HomeTrust Bancshares has one less worry after a judge dismissed a three-year-old lawsuit against the Asheville, N.C., company.
The lawsuit, filed in Buncombe County Superior Court in 2012, sought at least $12.5 million from the $2.6 billion-asset company. The plaintiffs, victims of a $15 million Ponzi scheme orchestrated by Asheville businessman Bill Bailey, claimed that HomeTrust should have detected Bailey's illegal dealings because he maintained a business account at the bank.
Bailey pleaded guilty to securities fraud, mail fraud and filing false tax returns in 2011. He was sentenced to 32 years in federal prison in 2013.
HomeTrust's lawyer, Kearns Davis, countered by noting that Bailey used the account to route tens of millions of dollars from legitimate real estate transactions. Davis noted in arguing his case that HomeTrust lost $4.8 million when Bailey bounced three certified checks drawn on his account.
Superior Court Judge Marvin Pope dismissed the case on Feb. 20. In addition to actual losses, the plaintiffs had been seeking "additional treble or other punitive damages as determined by the court."
Lawsuits "come with the territory," Dana Stonestreet, HomeTrust's chief executive, said in an interview Thursday. "The outcome was as expected, but I'm glad to have worked through it so we can get back to the business of banking and serving customers."
The upbeat legal news follows one of the busiest years in HomeTrust's 89-year history. The company completed two whole-bank acquisitions, established a presence in Raleigh, N.C., with a loan production office, and bought eight branches in southwest Virginia from Bank of America. It also established a common brand, unifying its seven bank divisions under the HomeTrust banner. As a result of the moves, HomeTrust entered four major metropolitan markets in 2014: Raleigh; Knoxville, Tenn.; Charlotte, N.C.; and Roanoke, Va.
Stonestreet said he was open to more expansion, "if the right unique opportunity" presents itself, though he said integration would be his priority this year.
"We plan to go deep in the new markets," he said. "We're just scratching the surface on our potential. We've got a lot of build-out to do."