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Form DEF 14A HomeTrust Bancshares, For: Nov 14

October 3, 2022 8:01 AM EDT

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united states

securities and exchange commission

Washington, D.C. 20549

 

SCHEDULE 14A INFORMATION

 

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

 

(Amendment No.      )

 

Filed by the Registrant x

 

Filed by a party other than the Registrant ¨

 

Check the appropriate box:

 

¨   Preliminary Proxy Statement

 

¨   Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

x   Definitive Proxy Statement

 

¨   Definitive Additional Materials

 

¨   Soliciting Material under §240.14a-12

 

HOMETRUST BANCSHARES, INC.

(Name of Registrant as Specified In Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check all boxes that apply):

 

x  No fee required

 

¨  Fee paid previously with preliminary materials

 

¨  Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 

 

 

 

 

October 3, 2022

 

Dear Fellow Stockholder:

 

On behalf of the Board of Directors and management of HomeTrust Bancshares, Inc., we cordially invite you to attend our annual meeting of stockholders. The meeting will be held at 10:00 a.m., local time, on Monday, November 14, 2022, at the Cambria Hotel, located at 15 Page Avenue, Asheville, North Carolina 28801. As part of our precautions regarding the COVID-19 pandemic, we are planning for the possibility that the annual meeting may be held solely by means of remote communication (commonly referred to as a “virtual” meeting). If we determine to make the annual meeting virtual, we will announce the decision to do so in advance, and provide information on how to participate, in a press release, which will be filed with the Securities and Exchange Commission as additional proxy soliciting material.

 

An important aspect of the annual meeting process is the stockholder vote on corporate business items. I urge you to exercise your rights as a stockholder to vote and participate in this process. Stockholders are being asked to consider and vote upon: (1) the election of three directors of the Company; (2) an advisory (non-binding) vote on executive compensation (commonly referred to as a “say on pay vote”); (3) the approval of the HomeTrust Bancshares, Inc. 2022 Omnibus Incentive Plan; and (4) the ratification of the appointment of FORVIS, LLP as the Company’s independent auditors for the fiscal year ending June 30, 2023.

 

This year we are again using a Securities and Exchange Commission rule to furnish our proxy statement, Annual Report on Form 10-K and proxy card over the internet to stockholders.  This means that stockholders will not receive paper copies of these documents.  Instead, stockholders will receive only a notice containing instructions on how to access the proxy materials over the internet.  This rule allows us to lower the costs of delivering the annual meeting materials and reduce the environmental impact of the meeting.  If you would like to receive printed copies of the materials, the notice contains instructions on how you can request printed copies.

 

Regardless of whether you plan to attend the annual meeting in person, please read the accompanying proxy statement and then vote by internet, telephone or mail as promptly as possible. Voting promptly will save us additional expense in soliciting proxies and will ensure that your shares are represented at the meeting.

 

Your Board of Directors and management are committed to the continued growth and success of HomeTrust Bancshares, Inc. and the enhancement of your investment. As Chairman of the Board, I greatly appreciate your confidence and support.

 

  Very truly yours,


/s/ Dana L. Stonestreet
Dana L. Stonestreet
Chairman of the Board

 

 

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD NOVEMBER 14, 2022

 

NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of HomeTrust Bancshares, Inc. will be held as follows:

 

TIME AND DATE

 

10:00 a.m. local time

Monday, November 14, 2022

 

PLACE**

 

Cambria Hotel

15 Page Avenue

Asheville, North Carolina 28801

 

ITEMS OF BUSINESS

 

(1)

 

The election of three directors.

  (2) An advisory (non-binding) vote on executive compensation (commonly referred to as a “say on pay vote”).
  (3) The approval of the HomeTrust Bancshares, Inc. 2022 Omnibus Incentive Plan.
  (4) The ratification of the appointment of FORVIS, LLP as HomeTrust Bancshares, Inc.’s independent auditors for the fiscal year ending June 30, 2023.

 

RECORD DATE

 

Holders of record of HomeTrust Bancshares, Inc. common stock at the close of business on September 16, 2022 are entitled to vote at the annual meeting or any adjournment or postponement thereof.

 

PROXY VOTING

 

It is very important that your shares be represented and voted at the annual meeting. Regardless of whether you plan to attend the annual meeting in person, please read the accompanying proxy statement and then vote by internet, telephone or mail as promptly as possible.


 

** As part of our precautions regarding the coronavirus (COVID-19) pandemic, we are planning for the possibility that the annual meeting may be held solely by means of remote communication (commonly referred to as a “virtual” meeting).  If we determine to make the annual meeting virtual, we will announce the decision to do so in advance, and provide information on how to participate, in a press release, which will be filed with the Securities and Exchange Commission as additional proxy soliciting material.

 

  BY ORDER OF THE BOARD OF DIRECTORS


/s/ Dana L. Stonestreet
Dana L. Stonestreet
Chairman of the Board

 

Asheville, North Carolina

October 3, 2022

 

 

 

 

HOMETRUST BANCSHARES, INC.

10 Woodfin Street

Asheville, North Carolina 28801

(828) 259-3939

 

 

 

PROXY STATEMENT

 

 

 

INTRODUCTION

 

The HomeTrust Bancshares, Inc. Board of Directors is using this proxy statement to solicit proxies from the holders of the Company’s common stock for use at the Company’s upcoming annual meeting of stockholders. The annual meeting of stockholders will be held at 10:00 a.m., local time, on Monday, November 14, 2022 at the Cambria Hotel, located at 15 Page Avenue, Asheville, North Carolina 28801. As part of our precautions regarding the COVID-19 pandemic, we are planning for the possibility that the annual meeting may be held solely by means of remote communication (commonly referred to as a “virtual” meeting). If we determine to make the annual meeting virtual, we will announce the decision to do so in advance, and provide information on how to participate, in a press release, which will be filed with the Securities and Exchange Commission (the “SEC”) as additional proxy soliciting material.

 

At the meeting, stockholders will be asked to vote on four proposals. The proposals are set forth in the accompanying Notice of Annual Meeting of Stockholders and are described in more detail below. Stockholders also will consider any other matters that may properly come before the meeting or any adjournment or postponement of the meeting, although the Board of Directors knows of no other business to be presented. HomeTrust Bancshares, Inc. is referred to in this proxy statement from time to time as the “Company,” “HomeTrust Bancshares,” “we,” “us” or “our.” Certain of the information in this proxy statement relates to HomeTrust Bank (sometimes referred to as the “Bank”), a wholly owned subsidiary of the Company.

 

We have decided to again use the “Notice and Access” rule adopted by the SEC to provide access to our proxy materials over the internet instead of mailing printed copies of the proxy materials to each stockholder. As a result, on or about October 3, 2022, we mailed to all stockholders a “Notice of Internet Availability of Proxy Materials” that tells them how to access and review the information contained in the proxy materials and how to vote their proxies over the internet.  You will not receive printed copies of the proxy materials in the mail unless you request them by following the instructions included in the Notice of Internet Availability of Proxy Materials.

 

By submitting your proxy, either by executing and returning the accompanying proxy card or by voting electronically via the internet or by telephone, you are authorizing the Company’s Board of Directors to represent you and vote your shares at the meeting in accordance with your instructions. The Board of Directors also may vote your shares to adjourn the meeting from time to time and will be authorized to vote your shares at any adjournments or postponements of the meeting.

 

This proxy statement and the accompanying materials are first being made available to stockholders on or about October 3, 2022.

 

Your proxy vote is important. Whether or not you plan to attend the meeting, please vote your proxy by internet, telephone or mail as promptly as possible.

 

 

 

 

INFORMATION ABOUT THE ANNUAL MEETING

 

What is the purpose of the annual meeting?

 

At the annual meeting, stockholders will be asked to vote on the following proposals:

 

  Proposal 1.

The election of three directors of the Company.

 

 

Proposal 2.

 

Proposal 3.

An advisory (non-binding) vote on executive compensation (the “Say on Pay Vote”).

 

The approval of the HomeTrust Bancshares, Inc. 2022 Omnibus Incentive Plan (the “Omnibus Incentive Plan Proposal”).

 

  Proposal 4. The ratification of the appointment of FORVIS, LLP (formerly Dixon Hughes Goodman LLP) as the Company’s independent auditors for the fiscal year ending June 30, 2023.

 

Stockholders also will transact any other business that may properly come before the meeting or any adjournment or postponement of the meeting. Members of our management team will be present at the meeting to respond to appropriate questions from stockholders.

 

How does the Board of Directors recommend that I vote?

 

The Board of Directors recommends that you vote FOR the election of the director nominees named in this proxy statement, FOR the Say on Pay Vote, FOR the Omnibus Incentive Plan Proposal and FOR the ratification of the appointment of FORVIS, LLP.

 

Who is entitled to vote?

 

The record date for the meeting is September 16, 2022. Only stockholders of record at the close of business on that date are entitled to notice of and to vote at the meeting. The only class of stock entitled to vote at the meeting is the Company’s common stock. Each outstanding share of common stock is entitled to one vote for all matters before the meeting; provided, however, that pursuant to Section D of Article 5 of the Company’s charter, no person who beneficially owns more than 10% of the shares of the Company’s common stock outstanding as of the record date may vote shares in excess of that amount. At the close of business on the record date there were 15,632,348 shares of common stock outstanding.

 

What if my shares are held in “street name” by a broker?

 

If you are the beneficial owner of shares held in “street name” by a broker, your broker, as the record holder of the shares, is required to vote those shares in accordance with your instructions. If you do not give instructions to your broker, your broker nevertheless will be entitled to vote the shares with respect to “discretionary” items but will not be permitted to vote your shares with respect to any “non-discretionary” items. In the case of non-discretionary items, the shares will be treated as “broker non-votes.” Whether an item is discretionary is determined by the exchange rules governing your broker. It is expected that the ratification of the appointment of FORVIS, LLP will be considered a discretionary item and that each of the other proposals will be considered a non-discretionary item.

 

What if I hold shares through an account under the HomeTrust Bank KSOP?

 

Each participant in the HomeTrust Bank KSOP (the “KSOP”) may instruct the KSOP trustee how to vote the shares of common stock held in the participant’s KSOP account. If a participant properly executes the voting instruction card distributed by the trustee, the trustee will vote the participant’s shares in accordance with the instructions. Where properly executed voting instruction cards are returned to the trustee with no specific instruction as to how to vote at the annual meeting, the trustee will vote the shares FOR the election of the director nominees named in this proxy statement, FOR the Say on Pay Vote, FOR the Omnibus Incentive Plan Proposal and FOR the ratification of the appointment of FORVIS, LLP. In the event the participant fails to give timely voting instructions to the trustee with respect to the voting of the shares of common stock held in the participant’s KSOP account, and in the case of shares held by the KSOP but not allocated to any participant’s account, the trustee will vote such shares in the same proportion as directed by the participants who directed the trustee as to the manner of voting the shares held in their KSOP accounts with respect to each proposal.

 

How many shares must be present to hold the meeting?

 

A quorum must be present at the meeting for any business to be conducted. The presence at the meeting, in person or by proxy, of the holders of at least one-third of the shares of the Company’s common stock outstanding on the record date will constitute a quorum. Proxies received but marked as abstentions or broker non-votes will be included in the calculation of the number of shares considered to be present at the meeting.

 

 

 

What if a quorum is not present at the meeting?

 

If a quorum is not present at the scheduled time of the meeting, the stockholders who are represented may adjourn the meeting until a quorum is present. The time and place of the adjourned meeting will be announced at the time the adjournment is taken, and no other notice will be given. An adjournment will have no effect on the business that may be conducted at the meeting.

 

How do I vote?

 

1. You may vote by mail. If you properly complete and sign the proxy card, it will be voted in accordance with your instructions.

 

2. You may vote by telephone. If you are a registered stockholder, that is, if you hold your stock in your own name, you may vote by telephone by following the instructions included on the proxy card. If you vote by telephone, you do not have to mail in your proxy card.

 

3. You may vote on the internet. If you are a registered stockholder, that is, if you hold your stock in your own name, you may vote on the internet by following the instructions included on the proxy card. If you vote on the internet, you do not have to mail in your proxy card.

 

4. You may vote in person at the meeting. If you plan to attend the annual meeting and wish to vote in person, we will give you a ballot at the annual meeting. However, if your shares are held in the name of your broker, bank or other nominee, you will need to obtain a proxy form from the institution that holds your shares indicating that you were the beneficial owner of the Company’s common stock on September 16, 2022, the record date for voting at the annual meeting.

 

Can I vote by telephone or on the internet if I am not a registered stockholder?

 

If your shares are held in “street name” by a broker or other nominee, you should check the voting form used by that firm to determine whether you will be able to vote by telephone or on the internet.

 

Can I change my vote after I submit my proxy?

 

If you are a registered stockholder, you may revoke your proxy and change your vote at any time before the polls close at the meeting by:

 

signing another proxy with a later date;

 

voting by telephone or on the internet -- your latest telephone or internet vote will be counted;

 

giving written notice of the revocation of your proxy to the Corporate Secretary of the Company prior to the annual meeting; or

 

voting in person at the annual meeting.

 

If you have instructed a broker, bank or other nominee to vote your shares, you must follow directions received from your nominee to change those instructions.

 

 

 

What if I do not specify how my shares are to be voted?

 

If you are a registered stockholder and you submit an executed proxy but do not indicate any voting instructions, your shares will be voted:

 

FOR the election of the three director nominees named in this proxy statement;

 

FOR the Say on Pay Vote;

 

FOR the Omnibus Incentive Plan Proposal; and

 

FOR the ratification of the appointment of FORVIS, LLP as the Company’s independent auditors for the fiscal year ending June 30, 2023.

 

Will any other business be conducted at the annual meeting?

 

The Board of Directors knows of no other business that will be conducted at the meeting. If any other business properly comes before the stockholders for a vote at the meeting, however, the proxy holders will vote your shares in accordance with their best judgment.

 

How many votes are required to approve the proposals?

 

Director nominees who receive the highest number of votes for the positions to be filled will be elected. Approval of each of the Say on Pay Vote, the Omnibus Incentive Plan Proposal and the ratification of the appointment of FORVIS, LLP as the Company’s independent auditors requires the affirmative vote of a majority of the votes cast on the matter.

 

How will withheld votes and abstentions be treated?

 

If you withhold authority to vote for one or more director nominees or if you abstain from voting on any other proposal, your shares will still be included for purposes of determining whether a quorum is present. If you abstain from voting on any proposal other than the election of directors, your shares will not be included in the number of shares voting on that proposal and, consequently, your abstention will have no practical effect on that proposal.

 

How will broker non-votes be treated?

 

Shares treated as broker non-votes on one or more proposals will be included for purposes of calculating the presence of a quorum. Otherwise, shares represented by broker non-votes will be treated as shares not entitled to vote on a proposal. Consequently, broker non-votes will have no effect on the election of directors or any other proposal.

 

Who can I call if I have questions?

 

If you have any questions, you can call Tony J. VunCannon, Executive Vice President, Chief Financial Officer, Corporate Secretary and Treasurer at 828-350-3049.

 

 

 

STOCK OWNERSHIP

 

As of September 16, 2022, there were 15,632,348 shares of the Company’s common stock outstanding. The following table sets forth, as of September 16, 2022, certain information as to each person known by management to be the beneficial owner of more than five percent of the outstanding shares of our common stock:

 

Name and Address of Beneficial Owner  Amount and
Nature of Beneficial
Ownership
    Percent of
Class
 

BlackRock, Inc.

55 East 52nd Street

New York, New York 10055

   1,148,032(1)    7.34%
            
FJ Capital Management LLC et al.
7901 Jones Branch Drive, Ste. 210
McLean, Virginia 22102
   1,017,383(2)    6.51%
            
HomeTrust Bank KSOP
10 Woodfin Street
Asheville, North Carolina 28801
   956,375(3)    6.12%

 

 

(1) As reported by BlackRock, Inc. in a Schedule 13G amendment filed with the SEC on February 3, 2022.  BlackRock, Inc. reported having sole voting power with respect to 1,126,423 shares and sole dispositive power with respect to 1,148,032 shares.

(2)

 

 

 

 

(3)

As reported by FJ Capital Management LLC, Financial Opportunity Fund LLC, Financial Opportunity Long/Short Fund LLC and Martin Friedman in a Schedule 13G amendment filed with the SEC on February 10, 2022. FJ Capital Management LLC reported having shared voting and dispositive powers with respect to 1,017,383 shares, Financial Opportunity Fund LLC reported having shared voting and dispositive powers with respect to 891,715 shares, Financial Opportunity Long/Short Fund LLC reported having shared voting and dispositive powers with respect to 33,009 shares and Mr. Friedman reported having shared voting and dispositive powers with respect to 1,087,383 shares.

Each KSOP participant may instruct the KSOP trustee how to vote the shares of common stock held in the participant’s KSOP account. In the event the participant fails to give timely voting instructions to the trustee with respect to the voting of the shares of common stock held in the participant’s KSOP account, and in the case of shares held by the KSOP but not allocated to any participant’s account, the trustee will vote such shares in the same proportion as directed by the participants who directed the trustee as to the manner of voting the shares held in their KSOP accounts with respect to each proposal.

 

 

 

The following table sets forth, as of September 16, 2022, certain information as to the shares of common stock beneficially owned by our current directors and named executive officers and by all current directors and executive officers as a group. The address of each person in the table is: c/o HomeTrust Bancshares, Inc., 10 Woodfin Street, Asheville, North Carolina 28801.

 

Name  Amount and
Nature of Beneficial
Ownership(1)(2) 
    Percent of
Class(5) 
 
Sidney A. Biesecker   50,300(3)    0.32%
W. Mark DeMarcus   29,154(3)    0.19 
Robert E. James, Jr.   26,049     0.17 
Laura C. Kendall   30,474     0.19 
Craig C. Koontz   43,619     0.28 
Rebekah M. Lowe   1,985     0.01 
F.K. McFarland, III   45,226(4)    0.29 
Kristin Y. Powell   18,344(3)    0.12 
Dana L. Stonestreet   395,782(3)    2.52 
John A. Switzer   4,474     0.03 
Tony J. VunCannon   139,604(3)    0.89 
C. Hunter Westbrook   165,704(3)    1.05 
Richard T. Williams   30,474     0.19 
Directors and Executive Officers as a Group (17 persons)   1,116,152(3)    6.95 

 

 

(1) Amounts include shares held directly, as well as shares held jointly with family members, in retirement accounts, in a fiduciary capacity, by certain family members, by certain related entities or by trusts of which the directors and executive officers are trustees or substantial beneficiaries, with respect to which shares the respective director or executive officer may be deemed to have sole or shared voting and/or dispositive powers. The holders may disclaim beneficial ownership of the included shares which are owned by or with family members, trusts or other entities.
(2) Included in the shares beneficially owned by the directors and executive officers are options to purchase shares of the Company’s common stock which are currently exercisable or which will become exercisable within 60 days after September 16, 2022, as follows: Mr. Biesecker – 15,700 shares; Mr. DeMarcus – 21,200 shares; Mr. James – 12,000 shares; Ms. Kendall – 12,000 shares; Mr. Koontz – 10,700 shares; Mr. McFarland – 2,300 shares; Ms. Powell – 7,400 shares; Mr. Stonestreet – 104,400 shares; Mr. VunCannon – 65,772 shares; Mr. Westbrook – 97,134 shares; Mr. Williams – 12,000 shares; and all directors and executive officers as a group – 437,606 shares.

(3)

 

Includes shares held in KSOP accounts, as follows: Mr. Biesecker – 2,019 shares; Mr. DeMarcus– 1,175 shares; Ms. Powell – 2,042 shares; Mr. VunCannon – 27,166 shares; Mr. Westbrook – 5,487 shares; and all directors and executive officers as a group – 68,565 shares.
(4) Includes 3,800 shares held by Mr. McFarland’s spouse.
(5) Shares subject to options that are currently exercisable or that will become exercisable within 60 days after September 16, 2022 are deemed outstanding for purposes of calculating the percentage ownership of the person holding those options but are not treated as outstanding for purposes of calculating the percentage ownership of any other person.

 

 

 

PROPOSAL I
ELECTION OF DIRECTORS

 

The Company’s Board of Directors currently consists of ten members. Approximately one-third of the Company’s directors are elected annually. Directors of the Company generally are elected to serve for a three-year term or until their respective successors are elected and qualified.

 

The following table sets forth certain information regarding the composition of the Company’s Board of Directors, including each director’s term of office. The Board of Directors, acting on the recommendation of the Governance and Nominating Committee, has recommended and approved the nominations of Laura C. Kendall, Rebekah M. Lowe and Dana L. Stonestreet. Mses. Kendall and Lowe have each been nominated for a three-year term to expire at the annual meeting of stockholders to be held in calendar year 2025. Mr. Stonestreet has been nominated for a one-year term to expire at the annual meeting of stockholders to be held in calendar year 2023, at which time it is expected he will retire as a director, as contemplated by his amended and restated employment and transition agreement with the Company. See “Executive Compensation--Employment and Transition Agreement with Mr. Stonestreet, Employment Agreements with Messrs. Westbrook and VunCannon and Change in Control Severance Agreements with Mr. DeMarcus and Ms. Powell.” It is intended that the proxies solicited on behalf of the Board of Directors (other than proxies in which the authority to vote for a nominee is withheld) will be voted at the annual meeting FOR the election of these director nominees. If any nominee is unable to serve, the shares represented by all valid proxies will be voted for the election of such substitute nominee as the Board of Directors may recommend, acting on the recommendations of the Governance and Nominating Committee. Except as disclosed in this proxy statement, there are no arrangements or understandings between any nominee and any other person pursuant to which the nominee was selected.

 

Name  Age(1)   Position(s) Held in the
Company and the Bank
  Director
Since(2) 
  Term of Office
Expires in
Calendar Year
NOMINEES
             
Laura C. Kendall  70  Director  2016  2025
Rebekah M. Lowe  63  Director  2020  2025
Dana L. Stonestreet  68  Chairman of the Company and the Bank  2007  2023
             
DIRECTORS REMAINING IN OFFICE
             
Robert E. James, Jr.  71  Director  2016  2023
Craig C. Koontz  72  Director  2010  2023
F. K. McFarland, III  65  Director  2003  2023
Sidney A. Biesecker  71  Director  2010  2024
John A. Switzer  65  Director  2019  2024
C. Hunter Westbrook  59  Director, President and Chief Executive Officer of the Company and the Bank  2021  2024
Richard T. Williams  69  Director  2016  2024

 

 

(1)As of June 30, 2022.

(2)Includes service as a director of the Bank.

 

Mandatory Director Retirement Bylaw Provision

 

Article II, Section 12 of the Company’s bylaws provides generally that a person who is 72 years of age or older shall not be eligible for election, re-election, appointment or re-appointment to the Company’s Board of Directors and shall also not be eligible to continue to serve as a director beyond the annual meeting of stockholders of the Company immediately following the director becoming 72 years of age.

 

Article II, Section 12 grants the Board discretion to exempt a director who (a) was a director of the Company on June 30, 2016 and (b) is between 72 and 74 years of age, from mandatory retirement until the Company’s next annual meeting of stockholders. This discretion may be exercised by the Board only if it finds that the exemption is in the best interest of the Company based on the qualifications considered in the selection of directors.

 

 

 

Board Diversity and Refreshment

 

Six of our ten directors - representing a majority of the Board - are individuals who became directors of the Company within the past six years. Of these six newer directors:

 

two are women (33% of newer directors);

 

one is African-American (17% of newer directors); and

 

five are independent (83% of newer directors).

 

Our Board has been greatly enhanced by the fresh and diverse perspectives of these directors.

 

On August 6, 2021, the SEC approved amendments to the Listing Rules of the NASDAQ Stock Market (“NASDAQ”) related to board diversity. New Listing Rule 5605(f) (the “Diverse Board Representation Rule”) requires each NASDAQ-listed company, subject to certain exceptions, (1) to have at least one director who self-identifies as female, and (2) to have at least one director who self-identifies as Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, two or more races or ethnicities, or as LGBTQ+, or (3) to explain why the company does not have at least two directors on its board who self-identify in the categories listed above. In addition, new Listing Rule 5606 (the “Board Diversity Disclosure Rule”) requires each NASDAQ-listed company, subject to certain exceptions, to provide statistical information about the company’s board of directors, in a uniform format, related to each director’s self-identified gender, race, and self-identification as LGBTQ+.

 

Although we are not required to fully comply with the Diverse Board Representation Rule until 2025, we believe we presently meet the requirements of that rule based on the self-identified characteristics of the current members of our Board of Directors. We were not required to comply with the Board Diversity Disclosure Rule until the date we filed our proxy statement for this year’s annual meeting of stockholders, but we elected to provide the statistical information required by the Board Diversity Disclosure Rule in last year’s annual meeting proxy statement. That information, which has not changed since last year’s disclosure, is provided in the matrix below.

 

Board Diversity Matrix (As of September 1, 2022)
Total Number of Directors 10
  Female Male

Non-

Binary

Did Not
Disclose
Gender
Part I: Gender Identity  
Directors 2 8 0 0
Part II: Demographic Background    
African American or Black 0 1 0 0
Alaskan Native or Native American 0 0 0 0
Asian 0 0 0 0
Hispanic or Latinx 0 0 0 0
Native Hawaiian or Pacific Islander 0 0 0 0
White 2 7 0 0
Two or More Races or Ethnicities 0 0 0 0
LGBTQ+ 0
Did Not Disclose Demographic Background 0

 

 

 

Business Experience and Qualifications of Our Directors

 

The business experience of each of our directors for at least the past five years and the experience, qualifications, attributes, skills and areas of expertise of each director that further supports his or her service as a director are set forth below. Unless otherwise indicated, each director has held his or her current occupation and employment position for the past five years.

 

Laura C. Kendall. Ms. Kendall is a Senior Managing Director at Aurora Management Partners and has over 40 years of financial and management experience. She has been with Aurora Management Partners since 2013 and prior to that worked in numerous leadership roles with Tanner Companies LLC (President 2008-2013; Chief Operating Officer 2006-2008; and Chief Financial Officer 2003-2006), CFOdynamics LLC (CEO 2002-2003), Delhaize America, Inc. (CFO 1999-2002), and its subsidiary, Food Lion, Inc. (CFO 1997-2002), F&M Distributors, Inc. (CFO 1988-1996), and Perry Drug Stores, Inc. (VP of Finance 1986-1988). Ms. Kendall is a registered CPA and a member of the American Institute of CPAs. She is a previous member of the Board of Directors at Bank of Commerce and of Charles & Colvard (2003-2011). Ms. Kendall joined the Board effective April 1, 2016 after having served as an advisory director of HomeTrust Bancshares and HomeTrust Bank since October 1, 2015.

 

Ms. Kendall’s broad business background and accounting expertise make her a valued member of the Board.

 

Rebekah M. Lowe. Ms. Lowe is the Chief Executive of Fizzywork Executive Coaching, a position she has held since 2012. Previously, Ms. Lowe was with Wachovia Bank (now Wells Fargo) beginning in 1982 and rose through the ranks to serve both East Florida and Western North Carolina as Regional President before her departure in 2007. A broad banking career included serving as a branch manager, regional risk administration manager, state retail banking manager, state mortgage manager, and mergers and integrations manager for three different acquisitions. As Regional President, she had overall responsibility for consumer, commercial, wealth, real estate, and dealer banking in the regions she served. She also held the title of Executive Vice President of Wachovia Bank since 2002.

 

Ms. Lowe graduated from Georgetown University’s Leadership Coaching Program. She completed the University of North Carolina at Chapel Hill’s Executive Leadership Program and the Duke University’s Senior Management Development Program, and was a member of Leadership North Carolina. Ms. Lowe has served on many community boards and executive committees, including those of The United Way, Chambers of Commerce, YMCA of Western North Carolina, and Sisters of Mercy of North Carolina Foundation. Ms. Lowe joined the Board effective September 1, 2020 after having served as an advisory director of HomeTrust Bancshares and HomeTrust Bank since January 10, 2020.

 

Ms. Lowe’s extensive experience in the banking industry and in working with executive-level employees on the development of leadership skills make her a valued member of the Board.

 

Dana L. Stonestreet. In his 33 years of service, Mr. Stonestreet has overseen ten acquisitions and the growth of HomeTrust Bank from $300 million in assets to $3.5 billion in assets at June 30, 2022. Mr. Stonestreet currently serves as Executive Chairman of HomeTrust Bancshares and HomeTrust Bank. Mr. Stonestreet served as Chief Executive Officer of HomeTrust Bancshares prior to the promotion of Mr. Westbrook to that position effective September 1, 2022, and as President of HomeTrust Bancshares and Chief Executive Officer of HomeTrust Bank prior to the promotion of Mr. Westbrook to those positions effective September 1, 2021. Mr. Stonestreet joined HomeTrust Bank in 1989 as its Chief Financial Officer and was promoted to Chief Operating Officer in 2003 and President in 2008. He became Co-Chief Executive Officer of HomeTrust Bancshares and HomeTrust Bank in July 2013 and Chairman and Chief Executive Officer of HomeTrust Bancshares and HomeTrust Bank in November 2013. 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 and was re-appointed for another four-year term in July 2021.

 

 

 

Mr. Stonestreet’s more than three decades 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.

 

Robert E. James, Jr. Mr. James has over 42 years of experience in the banking industry and is currently President of Robert E. James Advisors, LLP. In this capacity he works with CEOs and other executives of public and private companies to improve company performance and their leadership skills. From 2012 to 2015, he worked for Grant Thornton LLP as a Senior Advisor in their Banking and Securities Industry Practice. Prior to 2012, he worked for Fifth Third Bank, North Carolina (President and CEO 2008-2012), First Charter Corporation (President and CEO 2004-2008; Chief Banking Officer 1999-2004), and Centura Banks, Inc. (Executive Vice President 1989-1999). He is a current board member for the Salvation Army, Charlotte Area Command. In addition, he has served as Vice-Chair for the Board of Directors of Fifth Third Bank, North Carolina (2011-2014), served on the Board of Directors of the North Carolina Bankers Association (Chair 2007-2008), served as a board member for UNC Chapel Hill – Board of Visitors and has served as Chairman of the Staff-Parish Relations Committee, and a member of the Executive Committee, for Providence United Methodist Church in Charlotte. Mr. James joined the Board effective April 1, 2016 after having served as an advisory director of HomeTrust Bancshares and HomeTrust Bank since October 1, 2015.

 

Mr. James’s many years of experience in the banking industry, including having served as a CEO and in other senior executive positions, make him a valuable member of the Board.

 

Craig C. Koontz. In June 2016, Mr. Koontz retired as Eastern Region Director of Information Technology of Atrium Windows and Doors, Inc., a manufacturer of residential vinyl and aluminum windows and patio doors, a position he held since 2011. Prior to being promoted to that position, Mr. Koontz served as IT Director for Atrium’s North Carolina operations since 2002. From 1999 to 2002, Mr. Koontz served as Corporate IT Project Manager for Lifestyle Furnishings International, and from 1978 to 1999 served as Vice President of Information Technology and Customer Service for Lexington Furniture Industries. In addition, Mr. Koontz currently serves as Chair of the Transition Committee of First Presbyterian Church Lexington and is an elder. He also volunteers for Crisis Ministry of Davidson County and Habitat for Humanity. Mr. Koontz has also served as President of the Lexington Rotary Club, President of Hospice of Davidson County, and Chairman of the Lexington City Board of Education. Mr. Koontz became a director of HomeTrust Bank in 2010.

 

Mr. Koontz worked in the information technology field for over 45 years, 40 of which involved supporting systems that provide information used in financial reporting systems. This has given Mr. Koontz a sound understanding of internal and external auditing matters, especially with regard to information technology. Coupled with his knowledge of and experience with information technology matters in general, this has made Mr. Koontz a valued member of the Board.

 

F.K. McFarland, III. Mr. McFarland has served as President of McFarland Funeral Chapel, Inc. Mr. McFarland has served on a number of other community boards, including the board of trustees of St. Luke’s Hospital, the zoning board for Tryon, North Carolina, the Hospice of the Carolina Foothills, the Polk County, North Carolina Chamber of Commerce, the American Cancer Society – Polk County Unit (as Chairman) and the Forbes Foundation, a philanthropic organization. Mr. McFarland joined the Board of Directors of HomeTrust Bank in 2003.

 

Mr. McFarland adds value to the Board through his experience as a small business owner and operator for over 30 years and his strong ties to the local community from his other board service.

 

Sidney A. Biesecker. On January 31, 2015, Mr. Biesecker retired as Senior Vice President of HomeTrust Bank and President for HomeTrust Bank’s Industrial Federal Bank division, positions he had held since HomeTrust Bank’s acquisition of Industrial Federal Bank in February 2010. Prior to the acquisition, Mr. Biesecker held various officer positions for Industrial Federal Bank since 1974, including President and Chief Executive Officer since 1990. Mr. Biesecker was appointed to the Board of Directors of HomeTrust Bank in 2010. Mr. Biesecker has served on the boards and committees of numerous community organizations. Mr. Biesecker currently serves as Chair of Home Solutions of Davidson County, located in Lexington, North Carolina.

 

From over 40 years working for Industrial Federal Bank, Mr. Biesecker brings to the Board extensive knowledge of nearly all areas of banking operations and experience in all aspects of risk management.

 

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John A. Switzer. Mr. Switzer recently retired as the Managing Partner of the Charlotte office of KPMG LLP, and the Market Leader for KPMG’s Coastal Business Unit, encompassing offices in the Carolinas, Florida, and Puerto Rico. Over his 38-year career at the firm, he held various leadership roles which also included serving as the Managing Partner of the Cleveland, Louisville, and Lexington, Kentucky offices, as well as other leadership roles within the firm. Throughout his career, Mr. Switzer served as the lead audit partner for numerous publicly traded global and domestic companies in multiple industries. Mr. Switzer is a director of Barings BDC, Inc., a publicly traded business development company, where he has served as the audit committee chairman. He is also a director of Barings Capital Investment Corporation, a privately held business development company, where he serves on the audit committee. In addition, he is a director of CTE (Carolina Tractor and Equipment Company) and a board member for the Foundation for the Mint Museum and the National Association of Corporate Directors Carolinas Chapter. He has served on numerous other not-for-profit boards in several cities throughout his career. Mr. Switzer joined the Board effective September 3, 2019 after having served as an advisory director of HomeTrust Bancshares and HomeTrust Bank since January 1, 2019.

 

Mr. Switzer’s background as a business leader, a CPA and a lead audit partner for public companies, as well as his extensive board experience, is of great benefit to our board of directors.

 

C. Hunter Westbrook. Mr. Westbrook currently serves as President and Chief Executive Officer of HomeTrust Bancshares and HomeTrust Bank. Prior to September 1, 2022, Mr. Westbrook served as President and Chief Operating Officer of HomeTrust Bancshares and President and Chief Executive Officer of HomeTrust Bank. Prior to September 1, 2021, Mr. Westbrook served as Senior Executive Vice President and Chief Operating Officer of HomeTrust Bancshares since October 2018, President and Chief Operating Officer of HomeTrust Bank since October 2020 and Senior Executive Vice President and Chief Operating Officer of HomeTrust Bank from October 2018 to September 2020. Before that, Mr. Westbrook served as Executive Vice President (Senior Vice President prior to December 22, 2014) and Chief Banking Officer of HomeTrust Bancshares and HomeTrust Bank since June 2012. Mr. Westbrook 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, Mr. Westbrook served as Executive Vice President and Chief Operations Officer from 2008 to 2010 and as President and Chief Executive Officer from 2010 to 2012 of Second Federal Savings and Loan Association of Chicago, where he significantly grew core operating revenue, net checking account balances, and repositioned the bank’s entire product line.

 

Mr. Westbrook joined the Board effective September 1, 2021. Mr. Westbrook’s decades of experience as a senior executive in the banking industry and ten years of service with HomeTrust Bank make him a valued addition to the Board.

 

Richard T. Williams. Mr. Williams recently retired as Vice President (“VP”) of Corporate Community Affairs at Duke Energy Corporation and President of the Duke Energy Foundation. Over his 37-year career at Duke Energy Corporation, he held various leadership roles which included VP of Environmental, Health & Safety (2008-2012), VP of Enterprise Field Services (2006-2008), VP of Diversity & Talent Management (2004-2006), VP of Diversity, Ethics & Compliance and Chief Compliance Officer, (2002-2004), and VP of Business & Community Relations (1997-2002). Mr. Williams is a director of Coca-Cola Consolidated, Inc. He also is a current board member for Atrium Health and Hope Haven, Inc. In addition, he has served on various other boards throughout his career, including UNC Chapel Hill - Board of Trustees (Chair 2003-2005), Chapel Hill Chamber of Commerce (Chair 1995-1996), UNC General Alumni Association (Chair 2002), Durham Chamber of Commerce (Chair 2002), Greater Charlotte YMCA (Chair 2011-2013), The Mint Museum (Chair 2011-2013), Central Piedmont Community College, National Association of Corporate Directors – Carolinas Chapter and Bank of Commerce (2008-2014). Additionally, he was recognized as one of the Top 100 directors for 2020 nationally by the National Association of Corporate Directors and was named one of 2015’s “Heroes of the Fortune 500” for good works by employees of the nation’s largest companies. North Carolina’s Governor also conferred the Order of the Long Leaf Pine on Mr. Williams, one of North Carolina’s most prestigious honors. Mr. Williams joined the Board effective April 1, 2016 after having served as an advisory director of HomeTrust Bancshares and HomeTrust Bank since October 1, 2015.

 

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Mr. Williams brings to the Board extensive business experience gained from a variety of leadership roles within a large organization, as well as strong ties to the local community.

 

Executive Officers Who Are Not Also Directors

 

Set forth below is a description of the business experience for at least the past five years of each executive officer who is not also a director of the Company. Each executive officer’s age is as of June 30, 2022.

 

Tony J. VunCannon. Mr. VunCannon, age 57, is a certified public accountant and has served as Executive Vice President (Senior Vice President prior to December 22, 2014), Chief Financial Officer and Treasurer of HomeTrust Bank since July 2006 and as Corporate Secretary of HomeTrust Bank since September 2017. From March 1997 to June 2006, Mr. VunCannon served as Vice President and Treasurer of HomeTrust Bank and from April 1992 to February 1997, Mr. VunCannon served as Controller of HomeTrust Bank. In addition, Mr. VunCannon has served as Executive Vice President (Senior Vice President prior to December 22, 2014), Chief Financial Officer and Treasurer of HomeTrust Bancshares since HomeTrust Bank’s mutual-to-stock conversion and as Corporate Secretary of HomeTrust Bancshares since September 2017. Previously, Mr. VunCannon was employed by KPMG in Charlotte, North Carolina.

 

W. Mark DeMarcus. Mr. DeMarcus, age 57, joined HomeTrust Bancshares and HomeTrust Bank in February 2018 as Executive Vice President and Commercial Banking Group Executive. Mr. DeMarcus has more than 35 years of experience in the banking industry. Prior to joining HomeTrust, he served in key executive roles at Atlantic Capital Bank, Yadkin Bank and Wachovia Bank. Mr. DeMarcus held a variety of senior positions in Commercial Banking, Retail and Small Business Banking, Treasury Management, Credit Administration and Human Resources for Wachovia from 1986 to 2008. While at Yadkin Bank, Mr. DeMarcus served as Chief Operating Officer, Chief Banking Officer and Divisional President from 2008 to 2016. Mr. DeMarcus led the expansion of Atlantic Capital Bank to North Carolina prior to joining HomeTrust in 2018.

 

Kristin Y. Powell. Ms. Powell, age 46, joined HomeTrust Bancshares and HomeTrust Bank in July 2015. From July 2015 to May 2020, Ms. Powell served as Director of Residential Mortgage Lending, and from June 2020 to June 2022, Ms. Powell served as Executive Vice President, Consumer Banking Group Executive. As of July 2022, Ms. Powell was promoted to Executive Vice President, Consumer and Business Banking Group Executive. Her experience in the banking and financial services industry spans over 20 years. Prior to joining HomeTrust, she served for over 13 years at PNC in senior leadership and strategic positions throughout the Southeast. Currently, she provides direction and leadership to our Consumer and Business Banking lines of business, which include Mortgage, Retail, Business Banking, and Professional Investment Bank services.

