HomeTrust Bancshares (HTB) risk factors, FY2024 10-K

Risks Related to Macroeconomic Conditions

1. 01Adverse economic conditions in the market areas we serve could adversely impact our earnings and could increase the credit risk associated with our loan portfolio
2. 02A continued weak economic recovery or recessionary conditions could increase our level of nonperforming assets, lower real estate values and reduce demand for loans, which would result in increased loan losses and lower earnings
3. 03Inflationary pressures and rising prices may adversely affect our results of operations and financial condition
4. 04Severe weather and other natural disasters, acts of war or terrorism, new public health issues or other adverse external events could harm our business

Risks Related to Lending Activities

1. 05Our business may be adversely affected by credit risk associated with residential property
2. 06High loan-to-value ratios on a portion of our residential mortgage loan portfolio expose us to greater risk of loss
3. 07Our non-owner occupied real estate loans may expose us to increased credit risk
4. 08Our construction and land development loans have a higher risk of loss than residential or commercial real estate loans
5. 09Our 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
6. 10The level of our commercial real estate loan portfolio may subject us to additional regulatory scrutiny
7. 11Our equipment finance and auto finance lending increases our exposure to lending risks
8. 12Repayment of our municipal leases is dependent on fire departments receiving tax revenues from counties/municipalities
9. 13Our allowance for credit losses may prove to be insufficient to absorb losses in our loan portfolio
10. 14If our nonperforming assets increase, our earnings will be adversely affected
11. 15If our repossessed assets are 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

Risks Related to Market Interest Rates

1. 16Fluctuating interest rates can adversely affect our profitability
2. 17We may incur losses on our securities portfolio due to factors beyond our control, including changes in interest rates
3. 18Changes in the programs offered by GSEs, our ability to qualify for such programs, and changes in interest rates may affect our gains on sale of loans held for sale, which could negatively impact our noninterest income

Risks Related to Acquisition Activities

1. 19Our strategy of pursuing acquisitions exposes us to financial, execution and operational risks that could adversely affect us
2. 20The required accounting treatment of loans we acquire through acquisitions, including purchased financial assets with credit deterioration, could result in higher net interest margins and interest income initially and lower net interest margins and interest income in future periods
3. 21We may experience future goodwill impairment, which could reduce our earnings

Risks Related to Regulation

1. 22We operate in a highly regulated environment and may be adversely affected by changes in federal and state laws and regulations
2. 23Non-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 or other activities
3. 24Our framework for managing risks may not be effective in mitigating risk and loss to us

Risks Related to Cybersecurity, Data and Fraud

1. 25We are subject to certain risks in connection with our use of technology
2. 26Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes

Risks Related to Our Business and Industry Generally

1. 27Ineffective liquidity management could adversely affect our financial results and condition
2. 28Competition with other financial institutions could adversely affect our profitability
3. 29Our ability to retain and recruit key management personnel and bankers is critical to the success of our business strategy and any failure to do so could impair our customer relationships and adversely affect our business and results of operations
4. 30The 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
5. 31We rely on other companies to provide key components of our business infrastructure
6. 32As a community bank, maintaining our reputation in our market areas is critical to the success of our business, and the failure to do so may materially adversely affect our performance
7. 33Our 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
8. 34We rely on dividends from the Bank for substantially all of our revenue at the holding company level
9. 35Scrutiny and evolving expectations from customers, regulators, investors and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks