of any preferred or other stock of the Company then outstanding, holders of our common stock are entitled to receive such dividends as are declared by the board of directors of the Company out of funds legally available for dividends.

Except with respect to greater than 10% shareholders, full voting rights are vested in the holders of our common stock and each share is entitled to one vote. Subject to any prior rights of the holders of any of our preferred stock then outstanding, in the event of a liquidation, dissolution or winding up of the Company, holders of shares of our common stock will be entitled to receive, pro rata, any assets distributable to shareholders in respect of shares held by them. Holders of shares of Company common stock do not have any preemptive rights to subscribe for any additional securities which may be issued by the Company, nor do they have cumulative voting rights.

In addition to the foregoing, provisions in our Charter and Bylaws may discourage attempts to acquire HomeTrust Bancshares, pursue a proxy contest for control of HomeTrust Bancshares, assume control of HomeTrust Bancshares by a holder of a larger block of common stock, and remove HomeTrust Bancshares’ management, all of which shareholders might think are in their best interests.

These provisions include:

• an 80% shareholder vote requirement for certain business combinations not approved by disinterested directors, for amendments to some provisions of the articles of incorporation and for any amendment of the bylaws by shareholders;

• the election of directors to staggered terms of three years;

• provisions requiring advance notice of shareholder proposals and director nominations;

• a requirement that the calling of a special meeting by shareholders requires the written request of shareholders entitled to vote at least a majority of all votes entitled to vote at the meeting; and

• the removal of directors only for cause and by a vote of a majority of the outstanding shares of common stock.

Federal banking law also restricts acquisitions of control of savings and loan holding companies such as HomeTrust Bancshares. In addition, the business corporation law of Maryland, the state where HomeTrust Bancshares is incorporated, provides for certain restrictions on acquisition of HomeTrust Bancshares.

Preferred Share Purchase Rights

The following description of our preferred share purchase rights (the “Rights”) is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our Articles Supplementary to our Charter (“Articles Supplementary”) and our Tax Benefits Preservation Plan (the “Plan”), each of which is incorporated by reference as an exhibit to the Annual Report

1

on Form 10-K of which this Exhibit 4.4 is a part. We encourage you to read our Articles Supplementary and the Plan, for additional information.

On September 25, 2012, the Board of Directors of the Company declared a dividend of one Right for each share its common stock outstanding at the close of business on October 9, 2012 (the “Rights Record Date”), and to become outstanding between the Record Date and the earlier of the Distribution Date and the Expiration Date (each as defined below).  The Rights will be issued pursuant to the Plan, dated as of September 25, 2012, as amended on August 31, 2015 and August 21, 2018, between the Company and Computershare Trust Company, as rights agent (the “Rights Agent”).  Each Right represents the right to purchase, upon the terms and subject to the conditions set forth in the Plan, 1/1,000^th of a share of Junior Participating Preferred Stock, Series A, par value $0.01 per share (“Preferred Share”), for $22.63 (the “Purchase Price”), subject to adjustment as provided in the Plan.

The purpose of the Plan is to protect the Company’s ability to use certain tax assets, including net operating loss carryforwards (the “Tax Benefits”), to offset future taxable income.  The Company’s use of the Tax Benefits in the future would be substantially limited if it experiences an “ownership change” for purposes of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”).  In general, an ownership change will occur if the Company’s “5-percent shareholders,” as defined in Section 382 of the Code, collectively increase their ownership in the Company by more than 50 percentage points over a rolling three-year period.

The Plan is designed to reduce the likelihood that the Company will experience an ownership change by discouraging any person from becoming a beneficial owner of 4.99% or more of the then outstanding common stock (a “Threshold Holder”).  There is no guarantee, however, that the Plan will prevent the Company from experiencing an ownership change.  A corporation that experiences an ownership change will generally be subject to an annual limitation on certain of its pre-ownership change tax assets in an amount equal to the fair market value of the corporation’s outstanding stock immediately prior to the ownership change, multiplied by the long-term tax-exempt rate.  

Distribution Date.  Initially, the Rights will be attached to all shares of our common stock then outstanding, and no separate Right certificates will be distributed.  On or after the Distribution Date, the Rights will separate from the shares of common stock and become exercisable.

The “Distribution Date” will occur on the earlier of (i) the close of business on the tenth business day after a Shares Acquisition Date (as defined below) and (ii) the close of business on the tenth business day (or such later day as may be designated prior to a Shares Acquisition Date by the Company’s Board of Directors) after the date of the commencement of a tender or exchange offer by any person if, upon consummation of the offer, such person would or could be an Acquiring Person (as defined below).

A “Shares Acquisition Date” is the date of the first public announcement by the Company or an Acquiring Person indicating that an Acquiring Person has become such.

An “Acquiring Person” means any person who or which, together with its affiliates, beneficially owns 4.99% or more of the Company’s common stock (or any other securities of the Company then outstanding that would be treated as “stock” under Section 382 of the Code), other than (i) the U.S. Government; (ii) the Company or any subsidiary or employee benefit plan or compensation arrangement of the Company; (iii) any person or entity who or which, together with its affiliates, was on the Rights Record Date, the beneficial owner of 4.99% or more of the Company’s common stock, unless that person or entity subsequently increases their beneficial ownership percentage (other than as a result of any stock dividend, stock split or similar transaction or stock repurchase by the Company); (iv) any person or entity who or which the Company’s Board of Directors determines, in its sole discretion, has inadvertently become a 4.99% or greater stockholder so long as such person or entity promptly divests sufficient shares to no longer be a 4.99% or greater stockholder; (v) any person or entity who or which has become the beneficial owner of 4.99% or more of the Company’s common stock as a result of an acquisition of shares of common stock by the Company which, by reducing the number of shares outstanding, increased the proportionate number of shares beneficially owned by that person or entity, provided that the person or entity does not acquire any additional shares other than as a result of any stock dividend, stock split or similar transaction; and (vi) any person or entity who or which has become a 4.99% or greater stockholder if the Company’s Board of Directors in good faith determines that the attainment of such status has not jeopardized or endangered the Company’s utilization of the Tax Benefits.

Flip-In.  From and after a Shares Acquisition Date, (i) Rights owned by the Acquiring Person and its affiliates and certain of their transferees will automatically be void; and (ii) each other Right will automatically become a Right to buy, for the Purchase Price, in lieu of Series A Preferred Stock, that number of shares of the Company’s common stock equal to (a) the Purchase Price multiplied by the number of 1/1000ths of a share of Series A Preferred Stock for which the Right is then exercisable divided by (b) 50% of the then-current per share market price of the Company’s common stock.

Exchange.   At any time after a Shares Acquisition Date the Company’s Board of Directors may, at its option, exchange all or part of the then outstanding and exercisable Rights for shares of common stock at an exchange ratio of one share of common stock per Right, subject to adjustments and limitations described in the Plan.  The Board may enter into a trust agreement pursuant to which the Company would deposit into a trust shares of common stock that would be distributable to stockholders (excluding the Acquiring Person and its affiliates) in the event the exchange is implemented.  This feature is intended to facilitate a more orderly distribution of shares of common stock in the event that a Shares Acquisition Date occurs.

2

Redemption.  At any time prior to the Distribution Date, the Company’s Board of Directors may, at its option, redeem all, but not fewer than all, of the then outstanding Rights at a redemption price of $0.0001 per Right. 

Amendments. the Company may from time to time before the Distribution Date supplement or amend the Plan without the approval of any holders of Rights.

After the Distribution Date, the Plan may not be amended in any manner that would adversely affect the interests of the holders of Rights.

Expiration. The Rights will expire on the earliest of (i) August 21, 2021, (ii) the time at which all Rights have been redeemed by the Company, (iii) the time at which all Rights have been exchanged by the Company, (iv) such time as the Company’s Board of Directors determines, in its sole discretion, that the Rights and the Plan are no longer necessary for the preservation of existence of the Tax Benefits, and (v) a date prior to a Shares Acquisition Date on which the Board determines, in its sole discretion, that the Rights and the Plan are no longer in the best interests of the Company and its stockholders.

Anti-Takeover Impact. The Plan could have an anti-takeover effect because it will restrict the ability of a person, entity or group to accumulate 4.99% or more of our common stock, and the ability of persons, entities or groups owning 4.99% or more of our common stock prior to the adoption of the Plan, from acquiring additional shares of our common stock without the approval of the Company’s Board of Directors.  The Plan also could have an anti-takeover effect because an Acquiring Person’s ownership may be diluted substantially upon the occurrence of a triggering event. Accordingly, the overall effects of the Tax Benefits Preservation Plan may be to render more difficult, or discourage, a merger, tender offer, proxy contest or assumption of control by a substantial holder of Company stock.

3

EX-21

Exhibit 21

SUBSIDIARIES OF THE REGISTRANT

Parent	Subsidiary	Percentage of Ownership	State of Incorporation or Organization
HomeTrust Bancshares, Inc.	HomeTrust Bank	100%	North Carolina
HomeTrust Bank	Western North Carolina Service Corporation	100%	North Carolina

EX-23

Exhibit 23

Consent Of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors

HomeTrust Bancshares, Inc. and Subsidiary

We consent to the incorporation by reference in the registration statements No. 333-182635, 333-186666 and 333-210167 on Forms S-8 of HomeTrust Bancshares, Inc. and Subsidiary (the "Company"), of our reports dated September 13, 2019, with respect to the consolidated financial statements of the Company and the effectiveness of internal control over financial reporting, which reports appear in the Company's 2019 Annual Report on Form 10-K.

/s/ DIXON HUGHES GOODMAN LLP

Asheville, North Carolina

September 13, 2019

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Dana L. Stonestreet, certify that:

1. I have reviewed this annual report on Form 10-K of HomeTrust Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  September 13, 2019

/s/ Dana L. Stonestreet        

Dana L. Stonestreet

Chairman of the Board,

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Tony J. VunCannon, certify that:

1. I have reviewed this annual report on Form 10-K of HomeTrust Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  September 13, 2019

/s/ Tony J. VunCannon

Tony J. VunCannon

Executive Vice President, Chief Financial

Officer, Corporate Secretary and Treasurer

EX-32

Exhibit 32

CERTIFICATION UNDER SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned certifies in the capacity indicated below that this Annual Report on Form 10-K of HomeTrust Bancshares, Inc. (the “Company”) for the year ended June 30, 2019 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and that information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in such report.

Date: September 13, 2019	/s/ Dana L. Stonestreet
	Chairman of the Board, President and
	Chief Executive Officer
Date: September 13, 2019	/s/ Tony J. VunCannon
	Tony J. VunCannon
	Executive Vice President, Chief Financial
	Officer, Corporate Secretary and Treasurer

This certification accompanies this periodic report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

XML

Consolidated Statements of Income - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Interest and Dividend Income
Loans	$ 121,903	$ 105,082	$ 90,069
Securities available for sale	3,443	3,668	3,983
Certificates of deposit and other interest-bearing deposits	8,278	5,939	3,725
Other investments	3,635	2,713	1,659
Total interest and dividend income	137,259	117,402	99,436
Interest Expense
Deposits	15,757	6,758	4,588
Borrowings	14,626	9,314	3,657
Total interest expense	30,383	16,072	8,245
Net Interest Income	106,876	101,330	91,191
Provision for Loan Losses	5,700	0	0
Net Interest Income after Provision for Loan Losses	101,176	101,330	91,191
Noninterest Income
Service charges and fees on deposit accounts	9,611	8,802	7,709
Loan income and fees	1,422	1,176	971
Gain on sale of loans held for sale	6,218	4,276	2,674
BOLI income	2,103	2,117	2,088
Gain from sale of premises and equipment	0	164	385
Gain from sales of securities available for sale	0	0	22
Other, net	3,541	2,437	2,258
Total noninterest income	22,895	18,972	16,107
Noninterest Expense
Salaries and employee benefits	52,291	48,170	46,446
Net occupancy expense	9,454	9,689	9,121
Computer services	7,664	6,440	6,650
Telephone, postage, and supplies	3,040	2,958	2,732
Marketing and advertising	1,853	1,478	1,670
Deposit insurance premiums	1,426	1,619	1,378
Loss on sale and impairment of REO	439	127	300
REO expense	874	1,065	1,114
Core deposit intangible amortization	2,029	2,645	2,823
Merger-related expenses	0	0	7,805
Other	11,064	11,140	10,220
Total noninterest expense	90,134	85,331	90,259
Income Before Income Taxes	33,937	34,971	17,039
Income Tax Expense	6,791	26,736	5,192
Net Income	$ 27,146	$ 8,235	$ 11,847
Net income per common share:
Basic (in dollars per share)	$ 1.52	$ 0.45	$ 0.66
Diluted (in dollars per share)	$ 1.46	$ 0.44	$ 0.65
Average shares outstanding:
Basic (in shares)	17,692,493	18,028,854	17,379,487
Diluted (in shares)	18,393,184	18,726,431	17,956,443

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Operating Activities:
Net Income	$ 27,146	$ 8,235	$ 11,847
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	5,700	0	0
Depreciation	4,243	3,810	3,816
Deferred income tax expense	5,346	26,121	4,947
Net amortization and accretion	(6,828)	(5,950)	(6,658)
Gain on sale of premises and equipment	0	(164)	(385)
Loss on sale and impairment of REO	439	127	300
BOLI income	(2,103)	(2,117)	(2,088)
Gain from sales of securities available for sale	0	0	(22)
Gain on sale of loans held for sale	(6,218)	(4,276)	(2,674)
Origination of loans held for sale	(190,870)	(143,755)	(134,258)
Proceeds from sales of loans held for sale	174,973	143,350	137,108
Increase (decrease) in deferred loan fees, net	(768)	181	(1,317)
Increase in accrued interest receivable and other assets	(4,835)	(1,246)	(2,727)
Core deposit intangible amortization	2,029	2,645	2,823
ESOP compensation expense	1,422	1,367	1,186
Restricted stock and stock option expense	1,601	3,027	4,166
Increase in other liabilities	(3,615)	(13)	(949)
Net cash provided by operating activities	7,662	31,342	15,115
Investing Activities:
Purchase of securities available for sale	(34,675)	0	(15,082)
Proceeds from sales of securities available for sale	0	0	19,279
Proceeds from maturities of securities available for sale	38,430	20,675	27,145
Maturities (purchase) of commercial paper, net	(5,824)	(75,202)	81,821
Purchase of certificates of deposit in other banks	(18,154)	(17,201)	(41,988)
Maturities of certificates of deposit in other banks	33,086	82,538	71,476
Principal repayments of mortgage-backed securities	31,627	20,471	23,919
Net redemptions (purchases) of other investments	(3,447)	2,141	(7,255)
Net increase in loans	(173,754)	(168,602)	(255,853)
Purchase of BOLI	(137)	(76)	(273)
Proceeds from redemption of BOLI	14	146	0
Purchase of equipment for operating leases and other assets	(16,578)	0	0
Purchase of premises and equipment	(2,124)	(3,458)	(2,821)
Proceeds from sale of premises and equipment	0	923	395
Capital improvements to REO	0	(30)	(11)
Proceeds from sale of REO	1,047	3,883	3,277
Acquisition of United Financial of North Carolina, Inc.	0	(225)	(200)
Acquisition of TriSummit Bancorp, Inc., net of cash received	0	0	(10,585)
Net cash used in investing activities	(150,489)	(134,017)	(106,756)
Financing Activities:
Net increase (decrease) in deposits	131,004	147,802	(34,479)
Net increase (decrease) in borrowings	45,000	(61,500)	158,031
Common stock repurchased	(30,638)	0	0
Cash dividends paid	(3,176)	0	0
Retired stock	(205)	(494)	(569)
Stock options exercised	1,173	651	3,068
Decrease in capital lease obligations	(34)	(23)	(21)
Net cash provided by financing activities	143,124	86,436	126,030
Net Increase (Decrease) in Cash and Cash Equivalents	297	(16,239)	34,389
Cash and Cash Equivalents at Beginning of Period	70,746	86,985	52,596
Cash and Cash Equivalents at End of Period	71,043	70,746	86,985
Cash paid during the period for:
Interest	28,997	15,716	7,980
Income taxes	1,549	887	383
Noncash transactions:
Unrealized gain (loss) in value of securities available for sale, net of income taxes	2,331	(1,871)	(2,070)
Transfers of loans to REO	731	1,346	2,417
Retained portion of loans sold to the U.S. Small Business Administration (SBA)	15,607	4,415	0
Transfers of loans to held for sale from loans held for investment	5,794	0	0
Business Combinations:
Assets acquired	0	0	364,504
Liabilities assumed	0	0	328,378
Net assets acquired	$ 0	$ 0	$ 36,126

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Capital

12 Months Ended

Jun. 30, 2019

Banking and Thrift [Abstract]

Capital

Capital

At June 30, 2019, stockholder's equity totaled $408,896. HomeTrust Bancshares, Inc. is a bank holding company subject to regulation by the Federal Reserve. As a bank holding company, we are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended and the regulations of the Federal Reserve. Our subsidiary, the Bank, an FDIC-insured, North Carolina state-chartered bank and a member of the Federal Reserve System, is supervised and regulated by the Federal Reserve and the North Carolina Commissioner of Banks ("NCCOB") and is subject to minimum capital requirements applicable to state member banks established by the Federal Reserve that are calculated in a manner similar to those applicable to bank holding companies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by bank regulators that, if undertaken, could have a direct material effect on the Company's financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

At June 30, 2019, HomeTrust Bancshares, Inc. and the Bank each exceeded all regulatory capital requirements as of that date. Consistent with our goals to operate a sound and profitable organization, our policy is for the Bank to maintain a “well-capitalized” status under the regulatory capital categories of the Federal Reserve. The Bank was categorized as "well-capitalized" at June 30, 2019 under applicable regulatory requirements.

HomeTrust Bancshares, Inc. and the Bank's actual and required minimum capital amounts and ratiosare as follows:

					Regulatory Requirements
	Actual				Minimum for Capital Adequacy Purposes				Minimum to Be Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
HomeTrust Bancshares, Inc.
As of June 30, 2019
Common Equity Tier I Capital (to Risk-weighted Assets)	$	374,729	12.20	%	$	138,226	4.50	%	$	199,659	6.50	%
Tier I Capital (to Total Adjusted Assets)	$	374,729	10.89	%	$	137,649	4.00	%	$	172,062	5.00	%
Tier I Capital (to Risk-weighted Assets)	$	374,729	12.20	%	$	184,301	6.00	%	$	245,734	8.00	%
Total Risk-based Capital (to Risk-weighted Assets)	$	396,613	12.91	%	$	245,734	8.00	%	$	307,168	10.00	%
As of June 30, 2018
Common Equity Tier I Capital (to Risk-weighted Assets)	$	372,188	12.97	%	$	129,109	4.50	%	$	186,491	6.50	%
Tier I Capital (to Total Adjusted Assets)	$	372,188	11.45	%	$	130,032	4.00	%	$	162,539	5.00	%
Tier I Capital (to Risk-weighted Assets)	$	372,188	12.97	%	$	172,145	6.00	%	$	229,527	8.00	%
Total Risk-based Capital (to Risk-weighted Assets)	$	393,703	13.72	%	$	229,527	8.00	%	$	286,909	10.00	%
HomeTrust Bank:
As of June 30, 2019
Common Equity Tier I Capital (to Risk-weighted Assets)	$	355,759	11.59	%	$	138,153	4.50	%	$	199,555	6.50	%
Tier I Capital (to Total Adjusted Assets)	$	355,759	10.34	%	$	137,590	4.00	%	$	171,988	5.00	%
Tier I Capital (to Risk-weighted Assets)	$	355,759	11.59	%	$	184,204	6.00	%	$	245,606	8.00	%
Total Risk-based Capital (to Risk-weighted Assets)	$	377,639	12.30	%	$	245,606	8.00	%	$	307,007	10.00	%
As of June 30, 2018
Common Equity Tier I Capital (to Risk-weighted Assets)	$	335,152	11.70	%	$	128,889	4.50	%	$	186,173	6.50	%
Tier I Capital (to Total Adjusted Assets)	$	335,152	10.33	%	$	129,769	4.00	%	$	162,211	5.00	%
Tier I Capital (to Risk-weighted Assets)	$	335,152	11.70	%	$	171,852	6.00	%	$	229,136	8.00	%
Total Risk-based Capital (to Risk-weighted Assets)	$	356,603	12.45	%	$	229,136	8.00	%	$	286,421	10.00	%

___________________________________

In addition to the minimum common equity Tier 1 ("CET1"), Tier 1 and total risk-based capital ratios, HomeTrust Bancshares, Inc. and the Bank have to maintain a capital conservation buffer consisting of additional CET1 capital or more than 2.50% above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. As of June 30, 2019, the conservation buffer was 4.90%% and 4.30%% for HomeTrust Bancshares, Inc. and the Bank, respectively.

A reconciliation of HomeTrust Bancshares, Inc.'s stockholders' equity under US GAAP and regulatory capital amounts as of the dates indicated follows:

	June 30,
	2019			2018
Total stockholders' equity under US GAAP	$	408,896		$	409,242
Accumulated other comprehensive loss (income), net of tax	(733		)	1,598
Investment in nonincludable subsidiary	(780		)	(826		)
Disallowed deferred tax assets	(5,092		)	(8,701		)
Disallowed goodwill and other disallowed intangible assets	(27,562		)	(29,125		)
Tier I Capital	374,729			372,188
Allowable portion of allowance for loan losses and loan commitments	21,884			21,515
Total Risk-based Capital	$	396,613		$	393,703

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Deferred Compensation Agreements

12 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Deferred Compensation Agreements

Deferred Compensation Agreements

The Company’s Director Emeritus Plans (“Plans”) provide certain benefits to Emeritus Directors for providing current advisory services to the Company. The Plans are unfunded and are not qualified under the IRC. Plan benefits vary by participant and are payable to a designated beneficiary in the event of death. The Company records an expense based on the present value of expected future benefits. Plan expenses for the years ended June 30, 2019, 2018, and 2017 were $410, $417, and $419, respectively. Total accrued expenses related to these plans included in other liabilities were $8,268 and $8,542, respectively, as of June 30, 2019 and 2018.

The Company has deferred compensation agreements with certain members of the Company’s Board of Directors. The future payments related to these agreements are to be funded with life insurance contracts which are payable to the Company in the event of the director’s death. For the years ended June 30, 2019, 2018, and 2017 deferred compensation expense was $28, $32, and $34, respectively.

The net cash surrender value of the related life insurance policies and deferred compensation liability as of the dates indicated are detailed below:

	June 30,
	2019		2018
Net cash surrender value of life insurance, related to deferred compensation	$	7,413	$	7,142
Deferred compensation liability, included in other liabilities	$	956	$	1,075

Long term deferred compensation and supplemental retirement plans are provided to certain key current and former officers. These plans are unfunded and are not qualified under the IRC. The benefits will vary by participant and are payable to a designated beneficiary in the event of death.  Plan expenses for the years ended June 30, 2019, 2018, and 2017 were $771, $519, and $1,253, respectively. Total accrued expenses related to these plans included in other liabilities were $19,499 and $20,257, as of June 30, 2019 and 2018, respectively.

In addition, the Company has a deferred compensation plan provided to certain officers and directors. The plan allows the participants to defer any of their annual compensation, including bonus payments, up to the maximum allowed for each participant. The plan is unfunded and is not qualified under the IRC. Plan expenses for the years ended June 30, 2019, 2018, and 2017 were $223, $205, and $197, respectively. The total deferred compensation plan payable included in other liabilities was $4,966 and $5,274, respectively as of June 30, 2019 and 2018.

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Deposit Accounts (Tables)

12 Months Ended

Jun. 30, 2019

Banking and Thrift [Abstract]

Schedule of Deposit Accounts

Deposit accounts at the dates indicated consist of the following:

					Weighted Average Interest Rates
	June 30,				June 30,
	2019		2018		2019		2018
Noninterest-bearing accounts	$	294,322	$	317,822	—	%	—	%
NOW accounts	452,295		471,364		0.15	%	0.11	%
Money market accounts	691,172		677,665		0.89	%	0.48	%
Savings accounts	177,278		213,250		0.12	%	0.13	%
Certificates of deposit	712,190		516,152		1.99	%	1.01	%
Total	$	2,327,257	$	2,196,253	0.91	%	0.42	%

Schedule of Maturities of Certificates of Deposit

As of June 30, 2019, maturities of certificates of deposit are as follows:

2020	$	515,519
2021	114,927
2022	52,905
2023	17,868
2024	10,971
Thereafter	—
Total	$	712,190

Schedule of Interest Expense on Deposits

Interest expense on deposits at the dates indicated consists of the following:

	June 30,
	2019		2018		2017
NOW accounts	$	1,251	$	970	$	772
Money market accounts	5,102		2,442		1,405
Savings accounts	245		295		308
Certificates of deposit	9,159		3,051		2,103
Total	$	15,757	$	6,758	$	4,588

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Employee Benefit Plans (Tables)

12 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Employee Stock Ownership Plan (ESOP) Activity

Shares held by the ESOP at the dates indicated include the following:

	June 30,
	2019		2018
Unallocated ESOP shares	687,700		740,600
Allocated ESOP shares	317,400		264,500
ESOP shares committed to be released	52,900		52,900
Total ESOP shares	1,058,000		1,058,000
Fair value of unallocated ESOP shares	$	17,289	$	20,848

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Unaudited Interim Financial Information - Schedule of Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Quarterly Financial Information Disclosure [Abstract]
Interest and dividend income	$ 35,855	$ 34,724	$ 34,400	$ 32,280	$ 30,693	$ 29,265	$ 28,848	$ 27,896	$ 137,259	$ 117,402	$ 99,436
Interest expense	8,931	8,145	7,299	6,008	5,103	4,036	3,618	3,315	30,383	16,072	8,245
Net Interest Income	26,924	26,579	27,101	26,272	25,590	25,229	25,230	24,581	106,876	101,330	91,191
Provision for loan losses	200	5,500	0	0	0	0	0	0
Net interest income after provision for loan losses	26,724	21,079	27,101	26,272	25,590	25,229	25,230	24,581
Noninterest income	6,811	5,386	5,085	5,613	5,382	4,926	4,787	4,577	22,895	18,972	16,107
Noninterest expense	23,415	22,978	21,858	21,883	21,754	21,321	21,175	21,081	90,134	85,331	90,259
Net income before provision for income taxes	10,120	3,487	10,328	10,002	9,218	8,834	8,842	8,077
Income tax expense	2,107	185	2,287	2,212	2,011	2,707	19,508	2,510	6,791	26,736	5,192
Net Income	$ 8,013	$ 3,302	$ 8,041	$ 7,790	$ 7,207	$ 6,127	$ (10,666)	$ 5,567	$ 27,146	$ 8,235	$ 11,847
Basic net income per common share (in dollars per share)	$ 0.45	$ 0.19	$ 0.45	$ 0.43	$ 0.40	$ 0.34	$ (0.59)	$ 0.31
Diluted net income per common share (in dollars per share)	$ 0.44	$ 0.18	$ 0.43	$ 0.41	$ 0.38	$ 0.32	$ (0.59)	$ 0.30

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Loans - Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Accounts, Notes, Loans and Financing Receivable
Total loans	$ 2,705,186	$ 2,526,616
Deferred loan costs, net	4	(764)
Total loans, net of deferred loan fees and discount	2,705,190	2,525,852
Allowance for loan losses	(21,429)	(21,060)
Net loans	2,683,761	2,504,792
Retail Consumer Loans
Accounts, Notes, Loans and Financing Receivable
Total loans	1,162,464	1,219,204
Retail Consumer Loans | One-to-four family
Accounts, Notes, Loans and Financing Receivable
Total loans	660,591	664,289
Retail Consumer Loans | HELOCs - originated
Accounts, Notes, Loans and Financing Receivable
Total loans	131,095	137,564
Retail Consumer Loans | HELOCs - purchased
Accounts, Notes, Loans and Financing Receivable
Total loans	116,972	166,276
Retail Consumer Loans | Construction and land/lots
Accounts, Notes, Loans and Financing Receivable
Total loans	80,602	65,601
Retail Consumer Loans | Indirect auto finance
Accounts, Notes, Loans and Financing Receivable
Total loans	153,448	173,095
Retail Consumer Loans | Consumer
Accounts, Notes, Loans and Financing Receivable
Total loans	19,756	12,379
Commercial Loans
Accounts, Notes, Loans and Financing Receivable
Total loans	1,542,722	1,307,412
Commercial Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Total loans	927,261	857,315
Commercial Loans | Construction and development
Accounts, Notes, Loans and Financing Receivable
Total loans	210,916	192,102
Commercial Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Total loans	160,471	135,336
Commercial Loans | Equipment Finance
Accounts, Notes, Loans and Financing Receivable
Total loans	132,058	13,487
Commercial Loans | Municipal leases
Accounts, Notes, Loans and Financing Receivable
Total loans	112,016	109,172
Executive Officers and Directors
Accounts, Notes, Loans and Financing Receivable
Net loans	1,800	409
Executive Officers and Directors | Unfunded Loan Commitment
Accounts, Notes, Loans and Financing Receivable
Net loans	$ 118	$ 287

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Equity Incentive Plan - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - $ / shares	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Weighted-average volatility	17.84%	17.69%
Expected dividend yield	0.87%	0.00%
Risk-free interest rate	2.52%	2.67%
Expected life (years)	6 years 6 months	6 years 6 months
Weighted average grant date fair value (in dollars per share)	$ 5.88	$ 6.62

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Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Income Tax Disclosure [Abstract]
Tax at federal income tax rate	$ 7,127	$ 9,617	$ 5,793
Tax at federal income tax rate, Rate (as a percent)	21.00%	27.50%	34.00%
Tax exempt income	$ (855)	$ (1,075)	$ (1,391)
Tax exempt income, Rate (as a percent)	(2.00%)	(3.00%)	(8.00%)
Nondeductible merger expenses	$ 0	$ 0	$ 91
Nondeductible merger expenses, Rate (as a percent)	(0.00%)	(0.00%)	1.00%
Change in valuation allowance for deferred tax assets, allocated to income tax expense	$ (325)	$ 87	$ (327)
Change in valuation allowance for deferred tax assets, allocated to income tax expense, Rate (as a percent)	(1.00%)	0.00%	(2.00%)
State tax, net of federal benefit	$ 756	$ 688	$ 290
State tax, net of federal benefit, Rate (as a percent)	2.00%	2.00%	2.00%
Tax Cuts and Jobs Act of 2017, Adjustment, Rate Reconciliation	$ 0	$ 17,587	$ 0
Tax Cuts And Jobs Act of 2017, Adjustment, Percent	0.00%	50.00%	0.00%
Other	$ 88	$ (168)	$ 736
Other, Rate (as a percent)	0.00%	(1.00%)	4.00%
Total	$ 6,791	$ 26,736	$ 5,192
Total, Rate (as a percent)	20.00%	76.00%	31.00%

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Leases - Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Leases [Abstract]
2020	$ 1,660
2021	1,395
2022	1,296
2023	1,291
2024	643
Thereafter	1,076
Total of future minimum payments	$ 7,361

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Debt Securities - Schedule of Gross Proceeds and Gross Realized Gains and Losses from Sales of Securities (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Investments, Debt and Equity Securities [Abstract]
Gross proceeds from sales of securities	$ 0	$ 0	$ 19,279
Gross realized gains from sales of securities	0	0	70
Gross realized losses from sales of securities	$ 0	$ 0	$ (48)

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Income Taxes - Deferred Tax Asset and Liability Policy: Valuation Allowance for Deferred Tax Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2018	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Deferred tax assets, valuation allowance	$ 325	$ 0
Net decrease in total valuation allowance	325
Amount in retained earnings for bad debt reserve with no deferred tax liability	$ 19,570	$ 19,570

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Net Income per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Abstract]
Net Income	$ 8,013	$ 3,302	$ 8,041	$ 7,790	$ 7,207	$ 6,127	$ (10,666)	$ 5,567	$ 27,146	$ 8,235	$ 11,847
Allocation of earnings to participating securities									(189)	(60)	(125)
Numerator for basic EPS - Net income available to common stockholders									26,957	8,175	11,722
Effect of dilutive securities:
Dilutive effect to participating securities									7	2	4
Numerator for diluted EPS									$ 26,964	$ 8,177	$ 11,726
Denominator:
Weighted-average common shares outstanding - basic (in shares)									17,692,493	18,028,854	17,379,487
Effect of dilutive shares (in shares)									700,691	697,577	576,956
Weighted-average common shares outstanding - diluted (in shares)									18,393,184	18,726,431	17,956,443
Net income per share - basic (in dollars per share)									$ 1.52	$ 0.45	$ 0.66
Net income per share - diluted (in dollars per share)									$ 1.46	$ 0.44	$ 0.65

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Loans - Schedule of Past Due Financing Receivables (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	$ 10,067	$ 9,813
Current	2,695,119	2,516,803
Total Loans Receivable	2,705,186	2,526,616
30-89 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	5,579	4,160
90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	4,488	5,653
Retail Consumer Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans Receivable	1,162,464	1,219,204
Retail Consumer Loans | One-to-four family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	3,004	4,757
Current	657,587	659,532
Total Loans Receivable	660,591	664,289
Retail Consumer Loans | One-to-four family | 30-89 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,615	3,001
Retail Consumer Loans | One-to-four family | 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,389	1,756
Retail Consumer Loans | HELOCs - originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	434	366
Current	130,661	137,198
Total Loans Receivable	131,095	137,564
Retail Consumer Loans | HELOCs - originated | 30-89 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	226	98
Retail Consumer Loans | HELOCs - originated | 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	208	268
Retail Consumer Loans | HELOCs - purchased
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	485	0
Current	116,487	166,276
Total Loans Receivable	116,972	166,276
Retail Consumer Loans | HELOCs - purchased | 30-89 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Retail Consumer Loans | HELOCs - purchased | 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	485	0
Retail Consumer Loans | Construction and land/lots
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	144	98
Current	80,458	65,503
Total Loans Receivable	80,602	65,601
Retail Consumer Loans | Construction and land/lots | 30-89 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	138	44
Retail Consumer Loans | Construction and land/lots | 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	6	54
Retail Consumer Loans | Indirect auto finance
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	696	462
Current	152,752	172,633
Total Loans Receivable	153,448	173,095
Retail Consumer Loans | Indirect auto finance | 30-89 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	459	335
Retail Consumer Loans | Indirect auto finance | 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	237	127
Retail Consumer Loans | Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	37	277
Current	19,719	12,102
Total Loans Receivable	19,756	12,379
Retail Consumer Loans | Consumer | 30-89 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	6	238
Retail Consumer Loans | Consumer | 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	31	39
Commercial Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans Receivable	1,542,722	1,307,412
Commercial Loans | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	2,795	1,581
Current	924,466	855,734
Total Loans Receivable	927,261	857,315
Commercial Loans | Commercial real estate | 30-89 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	2,279	169
Commercial Loans | Commercial real estate | 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	516	1,412
Commercial Loans | Construction and development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,133	2,188
Current	209,783	189,914
Total Loans Receivable	210,916	192,102
Commercial Loans | Construction and development | 30-89 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	260
Commercial Loans | Construction and development | 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,133	1,928
Commercial Loans | Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	306	84
Current	160,165	135,252
Total Loans Receivable	160,471	135,336
Commercial Loans | Commercial and industrial | 30-89 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	207	15
Commercial Loans | Commercial and industrial | 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	99	69
Commercial Loans | Equipment Finance
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,033	0
Current	131,025	13,487
Total Loans Receivable	132,058	13,487
Commercial Loans | Equipment Finance | 30-89 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	649	0
Commercial Loans | Equipment Finance | 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	384	0
Commercial Loans | Municipal leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Current	112,016	109,172
Total Loans Receivable	112,016	109,172
Commercial Loans | Municipal leases | 30-89 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Commercial Loans | Municipal leases | 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	$ 0	$ 0

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Employee Benefit Plans - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Retirement Benefits [Abstract]
Employee stock ownership plan, requisite service for eligibility	1000 hours
Employee stock ownership plan, period for eligibility	12 months
Employee stock ownership plan, minimum age for eligibility	21 years
Employer matching contribution, percent of match	50.00%
Employer matching contribution, percent of employees' gross pay	6.00%
Employee service period	6 years
Defined contribution plan, administrative expenses	$ 810	$ 737	$ 450
ESOP compensation expense	1,422	1,367	1,186
Executive Medical Care Plan (EMCP) expenses	210	224	$ 135
Executive Medical Care Plan (EMCP) accrued expenses	$ 5,289	$ 5,237

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Business Combinations - Acquiree Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Thousands	Jan. 01, 2017	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Assets
Certificates of deposit in other banks		$ 52,005	$ 66,937
Other investments, at cost		45,378	41,931
Loans, net		2,683,761	2,504,792
Premises and equipment, net		61,051	62,537
Real estate owned (REO)		2,929	3,684	$ 6,318
Deferred income taxes		31,950	36,949
Bank owned life insurance (BOLI)		90,254	88,028
Core deposit intangibles		2,499	4,528
Other assets (includes $7,222 prepayment of TARP preferred stock)		23,157	3,503
Total Assets		3,476,178	3,304,169
Liabilities
Deposits		2,327,257	2,196,253
Borrowings		680,000	635,000
Other liabilities		58,145	61,760
Total liabilities		3,067,282	2,894,927
Goodwill		$ 25,638	$ 25,638
TriSummit Bancorp
Business Acquisition [Line Items]
Cash paid as deposit premium	$ 16,083
Fair value of HomeTrust common stock at $25.90 per share	20,043
Total consideration	$ 36,126
Price per share (in dollars per share)	$ 25.90
Assets
Fair value adjustments, cash and cash equivalents	$ 0
Cash and cash equivalents	5,498
Fair value adjustments, certificates of deposit	0
Certificates of deposit in other banks recorded by HTBI	250
Fair value adjustments, investment securities	(203)
Investment securities recorded by HTBI	58,525
Fair value adjustments, other investments and securities	0
Other investments, at cost recorded by HTBI	2,614
Fair value adjustments, loans net	(3,867)
Loans, net of allowance	258,059
Fair value adjustments, premises and equipment, net	(2,419)
Premises and equipment, net recorded by HTBI	10,422
Fair value adjustments, REO	(122)
REO	1,511
Fair value adjustments, deferred income tax	4,462
Deferred income taxes	7,115
Fair value adjustments, bank owned life insurance	0
Bank owned life insurance recorded by HTBI	3,762
Fair value adjustments, core deposit intangibles	1,575
Core deposit intangibles	2,860
Fair value adjustments, other assets	(105)
Other assets	1,348
Fair value adjustments, total assets	(679)
Total assets acquired	351,964
Liabilities
Fair value adjustments, deposits	587
Deposits	280,234
Fair value adjustments, borrowings	16
Borrowings	47,469
Fair value adjustments, other liabilities	0
Other liabilities	675
Fair value adjustments, total liabilities	603
Total liabilities assumed	328,378
Fair value adjustments, net identifiable assets acquired over liabilities assumed	(1,282)
Net identifiable assets acquired over liabilities assumed	23,586
Goodwill	12,540
TriSummit Bancorp
Assets
Cash and cash equivalents	5,498
Certificates of deposit in other banks	250
Investment securities	58,728
Other investments, at cost	2,614
Loans, net	261,926
Premises and equipment, net	12,841
Real estate owned (REO)	1,633
Deferred income taxes	2,653
Bank owned life insurance (BOLI)	3,762
Core deposit intangibles	1,285
Other assets (includes $7,222 prepayment of TARP preferred stock)	1,453
Total Assets	352,643
Liabilities
Deposits	279,647
Borrowings	47,453
Other liabilities	675
Total liabilities	327,775
Net identifiable assets acquired over liabilities assumed	$ 24,868