 

Marty T. Caywood. Mr. Caywood, age 50, joined HomeTrust Bank in May 1995 and has served as Executive Vice President and Chief Information Officer since April 2019. During his time at HomeTrust Bank, he has served in multiple capacities, developing and implementing technology initiatives across the organization. In 2014, Mr. Caywood assumed the role of Director of Information Technology and was promoted to Senior Vice President and Chief Technology Officer in September 2017. In addition to maintaining existing enterprise systems, he provides technical direction to all lines of business and has led numerous operational process improvement initiatives.

 

Keith J. Houghton. Mr. Houghton, age 60, has served as Executive Vice President (Senior Vice President prior to December 22, 2014) and Chief Credit Officer of HomeTrust Bank since March 2014. 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.

 

R. Parrish Little. Mr. Little, age 54, joined HomeTrust Bank in March 2015 as Executive Vice President and Chief Risk Officer. Mr. Little has more than 25 years of experience in the financial services industry serving in internal audit and risk management leadership positions. He began his career in banking with Citizens & Southern National Bank (Bank of America) in Columbia, S.C. as an auditor. In 1995 he managed and led audit initiatives with Fleet Financial Group’s (Bank of America) mortgage lending operations. He served in several leadership roles with Bank of America in Greensboro and Charlotte, N.C. from 1997 to 2007, during which time he was promoted to Senior Vice President. He joined First Citizens Bank and Trust in Columbia, South Carolina in 2008 as Director of Risk Management. In his most recent role there, which he held prior to joining HomeTrust Bank, he served as Chief Audit Executive of First Citizens Bank and Trust and directed the Internal Audit team.

 

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Megan Pelletier. Ms. Pelletier, age 43, joined HomeTrust Bancshares and HomeTrust Bank in May 2022 as Executive Vice President, Chief People Officer. Her experience spans almost 20 years of banking and financial industry roles as both a line of business employee and human resources leader, as well as serving in commercial banking positions. Prior to joining HomeTrust, she served in several key roles at SouthState Bank in Charlotte, NC, most recently as Senior Vice President, Director of Talent Acquisition. While at SouthState she also held the positions of Director of Commercial Operations, Human Resources Manager and Human Resources Business Partner.

 

Environmental, Social and Governance Matters

 

We view ourselves as a regional community bank positioned for smart growth—dedicated to maintaining the core values and culture that reflect our brand and commitment to solid, long-term value for all our stakeholders. We consider environmental, social and governance (“ESG”) matters to be an integral part of our business and are committed to continuous progression of our ESG efforts.

 

Environmental

 

Recent initiatives to reduce our environmental impact have included:

 

Completely redesigning our branch office back-end infrastructure to no longer rely on local servers and instead communicate directly with our two data center locations, significantly reducing our electricity usage.

 

Modernizing and consolidating our data centers with more energy-efficient equipment and migrating select software platforms and workloads to cloud providers.

 

Recycling older hardware and related equipment, enabling their valuable components to be reused instead of ending up in landfills.

 

Enforcing power saving settings, such as requiring all employee desktop monitors to turn off after 15 minutes of inactivity.

 

Converting all interior and exterior conventional lighting fixtures at our facilities to LED lighting.

 

Using photocells on parking lot lights and illuminated signage.

 

Replacing high energy water heaters with tankless, on-demand water heaters.

 

Reducing lawn irrigation to fewer days per week while installing more drought-resistant plantings.

 

Monthly monitoring of utility usage at all our facilities.

 

Incorporating solar technology into window glass replacements.

 

Reducing our use of paper by using electronic communication and storage for various internal reporting, board reports, and proxy materials.

 

Transitioning all vendors to paperless invoicing and encouraging customers to transition to online banking, receive digital delivery of documents, and use electronic signatures.

 

Reducing offsite document storage requirements and record retention of paper.

 

Ongoing activities to reduce our environmental impact include paper and plastic recycling in all locations and auto shut-off lighting in certain areas.

 

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Social

 

Our Communities

 

Supporting individuals and businesses in our local communities is a top priority for us. We were a proud participant in the Small Business Administration’s Paycheck Protection Program (“PPP”), originating $112.0 million of PPP loans (469 loans in total) throughout the COVID-19 pandemic. We have also accommodated many of our commercial and individual borrowers with loan modifications to assist them during the pandemic.

 

We employ a full-time Community Development Officer and a full-time Community Development Mortgage Originator (working solely with low-to-moderate income (“LMI”) applicants). We also maintain a Community Reinvestment Act and Fair Lending Management Committee responsible for the governance and oversight of the following activities:

 

Providing financial and professional expertise to individuals living in LMI or majority-minority areas or to non-profit organizations that primarily serve individuals and small businesses in those areas.

 

Donations to non-profit organizations that primarily serve individuals or small businesses in LMI and minority communities.

 

Community lending to individuals or organizations in support of affordable housing, community services, economic development, community revitalization, and other activities such as obtaining grant assistance that are responsive to the needs of individuals where we have office locations.

 

Investments in bonds, certificates of deposit, LMI loan pools, and equity that are designed to support individuals living in LMI or minority areas.

 

Establishment of policies, procedures, analytics and training to prevent discriminatory lending practices.

 

Community development initiatives in the past fiscal year have included:

 

Provided first mortgage loan opportunities through our Homeownership Now mortgage lending program, as well as various state- and federal-based programs (NC, TN Housing and USDA, FHA, VA), to qualified LMI first-time homebuyers.

 

Partnered with Habitat for Humanity (“Habitat”) in Wake County, North Carolina to originate mortgage loans for families purchasing new homes through Habitat. We are expanding this program with Habitat in Charlotte, North Carolina, Asheville, North Carolina, Greenville, South Carolina, and Knoxville, Tennessee. To date, we have made aggregate commitments to this program of more than $20 million.

 

Promoted financial literacy programs by providing FDIC Money Smart curriculum at no cost and partnering with the Banzai financial education program in several public schools.

 

Provided first-time home buyer seminars that included a road map to the buying and lending process and identified resources such as financial education and down payment assistance programs.

 

Supported a variety of non-profit organizations through approximately $325,000 in donations and sponsorships that work to make positive impacts on our communities with a focus on financial education, affordable housing, and essential community services to LMI individuals.

 

Made over $70 million in investments that promote LMI housing, including mortgages purchased from non-profit organizations, U.S. government-sponsored enterprises, low-income equity tax credits, and certificates of deposit.

 

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Establish a paid time off (“PTO”) benefit for our employees that provides every employee with eight hours of paid volunteer time to give back to the communities where they live and work.

 

Provided over 1,200 hours through our employee volunteer community service activities.

 

Provided over $70 million of Community Development lending through loans and leases to developers, non-profit entities, and municipalities. These loans benefit communities through services to LMI individuals, job creation and stabilization, economic development, and affordable housing.

 

Our Employees

 

Key aspects of our human capital management include the following:

 

Talent Acquisition. We recruit, hire, and promote employees based on their individual ability and experience and in accordance with Affirmative Action and Equal Employment Opportunity laws and regulations.

 

Employee Retention and Engagement. We offer competitive compensation and benefit packages, and a strong work culture centered on highly ethical, team-focused behavior. We provide regular performance feedback and encourage collaboration across the company through open dialogue and focused execution while seeking diverse perspectives.

 

We believe a strong corporate culture and employee engagement is crucial to the success of the company. In 2022, we conducted a comprehensive employee engagement survey, with a high level of employee participation, to gain perspective on what we do well and our opportunities for improvement. In addition, we launched a behavior-based set of company culture fundamentals, intended to support the Company’s core values and increase overall employee engagement.

 

Community Engagement. We are committed to serving and strengthening the communities in which we live, work and play and believe this commitment fosters strong and rewarding relationships with our clients and community partners.  Community Service Leave (“CSL”) is awarded annually to employees to foster volunteerism with charitable organizations of their choice throughout the year. All employees are eligible for CSL and may use it throughout the calendar year to participate in eligible community service activities.

 

Safety and Well-Being. Valuing our people, our greatest asset, means that good health, safety, and well-being practices, both at home and at work, are woven into the fabric of our culture.  We promote the health and wellness of our employees by strongly encouraging work-life balance and a healthy lifestyle. We offer a confidential assistance program for employees and those living in their households, which provides tools, resources, and counseling at no charge to them. We provide a wellness program that delivers products, services, and tools to help employees maintain a healthy life, and provide a competitive PTO program, which employees may use for vacation, personal time, and illnesses.

 

During the peak of the pandemic, we partnered with a third-party vendor to assist in managing the COVID-19 related cases, ensuring confidentiality and consistency in the process. We provide up to four hours of leave for employees who need time away to receive the vaccine and up to three days of COVID-19 PTO for eligible employees who are unable to work due to quarantine or illness related to COVID-19.

 

Diversity, Equity, and Inclusion. We recognize the importance of having a workforce that reflects the diversity of the communities we serve, and we are committed to continuous progression of a more equitable, diverse, and inclusive workplace. As of June 30, 2022, our senior management team was 40% female, and our broader employee population self-identified as follows: 67% female and 14% a member of a minority demographic.

 

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Governance

 

Our Board of Directors and management are committed to sound and effective corporate governance practices. Certain aspects of these practices, including the leadership structure of our Board and the Board’s role in risk oversight, the Board’s committees, our Code of Ethics and Conduct, our stock ownership guidelines for directors and executive officers and our director and executive compensation programs, are discussed in the sections that follow. We believe the diversity of our directors has significantly enhanced the effectiveness of our Board. This topic is discussed in greater detail under “Board Diversity and Refreshment.”

 

Director Independence

 

The Company’s Board of Directors has determined that the following directors, constituting a majority (eight of ten directors) of the Board, are “independent directors,” as that term is defined in NASDAQ Listing Rule 5605(a)(2): Biesecker, James, Kendall, Koontz, Lowe, McFarland, Switzer and Williams.

 

Board Leadership Structure and Role in Risk Oversight

 

Leadership Structure. Prior to September 1, 2022, we combined the positions of Chief Executive Officer and Chairman into one position, which had been held by Mr. Stonestreet. We believe this structure was appropriate because of the primarily singular operating environment of the Company and HomeTrust Bank, with our predominant focus on being a provider of retail and commercial banking services. Having the Chief Executive Officer and Chairman involved in the daily operations of this focused line of operations improves the communication between management and the Board and ensures that the Board’s interest is represented in our daily operations, particularly with regard to risk management. Effective September 1, 2022, as part of the Company’s senior management succession planning, Mr. Westbrook was promoted to Chief Executive Officer of the Company and Mr. Stonestreet became Executive Chairman, a position Mr. Stonestreet is expected to hold until he retires from the Board upon the expiration of his term as a director at the Company’s annual meeting of stockholders in 2023. The Board has not yet determined who will succeed Mr. Stonestreet as Chairman. Because Mr. Stonestreet will remain an employee of the Company until his retirement, the Board continues to believe it is appropriate to designate a non-management director (currently Director Williams) to serve as lead director. The lead director is responsible for presiding over executive sessions of the non-management directors held outside the presence of the Chairman, and for serving as a liaison between the non-management directors and the Chairman.

 

Role in Risk Oversight. Risk is inherent with the operation of every financial institution, and how well an institution manages risk can ultimately determine its success. We face a number of risks, including but not limited to credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputation risk. Management is responsible for the day-to-day management of the risks we face, while the Board has ultimate responsibility for the oversight of risk management. The Board believes that risk management, including setting appropriate risk limits and monitoring mechanisms, is an integral component and cannot be separated from strategic planning, annual operating planning, and daily management of our business. Consistent with this approach as well as based on the belief that certain risks require an oversight focus that a Board committee can better provide, the Board has delegated the oversight of certain risk areas to certain committees of the Board. The responsibilities of the Executive and Risk Committee of the Board of Directors include enterprise risk management, which encompasses the primary risks faced by HomeTrust Bank in its operations. The responsibilities of the Audit Committee of the Board of Directors include assisting the Board with respect to potential financial risks to the Company. The responsibilities of the Compensation Committee of the Board of Directors include the consideration of risks in connection with incentive and other compensation programs. See “—Board Meetings and Committees.” These committees regularly provide reports of their activities and recommendations to the full Board. In addition, members of senior management regularly attend meetings of the Board to report to the Board on the primary areas of risk that we face.

 

Cybersecurity risk is a key consideration in the operational risk management capabilities at HomeTrust Bank. We maintain a formal information security management program, which is subject to oversight by, and reporting to, the Executive and Risk Committee. Given the nature of our operations and business, including the Bank’s reliance on relationships with various third-party providers in the delivery of financial services, cybersecurity risk may manifest itself through various business activities and channels, and it is thus considered an enterprise-wide risk that is subject to control and monitoring at various levels of management throughout the Bank. The Executive and Risk Committee oversees and reviews reports on significant matters of corporate security, including cybersecurity.

 

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Board Meetings and Committees

 

The current members of the Boards of Directors of the Bank and the Company are identical. Meetings of the Company’s and the Bank’s Boards of Directors are generally held eight times per year. In those months when the Boards of Directors do not meet, the Boards’ Executive and Risk Committee meets. During the fiscal year ended June 30, 2022, the Board of Directors of the Company held ten meetings and the Board of Directors of the Bank held ten meetings. During fiscal year 2022, no incumbent director attended fewer than 75% of the aggregate of the total number of meetings of each Board and the total number of meetings held by the committees of each Board on which committees he or she served during the period in which he or she served.

 

The Company’s Board of Directors has the following standing committees, which are summarized below: Audit Committee; Compensation Committee; Executive and Risk Committee; Governance and Nominating Committee; Asset/Liability Committee; and Mergers and Acquisitions Committee.

 

Audit Committee. The Audit Committee is currently comprised of Directors Kendall (Chair), Biesecker, Koontz, McFarland and Switzer, each of whom is “independent,” as independence for audit committee members is defined in the NASDAQ Listing Rules. The Company’s Board of Directors has determined that each of Ms. Kendall and Mr. Switzer is an “audit committee financial expert,” as defined in Item 407(d)(5) of SEC Regulation S-K.

 

The Audit Committee operates under a written charter adopted by the Company’s Board of Directors, a copy of which is available on the Company’s website, located at www.htb.com, by clicking “Investor Relations,” then “Corporate Information” and then “Governance Documents.” The Audit Committee is appointed by the Company’s Board of Directors to provide assistance to the Board in fulfilling its oversight responsibility relating to: the integrity of the Company’s consolidated financial statements and the accounting and financial reporting processes; the systems of internal accounting and financial controls; compliance with legal and regulatory requirements and the Company’s policies; the annual independent audits of the Company’s consolidated financial statements and internal control over financial reporting; the independent auditors’ qualifications and independence; the performance of the Company’s internal audit department and independent auditors; and any other areas of potential financial risk to the Company specified by its Board of Directors. The Audit Committee also is responsible for hiring, retaining and terminating the Company’s independent auditors. In addition, the Audit Committee reviews, at least annually, the Company’s Code of Ethics and Conduct. The Audit Committee met nine times in fiscal 2022.

 

Compensation Committee. The Compensation Committee is currently comprised of Directors Koontz (Chair), James, Lowe and Williams, each of whom is an “independent director,” as that term is defined in the NASDAQ Listing Rules. The Compensation Committee is responsible for reviewing and evaluating executive compensation and administering the Company’s compensation and benefit programs. The Compensation Committee also is responsible for:

 

reviewing from time to time the Company’s compensation and incentive plans and, if the Committee believes it to be appropriate, amending these plans or adopting new plans;

 

overseeing the evaluation of management and determining the compensation for executive officers, including salary, bonus, short-term incentives, long-term incentives and all other forms of compensation, including participation in tax-qualified and non-qualified benefit plans. This includes evaluating performance following the end of incentive periods and setting specific awards for executive officers;

 

reviewing and approving the amount of the Company’s matching and profit sharing contributions under the KSOP each year;

 

performing such duties and responsibilities as may be assigned to the Committee under the terms of any executive or employee compensation plan;

 

reviewing annually all employment contracts of the Company’s executive officers and approving the amendment, extension or termination of such contracts as deemed appropriate, and considering any proposed new employment contracts with executive officers;

 

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periodically reviewing and recommending to the Board the appropriate level of compensation and the appropriate mix of cash compensation and equity compensation for Board and Board committee service; and

 

overseeing succession planning for the Company’s executive management team.

 

The Compensation Committee operates under a formal written charter, a copy of which is available on the Company’s website, located at www.htb.com, by clicking “Investor Relations,” then “Corporate Information” and then “Governance Documents.” In fiscal year 2022, the Compensation Committee met nine times.

 

The charter of the Compensation Committee authorizes the committee to retain a consultant to assist the committee in carrying out its responsibilities. Pursuant to this authority, the Compensation Committee retained the consulting firm of Pearl Meyer & Partners, LLC (“Pearl Meyer”). For additional information regarding the role of Pearl Meyer, see “Executive Compensation—Compensation Discussion and Analysis-What Guides Our Program-Role of Independent Compensation Consultant.”

 

The charter of the Compensation Committee does not specifically provide for delegation of any of the authorities or responsibilities of the committee. For a discussion of the role of executive officers in setting executive pay, see “Executive Compensation—Compensation Discussion and Analysis-What Guides Our Program-Role of Executive Officers in Determining Compensation.”

 

Executive and Risk Committee. The Executive and Risk Committee is currently comprised of Directors Williams (Chair), James, Kendall, Koontz, Stonestreet and Westbrook. The Executive and Risk Committee is authorized to exercise the power of the Board of Directors between Board meetings, to the extent permitted by applicable law, and performs the duties of the Loan Committee in the months the full Board of Directors does not meet. The responsibilities of the Executive and Risk Committee also include:

 

periodically review and approve the Company’s enterprise risk management program activities and related frameworks;

 

review and discuss the following with management: the Company’s risk appetite statement and risks to corporate strategy; alignment of strategy and business objectives with the Company’s stated mission, vision and core values; significant business decisions, including capital allocations, funding and dividend-related decisions, to understand the risks to the Company; responses to significant fluctuations in the performance of the Company or the risks impacting the Company; and corporate culture and desired behaviors, including responses to instances of deviations from core values;

 

coordinate with other Board committees, including the Audit and Compensation Committees, to assist in the performance of their duties and responsibilities with respect to risk management, to share information and to avoid duplication of efforts;

 

review and approve the Chief Risk Officer’s assessment of the risks with employee compensation and incentive practices;

 

review and approve policies, systems and processes for risk data aggregation and model governance;

 

receive and discuss with the Chief Risk Officer the Company’s major risk exposures and corporate risk profile and review steps taken by management to monitor, manage and mitigate significant risk exposures;

 

review the activities of management-level committees to identify, monitor and respond to the Company’s significant risks;

 

review and approve enterprise risk policies that reflect the Company’s risk management philosophies, principles, and risk limits;

 

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receive and review reports from the Chief Risk Officer and other members of management regarding the state and maturity of the Company’s overall risk management program;

 

receive and review communications from the Chief Risk Officer and other members of management on the results of risk management activities, including any emerging risks and risk topics to enhance the Executive and Risk Committee members’ knowledge and awareness of key risks that may impact the Company;

 

review and discuss with management any audit and examination results and other reports from regulatory authorities relating to the Company’s risk management activities;

 

review management’s process for the reporting of all independent loan review results directly to the full Board;

 

receive and review reports from management at least annually on the Company’s insurance program; and

 

review and approve the Company’s information security program and receive reports from management on the status of the program activities and any significant risks to the Company or customers.

 

The Executive and Risk Committee operates under a formal written charter, a copy of which is available on the Company’s website, located at www.htb.com, by clicking “Investor Relations,” then “Corporate Information” and then “Governance Documents.” The Executive and Risk Committee met four times during fiscal year 2022.

 

Governance and Nominating Committee. The Governance and Nominating Committee is currently comprised of Directors Williams (Chair), James, Kendall and Lowe, each of whom is an “independent director,” as that term is defined in the NASDAQ Listing Rules. The Governance and Nominating Committee is responsible for identifying and recommending director candidates to serve on the Board of Directors. Final approval of director nominees is determined by the full Board, based on the recommendations of the Governance and Nominating Committee. The nominees for election at the annual meeting identified in this proxy statement were recommended to the Board by the Governance and Nominating Committee.

 

The Governance and Nominating Committee operates under a formal written charter adopted by the Board, a copy of which is available on the Company’s website, located at www.htb.com, by clicking “Investor Relations,” then “Corporate Information” and then “Governance Documents.” The Governance and Nominating Committee has the following responsibilities under its charter:

 

recommend to the Board the appropriate size of the Board and assist in identifying, interviewing and recruiting candidates for the Board;

 

recommend candidates (including incumbents) for election and appointment to the Board of Directors, subject to the provisions set forth in the Company’s charter and bylaws relating to the nomination or appointment of directors, giving consideration to the candidate’s particular experience, qualifications, attributes or skills in view of the following criteria, as applicable:

 

honesty/integrity/reputation; commitment to the long-term success of the Company and stock ownership; right fit/collaborative leader/builds consensus/team builder; commitment and time to fulfill responsibilities; ability to read and understand financial statements; expertise in strategic thinking and planning; diversity of Board members; financial management expertise; understanding and knowledge of banking industry and trends; bank accounting expertise, experience as a CPA/CFO/auditor/other relevant experience and/or meets SEC “Audit Committee Financial Expert” definition; director/senior executive of a company comparable in size and/or complexity to the Company (or larger) with recent operating experience; experience with mergers/acquisitions; expertise in technology, including e-commerce and business continuity planning; expertise in enterprise risk management; experience as a human resources executive or related experience in culture change, recruiting and retaining talent; and any other factors that the Governance and Nominating Committee may deem appropriate.

 

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The Governance and Nominating Committee considers these criteria, and any other criteria established by the Board, in the context of an assessment of the operation and needs of the Board as a whole and the Board’s goal of maintaining diversity among its members;

 

review nominations submitted by stockholders addressed to the Company’s Corporate Secretary that comply with the requirements of the Company’s charter and bylaws. Nominations from stockholders will be considered and evaluated using the same criteria as all other nominations;

 

review proposals submitted by stockholders for business to be conducted at annual meetings of stockholders;

 

determine the criteria for the selection of the Chair and Vice Chair/Lead Director of the Board and make recommendations to the Board for these positions;

 

annually recommend to the Board committee assignments and committee chairs on all committees of the Board, and recommend committee members to fill vacancies on committees as necessary;

 

recommend to the Board a set of corporate governance principles applicable to the Company, review those principles at least annually and perform the responsibilities assigned to the Committee under those principles. Implement other policies regarding corporate governance matters as deemed necessary or appropriate;

 

oversee an annual performance evaluation of the Board;

 

recommend advisory directors and emeritus directors; and

 

perform any other duties or responsibilities delegated to the Committee by the Board.

 

Nominations of persons for election to the Board of Directors may be made only by or at the direction of the Board of Directors or by any stockholder entitled to vote for the election of directors who complies with the notice procedures. Pursuant to the Company’s bylaws, nominations for directors by stockholders must be made in writing and received by the Corporate Secretary of the Company at the Company’s principal executive offices no earlier than 120 days prior to the meeting date and no later than 90 days prior to the meeting date. If, however, less than 100 days’ notice or public announcement of the date of the meeting is given or made to stockholders, nominations must be received by the Company not later than the close of business on the tenth day following the earlier of the day on which notice of the date of the meeting was mailed or otherwise transmitted or the day on which public announcement of the date of the meeting was first made. In addition to meeting the applicable deadline, nominations must be accompanied by certain information specified in the Company’s bylaws.

 

The Governance and Nominating Committee met seven times during fiscal year 2022.

 

Asset/Liability Committee. The Asset/Liability Committee is currently comprised of Directors Biesecker (Chair), McFarland, Stonestreet and Switzer. The Asset/Liability Committee is responsible for the approval of the Company’s investment and asset/liability management strategies, establishing related policies and monitoring compliance with those policies. During fiscal 2022, the Asset/Liability Committee met four times.

 

Mergers and Acquisitions Committee. The Mergers and Acquisitions Committee is currently comprised of Directors James (Chair), Lowe, Switzer and Williams. The Mergers and Acquisitions Committee is responsible for reviewing potential merger and acquisition transactions and, if appropriate, recommending such transactions to the Board of Directors for the Board’s consideration and approval. The Mergers and Acquisitions Committee met five times during fiscal 2022.

 

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Stockholder Communications with Directors

 

Stockholders may communicate with the Board of Directors by writing to: Tony J. VunCannon, Executive Vice President, Chief Financial Officer, Corporate Secretary and Treasurer, HomeTrust Bancshares, Inc., 10 Woodfin Street, Asheville, North Carolina 28801.

 

Board Member Attendance at Annual Stockholder Meetings

 

Although the Company does not have a formal policy regarding director attendance at annual stockholder meetings, directors are expected to attend these meetings absent extenuating circumstances. Each of the Company’s current directors attended the Company’s last annual meeting of stockholders.

 

Director Compensation

 

The current members of the Boards of Directors of the Bank and the Company are identical. The following table includes information regarding the compensation earned, for service as a director, by each individual who served on the Company’s Board of Directors during fiscal 2022 other than Mr. Stonestreet, the Company’s Chief Executive Officer prior to September 1, 2022 and Executive Chairman since September 1, 2022, and Mr. Westbrook, the Company’s President and Chief Operating Officer prior to September 1, 2022 and President and Chief Executive Officer since September 1, 2022. During fiscal 2022, Messrs. Stonestreet and Westbrook did not receive any compensation for their service as directors. For information regarding Mr. Stonestreet’s and Mr. Westbrook’s compensation for service as executive officers, see “Executive Compensation.”

 

Name  Fees
Earned
Or Paid in
Cash
($)
   Stock
Awards
($)(2) 
   Option
Awards
($)(3) 
   Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(4) 
   All Other
Compensation
($)(5) 
   Total
($)
 
Sidney A. Biesecker(1)   $43,750   $29,939    ---    ---   $412   $74,101 
Robert E. James, Jr.  $49,750   $29,939    ---    ---   $582   $80,271 
Laura C. Kendall  $58,250   $29,939    ---    ---   $582   $88,771 
Craig C. Koontz  $58,750   $29,939    ---   $804   $412   $89,905 
Rebekah M. Lowe  $46,750   $29,939    ---    ---   $412   $77,101 
F.K. McFarland, III  $43,750   $29,939    ---   $12,588   $412   $86,689 
John A. Switzer  $46,750   $29,939    ---    ---   $412   $77,101 
Richard T. Williams  $69,000   $29,939    ---   $236   $582   $99,757 

 

 

(1) Mr. Biesecker is a former employee of HomeTrust Bank.  Information regarding compensation provided to him during fiscal 2022 for his service as former employee is provided under “Transactions with Related Persons.”
(2) Represents the grant date fair value under Accounting Standards Codification Topic No. 718, Compensation-Stock Compensation (“ASC Topic 718”), of an award of 955 shares of restricted stock to each of Messrs. Biesecker, James, Koontz, McFarland, Switzer and Williams and Mses. Kendall and Lowe, which is scheduled to vest in full on February 11, 2023.  The assumptions used in the calculation of the grant date fair value amount are included in Note 14 of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022, filed with the SEC.  As of June 30, 2022, each of Messrs. Biesecker, James, Koontz, McFarland, Switzer and Williams and Mses. Kendall and Lowe held 955 unvested shares of restricted stock.
(3) As of June 30, 2022, Mr. Biesecker held options to purchase 15,700 shares of common stock, Mr. Koontz held options to purchase 10,700 shares of common stock, Mr. McFarland held options to purchase 2,300 shares of common stock and each of Messrs. James and Williams and Ms. Kendall held options to purchase 12,000 shares of common stock.
(4) Includes the aggregate of (i) the change in the actuarial present value of the director’s accumulated benefit under HomeTrust Bank’s Director Emeritus Plan (the “Director Emeritus Plan”) from June 30, 2021 to June 30, 2022 and (ii) above-market interest on amounts deferred under HomeTrust Bank’s non-qualified deferred compensation plan (the “Deferred Compensation Plan”), respectively, as follows: Mr. Biesecker – (i) $0 and (ii) $0; Mr. James – (i) $0 and (ii) $0; Ms. Kendall – (i) $0 and (ii) $0; Mr. Koontz – (i) 0 and (ii) $804; Ms. Lowe – (i) $0 and (ii) $0; Mr. McFarland – (i) $11,892 and (ii) $696; Mr. Switzer – (i) $0 and (ii) $0; and Mr. Williams – (i) $0 and (ii) $236.  Messrs. Biesecker, James, Switzer and Williams and Mses. Kendall and Lowe currently do not participate in the Director Emeritus Plan.  For additional information, see “—Director Emeritus Plan.”   
(5) Represents dividends paid on unvested shares of restricted stock.  

 

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Director Retainer and Fees

 

During the fiscal year ended June 30, 2022, the compensation arrangement for non-employee directors consisted of the following: (i) an annual cash retainer of $34,000; (ii) a cash fee of $1,500 for each in-person Board meeting attended in excess of ten in-person meetings during the fiscal year; (iii) a cash fee of $750 for each in-person committee meeting attended and for each telephonic committee meeting attended lasting one hour or more; (iv) an annual restricted stock award with a value of approximately $30,000; and (v) an additional annual cash retainer of $15,000 for the Vice Chair and Lead Director, $10,000 for the Audit Committee Chair, $7,500 for the Compensation Committee Chair and $5,000 for the Governance and Nominating Committee Chair. There were no changes in the compensation arrangement for non-employee directors during the fiscal year.

 

Directors who are also employees of HomeTrust Bank do not receive an annual retainer or other fees for serving on the Board.

 

Equity-Based Compensation

 

At the Company’s annual meeting of stockholders held on January 17, 2013, its first meeting of stockholders following the July 2012 mutual-to-stock conversion of HomeTrust Bank, the Company’s 2013 Omnibus Incentive Plan was approved. The 2013 Omnibus Incentive Plan allows for the grant of stock options, stock appreciation rights, restricted stock, restricted share units and cash awards to eligible participants. The 2013 Omnibus Incentive Plan is similar to equity-based incentive plans adopted by other newly converted thrift institutions.

 

At the annual meeting, stockholders will be asked to approve the Company’s 2022 Omnibus Incentive Plan, which would permit the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units.  If the 2022 Omnibus Incentive Plan is approved at the annual meeting, no future awards will be made under the 2013 Omnibus Incentive Plan.  See “Proposal III. Approval of the 2022 Omnibus Incentive Plan.”

 

As noted under “-Director Retainer and Fees,” for fiscal 2022, non-employee directors were to receive an annual restricted stock award with a value of approximately $30,000. Accordingly, on February 11, 2022, Messrs. Biesecker, James, Koontz, McFarland, Switzer, Williams and Mses. Kendall and Lowe were each granted 955 shares of restricted stock, which are scheduled to vest in full on February 11, 2023.

 

Director Emeritus Plan

 

Under the Director Emeritus Plan, upon termination of service as a director other than for cause, a participating director becomes an emeritus director and is entitled to be paid a monthly director emeritus fee as set forth in his or her joinder agreement to the Director Emeritus Plan, for the benefit period specified in the joinder agreement. Directors Biesecker and Stonestreet do not currently participate in the Director Emeritus Plan. Directors Biesecker and Stonestreet are entitled to additional benefits under HomeTrust Bank’s Executive Supplemental Retirement Income Plan (the “SERP”). Directors James, Kendall, Lowe, Switzer, Westbrook and Williams do not participate in the Director Emeritus Plan, and it is expected that no future director will participate in the Director Emeritus Plan.

 

The specific Director Emeritus Plan benefits of each of the directors and former directors listed in the table under “Director Compensation” above who currently participate in the Director Emeritus Plan are described below. Each such participant is 100% vested in his or her benefits under the Director Emeritus Plan.

 

Director Koontz. Under his joinder agreement, Director Koontz is entitled to a 20-year director emeritus benefit in the annual amount of $30,000, with such amount increasing 5% per year after the first year of the benefit period.

 

Director McFarland. Under his joinder agreement, Director McFarland is entitled to a 20-year director emeritus benefit in the annual amount of $16,193, with such amount increasing 5% per year after the first year of the benefit period.

 

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Code of Ethics and Conduct

 

We have adopted a Code of Ethics and Conduct (the “Code of Ethics”), which applies to all directors, officers and employees of the Company and its subsidiaries. The Code of Ethics reflects our expectation of honest and ethical conduct in all aspects of our business from all directors, officers and employees. A copy of the Code of Ethics is available on the Company’s website, located at www.htb.com, by clicking “Investor Relations,” then “Corporate Information” and then “Governance Documents.”

 

Stock Ownership Guidelines

 

We have adopted stock ownership guidelines applicable to our directors and executive officers in order to further align their interests with the interests of our stockholders. These guidelines are described under “Executive Compensation—Compensation Discussion and Analysis-Other Compensation Practices, Policies and Guidelines-Stock Ownership Guidelines.”

 

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EXECUTIVE COMPENSATION

 

Compensation Discussion and Analysis

 

Introduction

 

In this section, we provide an overview and analysis of our compensation programs, the material compensation policy decisions we have made under those programs, and the material factors we considered in making those decisions. Following this section, you will find a series of additional tables containing specific information about compensation paid or payable to the following individuals, whom we refer to as our “named executive officers”:

 

Dana L. Stonestreet, Executive Chairman of the Company and the Bank*;

 

C. Hunter Westbrook, President and Chief Executive Officer of the Company and the Bank*;

 

Tony J. VunCannon, Executive Vice President, Chief Financial Officer, Corporate Secretary and Treasurer of the Company and the Bank;

 

W. Mark DeMarcus, Executive Vice President and Commercial Banking Group Executive of the Company and the Bank**; and

 

Kristin Y. Powell, Executive Vice President and Consumer and Business Banking Group Executive of the Company and the Bank**.

 

*Prior to September 1, 2022, Mr. Stonestreet was Chairman and Chief Executive Officer of the Company and Chairman of the Bank, and Mr. Westbrook was President and Chief Operating Officer of the Company and President and Chief Executive Officer of the Bank. Prior to September 1, 2021, Mr. Stonestreet was Chairman, President and Chief Executive Officer of the Company and Chairman and Chief Executive Officer of the Bank, and Mr. Westbrook was Senior Executive Vice President and Chief Operating Officer of the Company and President and Chief Operating Officer of the Bank. Prior to October 28, 2020, Mr. Stonestreet was also President of the Bank and Mr. Westbrook was Senior Executive Vice President and Chief Operating Officer of the Company and the Bank.

 

**Mr. DeMarcus and Ms. Powell became executive officers effective March 27, 2022.

 

Executive Summary

 

Business Highlights. For the fiscal year ended June 30, 2022, compared to the previous fiscal year:

 

net income was $35.7 million, compared to $15.7 million;

 

diluted earnings per share were $2.23, compared to $0.94;

 

return on average assets was 1.01%, compared to 0.42%;

 

return on average equity was 9.00%, compared to 3.88%;

 

net interest income was $110.8 million compared to $103.3 million;

 

provision for credit losses was a net benefit of $592,000, compared to a net benefit of $7.1 million;

 

noninterest income was $39.2 million, compared to $39.8 million;

 

there were no prepayment penalties on borrowings compared to prepayment penalties of $22.7 million;

 

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1.5 million shares of the Company’s common stock were repurchased during fiscal 2022 at an average price of $29.23 per share; and

 

net loan growth was $36.0 million, or 5.3%, compared to a decrease of $35.9 million, or 5.2%.

 

During fiscal 2022, we completed the transitioning of our back-office Small Business Administration (“SBA”) loan service process in-house, which, in the long run, is expected to provide additional servicing fee and gain on sale income. We also closed nine branch offices, representing 22% of our total branch network, which is expected to reduce our annual expenses significantly. In addition, we entered a new fintech partnership, which contributed to growth in the commercial and industrial loan segment and supplements our existing partnership with a fintech specializing in home equity lines of credit (HELOCs). Subsequent to fiscal year-end, we announced our signing of a definitive agreement to acquire Quantum Capital Corporation (“Quantum”), the holding company for Quantum National Bank, a $660 million-in-assets bank in the Atlanta metro area. We believe this transaction, which we expect will be completed in the first quarter of calendar year 2023, presents a unique opportunity to expand our franchise and meaningfully enhance our profitability.

 

Our senior leadership team is focused on executing our strategic plan to deliver value to our customers and stockholders. At the core of that plan is our successful transformation from a mutual thrift institution to a full-service commercial bank. That transformation began with our conversion in 2012 from the mutual form of ownership to the stock form of ownership (the “Mutual-to-Stock Conversion” or the “Conversion”). Prior to the Conversion, we had only three lines of business – retail/consumer, mortgage and commercial – with limited offerings and limited capabilities. Today, we have more than ten lines of business, which have greatly improved our offerings and capabilities. We expect the continued maturity of these lines of business to drive growth in our earnings and positively impact our financial performance.

 

The following table compares our pre-Conversion and current lines of business:

 

2012: Pre-Conversion   2022: Ten Years Post-Conversion
     

     Retail/Consumer – Limited Offerings

●     Mortgage – Old Savings and Loan Model

●     Commercial – Very Limited Capabilities

 

Commercial

●     Commercial Real Estate

●     Commercial and Industrial

●     Middle Market Banking

     Equipment and Municipal Finance

●     Treasury Management Services

 

Small Business Banking

     Business Banking

     Business Banking Centers

     SBA Lending

 

Consumer Banking

●     Retail Banking Market Teams

●     Consumer Banking

●     Mortgage Banking

●     Investment Services

●     Professional Banking

 

Wholesale Lending

●     HELOCs Originated for Sale

●     Indirect Auto

●     FinTech Partnerships

 

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Since the Conversion, we have also expanded geographically, adding larger growing, metro markets in North Carolina, South Carolina, Virginia and Tennessee. We will be entering the Atlanta metro area upon completion of our pending acquisition of Quantum. We currently have 32 banking offices, compared to 20 at the time of the Conversion, and will add two banking offices through the Quantum acquisition. Our growth since the Conversion has been enabled by hiring experienced bankers to build out the necessary infrastructure to support our commercial lenders and new lines of business.

 

Pay for performance has been focused on the execution of our strategic plan to build a high performing bank. Our management team has delivered exceptional performance in transitioning us from a rural thrift with $1.5 billion in total assets prior to the Conversion to a full-service regional commercial bank with $3.5 billion in total assets as of June 30, 2022. The following changes in our balance sheet reflect the significant transformation management has accomplished in executing our strategic plan since the Conversion:

 

Commercial loans were 75% of total loans at June 30, 2022 compared to 33% at June 30, 2012.

 

One-four family mortgage loans were 13% of total loans at June 30, 2022 compared to 50% at June 30, 2012.

 

Checking deposits were 45% of total deposits at June 30, 2022 compared to 15% at June 30, 2012.

 

Say on Pay and Key Compensation Actions. On the “say on pay vote” at our last annual meeting of stockholders (held in November 2021), the percentage of votes cast in favor was approximately 91%. We currently hold a say on pay vote annually. We strive to keep an open dialogue with investors to ensure we hear and understand their perspectives. We carefully consider the feedback received from these discussions, as well as the results of our say on pay vote, in evaluating our executive compensation.

 

The Compensation Committee is steadfast in its commitment to align the Company’s executive compensation programs with stockholder interests and expectations, while balancing the need to attract, motivate and retain high-performing leaders. In pursuit of this commitment, the Compensation Committee made the following key compensation-related decisions during fiscal 2022:

 

The entire annual equity award to Mr. Stonestreet, our chief executive officer during fiscal 2022, was in the form of performance-based restricted stock units;

 

Messrs. Westbrook and VunCannon were granted 50% of the value of their fiscal 2022 annual equity awards in performance-based restricted stock units and 50% in time-based restricted stock;

 

increases in named executive officer base salaries during fiscal 2022 were generally merit-based and to maintain such salaries at approximately the 50th percentile of the survey benchmark data for their positions; and

 

cash awards under the Company’s short-term incentive program were based on the Company’s financial performance and pre-established individual goals.

