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Merger with Quantum | 9 Months Ended
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Mar. 31, 2023
Business Combination and Asset Acquisition [Abstract] |
Merger with Quantum | Merger with Quantum On February 12, 2023, the Company merged with Quantum which operated two locations in the Atlanta metro area. The aggregate amount of consideration to be paid per the purchase agreement of approximately $70.8 million, inclusive of consideration of common stock, other cash consideration, and cash in lieu of fractional shares, included $15.9 million of cash consideration already paid by Quantum to its stockholders in advance of the closing date as is further described below. These distributions reduced Quantum's stockholders' equity by an equal amount prior to the transaction closing date. The following table provides a summary of the assets acquired, liabilities assumed, associated preliminary fair value adjustments, and provisional period adjustments by the Company as of the merger date. As provided for under US GAAP, management has up to 12 months following the date of merger to finalize the fair value adjustments.
| Quantum |  | Fair Value Adjustments |  | Provisional Period Adjustments |  | As Recorded by HomeTrust
Assets acquired |  |  |  |  |  |  |
Cash and cash equivalents | $ | 47,769 |  |  | $ | — |  |  | $ | — |  |  | $ | 47,769 |
Debt securities available for sale | 10,608 |  |  | — |  |  | — |  |  | 10,608 |
FHLB and FRB stock | 1,125 |  |  | — |  |  | — |  |  | 1,125 |
Loans(1) | 567,140 |  |  | (5,207) |  |  | — |  |  | 561,933 |
Premises and equipment | 4,415 |  |  | 4,668 |  |  | — |  |  | 9,083 |
Accrued interest receivable | 1,706 |  |  | — |  |  | — |  |  | 1,706 |
BOLI | 9,066 |  |  | — |  |  | — |  |  | 9,066 |
Core deposit intangibles | — |  |  | 12,210 |  |  | — |  |  | 12,210 |
Other assets | 2,727 |  |  | 569 |  |  | — |  |  | 3,296 |
Total assets acquired | $ | 644,556 |  |  | $ | 12,240 |  |  | $ | — |  |  | $ | 656,796 |
Liabilities assumed |  |  |  |  |  |  |
Deposits | $ | 570,419 |  |  | $ | 183 |  |  | $ | — |  |  | $ | 570,602 |
Junior subordinated debt | 11,341 |  |  | (1,408) |  |  | — |  |  | 9,933 |
Other borrowings | 24,728 |  |  | — |  |  | — |  |  | 24,728 |
Deferred income taxes | — |  |  | 1,341 |  |  | — |  |  | 1,341 |
Other liabilities | 3,334 |  |  | — |  |  | — |  |  | 3,334 |
Total liabilities assumed | $ | 609,822 |  |  | $ | 116 |  |  | $ | — |  |  | $ | 609,938 |
Net assets acquired |  |  |  |  |  |  | $ | 46,858 |
(1)Adjustments to Quantum's total loans include the elimination of Quantum's existing allowance for loan losses of $6.0 million, the recognition of an ACL at close on PCD loans of $0.4 million, and adjustments to reflect the estimated credit fair value mark on the non-PCD loan portfolio of $3.0 million and the estimated interest rate fair value adjustment on the loan portfolio as a whole (non-PCD and PCD) of $7.9 million.