XML

Revenue (Tables)

12 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The table below presents the Company's sources of noninterest income, segregated by in-scope and out-of-scope revenue streams of Topic 606 for the periods indicated:

	Year Ended June 30,
	2019		2018		2017
In-scope of Topic 606:
Service charges on deposit accounts	$	3,978	$	3,674	$	3,309
Fees, interchange, and other service charges	6,377		5,576		4,747
Other	775		909		943
Noninterest income (in-scope of Topic 606)	11,130		10,159		8,999
Noninterest income (out-of-scope of Topic 606)	11,765		8,813		7,108
Total noninterest income	$	22,895	$	18,972	$	16,107

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Capital - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Stockholder's equity	$ 408,896	$ 409,242
Common Equity Tier I Capital, Capital Conservation Buffer to Risk-weighted Assets (as a percent)	2.50%
Common Equity Tier I Capital, Capital Conservation Buffer (as a percent)	4.30%
HomeTrust Bancshares, Inc.
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Stockholder's equity	$ 408,896	$ 409,242
Common Equity Tier I Capital, Capital Conservation Buffer (as a percent)	4.90%

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Loans - Schedule of Debt Restructurings on Financing Receivables (Details) $ in Thousands	12 Months Ended
	Jun. 30, 2019 USD ($) loan	Jun. 30, 2018 USD ($) loan	Jun. 30, 2017 USD ($) loan
Financing Receivable, Modifications
Number of loans | loan	29	31	41
Pre-modification outstanding recorded investment	$ 7,291	$ 4,198	$ 4,915
Post-modification outstanding recorded investment	$ 7,249	$ 4,283	$ 4,472
Extended term
Financing Receivable, Modifications
Number of loans | loan	3	5	12
Pre-modification outstanding recorded investment	$ 68	$ 550	$ 1,005
Post-modification outstanding recorded investment	$ 67	$ 534	$ 980
Other Troubled Debt Restructing [Member]
Financing Receivable, Modifications
Number of loans | loan	25	26	24
Pre-modification outstanding recorded investment	$ 7,138	$ 3,648	$ 3,542
Post-modification outstanding recorded investment	$ 7,098	$ 3,749	$ 3,128
Retail Consumer Loans | Below market interest rate
Financing Receivable, Modifications
Number of loans | loan	1	0	5
Pre-modification outstanding recorded investment	$ 85	$ 0	$ 368
Post-modification outstanding recorded investment	$ 84	$ 0	$ 364
Retail Consumer Loans | Below market interest rate | One-to-four family
Financing Receivable, Modifications
Number of loans | loan	1	0	3
Pre-modification outstanding recorded investment	$ 85	$ 0	$ 288
Post-modification outstanding recorded investment	$ 84	$ 0	$ 285
Retail Consumer Loans | Below market interest rate | Construction and land/lots
Financing Receivable, Modifications
Number of loans | loan	0	0	2
Pre-modification outstanding recorded investment	$ 0	$ 0	$ 80
Post-modification outstanding recorded investment	$ 0	$ 0	$ 79
Retail Consumer Loans | Extended term | One-to-four family
Financing Receivable, Modifications
Number of loans | loan	1	4	5
Pre-modification outstanding recorded investment	$ 34	$ 514	$ 186
Post-modification outstanding recorded investment	$ 34	$ 502	$ 179
Retail Consumer Loans | Extended term | HELOCs - originated
Financing Receivable, Modifications
Number of loans | loan	0	0	1
Pre-modification outstanding recorded investment	$ 0	$ 0	$ 37
Post-modification outstanding recorded investment	$ 0	$ 0	$ 37
Retail Consumer Loans | Extended term | Construction and land/lots
Financing Receivable, Modifications
Number of loans | loan	0	1	1
Pre-modification outstanding recorded investment	$ 0	$ 36	$ 280
Post-modification outstanding recorded investment	$ 0	$ 32	$ 264
Retail Consumer Loans | Extended term | Consumer
Financing Receivable, Modifications
Number of loans | loan	2	0	2
Pre-modification outstanding recorded investment	$ 34	$ 0	$ 11
Post-modification outstanding recorded investment	$ 33	$ 0	$ 11
Retail Consumer Loans | Other Troubled Debt Restructing [Member] | One-to-four family
Financing Receivable, Modifications
Number of loans | loan	18	25	13
Pre-modification outstanding recorded investment	$ 1,452	$ 3,646	$ 525
Post-modification outstanding recorded investment	$ 1,433	$ 3,747	$ 517
Retail Consumer Loans | Other Troubled Debt Restructing [Member] | HELOCs - originated
Financing Receivable, Modifications
Number of loans | loan	0	0	2
Pre-modification outstanding recorded investment	$ 0	$ 0	$ 33
Post-modification outstanding recorded investment	$ 0	$ 0	$ 31
Retail Consumer Loans | Other Troubled Debt Restructing [Member] | Construction and land/lots
Financing Receivable, Modifications
Number of loans | loan	1	0	4
Pre-modification outstanding recorded investment	$ 29	$ 0	$ 404
Post-modification outstanding recorded investment	$ 28	$ 0	$ 318
Retail Consumer Loans | Other Troubled Debt Restructing [Member] | Indirect Auto Finance [Member]
Financing Receivable, Modifications
Number of loans | loan	1	0	0
Pre-modification outstanding recorded investment	$ 33	$ 0	$ 0
Post-modification outstanding recorded investment	$ 26	$ 0	$ 0
Retail Consumer Loans | Other Troubled Debt Restructing [Member] | Consumer
Financing Receivable, Modifications
Number of loans | loan	1	1	0
Pre-modification outstanding recorded investment	$ 2	$ 2	$ 0
Post-modification outstanding recorded investment	$ 2	$ 2	$ 0
Commercial Loans | Extended term | Construction and development
Financing Receivable, Modifications
Number of loans | loan	0	0	1
Pre-modification outstanding recorded investment	$ 0	$ 0	$ 439
Post-modification outstanding recorded investment	$ 0	$ 0	$ 439
Commercial Loans | Extended term | Commercial and industrial
Financing Receivable, Modifications
Number of loans | loan	0	0	2
Pre-modification outstanding recorded investment	$ 0	$ 0	$ 52
Post-modification outstanding recorded investment	$ 0	$ 0	$ 50
Commercial Loans | Other Troubled Debt Restructing [Member] | Construction and development
Financing Receivable, Modifications
Number of loans | loan	1	0	0
Pre-modification outstanding recorded investment	$ 182	$ 0	$ 0
Post-modification outstanding recorded investment	$ 182	$ 0	$ 0
Commercial Loans | Other Troubled Debt Restructing [Member] | Commercial real estate
Financing Receivable, Modifications
Number of loans | loan	3	0	3
Pre-modification outstanding recorded investment	$ 5,440	$ 0	$ 2,349
Post-modification outstanding recorded investment	$ 5,427	$ 0	$ 2,035
Commercial Loans | Other Troubled Debt Restructing [Member] | Commercial and industrial
Financing Receivable, Modifications
Number of loans | loan	0	0	2
Pre-modification outstanding recorded investment	$ 0	$ 0	$ 231
Post-modification outstanding recorded investment	$ 0	$ 0	$ 227

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Parent Company Financial Information - Condensed Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Income:
Interest income	$ 35,855	$ 34,724	$ 34,400	$ 32,280	$ 30,693	$ 29,265	$ 28,848	$ 27,896	$ 137,259	$ 117,402	$ 99,436
Expense:
Loss on sale and impairment of REO									439	127	300
Provision for (recovery of) loan losses	200	5,500	0	0	0	0	0	0
Income Tax Expense	2,107	185	2,287	2,212	2,011	2,707	19,508	2,510	6,791	26,736	5,192
Net Income	$ 8,013	$ 3,302	$ 8,041	$ 7,790	$ 7,207	$ 6,127	$ (10,666)	$ 5,567	27,146	8,235	11,847
Parent Company
Income:
Interest income									329	456	565
Other income									54	44	1
Equity earnings in Bank subsidiary									27,287	8,427	12,003
Total income									27,670	8,927	12,569
Expense:
Management fee expense									407	385	354
REO expense									11	34	62
Loss on sale and impairment of REO									114	158	39
Provision for (recovery of) loan losses									(259)	(131)	90
Other expense									251	246	177
Total expense									524	692	722
Income Before Income Taxes									27,146	8,235	11,847
Income Tax Expense									0	0	0
Net Income									$ 27,146	$ 8,235	$ 11,847

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Deposit Accounts - Schedule of Interest Expense on Deposits (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Banking and Thrift [Abstract]
NOW accounts	$ 1,251	$ 970	$ 772
Money market accounts	5,102	2,442	1,405
Savings accounts	245	295	308
Certificates of deposit	9,159	3,051	2,103
Total	$ 15,757	$ 6,758	$ 4,588

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Loans - Schedule of Past Due Loans Still Accruing and Nonaccruing Interest (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Accounts, Notes, Loans and Financing Receivable
Nonaccruing	$ 10,358	$ 10,914
90 Days & still accruing	0	0
Purchased Credit Impaired (PCI) Loans
Accounts, Notes, Loans and Financing Receivable
Nonaccruing	1,344	3,353
Retail Consumer Loans | One-to-four family
Accounts, Notes, Loans and Financing Receivable
Nonaccruing	3,223	4,308
90 Days & still accruing	0	0
Retail Consumer Loans | HELOCs - originated
Accounts, Notes, Loans and Financing Receivable
Nonaccruing	348	656
90 Days & still accruing	0	0
Retail Consumer Loans | HELOCs - purchased
Accounts, Notes, Loans and Financing Receivable
Nonaccruing	666	187
90 Days & still accruing	0	0
Retail Consumer Loans | Construction and land/lots
Accounts, Notes, Loans and Financing Receivable
Nonaccruing	6	165
90 Days & still accruing	0	0
Retail Consumer Loans | Indirect auto finance
Accounts, Notes, Loans and Financing Receivable
Nonaccruing	463	255
90 Days & still accruing	0	0
Retail Consumer Loans | Consumer
Accounts, Notes, Loans and Financing Receivable
Nonaccruing	45	321
90 Days & still accruing	0	0
Commercial Loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Nonaccruing	3,559	2,863
90 Days & still accruing	0	0
Commercial Loans | Construction and development
Accounts, Notes, Loans and Financing Receivable
Nonaccruing	1,357	2,045
90 Days & still accruing	0	0
Commercial Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Nonaccruing	307	114
90 Days & still accruing	0	0
Commercial Loans | Equipment Finance
Accounts, Notes, Loans and Financing Receivable
Nonaccruing	384	0
90 Days & still accruing	0	0
Commercial Loans | Municipal leases
Accounts, Notes, Loans and Financing Receivable
Nonaccruing	0	0
90 Days & still accruing	$ 0	$ 0

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Accrued Interest Receivable - Schedule of Accrued Interest Receivable (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Receivables [Abstract]
Loans	$ 9,433	$ 8,164
Securities available for sale	690	776
Other	410	404
Total	$ 10,533	$ 9,344

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Goodwill and Core Deposit Intangibles - Amortization expense related to core deposit intangibles (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2020	$ 1,414
2021	741
2022	251
2023	90
2024	3
Total	$ 2,499

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Fair Value of Financial Instruments - Schedule of Quantitative Information About Level 3 Fair Value Measurements (Details) - Nonrecurring Measurements - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Assets, fair value	$ 10,875	$ 10,527
Impaired loans, net
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Assets, fair value	$ 9,071
Weighted Average	1.00%
REO
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Assets, fair value	$ 1,804
Weighted Average	12.00%
Minimum | Impaired loans, net
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Weighted Average	0.00%
Minimum | REO
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Weighted Average	8.00%
Maximum | Impaired loans, net
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Weighted Average	16.00%
Maximum | REO
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Weighted Average	41.00%
Valuation Technique, Discounted Cash Flow | Minimum | Impaired loans, net
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Weighted Average	1.00%
Valuation Technique, Discounted Cash Flow | Maximum | Impaired loans, net
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Weighted Average	3.00%

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Loans - Schedule of Impaired Loans and Related Allowance by Segment and Class (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Financing Receivable, Impaired
Unpaid principal balance	$ 47,611	$ 42,677
Recorded investment with a recorded allowance	22,070	22,209
Recorded investment with no recorded allowance	10,885	9,152
Total	32,955	31,361
Related recorded allowance	601	687
Impaired loans not individually evaluated	17,212	17,477
Recorded allowance of impaired loans not individually evaluated	481	490
Purchased Credit Impaired (PCI) Loans
Financing Receivable, Impaired
Unpaid principal balance	20,141	25,746
Total	16,750	20,904
Retail Consumer Loans | One-to-four family
Financing Receivable, Impaired
Unpaid principal balance	18,302	23,295
Recorded investment with a recorded allowance	12,461	16,035
Recorded investment with no recorded allowance	3,152	4,140
Total	15,613	20,175
Related recorded allowance	472	554
Retail Consumer Loans | HELOCs - originated
Financing Receivable, Impaired
Unpaid principal balance	1,262	2,544
Recorded investment with a recorded allowance	564	1,017
Recorded investment with no recorded allowance	130	737
Total	694	1,754
Related recorded allowance	9	9
Retail Consumer Loans | HELOCs - purchased
Financing Receivable, Impaired
Unpaid principal balance	666	187
Recorded investment with a recorded allowance	0	0
Recorded investment with no recorded allowance	666	187
Total	666	187
Related recorded allowance	0	0
Retail Consumer Loans | Construction and land/lots
Financing Receivable, Impaired
Unpaid principal balance	1,917	2,348
Recorded investment with a recorded allowance	957	1,098
Recorded investment with no recorded allowance	323	446
Total	1,280	1,544
Related recorded allowance	26	53
Retail Consumer Loans | Indirect auto finance
Financing Receivable, Impaired
Unpaid principal balance	601	395
Recorded investment with a recorded allowance	353	122
Recorded investment with no recorded allowance	137	133
Total	490	255
Related recorded allowance	2	1
Retail Consumer Loans | Consumer
Financing Receivable, Impaired
Unpaid principal balance	1,527	501
Recorded investment with a recorded allowance	7	12
Recorded investment with no recorded allowance	1,130	46
Total	1,137	58
Related recorded allowance	43	11
Commercial Loans | Commercial real estate
Financing Receivable, Impaired
Unpaid principal balance	10,127	5,343
Recorded investment with a recorded allowance	6,434	2,862
Recorded investment with no recorded allowance	3,404	2,246
Total	9,838	5,108
Related recorded allowance	36	42
Commercial Loans | Construction and development
Financing Receivable, Impaired
Unpaid principal balance	2,574	3,166
Recorded investment with a recorded allowance	940	828
Recorded investment with no recorded allowance	791	1,217
Total	1,731	2,045
Related recorded allowance	7	14
Commercial Loans | Commercial and industrial
Financing Receivable, Impaired
Unpaid principal balance	10,173	4,898
Recorded investment with a recorded allowance	354	235
Recorded investment with no recorded allowance	768	0
Total	1,122	235
Related recorded allowance	6	$ 3
Commercial Loans | Equipment Finance
Financing Receivable, Impaired
Unpaid principal balance	462
Recorded investment with a recorded allowance	0
Recorded investment with no recorded allowance	384
Total	384
Related recorded allowance	$ 0

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Accrued Interest Receivable

12 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Accrued Interest Receivable

Accrued Interest Receivable

Accrued interest receivable as of the dates indicated consists of the following:

	June 30,
	2019		2018
Loans	$	9,433	$	8,164
Securities available for sale	690		776
Other	410		404
Total	$	10,533	$	9,344

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Debt Securities

12 Months Ended

Jun. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Securities Available for Sale

Securities available for sale consist of the following at the dates indicated:

	June 30, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Government Agencies	$	15,099	$	122	$	(11	)	$	15,210
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises	74,778		586		(184		)	75,180
Municipal Bonds	24,896		423		(7		)	25,312
Corporate Bonds	6,061		43		(20		)	6,084
Total	$	120,834	$	1,174	$	(222	)	$	121,786

	June 30, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Government Agencies	$	48,025	$	1	$	(484	)	$	47,542
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises	71,949		88		(1,438		)	70,599
Municipal Bonds	30,865		127		(226		)	30,766
Corporate Bonds	6,166		25		(168		)	6,023
Equity Securities	63		—					$	63
Total	$	157,068	$	241	$	(2,316	)	$	154,993

Debt securities available for sale by contractual maturity at the dates indicated are shown below. Mortgage-backed securities are not included in the maturity categories because the borrowers in the underlying pools may prepay without penalty; therefore, it is unlikely that the securities will pay at their stated maturity schedule.

	June 30, 2019
	Amortized Cost		Estimated Fair Value
Due within one year	$	5,350	$	5,359
Due after one year through five years	30,526		30,784
Due after five years through ten years	5,538		5,798
Due after ten years	4,642		4,665
Mortgage-backed securities	74,778		75,180
Total	$	120,834	$	121,786

	June 30, 2018
	Amortized Cost		Estimated Fair Value
Due within one year	$	28,728	$	28,573
Due after one year through five years	41,273		40,663
Due after five years through ten years	5,749		5,829
Due after ten years	9,306		9,266
Mortgage-backed securities	71,949		70,599
Total	$	157,005	$	154,930

Gross proceeds and gross realized gains and losses from sales of securities recognized in net income follow:

	June 30,
	2019		2018		2017
Gross proceeds from sales of securities	$	—	$	—	$	19,279
Gross realized gains from sales of securities	—		—		70
Gross realized losses from sales of securities	—		—		(48		)

Securities available for sale with amortized costs totaling $94,337 and $136,914 and market values of $94,876 and $135,313 at June 30, 2019 and June 30, 2018, respectively, were pledged as collateral to secure various public deposits and borrowings.

The gross unrealized losses and the fair value for securities available for sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2019 and June 30, 2018 were as follows:

	June 30, 2019
	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Government Agencies	$	—	$	—		$	6,988	$	(11	)	$	6,988	$	(11	)
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises	1,144		(3		)	24,242		(181		)	25,386		(184		)
Municipal Bonds	—		—			4,895		(7		)	4,895		(7		)
Corporate Bonds	393		(5		)	3,630		(15		)	4,023		(20		)
Total	$	1,537	$	(8	)	$	39,755	$	(214	)	$	41,292	$	(222	)

	June 30, 2018
	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Government Agencies	$	10,962	$	(93	)	$	35,605	$	(391	)	$	46,567	$	(484	)
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises	39,238		(827		)	21,297		(611		)	60,535		(1,438		)
Municipal Bonds	19,795		(208		)	1,446		(18		)	21,241		(226		)
Corporate Bonds	$	—	$	—		$	3,566	$	(168	)	$	3,566	$	(168	)
Total	$	69,995	$	(1,128	)	$	61,914	$	(1,188	)	$	131,909	$	(2,316	)

The total number of securities with unrealized losses at June 30, 2019, and June 30, 2018 were 100 and 218, respectively. Unrealized losses on securities have not been recognized in income because management has the intent and ability to hold the securities for the foreseeable future, and has determined that it is not more likely than not that the Company will be required to sell the securities prior to a recovery in value. The decline in fair value was largely due to increases in market interest rates. The Company had no other than temporary impairment losses during the years ended June 2019, 2018 or 2017.

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Borrowings

12 Months Ended

Jun. 30, 2019

Banking and Thrift [Abstract]

Borrowings

Borrowings

Borrowings consist of the following at the dates indicated:

	June 30,
	2019				2018
	Balance		Weighted Average Rate		Balance		Weighted Average Rate
FHLB Advances	$	680,000	2.10	%	$	635,000	1.95	%

The scheduled maturity dates, call dates, and related interest rates on FHLB advances at June 30, 2019:

Maturity Date	Interest Rate	Call Date	Outstanding Amount
7/1/2019	2.47%	—	$	15,000
7/8/2019	2.40%	—	45,000
7/8/2019	2.44%	—	135,000
7/10/2019	2.40%	—	10,000
7/10/2019	2.42%	—	40,000
7/15/2019	2.33%	—	130,000
7/29/2019	2.33%	—	5,000
9/20/2019	0.86%	9/20/2019	25,000
3/6/2028	1.72%	9/6/2019	100,000
3/22/2028	1.82%	9/23/2019	50,000
6/5/2028	1.87%	9/5/2019	50,000
9/13/2028	1.76%	9/13/2019	25,000
11/24/2028	2.07%	11/26/2019	25,000
11/24/2028	1.79%	8/26/2019	25,000
			$	680,000

All qualifying one-to-four family first mortgage loans, HELOCs, commercial real estate loans, FHLB stock, and certain investment securities were pledged as collateral to secure the FHLB advances.

At June 30, 2019 and 2018, the Company had the ability to borrow $89,499 and $79,226, respectively, in additional FHLB advances. At June 30, 2019 and 2018, the Company had an unused line of credit with the FRB for $130,036 and $132,349, respectively. At June 30, 2019 and 2018, the Company had unused lines of credit with three unaffiliated banks for $70,000 and $60,000, respectively.

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Subsequent Events

12 Months Ended

Jun. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

In September 2019, the Company decided to sell between $200 million and $300 million of one-to-four family loans to a third party. Once specifically identified, these loans will be moved from total loans to loans held for sale at the lower of cost or market. The transaction is anticipated to close during the second quarter of fiscal 2020 at a gain.

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Other Investments (Tables)

12 Months Ended

Jun. 30, 2019

Investments, All Other Investments [Abstract]

Investment

Other investments, at cost consist of the following at the dates indicated:

	June 30, 2019		June 30, 2018
FHLB of Atlanta stock	$	31,969	$	29,907
FRB stock	7,335		7,307
Small Business Investment Companies ("SBIC") investments	6,074		4,717
Total	$	45,378	$	41,931

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Business Combinations - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended
	Jan. 01, 2017	Dec. 31, 2016	Mar. 31, 2018
United Financial of North Carolina, Inc.
Business Acquisition [Line Items]
Aggregate transaction consideration		$ 425
Cash paid as deposit premium		$ 200	$ 225
TriSummit Bancorp
Business Acquisition [Line Items]
Aggregate transaction consideration	$ 36,126
Cash paid as deposit premium	$ 16,083
Number of shares converted, net of cancellations (in shares)	86,185
Shares issued for acquisition (in shares)	765,277
Common Stock | TriSummit Bancorp
Business Acquisition [Line Items]
Right to receive cash (in dollars per share)	$ 4.40
Number of securities called by each share of TriSummit (in shares)	0.2099
TriSummit Bancorp | TriSummit Bancorp
Business Acquisition [Line Items]
Percentage of outstanding options canceled	50.00%
TriSummit Bancorp | Series B, C, and D TARP Preferred Stock | TriSummit Bancorp
Business Acquisition [Line Items]
Value of redeemed preferred stock	$ 7,222

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Fair Value of Financial Instruments (Tables)

12 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table presents financial assets measured at fair value on a recurring basis at the dates indicated:

	June 30, 2019
Description	Total		Level 1		Level 2		Level 3
U.S Government Agencies	$	15,210	$	—	$	15,210	$	—
Residential Mortgage-backed Securities of U.S. Government Agencies and Government sponsored Enterprises	75,180		—		75,180		—
Municipal Bonds	25,312		—		25,312		—
Corporate Bonds	6,084		—		6,084		—
Total	$	121,786	$	—	$	121,786	$	—

	June 30, 2018
Description	Total		Level 1		Level 2		Level 3
U.S Government Agencies	$	47,542	$	—	$	47,542	$	—
Residential Mortgage-backed Securities of U.S. Government Agencies and Government sponsored Enterprises	70,599		—		70,599		—
Municipal Bonds	30,766		—		30,766		—
Corporate Bonds	6,023		—		6,023		—
Equity Securities	63		—		63		—
Total	$	154,993	$	—	$	154,993	$	—

Fair Value Measurements, Nonrecurring

The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated:

	June 30, 2019
Description	Total		Level 1		Level 2		Level 3
Impaired loans	$	9,071	$	—	$	—	$	9,071
REO	1,804		—		—		1,804
Total	$	10,875	$	—	$	—	$	10,875

	June 30, 2018
Description	Total		Level 1		Level 2		Level 3
Impaired loans	$	8,423	$	—	$	—	$	8,423
REO	2,104		—		—		2,104
Total	$	10,527	$	—	$	—	$	10,527

Schedule of Quantitative Information About Level 3 Fair Value Measurements

Quantitative information about Level 3 fair value measurements during the period ended June 30, 2019 is shown in the table below:

	Fair Value at June 30, 2019		Valuation Techniques	Unobservable Input	Range	Weighted Average
Nonrecurring measurements:
Impaired loans, net	$	9,071	Discounted appraisals and discounted cash flows	Collateral discounts: Discount spread:	0% - 16% 1% - 3%	1%
REO	$	1,804	Discounted Appraisals	Collateral discounts	8% - 41%	12%

Fair Value, by Balance Sheet Grouping

The stated carrying value and estimated fair value amounts of financial instruments as of June 30, 2019 and June 30, 2018, are summarized below:

	June 30, 2019
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and interest-bearing deposits	$	71,043	$	71,043	$	71,043	$	—	$	—
Commercial paper	241,446		241,446		241,446		—		—
Certificates of deposit in other banks	52,005		52,005		—		52,005		—
Securities available for sale	121,786		121,786		—		121,786		—
Loans, net	2,683,761		2,604,827		—		—		2,604,827
Loans held for sale	18,175		18,591		—		—		18,591
FHLB stock	31,969		31,969		31,969		—		—
FRB stock	7,335		7,335		7,335		—		—
SBIC investments	6,074		6,074		—		—		6,074
Accrued interest receivable	10,533		10,533		350		750		9,433
Liabilities:
Noninterest-bearing and NOW deposits	746,617		746,617		—		746,617		—
Money market accounts	691,172		691,172		—		691,172		—
Savings accounts	177,278		177,278		—		177,278		—
Certificates of deposit	712,190		712,485		—		712,485		—
Borrowings	680,000		688,418		—		688,418		—
Accrued interest payable	2,252		2,252		—		2,252		—

	June 30, 2018
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and interest-bearing deposits	$	70,746	$	70,746	$	70,746	$	—	$	—
Commercial paper	229,070		229,070		229,070		—		—
Certificates of deposit in other banks	66,937		66,937		—		66,937		—
Securities available for sale	154,993		154,993		—		154,993		—
Loans, net	2,504,792		2,414,647		—		—		2,414,647
Loans held for sale	5,873		5,990		—		—		5,990
FHLB stock	29,907		29,907		29,907		—		—
FRB stock	7,307		7,307		7,307		—		—
SBIC investments	4,717		4,717		—		—		4,717
Accrued interest receivable	9,344		9,344		297		883		8,164
Liabilities:
Noninterest-bearing and NOW deposits	789,186		789,186		—		789,186		—
Money market accounts	677,665		677,665		—		677,665		—
Savings accounts	213,250		213,250		—		213,250		—
Certificates of deposit	516,152		509,924		—		509,924		—
Borrowings	635,000		635,187		—		635,187		—
Accrued interest payable	805		805		—		805		—

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Loans - Schedule of Troubled Debt Restructurings Performing and Excluded from Nonaccruing Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Performing financing receivable
Financing Receivable, Modifications
Performing TDRs included in impaired loans	$ 23,116	$ 21,251

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Real Estate Owned - Activity Within REO (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Activity within REO
Balance at beginning of period	$ 3,684	$ 6,318
Transfers from loans	731	1,346	$ 2,417
Sales, net of gain/loss	(1,191)	(3,471)
Writedowns	(295)	(539)
Capital improvements	0	30	11
Balance at end of period	$ 2,929	$ 3,684	$ 6,318

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Deposit Accounts - Schedule of Deposit Accounts (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Banking and Thrift [Abstract]
Noninterest-bearing accounts	$ 294,322	$ 317,822
NOW accounts	452,295	471,364
Money market accounts	691,172	677,665
Savings accounts	177,278	213,250
Certificates of deposit	712,190	516,152
Deposits	$ 2,327,257	$ 2,196,253
Deposits, by Type [Line Items]
Weighted Average Interest Rates (as a percent)	0.91%	0.42%
Deposits received from executive officers and directors and their associates	$ 4,448	$ 5,692
Noninterest-bearing accounts
Deposits, by Type [Line Items]
Weighted Average Interest Rates (as a percent)	0.00%	0.00%
NOW accounts
Deposits, by Type [Line Items]
Weighted Average Interest Rates (as a percent)	0.15%	0.11%
Money market accounts
Deposits, by Type [Line Items]
Weighted Average Interest Rates (as a percent)	0.89%	0.48%
Savings accounts
Deposits, by Type [Line Items]
Weighted Average Interest Rates (as a percent)	0.12%	0.13%
Certificates of deposit
Deposits, by Type [Line Items]
Weighted Average Interest Rates (as a percent)	1.99%	1.01%

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Fair Value of Financial Instruments - Schedule of Fair Value Measurements, Nonrecurring (Details) - Nonrecurring Measurements - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	$ 10,875	$ 10,527
Impaired loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	9,071	8,423
REO
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	1,804	2,104
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 1 | Impaired loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 1 | REO
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 2 | Impaired loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 2 | REO
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	10,875	10,527
Level 3 | Impaired loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	9,071	8,423
Level 3 | REO
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	$ 1,804	$ 2,104

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Loans - Schedule of Average Recorded Investment in Loans, Interest Income Recognized (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Financing Receivable, Impaired
Average recorded investment	$ 29,098	$ 38,103	$ 43,091
Interest income recognized	2,033	1,763	1,945
Retail Consumer Loans | One-to-four family
Financing Receivable, Impaired
Average recorded investment	17,319	23,257	25,256
Interest income recognized	950	1,170	1,147
Retail Consumer Loans | HELOCs - originated
Financing Receivable, Impaired
Average recorded investment	1,005	2,304	2,548
Interest income recognized	63	104	152
Retail Consumer Loans | HELOCs - purchased
Financing Receivable, Impaired
Average recorded investment	320	189	48
Interest income recognized	13	15	12
Retail Consumer Loans | Construction and land/lots
Financing Receivable, Impaired
Average recorded investment	1,441	1,575	1,734
Interest income recognized	94	109	139
Retail Consumer Loans | Indirect auto finance
Financing Receivable, Impaired
Average recorded investment	373	256	106
Interest income recognized	29	23	2
Retail Consumer Loans | Consumer
Financing Receivable, Impaired
Average recorded investment	1,328	43	35
Interest income recognized	67	17	20
Commercial Loans | Commercial real estate
Financing Receivable, Impaired
Average recorded investment	5,026	6,496	7,771
Interest income recognized	466	209	272
Commercial Loans | Construction and development
Financing Receivable, Impaired
Average recorded investment	1,779	2,703	2,450
Interest income recognized	65	56	58
Commercial Loans | Commercial and industrial
Financing Receivable, Impaired
Average recorded investment	315	1,205	2,737
Interest income recognized	249	60	125
Commercial Loans | Equipment Finance
Financing Receivable, Impaired
Average recorded investment	192	0	0
Interest income recognized	37	0	0
Commercial Loans | Municipal leases
Financing Receivable, Impaired
Average recorded investment	0	75	406
Interest income recognized	$ 0	$ 0	$ 18

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Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Loss Contingencies [Line Items]
Undisbursed portions of construction loans	$ 181,477	$ 209,726
Loan commitments	93,432	49,949
Variable rate loan commitments	34,631	19,812
Fixed rate loan commitments	58,801	30,137
Pre-approved but unused lines of credit	353,663	491,649
Cash reserve deposit required and made	2,633	2,304
Letters of credit outstanding	$ 9,460	$ 8,227
Minimum
Loss Contingencies [Line Items]
Fixed rate interest rate (as a percent)	2.69%	2.10%
Loan commitments terms	3 years
Maximum
Loss Contingencies [Line Items]
Fixed rate interest rate (as a percent)	8.59%	6.15%
Loan commitments terms	30 years

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Loans - Schedule of Troubled Debt Restructurings With Payment Default (Details) $ in Thousands	12 Months Ended
	Jun. 30, 2019 USD ($) loan	Jun. 30, 2018 USD ($) loan	Jun. 30, 2017 USD ($) loan
Financing Receivable, Modifications
Number of loans | loan	2	5	3
Recorded investment | $	$ 74	$ 277	$ 46
Other Troubled Debt Restructing [Member]
Financing Receivable, Modifications
Number of loans | loan	2	5	3
Recorded investment | $	$ 74	$ 277	$ 46
Retail Consumer Loans | Other Troubled Debt Restructing [Member] | One-to-four family
Financing Receivable, Modifications
Number of loans | loan	1	5	2
Recorded investment | $	$ 72	$ 277	$ 27
Retail Consumer Loans | Other Troubled Debt Restructing [Member] | Construction and land/lots
Financing Receivable, Modifications
Number of loans | loan	0	0	1
Recorded investment | $	$ 0	$ 0	$ 19
Retail Consumer Loans | Other Troubled Debt Restructing [Member] | Consumer
Financing Receivable, Modifications
Number of loans | loan	1	0	0
Recorded investment | $	$ 2	$ 0	$ 0

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Parent Company Financial Information - Condensed Balance Sheet (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Assets
Cash and equivalents	$ 40,909	$ 45,222
Other securities	45,378	41,931
Allowance for loan losses	(21,429)	(21,060)
Net loans	2,683,761	2,504,792
Other assets	23,157	3,503
Total Assets	3,476,178	3,304,169
Liabilities and Stockholders’ Equity
Other liabilities	58,145	61,760
Stockholders’ Equity	408,896	409,242
Total Liabilities and Stockholders’ Equity	3,476,178	3,304,169
Parent Company
Assets
Cash and equivalents	8,481	23,042
Certificates of deposit in other banks	746	994
Other securities	0	63
Total loans	1,243	3,840
Allowance for loan losses	(4)	(64)
Net loans	1,239	3,776
REO	621	805
Investment in bank subsidiary	389,926	372,206
ESOP loan receivable	7,412	7,896
Other assets	510	499
Total Assets	408,935	409,281
Liabilities and Stockholders’ Equity
Other liabilities	39	39
Stockholders’ Equity	408,896	409,242
Total Liabilities and Stockholders’ Equity	$ 408,935	$ 409,281

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Borrowings (Details) $ in Thousands	Jun. 30, 2019 USD ($) bank	Jun. 30, 2018 USD ($)
Balance
FHLB Advances	$ 680,000	$ 635,000
Weighted Average Rate
FHLB Advances	2.10%	1.95%
Amount available to borrow in additional FHLB advances	$ 89,499	$ 79,226
Number of unaffiliated banks | bank	3
FRB | Line of Credit
Weighted Average Rate
Unused line of credit	$ 130,036	132,349
Unaffiliated Banks | Line of Credit
Weighted Average Rate
Unused line of credit	70,000	$ 60,000
$15,000 Advance Due 7/1/2019
Balance
FHLB Advances	$ 15,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	2.47%
$45,000 Advance Due 7/8/2019
Balance
FHLB Advances	$ 45,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	2.40%
$135,000 Advance Due 782/2019
Balance
FHLB Advances	$ 135,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	2.44%
$10,000 Advance Due 7/10/2019
Balance
FHLB Advances	$ 10,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	2.40%
$40,000 Advance Due 7/10/2019
Balance
FHLB Advances	$ 40,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	2.42%
$130,000 Advance Due 7/15/2019
Balance
FHLB Advances	$ 130,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	2.33%
$5,000 Advance Due 7/29/2019
Balance
FHLB Advances	$ 5,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	2.33%
$25,000 Advance Due 9/20/2019
Balance
FHLB Advances	$ 25,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	0.86%
$100,000 Advance Due 3/6/2028
Balance
FHLB Advances	$ 100,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	1.72%
$50,000 Advance Due 3/22/2028
Balance
FHLB Advances	$ 50,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	1.82%
$50,000 Advance Due 6/5/2028
Balance
FHLB Advances	$ 50,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	1.87%
$25,000 Advance Due 9/13/2028
Balance
FHLB Advances	$ 25,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	1.76%
$25,000 Advance Due 11/24/2028
Balance
FHLB Advances	$ 25,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	2.07%
$25,000 Advance Due 11/24/2028
Balance
FHLB Advances	$ 25,000
Weighted Average Rate
Federal home loan bank, advances, interest rate	1.79%

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Deposit Accounts

12 Months Ended

Jun. 30, 2019

Banking and Thrift [Abstract]

Deposit Accounts

Deposit Accounts

Deposit accounts at the dates indicated consist of the following:

					Weighted Average Interest Rates
	June 30,				June 30,
	2019		2018		2019		2018
Noninterest-bearing accounts	$	294,322	$	317,822	—	%	—	%
NOW accounts	452,295		471,364		0.15	%	0.11	%
Money market accounts	691,172		677,665		0.89	%	0.48	%
Savings accounts	177,278		213,250		0.12	%	0.13	%
Certificates of deposit	712,190		516,152		1.99	%	1.01	%
Total	$	2,327,257	$	2,196,253	0.91	%	0.42	%

Deposits received from executive officers and directors and their associates totaled approximately $4,448 and $5,692 at June 30, 2019 and 2018, respectively.

As of June 30, 2019, maturities of certificates of deposit are as follows:

2020	$	515,519
2021	114,927
2022	52,905
2023	17,868
2024	10,971
Thereafter	—
Total	$	712,190

Certificates of deposit with balances of $250 or greater totaled $93,654 and $70,553 at June 30, 2019 and 2018, respectively. Generally, deposit amounts in excess of $250 are not federally insured.

Interest expense on deposits at the dates indicated consists of the following:

	June 30,
	2019		2018		2017
NOW accounts	$	1,251	$	970	$	772
Money market accounts	5,102		2,442		1,405
Savings accounts	245		295		308
Certificates of deposit	9,159		3,051		2,103
Total	$	15,757	$	6,758	$	4,588

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Premises and Equipment

12 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Premises and Equipment

Premises and Equipment

Premises and equipment as of the dates indicated consist of the following:

	June 30,
	2019			2018
Land	$	19,730		$	19,934
Land held under capital lease	2,052			2,052
Office buildings	58,952			57,873
Furniture, fixtures and equipment	15,918			15,582
Total	96,652			95,441
Less accumulated depreciation	(35,601		)	(32,904		)
Premises and equipment, net	$	61,051		$	62,537

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Business Combinations

12 Months Ended

Jun. 30, 2019

Business Combinations [Abstract]

Business Combinations

Business Combinations

All business combinations are accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at acquisition date fair values. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding the closing date fair values becomes available.

United Financial of North Carolina, Inc.

On December 31, 2016, the Bank acquired United Financial of North Carolina, Inc. ("United Financial"), a municipal lease company headquartered in Fletcher, North Carolina that specializes in providing financing for fire departments and municipalities for the purchase of fire trucks and related equipment as well as the construction of fire stations and other municipal buildings across the Carolinas and other southeastern states. United Financial underwrites and originates these municipal leases and then sells them to HomeTrust and other financial institutions. Beginning January 1, 2017, United Financial has conducted business under the name United Financial, a division of HomeTrust Bank.

The total consideration paid by the Bank in the United Financial acquisition was $425. Per the merger agreement, a cash payment of $200 was paid on the acquisition date with an additional $225 paid in the third quarter of fiscal 2018; all of which was allocated to goodwill.

TriSummit Bancorp. Inc.

On January 1, 2017, HomeTrust completed its acquisition of TriSummit Bancorp, Inc., (“TriSummit”) pursuant to an Agreement and Plan of Merger, dated as of September 20, 2016, under which TriSummit merged with and into HomeTrust (the “Merger”) with HomeTrust as the surviving corporation in the Merger. Immediately following the Merger, TriSummit's wholly owned subsidiary bank, TriSummit Bank, merged with and into the Bank (together with the Merger, the “TriSummit Merger”).

Pursuant to the Merger Agreement, each share of the common stock of TriSummit and each share of Series A Preferred Stock of TriSummit issued and outstanding immediately prior to the Merger (on an as converted basis to a share of TriSummit common stock) was converted into the right to receive $4.40 in cash and .2099 shares of HomeTrust common stock, with cash paid in lieu of fractional share interests. At the Merger date, 50% of outstanding options granted by TriSummit were canceled. The remaining options were assumed by HomeTrust and converted into options to purchase 86,185 shares of HomeTrust Common Stock. In addition, TriSummit’s $7,222 Series B, Series C and Series D TARP preferred stock (all held by private shareholders) was redeemed in connection with the closing of the merger.

The total consideration paid by HomeTrust in the TriSummit Merger approximates $36,126. The total number of HomeTrust shares issued was 765,277 shares. HomeTrust paid aggregate cash consideration of approximately $16,083.

The following table presents the consideration paid by the Company in the acquisition of TriSummit and the assets acquired and liabilities assumed as of January 1, 2017:

	As Recorded by TriSummit		Fair Value and Other Merger Related Adjustments			As Recorded by the Company
Consideration Paid:
Cash paid including cash in lieu of fractional shares						$	16,083
Fair value of HomeTrust common stock at $25.90 per share						20,043
Total consideration						$	36,126
Assets:
Cash and cash equivalents	$	5,498	$	—		$	5,498
Certificates of deposit in other banks	250		—			250
Investment securities	58,728		(203		)	58,525
Other investments, at cost	2,614		—			2,614
Loans, net	261,926		(3,867		)	258,059
Premises and equipment, net	12,841		(2,419		)	10,422
REO	1,633		(122		)	1,511
Deferred income taxes	2,653		4,462			7,115
Bank owned life insurance	3,762		—			3,762
Core deposit intangibles	1,285		1,575			2,860
Other assets	1,453		(105		)	1,348
Total assets acquired	$	352,643	$	(679	)	$	351,964
Liabilities:
Deposits	$	279,647	$	587		280,234
Borrowings	47,453		16			47,469
Other liabilities	675		—			675
Total liabilities assumed	$	327,775	$	603		$	328,378
Net identifiable assets acquired over liabilities assumed	$	24,868	$	(1,282	)	$	23,586
Goodwill						$	12,540

The carrying amount of acquired loans from TriSummit as of January1, 2017 consisted of purchased performing loans and Purchase Credit Impaired ("PCI") loans as detailed in the following table:

	Purchased Performing		PCI		Total Loans
Retail Consumer Loans:
One-to-four family	$	75,179	$	3,753	$	78,932
HELOCs	6,479		2		6,481
Construction and land/lots	15,591		—		15,591
Consumer	1,686		17		1,703
Commercial:
Commercial real estate	107,880		3,494		111,374
Construction and development	15,253		142		15,395
Commercial and industrial	28,295		288		28,583
Total	$	250,363	$	7,696	$	258,059

The following table presents the performing loans receivable purchased from TriSummit at January 1, 2017, the acquisition date:

Contractually required principal payments receivable	$	255,852
Adjustment for credit, interest rate, and liquidity	5,489
Balance of purchased loans receivable	$	250,363

The following table presents the PCI loans acquired from TriSummit at January 1, 2017, the acquisition date:

Contractually required principal and interest payments receivable	$	11,474
Amounts not expected to be collected - nonaccretable difference	2,490
Estimated payments expected to be received	8,984
Accretable yield	1,288
Fair value of PCI loans	$	7,696

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Business

Business

The consolidated financial statements presented in this report include the accounts of HomeTrust Bancshares, Inc., a Maryland corporation (“HomeTrust”), and its wholly-owned subsidiary, HomeTrust Bank (the “Bank”). As used throughout this report, the term the “Company” refers to HomeTrust and its consolidated subsidiary, unless the context otherwise requires. HomeTrust is a bank holding company primarily engaged in the business of planning, directing, and coordinating the business activities of the Bank. The Bank is a North Carolina state chartered bank and provides a wide range of retail and commercial banking products within its geographic footprint, which includes: North Carolina (the Asheville metropolitan area, Greensboro/"Piedmont" region, Charlotte, and Raleigh/Cary), Upstate South Carolina (Greenville), East Tennessee (Kingsport/Johnson City/Bristol, Knoxville, and Morristown) and Southwest Virginia (the Roanoke Valley). The Bank operates under a single set of corporate policies and procedures and is recognized as a single banking segment for financial reporting purposes.

Accounting Principles

Accounting Principles

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States (“US GAAP”).

Principles of Consolidation and Subsidiary Activities

Principles of Consolidation and Subsidiary Activities

The accompanying consolidated financial statements include the accounts of HomeTrust, the Bank, and its wholly-owned subsidiary, Western North Carolina Service Corporation (“WNCSC”) at or for the years ended June 30, 2019, 2018, and 2017. WNCSC owns office buildings in Asheville, North Carolina that are leased to the Bank. All intercompany items have been eliminated.

Reclassifications

Reclassifications

Certain amounts reported in prior periods’ consolidated financial statements have been reclassified to conform to the current presentation. Such reclassifications had no effect on previously reported cash flows, stockholders’ equity or net income.

Use of Estimates in Financial Statements

Use of Estimates in Financial Statements

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include cash and interest-bearing deposits with initial terms to maturity of 90 days or less.

Commercial Paper

Commercial Paper

Commercial paper includes highly liquid short-term debt of investment graded corporations with maturities less than 270 days. These instruments are typically purchased at a discount based on prevailing interest rates and do not exceed $15.0 million per issuer.

Debt Securities

Debt Securities

The Company classifies debt securities as trading, available for sale, or held to maturity.

Securities available for sale are carried at fair value. These securities are used to execute asset/liability management strategies, manage liquidity, and leverage capital, and therefore may be sold prior to maturity. Adjustments for unrealized gains or losses, net of the income tax effect, are made to accumulated other comprehensive income, a separate component of total stockholders’ equity.

Securities held to maturity are stated at cost, net of unamortized balances of premiums and discounts. When these securities are purchased, the Company intends to and has the ability to hold such securities until maturity.

Declines in the fair value of individual securities available for sale or held to maturity below their cost that are other-than-temporary result in write-downs of the individual securities to their fair value. The related write-downs are included in earnings as realized losses. In estimating other-than-temporary impairment losses, the Company considers among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery of the unrealized loss, and in the case of debt securities, whether it is more likely than not that the Company will be required to sell the security prior to a recovery.

Premiums and discounts are amortized or accreted over the life of the security as an adjustment to yield. Dividend and interest income are recognized when earned. Gains or losses on the sale of securities are recognized on a specific identification, trade date basis.

Loans

Loans

Portfolio loans are carried at their outstanding principal amount, less unearned income and deferred nonrefundable loan fees, net of certain origination costs. Interest income is recorded as earned on an accrual basis based on the contractual rate and the outstanding balance, except for nonaccruing loans where interest is recorded as earned on a cash basis. Net deferred loan origination fees/costs are deferred and amortized to interest income over the life of the related loan.

Acquired Loans

Purchased loans are recorded at their fair value at the acquisition date. Credit discounts are included in the determination of fair value; therefore, an allowance for loan and lease losses is not recorded at the acquisition date. Acquired loans are evaluated upon acquisition and classified as either purchased impaired or purchased non-impaired. Purchased impaired loans reflect credit deterioration since origination such that it is probable at acquisition that the Company will be unable to collect all contractually required payments.

The cash flows expected to be received over the life of the loans were estimated by management. These cash flows were provided to third party analysts to calculate carrying values of the loans, book yields, effective interest income and impairment, if any, based on actual and projected events. Default rates, loss severity, and prepayment speed assumptions will be periodically reassessed to update our expectation of future cash flows. The excess of the cash flows expected to be collected over a loan's carrying value is considered to be the accretable yield and is recognized as interest income over the estimated life of the loan using the effective yield method. The accretable yield may change due to changes in the timing and amounts of expected cash flows. Changes in the accretable yield are disclosed quarterly.

The excess of the undiscounted contractual balances due over the cash flows expected to be collected is considered to be the nonaccretable difference. The nonaccretable difference represents our estimate of the credit losses expected to occur and was considered in determining the fair value of the loans as of the acquisition date. Subsequent to the acquisition date, any increases in expected cash flows over those expected at purchase date in excess of fair value are adjusted through a change to the accretable yield on a prospective basis. Any subsequent decreases in expected cash flows attributable to credit deterioration are recognized by recording a provision for loan losses. The purchased impaired loans acquired are and will continue to be subject to the Company's internal and external credit review and monitoring.

For purchased non-impaired loans, the difference between the fair value and unpaid principal balance of the loan at the acquisition date is amortized or accreted to interest income over the life of the loans.

Loan Segments and Classes

The Company’s loan portfolio is grouped into two segments (retail consumer loans and commercial loans) and into various classes within each segment. The Company originates, services, and manages its loans based on these segments and classes. The Company’s portfolio segments and classes within those segments are subject to risks that could have an adverse impact on the credit quality of the loan portfolio. Management identified the risks described below as significant risks that are generally similar among the loan segments and classes.

Retail Consumer loan segment

The Company underwrites its retail consumer loans using automated credit scoring and analysis tools. These credit scoring tools take into account factors such as payment history, credit utilization, length of credit history, types of credit currently in use, and recent credit inquiries. To the extent that the loan is secured by collateral, the value of the collateral is also evaluated. Common risks to each class of retail consumer loans include general economic conditions within the Company’s markets, such as unemployment and potential declines in collateral values, and the personal circumstances of the borrowers. In addition to these common risks for the Company’s retail consumer loans, various retail consumer loan classes may also have certain risks specific to them.

One-to-four family and construction and land/lot loans are to individuals and are typically secured by one-to-four family residential property, undeveloped land, and partially developed land in anticipation of pending construction of a personal residence. Significant and rapid declines in real estate values can result in residential mortgage loan borrowers having debt levels in excess of the current market value of the collateral, which can lead to higher levels of foreclosures. Construction and land/lot loans may experience delays in completion and cost overruns that exceed the borrower’s financial ability to complete the project. Such cost overruns can result in foreclosure of partially completed and unmarketable collateral.

Originated home equity lines of credit ("HELOCs") are often secured by second liens on residential real estate, thereby making such loans particularly susceptible to declining collateral values. A substantial decline in collateral value could render the Company’s second lien position to be effectively unsecured. Additional risks include lien perfection inaccuracies and disputes with first lien holders that may further weaken collateral positions. Further, the open-end structure of these loans creates the risk that customers may draw on the lines in excess of the collateral value if there have been significant declines since origination. In addition, the Company purchases certain HELOCs from a third party. The credit risk characteristics are different for these loans since they were not originated by the Company and the collateral is located outside the Company’s market area, primarily in several western states. The Company established an allowance for loan losses based on the historical losses of the portfolio. The Company monitors the performance of these loans and adjusts the allowance for loan losses as necessary.

Indirect auto finance loans are primarily for new and used personal automobiles originated by franchised and independent auto dealers within the Company's geographic footprint. The bank-dealer relationship is governed by contract, which provides warranties and representations, payment schedules, and rights and remedies upon breach. The underwriting process and standards are maintained by the Company and implemented via an automated decision tool, which incorporates the borrower's credit score, loan to value ratio, and terms of the loan to determine the borrower's creditworthiness.

Consumer loans include loans secured by deposit accounts or personal property such as automobiles, boats, and motorcycles, as well as unsecured consumer debt. The value of underlying collateral within this class is especially volatile due to potential rapid depreciation in values since date of loan origination in excess of principal repayment.

Commercial loan segment

The Company’s commercial loans are centrally underwritten based primarily on the customer’s ability to generate the required cash flow to service the debt in accordance with the contractual terms and conditions of the loan agreement. The Company’s commercial lenders and underwriters work to understand the borrower’s businesses and management experiences. The majority of the Company’s commercial loans are secured by collateral, so collateral values are important to the transaction. In commercial loan transactions where the principals or other parties provide personal guarantees, the Company’s commercial lenders and underwriters analyze the relative financial strength and liquidity of each guarantor. Risks that are common to the Company’s commercial loan classes include general economic conditions, demand for the borrowers’ products and services, the personal circumstances of the principals, and reductions in collateral values. In addition to these common risks for the Company’s commercial loans, the various commercial loan classes also have certain risks specific to them.

Construction and development loans are highly dependent on the supply and demand for commercial real estate in the Company’s markets as well as the demand for the newly constructed residential and commercial properties and lots being developed by the Company’s commercial loan customers. Prolonged deterioration in demand could result in significant decreases in the underlying collateral values and make repayment of the outstanding loans more difficult for the Company’s commercial borrowers.

Commercial real estate and commercial and industrial loans are primarily dependent on the ability of the Company’s commercial loan customers to achieve business results consistent with those projected at loan origination resulting in cash flow sufficient to service the debt. To the extent that a borrower’s actual business results significantly underperform the original projections, the ability of that borrower to service the Company’s loan on a basis consistent with the contractual terms may be at risk. While these loans and leases are generally secured by real property, personal property, or business assets such as inventory or accounts receivable, it is possible that the liquidation of the collateral will not fully satisfy the obligation.

Municipal leases are primarily made to volunteer fire departments and depend on the tax revenues received from the county or municipality. These leases are mainly secured by vehicles, fire stations, land, or equipment. The underwriting of the municipal leases is based on the cash flows of the fire department as well as projections of future income.

Equipment finance is primarily made up of commercial finance agreements and commercial loans and leases provided by our new Equipment Finance line of business, and primarily for transportation, construction, and manufacturing equipment. The loans have terms on average of five years or less and are secured by the financed equipment.

Credit Quality Indicators

Loans are monitored for credit quality on a recurring basis and the composition of the loans outstanding by credit quality indicator is provided below. Loan credit quality indicators are developed through review of individual borrowers on an ongoing basis. Generally, loans are monitored for performance on a quarterly basis with the credit quality indicators adjusted as needed. The indicators represent the rating for loans as of the date presented based on the most recent assessment performed. These credit quality indicators are defined as follows:

Pass—A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.

Special Mention—A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.

Substandard—A substandard asset is inadequately protected by the current net worth and paying capacity of the obligor, or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Doubtful—An asset classified doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions, and values.

Loss—Assets classified loss are considered uncollectible and of such little value that their continuing to be carried as an asset is not warranted. This classification is not necessarily equivalent to no potential for recovery or salvage value, but rather that it is not appropriate to defer a full write-off even though partial recovery may be effected in the future.

Loans Held for Sale

Loans Held for Sale

Residential mortgages held for sale are valued at the lower of cost or fair value as determined by outstanding commitments from investors on a “best efforts” basis or current investor yield requirements, calculated on the aggregate loan basis. 

Beginning in fiscal year 2018, the Company began providing loans guaranteed by the SBA for the purchase of businesses, business startups, business expansion, equipment, and working capital. All SBA loans are underwritten and documented as prescribed by the SBA. SBA loans are generally fully amortizing and have maturity dates and amortizations of up to 25 years. SBA loans are classified as held for sale and are carried at the lower of cost or fair value. The guaranteed portion of the loan is sold and the servicing rights are retained. At the time of the sale, an asset is recorded for the value of the servicing rights and is amortized over the remaining life of the loan on the effective interest method. The servicing asset is included in other assets and the corresponding servicing fees are recorded in noninterest income. A gain is recorded for any premium received in excess of the carrying value of the net assets transferred in the sale and is also included in noninterest income. The portion of SBA loans that are retained are adjusted to fair value and reclassified as a loan held to maturity. The net value of the retained loans is included in the appropriate loan classification for disclosure purposes.

Beginning in fiscal year 2019, the Company began originating HELOCs through a third party. These loans are originated in various states outside the Company's geographic footprint, but are underwritten to the Company's underwriting guidelines. The loans are held for sale by the Company over a 90 to 180 day period and are serviced by the third party. The loans are marketed by the third party to investors in pools and once sold the Company recognizes a gain on the sale.

Allowance for Loan Losses

Allowance for Loan Losses

The allowance for loan losses is management’s estimate of probable credit losses that are inherent in the Company’s loan portfolios at the balance sheet date. The allowance increases when the Company provides for loan losses through charges to operating earnings and when the Company recovers amounts from loans previously written down or charged off. The allowance decreases when the Company writes down or charges off loan amounts that are deemed uncollectible.

Management determines the allowance for loan losses based on periodic evaluations that are inherently subjective and require substantial judgment because the evaluations require the use of material estimates that are susceptible to significant change. The Company generally uses two allowance methodologies that are primarily based on management’s determination as to whether or not a loan is considered to be impaired.

All classified loans above a certain threshold meeting certain criteria are evaluated for impairment on a loan-by-loan basis and are considered impaired when it is probable, based on current information, that the borrower will be unable to pay contractual interest or principal as required by the loan agreement. Impaired loans below the threshold are evaluated as a pool with additional adjustments to the allowance for loan losses. Loans that experience insignificant payment delays and payment shortfalls are not necessarily considered impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment history, and the amount of the shortfall relative to the principal and interest owed. Impaired loans are measured at their estimated net realizable value based on either the value of the loan’s expected future cash flows discounted at the loan’s effective interest rate or on the collateral value, net of the estimated costs of disposal, if the loan is collateral dependent. For loans considered impaired, an individual allowance for loan losses is recorded when the loan principal balance exceeds the estimated net realizable value.

For loans not considered impaired, management determines the allowance for loan losses based on estimated loss percentages that are determined by and applied to the various classes of loans that comprise the segments of the Company’s loan portfolio. The estimated loss percentages by loan class are based on a number of factors that include by class (i) average historical losses over the past two years, (ii) levels and trends in delinquencies, impairments, and net charge-offs, (iii) trends in the volume, terms, and concentrations, (iv) trends in interest rates, (v) effects of changes in the Company’s risk tolerance, underwriting standards, lending policies, procedures, and practices, and (vi) national and local business and economic conditions.

Future material adjustments to the allowance for loan losses may be necessary due to changing economic conditions or declining collateral values. In addition, bank regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to make adjustments to the allowance for loan losses based upon judgments that differ significantly from those of management.

Nonperforming Assets

Nonperforming Assets

Nonperforming assets can include loans that are past due 90 days or more based on the loan’s contractual terms and continue to accrue interest, loans on which interest is not being accrued, and REO.

Loans Past Due 90 Days or More, Nonaccruing, Impaired, or Restructured

Loans Past Due 90 Days or More, Nonaccruing, Impaired, or Restructured

The Company’s policies related to when loans are placed on nonaccruing status conform to guidelines prescribed by bank regulatory authorities. Generally, the Company suspends the accrual of interest on loans (i) that are maintained on a cash basis because of the deterioration of the financial condition of the borrower, (ii) for which payment in full of principal or interest is not expected (impaired loans), or (iii) on which principal or interest has been in default for a period of 90 days or more, unless the loan is both well secured and in the process of collection. Under the Company’s cost recovery method, interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accruing status when all principal and interest amounts contractually due are brought current and concern no longer exists as to the future collectability of principal and interest, which is generally confirmed when the loan demonstrates performance for six consecutive months or payment cycles.

Restructured loans to borrowers who are experiencing financial difficulty, and on which the Company has granted concessions that modify the terms of the loan, are accounted for as troubled debt restructurings (“TDRs”). These loans remain as TDRs until the loan has been paid in full, modified to its original terms, or charged off. The Company may place these loans on accrual or nonaccrual status depending on the individual facts and circumstances of the borrower. Generally, these loans are put on nonaccrual status until there is adequate performance that evidences the ability of the borrower to make the contractual payments. This period of performance is normally at least six months, and may include performance immediately prior to or after the modification, depending on the specific facts and circumstances of the borrower.

Loan Charge-offs

Loan Charge-offs

The Company charges off loan balances, in whole or in part to net realizable value or fair value less costs to sell, when available, verifiable, and documentable information confirms that specific loans, or portions of specific loans, are uncollectible or unrecoverable. For unsecured loans, losses are confirmed when it can be determined that the borrower, or any guarantors, are unwilling or unable to pay the amounts as agreed. When the borrower, or any guarantor, is unwilling or unable to pay the amounts as agreed on a loan secured by collateral and any recovery will be realized upon the sale of the collateral, the loan is deemed to be collateral dependent. Repayments or recoveries for collateral dependent loans are directly affected by the value of the collateral at liquidation. As such, loan repayment can be affected by factors that influence the amount recoverable, the timing of the recovery, or a combination of the two. Such factors include economic conditions that affect the markets in which the loan or its collateral is sold, bankruptcy, repossession and foreclosure laws, and consumer banking regulations. Losses are also confirmed when the loan, or a portion of the loan, is classified as loss resulting from loan reviews conducted by the Company or its bank regulatory examiners.

Charge-offs of loans in the commercial loan segment are recognized when the uncollectibility of the loan balance and the inability to recover sufficient value from the sale of any collateral securing the loan is confirmed. The uncollectibility of the loan balance is evidenced by the inability of the commercial borrower to generate cash flows sufficient to repay the loan as agreed causing the loan to become delinquent. For collateral dependent commercial loans, the Company determines the net realizable value of the collateral based on appraisals, current market conditions, and estimated costs to sell the collateral. For collateral dependent commercial loans where the loan balance, including any accrued interest, net deferred fees or costs, and unamortized premiums or discounts, exceeds the net realizable value of the collateral securing the loan, the deficiency is identified as unrecoverable, is deemed to be a confirmed loss, and is charged off.

Charge-offs of loans in the retail consumer loan segment are generally confirmed and recognized in a manner similar to charge-offs of loans in the commercial loan segment. Secured retail consumer loans that are identified as uncollectible and are deemed to be collateral dependent are confirmed as loss to the extent the net realizable value of the collateral is insufficient to recover the loan balance. Consumer loans not secured by real estate that become 90 days past due are charged off to the extent that the fair value of any collateral, less estimated costs to sell the collateral, is insufficient to recover the loan balance. Consumer loans secured by real estate that become 120 days past due are charged off to the extent that the fair value of the real estate securing the loan, less estimated costs to sell the collateral, is insufficient to recover the loan balance. Loans to borrowers in bankruptcy are subject to modification by the bankruptcy court and are charged off to the extent that the fair value of any collateral securing the loan, less estimated costs to sell the collateral, is insufficient to recover the loan balance, unless the Company expects repayment is likely to occur. Such loans are charged off within 60 days of the receipt of notification from a bankruptcy court or when the loans become 120 days past due, whichever is shorter.

Real Estate Owned

Real Estate Owned

REO consists of real estate acquired as a result of customers’ loan defaults. REO is stated at the fair value of the property net of the estimated costs of disposal with a charge to the allowance for loan losses upon foreclosure, if necessary. Any write-downs subsequent to foreclosure are charged against operating earnings. To the extent recoverable, costs relating to the development and improvement of property are capitalized, whereas those costs relating to holding the property are charged to expense.

Premises and Equipment

Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives. Leasehold improvements are amortized over the lives of the respective leases or the estimated useful life of the leasehold improvement, whichever is less. Maintenance and repair costs are expensed as incurred. Capitalized leases are amortized using the same methods as premises and equipment over the estimated useful lives or lease terms, whichever is less. Obligations under capital leases are amortized using the interest method to allocate payments between principal reduction and interest expense.

Other Investments, at cost

Other Investments, at cost

As a requirement for membership, the Bank invests in stock of the Federal Home Loan Bank of Atlanta ("FHLB") and the Federal Reserve Bank of Richmond ("Federal Reserve Bank" or "FRB"). These investments are carried at cost due to the redemption provisions of these entities and the restricted nature of the securities. Small Business Investment Companies ("SBIC") are considered equity securities without a readily determinable fair value. Prior to the adoption of ASU 2016-01 in the first quarter of fiscal 2019, SBICs were maintained in other assets. Beginning July 1, 2018, the SBIC investments are accounted for at cost less impairment, plus or minus changes resulting from observable price changes. Management reviews for impairment based on the ultimate recoverability of the cost basis of these investments.

Business Combinations

Business Combinations

The Company uses the acquisition method of accounting for all business combinations. An acquirer must be identified for each business combination, and the acquisition date is the date the acquirer achieves control. The acquisition method of accounting requires the Company as acquirer to recognize the fair value of assets acquired and liabilities assumed at the acquisition date as well as recognize goodwill or a gain from a bargain purchase, if appropriate. Any acquisition-related costs and restructuring costs are recognized as period expenses as incurred.

Goodwill

Goodwill

Goodwill represents the excess of the purchase price over the sum of the estimated fair values of the tangible and identifiable intangible assets acquired less the estimated fair value of the liabilities assumed in a business combination. Goodwill has an indefinite useful life and is evaluated for impairment annually in the fourth quarter or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value.

In testing goodwill for impairment, we have the option to assess either qualitative or quantitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount. If we elect to perform a qualitative assessment and determine that an impairment is more likely than not, we are then required to perform a quantitative impairment test, otherwise no further analysis is required.

Under the quantitative impairment test, the evaluation involves comparing the current fair value of each reporting unit to its carrying value, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is considered not to be impaired. If the carrying value exceeds estimated fair value an impairment charge is recognized for the difference, but limited by the amount of goodwill allocated to that reporting unit. The Company uses a combination of the market and income approaches to estimate the fair value of its reporting unit. All inputs are evaluated by management at the evaluation date of April 1st and reviewed again at year end to ensure no significant changes occurred that could indicate impairment. Subsequent reversal of goodwill impairment losses is not permitted.

Core Deposit Intangibles

Core Deposit Intangibles

Core deposit intangibles represent the estimated value of long-term deposit relationships acquired in business combinations. These core deposit premiums are amortized using an accelerated method over the estimated useful lives of the related deposits typically between five and ten years. The estimated useful lives are periodically reviewed for reasonableness.

Income Taxes

Income Taxes

The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced, if necessary, by the amount of such benefits that are not expected to be realized based upon available evidence. See Note 13 for additional information.

The Company recognizes interest and penalties accrued relative to unrecognized tax benefits in its respective federal or state income taxes accounts.

Employee Benefit Plans

Employee Benefit Plans

The HomeTrust Bank KSOP Plan ("KSOP") is comprised of two components, the 401(k) Plan and the ESOP. The KSOP benefits employees with at least 1000 hours of service during a 12-month period and who have attained age 21.

Under the 401(k), the Company matches employee contributions at 50% of employee deferrals up to 6% of each employee’s compensation. The Company may also make discretionary profit sharing contributions for the benefit of all eligible participants as long as total contributions do not exceed applicable limitations. Employees become fully vested in the Company’s contributions after six years of service.

Under the ESOP, the amount of the Bank's annual contribution is discretionary, however it must be sufficient to pay the annual loan payment to the Company. Shares released are allocated to each eligible participant based on the ratio of each participant’s compensation, as defined in the ESOP, to the total compensation of all eligible plan participants. Forfeited shares are reallocated among other participants in the Plan. At the discretion of the Bank, cash dividends, when paid on allocated shares, are distributed to participants’ accounts, paid in cash to the participants, or used to repay the principal and interest on the ESOP loan used to acquire Company stock on which dividends were paid. Cash dividends on unallocated shares are used to repay the outstanding debt of the ESOP. It is anticipated that the Bank will make contributions to the ESOP in amounts necessary to amortize the ESOP loan payable to the Company over a 20-year period. Unearned ESOP shares are shown as a reduction of stockholders’ equity. The Company recognizes compensation expense equal to the fair value of the Company’s ESOP shares during the periods in which they become committed to be released. To the extent that the fair value of the Company’s ESOP shares differs from the cost of such shares, the differential is recognized as additional paid in capital. The Company recognizes a tax deduction equal to the cost of the shares released. Because the ESOP is internally leveraged through a loan from the Company to the ESOP, the loan receivable by the Company from the ESOP is not reported as an asset nor is the debt of the ESOP shown as a liability in the consolidated financial statements.

Equity Incentive Plan

Equity Incentive Plan

The Company issues restricted stock, restricted stock units, and stock options under the HomeTrust Bancshares, Inc. 2013 Omnibus Incentive Plan (“2013 Omnibus Incentive Plan”) to key officers and outside directors. In accordance with the requirements of the Financial Accounting Standards Board (the "FASB") Accounting Standards Codification (“ASC”) 718, Compensation – Stock Compensation, the Company has adopted a fair value based method of accounting for employee stock compensation plans, whereby compensation cost is measured based on the fair value of the award as of the grant date and recognized over the vesting period. The Company accounts for forfeitures as they occur.

Comprehensive Income

Comprehensive Income

Comprehensive income consists of net income and net unrealized gains (losses) on securities available for sale and is presented in the consolidated statements of comprehensive income.

Derivative Instruments and Hedging

Derivative Instruments and Hedging

The Company recognizes all derivatives as either assets or liabilities in the balance sheet, and measures those instruments at fair value. Changes in the fair value of those derivatives are reported in current earnings or other comprehensive income depending on the purpose for which the derivative is held and whether the derivative qualifies for hedge accounting. Loan commitments related to the origination or acquisition of mortgage loans that will be held for sale must be accounted for as derivative instruments. The Company enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (rate lock commitments). The Company also enters into forward sales commitments for the mortgage loans underlying the rate lock commitments. The fair values of these two derivative financial instruments are collectively insignificant to the consolidated financial statements.

Net Income Per Share

Net Income Per Share

Per the provisions of ASC 260, Earnings Per Share, basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding for the year, less the average number of nonvested restricted stock awards. Diluted earnings per share reflect the potential dilution from the issuance of additional shares of common stock caused by the exercise of stock options and restricted stock awards. In addition, nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities and are included in the computation of earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. ESOP shares are considered outstanding for basic and diluted earnings per share when the shares are committed to be released.

Net income is allocated between the common stock and participating securities pursuant to the two-class method, based on their rights to receive dividends, participate in earnings, or absorb losses. See Note 16 for further discussion on the Company’s earnings per share.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In August 2015, the FASB issued Accounting Standard Update ("ASU") No. 2015-14, “Revenue from Contracts with Customers (Topic 606)”, which defers the effective date of ASU No. 2014-09 one year. ASU No. 2014-09 created Topic 606 and supersedes Topic 605, Revenue Recognition. The core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In general, the new guidance requires companies to use more judgment and make more estimates than under current guidance, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which provides clarifying guidance in certain narrow areas and adds some practical expedients, but does not change the core revenue recognition principle in Topic 606. For financial reporting purposes, the standard allows for either full retrospective adoption, meaning the standard is applied to all of the periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period presented in the financial statements with the cumulative effect of initially applying the standard recognized at the date of initial application. A significant amount of the Company’s revenues are derived from net interest income on financial assets and liabilities, which are excluded from the scope of the amended guidance. The Company adopted this ASU on July 1, 2018. The adoption did not have a material effect on the Company's Consolidated Financial Statements. However, additional disclosures required by this ASU have been included in “Note 22 - Revenue” to the Company’s consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, "Financial Instruments (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities." The ASU amends the guidance in GAAP on the classification and measurement of financial instruments. The ASU includes the following changes: i) equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (ii) requires the use of exit price notion when measuring the fair value of financial instruments for disclosure purposes; (iii) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e. securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; (iv) allows an equity investment that does not have readily determinable fair values, to be measured at cost minus impairment (if any), plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer; (v) eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, and requires a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e. securities or loans and receivables) on the balance sheet or in the accompanying notes to the financial statements; and (vii) clarifies that a valuation allowance on a deferred tax asset related to available-for-sale securities should be evaluated in combination with the organization’s other deferred tax assets. Exit price is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company adopted this ASU on July 1, 2018. The adoption did not have a material effect on the Company's Consolidated Financial Statements. The disclosures to the Company’s consolidated financial statements have been updated appropriately using the exit price notion in “Note 21 - Fair Value of Financial Instruments."

In February 2016, the FASB issued ASU 2016-02, "Leases (ASC 842)." The guidance in this ASU requires most leases to be recognized on the balance sheet as a right-of-use asset and a lease liability. It will be critical to identify leases embedded in a contract to avoid misstating the lessee’s balance sheet. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. In July 2018, the FASB issued ASU 2018-10, "Codification Improvements to Topic 842, Leases" and ASU 2018-11 "Leases (Topic 842): Targeted Improvements." ASU 2018-10 made 16 narrow-scope amendments to ASC 842. The amendments in ASU 2018-11 are intended to provide entities with relief from the costs of implementing certain aspects of the the new lease accounting standard. Specifically, an entity can elect not to recast the comparative periods presented when transitioning to ASC 842 and provides a lessor with the option to not separate lease and nonlease components when certain conditions are met. This ASU also provides a new transition method in addition to the existing transition method contained in ASU No. 2016-02 to allow entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. These amendments have the same effective date as ASU 2016-02. The effect of the adoption of these ASUs will depend on leases at time of adoption. We expect to report between $4.0 million and $6.0 million higher assets and liabilities on our Consolidated Balance Sheets as a result of including right-of-use assets and lease liabilities related to certain banking offices and certain equipment under noncancelable operating lease agreements, which currently are not reflected in our Consolidated Balance Sheets. We do not expect the guidance to have a material impact on the Consolidated Statements of Income or the Consolidated Statements of Changes in Stockholders' Equity.

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The ASU significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for all entities beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating our current expected loss methodology of our loan and investment portfolios to identify the necessary modifications in accordance with this standard and expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. A valuation adjustment to our allowance for loan losses or investment portfolio that is identified in this process will be reflected as a one-time adjustment in equity rather than earnings. The Company is in the process of compiling historical data that will be used to calculate expected credit losses on its loan portfolio to ensure it is fully compliant with the ASU at the adoption date and is evaluating the potential impact adoption of this ASU will have on its consolidated financial statements. Once adopted, the Company expects its allowance for loan losses to increase, however, until its evaluation is complete the magnitude of the increase will be unknown.

In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." The ASU amends the guidance on the classification of certain cash receipts and payments in the statement of cash flows and is intended to reduce the diversity in practice. The Company adopted this ASU on July 1, 2018. The adoption did not have a material effect on the Company's Consolidated Financial Statements.

In March 2017, FASB issued ASU 2017-08, "Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities." The ASU requires entities to amortize the premium on certain purchased callable debt securities to the earliest call date, which more closely aligns the amortization period of premiums and discounts to expectations incorporated in the market prices. Entities no longer recognize a loss in earnings upon the debtor's exercise of a call on a purchased debt security held at a premium. The ASU does not require any accounting change for debt securities held at a discount, therefore the discount will continue to be amortized as an adjustment of yield over the contractual life of the investment. The Company adopted this ASU on January 1, 2019. The adoption did not have a material effect on the Company's Consolidated Financial Statements.

In May 2017, the FASB issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting." This ASU provides clarity on the guidance related to stock compensation when there have been changes to the terms or conditions of a share-based payment award to which an entity would be required to apply modification accounting under ASC 718. The ASU provides the three following criteria must be met in order to not account for the effect of the modification of terms or conditions: the fair value, the vesting conditions and the classification as an equity or liability instrument of the modified award is the same as the original award immediately before the original award is modified. The Company adopted this ASU on July 1, 2018. The adoption did not have a material effect on the Company's Consolidated Financial Statements.

In August 2017, FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." This ASU improves the transparency and understandability of disclosures in the financial statements regarding the entities risk management activities and reduces the complexity of hedge accounting. The amendments in this ASU permit hedge accounting for hedging relationships involving nonfinancial risk and interest rate risk by removing certain limitations in cash flow and fair value hedging relationships. In addition, the ASU requires an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and early adoption is permitted. The adoption of ASU No. 2017-12 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In June 2018, the FASB issued ASU No. 2018-07, "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." This ASU was issued to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Previously, these awards were recorded at the fair value of consideration received or the fair value of the equity instruments issued and was measured at the earlier of the commitment date or the date performance was completed. The amendments in this ASU require nonemployee share-based payment awards to be measured at the grant-date fair value of the equity instrument. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, but no earlier than an entity's adoption of Topic 606. The adoption of ASU No. 2018-07 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement." The amendments in this ASU removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC 820. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The adoption of ASU No. 2018-13 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In November 2018, the FASB issued ASU 2018-19, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses." This update clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. The effective date and transition requirements for this ASU are the same as ASU 2016-13. The adoption of ASU No. 2018-19 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In December 2018, the FASB issued ASU 2018-20, "Leases (Topic 842): Narrow-Scope Improvements for Lessors." The amendments in this update permit lessors, as an accounting policy election, to not evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs. Instead, those lessors will account for those costs as if they are lessee costs. A lessor making this election will exclude from the consideration in the contract and from variable payments not included in the consideration in the contract all collections from lessees of taxes within the scope of the election and will provide certain disclosures. For certain lessor costs, the lessor must exclude from variable payments, and therefore revenue, lessor costs paid by lessees directly to third parties from variable payments. In addition, the lessor must account for costs excluded from the consideration of a contract that are paid by the lessor and reimbursed by the lessee as variable payments. A lessor will record those reimbursed costs as revenue. The amendments in this ASU related to recognizing variable payments for contracts with lease and nonlease components require lessors to allocate (rather than recognize as currently required) certain variable payments to the lease and nonlease components when the changes in facts and circumstances on which the variable payment is based occur. After the allocation, the amount of variable payments allocated to the lease components will be recognized as income in profit or loss in accordance with Topic 842, while the amount of variable payments allocated to nonlease components will be recognized in accordance with other Topics, such as Topic 606. The effective date and transition requirements for this ASU are the same as ASU 2016-02. The adoption of ASU No. 2018-20 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In March 2019, the FASB issued ASU 2019-01, "Leases (Topic 842): Codification Improvements." The amendments in this update include the following items: i) determining the fair value of the underlying asset by lessors that are not manufacturers or dealers; ii) requiring cash received from lessors from sales-type and direct financing leases to be presented in the cash flow statement within investing activities; and iii) clarifying interim disclosure requirements. The effective date and transition requirements for the first and second items of this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The effective date and transition requirements for the third item of this ASU is the same as ASU 2016-02. The adoption of ASU No. 2019-01 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In April 2019, the FASB issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments." The amendments in this update are part of the FASB's ongoing project to improve codification and correcting unintended application. The items within this ASU are not expected to have significant effect on current accounting practice. The effective date and transition requirements for the amendments to Financial Instruments (ASU 2016-01) are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The effective date and transition requirements for the amendments to Financial Instruments-Credit Losses (ASU 2016-13) are the same as ASU 2016-13 noted above. The effective date and transition requirements for the amendments to Derivatives and Hedging (ASU 2017-12) are the same as ASU 2017-12 noted above.The adoption of ASU No. 2019-04 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In May 2019, the FASB issued ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief." The amendments in this update allow companies to irrevocably elect, upon the adoption of ASU 2016-13, the fair value option for financial instruments that i) were previously recorded at amortized cost and ii) are within the scope of the credit losses guidance in ASC 326-20, iii) are eligible for the fair value option under ASC 825-10, and iv) are not held-to-maturity debt securities. The effective date and transition requirements for this ASU is the same as ASU 2016-13. The adoption of ASU No. 2019-05 is not expected to have a material impact on the Company's Consolidated Financial Statements.

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Loans (Tables)

12 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

Loans consist of the following at the dates indicated:

	June 30, 2019			June 30, 2018
Retail consumer loans:
One-to-four family	$	660,591		$	664,289
HELOCs - originated	131,095			137,564
HELOCs - purchased	116,972			166,276
Construction and land/lots	80,602			65,601
Indirect auto finance	153,448			173,095
Consumer	19,756			12,379
Total retail consumer loans	1,162,464			1,219,204
Commercial loans:
Commercial real estate	927,261			857,315
Construction and development	210,916			192,102
Commercial and industrial	160,471			135,336
Equipment finance	132,058			13,487
Municipal leases	112,016			109,172
Total commercial loans	1,542,722			1,307,412
Total loans	2,705,186			2,526,616
Deferred loan costs (fees), net	4			(764		)
Total loans, net of deferred loan fees	2,705,190			2,525,852
Allowance for loan and lease losses	(21,429		)	(21,060		)
Net loans	$	2,683,761		$	2,504,792

Financing Receivable Credit Quality Indicators

The Company’s total non-purchased and purchased performing loans by segment, class, and risk grade at the dates indicated follows:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2019
Retail consumer loans:
One-to-four family	$	644,159	$	2,089	$	8,072	$	384	$	19	$	654,723
HELOCs - originated	129,775		111		976		—		8		130,870
HELOCs - purchased	116,306		—		666		—		—		116,972
Construction and land/lots	79,995		71		164		—		—		80,230
Indirect auto finance	152,393		13		1,042				—		153,448
Consumer	18,601		656		491		3		5		19,756
Commercial loans:
Commercial real estate	901,214		8,066		10,306		—		—		919,586
Construction and development	207,827		790		1,357		1		—		209,975
Commercial and industrial	157,325		877		600		—		—		158,802
Equipment finance	131,674		—		384		—		—		132,058
Municipal leases	111,721		295		—		—		—		112,016
Total loans	$	2,650,990	$	12,968	$	24,058	$	388	$	32	$	2,688,436

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2018
Retail consumer loans:
One-to-four family	$	643,077	$	3,576	$	10,059	$	746	$	14	$	657,472
HELOCs - originated	135,336		113		1,735		150		6		137,340
HELOCs - purchased	166,089		—		187		—		—		166,276
Construction and land/lots	64,823		23		257		54		—		65,157
Indirect auto finance	172,675		—		420		—		—		173,095
Consumer	11,723		85		558		2		11		12,379
Commercial loans:
Commercial real estate	835,485		5,804		6,787		—		—		848,076
Construction and development	187,187		621		2,067		—		—		189,875
Commercial and industrial	131,690		1,279		414		—		—		133,383
Equipment finance	13,487		—		—		—		—		13,487
Municipal leases	108,864		308		—		—		—		109,172
Total loans	$	2,470,436	$	11,809	$	22,484	$	952	$	31	$	2,505,712

The Company’s total PCI loans by segment, class, and risk grade at the dates indicated follows:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2019
Retail consumer loans:
One-to-four family	$	4,124	$	248	$	1,496	$	—	$	—	$	5,868
HELOCs - originated	225		—		—		—		—		225
Construction and land/lots	142		—		230		—		—		372
Commercial loans:
Commercial real estate	4,503		1,903		1,300		—		—		7,706
Construction and development	453		—		488		—		—		941
Commercial and industrial	1,666		—		—		—		3		1,669
Total loans	$	11,113	$	2,151	$	3,514	$	—	$	3	$	16,781

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2018
Retail consumer loans:
One-to-four family	$	4,620	$	388	$	1,809	$	—	$	—	$	6,817
HELOCs - originated	224		—		—		—		—		224
Construction and land/lots	444		—		—		—		—		444
Commercial loans:
Commercial real estate	4,718		2,162		2,359		—		—		9,239
Construction and development	547		—		1,680		—		—		2,227
Commercial and industrial	1,894		—		59		—		—		1,953
Total loans	$	12,447	$	2,550	$	5,907	$	—	$	—	$	20,904

Past Due Financing Receivables

The Company’s total loans by segment, class, and delinquency status at the dates indicated follows:

	Past Due								Total
	30-89 Days		90 Days+		Total		Current		Loans
June 30, 2019
Retail consumer loans:
One-to-four family	$	1,615	$	1,389	$	3,004	$	657,587	$	660,591
HELOCs - originated	226		208		434		130,661		131,095
HELOCs - purchased	—		485		485		116,487		116,972
Construction and land/lots	138		6		144		80,458		80,602
Indirect auto finance	459		237		696		152,752		153,448
Consumer	6		31		37		19,719		19,756
Commercial loans:
Commercial real estate	2,279		516		2,795		924,466		927,261
Construction and development	—		1,133		1,133		209,783		210,916
Commercial and industrial	207		99		306		160,165		160,471
Equipment finance	649		384		1,033		131,025		132,058
Municipal leases	—		—		—		112,016		112,016
Total loans	$	5,579	$	4,488	$	10,067	$	2,695,119	$	2,705,186

	Past Due								Total
	30-89 Days		90 Days+		Total		Current		Loans
June 30, 2018
Retail consumer loans:
One-to-four family	$	3,001	$	1,756	$	4,757	$	659,532	$	664,289
HELOCs - originated	98		268		366		137,198		137,564
HELOCs - purchased	—		—		—		166,276		166,276
Construction and land/lots	44		54		98		65,503		65,601
Indirect auto finance	335		127		462		172,633		173,095
Consumer	238		39		277		12,102		12,379
Commercial loans:
Commercial real estate	169		1,412		1,581		855,734		857,315
Construction and development	260		1,928		2,188		189,914		192,102
Commercial and industrial	15		69		84		135,252		135,336
Equipment finance	—		—		—		13,487		13,487
Municipal leases	—		—		—		109,172		109,172
Total loans	$	4,160	$	5,653	$	9,813	$	2,516,803	$	2,526,616

Schedule of Past Due Loans Still Accruing and Nonaccruing Interest

The Company’s recorded investment in loans, by segment and class that are not accruing interest or are 90 days or more past due and still accruing interest at the dates indicated follow:

	June 30, 2019				June 30, 2018
	Nonaccruing		90 Days + & still accruing		Nonaccruing		90 Days + & still accruing
Retail consumer loans:
One-to-four family	$	3,223	$	—	$	4,308	$	—
HELOCs - originated	348		—		656		—
HELOCs - purchased	666		—		187		—
Construction and land/lots	6		—		165		—
Indirect auto finance	463		—		255		—
Consumer	45		—		321		—
Commercial loans:
Commercial real estate	3,559		—		2,863		—
Construction and development	1,357		—		2,045		—
Commercial and industrial	307		—		114		—
Equipment finance	384		—		—		—
Municipal leases	—		—		—		—
Total loans	$	10,358	$	—	$	10,914	$	—

Schedule of Troubled Debt Restructurings Performing and Excluded from Nonaccruing Loans

The Company’s loans that were performing under the payment terms of TDRs that were excluded from nonaccruing loans above at the dates indicated follows:

	June 30, 2019		June 30, 2018
Performing TDRs	$	23,116	$	21,251

Allowance for Credit Losses on Financing Receivables

An analysis of the allowance for loan losses by segment for the periods shown is as follows:

	June 30, 2019
	PCI			Retail Consumer			Commercial			Total
Balance at beginning of period	$	483		$	7,527		$	13,050		$	21,060
Provision for (recovery of) loan losses	(282		)	(1,244		)	7,226			5,700
Charge-offs	—			(1,136		)	(6,273		)	(7,409		)
Recoveries	—			1,272			806			2,078
Balance at end of period	$	201		$	6,419		$	14,809		$	21,429

	June 30, 2018
	PCI			Retail Consumer			Commercial			Total
Balance at beginning of period	$	727		$	8,585		$	11,839		$	21,151
Provision for (recovery of) loan losses	228			(906		)	678			—
Charge-offs	(472		)	(1,142		)	(1,033		)	(2,647		)
Recoveries	—			990			1,566			2,556
Balance at end of period	$	483		$	7,527		$	13,050		$	21,060

	June 30, 2017
	PCI		Retail Consumer			Commercial			Total
Balance at beginning of period	$	361	$	11,549		$	9,382		$	21,292
Provision for (recovery of) loan losses	366		(2,829		)	2,463			—
Charge-offs	—		(1,219		)	(1,331		)	(2,550		)
Recoveries	—		1,084			1,325			2,409
Balance at end of period	$	727	$	8,585		$	11,839		$	21,151

Schedule of Ending Balances of Loans and the Related Allowance by Segment and Class

The Company’s ending balances of loans and the related allowance, by segment and class, at the dates indicated follows:

	Allowance for Loan Losses								Total Loans Receivable
	PCI		Loans individually evaluated for impairment		Loans Collectively Evaluated		Total		PCI		Loans individually evaluated for impairment		Loans Collectively Evaluated		Total
June 30, 2019
Retail consumer loans:
One-to-four family	$	62	$	74	$	2,375	$	2,511	$	5,868	$	5,318	$	649,405	$	660,591
HELOCs - originated	—		7		1,023		1,030		225		7		130,863		131,095
HELOCs - purchased	—		—		518		518		—		—		116,972		116,972
Construction and land/lots	—		—		1,265		1,265		372		323		79,907		80,602
Indirect auto finance	—		—		927		927		—		—		153,448		153,448
Consumer	—		4		226		230		—		4		19,752		19,756
Commercial loans:
Commercial real estate	118		28		7,890		8,036		7,706		8,692		910,863		927,261
Construction and development	4		5		3,187		3,196		941		1,397		208,578		210,916
Commercial and industrial	17		2		1,957		1,976		1,669		2		158,800		160,471
Equipment finance	—		—		1,305		1,305		—		—		132,058		132,058
Municipal leases	—		—		435		435		—		—		112,016		112,016
Total	$	201	$	120	$	21,108	$	21,429	$	16,781	$	15,743	$	2,672,662	$	2,705,186
June 30, 2018
Retail consumer loans:
One-to-four family	$	98	$	125	$	3,137	$	3,360	$	6,817	$	7,104	$	650,368	$	664,289
HELOCs - originated	—		6		1,117		1,123		224		452		136,888		137,564
HELOCs - purchased	—		—		795		795		—		—		166,276		166,276
Construction and land/lots	—		19		1,134		1,153		444		583		64,574		65,601
Indirect auto finance	—		—		1,126		1,126		—		—		173,095		173,095
Consumer	—		11		57		68		—		11		12,368		12,379
Commercial loans:
Commercial real estate	138		28		8,029		8,195		9,239		3,511		844,565		857,315
Construction and development	229		8		3,109		3,346		2,227		2,223		187,652		192,102
Commercial and industrial	18		—		1,458		1,476		1,953		—		133,383		135,336
Equipment finance	—		—		—		—		—		—		13,487		13,487
Municipal leases	—		—		418		418		—		—		109,172		109,172
Total	$	483	$	197	$	20,380	$	21,060	$	20,904	$	13,884	$	2,491,828	$	2,526,616

Schedule of Impaired Loans and Related Allowance by Segment and Class

The Company’s impaired loans and the related allowance, by segment and class, excluding PCI loans, at the dates indicated follows:

	Total Impaired Loans
	Unpaid Principal Balance		Recorded Investment						Related Recorded Allowance
			With a Recorded Allowance		With No Recorded Allowance		Total
June 30, 2019
Retail consumer loans:
One-to-four family	$	18,302	$	12,461	$	3,152	$	15,613	$	472
HELOCs - originated	1,262		564		130		694		9
HELOCs - purchased	666		—		666		666		—
Construction and land/lots	1,917		957		323		1,280		26
Indirect auto finance	601		353		137		490		2
Consumer	1,527		7		1,130		1,137		43
Commercial loans:
Commercial real estate	10,127		6,434		3,404		9,838		36
Construction and development	2,574		940		791		1,731		7
Commercial and industrial	10,173		354		768		1,122		6
Equipment finance	462		—		384		384		—
Total impaired loans	$	47,611	$	22,070	$	10,885	$	32,955	$	601
June 30, 2018
Retail consumer loans:
One-to-four family	$	23,295	$	16,035	$	4,140	$	20,175	$	554
HELOCs - originated	2,544		1,017		737		1,754		9
HELOCs - purchased	187		—		187		187		—
Construction and land/lots	2,348		1,098		446		1,544		53
Indirect auto finance	395		122		133		255		1
Consumer	501		12		46		58		11
Commercial loans:
Commercial real estate	5,343		2,862		2,246		5,108		42
Construction and development	3,166		828		1,217		2,045		14
Commercial and industrial	4,898		235		—		235		3
Total impaired loans	$	42,677	$	22,209	$	9,152	$	31,361	$	687

Schedule of Average Recorded Investment in Loans, Unpaid Principal Balance and Interest Income Recognized

The Company’s average recorded investment and interest income recognized on impaired loans as of the dates indicated follows:

	Year Ended
	June 30, 2019				June 30, 2018				June 30, 2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Retail consumer loans:
One-to-four family	$	17,319	$	950	$	23,257	$	1,170	$	25,256	$	1,147
HELOCs - originated	1,005		63		2,304		104		2,548		152
HELOCs - purchased	320		13		189		15		48		12
Construction and land/lots	1,441		94		1,575		109		1,734		139
Indirect auto finance	373		29		256		23		106		2
Consumer	1,328		67		43		17		35		20
Commercial loans:
Commercial real estate	5,026		466		6,496		209		7,771		272
Construction and development	1,779		65		2,703		56		2,450		58
Commercial and industrial	315		249		1,205		60		2,737		125
Equipment finance	192		37		—		—		—		—
Municipal leases	—		—		75		—		406		18
Total loans	$	29,098	$	2,033	$	38,103	$	1,763	$	43,091	$	1,945

Impaired Financing Receivable

A summary of changes in the accretable yield for PCI loans for the periods indicated follows:

	Year Ended June 30, 2019			Year Ended June 30, 2018
Accretable yield, beginning of period	$	5,734		$	7,080
Reclass from nonaccretable yield (1)	576			513
Other changes, net (2)	1,018			393
Interest income	(2,069		)	(2,252		)
Accretable yield, end of period	$	5,259		$	5,734

______________________________

(1) Represents changes attributable to expected losses assumptions.

(2) Represents changes in cash flows expected to be collected due to the impact of modifications, changes in prepayment assumptions, and changes in interest rates.

Impaired Financing Receivables

The following table presents carrying values and unpaid principal balances for PCI loans at the dates indicated below:

	June 30, 2019		June 30, 2018
Carrying value of PCI loans	$	16,750	$	20,904
Unpaid principal balance of PCI loans	$	20,141	$	25,746

Troubled Debt Restructurings on Financing Receivables

The following table presents a breakdown of the types of concessions made on TDRs by loan class for the periods indicated below:

	Year Ended June 30, 2019					Year Ended June 30, 2018					Year Ended June 30, 2017
	Number of Loans	Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment		Number of Loans	Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment		Number of Loans	Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment
Below market interest rate:
Retail consumer:
One-to-four family	1	$	85	$	84	—	$	—	$	—	3	$	288	$	285
Construction and land/lots	—	—		—		—	—		—		2	80		79
Commercial:
Total	1	$	85	$	84	—	$	—	$	—	5	$	368	$	364
Extended payment terms:
Retail consumer:
One-to-four family	1	$	34	$	34	4	$	514	$	502	5	$	186	$	179
HELOCs - originated	—	—		—		—	—		—		1	37		37
Construction and land/lots	—	—		—		1	36		32		1	280		264
Consumer	2	34		33		—	—		—		2	11		11
Commercial:
Construction and development	—	—		—		—	—		—		1	439		439
Commercial and industrial	—	—		—		—	—		$	—	2	52		$	50
Total	3	$	68	$	67	5	$	550	$	534	12	$	1,005	$	980
Other TDRs:
Retail consumer:
One-to-four family	18	$	1,452	$	1,433	25	$	3,646	$	3,747	13	$	525	$	517
HELOCs - originated	—	—		—		—	—		—		2	33		31
Construction and land/lots	1	29		28		—	—		—		4	404		318
Indirect auto finance	1	33		26		—	—		—		—	—		—
Consumer	1	2		2		1	2		2		—	—		—
Commercial:
Commercial real estate	3	5,440		5,427		—	—		—		3	2,349		2,035
Construction and development	1	182		182		—	—		—		—	—		—
Commercial and industrial	—	—		—		—	—		—		2	231		227
Total	25	$	7,138	$	7,098	26	$	3,648	$	3,749	24	$	3,542	$	3,128
Total	29	$	7,291	$	7,249	31	$	4,198	$	4,283	41	$	4,915	$	4,472

Schedule of Trouble Debt Restructurings With Payment Default

The following table presents loans that were modified as TDRs within the previous 12 months and for which there was a payment default during the periods indicated below:

	Year Ended June 30, 2019			Year Ended June 30, 2018			Year Ended June 30, 2017
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Other TDRs:
Retail consumer:
One-to-four family	1	$	72	5	$	277	2	$	27
Construction and land/lots	—	—		—	—		1	19
Consumer	1	2		—	—		—	—
Total Other TDRs	2	$	74	5	$	277	3	$	46
Total	2	$	74	5	$	277	3	$	46

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Summary of Significant Accounting Policies

12 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Business

The consolidated financial statements presented in this report include the accounts of HomeTrust Bancshares, Inc., a Maryland corporation (“HomeTrust”), and its wholly-owned subsidiary, HomeTrust Bank (the “Bank”). As used throughout this report, the term the “Company” refers to HomeTrust and its consolidated subsidiary, unless the context otherwise requires. HomeTrust is a bank holding company primarily engaged in the business of planning, directing, and coordinating the business activities of the Bank. The Bank is a North Carolina state chartered bank and provides a wide range of retail and commercial banking products within its geographic footprint, which includes: North Carolina (the Asheville metropolitan area, Greensboro/"Piedmont" region, Charlotte, and Raleigh/Cary), Upstate South Carolina (Greenville), East Tennessee (Kingsport/Johnson City/Bristol, Knoxville, and Morristown) and Southwest Virginia (the Roanoke Valley). The Bank operates under a single set of corporate policies and procedures and is recognized as a single banking segment for financial reporting purposes.

Accounting Principles

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States (“US GAAP”).

Principles of Consolidation and Subsidiary Activities

The accompanying consolidated financial statements include the accounts of HomeTrust, the Bank, and its wholly-owned subsidiary, Western North Carolina Service Corporation (“WNCSC”) at or for the years ended June 30, 2019, 2018, and 2017. WNCSC owns office buildings in Asheville, North Carolina that are leased to the Bank. All intercompany items have been eliminated.

Reclassifications

Certain amounts reported in prior periods’ consolidated financial statements have been reclassified to conform to the current presentation. Such reclassifications had no effect on previously reported cash flows, stockholders’ equity or net income.

Use of Estimates in Financial Statements

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash and interest-bearing deposits with initial terms to maturity of 90 days or less.

Commercial Paper

Commercial paper includes highly liquid short-term debt of investment graded corporations with maturities less than 270 days. These instruments are typically purchased at a discount based on prevailing interest rates and do not exceed $15.0 million per issuer.

Debt Securities

The Company classifies debt securities as trading, available for sale, or held to maturity.

Securities available for sale are carried at fair value. These securities are used to execute asset/liability management strategies, manage liquidity, and leverage capital, and therefore may be sold prior to maturity. Adjustments for unrealized gains or losses, net of the income tax effect, are made to accumulated other comprehensive income, a separate component of total stockholders’ equity.

Securities held to maturity are stated at cost, net of unamortized balances of premiums and discounts. When these securities are purchased, the Company intends to and has the ability to hold such securities until maturity.

Declines in the fair value of individual securities available for sale or held to maturity below their cost that are other-than-temporary result in write-downs of the individual securities to their fair value. The related write-downs are included in earnings as realized losses. In estimating other-than-temporary impairment losses, the Company considers among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery of the unrealized loss, and in the case of debt securities, whether it is more likely than not that the Company will be required to sell the security prior to a recovery.

Premiums and discounts are amortized or accreted over the life of the security as an adjustment to yield. Dividend and interest income are recognized when earned. Gains or losses on the sale of securities are recognized on a specific identification, trade date basis.

Loans

Portfolio loans are carried at their outstanding principal amount, less unearned income and deferred nonrefundable loan fees, net of certain origination costs. Interest income is recorded as earned on an accrual basis based on the contractual rate and the outstanding balance, except for nonaccruing loans where interest is recorded as earned on a cash basis. Net deferred loan origination fees/costs are deferred and amortized to interest income over the life of the related loan.

Acquired Loans

Purchased loans are recorded at their fair value at the acquisition date. Credit discounts are included in the determination of fair value; therefore, an allowance for loan and lease losses is not recorded at the acquisition date. Acquired loans are evaluated upon acquisition and classified as either purchased impaired or purchased non-impaired. Purchased impaired loans reflect credit deterioration since origination such that it is probable at acquisition that the Company will be unable to collect all contractually required payments.

The cash flows expected to be received over the life of the loans were estimated by management. These cash flows were provided to third party analysts to calculate carrying values of the loans, book yields, effective interest income and impairment, if any, based on actual and projected events. Default rates, loss severity, and prepayment speed assumptions will be periodically reassessed to update our expectation of future cash flows. The excess of the cash flows expected to be collected over a loan's carrying value is considered to be the accretable yield and is recognized as interest income over the estimated life of the loan using the effective yield method. The accretable yield may change due to changes in the timing and amounts of expected cash flows. Changes in the accretable yield are disclosed quarterly.

The excess of the undiscounted contractual balances due over the cash flows expected to be collected is considered to be the nonaccretable difference. The nonaccretable difference represents our estimate of the credit losses expected to occur and was considered in determining the fair value of the loans as of the acquisition date. Subsequent to the acquisition date, any increases in expected cash flows over those expected at purchase date in excess of fair value are adjusted through a change to the accretable yield on a prospective basis. Any subsequent decreases in expected cash flows attributable to credit deterioration are recognized by recording a provision for loan losses. The purchased impaired loans acquired are and will continue to be subject to the Company's internal and external credit review and monitoring.

For purchased non-impaired loans, the difference between the fair value and unpaid principal balance of the loan at the acquisition date is amortized or accreted to interest income over the life of the loans.

Loan Segments and Classes

The Company’s loan portfolio is grouped into two segments (retail consumer loans and commercial loans) and into various classes within each segment. The Company originates, services, and manages its loans based on these segments and classes. The Company’s portfolio segments and classes within those segments are subject to risks that could have an adverse impact on the credit quality of the loan portfolio. Management identified the risks described below as significant risks that are generally similar among the loan segments and classes.

Retail Consumer loan segment

The Company underwrites its retail consumer loans using automated credit scoring and analysis tools. These credit scoring tools take into account factors such as payment history, credit utilization, length of credit history, types of credit currently in use, and recent credit inquiries. To the extent that the loan is secured by collateral, the value of the collateral is also evaluated. Common risks to each class of retail consumer loans include general economic conditions within the Company’s markets, such as unemployment and potential declines in collateral values, and the personal circumstances of the borrowers. In addition to these common risks for the Company’s retail consumer loans, various retail consumer loan classes may also have certain risks specific to them.

One-to-four family and construction and land/lot loans are to individuals and are typically secured by one-to-four family residential property, undeveloped land, and partially developed land in anticipation of pending construction of a personal residence. Significant and rapid declines in real estate values can result in residential mortgage loan borrowers having debt levels in excess of the current market value of the collateral, which can lead to higher levels of foreclosures. Construction and land/lot loans may experience delays in completion and cost overruns that exceed the borrower’s financial ability to complete the project. Such cost overruns can result in foreclosure of partially completed and unmarketable collateral.

Originated home equity lines of credit ("HELOCs") are often secured by second liens on residential real estate, thereby making such loans particularly susceptible to declining collateral values. A substantial decline in collateral value could render the Company’s second lien position to be effectively unsecured. Additional risks include lien perfection inaccuracies and disputes with first lien holders that may further weaken collateral positions. Further, the open-end structure of these loans creates the risk that customers may draw on the lines in excess of the collateral value if there have been significant declines since origination. In addition, the Company purchases certain HELOCs from a third party. The credit risk characteristics are different for these loans since they were not originated by the Company and the collateral is located outside the Company’s market area, primarily in several western states. The Company established an allowance for loan losses based on the historical losses of the portfolio. The Company monitors the performance of these loans and adjusts the allowance for loan losses as necessary.

Indirect auto finance loans are primarily for new and used personal automobiles originated by franchised and independent auto dealers within the Company's geographic footprint. The bank-dealer relationship is governed by contract, which provides warranties and representations, payment schedules, and rights and remedies upon breach. The underwriting process and standards are maintained by the Company and implemented via an automated decision tool, which incorporates the borrower's credit score, loan to value ratio, and terms of the loan to determine the borrower's creditworthiness.

Consumer loans include loans secured by deposit accounts or personal property such as automobiles, boats, and motorcycles, as well as unsecured consumer debt. The value of underlying collateral within this class is especially volatile due to potential rapid depreciation in values since date of loan origination in excess of principal repayment.

Commercial loan segment

The Company’s commercial loans are centrally underwritten based primarily on the customer’s ability to generate the required cash flow to service the debt in accordance with the contractual terms and conditions of the loan agreement. The Company’s commercial lenders and underwriters work to understand the borrower’s businesses and management experiences. The majority of the Company’s commercial loans are secured by collateral, so collateral values are important to the transaction. In commercial loan transactions where the principals or other parties provide personal guarantees, the Company’s commercial lenders and underwriters analyze the relative financial strength and liquidity of each guarantor. Risks that are common to the Company’s commercial loan classes include general economic conditions, demand for the borrowers’ products and services, the personal circumstances of the principals, and reductions in collateral values. In addition to these common risks for the Company’s commercial loans, the various commercial loan classes also have certain risks specific to them.

Construction and development loans are highly dependent on the supply and demand for commercial real estate in the Company’s markets as well as the demand for the newly constructed residential and commercial properties and lots being developed by the Company’s commercial loan customers. Prolonged deterioration in demand could result in significant decreases in the underlying collateral values and make repayment of the outstanding loans more difficult for the Company’s commercial borrowers.

Commercial real estate and commercial and industrial loans are primarily dependent on the ability of the Company’s commercial loan customers to achieve business results consistent with those projected at loan origination resulting in cash flow sufficient to service the debt. To the extent that a borrower’s actual business results significantly underperform the original projections, the ability of that borrower to service the Company’s loan on a basis consistent with the contractual terms may be at risk. While these loans and leases are generally secured by real property, personal property, or business assets such as inventory or accounts receivable, it is possible that the liquidation of the collateral will not fully satisfy the obligation.

Municipal leases are primarily made to volunteer fire departments and depend on the tax revenues received from the county or municipality. These leases are mainly secured by vehicles, fire stations, land, or equipment. The underwriting of the municipal leases is based on the cash flows of the fire department as well as projections of future income.

Equipment finance is primarily made up of commercial finance agreements and commercial loans and leases provided by our new Equipment Finance line of business, and primarily for transportation, construction, and manufacturing equipment. The loans have terms on average of five years or less and are secured by the financed equipment.

Credit Quality Indicators

Loans are monitored for credit quality on a recurring basis and the composition of the loans outstanding by credit quality indicator is provided below. Loan credit quality indicators are developed through review of individual borrowers on an ongoing basis. Generally, loans are monitored for performance on a quarterly basis with the credit quality indicators adjusted as needed. The indicators represent the rating for loans as of the date presented based on the most recent assessment performed. These credit quality indicators are defined as follows:

Pass—A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.

Special Mention—A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.

Substandard—A substandard asset is inadequately protected by the current net worth and paying capacity of the obligor, or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Doubtful—An asset classified doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions, and values.

Loss—Assets classified loss are considered uncollectible and of such little value that their continuing to be carried as an asset is not warranted. This classification is not necessarily equivalent to no potential for recovery or salvage value, but rather that it is not appropriate to defer a full write-off even though partial recovery may be effected in the future.

Loans Held for Sale

Residential mortgages held for sale are valued at the lower of cost or fair value as determined by outstanding commitments from investors on a “best efforts” basis or current investor yield requirements, calculated on the aggregate loan basis. 

Beginning in fiscal year 2018, the Company began providing loans guaranteed by the SBA for the purchase of businesses, business startups, business expansion, equipment, and working capital. All SBA loans are underwritten and documented as prescribed by the SBA. SBA loans are generally fully amortizing and have maturity dates and amortizations of up to 25 years. SBA loans are classified as held for sale and are carried at the lower of cost or fair value. The guaranteed portion of the loan is sold and the servicing rights are retained. At the time of the sale, an asset is recorded for the value of the servicing rights and is amortized over the remaining life of the loan on the effective interest method. The servicing asset is included in other assets and the corresponding servicing fees are recorded in noninterest income. A gain is recorded for any premium received in excess of the carrying value of the net assets transferred in the sale and is also included in noninterest income. The portion of SBA loans that are retained are adjusted to fair value and reclassified as a loan held to maturity. The net value of the retained loans is included in the appropriate loan classification for disclosure purposes.

Beginning in fiscal year 2019, the Company began originating HELOCs through a third party. These loans are originated in various states outside the Company's geographic footprint, but are underwritten to the Company's underwriting guidelines. The loans are held for sale by the Company over a 90 to 180 day period and are serviced by the third party. The loans are marketed by the third party to investors in pools and once sold the Company recognizes a gain on the sale.

Allowance for Loan Losses

The allowance for loan losses is management’s estimate of probable credit losses that are inherent in the Company’s loan portfolios at the balance sheet date. The allowance increases when the Company provides for loan losses through charges to operating earnings and when the Company recovers amounts from loans previously written down or charged off. The allowance decreases when the Company writes down or charges off loan amounts that are deemed uncollectible.

Management determines the allowance for loan losses based on periodic evaluations that are inherently subjective and require substantial judgment because the evaluations require the use of material estimates that are susceptible to significant change. The Company generally uses two allowance methodologies that are primarily based on management’s determination as to whether or not a loan is considered to be impaired.

All classified loans above a certain threshold meeting certain criteria are evaluated for impairment on a loan-by-loan basis and are considered impaired when it is probable, based on current information, that the borrower will be unable to pay contractual interest or principal as required by the loan agreement. Impaired loans below the threshold are evaluated as a pool with additional adjustments to the allowance for loan losses. Loans that experience insignificant payment delays and payment shortfalls are not necessarily considered impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment history, and the amount of the shortfall relative to the principal and interest owed. Impaired loans are measured at their estimated net realizable value based on either the value of the loan’s expected future cash flows discounted at the loan’s effective interest rate or on the collateral value, net of the estimated costs of disposal, if the loan is collateral dependent. For loans considered impaired, an individual allowance for loan losses is recorded when the loan principal balance exceeds the estimated net realizable value.

For loans not considered impaired, management determines the allowance for loan losses based on estimated loss percentages that are determined by and applied to the various classes of loans that comprise the segments of the Company’s loan portfolio. The estimated loss percentages by loan class are based on a number of factors that include by class (i) average historical losses over the past two years, (ii) levels and trends in delinquencies, impairments, and net charge-offs, (iii) trends in the volume, terms, and concentrations, (iv) trends in interest rates, (v) effects of changes in the Company’s risk tolerance, underwriting standards, lending policies, procedures, and practices, and (vi) national and local business and economic conditions.

Future material adjustments to the allowance for loan losses may be necessary due to changing economic conditions or declining collateral values. In addition, bank regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to make adjustments to the allowance for loan losses based upon judgments that differ significantly from those of management.

Nonperforming Assets

Nonperforming assets can include loans that are past due 90 days or more based on the loan’s contractual terms and continue to accrue interest, loans on which interest is not being accrued, and REO.

Loans Past Due 90 Days or More, Nonaccruing, Impaired, or Restructured

The Company’s policies related to when loans are placed on nonaccruing status conform to guidelines prescribed by bank regulatory authorities. Generally, the Company suspends the accrual of interest on loans (i) that are maintained on a cash basis because of the deterioration of the financial condition of the borrower, (ii) for which payment in full of principal or interest is not expected (impaired loans), or (iii) on which principal or interest has been in default for a period of 90 days or more, unless the loan is both well secured and in the process of collection. Under the Company’s cost recovery method, interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accruing status when all principal and interest amounts contractually due are brought current and concern no longer exists as to the future collectability of principal and interest, which is generally confirmed when the loan demonstrates performance for six consecutive months or payment cycles.

Restructured loans to borrowers who are experiencing financial difficulty, and on which the Company has granted concessions that modify the terms of the loan, are accounted for as troubled debt restructurings (“TDRs”). These loans remain as TDRs until the loan has been paid in full, modified to its original terms, or charged off. The Company may place these loans on accrual or nonaccrual status depending on the individual facts and circumstances of the borrower. Generally, these loans are put on nonaccrual status until there is adequate performance that evidences the ability of the borrower to make the contractual payments. This period of performance is normally at least six months, and may include performance immediately prior to or after the modification, depending on the specific facts and circumstances of the borrower.

Loan Charge-offs

The Company charges off loan balances, in whole or in part to net realizable value or fair value less costs to sell, when available, verifiable, and documentable information confirms that specific loans, or portions of specific loans, are uncollectible or unrecoverable. For unsecured loans, losses are confirmed when it can be determined that the borrower, or any guarantors, are unwilling or unable to pay the amounts as agreed. When the borrower, or any guarantor, is unwilling or unable to pay the amounts as agreed on a loan secured by collateral and any recovery will be realized upon the sale of the collateral, the loan is deemed to be collateral dependent. Repayments or recoveries for collateral dependent loans are directly affected by the value of the collateral at liquidation. As such, loan repayment can be affected by factors that influence the amount recoverable, the timing of the recovery, or a combination of the two. Such factors include economic conditions that affect the markets in which the loan or its collateral is sold, bankruptcy, repossession and foreclosure laws, and consumer banking regulations. Losses are also confirmed when the loan, or a portion of the loan, is classified as loss resulting from loan reviews conducted by the Company or its bank regulatory examiners.

Charge-offs of loans in the commercial loan segment are recognized when the uncollectibility of the loan balance and the inability to recover sufficient value from the sale of any collateral securing the loan is confirmed. The uncollectibility of the loan balance is evidenced by the inability of the commercial borrower to generate cash flows sufficient to repay the loan as agreed causing the loan to become delinquent. For collateral dependent commercial loans, the Company determines the net realizable value of the collateral based on appraisals, current market conditions, and estimated costs to sell the collateral. For collateral dependent commercial loans where the loan balance, including any accrued interest, net deferred fees or costs, and unamortized premiums or discounts, exceeds the net realizable value of the collateral securing the loan, the deficiency is identified as unrecoverable, is deemed to be a confirmed loss, and is charged off.

Charge-offs of loans in the retail consumer loan segment are generally confirmed and recognized in a manner similar to charge-offs of loans in the commercial loan segment. Secured retail consumer loans that are identified as uncollectible and are deemed to be collateral dependent are confirmed as loss to the extent the net realizable value of the collateral is insufficient to recover the loan balance. Consumer loans not secured by real estate that become 90 days past due are charged off to the extent that the fair value of any collateral, less estimated costs to sell the collateral, is insufficient to recover the loan balance. Consumer loans secured by real estate that become 120 days past due are charged off to the extent that the fair value of the real estate securing the loan, less estimated costs to sell the collateral, is insufficient to recover the loan balance. Loans to borrowers in bankruptcy are subject to modification by the bankruptcy court and are charged off to the extent that the fair value of any collateral securing the loan, less estimated costs to sell the collateral, is insufficient to recover the loan balance, unless the Company expects repayment is likely to occur. Such loans are charged off within 60 days of the receipt of notification from a bankruptcy court or when the loans become 120 days past due, whichever is shorter.

Real Estate Owned

REO consists of real estate acquired as a result of customers’ loan defaults. REO is stated at the fair value of the property net of the estimated costs of disposal with a charge to the allowance for loan losses upon foreclosure, if necessary. Any write-downs subsequent to foreclosure are charged against operating earnings. To the extent recoverable, costs relating to the development and improvement of property are capitalized, whereas those costs relating to holding the property are charged to expense.

Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives. Leasehold improvements are amortized over the lives of the respective leases or the estimated useful life of the leasehold improvement, whichever is less. Maintenance and repair costs are expensed as incurred. Capitalized leases are amortized using the same methods as premises and equipment over the estimated useful lives or lease terms, whichever is less. Obligations under capital leases are amortized using the interest method to allocate payments between principal reduction and interest expense.

Other Investments, at cost

As a requirement for membership, the Bank invests in stock of the Federal Home Loan Bank of Atlanta ("FHLB") and the Federal Reserve Bank of Richmond ("Federal Reserve Bank" or "FRB"). These investments are carried at cost due to the redemption provisions of these entities and the restricted nature of the securities. Small Business Investment Companies ("SBIC") are considered equity securities without a readily determinable fair value. Prior to the adoption of ASU 2016-01 in the first quarter of fiscal 2019, SBICs were maintained in other assets. Beginning July 1, 2018, the SBIC investments are accounted for at cost less impairment, plus or minus changes resulting from observable price changes. Management reviews for impairment based on the ultimate recoverability of the cost basis of these investments.

Business Combinations

The Company uses the acquisition method of accounting for all business combinations. An acquirer must be identified for each business combination, and the acquisition date is the date the acquirer achieves control. The acquisition method of accounting requires the Company as acquirer to recognize the fair value of assets acquired and liabilities assumed at the acquisition date as well as recognize goodwill or a gain from a bargain purchase, if appropriate. Any acquisition-related costs and restructuring costs are recognized as period expenses as incurred.

Goodwill

Goodwill represents the excess of the purchase price over the sum of the estimated fair values of the tangible and identifiable intangible assets acquired less the estimated fair value of the liabilities assumed in a business combination. Goodwill has an indefinite useful life and is evaluated for impairment annually in the fourth quarter or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value.

In testing goodwill for impairment, we have the option to assess either qualitative or quantitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount. If we elect to perform a qualitative assessment and determine that an impairment is more likely than not, we are then required to perform a quantitative impairment test, otherwise no further analysis is required.

Under the quantitative impairment test, the evaluation involves comparing the current fair value of each reporting unit to its carrying value, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is considered not to be impaired. If the carrying value exceeds estimated fair value an impairment charge is recognized for the difference, but limited by the amount of goodwill allocated to that reporting unit. The Company uses a combination of the market and income approaches to estimate the fair value of its reporting unit. All inputs are evaluated by management at the evaluation date of April 1st and reviewed again at year end to ensure no significant changes occurred that could indicate impairment. Subsequent reversal of goodwill impairment losses is not permitted.