 

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Best-Practice Compensation Approaches. To support long-term value creation, we follow good governance practices, including the following:

 

Pay for performance, minimum performance requirements and capped payouts Our annual incentives require minimum levels of performance before amounts are earned and also have a cap on maximum payouts.  Since fiscal 2019, the entirety of our chief executive officer’s annual equity award has been performance-based and one-half of the equity awards to other persons who were executive officers at the time of grant have been performance-based.
Appropriate risk-taking We set challenging, yet achievable performance goals that are centered around our internal financial plan, which we believe will not encourage risk taking outside the range of risk inherent in our business.
Clawback provisions Our annual incentives are subject to clawback if we are required to restate our financial results.
Limited perquisites Other than providing Mr. Stonestreet with a company automobile and providing Mr. Westbrook with an automobile allowance, we do not provide the named executive officers with any perquisites or other personal benefits.  
No golden-parachute excise tax gross-ups We have not entered into any agreements that provide a golden parachute excise tax gross-up in the event of a change in control.
“Double-trigger” severance benefits in the event of a change in control In the event of a change in control, the payment of severance benefits to the named executive officers under their employment (Messrs. Stonestreet, Westbrook and VunCannon) and change in control severance (Mr. DeMarcus and Ms. Powell) agreements are set to a “double trigger.”   This means that these severance benefits will not be paid unless there is also a qualifying termination of employment upon or after the change in control.
No repricing or exchanges of underwater stock options Our 2013 Omnibus Incentive Plan and our proposed 2022 Omnibus Incentive Plan both prohibit the repricing or exchange of underwater stock options without stockholder approval.
Significant stock ownership requirement Our executive officers and directors are required to accumulate and hold our common stock equal to a multiple of base salary (three times base salary for the chief executive officer and one times base salary for each of the other named executive officers) or annual Board retainer (five times annual retainer for each non-employee director).
No hedging or pledging Our executive officers and directors are prohibited from hedging or pledging our securities.
Annual say on pay vote The Company both seeks and values stockholder feedback and holds a say on pay vote every year.

 

What Guides Our Program

 

Compensation Philosophy and Objectives. The Compensation Committee of the Board of Directors administers our compensation and benefit programs. The Compensation Committee is responsible for setting and administering the policies which govern executive compensation. Our current compensation philosophy is designed to:

 

attract the right people and retain top performers;

 

be competitive with other companies of similar size and complexity;

 

reward and motivate behaviors consistent with our culture and values;

 

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inspire and motivate employees, both individually and as a team, to execute our vision, business strategy and drive for enduring customer satisfaction; and

 

differentiate rewards for our top performers through performance-based compensation.

 

Our compensation philosophy is supported by the elements of our executive compensation program listed in the table below. These compensation elements provide a balanced mix of guaranteed compensation and variable, at-risk compensation with an emphasis on annual and long-term incentives.

 

Compensation Element Form Description
Base Salary Cash (Fixed) Provides a competitive fixed rate of pay relative to similar positions in the market, and enables the Company to attract and retain critical executive talent
Annual Incentives Cash (Variable) Focuses executives on achieving annual financial and strategic goals that drive long-term stockholder value by continuing the Company’s significant progress in transitioning from a traditional thrift to a full-service commercial bank and maturing our new lines of business to drive higher levels of earnings and value creation for stockholders
Long-Term Incentives Equity (Variable) Provides incentives for executives to execute on longer-term financial/strategic growth goals that drive stockholder value creation and support the Company’s retention strategy

 

Role of the Compensation Committee. The Compensation Committee oversees the executive compensation program for our named executive officers. The Compensation Committee is comprised of independent, non-employee members of the Board. The Compensation Committee works very closely with its independent consultant and management to examine the effectiveness of the Company’s executive compensation program throughout the year. The Compensation Committee operates under a formal written charter, a copy of which is available on the Company’s website, located at www.htb.com, by clicking “Investor Relations,” then “Corporate Information” and then “Governance Documents.”

 

The Compensation Committee makes all final compensation and equity award decisions regarding our chief executive officer and other named executive officers.

 

Role of Executive Officers in Determining Compensation. For fiscal 2022, Mr. Stonestreet recommended to the Compensation Committee the compensation of the named executive officers other than himself. Mr. Stonestreet was not involved with any aspect of determining his own compensation.

 

Role of Independent Compensation Consultant. The Compensation Committee has engaged Pearl Meyer as its independent compensation consultant to review our executive and director compensation programs and arrangements from time to time. As a result of these reviews, the base salaries of the named executive officers have been adjusted to reflect market-based levels using peer group and survey data. See “-Fiscal 2022 Executive Compensation Program in Detail-Base Salaries.” The Compensation Committee also consulted with Pearl Meyer in connection with the adoption and implementation of the Strategic Operating Committee Incentive Program, which was renamed the Senior Leadership Incentive Plan effective July 1, 2022 (the “SOC Incentive Program”), and equity awards granted under the Omnibus Incentive Plan. See “-Fiscal 2022 Executive Compensation Program in Detail-Annual Incentives” and “-Fiscal 2022 Executive Compensation Program in Detail -Equity-Based Awards.”

 

Under its engagement letter, Pearl Meyer acknowledged that it was retained by and performs its services for the Compensation Committee. In performing work for the Compensation Committee, Pearl Meyer interacts with Company management as part of the process for developing information and data required by the Compensation Committee.

 

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The Compensation Committee has assessed the independence of Pearl Meyer pursuant to the NASDAQ Listing Rules and the Compensation Committee has concluded that Pearl Meyer’s work for the Compensation Committee has not raised any conflict of interest.

 

Role of Peer Groups. In setting the named executive officers’ compensation levels, the Compensation Committee typically reviews proxy statement data of compensation paid to the executive officers of other community banks comparable to us in size and complexity. The most recent such analysis, which was done in conjunction with a review of our compensation program by Pearl Meyer, included the following institutions, which ranged in asset size from $2.8 billion to $7.6 billion:

 

American National Bankshares, Inc.   Blue Ridge Bankshares, Inc.

Capital City Bank Group, Inc.

Carter Bankshares, Inc.

Civista Bancshares, Inc.

Community Trust Bancorp, Inc.

 

CapStar Financial Holdings, Inc

City Holding Company

CNB Financial Corporation

Farmers National Banc Corp.

First Community Bankshares, Inc.   Peoples Bancorp Inc.

Primis Financial Corp.

SmartFinancial, Inc.

 

Republic Bancorp, Inc.

Southern First Bancshares, Inc.

Stock Yards Bancorp, Inc.   Summit Financial Group, Inc.
Univest Financial Corporation    

 

In addition to proxy statement data, Pearl Meyer analyzes the compensation paid to our executive officers using national survey data for the banking industry and selects a scope of institutions comparable to us in asset size.

 

Fiscal 2022 Executive Compensation Program in Detail

 

Base Salaries. We seek to provide our named executive officers and other executives with a competitive annual base salary. We do so in order to attract and retain an appropriate caliber of talent for the position. Our base salary levels reflect a combination of factors, including competitive pay levels and the executive’s experience and tenure, individual performance and job responsibilities. We generally review salary levels annually to recognize these factors.

 

Effective August 30, 2021, Mr. Westbrook’s base salary was increased in conjunction with his promotion to President of the Company and Chief Executive Officer of the Bank. Effective September 27, 2021, Messrs. Stonestreet, VunCannon and DeMarcus and Ms. Powell received increases in their base salaries that were merit-based and to maintain such salaries at approximately the 50th percentile of the survey benchmark data for their positions. These increases are reflected in the following table.

 

Name  Base Salary
Before Increase
   Base Salary
After Increase
   Percentage
Increase
 
Dana L. Stonestreet  $546,500   $562,900    3.00%
C. Hunter Westbrook  $400,000   $450,000    12.50%
Tony J. VunCannon  $266,000   $272,650    2.50%
W. Mark DeMarcus  $280,012   $288,412    3.00%
Kristin Y. Powell  $255,000   $265,000    3.92%

 

Effective July 4, 2022, Ms. Powell’s base salary was increased in conjunction with her promotion from Consumer Banking Group Executive to Consumer and Business Banking Group Executive. Effective September 1, 2022, in conjunction with Mr. Westbrook’s promotion to Chief Executive Officer of the Company and Mr. Stonestreet’s transition from that position to Executive Chairman, Mr. Westbrook’s base salary was increased and Mr. Stonestreet’s base salary was decreased. Effective September 26, 2022, Messrs. VunCannon and DeMarcus received increases in their base salaries that were merit-based and to maintain such salaries at approximately the 50th percentile of the survey benchmark data for their positions. These changes are reflected in the following table.

 

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Name  Base Salary
Before Change
   Base Salary
After Change
   Percentage
Change
 
Dana L. Stonestreet  $562,900   $420,000    (25.39)%
C. Hunter Westbrook  $450,000   $550,000    22.22%
Tony J. VunCannon  $272,650   $280,830    3.00%
W. Mark DeMarcus  $288,412   $295,622    2.50%
Kristin Y. Powell  $265,000   $285,000    7.55%

 

Annual Incentives. Under the SOC Incentive Program, participating executive officers are generally eligible to earn an annual cash bonus ranging from 50% to 150% of their targeted incentive award opportunities based on the extent to which certain weighted performance goals have been achieved relative to a targeted level of performance. Executive officers receive a payout of 50% of their targeted incentive award opportunity if actual performance under a performance goal is at the threshold (minimum) level of performance, 100% of their targeted incentive award opportunity if actual performance is at the target level of performance, and 150% of their targeted incentive award opportunity if actual performance is at or above the stretch (maximum) level of performance, subject to the discretion of the Compensation Committee to modify awards.

 

For fiscal 2021, the payout percentages for performance at the threshold, target and stretch levels of performance were 25-50%, 100% and 130%, respectively. The payout percentages were changed for fiscal 2021 due to the uncertainties in the operating environment and the challenge of establishing reasonable operating targets for that fiscal year due to the impacts of the COVID-19 pandemic. The Committee focused on providing appropriate, but reduced, award opportunities for performance in fiscal 2021.

 

Set forth below is a summary of the award opportunities for fiscal 2022 under the SOC Incentive Program for Messrs. Stonestreet, Westbrook and VunCannon. For fiscal 2022, Mr. DeMarcus and Ms. Powell did not participate in the SOC Incentive Program but instead were participants in the Company’s Management Incentive Plan because they were not executive officers prior to March 27, 2022.

 

Dana L. Stonestreet
    
Targeted Incentive Award Opportunity (as a % of Base Salary):  55%
    
Targeted Incentive Award Opportunity (as a $ Amount):  $309,595
    
Performance Goals  Weighting
Pre-Tax, Pre-Provision Income  50%
Noninterest Income  10%
Efficiency Ratio  20%
Functional Team Goals  20%

 

C. Hunter Westbrook
    
Targeted Incentive Award Opportunity (as a % of Base Salary):  45%
    
Targeted Incentive Award Opportunity (as a $ Amount):  $202,500
    
Performance Goals  Weighting
Pre-Tax, Pre-Provision Income  50%
Noninterest Income  10%
Efficiency Ratio  20%
Functional Team Goals  20%

 

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Tony J. VunCannon
    
Targeted Incentive Award Opportunity (as a % of Base Salary):  30%
    
Targeted Incentive Award Opportunity (as a $ Amount):  $81,795
    
Performance Goals  Weighting
Pre-Tax, Pre-Provision Income  45%
Noninterest Income  10%
Efficiency Ratio  20%
Functional Team Goals  25%

 

The following table outlines the SOC Incentive Program performance goals, other than functional team goals (the “corporate performance goals”), and actual results for fiscal 2022, as well as the payout achievement of the corporate performance goals for fiscal 2022 (dollars in thousands):

 

Corporate Performance Goal  Threshold   Target   Maximum   Fiscal
2022
Actual
Results
   Payout
Achievement
as
Calculated
 
Pre-Tax, Pre-Provision Income  $38,608   $42,898   $51,478   $44,686    110.4%
Noninterest Income  $37,803   $42,003   $50,404   $37,301    0.0%
Efficiency Ratio   73.55%   71.11%   66.44%   69.25%   119.9%

 

The SOC Incentive Program permitted the Compensation Committee to modify payout amounts at the committee’s discretion based on changes in key asset quality indicators and/or performance in comparison to a peer group. The Compensation Committee did not modify payout amounts for fiscal 2022 because the Committee determined that asset quality at fiscal year-end and the Company’s movement toward peer financial performance were both satisfactory.

 

The Company’s adjusted pre-tax, pre-provision income for fiscal 2022 (a 50% weighting in determining the awards payable to Messrs. Stonestreet and Westbrook and a 45% weighting in determining the award payable to Mr. VunCannon) was $44.7 million, which is higher than the target level of performance of $42.9 million but lower than the stretch level of performance of $51.5 million. The adjusted pre-tax, pre-provision income amount for fiscal 2022 excludes $1.9 million from the gain on sale of securities and $1.8 million in expenses related to the transition of Mr. Stonestreet to the role of Executive Chairman.

 

The Company’s adjusted noninterest income for fiscal 2022 (a 10% weighting in determining the award payable to each of Messrs. Stonestreet, Westbrook, and VunCannon) was $37.3 million, which is lower than the threshold level of performance of $37.8 million. The adjusted noninterest income amount for fiscal 2022 excludes $1.9 million from the gain on sale of securities.

 

The Company’s adjusted efficiency ratio for fiscal 2022 (a 20% weighting in determining the awards payable to Messrs. Stonestreet, Westbrook, and VunCannon) was 69.25%, which was lower (i.e., better) than the target level of performance of 71.11% but higher than the stretch level of performance of 66.44%. The adjusted efficiency ratio for fiscal 2022, which was calculated by dividing total noninterest expense of $103.4 million by total income of $149.3 million, includes in total income $1.2 million in tax equivalent adjustments for tax-free interest income on municipal leases and excludes $1.8 million in expenses related to the transition of Mr. Stonestreet to the role of Executive Chairman.

 

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The following table outlines the payout achievement of the SOC Incentive Program functional team goals for fiscal 2022:

 

Name  Weighting   Payout Achievement
(as a % of Target)
 
Dana L. Stonestreet   20%   115%
C. Hunter Westbrook   20%   125%
Tony J. VunCannon   25%   100%

 

In the case of Mr. Stonestreet, who, during fiscal 2022, led and was ultimately responsible for the performance of the other members of our strategic operating committee, goals achieved reflect those collectively achieved by the other members of the strategic operating committee, as well as continued progress with the execution of the Company’s strategic plan, continued focus on potential in-market and adjacent market merger and acquisition opportunities, active monitoring of the progress and profitability of existing and new lines of business, furthering efforts on the Company’s diversity, equity and inclusion initiatives, working closely with the Compensation Committee on executive succession planning and with Mr. Westbrook on Mr. Westbrook’s transition to the CEO position, and working with the Governance and Nominating Committee on corporate governance matters, including director succession and Board refreshment.

 

In the case of Mr. Westbrook, goals achieved included leading the lines of business with loan production, gain on sale of loans, and deposit growth that exceeded 125% of planned growth levels for the fiscal year. In addition, Mr. Westbrook led teams that made significant progress on loan risk grading expansion, deposit gathering strategies and multi-year digital enhancements.

 

In the case of Mr. VunCannon, goals achieved included the continued development of a new financial planning and analysis model, enhancing the model for the allowance for credit losses, completing the buildout of the finance and accounting department, and supporting various new strategic projects across the Company.

 

As noted above, for fiscal 2022, Mr. DeMarcus and Ms. Powell did not participate in the SOC Incentive Program but instead were participants in the Company’s Management Incentive Plan, under which they were each eligible for a cash bonus largely based on an assessment of their achievement of individual performance goals.

 

In the case of Mr. DeMarcus, goals achieved included solid performance in the areas of commercial lending, deposits and fee income, enhancements to treasury management profitability reporting, and building a pipeline for recruiting. Additionally, Mr. DeMarcus ensured the SBA back-office conversion was seamless, without customer interruption and operationally sound.

 

In the case of Ms. Powell, goals achieved included ensuring the branch consolidation met financial hurdles and was executed in an operationally safe and sound manner. In addition, Ms. Powell achieved goals related to consumer deposit growth, mortgage loan volumes and related gain on sale fee income.

 

Based on the results discussed above, the following table shows the actual incentive award amounts earned for fiscal 2022 under the SOC Incentive Program by Messrs. Stonestreet, Westbrook and VunCannon and under the Management Incentive Plan by Mr. DeMarcus and Ms. Powell. The payout amounts are also set forth in the Summary Compensation Table under the “Non-Equity Incentive Plan Compensation” column.

 

   Target Incentive
Award Opportunity
   Actual Award
Payout
   Actual Award
Payout
 
Name  (as a % of
Base Salary)
   (as a % of
Base Salary)
   (as a $
Amount)
 
Dana L. Stonestreet   55%   56%  $316,344 
C. Hunter Westbrook   45%   47%  $210,965 
Tony J. VunCannon   30%   30%  $80,699 
W. Mark DeMarcus   30%   29%  $85,000 
Kristin Y. Powell   30%   32%  $85,000 

 

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The SOC Incentive Program and Management Incentive Plan documents each contain a clawback provision, which provides that if we are required to restate our financial statements due to our material non-compliance with any financial reporting requirement, a participant must, unless otherwise determined in the sole discretion of the Committee, reimburse us to the extent any incentive payment to the participant was calculated based on financial results that were required to be restated.

 

Equity-Based Awards. Equity-based awards, which are currently granted under the Company’s 2013 Omnibus Incentive Plan, are designed to align the interests of award recipients with the interests of our stockholders by providing award recipients with the opportunity to share in the long-term appreciation, if any, in the Company’s stock price which may occur after their awards are granted. At the annual meeting, stockholders will be asked to approve the Company’s 2022 Omnibus Incentive Plan.  If the 2022 Omnibus Incentive Plan is approved at the annual meeting, no future awards will be made under the 2013 Omnibus Incentive Plan.  See “Proposal III. Approval of the 2022 Omnibus Incentive Plan.”

 

During fiscal 2022, Messrs. Stonestreet, Westbrook and VunCannon were each granted performance-based restricted stock units, with performance measured by the cumulative fully diluted earnings per share of the Company over the three-year period ending June 30, 2024, calculated in accordance with accounting principles generally accepted in the United States (“GAAP”), exclusive of the after-tax effects of (i) merger and consolidation costs, (ii) deleveraging programs implemented by the Company, (iii) changes in unrealized gain (loss) on speculative derivatives and (iv) other adjustments as determined by the Compensation Committee. Payout will range from 25% of the target number of shares for performance at 80% of target to 150% of the target number of shares for performance at 110% of target. The target number of shares underlying the performance-based awards to Messrs. Stonestreet, Westbrook and VunCannon were 4,927, 1,790 and 759, respectively.

 

The following table illustrates the performance/payout structure of the performance-based restricted stock units awarded during fiscal 2022 to Messrs, Stonestreet, Westbrook and VunCannon. Payout amounts will be interpolated on a straight-line basis.

 

Measure  Performance/Payout  Threshold  Target  Maximum
EPS  Performance  80% of target  100% of target  110% of target
   Payout  25% of target  100% of target  150% of target

 

The following table shows the target number of shares underlying the performance-based restricted stock units awarded during fiscal 2022 to Messrs. Stonestreet, Westbrook and VunCannon and the fair value of such awards, as determined under ASC 718, on the grant date:

 

Name  Target Number of
Shares Underlying
Performance-Based
Restricted Stock Units
   Grant Date
Fair Value
 
Dana L. Stonestreet   4,927   $154,461 
C. Hunter Westbrook   1,790   $56,117 
Tony J. VunCannon   759   $23,795 

 

During fiscal 2022, Messrs. Westbrook and VunCannon also were awarded shares of restricted stock with time-based vesting, as were Mr. DeMarcus and Ms. Powell. These awards are scheduled to vest in five equal annual installments commencing on the first anniversary of the grant date. Mr. Stonestreet did not receive a time-based restricted stock award ─ his entire equity award was granted in performance-based restricted stock units as described above.

 

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The following table shows the number of shares of time-based restricted stock awarded during fiscal 2022 to Messrs. Westbrook, VunCannon and DeMarcus and Ms. Powell and the fair value of such awards, as determined under ASC 718, on the grant date:

 

Name  Number of Shares
of Time-Based Restricted Stock
   Grant Date
Fair Value
 
C. Hunter Westbrook   1,791   $56,148 
Tony J. VunCannon   760   $23,826 
W. Mark DeMarcus   2,000   $62,700 
Kristin Y. Powell   2,500   $78,375 

 

During fiscal 2022, Messrs. Westbrook and DeMarcus and Ms. Powell were granted stock options with time-based vesting. These options are scheduled to vest in five equal annual installments commencing on the first anniversary of the grant date. The exercise price of each option is $31.35, which was the closing price of the Company’s common stock on the grant date.