| Quantum |  | Fair Value Adjustments |  | Provisional Period Adjustments |  | As Recorded by HomeTrust
Consideration paid |  |  |  |  |  |  |
Common stock consideration |  |  |  |  |  |  |
Shares of Quantum |  |  |  |  |  |  | 574,157 |
Exchange ratio |  |  |  |  |  |  | 2.3942 |
HomeTrust common stock issued |  |  |  |  |  |  | 1,374,647 |
Price per share of HomeTrust common stock on February 10, 2023 |  |  |  |  |  |  | $ | 27.45 |
HomeTrust common stock consideration |  |  |  |  |  |  | $ | 37,734 |
Cash consideration(2) |  |  |  |  |  |  | 17,168 |
Total consideration |  |  |  |  |  |  | $ | 54,902 |
Goodwill |  |  |  |  |  |  | $ | 8,044 |
(2)As indicated in the Current Report on Form 8-K/A filed with the SEC on March 30, 2023, the amount of cash consideration paid at closing differs from the $57.54 per share, or $33.0 million, reported in the Current Report on Form 8-K filed on February 13, 2023, which announced the closing of the merger. Consistent with the merger agreement, between the execution of the merger agreement and the transaction closing date, Quantum's principal stockholders had the option to withdraw some or all of the amount of cash consideration to eventually be paid at closing in advance of the closing date. The amount of cash consideration paid at closing was reduced by the amount withdrawn during this time period. Goodwill of $8,044 arising from the merger consisted largely of synergies and the cost saves resulting from the combining of operations of the companies, and is not expected to be deductible for income tax purposes. The following table provides a summary of PCD loans purchased as part of the Quantum merger as of the merger date:
| Commercial Real Estate |  | Commercial |  | Residential Real Estate |  | Consumer |  | Total |  |  |  |  |  |  |  |
Unpaid principal balance | $ | 4,472 |  |  | $ | 9,631 |  |  | $ | 393 |  |  | $ | — |  |  | $ | 14,496 |  |  |  |  |  |  |  |  |
ACL | (292) |  |  | (72) |  |  | (5) |  |  | — |  |  | (369) |  |  |  |  |  |  |  |  |
Non-credit premium (discount) | (1,448) |  |  | (190) |  |  | 4 |  |  | — |  |  | (1,634) |  |  |  |  |  |  |  |  |
Fair value of PCD loans at merger date | $ | 2,732 |  |  | $ | 9,369 |  |  | $ | 392 |  |  | $ | — |  |  | $ | 12,493 |  |  |  |  |  |  |  |  |
The following unaudited pro forma combined condensed consolidated financial information presents the results of operations of the Company, including the effects of purchase accounting adjustments and acquisition expenses, had the merger taken place at July 1, 2021. The schedule excludes merger-related credit loss and merger-related expenses.
| (Unaudited)
| Three Months Ended |  | Nine Months Ended
| March 31, |  | March 31,
| 2023 |  | 2022 |  | 2023 |  | 2022
Interest and dividend income | $ | 56,512 |  |  | $ | 36,480 |  |  | $ | 154,621 |  |  | $ | 112,282 |
Interest expense | 10,201 |  |  | 1,514 |  |  | 17,606 |  |  | 5,021 |
Net interest income | 46,311 |  |  | 34,966 |  |  | 137,015 |  |  | 107,261 |
Provision (benefit) for credit losses | 3,490 |  |  | (45) |  |  | 9,717 |  |  | (4,490) |
Net interest income after provision (benefit) for credit losses | 42,821 |  |  | 35,011 |  |  | 127,298 |  |  | 111,751 |
Noninterest income | 8,835 |  |  | 9,399 |  |  | 26,068 |  |  | 34,055 |
Noninterest expense | 30,296 |  |  | 30,293 |  |  | 89,928 |  |  | 91,715 |
Net income before income taxes | 21,360 |  |  | 14,117 |  |  | 63,438 |  |  | 54,091 |
Income tax expense | 4,470 |  |  | 3,103 |  |  | 14,026 |  |  | 11,823 |
Net income | $ | 16,890 |  |  | $ | 11,014 |  |  | $ | 49,412 |  |  | $ | 42,268 |
Per share data |  |  |  |  |  |  |
Net income per common share |  |  |  |  |  |  |
Basic | $ | 0.96 |  |  | $ | 0.65 |  |  | $ | 2.93 |  |  | $ | 2.46 |
Diluted | $ | 0.96 |  |  | $ | 0.64 |  |  | $ | 2.91 |  |  | $ | 2.41 |
Average shares outstanding |  |  |  |  |  |  |
Basic | 17,396,640 |  |  | 16,898,459 |  |  | 16,715,868 |  |  | 17,040,739 |
Diluted | 17,451,762 |  |  | 17,167,658 |  |  | 16,823,706 |  |  | 17,372,023 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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