Core Deposit Intangibles

Core deposit intangibles represent the estimated value of long-term deposit relationships acquired in business combinations. These core deposit premiums are amortized using an accelerated method over the estimated useful lives of the related deposits typically between five and ten years. The estimated useful lives are periodically reviewed for reasonableness.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced, if necessary, by the amount of such benefits that are not expected to be realized based upon available evidence. See Note 13 for additional information.

The Company recognizes interest and penalties accrued relative to unrecognized tax benefits in its respective federal or state income taxes accounts. As of June 30, 2019 and 2018, there were no accruals for uncertain tax positions and no accruals for interest and penalties. The Company is no longer subject to examination for federal and state purposes for tax years prior to 2015.

Employee Benefit Plans

The HomeTrust Bank KSOP Plan ("KSOP") is comprised of two components, the 401(k) Plan and the ESOP. The KSOP benefits employees with at least 1000 hours of service during a 12-month period and who have attained age 21.

Under the 401(k), the Company matches employee contributions at 50% of employee deferrals up to 6% of each employee’s compensation. The Company may also make discretionary profit sharing contributions for the benefit of all eligible participants as long as total contributions do not exceed applicable limitations. Employees become fully vested in the Company’s contributions after six years of service.

Under the ESOP, the amount of the Bank's annual contribution is discretionary, however it must be sufficient to pay the annual loan payment to the Company. Shares released are allocated to each eligible participant based on the ratio of each participant’s compensation, as defined in the ESOP, to the total compensation of all eligible plan participants. Forfeited shares are reallocated among other participants in the Plan. At the discretion of the Bank, cash dividends, when paid on allocated shares, are distributed to participants’ accounts, paid in cash to the participants, or used to repay the principal and interest on the ESOP loan used to acquire Company stock on which dividends were paid. Cash dividends on unallocated shares are used to repay the outstanding debt of the ESOP. It is anticipated that the Bank will make contributions to the ESOP in amounts necessary to amortize the ESOP loan payable to the Company over a 20-year period. Unearned ESOP shares are shown as a reduction of stockholders’ equity. The Company recognizes compensation expense equal to the fair value of the Company’s ESOP shares during the periods in which they become committed to be released. To the extent that the fair value of the Company’s ESOP shares differs from the cost of such shares, the differential is recognized as additional paid in capital. The Company recognizes a tax deduction equal to the cost of the shares released. Because the ESOP is internally leveraged through a loan from the Company to the ESOP, the loan receivable by the Company from the ESOP is not reported as an asset nor is the debt of the ESOP shown as a liability in the consolidated financial statements.

See Note 14 for additional information.

Equity Incentive Plan

The Company issues restricted stock, restricted stock units, and stock options under the HomeTrust Bancshares, Inc. 2013 Omnibus Incentive Plan (“2013 Omnibus Incentive Plan”) to key officers and outside directors. In accordance with the requirements of the Financial Accounting Standards Board (the "FASB") Accounting Standards Codification (“ASC”) 718, Compensation – Stock Compensation, the Company has adopted a fair value based method of accounting for employee stock compensation plans, whereby compensation cost is measured based on the fair value of the award as of the grant date and recognized over the vesting period. The Company accounts for forfeitures as they occur.

Comprehensive Income

Comprehensive income consists of net income and net unrealized gains (losses) on securities available for sale and is presented in the consolidated statements of comprehensive income.

Derivative Instruments and Hedging

The Company recognizes all derivatives as either assets or liabilities in the balance sheet, and measures those instruments at fair value. Changes in the fair value of those derivatives are reported in current earnings or other comprehensive income depending on the purpose for which the derivative is held and whether the derivative qualifies for hedge accounting. Loan commitments related to the origination or acquisition of mortgage loans that will be held for sale must be accounted for as derivative instruments. The Company enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (rate lock commitments). The Company also enters into forward sales commitments for the mortgage loans underlying the rate lock commitments. The fair values of these two derivative financial instruments are collectively insignificant to the consolidated financial statements.

Net Income Per Share

Per the provisions of ASC 260, Earnings Per Share, basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding for the year, less the average number of nonvested restricted stock awards. Diluted earnings per share reflect the potential dilution from the issuance of additional shares of common stock caused by the exercise of stock options and restricted stock awards. In addition, nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities and are included in the computation of earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. ESOP shares are considered outstanding for basic and diluted earnings per share when the shares are committed to be released.

Net income is allocated between the common stock and participating securities pursuant to the two-class method, based on their rights to receive dividends, participate in earnings, or absorb losses. See Note 16 for further discussion on the Company’s earnings per share.

Recent Accounting Pronouncements

In August 2015, the FASB issued Accounting Standard Update ("ASU") No. 2015-14, “Revenue from Contracts with Customers (Topic 606)”, which defers the effective date of ASU No. 2014-09 one year. ASU No. 2014-09 created Topic 606 and supersedes Topic 605, Revenue Recognition. The core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In general, the new guidance requires companies to use more judgment and make more estimates than under current guidance, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which provides clarifying guidance in certain narrow areas and adds some practical expedients, but does not change the core revenue recognition principle in Topic 606. For financial reporting purposes, the standard allows for either full retrospective adoption, meaning the standard is applied to all of the periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period presented in the financial statements with the cumulative effect of initially applying the standard recognized at the date of initial application. A significant amount of the Company’s revenues are derived from net interest income on financial assets and liabilities, which are excluded from the scope of the amended guidance. The Company adopted this ASU on July 1, 2018. The adoption did not have a material effect on the Company's Consolidated Financial Statements. However, additional disclosures required by this ASU have been included in “Note 22 - Revenue” to the Company’s consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, "Financial Instruments (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities." The ASU amends the guidance in GAAP on the classification and measurement of financial instruments. The ASU includes the following changes: i) equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (ii) requires the use of exit price notion when measuring the fair value of financial instruments for disclosure purposes; (iii) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e. securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; (iv) allows an equity investment that does not have readily determinable fair values, to be measured at cost minus impairment (if any), plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer; (v) eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, and requires a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e. securities or loans and receivables) on the balance sheet or in the accompanying notes to the financial statements; and (vii) clarifies that a valuation allowance on a deferred tax asset related to available-for-sale securities should be evaluated in combination with the organization’s other deferred tax assets. Exit price is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company adopted this ASU on July 1, 2018. The adoption did not have a material effect on the Company's Consolidated Financial Statements. The disclosures to the Company’s consolidated financial statements have been updated appropriately using the exit price notion in “Note 21 - Fair Value of Financial Instruments."

In February 2016, the FASB issued ASU 2016-02, "Leases (ASC 842)." The guidance in this ASU requires most leases to be recognized on the balance sheet as a right-of-use asset and a lease liability. It will be critical to identify leases embedded in a contract to avoid misstating the lessee’s balance sheet. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. In July 2018, the FASB issued ASU 2018-10, "Codification Improvements to Topic 842, Leases" and ASU 2018-11 "Leases (Topic 842): Targeted Improvements." ASU 2018-10 made 16 narrow-scope amendments to ASC 842. The amendments in ASU 2018-11 are intended to provide entities with relief from the costs of implementing certain aspects of the the new lease accounting standard. Specifically, an entity can elect not to recast the comparative periods presented when transitioning to ASC 842 and provides a lessor with the option to not separate lease and nonlease components when certain conditions are met. This ASU also provides a new transition method in addition to the existing transition method contained in ASU No. 2016-02 to allow entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. These amendments have the same effective date as ASU 2016-02. The effect of the adoption of these ASUs will depend on leases at time of adoption. We expect to report between $4.0 million and $6.0 million higher assets and liabilities on our Consolidated Balance Sheets as a result of including right-of-use assets and lease liabilities related to certain banking offices and certain equipment under noncancelable operating lease agreements, which currently are not reflected in our Consolidated Balance Sheets. We do not expect the guidance to have a material impact on the Consolidated Statements of Income or the Consolidated Statements of Changes in Stockholders' Equity.

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The ASU significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for all entities beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating our current expected loss methodology of our loan and investment portfolios to identify the necessary modifications in accordance with this standard and expects a change in the processes and procedures to calculate the allowance for loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. A valuation adjustment to our allowance for loan losses or investment portfolio that is identified in this process will be reflected as a one-time adjustment in equity rather than earnings. The Company is in the process of compiling historical data that will be used to calculate expected credit losses on its loan portfolio to ensure it is fully compliant with the ASU at the adoption date and is evaluating the potential impact adoption of this ASU will have on its consolidated financial statements. Once adopted, the Company expects its allowance for loan losses to increase, however, until its evaluation is complete the magnitude of the increase will be unknown.

In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." The ASU amends the guidance on the classification of certain cash receipts and payments in the statement of cash flows and is intended to reduce the diversity in practice. The Company adopted this ASU on July 1, 2018. The adoption did not have a material effect on the Company's Consolidated Financial Statements.

In March 2017, FASB issued ASU 2017-08, "Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities." The ASU requires entities to amortize the premium on certain purchased callable debt securities to the earliest call date, which more closely aligns the amortization period of premiums and discounts to expectations incorporated in the market prices. Entities no longer recognize a loss in earnings upon the debtor's exercise of a call on a purchased debt security held at a premium. The ASU does not require any accounting change for debt securities held at a discount, therefore the discount will continue to be amortized as an adjustment of yield over the contractual life of the investment. The Company adopted this ASU on January 1, 2019. The adoption did not have a material effect on the Company's Consolidated Financial Statements.

In May 2017, the FASB issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting." This ASU provides clarity on the guidance related to stock compensation when there have been changes to the terms or conditions of a share-based payment award to which an entity would be required to apply modification accounting under ASC 718. The ASU provides the three following criteria must be met in order to not account for the effect of the modification of terms or conditions: the fair value, the vesting conditions and the classification as an equity or liability instrument of the modified award is the same as the original award immediately before the original award is modified. The Company adopted this ASU on July 1, 2018. The adoption did not have a material effect on the Company's Consolidated Financial Statements.

In August 2017, FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." This ASU improves the transparency and understandability of disclosures in the financial statements regarding the entities risk management activities and reduces the complexity of hedge accounting. The amendments in this ASU permit hedge accounting for hedging relationships involving nonfinancial risk and interest rate risk by removing certain limitations in cash flow and fair value hedging relationships. In addition, the ASU requires an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and early adoption is permitted. The adoption of ASU No. 2017-12 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In June 2018, the FASB issued ASU No. 2018-07, "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." This ASU was issued to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Previously, these awards were recorded at the fair value of consideration received or the fair value of the equity instruments issued and was measured at the earlier of the commitment date or the date performance was completed. The amendments in this ASU require nonemployee share-based payment awards to be measured at the grant-date fair value of the equity instrument. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, but no earlier than an entity's adoption of Topic 606. The adoption of ASU No. 2018-07 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement." The amendments in this ASU removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC 820. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The adoption of ASU No. 2018-13 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In November 2018, the FASB issued ASU 2018-19, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses." This update clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. The effective date and transition requirements for this ASU are the same as ASU 2016-13. The adoption of ASU No. 2018-19 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In December 2018, the FASB issued ASU 2018-20, "Leases (Topic 842): Narrow-Scope Improvements for Lessors." The amendments in this update permit lessors, as an accounting policy election, to not evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs. Instead, those lessors will account for those costs as if they are lessee costs. A lessor making this election will exclude from the consideration in the contract and from variable payments not included in the consideration in the contract all collections from lessees of taxes within the scope of the election and will provide certain disclosures. For certain lessor costs, the lessor must exclude from variable payments, and therefore revenue, lessor costs paid by lessees directly to third parties from variable payments. In addition, the lessor must account for costs excluded from the consideration of a contract that are paid by the lessor and reimbursed by the lessee as variable payments. A lessor will record those reimbursed costs as revenue. The amendments in this ASU related to recognizing variable payments for contracts with lease and nonlease components require lessors to allocate (rather than recognize as currently required) certain variable payments to the lease and nonlease components when the changes in facts and circumstances on which the variable payment is based occur. After the allocation, the amount of variable payments allocated to the lease components will be recognized as income in profit or loss in accordance with Topic 842, while the amount of variable payments allocated to nonlease components will be recognized in accordance with other Topics, such as Topic 606. The effective date and transition requirements for this ASU are the same as ASU 2016-02. The adoption of ASU No. 2018-20 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In March 2019, the FASB issued ASU 2019-01, "Leases (Topic 842): Codification Improvements." The amendments in this update include the following items: i) determining the fair value of the underlying asset by lessors that are not manufacturers or dealers; ii) requiring cash received from lessors from sales-type and direct financing leases to be presented in the cash flow statement within investing activities; and iii) clarifying interim disclosure requirements. The effective date and transition requirements for the first and second items of this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The effective date and transition requirements for the third item of this ASU is the same as ASU 2016-02. The adoption of ASU No. 2019-01 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In April 2019, the FASB issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments." The amendments in this update are part of the FASB's ongoing project to improve codification and correcting unintended application. The items within this ASU are not expected to have significant effect on current accounting practice. The effective date and transition requirements for the amendments to Financial Instruments (ASU 2016-01) are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 and early adoption is permitted. The effective date and transition requirements for the amendments to Financial Instruments-Credit Losses (ASU 2016-13) are the same as ASU 2016-13 noted above. The effective date and transition requirements for the amendments to Derivatives and Hedging (ASU 2017-12) are the same as ASU 2017-12 noted above.The adoption of ASU No. 2019-04 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In May 2019, the FASB issued ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief." The amendments in this update allow companies to irrevocably elect, upon the adoption of ASU 2016-13, the fair value option for financial instruments that i) were previously recorded at amortized cost and ii) are within the scope of the credit losses guidance in ASC 326-20, iii) are eligible for the fair value option under ASC 825-10, and iv) are not held-to-maturity debt securities. The effective date and transition requirements for this ASU is the same as ASU 2016-13. The adoption of ASU No. 2019-05 is not expected to have a material impact on the Company's Consolidated Financial Statements.

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Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Jun. 30, 2019	Sep. 10, 2019	Dec. 31, 2018
Document and Entity Information:
Entity Registrant Name	HomeTrust Bancshares, Inc.
Entity Central Index Key	0001538263
Current Fiscal Year End Date	--06-30
Entity Filer Category	Accelerated Filer
Document Type	10-K
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		17,860,045
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 468.0

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net Income	$ 27,146	$ 8,235	$ 11,847
Unrealized holding gains (losses) on securities available for sale
Gains (losses) arising during the period	3,027	(2,489)	(3,113)
Deferred income tax benefit (expense)	(696)	618	1,058
Reclassification of securities gains recognized in net income	0	0	(22)
Deferred income tax expense	0	0	7
Total other comprehensive income (loss)	2,331	(1,871)	(2,070)
Comprehensive Income	$ 29,477	$ 6,364	$ 9,777

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Commitments and Contingencies

12 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Loan Commitments

Legally binding commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. In the normal course of business, there are various outstanding commitments to extend credit that are not reflected in the consolidated financial statements. At June 30, 2019 and June 30, 2018, respectively, loan commitments (excluding $181,477 and $209,726 of undisbursed portions of construction loans) totaled $93,432 and $49,949 of which $34,631 and $19,812 were variable rate commitments and $58,801 and $30,137 were fixed rate commitments. The fixed rate loans had interest rates ranging from 2.69% to 8.59% at June 30, 2019 and 2.10% to 6.15% at June 30, 2018, and terms ranging from three to 30 years. Pre-approved but unused lines of credit (principally second mortgage home equity loans and overdraft protection loans) totaled $353,663 and $491,649 at June 30, 2019 and 2018, respectively. These amounts represent the Company’s exposure to credit risk, and in the opinion of management have no more than the normal lending risk that the Company commits to its borrowers. The Company has two types of commitments related to loans held for sale: rate lock commitments and forward loan sale commitments. Rate lock commitments are commitments to extend credit to a customer that has an interest rate lock and are considered derivative instruments. The rate lock commitments do not qualify for hedge accounting. In order to mitigate the risk from interest rate fluctuations, we enter into forward loan sale commitments on a “best efforts” basis, which do not meet the definition of a derivative instrument. The fair value of these commitments was not material at June 30, 2019 or June 30, 2018.

The Company grants construction and permanent loans collateralized primarily by residential and commercial real estate to customers throughout its primary market area. In addition, the Company grants equipment financing throughout the eastern United States and municipal leases to customers throughout North and South Carolina. The Company’s loan portfolio can be affected by the general economic conditions within these market areas. Management believes that the Company has no significant concentration of credit in the loan portfolio.

Restrictions on Cash

The Bank is required by regulation to maintain a varying cash reserve balance with the Federal Reserve System. The daily average calculated cash reserve required as of June 30, 2019 and 2018 was $2,633, and $2,304, respectively, which was satisfied by vault cash and balances held at the Federal Reserve Bank.

Guarantees

Standby letters of credit obligate the Company to meet certain financial obligations of its customers, if, under the contractual terms of the agreement, the customers are unable to do so. The financial standby letters of credit issued by the Company are irrevocable and payment is only guaranteed upon the borrower’s failure to perform its obligations to the beneficiary. Total commitments under standby letters of credit as of June 30, 2019 and 2018 were $9,460 and $8,227, respectively. There was no liability recorded for these letters of credit at June 30, 2019 or June 30, 2018.

Litigation

The Company is involved in several litigation matters in the ordinary course of business. These proceedings and the associated legal claims are often contested and the outcome of individual matters is not always predictable. These claims and counter claims typically arise during the course of collection efforts on problem loans or with respect to actions to enforce liens on properties in which the Company holds a security interest. There can be no assurance that loan workouts and other activities will not expose the Company to additional legal actions, including lender liability or environmental claims. Therefore, the Company may be exposed to substantial liabilities, which could adversely affect its results of operations and financial condition. Moreover, the expenses of legal proceedings will adversely affect its results of operations until they are resolved. The Company is not a party to any pending legal proceedings that management believes would have a material adverse effect on the Company’s financial condition or results of operations.

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Employee Benefit Plans

12 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Employee Benefit Plans

Employee Benefit Plans

The HomeTrust Bank KSOP Plan ("KSOP") is comprised of two components, the 401(k) Plan and the ESOP. The KSOP benefits employees with at least 1000 hours of service during a 12-month period and who have attained age 21. Under the 401(k), the Company matches employee contributions at 50% of employee deferrals up to 6% of each employee’s compensation. The Company may also make discretionary profit sharing contributions for the benefit of all eligible participants as long as total contributions do not exceed applicable limitations. Employees become fully vested in the Company’s contributions after six years of service. Under the ESOP, the amount of the Bank's annual contribution is discretionary, however it must be sufficient to pay the annual loan payment to the Company.

The Company’s expense for 401(k) contributions to this plan was $810, $737, and $450 for the years ended June 30, 2019, 2018, and 2017, respectively. The Company's expense related to the ESOP for the fiscal year ended June 30, 2019, 2018, and 2017 was $1,422, $1,367, and $1,186, respectively. 

Shares held by the ESOP at the dates indicated include the following:

	June 30,
	2019		2018
Unallocated ESOP shares	687,700		740,600
Allocated ESOP shares	317,400		264,500
ESOP shares committed to be released	52,900		52,900
Total ESOP shares	1,058,000		1,058,000
Fair value of unallocated ESOP shares	$	17,289	$	20,848

Post-retirement health care benefits are provided to certain key officers under the Company’s Executive Medical Care Plan (“EMCP”). The EMCP is unfunded and is not qualified under the Internal Revenue Code ("IRC"). Plan expense for the years ended June 30, 2019, 2018, and 2017 was $210, $224, and $135, respectively. Total accrued expenses related to this plan included in other liabilities were $5,289 and $5,237, respectively, as of June 30, 2019 and 2018.

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Revenue (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Disaggregation of Revenue [Line Items]
Offset of interchange costs against interchange income										$ 660	$ 667
Noninterest income (in-scope of ASC 606)									$ 11,130	10,159	8,999
Noninterest income (out-of-scope of ASC 606)									11,765	8,813	7,108
Total noninterest income	$ 6,811	$ 5,386	$ 5,085	$ 5,613	$ 5,382	$ 4,926	$ 4,787	$ 4,577	22,895	18,972	16,107
Service Charges on Deposit Accounts
Disaggregation of Revenue [Line Items]
Noninterest income (in-scope of ASC 606)									3,978	3,674	3,309
Fees, Interchange, and Other Service Charges
Disaggregation of Revenue [Line Items]
Noninterest income (in-scope of ASC 606)									6,377	5,576	4,747
Other Revenues
Disaggregation of Revenue [Line Items]
Noninterest income (in-scope of ASC 606)									$ 775	$ 909	$ 943

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Borrowings (Tables)

12 Months Ended

Jun. 30, 2019

Banking and Thrift [Abstract]

Schedule of Borrowings

	June 30,
	2019				2018
	Balance		Weighted Average Rate		Balance		Weighted Average Rate
FHLB Advances	$	680,000	2.10	%	$	635,000	1.95	%

The scheduled maturity dates, call dates, and related interest rates on FHLB advances at June 30, 2019:

Maturity Date	Interest Rate	Call Date	Outstanding Amount
7/1/2019	2.47%	—	$	15,000
7/8/2019	2.40%	—	45,000
7/8/2019	2.44%	—	135,000
7/10/2019	2.40%	—	10,000
7/10/2019	2.42%	—	40,000
7/15/2019	2.33%	—	130,000
7/29/2019	2.33%	—	5,000
9/20/2019	0.86%	9/20/2019	25,000
3/6/2028	1.72%	9/6/2019	100,000
3/22/2028	1.82%	9/23/2019	50,000
6/5/2028	1.87%	9/5/2019	50,000
9/13/2028	1.76%	9/13/2019	25,000
11/24/2028	2.07%	11/26/2019	25,000
11/24/2028	1.79%	8/26/2019	25,000
			$	680,000

Borrowings consist of the following at the dates indicated:

	June 30,
	2019				2018
	Balance		Weighted Average Rate		Balance		Weighted Average Rate
FHLB Advances	$	680,000	2.10	%	$	635,000	1.95	%

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Deferred Compensation Agreements (Tables)

12 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Schedule of Net Cash Surrender Value Life Insurance Policies and Deferred Compensation Liability

The net cash surrender value of the related life insurance policies and deferred compensation liability as of the dates indicated are detailed below:

	June 30,
	2019		2018
Net cash surrender value of life insurance, related to deferred compensation	$	7,413	$	7,142
Deferred compensation liability, included in other liabilities	$	956	$	1,075

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Income Taxes - Deferred Tax Asset and Liability Policy: Net Operating Loss Carryforwards Included in Deferred Tax Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Net operating loss carry forwards	$ 24,248	$ 40,780
Recorded tax benefit	$ 5,092	$ 8,635

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Net Income per Share - Narrative (Details) - shares	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share (in shares)	455,800	420,800

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Loans - Schedule of PCI Loans Credit Quality Indicators (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Financing Receivable, Recorded Investment
Total loans	$ 2,688,436	$ 2,505,712
Pass
Financing Receivable, Recorded Investment
Total loans	2,650,990	2,470,436
Special Mention
Financing Receivable, Recorded Investment
Total loans	12,968	11,809
Substandard
Financing Receivable, Recorded Investment
Total loans	24,058	22,484
Doubtful
Financing Receivable, Recorded Investment
Total loans	388	952
Loss
Financing Receivable, Recorded Investment
Total loans	32	31
Retail Consumer Loans | One-to-four family
Financing Receivable, Recorded Investment
Total loans	654,723	657,472
Retail Consumer Loans | HELOCs - originated
Financing Receivable, Recorded Investment
Total loans	130,870	137,340
Retail Consumer Loans | Construction and land/lots
Financing Receivable, Recorded Investment
Total loans	80,230	65,157
Retail Consumer Loans | Pass | One-to-four family
Financing Receivable, Recorded Investment
Total loans	644,159	643,077
Retail Consumer Loans | Pass | HELOCs - originated
Financing Receivable, Recorded Investment
Total loans	129,775	135,336
Retail Consumer Loans | Pass | Construction and land/lots
Financing Receivable, Recorded Investment
Total loans	79,995	64,823
Retail Consumer Loans | Special Mention | One-to-four family
Financing Receivable, Recorded Investment
Total loans	2,089	3,576
Retail Consumer Loans | Special Mention | HELOCs - originated
Financing Receivable, Recorded Investment
Total loans	111	113
Retail Consumer Loans | Special Mention | Construction and land/lots
Financing Receivable, Recorded Investment
Total loans	71	23
Retail Consumer Loans | Substandard | One-to-four family
Financing Receivable, Recorded Investment
Total loans	8,072	10,059
Retail Consumer Loans | Substandard | HELOCs - originated
Financing Receivable, Recorded Investment
Total loans	976	1,735
Retail Consumer Loans | Substandard | Construction and land/lots
Financing Receivable, Recorded Investment
Total loans	164	257
Retail Consumer Loans | Doubtful | One-to-four family
Financing Receivable, Recorded Investment
Total loans	384	746
Retail Consumer Loans | Doubtful | HELOCs - originated
Financing Receivable, Recorded Investment
Total loans	0	150
Retail Consumer Loans | Doubtful | Construction and land/lots
Financing Receivable, Recorded Investment
Total loans	0	54
Retail Consumer Loans | Loss | One-to-four family
Financing Receivable, Recorded Investment
Total loans	19	14
Retail Consumer Loans | Loss | HELOCs - originated
Financing Receivable, Recorded Investment
Total loans	8	6
Retail Consumer Loans | Loss | Construction and land/lots
Financing Receivable, Recorded Investment
Total loans	0	0
Commercial Loans | Commercial real estate
Financing Receivable, Recorded Investment
Total loans	919,586	848,076
Commercial Loans | Construction and development
Financing Receivable, Recorded Investment
Total loans	209,975	189,875
Commercial Loans | Commercial and industrial
Financing Receivable, Recorded Investment
Total loans	158,802	133,383
Commercial Loans | Pass | Commercial real estate
Financing Receivable, Recorded Investment
Total loans	901,214	835,485
Commercial Loans | Pass | Construction and development
Financing Receivable, Recorded Investment
Total loans	207,827	187,187
Commercial Loans | Pass | Commercial and industrial
Financing Receivable, Recorded Investment
Total loans	157,325	131,690
Commercial Loans | Special Mention | Commercial real estate
Financing Receivable, Recorded Investment
Total loans	8,066	5,804
Commercial Loans | Special Mention | Construction and development
Financing Receivable, Recorded Investment
Total loans	790	621
Commercial Loans | Special Mention | Commercial and industrial
Financing Receivable, Recorded Investment
Total loans	877	1,279
Commercial Loans | Substandard | Commercial real estate
Financing Receivable, Recorded Investment
Total loans	10,306	6,787
Commercial Loans | Substandard | Construction and development
Financing Receivable, Recorded Investment
Total loans	1,357	2,067
Commercial Loans | Substandard | Commercial and industrial
Financing Receivable, Recorded Investment
Total loans	600	414
Commercial Loans | Doubtful | Commercial real estate
Financing Receivable, Recorded Investment
Total loans	0	0
Commercial Loans | Doubtful | Construction and development
Financing Receivable, Recorded Investment
Total loans	1	0
Commercial Loans | Doubtful | Commercial and industrial
Financing Receivable, Recorded Investment
Total loans	0	0
Commercial Loans | Loss | Commercial real estate
Financing Receivable, Recorded Investment
Total loans	0	0
Commercial Loans | Loss | Construction and development
Financing Receivable, Recorded Investment
Total loans	0	0
Commercial Loans | Loss | Commercial and industrial
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans
Financing Receivable, Recorded Investment
Total loans	16,781	20,904
Purchased Credit Impaired (PCI) Loans | Pass
Financing Receivable, Recorded Investment
Total loans	11,113	12,447
Purchased Credit Impaired (PCI) Loans | Special Mention
Financing Receivable, Recorded Investment
Total loans	2,151	2,550
Purchased Credit Impaired (PCI) Loans | Substandard
Financing Receivable, Recorded Investment
Total loans	3,514	5,907
Purchased Credit Impaired (PCI) Loans | Doubtful
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Loss
Financing Receivable, Recorded Investment
Total loans	3	0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | One-to-four family
Financing Receivable, Recorded Investment
Total loans	5,868	6,817
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | HELOCs - originated
Financing Receivable, Recorded Investment
Total loans	225	224
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Construction and land/lots
Financing Receivable, Recorded Investment
Total loans	372	444
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Pass | One-to-four family
Financing Receivable, Recorded Investment
Total loans	4,124	4,620
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Pass | HELOCs - originated
Financing Receivable, Recorded Investment
Total loans	225	224
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Pass | Construction and land/lots
Financing Receivable, Recorded Investment
Total loans	142	444
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Special Mention | One-to-four family
Financing Receivable, Recorded Investment
Total loans	248	388
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Special Mention | HELOCs - originated
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Special Mention | Construction and land/lots
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Substandard | One-to-four family
Financing Receivable, Recorded Investment
Total loans	1,496	1,809
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Substandard | HELOCs - originated
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Substandard | Construction and land/lots
Financing Receivable, Recorded Investment
Total loans	230	0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Doubtful | One-to-four family
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Doubtful | HELOCs - originated
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Doubtful | Construction and land/lots
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Loss | One-to-four family
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Loss | HELOCs - originated
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Retail Consumer Loans | Loss | Construction and land/lots
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Commercial real estate
Financing Receivable, Recorded Investment
Total loans	7,706	9,239
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Construction and development
Financing Receivable, Recorded Investment
Total loans	941	2,227
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Commercial and industrial
Financing Receivable, Recorded Investment
Total loans	1,669	1,953
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Pass | Commercial real estate
Financing Receivable, Recorded Investment
Total loans	4,503	4,718
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Pass | Construction and development
Financing Receivable, Recorded Investment
Total loans	453	547
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Pass | Commercial and industrial
Financing Receivable, Recorded Investment
Total loans	1,666	1,894
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Special Mention | Commercial real estate
Financing Receivable, Recorded Investment
Total loans	1,903	2,162
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Special Mention | Construction and development
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Special Mention | Commercial and industrial
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Substandard | Commercial real estate
Financing Receivable, Recorded Investment
Total loans	1,300	2,359
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Substandard | Construction and development
Financing Receivable, Recorded Investment
Total loans	488	1,680
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Substandard | Commercial and industrial
Financing Receivable, Recorded Investment
Total loans	0	59
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Doubtful | Commercial real estate
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Doubtful | Construction and development
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Doubtful | Commercial and industrial
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Loss | Commercial real estate
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Loss | Construction and development
Financing Receivable, Recorded Investment
Total loans	0	0
Purchased Credit Impaired (PCI) Loans | Commercial Loans | Loss | Commercial and industrial
Financing Receivable, Recorded Investment
Total loans	$ 3	$ 0

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Employee Benefit Plans - Schedule of Shares Held by the Employee Stock Ownership Plan (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Retirement Benefits [Abstract]
Unallocated ESOP shares (in shares)	687,700	740,600
Allocated ESOP shares (in shares)	317,400	264,500
ESOP shares committed to be released (in shares)	52,900	52,900
Total ESOP shares (in shares)	1,058,000	1,058,000
Fair value of unallocated ESOP shares	$ 17,289	$ 20,848

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Other Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Investments, All Other Investments [Abstract]
FHLB of Atlanta	$ 31,969	$ 29,907
Federal Reserve Bank of Richmond (FRB)	7,335	7,307
Nonmarketable Investment Securities	6,074	4,717
Other investments, at cost	$ 45,378	$ 41,931

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Equity Incentive Plan - Equity Incentive Plan Restricted Award Activity (Details) - Restricted Stock - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2016
Restricted stock awards
Non-vested at beginning of period (in shares)	133,410	185,630	248,750
Granted (in shares)	34,000	55,200	47,500
Vested (in shares)	39,310	100,820	104,620
Forfeited (in shares)	4,300	6,600	6,000
Non-vested at end of period (in shares)	123,800	133,410	185,630
Weighted- average grant date fair value
Non-vested at beginning of period (in dollars per share)	$ 22.85	$ 17.46	$ 14.81
Granted (in dollars per share)	27.51	25.89	24.70
Vested (in dollars per share)	21.64	15.14	14.58
Forfeited (in dollars per share)	19.08	14.37	15.07
Non-vested at end of period (in dollars per share)	$ 24.65	$ 22.85	$ 17.46
Aggregate Intrinsic Value	$ 2,258	$ 3,755	$ 3,419	$ 4,602

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Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Current:
Federal									$ 755	$ 291	$ 191
State									690	324	54
Total current expense									1,445	615	245
Deferred:
Federal									5,404	7,909	4,561
State									267	625	386
Adjustment due to the Tax Cuts and Jobs Act (“Tax Act”)									(325)	17,587	0
Total deferred expense									5,346	26,121	4,947
Total income tax expense	$ 2,107	$ 185	$ 2,287	$ 2,212	$ 2,011	$ 2,707	$ 19,508	$ 2,510	$ 6,791	$ 26,736	$ 5,192

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Leases - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Leases [Abstract]
Rent expense under operating leases	$ 1,847	$ 1,829	$ 1,583
Capital lease obligations included in property plant and equipment	2,052	$ 2,052
Leased assets	10,000
Operating lease, residual value of leased asset	5,800
Lease income	$ 936

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Debt Securities - Schedule of Investments Classified by Contractual Maturity Date (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Amortized Cost
Due within one year	$ 5,350	$ 28,728
Due after one year through five years	30,526	41,273
Due after five years through ten years	5,538	5,749
Due after ten years	4,642	9,306
Total	120,834	157,005
Estimated Fair Value
Due within one year	5,359	28,573
Due after one year through five years	30,784	40,663
Due after five years through ten years	5,798	5,829
Due after ten years	4,665	9,266
Total	121,786	154,930
Mortgage-backed Securities
Amortized Cost
Total	74,778	71,949
Estimated Fair Value
Total	$ 75,180	$ 70,599

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Loans - Schedule of Ending Balances of Loans and the Related Allowance by Segment and Class (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2016
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	$ 21,429	$ 21,060	$ 21,151	$ 21,292
Allowance for loan losses, Loans individually evaluated for impairment	120	197
Allowance for loan losses, Loans collectively evaluated	21,108	20,380
Allowance for loan losses, Total	21,429	21,060
Total loans receivable, PCI	2,688,436	2,505,712
Total loans receivable, Loans individually evaluated for impairment	15,743	13,884
Total loans receivable, Loans collectively evaluated	2,672,662	2,491,828
Total loans	2,705,186	2,526,616
Purchased Credit Impaired (PCI) Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	201	483	727	361
Total loans receivable, PCI	16,781	20,904
Retail Consumer Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	6,419	7,527	8,585	11,549
Total loans	1,162,464	1,219,204
Retail Consumer Loans | One-to-four family
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Loans individually evaluated for impairment	74	125
Allowance for loan losses, Loans collectively evaluated	2,375	3,137
Allowance for loan losses, Total	2,511	3,360
Total loans receivable, PCI	654,723	657,472
Total loans receivable, Loans individually evaluated for impairment	5,318	7,104
Total loans receivable, Loans collectively evaluated	649,405	650,368
Total loans	660,591	664,289
Retail Consumer Loans | One-to-four family | Purchased Credit Impaired (PCI) Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	62	98
Total loans receivable, PCI	5,868	6,817
Retail Consumer Loans | HELOCs - originated
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Loans individually evaluated for impairment	7	6
Allowance for loan losses, Loans collectively evaluated	1,023	1,117
Allowance for loan losses, Total	1,030	1,123
Total loans receivable, PCI	130,870	137,340
Total loans receivable, Loans individually evaluated for impairment	7	452
Total loans receivable, Loans collectively evaluated	130,863	136,888
Total loans	131,095	137,564
Retail Consumer Loans | HELOCs - originated | Purchased Credit Impaired (PCI) Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	0	0
Total loans receivable, PCI	225	224
Retail Consumer Loans | HELOCs - purchased
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Loans individually evaluated for impairment	0	0
Allowance for loan losses, Loans collectively evaluated	518	795
Allowance for loan losses, Total	518	795
Total loans receivable, PCI	116,972	166,276
Total loans receivable, Loans individually evaluated for impairment	0	0
Total loans receivable, Loans collectively evaluated	116,972	166,276
Total loans	116,972	166,276
Retail Consumer Loans | HELOCs - purchased | Purchased Credit Impaired (PCI) Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	0	0
Total loans receivable, PCI	0	0
Retail Consumer Loans | Construction and land/lots
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Loans individually evaluated for impairment	0	19
Allowance for loan losses, Loans collectively evaluated	1,265	1,134
Allowance for loan losses, Total	1,265	1,153
Total loans receivable, PCI	80,230	65,157
Total loans receivable, Loans individually evaluated for impairment	323	583
Total loans receivable, Loans collectively evaluated	79,907	64,574
Total loans	80,602	65,601
Retail Consumer Loans | Construction and land/lots | Purchased Credit Impaired (PCI) Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	0	0
Total loans receivable, PCI	372	444
Retail Consumer Loans | Indirect auto finance
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Loans individually evaluated for impairment	0	0
Allowance for loan losses, Loans collectively evaluated	927	1,126
Allowance for loan losses, Total	927	1,126
Total loans receivable, PCI	153,448	173,095
Total loans receivable, Loans individually evaluated for impairment	0	0
Total loans receivable, Loans collectively evaluated	153,448	173,095
Total loans	153,448	173,095
Retail Consumer Loans | Indirect auto finance | Purchased Credit Impaired (PCI) Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	0	0
Total loans receivable, PCI	0	0
Retail Consumer Loans | Consumer
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Loans individually evaluated for impairment	4	11
Allowance for loan losses, Loans collectively evaluated	226	57
Allowance for loan losses, Total	230	68
Total loans receivable, PCI	19,756	12,379
Total loans receivable, Loans individually evaluated for impairment	4	11
Total loans receivable, Loans collectively evaluated	19,752	12,368
Total loans	19,756	12,379
Retail Consumer Loans | Consumer | Purchased Credit Impaired (PCI) Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	0	0
Total loans receivable, PCI	0	0
Commercial Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	14,809	13,050	$ 11,839	$ 9,382
Total loans	1,542,722	1,307,412
Commercial Loans | Commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Loans individually evaluated for impairment	28	28
Allowance for loan losses, Loans collectively evaluated	7,890	8,029
Allowance for loan losses, Total	8,036	8,195
Total loans receivable, PCI	919,586	848,076
Total loans receivable, Loans individually evaluated for impairment	8,692	3,511
Total loans receivable, Loans collectively evaluated	910,863	844,565
Total loans	927,261	857,315
Commercial Loans | Commercial real estate | Purchased Credit Impaired (PCI) Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	118	138
Total loans receivable, PCI	7,706	9,239
Commercial Loans | Construction and development
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Loans individually evaluated for impairment	5	8
Allowance for loan losses, Loans collectively evaluated	3,187	3,109
Allowance for loan losses, Total	3,196	3,346
Total loans receivable, PCI	209,975	189,875
Total loans receivable, Loans individually evaluated for impairment	1,397	2,223
Total loans receivable, Loans collectively evaluated	208,578	187,652
Total loans	210,916	192,102
Commercial Loans | Construction and development | Purchased Credit Impaired (PCI) Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	4	229
Total loans receivable, PCI	941	2,227
Commercial Loans | Commercial and industrial
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Loans individually evaluated for impairment	2	0
Allowance for loan losses, Loans collectively evaluated	1,957	1,458
Allowance for loan losses, Total	1,976	1,476
Total loans receivable, PCI	158,802	133,383
Total loans receivable, Loans individually evaluated for impairment	2	0
Total loans receivable, Loans collectively evaluated	158,800	133,383
Total loans	160,471	135,336
Commercial Loans | Commercial and industrial | Purchased Credit Impaired (PCI) Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	17	18
Total loans receivable, PCI	1,669	1,953
Commercial Loans | Equipment Finance
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Loans individually evaluated for impairment	0	0
Allowance for loan losses, Loans collectively evaluated	1,305	0
Allowance for loan losses, Total	1,305	0
Total loans receivable, PCI	132,058	13,487
Total loans receivable, Loans individually evaluated for impairment	0	0
Total loans receivable, Loans collectively evaluated	132,058	13,487
Total loans	132,058	13,487
Commercial Loans | Equipment Finance | Purchased Credit Impaired (PCI) Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	0	0
Total loans receivable, PCI	0	0
Commercial Loans | Municipal leases
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Loans individually evaluated for impairment	0	0
Allowance for loan losses, Loans collectively evaluated	435	418
Allowance for loan losses, Total	435	418
Total loans receivable, PCI	112,016	109,172
Total loans receivable, Loans individually evaluated for impairment	0	0
Total loans receivable, Loans collectively evaluated	112,016	109,172
Total loans	112,016	109,172
Commercial Loans | Municipal leases | Purchased Credit Impaired (PCI) Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, PCI	0	0
Total loans receivable, PCI	$ 0	$ 0