 

The following table shows the number of shares underlying stock options granted during fiscal 2022 to Messrs. Westbrook and DeMarcus and Ms. Powell and the fair value of such options, as determined under ASC 718, on the grant date:

 

Name  Number of Option Shares   Grant Date
Fair Value
 
C. Hunter Westbrook   10,000   $86,770 
W. Mark DeMarcus   2,000   $17,354 
Kristin Y. Powell   2,500   $21,693 

 

During fiscal 2020, Messrs. Stonestreet, Westbrook and VunCannon were each granted performance-based restricted stock units, with performance measured by the cumulative fully diluted earnings per share of the Company over the three-year period ended June 30, 2022, calculated in accordance with GAAP, exclusive of the after-tax effects of (i) merger and consolidation costs, (ii) deleveraging programs implemented by the Company, (iii) changes in unrealized gain (loss) on speculative derivatives and (iv) other adjustments as determined by the Compensation Committee. Payout was to range from 50% of the target number of shares for performance at 90% of target to 150% of the target number of shares for performance at 110% of target.

 

The target number of shares underlying the performance-based awards granted during fiscal 2020 to Messrs. Stonestreet, Westbrook and VunCannon were 5,250, 1,625 and 875, respectively. The target and actual cumulative fully diluted earnings per share of the Company over the three-year period ended June 30, 2022, calculated as described above, were $5.19 and $5.54, respectively. Cumulative fully diluted GAAP earnings per share of $4.47 were adjusted for the prepayment penalties paid in fiscal 2021 related to the repayment of all our remaining long-term borrowings, expenses incurred in fiscal 2021 related to the announced branch closures, and a nonrecurring gain on the sale of 1-4 family loans in fiscal 2020. Accordingly, the number of shares paid out to Messrs. Stonestreet, Westbrook and VunCannon, following the Compensation Committee’s certification on September 12, 2022 of the level of performance achieved, were 7,014, 2,171, and 1,169, respectively.

 

Other Compensation Practices, Policies and Guidelines

 

Stock Ownership Guidelines. Effective September 1, 2017, we adopted stock ownership guidelines applicable to our directors and executive officers in order to further align their interests with the interests of our stockholders. The minimum levels of common stock ownership under the guidelines are as follows: Chief Executive Officer – three times base salary; other executive officers – one times base salary; and non-employee directors – five times annual Board retainer. Shares qualifying for purposes of the guidelines include shares owned directly, shares owned indirectly in which the director or executive officer has a pecuniary interest, vested and unvested shares of time-based restricted stock, and shares underlying vested and unvested time-based restricted stock units. Unearned performance shares awarded to executive officers and unexercised stock options that are vested and in-the-money do not qualify for purposes of the guidelines.

 

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Our directors and executive officers are required to satisfy their minimum levels of ownership by the end of the five-year period commencing on the next July 1st following their appointment or election as a director or hiring or designation as an executive officer. Progress toward, and compliance with, the minimum levels of ownership is assessed following the end of each fiscal year, with the value of stock holdings based on the closing price of our common stock on the last trading day of the applicable fiscal year (referred to as the “determination date”). If an individual does not meet the guidelines as of the applicable determination date, then until he or she meets the guidelines, he or she must retain 50 percent of his or her vested full value shares of common stock acquired as equity compensation after the determination date and is prohibited from selling shares acquired after the determination date upon exercise of stock options, other than shares sold for the purpose of paying the option exercise price and covering any tax obligation. As of June 30, 2022, all directors and executive officers either satisfied or were progressing toward their minimum levels of ownership, as applicable.

 

Violations of the guidelines by executive officers may result in adjustments to incentive-based compensation, including a requirement to receive incentive compensation in the form of Company common stock or the loss of future equity grants. The Company’s Board of Directors has the discretion to enforce the guidelines on a case-by-case basis, including the development of alternative guidelines to avoid the imposition of a severe hardship upon an individual director or executive officer.

 

Anti-Hedging and Pledging Policy. Our executive officers and directors are subject to a policy that specifically prohibits: 1) directly or indirectly engaging in hedging or monetization transactions, through transactions in the Company’s securities or through the use of financial instruments designed for such purpose; 2) engaging in short sale transactions in the Company’s securities; and 3) pledging the Company’s securities as collateral for a loan, including through the use of traditional margin accounts with a broker.

 

Deferred Compensation Plan. Under HomeTrust Bank’s Deferred Compensation Plan, directors and a select group of employees can elect to defer a portion of their cash compensation. Messrs. Stonestreet and VunCannon are the only named executive officers who currently participate in this plan. See “—Deferred Compensation Plan.”

 

Executive Medical Care Plan. HomeTrust Bank maintains an Executive Medical Care Plan (the “EMCP”), which is a nonqualified, deferred compensation plan under which certain key employees are given the opportunity to contribute toward, and to receive employer contributions toward, certain health and long-term care benefits, including the payment of health and long-term care plan premiums and the reimbursement of medical expenses. Messrs. Stonestreet and VunCannon are the only named executive officers who currently participate in the EMCP. For additional information regarding the EMCP and the EMCP benefits of each of the participating named executive officers, see “—Executive Medical Care Plan.”

 

Executive Supplemental Retirement Income Plan (SERP). Under HomeTrust Bank’s SERP, a participating executive is entitled to receive an annual supplemental retirement income benefit as specified in his or her joinder agreement to the SERP master agreement, payable monthly, commencing on his or her benefit eligibility date or on the date specified in his or her joinder agreement. Unless a different date is specified in the executive’s joinder agreement, the benefit eligibility date is the first day of the month next following the later of the month in which the executive attains age 55 or separates from service with the Bank (subject to a six-month delay for employees subject to Section 409A of the Internal Revenue Code to the extent necessary to comply with Section 409A) for any reason other than cause. Messrs. Stonestreet and VunCannon are the only named executive officers who currently participate in the SERP. Both the SERP and the Director Emeritus Plan were established by HomeTrust Bank when it was a mutual institution to compensate senior executives and directors for their service to HomeTrust Bank in recognition of the fact that equity incentive plans are not available to mutual institutions. The Company has fully accrued for the expense associated with the present values of the accumulated benefits under the SERP and the Director Emeritus Plan. For additional information regarding the SERP and the specific terms of the SERP benefits of each of the participating named executive officers, see “—Executive Supplemental Retirement Income Plan.”

 

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KSOP. Effective July 1, 2015, the HomeTrust Bank 401(k) plan and the employee stock ownership plan (the “ESOP”) were combined to form the HomeTrust Bank KSOP (the “KSOP”). Participation in the 401(k) component of the KSOP is available to all of our employees who meet minimum eligibility requirements. This plan allows our employees to save money for retirement in a tax-advantaged manner. During fiscal 2022, we matched employee contributions, to the extent allowed under qualified plan limitations, fifty cents on the dollar up to 6% of compensation. Our contributions for fiscal 2022 under the 401(k) component of this plan to the named executive officers are reflected as compensation for fiscal 2022 in the Summary Compensation Table under the “All Other Compensation” column.

 

The ESOP was established in connection with our Mutual-to-Stock Conversion in 2012. The ESOP trust purchased shares of HomeTrust Bancshares common stock in the Conversion using the proceeds of a loan from HomeTrust Bancshares. This borrowing is repaid over a period of 20 years using contributions from HomeTrust Bank to the trust fund. As each payment of principal and interest is made on the loan, a percentage of HomeTrust Bancshares common stock is allocated to eligible employees’ plan accounts, typically on an annual basis as of the end of the plan year. The ESOP component of the KSOP gives eligible employees an equity interest in HomeTrust Bancshares, thereby aligning their interests with the interests of our stockholders, and an additional retirement benefit in the form of HomeTrust Bancshares common stock.

 

Effective July 1, 2019, the plan year-end of the KSOP was changed from June 30th to December 31st, resulting in a transitional short plan year that commenced on July 1, 2019 and ended on December 31, 2019, followed by a new plan year that commenced on January 1, 2020 and ended on December 31, 2020. The allocations made for the plan years ended December 31, 2020 and December 30, 2021 under the ESOP component of the KSOP to the named executive officers are reflected as compensation for fiscal 2021 and fiscal 2022, respectively, in the Summary Compensation Table under the “All Other Compensation” column.

 

Other Employee Benefits. Other benefits, in which all employees generally may participate, include the following: medical and dental insurance coverage, vision care coverage, group life insurance coverage and long- and short-term disability insurance coverage. HomeTrust Bank reimburses employees with salaries in excess of $100,000 for the premium paid for long-term disability insurance.

 

Perquisites and Other Personal Benefits. Other than providing Mr. Stonestreet with a company automobile and providing Mr. Westbrook with an automobile allowance, we currently do not provide the named executive officers with any perquisites or other personal benefits.

 

Employment and Change in Control Severance Agreements. The Company is a party to an amended and restated employment and transition agreement with Mr. Stonestreet, amended and restated employment agreements with Messrs. Westbrook and VunCannon and change in control severance agreements with Mr. DeMarcus and Ms. Powell. These agreements are intended to be closely aligned with market-based terms and best practices in the executive compensation area.

 

The agreements require a “double trigger” in order for any payments or benefits to be provided to the executive in connection with or following a change in control — in other words, both a change in control and an involuntary termination of employment (which includes a voluntary termination by the executive following a material reduction in his duties, responsibilities or benefits) must occur. The purpose of providing the change in control payments is to attract and retain top level executives of the highest caliber and mitigate the risk to these executives that their employment will be involuntarily terminated in the event we are acquired. At the same time, a change in control, by itself, will not automatically trigger a payout, as our intention is to induce the executive to remain employed following a change in control so long as the acquiror so desires without a material reduction in the executive’s duties, responsibilities or benefits.

 

For additional information, see “Employment and Transition Agreement with Mr. Stonestreet, Employment Agreements with Messrs. Westbrook and VunCannon and Change in Control Severance Agreements with Mr. DeMarcus and Ms. Powell.”

 

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Summary Compensation Table

 

The following table sets forth information concerning the compensation paid to or earned by the named executive officers for fiscal years 2022, 2021 and 2020:

 

Name and Principal Position   Fiscal Year     Salary
($)
    Bonus
($)
   

Stock
Awards

($)(3)

    Option
Awards
($)(4) 
    Non-
Equity
Incentive
Plan
Compensation
($)
    Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($)(5) 
    All
Other
Compensation
($)(6) 
    Total
Compensation
($)
 
Dana L. Stonestreet,
Chairman of the Company and
the Bank(1) 
  2022     $ 558,485     $ ---     $ 154,461     $ ---     $ 316,344     $ 32,014     $ 25,712     $ 1,087,016  
  2021     $ 542,207     $ ---     $ 162,182     $ ---     $ 315,604     $ 135,539     $ 23,512     $ 1,179,044  
  2020     $ 531,705     $ ---     $ 142,328     $ ---     $ 190,957     $ 159,497     $ 15,858     $ 1,040,345  
                                                                       
C. Hunter Westbrook,
President and Chief Executive Officer
of the Company and the Bank (1) 
  2022     $ 440,385     $ ---     $ 112,265     $ 86,770     $ 210,965     $ ---     $ 26,671     $ 877,056  
  2021     $ 394,029     $ ---     $ 97,112     $ ---     $ 172,000     $ ---     $ 25,470     $ 688,611  
  2020     $ 378,641     $ ---     $ 88,108     $ ---     $ 110,838     $ ---     $ 12,642     $ 590,229  
                                                                       
Tony J. VunCannon,
Executive Vice President,
Chief Financial Officer,
Corporate Secretary and
Treasurer of the Company and the Bank
  2022     $ 270,860     $ ---     $ 47,621     $ ---     $ 80,699     $ 25,020     $ 23,721     $ 447,921  
  2021     $ 263,889     $ ---     $ 50,241     $ ---     $ 78,803     $ 13,237     $ 20,991     $ 427,161  
  2020     $ 257,479     $ ---     $ 47,443     $ ---     $ 55,832     $ 12,080     $ 9,227     $ 382,061  
                                                                       
W. Mark DeMarcus,
Executive Vice President and
Commercial Banking Group Executive
of the Company and the Bank(2) 
  2022     $ 286,150     $ ---     $ 62,700     $ 17,354     $ 85,000     $ ---     $ 22,134     $ 473,338  
                                                                       
Kristin Y. Powell,
Executive Vice President and Consumer
and Business Banking Group Executive
of the Company and the Bank(2) 
  2022     $ 262,308     $ ---     $ 78,375     $ 21,693     $ 85,000     $ ---     $ 21,055     $ 468,431  

 

 

(1) Prior to September 1, 2022, Mr. Stonestreet was Chairman and Chief Executive Officer of the Company and Chairman of the Bank, and Mr. Westbrook was President and Chief Operating Officer of the Company and President and Chief Executive Officer of the Bank. Prior to September 1, 2021, Mr. Stonestreet was Chairman, President and Chief Executive Officer of the Company and Chairman and Chief Executive Officer of the Bank, and Mr. Westbrook was Senior Executive Vice President and Chief Operating Officer of the Company and President and Chief Operating Officer of the Bank.  Prior to October 28, 2020, Mr. Stonestreet was also President of the Bank and Mr. Westbrook was Senior Executive Vice President and Chief Operating Officer of the Company and the Bank.
(2) No compensation information is provided for Mr. DeMarcus or Ms. Powell for fiscal 2021 or fiscal 2020 because they were not named executive officers for those fiscal years.
(3) Represents the grant date fair values under ASC Topic 718 of stock awards.  The assumptions used in the calculations of the grant date fair value amounts are included in Note 14 of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022 filed with the SEC.  The number of shares for the stock awards made during fiscal 2022 to the named executive officers are provided in the Grants of Plan-Based Awards table. The entirety of Mr. Stonestreet’s stock award for fiscal 2022, and a portion of the stock awards for fiscal 2022 to Messrs. Westbrook and VunCannon, was in the form of performance-based restricted stock units.  The value of the performance-based restricted stock units reflected in the table above is the grant date fair value based on probable outcomes at the date of grant.  For each such award, the fair value at grant date reflected in the table above, and the value at grant date assuming the highest level of performance (maximum value), are as follows:   Name Fair Value at Grant Date Maximum Value at Grant Date Dana L. Stonestreet C. Hunter Westbrook Tony J. VunCannon $154,461 $  56,117 $  23,795 $ 231,692 $   84,175 $   35,692  
(4)

Represents the grant date fair values under ASC Topic 718, as estimated by using the Black-Scholes pricing model, of awards of options to purchase shares of the Company’s common stock. The assumptions used in the calculations of the grant date fair value amounts are included in Note 14 of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022 filed with the SEC.

 

37 

 

 

(5) Amounts under this column for fiscal 2022 present the aggregate of (i) the change in the actuarial present value of the named executive officer’s accumulated benefit under the SERP from June 30, 2021 to June 30, 2022, (ii) above-market interest on amounts deferred under the Deferred Compensation Plan and (iii) above-market interest on amounts deferred under the EMCP, respectively, as follows: Mr. Stonestreet – (i) $13,766; (ii) $18,248; and (iii) $0; Mr. Westbrook – (i) $0; (ii) $0;  and (iii) $0; Mr. VunCannon – (i) $22,213; (ii) $2,807; and (iii) $0; Mr. DeMarcus – (i) $0; (ii) $0; and (iii) $0; and Ms. Powell – (i) $0; (ii) $0; and (iii) $0.  Amounts under this column for fiscal 2021 present the aggregate of (i) the change in the actuarial present value of the named executive officer’s accumulated benefit under the SERP from June 30, 2020 to June 30, 2021, (ii) above-market interest on amounts deferred under the Deferred Compensation Plan and (iii) above-market interest on amounts deferred under the EMCP, respectively, as follows: Mr. Stonestreet – (i) $76,343; (ii) $37,621; and (iii) $21,575; Mr. Westbrook – (i) $0; (ii) $0;  and (iii) $0; and Mr. VunCannon – (i) $0; (ii) $5,787; and (iii) $7,450.  Amounts under this column for fiscal 2020 present the aggregate of (i) the change in the actuarial present value of the named executive officer’s accumulated benefit under the SERP from June 30, 2019 to June 30, 2020, (ii) above-market interest on amounts deferred under the Deferred Compensation Plan and (iii) above-market interest on amounts deferred under the EMCP, respectively, as follows: Mr. Stonestreet – (i) $99,700; (ii) $41,767; and (iii) $18,030; Mr. Westbrook – (i) $0; (ii) $0; and (iii) $0; and Mr. VunCannon – (i) $0; (ii) $6,425; and (iii) $5,655.        
(6) For Messrs. Stonestreet, Westbrook, VunCannon, DeMarcus and Ms. Powell, amounts under this column for fiscal 2022 consist of the following:  Mr. Stonestreet –life insurance premiums paid by HomeTrust Bank of $1,242; reimbursement for long-term disability insurance premium paid by Mr. Stonestreet of $897; employer contributions under HomeTrust Bank’s 401(k) plan of $8,250; value as of December 31, 2021 of ESOP allocation of $10,017; dividends on unvested shares of restricted stock of $2,496; and dividend equivalents on performance-based restricted stock units that vested during fiscal 2022 of $2,810; Mr. Westbrook –life insurance premiums paid by HomeTrust Bank of $1,104; reimbursement for long-term disability insurance premium paid by Mr. Westbrook of $897; employer contributions under HomeTrust Bank’s 401(k) plan of $9,776; value as of December 31, 2021 of ESOP allocation of $10,017; dividends on unvested shares of restricted stock of $4,007; and dividend equivalents on performance-based restricted stock units that vested during fiscal 2022 of $870; Mr. VunCannon –life insurance premiums paid by HomeTrust Bank of $828; reimbursement for long-term disability insurance premium paid by Mr. VunCannon of $897; employer contributions under HomeTrust Bank’s 401(k) plan of $10,457; value as of December 31, 2021 of ESOP allocation of $10,017; dividends on unvested shares of restricted stock of $1,054; and dividend equivalents on performance-based restricted stock units that vested during fiscal 2022 of $468; Mr. DeMarcus –life insurance premiums paid by HomeTrust Bank of $690; reimbursement for long-term disability insurance premium paid by Mr. DeMarcus of $897; employer contributions under HomeTrust Bank’s 401(k) plan of $8,585; value as of December 31, 2021 of ESOP allocation of $10,017; and dividends on unvested shares of restricted stock of $1,945; and Ms. Powell –life insurance premiums paid by HomeTrust Bank of $690; reimbursement for long-term disability insurance premium paid by Ms. Powell of $897; employer contributions under HomeTrust Bank’s 401(k) plan of $7,869; value as of December 31, 2021 of ESOP allocation of $10,017; and dividends on unvested shares of restricted stock of $1,582. For Messrs. Stonestreet, Westbrook and VunCannon, amounts under this column for fiscal 2021 consist of the following:  Mr. Stonestreet –life insurance premiums paid by HomeTrust Bank of $1,337; reimbursement for long-term disability insurance premium paid by Mr. Stonestreet of $823; employer contributions under HomeTrust Bank’s 401(k) plan of $8,580; value as of December 31, 2020 of ESOP allocation of $9,076; and dividends on unvested shares of restricted stock of $3,696; Mr. Westbrook –life insurance premiums paid by HomeTrust Bank of $1,188; reimbursement for long-term disability insurance premium paid by Mr. Westbrook of $823; employer contributions under HomeTrust Bank’s 401(k) plan of $9,776; value as of December 31, 2020 of ESOP allocation of $9,076; and dividends on unvested shares of restricted stock of $4,607; and Mr. VunCannon –life insurance premiums paid by HomeTrust Bank of $891; reimbursement for long-term disability insurance premium paid by Mr. VunCannon of $823; employer contributions under HomeTrust Bank’s 401(k) plan of $9,285; value as of December 31, 2020 of ESOP allocation of $9,076; and dividends on unvested shares of restricted stock of $916.  For Messrs. Stonestreet, Westbrook and VunCannon, amounts under this column for fiscal 2020 consist of the following:  Mr. Stonestreet –life insurance premiums paid by HomeTrust Bank of $1,458; reimbursement for long-term disability insurance premium paid by Mr. Stonestreet of $828; employer contributions under HomeTrust Bank’s 401(k) plan of $9,060; and dividends on unvested shares of restricted stock of $4,512; Mr. Westbrook –life insurance premiums paid by HomeTrust Bank of $1,296; reimbursement for long-term disability insurance premium paid by Mr. Westbrook of $828; employer contributions under HomeTrust Bank’s 401(k) plan of $5,667; and dividends on unvested shares of restricted stock of $4,851; and Mr. VunCannon –life insurance premiums paid by HomeTrust Bank of $972; reimbursement for long-term disability insurance premium paid by Mr. VunCannon of $828; employer contributions under HomeTrust Bank’s 401(k) plan of $6,717; and dividends on unvested shares of restricted stock of $710.           

