HomeTrust Bancshares, Inc. (HTB) stock intrinsic value fair value estimate & owner earnings analysis

HomeTrust Bancshares is the holding company for HomeTrust Bank, founded in 1926 and headquartered in Asheville, North Carolina. It has more than 30 locations across Georgia, North Carolina, South Carolina, Tennessee and Virginia. It gathers deposits and lends them out as commercial real estate, construction, commercial, equipment finance, municipal lease, home equity and residential loans. It also originates SBA, residential and home equity loans to sell to third parties. The bank grew through acquisitions in Tennessee, South Carolina, Virginia and North Carolina, and most recently bought Quantum Capital (two offices in Atlanta, Georgia) in February 2023. How we measured earnings. We start from cash generated by operations and remove the swings from loans originated for sale (the bank builds and sells loan inventory, which moves operating cash by tens of millions of dollars a year), then subtract stock-based and employee-ownership-plan compensation and the cost of premises and leased equipment. On this basis earnings per diluted share were about $1.01 in the year to June 2021, $2.31 in the year to June 2022, $3.08 in the year to June 2023, $3.21 in calendar 2024 and $4.54 in calendar 2025. The company changed its year-end from June to December in 2023. We used the four years from mid-2022 to the end of 2025, after the acquisition and the growth of the equipment finance and SBA lines, and took the middle of that range: about $3.14 per share. Earlier years describe a smaller, differently run bank, and fiscal 2020 also carried a one-time $22.7 million charge for prepaying borrowings. We deliberately did not use the 2025 figure of $4.54 as the level. It was 41 percent above 2024, but part of the jump is because the bank spent only $2.6 million on new lease equipment against $13.7 million the year before, while depreciation on that equipment continues. That is a lower reinvestment cost we cannot count on repeating. Net income was $32.4 million in the first half of 2026 against $31.7 million a year earlier, so nothing in the recent quarters argues for moving the level. Base case, about $52 per share. Earnings hold at about $3.14 per share indefinitely and are discounted at 6 percent. We give no growth. A bank can only grow its loan book by keeping back some of its earnings to support it, and our earnings measure does not deduct that retention, so crediting growth on top would count the same dollars twice. The trailing year grew 41 percent, and year one of this case assumes zero, below that. The lasting franchise is a deposit base and customer relationships built over a century, which is why the case does not fade. Bear case, about $38 per share. Problem loans rose in 2025: nonperforming assets went from $28.8 million to $44.4 million (0.63 percent to 0.98 percent of total assets), and reserves covered 95 percent of nonaccruing loans against 164 percent a year earlier. The increase is concentrated in SBA loans ($20.6 million of nonaccruals, most of it not guaranteed by the government) and in equipment finance loans concentrated in transportation ($6.6 million). We assume a credit downturn cuts earnings to about $1.30 per share in the first year and $1.70 in the second, then settles at about $2.40, some 24 percent below our normal level, because the higher-risk SBA and equipment lines earn less after losses. Bull case, about $61 per share. Earnings grow 2 percent a year for ten years and then hold. This rests on the bank's record of shrinking its share count when capital allows (diluted shares fell from 18.7 million in fiscal 2018 to 15.8 million in fiscal 2023) and on equity of 13.2 percent of assets at the end of 2025, which leaves room to keep repurchasing shares. We include no market-wide recovery and no share gains. What we left out. We give no credit for new branches, loan-office openings or further acquisitions, since none is contracted. Management guidance and analyst forecasts were not used. What could make this wrong. Loans total about $3.6 billion against an allowance of $41.5 million (1.16 percent), so a downturn that raises annual losses well above the recent 0.24 percent of average loans would cut earnings faster than the bear case assumes. Earnings could also prove higher than our normal level if the 2025 result reflects a lasting shift. The cash flow figures were reconciled to net income and non-cash items within our tolerance, though the loans-held-for-sale adjustment is large each year and we treated it as working capital.