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Goodwill and Core Deposit Intangibles - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Goodwill [Line Items]
Goodwill	$ 25,638	$ 25,638
Core Deposits
Goodwill [Line Items]
Amortization expense related to core deposit intangibles in acquisitions	$ 2,029	$ 2,645	$ 2,823

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Deposit Accounts - Certificates of Deposit With Balances of $100 Or Greater (Details) - USD ($)	Jun. 30, 2019	Jun. 30, 2018
Banking and Thrift [Abstract]
Certificates of deposit, minimum account balance	$ 250,000
Certificates of Deposit With Balances of $250 or Greater	93,654,000	$ 70,553,000
FDIC insured amount	$ 250,000

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Loans Loans - Schedule of Impaired PCI Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Financing Receivable, Impaired
Carrying value of PCI loans	$ 32,955	$ 31,361
Unpaid principal balance of PCI loans	47,611	42,677
Purchased Credit Impaired (PCI) Loans
Financing Receivable, Impaired
Carrying value of PCI loans	16,750	20,904
Unpaid principal balance of PCI loans	$ 20,141	$ 25,746

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Capital - Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Common Equity Tier I Capital
Common Equity Tier I Capital	$ 355,759	$ 335,152
Common Equity Tier I Capital (as a percent)	11.59%	11.70%
Common Equity Tier I Capital, Minimum for Capital Adequacy Purposes	$ 138,153	$ 128,889
Common Equity Tier I Capital, Minimum for Capital Adequacy Purposes (as a percent)	4.50%	4.50%
Common Equity Tier I Capital, Minimum for Be Well Capitalized	$ 199,555	$ 186,173
Common Equity Tier I Capital, Minimum to Be Well Capitalized (as a percent)	6.50%	6.50%
Tier I Capital (to Total Adjusted Assets)
Tier 1 Capital (to Total Adjusted Assets)	$ 355,759	$ 335,152
Tier 1 Capital (to Total Adjusted Assets) (as a percent)	10.34%	10.33%
Tier 1 Capital (to Total Adjusted Assets), Minimum for Capital Adequacy Purposes	$ 137,590	$ 129,769
Tier 1 Capital (to Total Adjusted Assets), Minimum for Capital Adequacy Purposes (as a percent)	4.00%	4.00%
Tier 1 Capital (to Total Adjusted Assets), Minimum to Be Well Capitalized	$ 171,988	$ 162,211
Tier 1 Capital (to Total Adjusted Assets), Minimum to Be Well Capitalized (as a percent)	5.00%	5.00%
Tier I Capital (to Risk-weighted Assets)
Tier 1 Capital (to Risk-weighted Assets)	$ 355,759	$ 335,152
Tier 1 Capital (to Risk-weighted Assets) (as a percent)	11.59%	11.70%
Tier 1 Capital (to Risk-weighted Assets), Minimum for Capital Adequacy Purposes	$ 184,204	$ 171,852
Tier 1 Capital (to Risk-weighted Assets), Minimum for Capital Adequacy Purposes (as a percent)	6.00%	6.00%
Tier 1 Capital (to Risk-weighted Assets), Minimum to Be Well Capitalized	$ 245,606	$ 229,136
Tier I Capital (to Risk-weighted Assets), Minimum to Be Well Capitalized (as a percent)	8.00%	8.00%
Total Risk-based Capital (to Risk-weighted Assets)
Total Risk-based Capital (to Risk-weighted Assets)	$ 377,639	$ 356,603
Total Risk-based Capital (to Risk-weighted Assets) (as a percent)	12.30%	12.45%
Total Risk-based Capital (to Risk-weighted Assets), Minimum for Capital Adequacy Purposes	$ 245,606	$ 229,136
Total Risk-based Capital (to Risk-weighted Assets), Minimum for Capital Adequacy Purposes (as a percent)	8.00%	8.00%
Total Risk-based Capital (to Risk-weighted Assets), Minimum to Be Well Capitalized	$ 307,007	$ 286,421
Total Risk-based Capital (to Risk-weighted Assets), Minimum to Be Well Capitalized (as a percent)	10.00%	10.00%
HomeTrust Bancshares, Inc.
Common Equity Tier I Capital
Common Equity Tier I Capital	$ 374,729	$ 372,188
Common Equity Tier I Capital (as a percent)	12.20%	12.97%
Common Equity Tier I Capital, Minimum for Capital Adequacy Purposes	$ 138,226	$ 129,109
Common Equity Tier I Capital, Minimum for Capital Adequacy Purposes (as a percent)	4.50%	4.50%
Common Equity Tier I Capital, Minimum for Be Well Capitalized	$ 199,659	$ 186,491
Common Equity Tier I Capital, Minimum to Be Well Capitalized (as a percent)	6.50%	6.50%
Tier I Capital (to Total Adjusted Assets)
Tier 1 Capital (to Total Adjusted Assets)	$ 374,729	$ 372,188
Tier 1 Capital (to Total Adjusted Assets) (as a percent)	10.89%	11.45%
Tier 1 Capital (to Total Adjusted Assets), Minimum for Capital Adequacy Purposes	$ 137,649	$ 130,032
Tier 1 Capital (to Total Adjusted Assets), Minimum for Capital Adequacy Purposes (as a percent)	4.00%	4.00%
Tier 1 Capital (to Total Adjusted Assets), Minimum to Be Well Capitalized	$ 172,062	$ 162,539
Tier 1 Capital (to Total Adjusted Assets), Minimum to Be Well Capitalized (as a percent)	5.00%	5.00%
Tier I Capital (to Risk-weighted Assets)
Tier 1 Capital (to Risk-weighted Assets)	$ 374,729	$ 372,188
Tier 1 Capital (to Risk-weighted Assets) (as a percent)	12.20%	12.97%
Tier 1 Capital (to Risk-weighted Assets), Minimum for Capital Adequacy Purposes	$ 184,301	$ 172,145
Tier 1 Capital (to Risk-weighted Assets), Minimum for Capital Adequacy Purposes (as a percent)	6.00%	6.00%
Tier 1 Capital (to Risk-weighted Assets), Minimum to Be Well Capitalized	$ 245,734	$ 229,527
Tier I Capital (to Risk-weighted Assets), Minimum to Be Well Capitalized (as a percent)	8.00%	8.00%
Total Risk-based Capital (to Risk-weighted Assets)
Total Risk-based Capital (to Risk-weighted Assets)	$ 396,613	$ 393,703
Total Risk-based Capital (to Risk-weighted Assets) (as a percent)	12.91%	13.72%
Total Risk-based Capital (to Risk-weighted Assets), Minimum for Capital Adequacy Purposes	$ 245,734	$ 229,527
Total Risk-based Capital (to Risk-weighted Assets), Minimum for Capital Adequacy Purposes (as a percent)	8.00%	8.00%
Total Risk-based Capital (to Risk-weighted Assets), Minimum to Be Well Capitalized	$ 307,168	$ 286,909
Total Risk-based Capital (to Risk-weighted Assets), Minimum to Be Well Capitalized (as a percent)	10.00%	10.00%

XML

Parent Company Financial Information - Condensed Cash Flow Statement (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Operating Activities:
Net Income	$ 8,013	$ 3,302	$ 8,041	$ 7,790	$ 7,207	$ 6,127	$ (10,666)	$ 5,567	$ 27,146	$ 8,235	$ 11,847
Provision for (recovery of) loan losses	200	$ 5,500	$ 0	0	0	$ 0	$ 0	0
Loss on sale and impairment of REO									439	127	300
ESOP compensation expense									1,422	1,367	1,186
Net cash provided by operating activities									7,662	31,342	15,115
Investing Activities:
Maturities of certificates of deposit in other banks									33,086	82,538	71,476
Net cash used in investing activities									(150,489)	(134,017)	(106,756)
Financing Activities:
Cash dividends paid									(3,176)	0	0
Retired stock									(205)	(494)	(569)
Stock options exercised									1,173	651	3,068
Net cash provided by financing activities									143,124	86,436	126,030
Net Increase (Decrease) in Cash and Cash Equivalents									297	(16,239)	34,389
Cash and Cash Equivalents at Beginning of Period				70,746				86,985	70,746	86,985	52,596
Cash and Cash Equivalents at End of Period	71,043				70,746				71,043	70,746	86,985
Parent Company
Operating Activities:
Net Income									27,146	8,235	11,847
Provision for (recovery of) loan losses									(259)	(131)	90
Loss on sale and impairment of REO									114	158	39
Decrease (increase) in accrued interest receivable and other assets									52	291	(30)
Equity in undistributed income of Bank									(27,287)	(8,427)	(12,003)
ESOP compensation expense									1,422	1,367	1,186
Restricted stock and stock option expense									1,601	3,027	4,166
Decrease in other liabilities									0	(48)	(260)
Net cash provided by operating activities									2,789	4,472	5,035
Investing Activities:
Maturities of certificates of deposit in other banks									248	6,217	1,245
Repayment of loans									2,796	1,514	2,176
Increase in investment in Bank subsidiary									(1,556)	(1,367)	(3,408)
Dividend from subsidiary									13,454	0	10,291
ESOP principal payments received									484	472	462
Proceeds from sale of REO									70	499	61
Acquisition of TriSummit Bancorp, Inc.									0	0	(13,862)
Net cash used in investing activities									15,496	7,335	(3,035)
Financing Activities:
Common stock repurchased									(30,638)	0	0
Cash dividends paid									(3,176)	0	0
Retired stock									(205)	(494)	(569)
Stock options exercised									1,173	651	3,068
Net cash provided by financing activities									(32,846)	157	2,499
Net Increase (Decrease) in Cash and Cash Equivalents									(14,561)	11,964	4,499
Cash and Cash Equivalents at Beginning of Period				$ 23,042				$ 11,078	23,042	11,078	6,579
Cash and Cash Equivalents at End of Period	$ 8,481				$ 23,042				$ 8,481	$ 23,042	$ 11,078

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Unaudited Interim Financial Information (Tables)

12 Months Ended

Jun. 30, 2019

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

The unaudited statements of income for each of the quarters during the fiscal years ended June 30, 2019 and 2018 are summarized below:

	Three months ended
	June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018
Interest and dividend income	$	35,855	$	34,724	$	34,400	$	32,280
Interest expense	8,931		8,145		7,299		6,008
Net interest income	26,924		26,579		27,101		26,272
Provision for loan losses	200		5,500		—		—
Net interest income after provision for loan losses	26,724		21,079		27,101		26,272
Noninterest income	6,811		5,386		5,085		5,613
Noninterest expense	23,415		22,978		21,858		21,883
Net income before provision for income taxes	10,120		3,487		10,328		10,002
Income tax expense	2,107		185		2,287		2,212
Net income	$	8,013	$	3,302	$	8,041	$	7,790
Net income per common share:
Basic	$	0.45	$	0.19	$	0.45	$	0.43
Diluted	$	0.44	$	0.18	$	0.43	$	0.41

	Three months ended
	June 30, 2018		March 31, 2018		December 31, 2017			September 30, 2017
Interest and dividend income	$	30,693	$	29,265	$	28,848		$	27,896
Interest expense	5,103		4,036		3,618			3,315
Net interest income	25,590		25,229		25,230			24,581
Provision for loan losses	—		—		—			—
Net interest income after provision for loan losses	25,590		25,229		25,230			24,581
Noninterest income	5,382		4,926		4,787			4,577
Noninterest expense	21,754		21,321		21,175			21,081
Net income before provision for income taxes	9,218		8,834		8,842			8,077
Income tax expense	2,011		2,707		19,508			2,510
Net income (loss)	$	7,207	$	6,127	$	(10,666	)	$	5,567
Net income (loss) per common share:
Basic	$	0.40	$	0.34	$	(0.59	)	$	0.31
Diluted	$	0.38	$	0.32	$	(0.59	)	$	0.30

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Capital (Tables)

12 Months Ended

Jun. 30, 2019

Banking and Thrift [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations

HomeTrust Bancshares, Inc. and the Bank's actual and required minimum capital amounts and ratiosare as follows:

					Regulatory Requirements
	Actual				Minimum for Capital Adequacy Purposes				Minimum to Be Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
HomeTrust Bancshares, Inc.
As of June 30, 2019
Common Equity Tier I Capital (to Risk-weighted Assets)	$	374,729	12.20	%	$	138,226	4.50	%	$	199,659	6.50	%
Tier I Capital (to Total Adjusted Assets)	$	374,729	10.89	%	$	137,649	4.00	%	$	172,062	5.00	%
Tier I Capital (to Risk-weighted Assets)	$	374,729	12.20	%	$	184,301	6.00	%	$	245,734	8.00	%
Total Risk-based Capital (to Risk-weighted Assets)	$	396,613	12.91	%	$	245,734	8.00	%	$	307,168	10.00	%
As of June 30, 2018
Common Equity Tier I Capital (to Risk-weighted Assets)	$	372,188	12.97	%	$	129,109	4.50	%	$	186,491	6.50	%
Tier I Capital (to Total Adjusted Assets)	$	372,188	11.45	%	$	130,032	4.00	%	$	162,539	5.00	%
Tier I Capital (to Risk-weighted Assets)	$	372,188	12.97	%	$	172,145	6.00	%	$	229,527	8.00	%
Total Risk-based Capital (to Risk-weighted Assets)	$	393,703	13.72	%	$	229,527	8.00	%	$	286,909	10.00	%
HomeTrust Bank:
As of June 30, 2019
Common Equity Tier I Capital (to Risk-weighted Assets)	$	355,759	11.59	%	$	138,153	4.50	%	$	199,555	6.50	%
Tier I Capital (to Total Adjusted Assets)	$	355,759	10.34	%	$	137,590	4.00	%	$	171,988	5.00	%
Tier I Capital (to Risk-weighted Assets)	$	355,759	11.59	%	$	184,204	6.00	%	$	245,606	8.00	%
Total Risk-based Capital (to Risk-weighted Assets)	$	377,639	12.30	%	$	245,606	8.00	%	$	307,007	10.00	%
As of June 30, 2018
Common Equity Tier I Capital (to Risk-weighted Assets)	$	335,152	11.70	%	$	128,889	4.50	%	$	186,173	6.50	%
Tier I Capital (to Total Adjusted Assets)	$	335,152	10.33	%	$	129,769	4.00	%	$	162,211	5.00	%
Tier I Capital (to Risk-weighted Assets)	$	335,152	11.70	%	$	171,852	6.00	%	$	229,136	8.00	%
Total Risk-based Capital (to Risk-weighted Assets)	$	356,603	12.45	%	$	229,136	8.00	%	$	286,421	10.00	%

___________________________________

In addition to the minimum common equity Tier 1 ("CET1"), Tier 1 and total risk-based capital ratios, HomeTrust Bancshares, Inc. and the Bank have to maintain a capital conservation buffer consisting of additional CET1 capital or more than 2.50% above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. As of June 30, 2019, the conservation buffer was 4.90%% and 4.30%% for HomeTrust Bancshares, Inc. and the Bank, respectively.

Reconciliation of the Bank's Total Equity Capital Under US GAAP and Regulatory Capital Amounts

A reconciliation of HomeTrust Bancshares, Inc.'s stockholders' equity under US GAAP and regulatory capital amounts as of the dates indicated follows:

	June 30,
	2019			2018
Total stockholders' equity under US GAAP	$	408,896		$	409,242
Accumulated other comprehensive loss (income), net of tax	(733		)	1,598
Investment in nonincludable subsidiary	(780		)	(826		)
Disallowed deferred tax assets	(5,092		)	(8,701		)
Disallowed goodwill and other disallowed intangible assets	(27,562		)	(29,125		)
Tier I Capital	374,729			372,188
Allowable portion of allowance for loan losses and loan commitments	21,884			21,515
Total Risk-based Capital	$	396,613		$	393,703

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Business Combinations - Financial Loan Portfolio Acquired (Details) $ in Thousands	Jan. 01, 2017 USD ($)
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	$ 258,059
PCI
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	7,696
Retail Consumer Loans | One-to-four family
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	78,932
Retail Consumer Loans | One-to-four family | PCI
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	3,753
Retail Consumer Loans | Home equity lines of credit
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	6,481
Retail Consumer Loans | Home equity lines of credit | PCI
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	2
Retail Consumer Loans | Construction and land/lots
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	15,591
Retail Consumer Loans | Construction and land/lots | PCI
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	0
Retail Consumer Loans | Consumer
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	1,703
Retail Consumer Loans | Consumer | PCI
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	17
Commercial Loans | Commercial real estate
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	111,374
Commercial Loans | Commercial real estate | PCI
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	3,494
Commercial Loans | Construction and development
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	15,395
Commercial Loans | Construction and development | PCI
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	142
Commercial Loans | Commercial and industrial
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	28,583
Commercial Loans | Commercial and industrial | PCI
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	288
Performing financing receivable
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	250,363
Performing financing receivable | Retail Consumer Loans | One-to-four family
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	75,179
Performing financing receivable | Retail Consumer Loans | Home equity lines of credit
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	6,479
Performing financing receivable | Retail Consumer Loans | Construction and land/lots
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	15,591
Performing financing receivable | Retail Consumer Loans | Consumer
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	1,686
Performing financing receivable | Commercial Loans | Commercial real estate
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	107,880
Performing financing receivable | Commercial Loans | Construction and development
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	15,253
Performing financing receivable | Commercial Loans | Commercial and industrial
Business Acquisition [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	28,295
TriSummit Bancorp | PCI
Business Acquisition [Line Items]
Contractually required principal and interest payments receivable	11,474
Amounts not expected to be collected - nonaccretable difference	2,490
Estimated payments expected to be received	8,984
Accretable yield	1,288
Fair value of PCI loans	7,696
TriSummit Bancorp | Performing financing receivable
Business Acquisition [Line Items]
Contractually required principal and interest payments receivable	255,852
Amounts not expected to be collected - nonaccretable difference	5,489
Estimated payments expected to be received	$ 250,363

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Accrued Interest Receivable (Tables)

12 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Schedule of Accrued Interest Receivable

Accrued interest receivable as of the dates indicated consists of the following:

	June 30,
	2019		2018
Loans	$	9,433	$	8,164
Securities available for sale	690		776
Other	410		404
Total	$	10,533	$	9,344

XML

Unaudited Interim Financial Information

12 Months Ended

Jun. 30, 2019

Quarterly Financial Information Disclosure [Abstract]

Unaudited Interim Financial Information

Unaudited Interim Financial Information

The unaudited statements of income for each of the quarters during the fiscal years ended June 30, 2019 and 2018 are summarized below:

	Three months ended
	June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018
Interest and dividend income	$	35,855	$	34,724	$	34,400	$	32,280
Interest expense	8,931		8,145		7,299		6,008
Net interest income	26,924		26,579		27,101		26,272
Provision for loan losses	200		5,500		—		—
Net interest income after provision for loan losses	26,724		21,079		27,101		26,272
Noninterest income	6,811		5,386		5,085		5,613
Noninterest expense	23,415		22,978		21,858		21,883
Net income before provision for income taxes	10,120		3,487		10,328		10,002
Income tax expense	2,107		185		2,287		2,212
Net income	$	8,013	$	3,302	$	8,041	$	7,790
Net income per common share:
Basic	$	0.45	$	0.19	$	0.45	$	0.43
Diluted	$	0.44	$	0.18	$	0.43	$	0.41

	Three months ended
	June 30, 2018		March 31, 2018		December 31, 2017			September 30, 2017
Interest and dividend income	$	30,693	$	29,265	$	28,848		$	27,896
Interest expense	5,103		4,036		3,618			3,315
Net interest income	25,590		25,229		25,230			24,581
Provision for loan losses	—		—		—			—
Net interest income after provision for loan losses	25,590		25,229		25,230			24,581
Noninterest income	5,382		4,926		4,787			4,577
Noninterest expense	21,754		21,321		21,175			21,081
Net income before provision for income taxes	9,218		8,834		8,842			8,077
Income tax expense	2,011		2,707		19,508			2,510
Net income (loss)	$	7,207	$	6,127	$	(10,666	)	$	5,567
Net income (loss) per common share:
Basic	$	0.40	$	0.34	$	(0.59	)	$	0.31
Diluted	$	0.38	$	0.32	$	(0.59	)	$	0.30

XML

Debt Securities (Tables)

12 Months Ended

Jun. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-sale Securities Reconciliation

Securities available for sale consist of the following at the dates indicated:

	June 30, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Government Agencies	$	15,099	$	122	$	(11	)	$	15,210
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises	74,778		586		(184		)	75,180
Municipal Bonds	24,896		423		(7		)	25,312
Corporate Bonds	6,061		43		(20		)	6,084
Total	$	120,834	$	1,174	$	(222	)	$	121,786

	June 30, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Government Agencies	$	48,025	$	1	$	(484	)	$	47,542
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises	71,949		88		(1,438		)	70,599
Municipal Bonds	30,865		127		(226		)	30,766
Corporate Bonds	6,166		25		(168		)	6,023
Equity Securities	63		—					$	63
Total	$	157,068	$	241	$	(2,316	)	$	154,993

Investments Classified by Contractual Maturity Date

Debt securities available for sale by contractual maturity at the dates indicated are shown below. Mortgage-backed securities are not included in the maturity categories because the borrowers in the underlying pools may prepay without penalty; therefore, it is unlikely that the securities will pay at their stated maturity schedule.

	June 30, 2019
	Amortized Cost		Estimated Fair Value
Due within one year	$	5,350	$	5,359
Due after one year through five years	30,526		30,784
Due after five years through ten years	5,538		5,798
Due after ten years	4,642		4,665
Mortgage-backed securities	74,778		75,180
Total	$	120,834	$	121,786

	June 30, 2018
	Amortized Cost		Estimated Fair Value
Due within one year	$	28,728	$	28,573
Due after one year through five years	41,273		40,663
Due after five years through ten years	5,749		5,829
Due after ten years	9,306		9,266
Mortgage-backed securities	71,949		70,599
Total	$	157,005	$	154,930

Schedule of Gross Proceeds and Gross Realized Gains and Losses from Sales of Securities

Gross proceeds and gross realized gains and losses from sales of securities recognized in net income follow:

	June 30,
	2019		2018		2017
Gross proceeds from sales of securities	$	—	$	—	$	19,279
Gross realized gains from sales of securities	—		—		70
Gross realized losses from sales of securities	—		—		(48		)

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value

The gross unrealized losses and the fair value for securities available for sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2019 and June 30, 2018 were as follows:

	June 30, 2019
	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Government Agencies	$	—	$	—		$	6,988	$	(11	)	$	6,988	$	(11	)
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises	1,144		(3		)	24,242		(181		)	25,386		(184		)
Municipal Bonds	—		—			4,895		(7		)	4,895		(7		)
Corporate Bonds	393		(5		)	3,630		(15		)	4,023		(20		)
Total	$	1,537	$	(8	)	$	39,755	$	(214	)	$	41,292	$	(222	)

	June 30, 2018
	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Government Agencies	$	10,962	$	(93	)	$	35,605	$	(391	)	$	46,567	$	(484	)
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises	39,238		(827		)	21,297		(611		)	60,535		(1,438		)
Municipal Bonds	19,795		(208		)	1,446		(18		)	21,241		(226		)
Corporate Bonds	$	—	$	—		$	3,566	$	(168	)	$	3,566	$	(168	)
Total	$	69,995	$	(1,128	)	$	61,914	$	(1,188	)	$	131,909	$	(2,316	)

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Real Estate Owned Real Estate Owned

12 Months Ended

Jun. 30, 2019

Real Estate Owned [Abstract]

Real Estate Owned

Real Estate Owned

The activity within REO for the periods shown is as follows:

	Year Ended
	June 30,
	2019			2018
Balance at beginning of period	$	3,684		$	6,318
Transfers from loans	731			1,346
Sales, net of gain/loss	(1,191		)	(3,471		)
Writedowns	(295		)	(539		)
Capital improvements	—			30
Balance at end of period	$	2,929		$	3,684

At June 30, 2019 and 2018, the Bank had $1,018 and $998, respectively, of foreclosed residential real estate property in REO. The recorded investment in consumer mortgage loans collateralized by residential real estate in the process of foreclosure totaled $243 and $395 for June 30, 2019 and 2018, respectively.

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Other Investments

12 Months Ended

Jun. 30, 2019

Investments, All Other Investments [Abstract]

Other Investments

Other Investments

Other investments, at cost consist of the following at the dates indicated:

	June 30, 2019		June 30, 2018
FHLB of Atlanta stock	$	31,969	$	29,907
FRB stock	7,335		7,307
Small Business Investment Companies ("SBIC") investments	6,074		4,717
Total	$	45,378	$	41,931

As a requirement for membership, the Bank invests in the stock of both the FHLB of Atlanta and the FRB. No ready market exists for these securities so carrying value approximates their fair value based on the redemption provisions of the FHLB of Atlanta and the FRB, respectively. SBIC investments are equity securities without a readily determinable fair value. Prior to the adoption of ASU 2016-01, SBIC investments were maintained in other assets.

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Net Income per Share

12 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Net Income per Share

Net Income per Share

The following is a reconciliation of the numerator and denominator of basic and diluted net income per share of common stock as of the dates indicated:

	June 30,
	2019			2018			2017
Numerator:
Net income	$	27,146		$	8,235		$	11,847
Allocation of earnings to participating securities	(189		)	(60		)	(125		)
Numerator for basic EPS - Net income available to common stockholders	$	26,957		$	8,175		$	11,722
Effect of dilutive securities:
Dilutive effect to participating securities	7			2			4
Numerator for diluted EPS	$	26,964		$	8,177		$	11,726
Denominator:
Weighted-average common shares outstanding - basic	17,692,493			18,028,854			17,379,487
Effect of dilutive shares	700,691			697,577			576,956
Weighted-average common shares outstanding - diluted	18,393,184			18,726,431			17,956,443
Net income per share - basic	$	1.52		$	0.45		$	0.66
Net income per share - diluted	$	1.46		$	0.44		$	0.65

There were 455,800 and 420,800 outstanding stock options that were anti-dilutive as of June 30, 2019 and 2018, respectively.

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Leases

12 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

Leases

As Lessee

The Company leases certain real property under long-term operating lease agreements. Rent expense under operating leases was $1,847, $1,829, and $1,583 for the years ended June 30, 2019, 2018, and 2017, respectively.

The following schedule summarizes aggregate future minimum lease payments under these operating leases at June 30, 2019:

Fiscal year ending June 30:
2020	$	1,660
2021	1,395
2022	1,296
2023	1,291
2022	643
Thereafter	1,076
Total of future minimum payments	$	7,361

The Company currently leases land for one of its retail office locations under a capital lease. Leases that meet the criteria for capitalization are recorded as assets and the related obligations are reflected as capital lease obligations on the accompanying balance sheets, because the lease has been deemed to have a bargain purchase option. Included in premises and equipment at June 30, 2019 and June 30, 2018 is $2,052 as the capitalized cost of the leased land.

Aggregate future minimum lease payments due under this capital lease obligation as of June 30, 2019 are as follows:

Fiscal year ending June 30, 2019:
2020	$	134
2021	134
2022	134
2023	134
2023	145
Thereafter	1,995
Total minimum lease payments	2,676
Less: amount representing interest	(796		)
Present value of net minimum lease payments	$	1,880

As Lessor

The Company's new Equipment Finance line of business first began in May 2018 and offers operating leases as a financing option. Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of noninterest expense. Leased assets totaled $10.0 million with a residual value of $5.8 million as of June 30, 2019. For the year ended June 30, 2019, total operating lease income totaled $936.

The following schedule summarizes aggregate future minimum lease payments to be received at June 30, 2019:

Fiscal year ending June 30:
2020	$	2,066
2021	4,499
2022	3,011
2023	175
2022	244
Thereafter	—
Total of future minimum payments	$	9,995

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Parent Company Financial Information

12 Months Ended

Jun. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Parent Company Financial Information

Parent Company Financial Information

The Company’s principal asset is its investment in its subsidiary, the Bank. The following tables present condensed financial information of the Company:

Condensed balance sheet

	June 30, 2019			June 30, 2018
Assets:
Cash and equivalents	$	8,481		$	23,042
Certificates of deposit in other banks	746			994
Other securities	—			63
Total loans	1,243			3,840
Allowance for loan losses	(4		)	(64		)
Net loans	1,239			3,776
REO	621			805
Investment in bank subsidiary	389,926			372,206
ESOP loan receivable	7,412			7,896
Other assets	510			499
Total Assets	$	408,935		$	409,281
Liabilities and Stockholders’ Equity:
Other liabilities	39			39
Stockholders’ Equity	408,896			409,242
Total Liabilities and Stockholders’ Equity	$	408,935		$	409,281

Condensed statement of income

	June 30, 2019			June 30, 2018			June 30, 2017
Income:
Interest income	$	329		$	456		$	565
Other income	54			44			1
Equity earnings in Bank subsidiary	27,287			8,427			12,003
Total income	27,670			8,927			12,569
Expense:
Management fee expense	407			385			354
REO expense	11			34			62
Loss on sale and impairment of REO	114			158			39
Provision for (recovery of) loan losses	(259		)	(131		)	90
Other expense	251			246			177
Total expense	524			692			722
Income Before Income Taxes	27,146			8,235			11,847
Income Tax Expense	—			—			—
Net Income	$	27,146		$	8,235		$	11,847

Condensed statement of cash flows

	June 30, 2019			June 30, 2018			June 30, 2017
Operating Activities:
Net income	$	27,146		$	8,235		$	11,847
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for (recovery of) loan losses	(259		)	(131		)	90
Loss on sale and impairment of REO	114			158			39
Decrease (increase) in accrued interest receivable and other assets	52			291			(30		)
Equity in undistributed income of Bank	(27,287		)	(8,427		)	(12,003		)
ESOP compensation expense	1,422			1,367			1,186
Restricted stock and stock option expense	1,601			3,027			4,166
Decrease in other liabilities	—			(48		)	(260		)
Net cash provided by operating activities	2,789			4,472			5,035
Investing Activities:
Maturities of certificates of deposit in other banks	248			6,217			1,245
Repayment of loans	2,796			1,514			2,176
Increase in investment in Bank subsidiary	(1,556		)	(1,367		)	(3,408		)
Dividend from subsidiary	13,454			—			10,291
ESOP principal payments received	484			472			462
Proceeds from sale of REO	70			499			61
Acquisition of TriSummit Bancorp, Inc.	—			—			(13,862		)
Net cash provided by (used in) investing activities	15,496			7,335			(3,035		)
Financing Activities:
Common stock repurchased	(30,638		)	—			—
Cash dividends paid	(3,176		)	—			—
Retired stock	(205		)	(494		)	(569		)
Exercised stock options	1,173			651			3,068
Net cash provided by (used in) financing activities	(32,846		)	157			2,499
Net Increase (Decrease) in Cash and Cash Equivalents	(14,561		)	11,964			4,499
Cash and Cash Equivalents at Beginning of Period	23,042			11,078			6,579
Cash and Cash Equivalents at End of Period	$	8,481		$	23,042		$	11,078

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Consolidated Balance Sheets (Parentheticals) - $ / shares	Jun. 30, 2019	Jun. 30, 2018
Statement of Financial Position [Abstract]
Preferred stock par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock shares authorized (in shares)	10,000,000	10,000,000
Preferred stock shares issued (in shares)	0	0
Preferred stock shares outstanding (in shares)	0	0
Common stock par value (in dollars per share)	$ 0.01	$ 0.01
Common stock shares authorized (in shares)	60,000,000	60,000,000
Common stock shares issued (in shares)	17,984,105	19,041,668
Common stock shares outstanding (in shares)	17,984,105	19,041,668

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Consolidated Statements of Changes in Stockholders' Equity (Parentheticals)	12 Months Ended
	Jun. 30, 2019 $ / shares
Statement of Stockholders' Equity [Abstract]
Common Stock, dividends, per share, cash paid (in dollars per share)	$ 0.18

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Equity Incentive Plan - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2015	Jun. 30, 2016
Options
Options outstanding at beginning of period (in shares)	494,800
Options outstanding at end of period (in shares)	377,600	494,800
Weighted- average exercise price
Exercisable, weighted average exercise price (in dollars per share)			$ 14.82
Stock Options
Options
Options outstanding at beginning of period (in shares)	1,718,270	1,470,043	1,529,300
Granted (in shares)	40,500	360,400	60,500
Exercised (in shares)	80,311	44,200	185,142
Forfeited (in shares)	20,300	24,700	19,000
Expired (in shares)	945	43,273	1,800
Options outstanding at end of period (in shares)	1,657,214	1,718,270	1,470,043
Options Exercisable (in shares)	1,279,614	1,223,470	1,033,943
Options, Nonvested, Number of Shares	377,600
Weighted- average exercise price
Options outstanding weighted average exercise price at beginning of year (in dollars per share)	$ 17.29	$ 15.22	$ 14.50
Granted, Weighted average exercise price (in dollars per share)	27.51	26.01	24.95
Exercised, Weighted average exercise price (in dollars per share)	14.62	14.72	16.56
Forfeited, Weighted average exercise price (in dollars per share)	23.30	14.43	14.53
Expired, Weighted average exercise price (in dollars per share)	23.82	23.82	14.37
Options outstanding weighted average exercise price at end of year (in dollars per share)	17.59	17.29	$ 15.22
Exercisable, weighted average exercise price (in dollars per share)	15.39	$ 14.51
Option, nonvested, weighted average exercise price (in dollars per share)	$ 25.04
Options outstanding, remaining contractual life	5 years	5 years 10 months 10 days	5 years 9 months 18 days	6 years 9 months 18 days
Weighted average remaining contractual term	4 years 1 month
Average remaining contractual life	8 years 4 months
Options outstanding, aggregate intrinsic value	$ 12,909	$ 18,664	$ 13,533		$ 6,117
Exercisable, intrinsic value	12,549
Options, nonvested, intrinsic value	$ 360
TriSummit Bancorp
Options
Granted (in shares)		86,185
Weighted- average exercise price
Granted, Weighted average exercise price (in dollars per share)		$ 23.82

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Deferred Compensation Agreements - Schedule of Net Cash Surrender Value Life Insurance Policies and Deferred Compensation Liability (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Retirement Benefits [Abstract]
Net cash surrender value of life insurance, related to deferred compensation	$ 7,413	$ 7,142
Deferred compensation liability, included in other liabilities	$ 956	$ 1,075

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Premises and Equipment - Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Property, Plant and Equipment [Abstract]
Land	$ 19,730	$ 19,934
Land held under capital lease	2,052	2,052
Office buildings	58,952	57,873
Furniture, fixtures and equipment	15,918	15,582
Total	96,652	95,441
Less accumulated depreciation	(35,601)	(32,904)
Premises and equipment, net	$ 61,051	$ 62,537

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Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Deferred tax assets:
Alternative minimum tax credit	$ 4,799	$ 4,920
Allowance for loan losses	4,685	4,637
Deferred compensation and post-retirement benefits	8,988	9,400
Accrued vacation and sick leave	18	18
Impairments on real estate owned	461	495
Other than temporary impairment on investments	2,232	2,254
Net operating loss carryforward	5,092	8,635
Discount from business combination	2,373	2,605
Unrealized loss on securities held for sale	0	477
Stock compensation plans	2,162	2,271
Other	1,140	1,562
Total gross deferred tax assets	31,950	37,274
Less valuation allowance	0	(325)
Deferred tax assets	31,950	36,949
Deferred tax (liabilities):
Depreciable basis of fixed assets	(1,089)	(566)
Deferred loan fees	(520)	(453)
FHLB stock, book basis in excess of tax	(89)	(89)
Unrealized gain on securities available for sale	(219)	0
Other	(3,510)	(3,276)
Total gross deferred tax liabilities	(5,427)	(4,384)
Net deferred tax assets	$ 26,523	$ 32,565

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Leases - Schedule of Future Minimum Lease Payments for Capital Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Leases [Abstract]
2020	$ 134
2021	134
2022	134
2023	134
2024	145
Thereafter	1,995
Total minimum lease payments	2,676
Less: amount representing interest	(796)
Present value of net minimum lease payments	$ 1,880	$ 1,914

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Debt Securities - Schedule of Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Fair Value
Less than 12 Months, Fair Value	$ 1,537	$ 69,995
12 Months or More, Fair Value	39,755	61,914
Total fair value	41,292	131,909
Unrealized Losses
Less than 12 Months, Unrealized Losses	(8)	(1,128)
12 Months or More, Unrealized Losses	(214)	(1,188)
Total, unrealized losses	(222)	(2,316)
US Government Agencies Debt Securities
Fair Value
Less than 12 Months, Fair Value	0	10,962
12 Months or More, Fair Value	6,988	35,605
Total fair value	6,988	46,567
Unrealized Losses
Less than 12 Months, Unrealized Losses	0	(93)
12 Months or More, Unrealized Losses	(11)	(391)
Total, unrealized losses	(11)	(484)
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises
Fair Value
Less than 12 Months, Fair Value	1,144	39,238
12 Months or More, Fair Value	24,242	21,297
Total fair value	25,386	60,535
Unrealized Losses
Less than 12 Months, Unrealized Losses	(3)	(827)
12 Months or More, Unrealized Losses	(181)	(611)
Total, unrealized losses	(184)	(1,438)
Municipal Bonds
Fair Value
Less than 12 Months, Fair Value	0	19,795
12 Months or More, Fair Value	4,895	1,446
Total fair value	4,895	21,241
Unrealized Losses
Less than 12 Months, Unrealized Losses	0	(208)
12 Months or More, Unrealized Losses	(7)	(18)
Total, unrealized losses	(7)	(226)
Corporate Bonds
Fair Value
Less than 12 Months, Fair Value	393	0
12 Months or More, Fair Value	3,630	3,566
Total fair value	4,023	3,566
Unrealized Losses
Less than 12 Months, Unrealized Losses	(5)	0
12 Months or More, Unrealized Losses	(15)	(168)
Total, unrealized losses	$ (20)	$ (168)