 

38 

 

 

Grants of Plan-Based Awards

 

              All             
              Other   All         
              Stock   Other         
              Awards:   Option       Grant 
         Estimated Future   Number   Awards:       Date 
      Estimated Possible Payouts   Payouts   of   Number       Fair 
      Under Non-Equity   Under Equity   Shares   of   Exercise   Value 
      Incentive Plan Awards   Incentive Plan Awards   of   Securities   Price of   of Stock 
                              Stock or   Underlying   Option   and 
   Grant  Threshold   Target   Maximum   Threshold   Target   Maximum   Units   Options   Awards   Option 
Name  Date  ($)(1)    ($)(1)    ($)(1)    (#)(2)    (#)(2)    (#)(2)    (#)   (#)   ($/Sh)   Awards 
Dana L. Stonestreet  09/23/21  154,798   309,595   464,393   ---   ---   ---   ---   ---   ---   --- 
   02/11/22   ---    ---    ---    1,232    4,927    7,391    ---    ---    ---   $154,461(5)
                                                      
C. Hunter Westbrook  09/23/21   101,250    202,500    303,750    ---    ---    ---    ---    ---    ---    --- 
   02/11/22   ---    ---    ---    448    1,790    2,685    ---    ---    ---   $56,117(5)
   02/11/22   ---    ---    ---    ---    ---    ---    1,791(3)   ---    ---   $56,148(5)
   02/11/22   ---    ---    ---    ---    ---    ---    ---    10,000(4)  $31.35   $86,770(5)
                                                      
Tony J. VunCannon  09/23/21   40,898    81,795    122,693    ---    ---    ---    ---    ---    ---    --- 
   02/11/22   ---    ---    ---    190    759    1,139    ---    ---    ---   $23,795(5)
   02/11/22   ---    ---    ---    ---    ---    ---    760(3)   ---    ---   $23,826(5)
                                                     
W. Mark DeMarcus  09/23/21   n/a    86,524    n/a    ---    ---    ---    ---    ---    ---    --- 
   02/11/22   ---    ---    ---    ---    ---    ---    2,000(3)   ---    ---   $62,700(5)
  02/11/22   ---    ---    ---    ---    ---    ---    ---    2,000(4)  $31.35   $17,354(5)
                                                      
Kristin Y. Powell  09/23/21   n/a    79,500    n/a    ---    ---    ---    ---    ---    ---    --- 
   02/11/22   ---    ---    ---    ---    ---    ---    2,500(3)   ---    ---   $78,375(5)
   02/11/22   ---    ---    ---    ---    ---    ---    ---    2,500(4)  $31.35   $21,693(5)

 

 

(1)For Messrs. Stonestreet, Westbrook and VunCannon, represents the threshold (i.e. lowest), target and maximum amounts that were potentially payable for fiscal year 2022 under the Company’s SOC Incentive Program, and for Mr. DeMarcus and Ms. Powell, represents the target amounts that were potentially payable for fiscal year 2022 under the Company’s Management Incentive Plan. The actual amounts earned under these awards for fiscal year 2022 are reflected in the Summary Compensation Table under the “Non-Equity Incentive Plan Compensation” column. For additional information regarding the SOC Incentive Program and Management Incentive Plan, see “Compensation Discussion and Analysis—Fiscal 2022 Executive Compensation Program in Detail-Annual Incentives.”
(2)Represents the threshold (i.e. lowest), target and maximum number of shares issuable under performance-based restricted stock units based on performance over a three-year period. For additional information regarding these awards, see “Compensation Discussion and Analysis—Fiscal 2022 Executive Compensation Program in Detail-Omnibus Incentive Plan.”
(3)Represents a restricted stock award with the following vesting schedule: 20% increments on February 11, 2023, 2024, 2025, 2026 and 2027.
(4)Represents a stock option award with the following vesting schedule: 20% increments on February 11, 2023, 2024, 2025, 2026 and 2027.
(5)Represents the grant date fair value of the award determined in accordance with ASC Topic 718. The assumptions used in calculating the grant date fair value of the award are included in Note 14 of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022 filed with the SEC.

 

39 

 

 

 

Employment and Transition Agreement with Mr. Stonestreet, Employment Agreements with Messrs. Westbrook and VunCannon and Change in Control Severance Agreements with Mr. DeMarcus and Ms. Powell

 

Employment and Transition Agreement with Mr. Stonestreet. On May 23, 2022, the Company entered into an amended and restated employment and transition agreement with Mr. Stonestreet (the “Transition Agreement”). The Transition Agreement provides for (i) the transition of Mr. Stonestreet to Executive Chairman of the Company and the Bank, which occurred effective September 1, 2022: (ii) the voluntary relinquishment of Mr. Stonestreet’s title as Chief Executive Officer of the Company, which occurred effective September 1, 2022, as part of his transition toward retirement; (iii) a decrease in Mr. Stonestreet’s salary to $420,000, which occurred effective September 1, 2022, to reflect his reduced responsibilities; (iv) the retirement of Mr. Stonestreet as Executive Chairman and a director of the Company and the Bank effective as of the date of the Company’s 2023 annual meeting of shareholders or such earlier date as may be mutually agreed to by the parties (the “Separation Date”); and (v) the appointment of Mr. Stonestreet as a director emeritus of the Company effective immediately following the Separation Date.

 

The Transition Agreement provides that if Mr. Stonestreet remains employed as Executive Chairman of both the Company and the Bank until the Separation Date, he will receive a separation payment (the “Separation Payment”) equal to (a) the amount of cash compensation (as defined below) that would have been paid to him pursuant to the Transition Agreement as if he had experienced an involuntary termination (as defined below) on September 1, 2022, minus (b) the sum of the salary and any cash bonus paid to him after August 31, 2022, including any amounts deferred by him and excluding any bonus for services performed during the fiscal year ended June 30, 2022, with the Separation Payment payable in monthly installments through August 2024. In addition to the Separation Payment, if Mr. Stonestreet remains employed as Executive Chairman of both the Company and the Bank until his Separation Date, Mr. Stonestreet and his wife will have their Medicare premiums, as well as other insurance benefits (“Health and Other Insurance Benefits”), paid by the Company or the Bank through August 31, 2024.

 

Under the Transition Agreement, if Mr. Stonestreet is involuntarily terminated prior to the Separation Date, other than at the time of or within 12 months following a change in control of the Company or the Bank, he will receive, through August 31, 2024: (i) monthly payments of one-twelfth of the greater of his cash compensation or the Separation Payment; and (ii) continuation of the Health and Other Insurance Benefits. If Mr. Stonestreet is involuntarily terminated prior to the Separation Date at the time of or within 12 months following a change in control of the Company or the Bank, then in lieu of the benefits described in the immediately preceding sentence, Mr. Stonestreet will receive (i) a lump sum cash amount equal to three times his cash compensation, and (ii) continuation of the Health and Other Insurance Benefits until the three-year anniversary of the date of termination. The Transition Agreement provides that Mr. Stonestreet will either receive the full amount of these change in control severance payments or be cut back to the extent such payments would, or together with other payments would, be nondeductible under Section 280G of the Internal Revenue Code, whichever results in a greater after-tax benefit with Mr. Stonestreet paying any applicable excise tax.

 

The Transition Agreement provides that if Mr. Stonestreet dies while employed under the agreement, his estate or designated beneficiary will be entitled to receive: (i) a lump sum equal to the greater of (A) Mr. Stonestreet’s cash compensation for the remainder of the term of the agreement, reduced by the proceeds of any Company- or Bank-sponsored life insurance plan or policy covering Mr. Stonestreet, or (B) if Mr. Stonestreet died within six months prior to or 12 months following a change in control of the Company or the Bank, a lump sum cash amount equal to three times Mr. Stonestreet’s cash compensation; and (ii) the amounts of any benefits or awards which were earned with respect to the fiscal year in which Mr. Stonestreet died and which Mr. Stonestreet would have been entitled to receive had he remained employed, and the prorated amount of any bonus or incentive compensation for such fiscal year to which Mr. Stonestreet would have been entitled had he remained employed.  The Transition Agreement also provides that if the Company terminates Mr. Stonestreet’s employment after having established that he has incurred a disability, then after exhaustion of all paid time off days allocated for the calendar year, the Company will pay to Mr. Stonestreet monthly one-twelfth of his cash compensation for the remaining term of the agreement, reduced by the proceeds of any disability plan then in effect.  If Mr. Stonestreet’s employment is terminated on account of disability during the one year commencing on the effective date of a change in control of the Company or the Bank, he will receive his change in control severance payment and benefits as provided under the Transition Agreement.

 

Employment Agreements with Messrs. Westbrook and VunCannon. Effective September 11, 2018, the Company entered into amended and restated employment agreements with Messrs. Westbrook and VunCannon. The employment agreement with Mr. Westbrook provides for an initial term that ended on September 11, 2021, and the employment agreement with Mr. VunCannon provides for an initial term that ended on September 11, 2020. The term of each agreement extends by one year on September 11th of each year (beginning September 11, 2019), provided that the Company has not given written notice to the contrary to the executive within a specified period before such date and the executive has not received an unsatisfactory performance review by the Board of Directors of the Company or the Bank.

 

40 

 

 

In conjunction with his promotion to Chief Executive Officer of the Company, Mr. Westbrook’s employment agreement was amended to increase his base salary to $550,000, effective September 1, 2022. Mr. VunCannon’s employment agreement provides for a minimum annual base salary of not less than his base salary as in effect on the effective date of the agreement. Each employment agreement entitles the executive to participate in an equitable manner with all other executive officers of the Company and the Bank in such performance-based and discretionary bonuses, if any, as are authorized by the Boards of Directors of the Company and the Bank, and to participate in, to the same extent as executive officers of the Company and the Bank generally, all retirement and other employee benefits and any fringe benefits, and such other benefits as the Board of Directors may provide in its discretion.

 

Each employment agreement provides that if the executive is involuntarily terminated, other than at the time of or within 12 months following a change in control of the Company or the Bank, he will receive (i) monthly payments of one-twelfth of his cash compensation for the remaining term of the agreement, (ii) continuation of specified health insurance benefits for the executive and his dependents until the expiration of the remaining term of the agreement and (iii) continuation of specified other insurance benefits until the expiration of the remaining term of the agreement. Each employment agreement further provides that if the executive is involuntarily terminated at the time of or within 12 months following a change in control of the Company or the Bank, then in lieu of the benefits described in the immediately preceding sentence, the executive will receive (i) a lump sum cash amount equal to three times his cash compensation, (ii) continuation of specified health insurance benefits for the executive and his dependents until the three-year anniversary of the date of termination and (iii) continuation of specified other insurance benefits until the three-year anniversary of the date of termination. In addition, each employment agreement provides that the executive will either receive the full amount of these change in control severance payments or be cut back to the extent such payments would, or together with other payments would, be nondeductible under Section 280G of the Internal Revenue Code, whichever results in a greater after-tax benefit with the executive paying any applicable excise tax.

 

Each employment agreement provides that if the executive dies while employed under the agreement, his estate or designated beneficiary will be entitled to receive: (i) a lump sum equal to the executive’s cash compensation through the last day of calendar month in which his death occurred, plus the greater of (A) an additional three months of the executive’s cash compensation or (B) if the executive died within six months prior to or 12 months following a change in control of the Company or the Bank, a lump sum cash amount equal to three times the executive’s cash compensation; and (ii) the amounts of any benefits or awards which were earned with respect to the fiscal year in which the executive died and which the executive would have been entitled to receive had he remained employed, and the prorated amount of any bonus or incentive compensation for such fiscal year to which the executive would have been entitled had he remained employed.  Each employment agreement also provides that if the Company terminates the executive’s employment after having established that the executive has incurred a disability, then after exhaustion of all paid time off days allocated for the calendar year, the Company will pay to the executive monthly one-twelfth of his cash compensation for the remaining term of the agreement, reduced by the proceeds of any disability plan then in effect.  If the executive’s employment is terminated on account of disability during the one year commencing on the effective date of a change in control of the Company or the Bank, he will receive his change in control severance payment and benefits as provided under his employment agreement.

 

Change in Control Severance Agreements with Mr. DeMarcus and Ms. Powell. Effective September 11, 2018, the Company entered into an amended and restated change in control severance agreement with Mr. DeMarcus, and effective January 26, 2021, the Company entered into a change in control severance agreement with Ms. Powell. Mr. DeMarcus’s agreement provides for an initial term that ended on September 11, 2020, and Ms. Powell’s agreement provides for an initial term that ends on September 11, 2023. The term of each agreement extends by one year on September 11th of each year (beginning September 11, 2019, in the case of Mr. DeMarcus’s agreement, and beginning September 11, 2022, in the case of Ms. Powell’s agreement), provided that the Company has not given written notice to the contrary to the executive within a specified period before such date and the executive has not received an unsatisfactory performance review. Each agreement provides that if the executive is involuntarily terminated at the time of or within 12 months following a change in control of the Company or the Bank, the executive will receive (i) a lump sum cash amount equal to two times the executive’s cash compensation and (ii) specified health insurance benefits for the executive and his or her dependents. Each agreement further provides that these change in control severance payments are subject to reduction to the extent payments to the executive (whether under the agreement or otherwise) would be nondeductible under Section 280G of the Internal Revenue Code.

 

41 

 

 

For purposes of the Transition Agreement with Mr. Stonestreet, the employment agreements with Messrs. Westbrook and VunCannon and the change in control severance agreements with Mr. DeMarcus and Ms. Powell, the term “involuntary termination” includes a material diminution in the executive’s duties, responsibilities or benefits, and the term “cash compensation” is defined as the highest annual base salary rate paid to the executive at any time during his or her employment by the Company plus the higher of (i) the executive’s annual bonus paid during the year immediately preceding the date of termination or (ii) the executive’s target bonus for the year in which the date of termination occurs, in each case including any salary or bonus amounts deferred by the executive. The Company’s obligation to pay severance or provide benefits under these agreements is expressly conditioned upon the executive executing (and not revoking) a general release of claims.

 

42 

 

 

Outstanding Equity Awards at June 30, 2022

 

The following table provides information regarding the unexercised stock options and stock awards held by each of the named executive officers as of June 30, 2022.

 

   Option Awards   Stock Awards 
Name  Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
    Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
    Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
   Option
Exercise
Price ($)
   Option
Expiration
Date
   Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
    Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($)
   Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units
or Other
Rights
That Have
Not
Vested (#)
    Equity
Incentive
Plan
Awards:
Market
or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested ($)
 
Dana L. Stonestreet   104,400(2)    26,100(2)    ---   $26.00    02/11/2028    ---     ---    ---     --- 
                          4,800(3)   $120,000          
                          7,014(4)   $175,350          
                                   7,076(5)   $176,900 
                                   4,927(6)   $123,175 
C. Hunter Westbrook   49,134(1)            $14.37    02/11/2023                   
    16,000(2)    4,000(2)       $24.95    02/11/2027                   
    32,000(2)    8,000(2)       $26.00    02/11/2028                   
         10,000(11)       $31.35    02/11/2032                   
                          4,000(3)   $100,000          
                          500(3)   $12,500          
                          2,171(4)   $54,275          
                          650(7)   $16,250          
                          975(8)   $24,375          
                                   2,118(5)   $52,950 
                                   1,790(6)   $44,750 
                          1,695(9)   $42,375          
                          1,791(10)   $44,775          
Tony J. VunCannon   45,772(1)            $14.37    02/11/2023                   
    20,000(2)    5,000(2)       $26.00    02/11/2028                   
                          400(3)   $10,000          
                          1,169(4)   $29,225          
                          350(7)   $8,750          
                          525(8)   $13,125          
                                   1,096(5)   $27,400 
                                   759(6)   $18,975 
                          877(9)   $21,925          
                          760(10)   $19,000          
W. Mark DeMarcus   20,000(2)    5,000(2)       $26.00    02/11/2028                   
    800(12)    1,200(12)       $27.11    02/11/2030                   
    400(13)    1,600(13)       $22.92    02/11/2031                   
         2,000(11)       $31.35    02/11/2032                   
                          400(3)   $10,000          
                          600(7)   $15,000          
                          1,200(8)   $30,000          
                          1,600(9)   $40,000          
                          2,000(10)   $50,000          
Kristin Y.
Powell
   2,000(14)            $17.35    02/11/2026                   
    1,000(15)            $24.95    02/11/2027                   
    4,000(2)    1,000(2)       $26.00    02/11/2028                   
    400(13)    1,600(13)       $22.92    02/11/2031                   
         2,500(11)       $31.35    02/11/2032                   
                          100(3)   $2,500          
                          400(7)   $10,000          
                          600(8)   $15,000          
                          1,600(9)   $40,000          
                          2,500(10)   $62,500          

 

 

(1)Remaining unexercised portion of stock option award with the following vesting schedule: 20% increments on February 11, 2014, 2015, 2016, 2017 and 2018.

(2)Stock option award with the following vesting schedule: 20% increments on February 11, 2019, 2020, 2021, 2022 and 2023.

(3)Restricted stock award with the following vesting schedule: 20% increments on February 11, 2019, 2020, 2021, 2022 and 2023.

(4)Reflects number of shares earned under performance-based restricted stock units. Performance was measured over a three-year period that ended June 30, 2022, with vesting contingent upon continued service through the date the Compensation Committee certified the level of achievement of the performance goal (September 12, 2022).

(5)Reflects number of shares issuable under performance-based restricted stock units based on target level of performance. Performance is measured over a three-year period ending June 30, 2023.

(6)Reflects number of shares issuable under performance-based restricted stock units based on target level of performance. Performance is measured over a three-year period ending June 30, 2024.

(7)Restricted stock award with the following vesting schedule: 20% increments on February 11, 2020, 2021, 2022, 2023 and 2024.

(8)Restricted stock award with the following vesting schedule: 20% increments on February 11, 2021, 2022, 2023, 2024 and 2025.

(9)Restricted stock award with the following vesting schedule: 20% increments on February 11, 2022, 2023, 2024, 2025 and 2026.

(10)Restricted stock award with the following vesting schedule: 20% increments on February 11, 2023, 2024, 2025, 2026 and 2027.

(11)Stock option award with the following vesting schedule: 20% increments on February 11, 2023, 2024, 2025, 2026 and 2027.

(12)Stock option award with the following vesting schedule: 20% increments on February 11, 2021, 2022, 2023, 2024 and 2025.

(13)Stock option award with the following vesting schedule: 20% increments on February 11, 2022, 2023, 2024, 2025 and 2026.

(14)Stock option award with the following vesting schedule: 20% increments on February 11, 2017, 2018, 2019, 2020 and 2021.

(15)Stock option award with the following vesting schedule: 20% increments on February 11, 2018, 2019, 2020, 2021 and 2022.

 

43 

 

 

Option Exercises and Stock Vested

 

The following table sets forth information regarding stock options exercised and shares of restricted stock that vested during the fiscal year ended June 30, 2022 with respect to each named executive officer:

 

   Option Awards   Stock Awards 
Name  Number of
Shares
Acquired on
Exercise (#)
   Value
Realized on
Exercise ($)(1)
   Number of
Shares
Acquired on
Vesting (#)
   Value
Realized on
Vesting ($)(2)
 
Dana L. Stonestreet   100,000   $1,576,788    4,800   $150,480 
C. Hunter Westbrook   17,500   $293,962    5,574   $174,745 
Tony J. VunCannon   15,000   $255,978    970   $30,410 
W. Mark DeMarcus      $    1,500   $47,025 
Kristin Y. Powell      $    1,100   $34,485 

 

 

(1) Represents amount realized upon exercise of stock options, based on the difference between the market value of the shares acquired at the time of exercise and the exercise price.  
(2) Represents the value realized upon vesting of restricted stock award, based on the market value of the shares on the vesting date.

 

Deferred Compensation Plan

 

The Deferred Compensation Plan is a nonqualified deferred compensation plan under which directors and a select group of employees can elect to defer a portion of their cash compensation. At the end of each calendar month, each participant’s account balance is credited with earnings based on the value of the participant’s account balance on the last day of such month. Earnings are currently credited at a rate equal to the average rate of HomeTrust Bank’s earning assets determined as of the last day of the preceding calendar month. A participant is always 100% vested in his or her account, which will be distributed in cash following his or her separation from service with HomeTrust Bank at the time and in the manner specified in the plan and the participant’s election form.

 

Messrs. Stonestreet and VunCannon are the only named executive officers who currently participate in the Deferred Compensation Plan. The following table provides information regarding the Deferred Compensation Plan for Messrs. Stonestreet and VunCannon.

 

   Executive   Registrant   Aggregate
Earnings
   Aggregate   Aggregate 
   Contributions   Contributions   in Last   Withdrawals/   Balance 
Name  in Last FY   in Last FY(1)   FY(2)   Distributions(3)   at Last FYE(4) 
Dana L. Stonestreet  $   $   $74,127   $   $2,288,900 
Tony J. VunCannon  $   $   $11,402   $   $352,081 

 

 

(1)During fiscal 2022, no employer contributions were made under the Deferred Compensation Plan to the participating named executive officers.

(2)Of the amounts shown, $18,248 and $2,807 constitute above market interest under SEC rules and were therefore reported as compensation earned by Messrs. Stonestreet and VunCannon for fiscal 2022 in the Summary Compensation Table under the “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” column.

(3)During fiscal 2022, there were no withdrawals from the Deferred Compensation Plan by, or distributions under the Deferred Compensation Plan to, the participating named executive officers.

(4)Of the aggregate balances shown, $182,603 and $37,078 were reported as compensation earned by Messrs. Stonestreet and VunCannon in the Company’s Summary Compensation Table for fiscal 2021 and for prior years.

 

44 

 

 

Executive Medical Care Plan

 

The EMCP is a nonqualified, deferred compensation plan under which certain key employees are given the opportunity to receive employer-provided health and long-term care benefits through the payment of health and long-term care plan premiums and to receive reimbursement of medical expenses. Under the EMCP, a participant may be provided with an initial benefit amount set forth in his or her individual joinder agreement and, if the participant is fully vested under the plan, may elect to defer a portion of his base salary, bonuses or other compensation. Following the benefit commencement date (as defined below), a participant’s benefit account under the EMCP may be used to reimburse the participant for medical expenses (but only using the pre-2005 portion of the account) or pay insurance premiums under any health or qualified long-term care plan. Any such reimbursement or premium payment results in a charge to the participant’s account balance. At the end of each plan year, each participant’s account is credited with a percentage adjustment equal to 120% of the long-term applicable federal rate (compounded annually) for the last month of the plan year, based on the average balance of the account during the plan year. For each plan year beginning on or after July 1, 2022, this earnings credit only applies to participants who have not yet had a benefit commencement date.  The “benefit commencement date” means (1) with respect to the payment of health plan premiums, the first day of the month next following (a) the date of the participant’s termination of employment after age 65, unless the participant, having attained age 65, requests that his benefits commence sooner, (b) if the participant’s employment terminates before age 65, the earlier of the date he or she requests payment of the health plan premiums subsequent to termination of employment or the date the participant attains age 65, or (c) in the case of the participant’s death before age 65, the first day of the month next following the date of the participant’s death; and (2) with respect to qualified long-term care coverage and the reimbursement of medical expenses, the date the participant is first designated to participate in the EMCP, provided that with respect to the reimbursement of medical expenses, the participant must be 100% vested before benefits may commence. A participant may request that his benefit commencement date be delayed (except for the reimbursement of medical expenses) or, with respect to the payment of health care plan premiums, accelerated, in each case subject to the approval of the committee administering the EMCP.

 

Messrs. Stonestreet and VunCannon are the only named executive officers who currently participate in the EMCP, and they are fully vested in their accounts. The following table provides information regarding the EMCP for Messrs. Stonestreet and VunCannon.

 

   Executive   Registrant   Aggregate   Aggregate   Aggregate 
   Contributions   Contributions   Earnings   Withdrawals/   Balance 
Name  in Last FY   in Last FY(2)    in Last FY(3)    Distributions   at Last FYE(4)  
Dana L. Stonestreet  $   $   $25,406   $16,377   $699,020 
Tony J. VunCannon  $22,750(1)   $   $9,529   $4,937   $272,473 

 

 

(1)Reported as compensation for fiscal 2022 in the Summary Compensation Table under the “Salary” column. During fiscal 2022, Mr. VunCannon was the only participating named executive officer who made contributions under the EMCP.

(2)During fiscal 2022, no employer contributions were made under the EMCP to the participating named executive officers.

(3)Of the amounts shown, none constituted above-market interest under SEC rules.

(4)Of the aggregate balances shown, $127,029 and $192,021 were reported as compensation earned by Messrs. Stonestreet and VunCannon in the Company’s Summary Compensation Table for fiscal 2021 and for prior years.

 

Executive Supplemental Retirement Income Plan

 

General. Under the SERP, a participating executive is entitled to receive an annual supplemental retirement income benefit as specified in his or her joinder agreement to the SERP master agreement, payable monthly, commencing on his or her benefit eligibility date or on the date specified in his or her joinder agreement. Unless a different date is specified in the executive’s joinder agreement, the benefit eligibility date is the first day of the month next following the later of the month in which the executive attains age 55 or separates from service with HomeTrust Bank (subject to a six-month delay for employees subject to Section 409A of the Internal Revenue Code to the extent necessary to comply with Section 409A) for any reason other than cause. Messrs. Stonestreet and VunCannon are the only named executive officers who currently participate in the SERP. The specific terms of the SERP benefits of each of the participating named executive officers, the present values of their respective accumulated benefits and any payments under the SERP to the participating named executive officers during the last fiscal year are described below. Solely for purposes of calculating the present values of such accumulated benefits, it was assumed that Messrs. Stonestreet and VunCannon will retire in fiscal 2022, in each case using a discount rate of 5%. These assumptions are the same as those used in preparing the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022.

 

45 

 

 

Mr. Stonestreet. Under his joinder agreement, Mr. Stonestreet’s supplemental retirement income benefit is comprised of the following: (1) a 20-year annual benefit, payable monthly, equal to 60% of his highest average compensation (taking into account only base salary, bonuses and amounts deferred at his election) for a three (consecutive or nonconsecutive) calendar year period preceding the date Mr. Stonestreet separates from service with HomeTrust Bank, provided that this annual benefit may not be less than $350,000 or more than $425,000 (his “Main Retirement Benefit”); and (2) a separate, additional 20-year retirement benefit, payable monthly, in the annual amount of $16,193, subject to an adjustment of 5% per year commencing with the second year of the payout period (his “Additional Retirement Benefit”). Mr. Stonestreet is fully vested in both his Main Retirement Benefit and his Additional Retirement Benefit.

 

Mr. VunCannon. Under his joinder agreement, Mr. VunCannon’s supplemental retirement income benefit is comprised of a 15-year annual benefit of $25,000, payable monthly. Mr. VunCannon is fully vested in his supplemental retirement income benefit.

 

The following table provides information regarding the SERP for each participating named executive officer.

 

Name  Plan Name  Number of
Years
Credited
Service
(#)
  Present
Value of
Accumulated
Benefit
($)
   Payments
During Last
Fiscal Year
($)
 
Dana L. Stonestreet  SERP  n/a  $5,589,298   $ 
Tony J. VunCannon  SERP  n/a  $275,526     

 

Potential Payments upon Termination of Employment or Change in Control

 

The following tables summarize the approximate value of the termination payments and benefits that the named executive officers would have received if their employment had been terminated on June 30, 2022 under the circumstances shown. See “—Employment and Transition Agreement with Mr. Stonestreet, Employment Agreements with Messrs. Westbrook and VunCannon and Change in Control Severance Agreements with Mr. DeMarcus and Ms. Powell.”

 

The tables exclude (i) amounts accrued through June 30, 2022 that would be paid in the normal course of continued employment, such as accrued but unpaid salary, and (ii) account balances under HomeTrust Bank’s KSOP, Deferred Compensation Plan, EMCP and SERP. Messrs. Stonestreet and VunCannon are fully vested in their account balances under the Deferred Compensation Plan, EMCP and SERP, and the forms and amounts of their benefits under those plans would not be enhanced by a termination of employment with HomeTrust Bank or a change in control. Messrs. Stonestreet and VunCannon are the only named executive officers who participate in the Deferred Compensation Plan, the EMCP and the SERP. If Mr. Stonestreet or Mr. VunCannon is terminated for cause, he will forfeit all benefits under the SERP and will generally forfeit the right to receive any further benefits under the EMCP that are not attributable to compensation he previously deferred. For information regarding the benefits of Messrs. Stonestreet and VunCannon under the Deferred Compensation Plan, EMCP and SERP, see “—Deferred Compensation Plan,” “—Executive Medical Care Plan” and “—Executive Supplemental Retirement Income Plan.”

 

46 

 

 

Dana L. Stonestreet

 

Termination Scenario  Total
Compensation
and Health
and Other
Insurance
Benefits
Continuation
($)
   Payout of
Unused Paid
Time Off
($)
   Life
Insurance
Benefit
($)
   Accelerated
Vesting of
Stock
Options
and
Restricted
Stock
Awards and
Units
($)
   Payment of
300% of
Cash
Compensation
and Continuation
of Health and
Other Insurance
Benefits
($)
 
If termination for cause occurs  $   $25,977(7)   $   $   $ 
                          
If voluntary termination occurs that does not constitute “involuntary termination” under Employment Agreement  $   $25,977(7)   $   $   $ 
                          
If “involuntary termination” under Employment Agreement occurs, but not at the time of or within 12 months following a change in control  $1,955,096(1)   $25,977(7)   $   $   $ 
                          
If “involuntary termination” under Employment Agreement occurs at the time of or within 12 months following a change in control  $   $25,977(7)   $   $595,425(2)   $2,707,057(3) 
                          
If termination occurs as a result of death, not within six months before, or 12 months after, a change in control  $1,005,028(4)   $25,977(7)   $900,000   $595,425(2)   $ 
                          
If termination occurs as a result of death within six months before, or 12 months after, a change in control  $   $25,977(7)   $900,000   $595,425(2)   $2,707,057(5) 
                          
If termination occurs as a result of disability, not during the one-year period following a change in control  $1,489,051(6)   $25,977(7)   $   $595,425(2)   $ 
                          
If termination occurs as a result of disability during the one-year period following a change in control  $(8)  $25,977(7)   $   $595,425(2)   $2,707,057(8) 

 

 

(1) Represents the continuation of “cash compensation” (payable monthly) and health and other insurance benefits under Mr. Stonestreet’s employment and transition agreement, as described under “—Employment and Transition Agreement with Mr. Stonestreet, Employment Agreements with Messrs. Westbrook and VunCannon and Change in Control Severance Agreements with Mr. DeMarcus and Ms. Powell,” for the remaining term of Mr. Stonestreet’s employment and transition agreement (i.e., through August 31, 2024), assuming that Mr. Stonestreet’s employment is, on June 30, 2022, “involuntarily terminated” but not at the time of or within 12 months following a change in control. For purposes of the above table, Mr. Stonestreet’s annualized “cash compensation” is calculated as $879,244, and the annualized amount of his health and other insurance benefits is calculated at $23,108.
(2) Represents the value of acceleration of vesting of unvested restricted stock awards and performance-based restricted stock units, based on the closing price per share of the Company’s common stock on June 30, 2022 of $25.00.  In the case of performance-based restricted stock units for which the performance period ended on June 30, 2022, reflects the number of shares that subsequently vested (on September 12, 2022) when the Compensation Committee certified the level of achievement of the performance goal.  In the case of all other performance-based restricted stock units, assumes the units vest at the target level of performance without proration of the number of underlying performance shares earned, as discussed below.  No value is included for the acceleration of vesting of Mr. Stonestreet’s unvested stock options because none of such options were in-the-money as of June 30, 2022.  All unvested stock options and restricted stock awards vest upon a change in control, regardless of whether employment is terminated, as well as upon termination of employment due to death or disability, regardless of whether a change in control occurs.  Upon termination of employment prior to a change in control due to death, disability, retirement, involuntary termination or resignation for good reason, a prorated portion of the performance shares underlying the performance-based restricted stock units may become earned and vested at the end of the performance period based on the number of months’ service during the performance period.  In the event of a change in control prior to the end of the performance period, the performance shares may be deemed earned based on a prorated performance goal reflecting the shortened performance period, but without proration of the number of performance shares.
(3) Represents the amount payable to Mr. Stonestreet under his employment and transition agreement in the event his employment is “involuntarily terminated” at the time of or within 12 months following a change in control.  
(4) Represents the amount payable to Mr. Stonestreet under his employment and transition agreement in the event of his death while employed under the agreement.  The amount shown is his “cash compensation” for the remaining term of the agreement ($1,955,029), less the proceeds of his life insurance benefit ($900,000).  
(5) Represents the amount payable under Mr. Stonestreet’s employment agreement to his estate or designated beneficiary in the event that during the six months before, or 12 months after, a change in control, his employment terminates due to death.  
(6) Represents continued payment of Mr. Stonestreet’s “cash compensation” for the remaining term of his employment and transition agreement, assuming that Mr. Stonestreet’s employment is terminated by HomeTrust Bancshares on June 30, 2022 after having established that he is permanently disabled ($1,905,029 in total), less the payout amount of his unused time off allocated for the 2022 calendar year (annualized at $25,977) and less the proceeds of the disability insurance policy maintained for him by HomeTrust Bank or HomeTrust Bancshares ($15,000 per month).  As provided in Mr. Stonestreet’s employment and transition agreement, this disability benefit is not payable until after the exhaustion of all paid time off days allocated for the calendar year and is reduced by the proceeds of any disability insurance policy then in effect pursuant to a disability insurance program sponsored by HomeTrust Bank or HomeTrust Bancshares.
(7) Represents annualized unused paid time off accrued for the 2022 calendar year through June 30, 2022, plus unused paid time off banked from prior years (maximum of one week per calendar year under the Company’s paid time off policy).   
(8) Under his employment and transition agreement, if Mr. Stonestreet’s employment terminates due to permanent disability during the one-year period following a change in control, Mr. Stonestreet is entitled to a payment of 300% of his “cash compensation” and health and other insurance benefits for three years following the change in control.
                       

47 

 

 

C. Hunter Westbrook

 

Termination Scenario  Total
Compensation
and Health
and Other
Insurance
Benefits
Continuation
($)
    Payout of
Unused Paid
Time Off
($)
    Life
Insurance
Benefit
($)
   Accelerated
Vesting of
Stock
Options
and
Restricted
Stock
Awards and Units
($)
    Payment of
300% of
Cash
Compensation
and Continuation
of Health and
Other Insurance
Benefits
($)
  
If termination for cause occurs  $    $31,152(7)   $   $    $  
                              
If voluntary termination occurs that does not constitute “involuntary termination” under Employment Agreement  $    $31,152(7)   $   $    $  
                              
If “involuntary termination” under Employment Agreement occurs, but not at the time of or within 12 months following a change in control  $2,177,615(1)   $31,152(7)   $   $    $  
                              
If “involuntary termination” under Employment Agreement occurs at the time of or within 12 months following a change in control  $    $31,152(7)   $   $392,475(2)   $2,177,615(3) 
                              
If termination occurs as a result of death, not within six months before, or 12 months after, a change in control  $174,375(4)   $31,152(7)   $800,000   $392,475(2)   $  
                              
If termination occurs as a result of death within six months before, or 12 months after, a change in control  $    $31,152(7)   $800,000   $392,475(2)   $2,177,615(5) 
                              
If termination occurs as a result of disability, not during the one-year period following a change in control  $1,526,541(6)   $31,152(7)   $   $392,475(2)   $  
                              
If termination occurs as a result of disability during the one-year period following a change in control  $(8)   $31,152(7)   $   $392,475(2)   $2,177,615(8) 

 

 

(1) Represents the continuation of “cash compensation” (payable monthly) and health and other insurance benefits under Mr. Westbrook’s employment agreement, as described under “—Employment and Transition Agreement with Mr. Stonestreet, Employment Agreements with Messrs. Westbrook and VunCannon and Change in Control Severance Agreements with Mr. DeMarcus and Ms. Powell, ” for the remaining term of Mr. Westbrook’s employment agreement, assuming that Mr. Westbrook’s employment is, on June 30, 2022, “involuntarily terminated” but not at the time of or within 12 months following a change in control and that the then-remaining term of Mr. Westbrook’s employment agreement is not renewed and ends on June 30, 2025. For purposes of the above table, Mr. Westbrook’s annual “cash compensation” is calculated as $697,500, and the annual amount of his health and other insurance benefits is calculated at $28,372.  
(2) Represents the value of acceleration of vesting of in-the-money unvested stock options, based on the closing price per share of the Company’s common stock on June 30, 2022 of $25.00 and the exercise price of the options of $24.95 with respect to 4,000 option shares, and the value of acceleration of vesting of unvested restricted stock awards and performance-based restricted stock units, based on the closing price per share of the Company’s common stock on June 30, 2022 of $25.00.  No value is included for the acceleration of vesting of Mr. Westbrook’s remaining unvested stock options because none of such options were in-the-money as of June 30, 2022.  In the case of performance-based restricted stock units for which the performance period ended on June 30, 2022, reflects the number of shares that subsequently vested (on September 12, 2022) when the Compensation Committee certified the level of achievement of the performance goal.  In the case of all other performance-based restricted stock units, assumes the units vest at the target level of performance without proration of the number of underlying performance shares earned, as discussed below.  All unvested stock options and restricted stock awards vest upon a change in control, regardless of whether employment is terminated, as well as upon termination of employment due to death or disability, regardless of whether a change in control occurs.  Upon termination of employment prior to a change in control due to death, disability, retirement, involuntary termination or resignation for good reason, a prorated portion of the performance shares underlying the performance-based restricted stock units may become earned and vested at the end of the performance period based on the number of months’ service during the performance period.  In the event of a change in control prior to the end of the performance period, the performance shares may be deemed earned based on a prorated performance goal reflecting the shortened performance period, but without proration of the number of performance shares.
(3) Represents the amount payable to Mr. Westbrook under his employment agreement in the event his employment is “involuntarily terminated” at the time of or within 12 months following a change in control.
(4) Represents continued payment of Mr. Westbrook’s “cash compensation” for a period of three months following his death, as provided in his employment agreement.  The amount shown is 25% of the annual amount of his “cash compensation” ($697,500).
(5) Represents the amount payable under Mr. Westbrook’s employment agreement to his estate or designated beneficiary in the event that during the six months before, or 12 months after, a change in control, his employment terminates due to death.  
(6) Represents the continuation of Mr. Westbrook’s “cash compensation” for the remaining term of his employment agreement, assuming that Mr. Westbrook’s employment is terminated by HomeTrust Bancshares on June 30, 2022 after having established that he is permanently disabled and that the then-remaining term of Mr. Westbrook’s employment agreement is not renewed and ends on June 30, 2025 ($697,500 per year), less the payout amount of his unused time off allocated for the 2022 calendar year (annualized at $25,959) and less the proceeds of the disability insurance policy maintained for him by HomeTrust Bank or HomeTrust Bancshares ($15,000 per month).  As provided in Mr. Westbrook’s employment agreement, this disability benefit is not payable until after the exhaustion of all paid time off days allocated for the calendar year and is reduced by the proceeds of any disability insurance policy then in effect pursuant to a disability insurance program sponsored by HomeTrust Bank or HomeTrust Bancshares.
(7) Represents annualized unused paid time off accrued for the 2022 calendar year through June 30, 2022, plus unused paid time off banked from prior years (maximum of one week per calendar year under the Company’s paid time off policy).   
(8) Under his employment agreement, if Mr. Westbrook’s employment terminates due to disability during the one-year period following a change in control, Mr. Westbrook is entitled to a payment of 300% of his “cash compensation” and health and other insurance benefits for three years following the change in control.
                             

48 

 

 

Tony J. VunCannon

 

Termination Scenario  Total
Compensation
and Health
and Other
Insurance
Benefits
Continuation
($)
    Payout of
Unused Paid
Time Off
($)
    Life
Insurance
Benefit
($)
   Accelerated
Vesting of
Stock
Options
and
Restricted
Stock
Awards and
Units
($)
    Payment of
300% of
Cash
Compensation
and Continuation
of Health and
Other Insurance
Benefits
($)