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Fair Value of Financial Instruments - Schedule of Fair Value, by Balance Sheet Grouping (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Level 3 | Small Business Investment Company Funds [Member] [Domain]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	$ 6,074	$ 4,717
Carrying Value | Cash and interest-bearing deposits
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	71,043	70,746
Carrying Value | Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	241,446	229,070
Carrying Value | Certificates of deposit in other banks
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	52,005	66,937
Carrying Value | Securities available for sale
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	121,786	154,993
Carrying Value | Loans, net
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	2,683,761	2,504,792
Carrying Value | Loans held for sale
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	18,175	5,873
Carrying Value | FHLB stock
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	31,969	29,907
Carrying Value | FRB stock
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	7,335	7,307
Carrying Value | Small Business Investment Company Funds [Member] [Domain]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	6,074	4,717
Carrying Value | Accrued interest receivable
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	10,533	9,344
Carrying Value | Noninterest-bearing and NOW deposits
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	746,617	789,186
Carrying Value | Money market accounts
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	691,172	677,665
Carrying Value | Savings accounts
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	177,278	213,250
Carrying Value | Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	712,190	516,152
Carrying Value | Borrowings
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	680,000	635,000
Carrying Value | Accrued interest payable
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	2,252	805
Estimate of Fair Value Measurement | Cash and interest-bearing deposits
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	71,043	70,746
Estimate of Fair Value Measurement | Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	241,446	229,070
Estimate of Fair Value Measurement | Certificates of deposit in other banks
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	52,005	66,937
Estimate of Fair Value Measurement | Securities available for sale
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	121,786	154,993
Estimate of Fair Value Measurement | Loans, net
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	2,604,827	2,414,647
Estimate of Fair Value Measurement | Loans held for sale
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	18,591	5,990
Estimate of Fair Value Measurement | FHLB stock
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	31,969	29,907
Estimate of Fair Value Measurement | FRB stock
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	7,335	7,307
Estimate of Fair Value Measurement | Small Business Investment Company Funds [Member] [Domain]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	6,074	4,717
Estimate of Fair Value Measurement | Accrued interest receivable
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	10,533	9,344
Estimate of Fair Value Measurement | Noninterest-bearing and NOW deposits
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	746,617	789,186
Estimate of Fair Value Measurement | Money market accounts
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	691,172	677,665
Estimate of Fair Value Measurement | Savings accounts
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	177,278	213,250
Estimate of Fair Value Measurement | Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	712,485	509,924
Estimate of Fair Value Measurement | Borrowings
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	688,418	635,187
Estimate of Fair Value Measurement | Accrued interest payable
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	2,252	805
Estimate of Fair Value Measurement | Level 1 | Cash and interest-bearing deposits
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	71,043	70,746
Estimate of Fair Value Measurement | Level 1 | Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	241,446	229,070
Estimate of Fair Value Measurement | Level 1 | FHLB stock
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	31,969	29,907
Estimate of Fair Value Measurement | Level 1 | FRB stock
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	7,335	7,307
Estimate of Fair Value Measurement | Level 1 | Accrued interest receivable
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	350	297
Estimate of Fair Value Measurement | Level 2 | Certificates of deposit in other banks
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	52,005	66,937
Estimate of Fair Value Measurement | Level 2 | Securities available for sale
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	121,786	154,993
Estimate of Fair Value Measurement | Level 2 | Accrued interest receivable
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	750	883
Estimate of Fair Value Measurement | Level 2 | Noninterest-bearing and NOW deposits
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	746,617	789,186
Estimate of Fair Value Measurement | Level 2 | Money market accounts
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	691,172	677,665
Estimate of Fair Value Measurement | Level 2 | Savings accounts
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	177,278	213,250
Estimate of Fair Value Measurement | Level 2 | Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	712,485	509,924
Estimate of Fair Value Measurement | Level 2 | Borrowings
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	688,418	635,187
Estimate of Fair Value Measurement | Level 2 | Accrued interest payable
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	2,252	805
Estimate of Fair Value Measurement | Level 3 | Loans, net
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	2,604,827	2,414,647
Estimate of Fair Value Measurement | Level 3 | Loans held for sale
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	18,591	5,990
Estimate of Fair Value Measurement | Level 3 | Accrued interest receivable
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instruments	$ 9,433	$ 8,164

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Equity Incentive Plan (Tables)

12 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity Incentive Plan Stock Option Activity

The table below presents stock option activity and related information:

	Options	Weighted- average exercise price		Remaining contractual life (years)	Aggregate Intrinsic Value
Options outstanding at June 30, 2016	1,529,300	14.50		6.8	$	6,117
Granted	60,500	24.95		—	—
Granted, TriSummit acquisition	86,185	23.82
Exercised	185,142	16.56		—	—
Forfeited	19,000	14.53		—	—
Expired	1,800	14.37		—	—
Options outstanding at June 30, 2017	1,470,043	$	15.22	5.8	$	13,533
Exercisable at June 30, 2017	1,033,943	$	14.82
Granted	360,400	26.01		—	—
Exercised	44,200	14.72		—	—
Forfeited	24,700	14.43		—	—
Expired	43,273	23.82		—	—
Options outstanding at June 30, 2018	1,718,270	$	17.29	5.9	$	18,664
Exercisable at June 30, 2018	1,223,470	$	14.51
Granted	40,500	27.51		—	—
Exercised	80,311	14.62		—	—
Forfeited	20,300	23.30		—	—
Expired	945	23.82		—	—
Options outstanding at June 30, 2019	1,657,214	$	17.59	5.0	$	12,909
Exercisable at June 30, 2019	1,279,614	$	15.39	4.1	$	12,549
Non-vested at June 30, 2019	377,600	$	25.04	8.3	$	360

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

Assumptions used for grants were as follows:

Assumptions in Estimating Option Values
	2019			2018
Weighted-average volatility	17.84		%	17.69		%
Expected dividend yield (1)	0.87		%	—		%
Risk-free interest rate	2.52		%	2.67		%
Expected life (years)	6.5			6.5
Weighted-average fair value of options granted	$	5.88		$	6.62

(1)    The Company began paying a cash dividend during the second quarter of fiscal 2019.

Equity Incentive Plan Restricted Award Activity

The table below presents restricted stock award activity and related information:

	Restricted stock awards	Weighted- average grant date fair value		Aggregate Intrinsic Value
Non-vested at June 30, 2016	248,750	$	14.81	$	4,602
Granted	47,500	24.70		—
Vested	104,620	14.58		—
Forfeited	6,000	15.07		—
Non-vested at June 30, 2017	185,630	$	17.46	$	3,419
Granted	55,200	25.89		—
Vested	100,820	15.14		—
Forfeited	6,600	14.37		—
Non-vested at June 30, 2018	133,410	$	22.85	$	3,755
Granted	34,000	27.51		—
Vested	39,310	21.64		—
Forfeited	4,300	19.08		—
Non-vested at June 30, 2019	123,800	$	24.65	$	2,258

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Subsequent Events - Narrative (Details) - USD ($) $ in Thousands	2 Months Ended	12 Months Ended
	Sep. 13, 2019	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Subsequent Event [Line Items]
Transfers of loans to held for sale from loans held for investment		$ 5,794	$ 0	$ 0
Minimum | One-to-four family | Retail Consumer Loans | Subsequent Event
Subsequent Event [Line Items]
Transfers of loans to held for sale from loans held for investment	$ 200,000
Maximum | One-to-four family | Retail Consumer Loans | Subsequent Event
Subsequent Event [Line Items]
Transfers of loans to held for sale from loans held for investment	$ 300,000

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Goodwill and Core Deposit Intangibles (Tables)

12 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Amortization expense related to core deposit intangibles

As of June 30, 2019, estimated amortization expense for each of the next five years is as follows:

2020	$	1,414
2021	741
2022	251
2023	90
2024	3
Total	$	2,499

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Income Taxes (Tables)

12 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense

Income tax expense as of the dates indicated consists of:

	June 30,
	2019			2018		2017
Current:
Federal	$	755		$	291	$	191
State	690			324		54
Total current expense	1,445			615		245
Deferred:
Federal	5,404			7,909		4,561
State	267			625		386
Adjustment due to the Tax Cuts and Jobs Act (“Tax Act”)	(325		)	17,587		—
Total deferred expense	5,346			26,121		4,947
Total income tax expense	$	6,791		$	26,736	$	5,192

Schedule of Effective Income Tax Rate Reconciliation

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to income before income taxes as a result of the following differences for the periods indicated:

	Year Ended June 30,
	2019					2018					2017
	$			Rate		$			Rate		$			Rate
Tax at federal income tax rate	$	7,127		21	%	$	9,617		28	%	$	5,793		34	%
Increase (decrease) resulting from:
Tax exempt income	(855		)	(2	)%	(1,075		)	(3	)%	(1,391		)	(8	)%
Nondeductible merger expenses	—			—	%	—			—	%	91			1	%
Change in valuation allowance for deferred tax assets, allocated to income tax expense	(325		)	(1	)%	87			—	%	(327		)	(2	)%
State tax, net of federal benefit	756			2	%	688			2	%	290			2	%
Change in deferred tax assets due to the Tax Act	—			—	%	17,587			50	%	—			—	%
Other	88			—	%	(168		)	(1	)%	736			4	%
Total	$	6,791		20	%	$	26,736		76	%	$	5,192		31	%

Schedule of Deferred Tax Assets and Liabilities

The sources and tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at June 30, 2019 and 2018 are presented below:

	June 30,
	2019			2018
Deferred tax assets:
Alternative minimum tax credit	$	4,799		$	4,920
Allowance for loan losses	4,685			4,637
Deferred compensation and post-retirement benefits	8,988			9,400
Accrued vacation and sick leave	18			18
Impairments on real estate owned	461			495
Other than temporary impairment on investments	2,232			2,254
Net operating loss carryforward	5,092			8,635
Discount from business combination	2,373			2,605
Unrealized loss on securities held for sale	—			477
Stock compensation plans	2,162			2,271
Other	1,140			1,562
Total gross deferred tax assets	31,950			37,274
Less valuation allowance	—			(325		)
Deferred tax assets	31,950			36,949
Deferred tax (liabilities):
Depreciable basis of fixed assets	(1,089		)	(566		)
Deferred loan fees	(520		)	(453		)
FHLB stock, book basis in excess of tax	(89		)	(89		)
Unrealized gain on securities available for sale	(219		)	—
Other	(3,510		)	(3,276		)
Total gross deferred tax liabilities	(5,427		)	(4,384		)
Net deferred tax assets	$	26,523		$	32,565

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Fair Value of Financial Instruments

12 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company utilizes fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. The Company has adopted ASU 2016-01, and therefore is measuring the fair value of loans receivable under the exit price notion rather than the previous method of entry price notion. Under the previous method, the fair value estimate of loans receivable was based on discounted cash flow. At June 30, 2019, the exit price notion used to estimate the fair value of loans receivable was based on similar techniques, with the addition of liquidity premiums. The fair value of nonperforming loans is based on the underlying value of the collateral for periods prior to and after adoption of ASU 2016-01.

Fair Value Hierarchy

The Company groups assets at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1: Valuation is based upon quoted prices for identical instruments traded in active markets.

Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3: Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

Following is a description of valuation methodologies used for assets recorded at fair value. The Company does not have any liabilities recorded at fair value.

Investment Securities Available for Sale

Securities available for sale are valued on a recurring basis at quoted market prices where available. If quoted market prices are not available, fair values are based on quoted prices of comparable securities. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange or U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities and debentures issued by government sponsored enterprises, municipal bonds, and corporate debt securities. The Company has no Level 3 securities.

Impaired Loans

The Company does not record loans at fair value on a recurring basis. From time to time, however, a loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, the fair value is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. The Company reviews all impaired loans each quarter to determine if an allowance is necessary. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans.

The fair value of impaired loans is estimated in one of two ways, which include collateral value and discounted cash flows. Loans are considered collateral dependent if repayment is expected solely from the collateral. For these collateral dependent impaired loans, the Company obtains updated appraisals at least annually. These appraisals are reviewed for appropriateness and then discounted for estimated closing costs to determine if an allowance is necessary. As part of the quarterly review of impaired loans, the Company reviews these appraisals to determine if any additional discounts to the fair value are necessary. If a current appraisal is not obtained, the Company determines whether a discount is needed to the value from the original appraisal based on the decline in value of similar properties with recent appraisals. For loans that are not collateral dependent, estimated fair value is based on the present value of expected future cash flows using the interest rate implicit in the original agreement. Impaired loans where a charge-off has occurred or an allowance is established during the period being reported require classification in the fair value hierarchy. The Company records such impaired loans as a nonrecurring Level 3 in the fair value hierarchy. 

Loans Held for Sale

Loans held for sale are adjusted to lower of cost or fair value. Fair value is based on commitments on hand from investors or, if commitments have not yet been obtained, what investors are currently offering for loans with similar characteristics. The Company considers all loans held for sale carried at fair value as nonrecurring Level 3.

Real Estate Owned

REO is considered held for sale and is adjusted to fair value less estimated selling costs upon transfer of the loan to foreclosed assets. Fair value is based upon independent market prices, appraised value of the collateral or management’s estimation of the value of the collateral. The Company considers all REO that has been charged off or received an allowance during the period as nonrecurring Level 3.

Financial Assets Recorded at Fair Value on a Recurring Basis

The following table presents financial assets measured at fair value on a recurring basis at the dates indicated:

	June 30, 2019
Description	Total		Level 1		Level 2		Level 3
U.S Government Agencies	$	15,210	$	—	$	15,210	$	—
Residential Mortgage-backed Securities of U.S. Government Agencies and Government sponsored Enterprises	75,180		—		75,180		—
Municipal Bonds	25,312		—		25,312		—
Corporate Bonds	6,084		—		6,084		—
Total	$	121,786	$	—	$	121,786	$	—

	June 30, 2018
Description	Total		Level 1		Level 2		Level 3
U.S Government Agencies	$	47,542	$	—	$	47,542	$	—
Residential Mortgage-backed Securities of U.S. Government Agencies and Government sponsored Enterprises	70,599		—		70,599		—
Municipal Bonds	30,766		—		30,766		—
Corporate Bonds	6,023		—		6,023		—
Equity Securities	63		—		63		—
Total	$	154,993	$	—	$	154,993	$	—

Financial Assets Recorded at Fair Value on a Nonrecurring Basis

The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated:

	June 30, 2019
Description	Total		Level 1		Level 2		Level 3
Impaired loans	$	9,071	$	—	$	—	$	9,071
REO	1,804		—		—		1,804
Total	$	10,875	$	—	$	—	$	10,875

	June 30, 2018
Description	Total		Level 1		Level 2		Level 3
Impaired loans	$	8,423	$	—	$	—	$	8,423
REO	2,104		—		—		2,104
Total	$	10,527	$	—	$	—	$	10,527

Quantitative information about Level 3 fair value measurements during the period ended June 30, 2019 is shown in the table below:

	Fair Value at June 30, 2019		Valuation Techniques	Unobservable Input	Range	Weighted Average
Nonrecurring measurements:
Impaired loans, net	$	9,071	Discounted appraisals and discounted cash flows	Collateral discounts: Discount spread:	0% - 16% 1% - 3%	1%
REO	$	1,804	Discounted Appraisals	Collateral discounts	8% - 41%	12%

The stated carrying value and estimated fair value amounts of financial instruments as of June 30, 2019 and June 30, 2018, are summarized below:

	June 30, 2019
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and interest-bearing deposits	$	71,043	$	71,043	$	71,043	$	—	$	—
Commercial paper	241,446		241,446		241,446		—		—
Certificates of deposit in other banks	52,005		52,005		—		52,005		—
Securities available for sale	121,786		121,786		—		121,786		—
Loans, net	2,683,761		2,604,827		—		—		2,604,827
Loans held for sale	18,175		18,591		—		—		18,591
FHLB stock	31,969		31,969		31,969		—		—
FRB stock	7,335		7,335		7,335		—		—
SBIC investments	6,074		6,074		—		—		6,074
Accrued interest receivable	10,533		10,533		350		750		9,433
Liabilities:
Noninterest-bearing and NOW deposits	746,617		746,617		—		746,617		—
Money market accounts	691,172		691,172		—		691,172		—
Savings accounts	177,278		177,278		—		177,278		—
Certificates of deposit	712,190		712,485		—		712,485		—
Borrowings	680,000		688,418		—		688,418		—
Accrued interest payable	2,252		2,252		—		2,252		—

	June 30, 2018
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and interest-bearing deposits	$	70,746	$	70,746	$	70,746	$	—	$	—
Commercial paper	229,070		229,070		229,070		—		—
Certificates of deposit in other banks	66,937		66,937		—		66,937		—
Securities available for sale	154,993		154,993		—		154,993		—
Loans, net	2,504,792		2,414,647		—		—		2,414,647
Loans held for sale	5,873		5,990		—		—		5,990
FHLB stock	29,907		29,907		29,907		—		—
FRB stock	7,307		7,307		7,307		—		—
SBIC investments	4,717		4,717		—		—		4,717
Accrued interest receivable	9,344		9,344		297		883		8,164
Liabilities:
Noninterest-bearing and NOW deposits	789,186		789,186		—		789,186		—
Money market accounts	677,665		677,665		—		677,665		—
Savings accounts	213,250		213,250		—		213,250		—
Certificates of deposit	516,152		509,924		—		509,924		—
Borrowings	635,000		635,187		—		635,187		—
Accrued interest payable	805		805		—		805		—

The Company had off-balance sheet financial commitments, which include approximately $628,572 and $751,324 of commitments to originate loans, undisbursed portions of interim construction loans, and unused lines of credit at June 30, 2019 and June 30, 2018 (see Note 18).  Since these commitments are based on current rates, the carrying amount approximates the fair value.

Estimated fair values were determined using the following methods and assumptions:

Cash and interest-bearing deposits – The stated amounts approximate fair values as maturities are less than 90 days.

Commercial paper – The stated amounts approximate fair value due to the short-term nature of these investments.

Certificates of deposit in other banks – The stated amounts approximate fair values.

Securities available for sale – Fair values are based on quoted market prices where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

Loans, net – Fair values for loans are estimated by segregating the portfolio by type of loan and discounting scheduled cash flows using current market interest rates for loans with similar terms and credit quality. A prepayment assumption is used as an estimate of the portion of loans that will be repaid prior to their scheduled maturity. For the June 30, 2019 fair value, a liquidity premium assumption is used as an estimate for the additional return required by an investor of assets that are potentially considered illiquid.

Loans held for sale – The fair value of mortgage loans held for sale is determined by outstanding commitments from investors on a "best efforts" basis or current investor yield requirements, calculated on the aggregate loan basis. The fair value of U.S. Small Business Administration ("SBA") loans held for sale is based on what investors are currently offering for loans with similar characteristics.

FHLB and FRB stock – No ready market exists for these stocks and they have no quoted market value. However, redemption of these stocks has historically been at par value. Accordingly, cost is deemed to be a reasonable estimate of fair value.

SBIC– No ready market exists for these investments and they have no quoted market value. SBIC investments are valued at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions of identical or similar investments. Accordingly, cost is deemed to be a reasonable estimate of fair value.

Deposits– Fair values for demand deposits, money market accounts, and savings accounts are the amounts payable on demand as of June 30, 2019 and June 30, 2018. The fair value of certificates of deposit is estimated by discounting the contractual cash flows using current market interest rates for accounts with similar maturities.

Borrowings – The fair value of advances from the FHLB is estimated based on current rates for borrowings with similar terms.

Accrued interest receivable and payable – The stated amounts of accrued interest receivable and payable approximate the fair value.

Limitations – Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on-and-off balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, a significant asset not considered a financial asset is premises and equipment.  In addition, tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

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Equity Incentive Plan

12 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity Incentive Plan

Equity Incentive Plan

The Company provides stock-based awards through the 2013 Omnibus Incentive Plan which provides for awards of restricted stock, restricted stock units, stock options, stock appreciation rights, and cash awards to directors, emeritus directors, officers, employees, and advisory directors. The cost of equity-based awards under the 2013 Omnibus Incentive Plan generally is based on the fair value of the awards on their grant date. The maximum number of shares that may be utilized for awards under the plan is 2,962,400, including 2,116,000 for stock options and stock appreciation rights and 846,400 for awards of restricted stock and restricted stock units.

Shares of common stock issued under the 2013 Omnibus Incentive Plan may be authorized but unissued shares or, in the case of restricted stock awards, may be repurchased shares. As of June 30, 2013, the Company had repurchased all 846,400 shares on the open market for issuance under the 2013 Omnibus Incentive Plan, for $13,297, at an average cost of $15.71 per share.

Share based compensation expense related to stock options and restricted stock recognized for the fiscal year ended June 30, 2019, 2018, and 2017 was $1,601, $3,027, and $4,166, respectively, before the related tax benefit of $376, $908, and $1,541, respectively.

The table below presents stock option activity and related information:

	Options	Weighted- average exercise price		Remaining contractual life (years)	Aggregate Intrinsic Value
Options outstanding at June 30, 2016	1,529,300	14.50		6.8	$	6,117
Granted	60,500	24.95		—	—
Granted, TriSummit acquisition	86,185	23.82
Exercised	185,142	16.56		—	—
Forfeited	19,000	14.53		—	—
Expired	1,800	14.37		—	—
Options outstanding at June 30, 2017	1,470,043	$	15.22	5.8	$	13,533
Exercisable at June 30, 2017	1,033,943	$	14.82
Granted	360,400	26.01		—	—
Exercised	44,200	14.72		—	—
Forfeited	24,700	14.43		—	—
Expired	43,273	23.82		—	—
Options outstanding at June 30, 2018	1,718,270	$	17.29	5.9	$	18,664
Exercisable at June 30, 2018	1,223,470	$	14.51
Granted	40,500	27.51		—	—
Exercised	80,311	14.62		—	—
Forfeited	20,300	23.30		—	—
Expired	945	23.82		—	—
Options outstanding at June 30, 2019	1,657,214	$	17.59	5.0	$	12,909
Exercisable at June 30, 2019	1,279,614	$	15.39	4.1	$	12,549
Non-vested at June 30, 2019	377,600	$	25.04	8.3	$	360

The fair value of each option is estimated on the date of grant using the Black-Scholes-Merton option pricing model. Assumptions used for grants were as follows:

Assumptions in Estimating Option Values
	2019			2018
Weighted-average volatility	17.84		%	17.69		%
Expected dividend yield (1)	0.87		%	—		%
Risk-free interest rate	2.52		%	2.67		%
Expected life (years)	6.5			6.5
Weighted-average fair value of options granted	$	5.88		$	6.62

(1)    The Company began paying a cash dividend during the second quarter of fiscal 2019.

At June 30, 2019, the Company had $2,133 of unrecognized compensation expense related to 377,600 stock options originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.9 years at June 30, 2019. At June 30, 2018, the Company had $2,705 of unrecognized compensation expense related to 494,800 stock options originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 2.3 years at June 30, 2018. All unexercised options expire ten years after the grant date.

The table below presents restricted stock award activity and related information:

	Restricted stock awards	Weighted- average grant date fair value		Aggregate Intrinsic Value
Non-vested at June 30, 2016	248,750	$	14.81	$	4,602
Granted	47,500	24.70		—
Vested	104,620	14.58		—
Forfeited	6,000	15.07		—
Non-vested at June 30, 2017	185,630	$	17.46	$	3,419
Granted	55,200	25.89		—
Vested	100,820	15.14		—
Forfeited	6,600	14.37		—
Non-vested at June 30, 2018	133,410	$	22.85	$	3,755
Granted	34,000	27.51		—
Vested	39,310	21.64		—
Forfeited	4,300	19.08		—
Non-vested at June 30, 2019	123,800	$	24.65	$	2,258

The table above includes performance-based restrictive stock units totaling 10,375 which were granted during the year ended June 30, 2019. These stock units are scheduled to vest over 3.0 years assuming certain performance metrics are met.

At June 30, 2019, unrecognized compensation expense was $2,547 related to 123,800 shares of restricted stock originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 1.9 years at June 30, 2019. At June 30, 2018, unrecognized compensation expense was $2,570 related to 133,410 shares of restricted stock originally scheduled to vest over five- and seven-year vesting periods. The weighted average period over which compensation cost related to non-vested awards is expected to be recognized was 2.1 years at June 30, 2018.

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Income Taxes

12 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense as of the dates indicated consists of:

	June 30,
	2019			2018		2017
Current:
Federal	$	755		$	291	$	191
State	690			324		54
Total current expense	1,445			615		245
Deferred:
Federal	5,404			7,909		4,561
State	267			625		386
Adjustment due to the Tax Cuts and Jobs Act (“Tax Act”)	(325		)	17,587		—
Total deferred expense	5,346			26,121		4,947
Total income tax expense	$	6,791		$	26,736	$	5,192

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to income before income taxes as a result of the following differences for the periods indicated:

	Year Ended June 30,
	2019					2018					2017
	$			Rate		$			Rate		$			Rate
Tax at federal income tax rate	$	7,127		21	%	$	9,617		28	%	$	5,793		34	%
Increase (decrease) resulting from:
Tax exempt income	(855		)	(2	)%	(1,075		)	(3	)%	(1,391		)	(8	)%
Nondeductible merger expenses	—			—	%	—			—	%	91			1	%
Change in valuation allowance for deferred tax assets, allocated to income tax expense	(325		)	(1	)%	87			—	%	(327		)	(2	)%
State tax, net of federal benefit	756			2	%	688			2	%	290			2	%
Change in deferred tax assets due to the Tax Act	—			—	%	17,587			50	%	—			—	%
Other	88			—	%	(168		)	(1	)%	736			4	%
Total	$	6,791		20	%	$	26,736		76	%	$	5,192		31	%

The sources and tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at June 30, 2019 and 2018 are presented below:

	June 30,
	2019			2018
Deferred tax assets:
Alternative minimum tax credit	$	4,799		$	4,920
Allowance for loan losses	4,685			4,637
Deferred compensation and post-retirement benefits	8,988			9,400
Accrued vacation and sick leave	18			18
Impairments on real estate owned	461			495
Other than temporary impairment on investments	2,232			2,254
Net operating loss carryforward	5,092			8,635
Discount from business combination	2,373			2,605
Unrealized loss on securities held for sale	—			477
Stock compensation plans	2,162			2,271
Other	1,140			1,562
Total gross deferred tax assets	31,950			37,274
Less valuation allowance	—			(325		)
Deferred tax assets	31,950			36,949
Deferred tax (liabilities):
Depreciable basis of fixed assets	(1,089		)	(566		)
Deferred loan fees	(520		)	(453		)
FHLB stock, book basis in excess of tax	(89		)	(89		)
Unrealized gain on securities available for sale	(219		)	—
Other	(3,510		)	(3,276		)
Total gross deferred tax liabilities	(5,427		)	(4,384		)
Net deferred tax assets	$	26,523		$	32,565

The enactment of the Tax Act and subsequent Internal Revenue Service guidelines reduced the statutory federal corporate income tax rate to 21% effective January 1, 2018, requiring the Company to revalue its DTA. The resulting $17.6 million in adjustments were reflected as an increase to the Company's income tax expense with an additional $325,000 in income tax expense during the fiscal year ended June 30, 2018 to establish a tax valuation allowance on our alternative minimum tax ("AMT") credits. In addition, our June 30, 2018 fiscal year end required the use of a blended federal income tax rate as prescribed by the Internal Revenue Code. The blended federal income tax rate of 27.5% was retroactively effective July 1, 2017 and was used for the entire fiscal year ended June 30, 2018.

The Company had federal net operating loss ("NOL") carry forwards of $24,248 and $40,780 as of June 30, 2019 and June 30, 2018, respectively, with a recorded tax benefit of $5,092 and $8,635 included in deferred tax assets. The majority of these NOLs will expire for federal tax purposes from 2024 through 2036.

The valuation allowance for deferred tax assets as of June 30, 2019 and 2018 was $0 and $325, respectively. The valuation allowance of $325 was reversed during the year ended June 30, 2019 based on clarifying guidance released by the Internal Revenue Service related to the treatment of AMT credits under the Tax Act. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management performed a robust evaluation of the Company’s deferred tax assets at June 30, 2019 and June 30, 2018. Management considered all available positive and negative evidence including the possibility of future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and recent financial performance in making this assessment. Based upon this evaluation, management believes there is more positive evidence than negative evidence and it is more likely than not the Company will realize the benefits of these deductible differences, net of the existing valuation allowances at June 30, 2019 and June 30, 2018. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if negative trends occur with credit quality and earnings during the carryforward period.

Retained earnings at June 30, 2019 and 2018 include $19,570 representing pre-1988 tax bad debt reserve base year amounts for which no deferred tax liability has been provided since these reserves are not expected to reverse and may never reverse. Circumstances that would require an accrual of a portion or all of this unrecorded tax liability are a failure to meet the definition of a bank, dividend payments in excess of current year or accumulated earnings and profits, or other distributions in dissolution or liquidation of the Bank. The Company is no longer subject to examination for federal and state purposes for tax years prior to 2015.

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Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Assets
Cash	$ 40,909	$ 45,222
Interest-bearing deposits	30,134	25,524
Cash and cash equivalents	71,043	70,746
Commercial paper	241,446	229,070
Certificates of deposit in other banks	52,005	66,937
Securities available for sale, at fair value	121,786	154,993
Other investments, at cost	45,378	41,931
Loans held for sale	18,175	5,873
Total loans, net of deferred loan fees	2,705,190	2,525,852
Allowance for loan losses	(21,429)	(21,060)
Net loans	2,683,761	2,504,792
Premises and equipment, net	61,051	62,537
Accrued interest receivable	10,533	9,344
Real estate owned (REO)	2,929	3,684
Deferred income taxes	26,523	32,565
Bank owned life insurance (BOLI)	90,254	88,028
Goodwill	25,638	25,638
Core deposit intangibles	2,499	4,528
Other assets	23,157	3,503
Total Assets	3,476,178	3,304,169
Liabilities
Deposits	2,327,257	2,196,253
Borrowings	680,000	635,000
Capital lease obligations	1,880	1,914
Other liabilities	58,145	61,760
Total liabilities	3,067,282	2,894,927
Stockholders’ Equity
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued or outstanding	0	0
Common stock, $0.01 par value, 60,000,000 shares authorized, 17,984,105 shares issued and outstanding at June 30, 2019; 19,041,668 at June 30, 2018	180	191
Additional paid in capital	190,315	217,480
Retained earnings	224,545	200,575
Unearned Employee Stock Ownership Plan (ESOP) shares	(6,877)	(7,406)
Accumulated other comprehensive income (loss)	733	(1,598)
Total stockholders’ equity	408,896	409,242
Total Liabilities and Stockholders’ Equity	$ 3,476,178	$ 3,304,169

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Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid In Capital	Retained Earnings	Unearned ESOP Shares	Accumulated Other Comprehensive Income (Loss)
Beginning balance at Jun. 30, 2016	$ 359,976	$ 180	$ 186,104	$ 179,813	$ (8,464)	$ 2,343
Beginning balance (in shares) at Jun. 30, 2016		17,998,750
Increase (Decrease) in Stockholders' Equity
Net income	$ 11,847			11,847
Granted restricted stock (in shares)	47,500
Forfeited restricted stock (in shares)		(6,000)
Retired stock	$ (569)		(569)
Retired stock (in shares)		(22,794)
Exercised stock options	3,068	$ 3	3,065
Exercised stock options (in shares)		185,142
Shares issued for TriSummit Bancorp, Inc. merger	20,043	$ 7	20,036
Shares issued for Jefferson Bancshares, Inc. merger (in shares)		765,277
Stock option expense	2,627		2,627
Restricted stock expense	1,539		1,539
ESOP shares allocated	1,186		657		529
Other comprehensive loss	(2,070)					(2,070)
Ending balance at Jun. 30, 2017	397,647	$ 190	213,459	191,660	(7,935)	273
Ending balance, shares (in shares) at Jun. 30, 2017		18,967,875
Increase (Decrease) in Stockholders' Equity
Net income	$ 8,235			8,235
Granted restricted stock (in shares)	55,200
Forfeited restricted stock (in shares)		(6,600)
Retired stock	$ (494)		(494)
Retired stock (in shares)		(19,007)
Exercised stock options	651	$ 1	650
Exercised stock options (in shares)		44,200
Stock option expense	1,758		1,758
Restricted stock expense	1,269		1,269
ESOP shares allocated	1,367		838		529
Other comprehensive loss	(1,871)					(1,871)
Ending balance at Jun. 30, 2018	$ 409,242	$ 191	217,480	200,575	(7,406)	(1,598)
Ending balance, shares (in shares) at Jun. 30, 2018	19,041,668	19,041,668
Increase (Decrease) in Stockholders' Equity
Cumulative-effect adjustment on the change in accounting for share-based payments	$ 680			680
Net income	27,146			27,146
Cash dividends declared on common stock, $0.18/common share	(3,176)			(3,176)
Stock repurchased	$ (30,638)	$ (11)	(30,627)
Stock repurchased (in shares)		(1,149,785)
Granted restricted stock (in shares)	23,625
Forfeited restricted stock (in shares)		(4,300)
Retired stock	$ (205)		(205)
Retired stock (in shares)		(7,414)
Exercised stock options	1,173	$ 0	1,173
Exercised stock options (in shares)		80,311
Stock option expense	736		736
Restricted stock expense	865		865
ESOP shares allocated	1,422		893		529
Other comprehensive loss	2,331					2,331
Ending balance at Jun. 30, 2019	$ 408,896	$ 180	$ 190,315	$ 224,545	$ (6,877)	$ 733
Ending balance, shares (in shares) at Jun. 30, 2019	17,984,105	17,984,105

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Loans - Financing Receivable Credit Quality Indicators (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	$ 2,688,436	$ 2,505,712
Pass
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	2,650,990	2,470,436
Special Mention
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	12,968	11,809
Substandard
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	24,058	22,484
Doubtful
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	388	952
Loss
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	32	31
Retail Consumer Loans | One-to-four family
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	654,723	657,472
Retail Consumer Loans | HELOCs - originated
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	130,870	137,340
Retail Consumer Loans | HELOCs - purchased
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	116,972	166,276
Retail Consumer Loans | Construction and land/lots
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	80,230	65,157
Retail Consumer Loans | Indirect auto finance
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	153,448	173,095
Retail Consumer Loans | Consumer
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	19,756	12,379
Retail Consumer Loans | Pass | One-to-four family
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	644,159	643,077
Retail Consumer Loans | Pass | HELOCs - originated
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	129,775	135,336
Retail Consumer Loans | Pass | HELOCs - purchased
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	116,306	166,089
Retail Consumer Loans | Pass | Construction and land/lots
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	79,995	64,823
Retail Consumer Loans | Pass | Indirect auto finance
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	152,393	172,675
Retail Consumer Loans | Pass | Consumer
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	18,601	11,723
Retail Consumer Loans | Special Mention | One-to-four family
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	2,089	3,576
Retail Consumer Loans | Special Mention | HELOCs - originated
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	111	113
Retail Consumer Loans | Special Mention | HELOCs - purchased
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Retail Consumer Loans | Special Mention | Construction and land/lots
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	71	23
Retail Consumer Loans | Special Mention | Indirect auto finance
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	13	0
Retail Consumer Loans | Special Mention | Consumer
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	656	85
Retail Consumer Loans | Substandard | One-to-four family
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	8,072	10,059
Retail Consumer Loans | Substandard | HELOCs - originated
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	976	1,735
Retail Consumer Loans | Substandard | HELOCs - purchased
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	666	187
Retail Consumer Loans | Substandard | Construction and land/lots
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	164	257
Retail Consumer Loans | Substandard | Indirect auto finance
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	1,042	420
Retail Consumer Loans | Substandard | Consumer
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	491	558
Retail Consumer Loans | Doubtful | One-to-four family
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	384	746
Retail Consumer Loans | Doubtful | HELOCs - originated
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	150
Retail Consumer Loans | Doubtful | HELOCs - purchased
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Retail Consumer Loans | Doubtful | Construction and land/lots
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	54
Retail Consumer Loans | Doubtful | Indirect auto finance
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans		0
Retail Consumer Loans | Doubtful | Consumer
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	3	2
Retail Consumer Loans | Loss | One-to-four family
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	19	14
Retail Consumer Loans | Loss | HELOCs - originated
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	8	6
Retail Consumer Loans | Loss | HELOCs - purchased
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Retail Consumer Loans | Loss | Construction and land/lots
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Retail Consumer Loans | Loss | Indirect auto finance
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Retail Consumer Loans | Loss | Consumer
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	5	11
Commercial Loans | Commercial real estate
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	919,586	848,076
Commercial Loans | Construction and development
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	209,975	189,875
Commercial Loans | Commercial and industrial
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	158,802	133,383
Commercial Loans | Equipment Finance
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	132,058	13,487
Commercial Loans | Municipal leases
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	112,016	109,172
Commercial Loans | Pass | Commercial real estate
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	901,214	835,485
Commercial Loans | Pass | Construction and development
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	207,827	187,187
Commercial Loans | Pass | Commercial and industrial
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	157,325	131,690
Commercial Loans | Pass | Equipment Finance
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	131,674	13,487
Commercial Loans | Pass | Municipal leases
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	111,721	108,864
Commercial Loans | Special Mention | Commercial real estate
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	8,066	5,804
Commercial Loans | Special Mention | Construction and development
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	790	621
Commercial Loans | Special Mention | Commercial and industrial
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	877	1,279
Commercial Loans | Special Mention | Equipment Finance
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Commercial Loans | Special Mention | Municipal leases
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	295	308
Commercial Loans | Substandard | Commercial real estate
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	10,306	6,787
Commercial Loans | Substandard | Construction and development
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	1,357	2,067
Commercial Loans | Substandard | Commercial and industrial
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	600	414
Commercial Loans | Substandard | Equipment Finance
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	384	0
Commercial Loans | Substandard | Municipal leases
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Commercial Loans | Doubtful | Commercial real estate
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Commercial Loans | Doubtful | Construction and development
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	1	0
Commercial Loans | Doubtful | Commercial and industrial
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Commercial Loans | Doubtful | Equipment Finance
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Commercial Loans | Doubtful | Municipal leases
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Commercial Loans | Loss | Commercial real estate
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Commercial Loans | Loss | Construction and development
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Commercial Loans | Loss | Commercial and industrial
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Commercial Loans | Loss | Equipment Finance
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	0	0
Commercial Loans | Loss | Municipal leases
Financing Receivable, Recorded Investment
Non-purchased and purchased performing loans	$ 0	$ 0

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Income Taxes Income Taxes - Tax Cut and Job Acts 2017 (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Income Tax Disclosure [Abstract]
Tax Cuts And Jobs Act Of 2017, deferred tax asset, provisional income tax expense (benefit)	$ 17,600
Tax Cuts and Jobs Act of 2017, existing income tax expense (benefit)	$ 325,000
Tax at federal income tax rate, Rate (as a percent)	21.00%	27.50%	34.00%

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Leases - Schedule of Future Minimum Leases Payments to be Received (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Leases [Abstract]
2020	$ 2,066
2021	4,499
2022	3,011
2023	175
2024	244
Thereafter	0
Total of future minimum payments	$ 9,995

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Debt Securities - Narrative (Details) $ in Thousands	Jun. 30, 2019 USD ($) security	Jun. 30, 2018 USD ($) security
Debt Securities, Available-for-sale [Line Items]
Securities available for sale, at fair value	$ 121,786	$ 154,993
Market value of available-for-sale securities pledged as collateral	$ 94,876	$ 135,313
Number of securities with unrealized losses | security	100	218
Collateral Pledged
Debt Securities, Available-for-sale [Line Items]
Securities available for sale, at fair value	$ 94,337	$ 136,914

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Equity Incentive Plan - Narrative (Details) - USD ($)		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity incentive plan name		2013 Omnibus Incentive Plan
Stock repurchase program, authorized amount						$ 13,297,000
Average cost per share repurchased (in dollars per share)						$ 15.71
Restricted stock and stock option expense		$ 1,601,000	$ 3,027,000	$ 4,166,000
Tax benefit from exercise of stock options and restricted stock		$ 376,000	$ 908,000	$ 1,541,000
Options outstanding (in shares)		377,600	494,800
2013 Omnibus Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity Incentive plan description		provides for awards of restricted stock, restricted stock units, stock options, stock appreciation rights, and cash awards to directors, emeritus directors, officers, employees, and advisory directors.
Shares authorized (in shares)		2,962,400
Shares authorized for stock options and stock appreciation rights (in shares)		2,116,000
Shares authorized for awards of restricted stock and restricted stock units (in shares)	846,400	846,400
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense		$ 2,133,000	$ 2,705,000
Options outstanding (in shares)		1,657,214	1,718,270	1,470,043	1,529,300
Unrecognized compensation cost, period for recognition		1 year 11 months	2 years 4 months 1 day
Share-based payment award, expiration period		10 years
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense		$ 2,547,000	$ 2,570,000
Granted (in shares)		34,000	55,200	47,500
Unrecognized compensation cost description		123,800 shares of restricted stock originally scheduled to vest over five- and seven-year vesting periods	133,410 shares of restricted stock originally scheduled to vest over five- and seven-year vesting periods
Non-option equity instruments, outstanding (in shares)		123,800	133,410
Weighted average period for recognition of unrecognized compensation expense		1 year 11 months	2 years 1 month
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options/awards, vesting period		3 years
Granted (in shares)		10,375
Minimum | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options/awards, vesting period		5 years	5 years
Minimum | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options/awards, vesting period		5 years	5 years
Maximum | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options/awards, vesting period		7 years	7 years
Maximum | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options/awards, vesting period		7 years	7 years

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Deferred Compensation Agreements - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Retirement Benefits [Abstract]
Director emeritus plans expenses	$ 410	$ 417	$ 419
Director Emeritus Plans accrued expenses included in other liabilities	8,268	8,542
Expense for Board of Director plans	28	32	34
Expense for Officer Plans	771	519	1,253
Expense included in other liabilities for officer plans	19,499	20,257
Deferred compensation plan for officers and directors expense	223	205	$ 197
Deferred compensation plan for officers and directors expense included in other liabilities	$ 4,966	$ 5,274

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Real Estate Owned Real Estate Owned (Tables)

12 Months Ended

Jun. 30, 2019

Real Estate Owned [Abstract]

Schedule of Real Estate Owned

The activity within REO for the periods shown is as follows:

	Year Ended
	June 30,
	2019			2018
Balance at beginning of period	$	3,684		$	6,318
Transfers from loans	731			1,346
Sales, net of gain/loss	(1,191		)	(3,471		)
Writedowns	(295		)	(539		)
Capital improvements	—			30
Balance at end of period	$	2,929		$	3,684

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Leases (Tables)

12 Months Ended

Jun. 30, 2019

Leases [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

The following schedule summarizes aggregate future minimum lease payments under these operating leases at June 30, 2019:

Fiscal year ending June 30:
2020	$	1,660
2021	1,395
2022	1,296
2023	1,291
2022	643
Thereafter	1,076
Total of future minimum payments	$	7,361

The following schedule summarizes aggregate future minimum lease payments to be received at June 30, 2019:

Fiscal year ending June 30:
2020	$	2,066
2021	4,499
2022	3,011
2023	175
2022	244
Thereafter	—
Total of future minimum payments	$	9,995

Schedule of Future Minimum Lease Payments for Capital Leases

Aggregate future minimum lease payments due under this capital lease obligation as of June 30, 2019 are as follows:

Fiscal year ending June 30, 2019:
2020	$	134
2021	134
2022	134
2023	134
2023	145
Thereafter	1,995
Total minimum lease payments	2,676
Less: amount representing interest	(796		)
Present value of net minimum lease payments	$	1,880

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Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Fair Value Disclosures [Abstract]
Off-balance sheet financial commitments	$ 628,572	$ 751,324

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Net Income per Share (Tables)

12 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following is a reconciliation of the numerator and denominator of basic and diluted net income per share of common stock as of the dates indicated:

	June 30,
	2019			2018			2017
Numerator:
Net income	$	27,146		$	8,235		$	11,847
Allocation of earnings to participating securities	(189		)	(60		)	(125		)
Numerator for basic EPS - Net income available to common stockholders	$	26,957		$	8,175		$	11,722
Effect of dilutive securities:
Dilutive effect to participating securities	7			2			4
Numerator for diluted EPS	$	26,964		$	8,177		$	11,726
Denominator:
Weighted-average common shares outstanding - basic	17,692,493			18,028,854			17,379,487
Effect of dilutive shares	700,691			697,577			576,956
Weighted-average common shares outstanding - diluted	18,393,184			18,726,431			17,956,443
Net income per share - basic	$	1.52		$	0.45		$	0.66
Net income per share - diluted	$	1.46		$	0.44		$	0.65

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Capital - Reconciliation of the Bank's Total Equity Capital Under US GAAP and Regulatory Capital Amounts (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2016
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total stockholders' equity under US GAAP	$ 408,896	$ 409,242	$ 397,647	$ 359,976
Tier I Capital	355,759	335,152
Total Risk-based Capital	377,639	356,603
HomeTrust Bancshares, Inc.
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total stockholders' equity under US GAAP	408,896	409,242
Accumulated other comprehensive loss (income), net of tax	(733)	1,598
Investment in nonincludable subsidiary	(780)	(826)
Disallowed deferred tax assets	(5,092)	(8,701)
Disallowed goodwill and other disallowed intangible assets	(27,562)	(29,125)
Tier I Capital	374,729	372,188
Allowable portion of allowance for loan losses and loan commitments	21,884	21,515
Total Risk-based Capital	$ 396,613	$ 393,703

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Fair Value of Financial Instruments - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	$ 121,786	$ 154,993
U.S. Government Agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	15,210	47,542
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	75,180	70,599
Municipal Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	25,312	30,766
Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	6,084	6,023
Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		63
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 1 | U.S. Government Agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 1 | Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 1 | Municipal Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 1 | Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 1 | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	121,786	154,993
Level 2 | U.S. Government Agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	15,210	47,542
Level 2 | Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	75,180	70,599
Level 2 | Municipal Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	25,312	30,766
Level 2 | Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	6,084	6,023
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 3 | U.S. Government Agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 3 | Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 3 | Municipal Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	0	0
Level 3 | Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	$ 0	0
Level 3 | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		$ 0

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Loans - Schedule of Allowance for Credit Losses on Financing Receivables Table (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	$ 21,060	$ 21,151	$ 21,292
Provision for (recovery of) loan losses	5,700	0	0
Charge-offs	(7,409)	(2,647)	(2,550)
Recoveries	2,078	2,556	2,409
Balance at end of period	21,429	21,060	21,151
Retail Consumer Loans
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	7,527	8,585	11,549
Provision for (recovery of) loan losses	(1,244)	(906)	(2,829)
Charge-offs	(1,136)	(1,142)	(1,219)
Recoveries	1,272	990	1,084
Balance at end of period	6,419	7,527	8,585
Commercial Loans
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	13,050	11,839	9,382
Provision for (recovery of) loan losses	7,226	678	2,463
Charge-offs	(6,273)	(1,033)	(1,331)
Recoveries	806	1,566	1,325
Balance at end of period	14,809	13,050	11,839
Purchased Credit Impaired (PCI) Loans
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period	483	727	361
Provision for (recovery of) loan losses	(282)	228	366
Charge-offs	0	(472)	0
Recoveries	0	0	0
Balance at end of period	$ 201	$ 483	$ 727

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Real Estate Owned - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Financing Receivable, Modifications
Real estate owned (REO)	$ 2,929	$ 3,684	$ 6,318
Consumer | Retail Consumer Loans
Financing Receivable, Modifications
Real estate owned (REO)	1,018	998
Mortgage loans in process of foreclosure	$ 243	$ 395

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Deposit Accounts - Schedule of Maturities of Certificates of Deposit (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Banking and Thrift [Abstract]
2020	$ 515,519
2021	114,927
2022	52,905
2023	17,868
2024	10,971
Thereafter	0
Total	$ 712,190

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Loans - Schedule of Changes in Accretable Yield for Purchased Impaired Loans (Details) - Purchased Credit Impaired (PCI) Loans - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Changes in Accretable Yield
Accretable yield, beginning of period	$ 5,734	$ 7,080
Reclass from nonaccretable yield	576	513
Other changes, net	1,018	393
Interest income	(2,069)	(2,252)
Accretable yield, end of period	$ 5,259	$ 5,734

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Debt Securities - Schedule of Available-for-sale Securities Reconciliation (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Debt Securities, Available-for-sale [Line Items]
Gross Unrealized Gains	$ 1,174	$ 241
Gross Unrealized Losses	(222)	(2,316)
Estimated Fair Value	121,786	154,993
Available-for-sale securities, amortized cost	120,834	157,068
Securities available for sale, at fair value	121,786	154,993
US Government Agencies Debt Securities
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	15,099	48,025
Gross Unrealized Gains	122	1
Gross Unrealized Losses	(11)	(484)
Estimated Fair Value	15,210	47,542
Residential Mortgage-backed Securities of U.S. Government Agencies and Government-Sponsored Enterprises
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	74,778	71,949
Gross Unrealized Gains	586	88
Gross Unrealized Losses	(184)	(1,438)
Estimated Fair Value	75,180	70,599
Municipal Bonds
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	24,896	30,865
Gross Unrealized Gains	423	127
Gross Unrealized Losses	(7)	(226)
Estimated Fair Value	25,312	30,766
Corporate Bonds
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	6,061	6,166
Gross Unrealized Gains	43	25
Gross Unrealized Losses	(20)	(168)
Estimated Fair Value	$ 6,084	6,023
Equity Securities
Debt Securities, Available-for-sale [Line Items]
Equity securities, amortized cost		63
Equity securities, fair value		$ 63

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Summary of Significant Accounting Policies - Narrative (Details)	12 Months Ended
	Jun. 30, 2019 USD ($) segment derivative_instrument	Sep. 30, 2019 USD ($)
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loan portfolio segments | segment	2
Nonperforming assets, period past due	90 days
Threshold period after bankruptcy notification for charge-off	60 days
Threshold period after bankruptcy notification past due	120 days
Employee stock ownership plan, requisite service for eligibility	1000 hours
Employee stock ownership plan, period for eligibility	12 months
Employee stock ownership plan, minimum age for eligibility	21 years
Employer matching contribution, percent of match	50.00%
Employer matching contribution, percent of employees' gross pay	6.00%
Employee service period	6 years
Employee stock ownership plan, contribution period for loan payable	20 years
Derivative, number of instruments held | derivative_instrument	2
Core Deposits | Minimum
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finite-lived intangible asset, useful life	5 years
Core Deposits | Maximum
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finite-lived intangible asset, useful life	10 years
Retail Consumer loans | Uncollateralized
Financing Receivable, Recorded Investment, Past Due [Line Items]
Threshold period past due for charge-off	90 days
Retail Consumer loans | Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Threshold period past due for charge-off	120 days
Commercial Paper
Financing Receivable, Recorded Investment, Past Due [Line Items]
Maturities of short-term debt of investment graded corporations (less than)	270 days
Maximum amount of instruments per issuer	$ 15,000,000.0
Accounting Standards Update 2016-02 | Scenario, Forecast
Financing Receivable, Recorded Investment, Past Due [Line Items]
Operating lease, right-of-use asset		$ 4,000,000
Operating lease, liability		$ 6,000,000

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Parent Company Financial Information (Tables)

12 Months Ended

Jun. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed Balance Sheet

Condensed balance sheet

	June 30, 2019			June 30, 2018
Assets:
Cash and equivalents	$	8,481		$	23,042
Certificates of deposit in other banks	746			994
Other securities	—			63
Total loans	1,243			3,840
Allowance for loan losses	(4		)	(64		)
Net loans	1,239			3,776
REO	621			805
Investment in bank subsidiary	389,926			372,206
ESOP loan receivable	7,412			7,896
Other assets	510			499
Total Assets	$	408,935		$	409,281
Liabilities and Stockholders’ Equity:
Other liabilities	39			39
Stockholders’ Equity	408,896			409,242
Total Liabilities and Stockholders’ Equity	$	408,935		$	409,281

Condensed Income Statement

Condensed statement of income

	June 30, 2019			June 30, 2018			June 30, 2017
Income:
Interest income	$	329		$	456		$	565
Other income	54			44			1
Equity earnings in Bank subsidiary	27,287			8,427			12,003
Total income	27,670			8,927			12,569
Expense:
Management fee expense	407			385			354
REO expense	11			34			62
Loss on sale and impairment of REO	114			158			39
Provision for (recovery of) loan losses	(259		)	(131		)	90
Other expense	251			246			177
Total expense	524			692			722
Income Before Income Taxes	27,146			8,235			11,847
Income Tax Expense	—			—			—
Net Income	$	27,146		$	8,235		$	11,847

Condensed Cash Flow Statement

Condensed statement of cash flows

	June 30, 2019			June 30, 2018			June 30, 2017
Operating Activities:
Net income	$	27,146		$	8,235		$	11,847
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for (recovery of) loan losses	(259		)	(131		)	90
Loss on sale and impairment of REO	114			158			39
Decrease (increase) in accrued interest receivable and other assets	52			291			(30		)
Equity in undistributed income of Bank	(27,287		)	(8,427		)	(12,003		)
ESOP compensation expense	1,422			1,367			1,186
Restricted stock and stock option expense	1,601			3,027			4,166
Decrease in other liabilities	—			(48		)	(260		)
Net cash provided by operating activities	2,789			4,472			5,035
Investing Activities:
Maturities of certificates of deposit in other banks	248			6,217			1,245
Repayment of loans	2,796			1,514			2,176
Increase in investment in Bank subsidiary	(1,556		)	(1,367		)	(3,408		)
Dividend from subsidiary	13,454			—			10,291
ESOP principal payments received	484			472			462
Proceeds from sale of REO	70			499			61
Acquisition of TriSummit Bancorp, Inc.	—			—			(13,862		)
Net cash provided by (used in) investing activities	15,496			7,335			(3,035		)
Financing Activities:
Common stock repurchased	(30,638		)	—			—
Cash dividends paid	(3,176		)	—			—
Retired stock	(205		)	(494		)	(569		)
Exercised stock options	1,173			651			3,068
Net cash provided by (used in) financing activities	(32,846		)	157			2,499
Net Increase (Decrease) in Cash and Cash Equivalents	(14,561		)	11,964			4,499
Cash and Cash Equivalents at Beginning of Period	23,042			11,078			6,579
Cash and Cash Equivalents at End of Period	$	8,481		$	23,042		$	11,078

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Revenue

12 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

On July 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” and all subsequent ASUs that modified ASC 606. The adoption of the new standard did not have a material impact on the measurement or recognition of revenue. Results for year ended June 30, 2019 are presented under Topic 606, while the years ended June 30, 2018 and 2017 reflects an offset of $660 and $667, respectively, of interchange costs against interchange income.

Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, and certain credit card fees are also not in scope of the new guidance. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, interchange fees, merchant income, and various other service fees. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Substantially all of the Company’s revenue is generated from contracts with customers. The Company has made no significant judgments in applying the revenue guidance prescribed in Topic 606 that affect the determination of the amount and timing of revenue streams with customers.

The table below presents the Company's sources of noninterest income, segregated by in-scope and out-of-scope revenue streams of Topic 606 for the periods indicated:

	Year Ended June 30,
	2019		2018		2017
In-scope of Topic 606:
Service charges on deposit accounts	$	3,978	$	3,674	$	3,309
Fees, interchange, and other service charges	6,377		5,576		4,747
Other	775		909		943
Noninterest income (in-scope of Topic 606)	11,130		10,159		8,999
Noninterest income (out-of-scope of Topic 606)	11,765		8,813		7,108
Total noninterest income	$	22,895	$	18,972	$	16,107

The following is a description of revenue streams accounted for under Topic 606:

Service charges on deposit accounts

Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, nonsufficient fund fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Nonsufficient fund fees, check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts.

Fees, interchange, and other service charges

Fees, interchange, and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Other service charges include revenue from processing wire transfers, cashier’s checks, and other services. The Company’s performance obligation for fees, interchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month.

Other

Other noninterest income consists of safety deposit box rental fees and other miscellaneous revenue streams. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation.

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Business Combinations (Tables)

12 Months Ended

Jun. 30, 2019

Business Combinations [Abstract]

Schedule of Business Acquisitions, by Acquisition

The following table presents the consideration paid by the Company in the acquisition of TriSummit and the assets acquired and liabilities assumed as of January 1, 2017:

	As Recorded by TriSummit		Fair Value and Other Merger Related Adjustments			As Recorded by the Company
Consideration Paid:
Cash paid including cash in lieu of fractional shares						$	16,083
Fair value of HomeTrust common stock at $25.90 per share						20,043
Total consideration						$	36,126
Assets:
Cash and cash equivalents	$	5,498	$	—		$	5,498
Certificates of deposit in other banks	250		—			250
Investment securities	58,728		(203		)	58,525
Other investments, at cost	2,614		—			2,614
Loans, net	261,926		(3,867		)	258,059
Premises and equipment, net	12,841		(2,419		)	10,422
REO	1,633		(122		)	1,511
Deferred income taxes	2,653		4,462			7,115
Bank owned life insurance	3,762		—			3,762
Core deposit intangibles	1,285		1,575			2,860
Other assets	1,453		(105		)	1,348
Total assets acquired	$	352,643	$	(679	)	$	351,964
Liabilities:
Deposits	$	279,647	$	587		280,234
Borrowings	47,453		16			47,469
Other liabilities	675		—			675
Total liabilities assumed	$	327,775	$	603		$	328,378
Net identifiable assets acquired over liabilities assumed	$	24,868	$	(1,282	)	$	23,586
Goodwill						$	12,540

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period

The carrying amount of acquired loans from TriSummit as of January1, 2017 consisted of purchased performing loans and Purchase Credit Impaired ("PCI") loans as detailed in the following table:

	Purchased Performing		PCI		Total Loans
Retail Consumer Loans:
One-to-four family	$	75,179	$	3,753	$	78,932
HELOCs	6,479		2		6,481
Construction and land/lots	15,591		—		15,591
Consumer	1,686		17		1,703
Commercial:
Commercial real estate	107,880		3,494		111,374
Construction and development	15,253		142		15,395
Commercial and industrial	28,295		288		28,583
Total	$	250,363	$	7,696	$	258,059

The following table presents the performing loans receivable purchased from TriSummit at January 1, 2017, the acquisition date:

Contractually required principal payments receivable	$	255,852
Adjustment for credit, interest rate, and liquidity	5,489
Balance of purchased loans receivable	$	250,363

The following table presents the PCI loans acquired from TriSummit at January 1, 2017, the acquisition date:

Contractually required principal and interest payments receivable	$	11,474
Amounts not expected to be collected - nonaccretable difference	2,490
Estimated payments expected to be received	8,984
Accretable yield	1,288
Fair value of PCI loans	$	7,696

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Premises and Equipment (Tables)

12 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Premises and equipment as of the dates indicated consist of the following:

	June 30,
	2019			2018
Land	$	19,730		$	19,934
Land held under capital lease	2,052			2,052
Office buildings	58,952			57,873
Furniture, fixtures and equipment	15,918			15,582
Total	96,652			95,441
Less accumulated depreciation	(35,601		)	(32,904		)
Premises and equipment, net	$	61,051		$	62,537

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Goodwill and Core Deposit Intangibles

12 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Core Deposit Intangibles

Goodwill and Core Deposit Intangibles

The carrying amount of the Company's goodwill was $25,638 as of June 30, 2019 and 2018.

Amortization expense related to core deposit intangibles was $2,029, $2,645, and $2,823 for the years ended June 30, 2019, 2018, and 2017, respectively.

As of June 30, 2019, estimated amortization expense for each of the next five years is as follows:

2020	$	1,414
2021	741
2022	251
2023	90
2024	3
Total	$	2,499

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Loans

12 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Loans

Loans

Loans consist of the following at the dates indicated:

	June 30, 2019			June 30, 2018
Retail consumer loans:
One-to-four family	$	660,591		$	664,289
HELOCs - originated	131,095			137,564
HELOCs - purchased	116,972			166,276
Construction and land/lots	80,602			65,601
Indirect auto finance	153,448			173,095
Consumer	19,756			12,379
Total retail consumer loans	1,162,464			1,219,204
Commercial loans:
Commercial real estate	927,261			857,315
Construction and development	210,916			192,102
Commercial and industrial	160,471			135,336
Equipment finance	132,058			13,487
Municipal leases	112,016			109,172
Total commercial loans	1,542,722			1,307,412
Total loans	2,705,186			2,526,616
Deferred loan costs (fees), net	4			(764		)
Total loans, net of deferred loan fees	2,705,190			2,525,852
Allowance for loan and lease losses	(21,429		)	(21,060		)
Net loans	$	2,683,761		$	2,504,792

All qualifying one-to-four family first mortgage loans, HELOCs, commercial real estate loans, and FHLB Stock are pledged as collateral by a blanket pledge to secure outstanding FHLB advances.

Loans are made to the Company's executive officers and directors and their associates during the ordinary course of business. The aggregate amount of loans to related parties totaled approximately $1,800 and $409 at June 30, 2019 and 2018, respectively. In relation to these loans are unfunded commitments that totaled approximately $118 and $287 at June 30, 2019 and 2018, respectively.

The Company’s total non-purchased and purchased performing loans by segment, class, and risk grade at the dates indicated follows:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2019
Retail consumer loans:
One-to-four family	$	644,159	$	2,089	$	8,072	$	384	$	19	$	654,723
HELOCs - originated	129,775		111		976		—		8		130,870
HELOCs - purchased	116,306		—		666		—		—		116,972
Construction and land/lots	79,995		71		164		—		—		80,230
Indirect auto finance	152,393		13		1,042				—		153,448
Consumer	18,601		656		491		3		5		19,756
Commercial loans:
Commercial real estate	901,214		8,066		10,306		—		—		919,586
Construction and development	207,827		790		1,357		1		—		209,975
Commercial and industrial	157,325		877		600		—		—		158,802
Equipment finance	131,674		—		384		—		—		132,058
Municipal leases	111,721		295		—		—		—		112,016
Total loans	$	2,650,990	$	12,968	$	24,058	$	388	$	32	$	2,688,436

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2018
Retail consumer loans:
One-to-four family	$	643,077	$	3,576	$	10,059	$	746	$	14	$	657,472
HELOCs - originated	135,336		113		1,735		150		6		137,340
HELOCs - purchased	166,089		—		187		—		—		166,276
Construction and land/lots	64,823		23		257		54		—		65,157
Indirect auto finance	172,675		—		420		—		—		173,095
Consumer	11,723		85		558		2		11		12,379
Commercial loans:
Commercial real estate	835,485		5,804		6,787		—		—		848,076
Construction and development	187,187		621		2,067		—		—		189,875
Commercial and industrial	131,690		1,279		414		—		—		133,383
Equipment finance	13,487		—		—		—		—		13,487
Municipal leases	108,864		308		—		—		—		109,172
Total loans	$	2,470,436	$	11,809	$	22,484	$	952	$	31	$	2,505,712

The Company’s total PCI loans by segment, class, and risk grade at the dates indicated follows:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2019
Retail consumer loans:
One-to-four family	$	4,124	$	248	$	1,496	$	—	$	—	$	5,868
HELOCs - originated	225		—		—		—		—		225
Construction and land/lots	142		—		230		—		—		372
Commercial loans:
Commercial real estate	4,503		1,903		1,300		—		—		7,706
Construction and development	453		—		488		—		—		941
Commercial and industrial	1,666		—		—		—		3		1,669
Total loans	$	11,113	$	2,151	$	3,514	$	—	$	3	$	16,781

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2018
Retail consumer loans:
One-to-four family	$	4,620	$	388	$	1,809	$	—	$	—	$	6,817
HELOCs - originated	224		—		—		—		—		224
Construction and land/lots	444		—		—		—		—		444
Commercial loans:
Commercial real estate	4,718		2,162		2,359		—		—		9,239
Construction and development	547		—		1,680		—		—		2,227
Commercial and industrial	1,894		—		59		—		—		1,953
Total loans	$	12,447	$	2,550	$	5,907	$	—	$	—	$	20,904

The Company’s total loans by segment, class, and delinquency status at the dates indicated follows:

	Past Due								Total
	30-89 Days		90 Days+		Total		Current		Loans
June 30, 2019
Retail consumer loans:
One-to-four family	$	1,615	$	1,389	$	3,004	$	657,587	$	660,591
HELOCs - originated	226		208		434		130,661		131,095
HELOCs - purchased	—		485		485		116,487		116,972
Construction and land/lots	138		6		144		80,458		80,602
Indirect auto finance	459		237		696		152,752		153,448
Consumer	6		31		37		19,719		19,756
Commercial loans:
Commercial real estate	2,279		516		2,795		924,466		927,261
Construction and development	—		1,133		1,133		209,783		210,916
Commercial and industrial	207		99		306		160,165		160,471
Equipment finance	649		384		1,033		131,025		132,058
Municipal leases	—		—		—		112,016		112,016
Total loans	$	5,579	$	4,488	$	10,067	$	2,695,119	$	2,705,186

	Past Due								Total
	30-89 Days		90 Days+		Total		Current		Loans
June 30, 2018
Retail consumer loans:
One-to-four family	$	3,001	$	1,756	$	4,757	$	659,532	$	664,289
HELOCs - originated	98		268		366		137,198		137,564
HELOCs - purchased	—		—		—		166,276		166,276
Construction and land/lots	44		54		98		65,503		65,601
Indirect auto finance	335		127		462		172,633		173,095
Consumer	238		39		277		12,102		12,379
Commercial loans:
Commercial real estate	169		1,412		1,581		855,734		857,315
Construction and development	260		1,928		2,188		189,914		192,102
Commercial and industrial	15		69		84		135,252		135,336
Equipment finance	—		—		—		13,487		13,487
Municipal leases	—		—		—		109,172		109,172
Total loans	$	4,160	$	5,653	$	9,813	$	2,516,803	$	2,526,616

The Company’s recorded investment in loans, by segment and class that are not accruing interest or are 90 days or more past due and still accruing interest at the dates indicated follow:

	June 30, 2019				June 30, 2018
	Nonaccruing		90 Days + & still accruing		Nonaccruing		90 Days + & still accruing
Retail consumer loans:
One-to-four family	$	3,223	$	—	$	4,308	$	—
HELOCs - originated	348		—		656		—
HELOCs - purchased	666		—		187		—
Construction and land/lots	6		—		165		—
Indirect auto finance	463		—		255		—
Consumer	45		—		321		—
Commercial loans:
Commercial real estate	3,559		—		2,863		—
Construction and development	1,357		—		2,045		—
Commercial and industrial	307		—		114		—
Equipment finance	384		—		—		—
Municipal leases	—		—		—		—
Total loans	$	10,358	$	—	$	10,914	$	—

PCI loans totaling $1,344at June 30, 2019 and $3,353 at June 30, 2018 are excluded from nonaccruing loans due to the accretion of discounts established in accordance with the acquisition method of accounting for business combinations.

TDRs are loans which have renegotiated loan terms to assist borrowers who are unable to meet the original terms of their loans. Such modifications to loan terms may include a lower interest rate, a reduction in principal, or a longer term to maturity. Additionally, all TDRs are considered impaired.

The Company’s loans that were performing under the payment terms of TDRs that were excluded from nonaccruing loans above at the dates indicated follows:

	June 30, 2019		June 30, 2018
Performing TDRs	$	23,116	$	21,251

An analysis of the allowance for loan losses by segment for the periods shown is as follows:

	June 30, 2019
	PCI			Retail Consumer			Commercial			Total
Balance at beginning of period	$	483		$	7,527		$	13,050		$	21,060
Provision for (recovery of) loan losses	(282		)	(1,244		)	7,226			5,700
Charge-offs	—			(1,136		)	(6,273		)	(7,409		)
Recoveries	—			1,272			806			2,078
Balance at end of period	$	201		$	6,419		$	14,809		$	21,429

	June 30, 2018
	PCI			Retail Consumer			Commercial			Total
Balance at beginning of period	$	727		$	8,585		$	11,839		$	21,151
Provision for (recovery of) loan losses	228			(906		)	678			—
Charge-offs	(472		)	(1,142		)	(1,033		)	(2,647		)
Recoveries	—			990			1,566			2,556
Balance at end of period	$	483		$	7,527		$	13,050		$	21,060

	June 30, 2017
	PCI		Retail Consumer			Commercial			Total
Balance at beginning of period	$	361	$	11,549		$	9,382		$	21,292
Provision for (recovery of) loan losses	366		(2,829		)	2,463			—
Charge-offs	—		(1,219		)	(1,331		)	(2,550		)
Recoveries	—		1,084			1,325			2,409
Balance at end of period	$	727	$	8,585		$	11,839		$	21,151

The Company’s ending balances of loans and the related allowance, by segment and class, at the dates indicated follows:

	Allowance for Loan Losses								Total Loans Receivable
	PCI		Loans individually evaluated for impairment		Loans Collectively Evaluated		Total		PCI		Loans individually evaluated for impairment		Loans Collectively Evaluated		Total
June 30, 2019
Retail consumer loans:
One-to-four family	$	62	$	74	$	2,375	$	2,511	$	5,868	$	5,318	$	649,405	$	660,591
HELOCs - originated	—		7		1,023		1,030		225		7		130,863		131,095
HELOCs - purchased	—		—		518		518		—		—		116,972		116,972
Construction and land/lots	—		—		1,265		1,265		372		323		79,907		80,602
Indirect auto finance	—		—		927		927		—		—		153,448		153,448
Consumer	—		4		226		230		—		4		19,752		19,756
Commercial loans:
Commercial real estate	118		28		7,890		8,036		7,706		8,692		910,863		927,261
Construction and development	4		5		3,187		3,196		941		1,397		208,578		210,916
Commercial and industrial	17		2		1,957		1,976		1,669		2		158,800		160,471
Equipment finance	—		—		1,305		1,305		—		—		132,058		132,058
Municipal leases	—		—		435		435		—		—		112,016		112,016
Total	$	201	$	120	$	21,108	$	21,429	$	16,781	$	15,743	$	2,672,662	$	2,705,186
June 30, 2018
Retail consumer loans:
One-to-four family	$	98	$	125	$	3,137	$	3,360	$	6,817	$	7,104	$	650,368	$	664,289
HELOCs - originated	—		6		1,117		1,123		224		452		136,888		137,564
HELOCs - purchased	—		—		795		795		—		—		166,276		166,276
Construction and land/lots	—		19		1,134		1,153		444		583		64,574		65,601
Indirect auto finance	—		—		1,126		1,126		—		—		173,095		173,095
Consumer	—		11		57		68		—		11		12,368		12,379
Commercial loans:
Commercial real estate	138		28		8,029		8,195		9,239		3,511		844,565		857,315
Construction and development	229		8		3,109		3,346		2,227		2,223		187,652		192,102
Commercial and industrial	18		—		1,458		1,476		1,953		—		133,383		135,336
Equipment finance	—		—		—		—		—		—		13,487		13,487
Municipal leases	—		—		418		418		—		—		109,172		109,172
Total	$	483	$	197	$	20,380	$	21,060	$	20,904	$	13,884	$	2,491,828	$	2,526,616

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

The Company’s impaired loans and the related allowance, by segment and class, excluding PCI loans, at the dates indicated follows:

	Total Impaired Loans
	Unpaid Principal Balance		Recorded Investment						Related Recorded Allowance
			With a Recorded Allowance		With No Recorded Allowance		Total
June 30, 2019
Retail consumer loans:
One-to-four family	$	18,302	$	12,461	$	3,152	$	15,613	$	472
HELOCs - originated	1,262		564		130		694		9
HELOCs - purchased	666		—		666		666		—
Construction and land/lots	1,917		957		323		1,280		26
Indirect auto finance	601		353		137		490		2
Consumer	1,527		7		1,130		1,137		43
Commercial loans:
Commercial real estate	10,127		6,434		3,404		9,838		36
Construction and development	2,574		940		791		1,731		7
Commercial and industrial	10,173		354		768		1,122		6
Equipment finance	462		—		384		384		—
Total impaired loans	$	47,611	$	22,070	$	10,885	$	32,955	$	601
June 30, 2018
Retail consumer loans:
One-to-four family	$	23,295	$	16,035	$	4,140	$	20,175	$	554
HELOCs - originated	2,544		1,017		737		1,754		9
HELOCs - purchased	187		—		187		187		—
Construction and land/lots	2,348		1,098		446		1,544		53
Indirect auto finance	395		122		133		255		1
Consumer	501		12		46		58		11
Commercial loans:
Commercial real estate	5,343		2,862		2,246		5,108		42
Construction and development	3,166		828		1,217		2,045		14
Commercial and industrial	4,898		235		—		235		3
Total impaired loans	$	42,677	$	22,209	$	9,152	$	31,361	$	687

The table above includes $17,212 and $17,477 of impaired loans that were not individually evaluated at June 30, 2019 and June 30, 2018, respectively, because these loans did not meet the Company’s threshold for individual impairment evaluation. The recorded allowance above includes $481 and $490 related to these loans that were not individually evaluated at June 30, 2019 and June 30, 2018, respectively.

The Company’s average recorded investment and interest income recognized on impaired loans as of the dates indicated follows:

	Year Ended
	June 30, 2019				June 30, 2018				June 30, 2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Retail consumer loans:
One-to-four family	$	17,319	$	950	$	23,257	$	1,170	$	25,256	$	1,147
HELOCs - originated	1,005		63		2,304		104		2,548		152
HELOCs - purchased	320		13		189		15		48		12
Construction and land/lots	1,441		94		1,575		109		1,734		139
Indirect auto finance	373		29		256		23		106		2
Consumer	1,328		67		43		17		35		20
Commercial loans:
Commercial real estate	5,026		466		6,496		209		7,771		272
Construction and development	1,779		65		2,703		56		2,450		58
Commercial and industrial	315		249		1,205		60		2,737		125
Equipment finance	192		37		—		—		—		—
Municipal leases	—		—		75		—		406		18
Total loans	$	29,098	$	2,033	$	38,103	$	1,763	$	43,091	$	1,945

A summary of changes in the accretable yield for PCI loans for the periods indicated follows:

	Year Ended June 30, 2019			Year Ended June 30, 2018
Accretable yield, beginning of period	$	5,734		$	7,080
Reclass from nonaccretable yield (1)	576			513
Other changes, net (2)	1,018			393
Interest income	(2,069		)	(2,252		)
Accretable yield, end of period	$	5,259		$	5,734

______________________________

(1) Represents changes attributable to expected losses assumptions.

(2) Represents changes in cash flows expected to be collected due to the impact of modifications, changes in prepayment assumptions, and changes in interest rates.

The following table presents carrying values and unpaid principal balances for PCI loans at the dates indicated below:

	June 30, 2019		June 30, 2018
Carrying value of PCI loans	$	16,750	$	20,904
Unpaid principal balance of PCI loans	$	20,141	$	25,746

The following table presents a breakdown of the types of concessions made on TDRs by loan class for the periods indicated below:

	Year Ended June 30, 2019					Year Ended June 30, 2018					Year Ended June 30, 2017
	Number of Loans	Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment		Number of Loans	Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment		Number of Loans	Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment
Below market interest rate:
Retail consumer:
One-to-four family	1	$	85	$	84	—	$	—	$	—	3	$	288	$	285
Construction and land/lots	—	—		—		—	—		—		2	80		79
Commercial:
Total	1	$	85	$	84	—	$	—	$	—	5	$	368	$	364
Extended payment terms:
Retail consumer:
One-to-four family	1	$	34	$	34	4	$	514	$	502	5	$	186	$	179
HELOCs - originated	—	—		—		—	—		—		1	37		37
Construction and land/lots	—	—		—		1	36		32		1	280		264
Consumer	2	34		33		—	—		—		2	11		11
Commercial:
Construction and development	—	—		—		—	—		—		1	439		439
Commercial and industrial	—	—		—		—	—		$	—	2	52		$	50
Total	3	$	68	$	67	5	$	550	$	534	12	$	1,005	$	980
Other TDRs:
Retail consumer:
One-to-four family	18	$	1,452	$	1,433	25	$	3,646	$	3,747	13	$	525	$	517
HELOCs - originated	—	—		—		—	—		—		2	33		31
Construction and land/lots	1	29		28		—	—		—		4	404		318
Indirect auto finance	1	33		26		—	—		—		—	—		—
Consumer	1	2		2		1	2		2		—	—		—
Commercial:
Commercial real estate	3	5,440		5,427		—	—		—		3	2,349		2,035
Construction and development	1	182		182		—	—		—		—	—		—
Commercial and industrial	—	—		—		—	—		—		2	231		227
Total	25	$	7,138	$	7,098	26	$	3,648	$	3,749	24	$	3,542	$	3,128
Total	29	$	7,291	$	7,249	31	$	4,198	$	4,283	41	$	4,915	$	4,472

The following table presents loans that were modified as TDRs within the previous 12 months and for which there was a payment default during the periods indicated below:

	Year Ended June 30, 2019			Year Ended June 30, 2018			Year Ended June 30, 2017
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Other TDRs:
Retail consumer:
One-to-four family	1	$	72	5	$	277	2	$	27
Construction and land/lots	—	—		—	—		1	19
Consumer	1	2		—	—		—	—
Total Other TDRs	2	$	74	5	$	277	3	$	46
Total	2	$	74	5	$	277	3	$	46

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

In the determination of the allowance for loan losses, management considers TDRs for all loan classes, and the subsequent nonperformance in accordance with their modified terms, by measuring impairment on a loan-by-loan basis based on either the value of the loan’s expected future cash flows discounted at the loan’s original effective interest rate or on the collateral value, net of the estimated costs of disposal, if the loan is collateral dependent.