Hbt Financial, Inc. · NASDAQ:HBT
Hbt Financial — Q4 2022 Earnings Presentation
36 slides from Hbt Financial's earnings presentation, Jan 25, 2023
Slide 1: Q4 2022 Results Presentation
STRICTLY PRIVATE AND CONFIDENTIAL Q4 2022 Results Presentation January 25, 2023 HBT Financial, Inc.
Slide 2: Forward-Looking Statements
Forward - Looking Statements Readers should note that in addition to the historical information contained herein, this presentation contains, and future o ral and written statements of HBT Financial, Inc. (the “Company” or “HBT”) and its management may contain, "forward - looking statements" within
Slide 3: Important Information and Where to Find It
Important Information and Where to Find It In connection with the proposed transaction, HBT and Town and Country filed a Registration Statement on Form S - 4 of HBT that inc ludes a proxy statement of Town and Country and a prospectus of HBT that has been distributed to the stockholders of Town and
Slide 4: Q4 2022 Highlights
Q4 2022 Highlights M&A continues to enhance value of HBT franchise ◼ Pending merger with Town and Country Financial Corporation (expected to close on February 1, 2023) ➢ Expands HBT’s Illinois footprint while adding exposure to St. Louis MSA ➢ Adds high performing, highly compatible commercial banki
Slide 5: Company Snapshot
Noninterest - bearing demand 28% Interest - bearing demand 32% Money Market 15% Savings 18% Time 7% Financial highlights ($mm) C&I 10% CRE – Owner occupied 8% Agricultural & farmland 9% CRE – Non - owner occupied 27% C&D 14% Multi - family 11% 1 - 4 Family residential 13% Municipal, consumer & other
Slide 6: Earnings Overview
Earnings Overview 5 ($mm) 4Q22 Interest and dividend income $44,948 Interest expense 2,765 Net interest income 42,183 Provision for loan losses (653) Net interest income after provision for loan losses 42,836 Noninterest income 7,889 Noninterest expense 27,510 Income before income tax expense 23,215
Slide 7: Net Interest Margin
◼ Fourth quarter 2022 net interest margin increased 45 basis points from the prior quarter, primarily due to higher yields on earning assets and relatively stable deposit costs ◼ 41% of the loan portfolio matures or reprices within the next 12 months ◼ Loan mix is 64% fixed rate and 36% variable rat
Slide 8: Loan Portfolio Overview: Commercial and Commercial Real Estate
Loan Portfolio Overview: Commercial and Commercial Real Estate ◼ $1.36 billion portfolio as of December 31, 2022 ➢ $713 million in non - owner occupied CRE primarily supported by rental cash flow of the underlying properties ➢ $288 million in multi - family loans secured by 5+ unit apartment buildin
Slide 9: Loan Portfolio Overview: Selected Portfolios
Loan Portfolio Overview: Selected Portfolios Agriculture and Farmland ◼ $238 million portfolio as of December 31, 2022 ◼ Significant increase in corn and soybean prices since 2020 improved borrower profitability and should reduce portfolio credit risk ◼ Federal crop insurance programs mitigate produ
Slide 10: Loan Portfolio Overview: Asset Quality and Reserves
Loan Portfolio Overview: Asset Quality and Reserves Non - performing Assets/Total Assets % and Net Charge - off % Allowance for Loan Losses to Total Loans % 9 ◼ Substandard loans increased $1.4 million to $73.8 million and Pass - Watch loans increased $9.1 million to $66.9 million as of December 31,
Slide 11: Securities Portfolio Overview
U.S. Treasury 12% Book Yield: 1.38% U.S. Gov't Agency 10% Book Yield: 2.49% Municipal 22% Book Yield: 2.06% Agency RMBS 21% Book Yield: 2.71% Agency CMBS 31% Book Yield: 1.86% Corporate 4% Book Yield: 4.20% Securities Portfolio Overview ◼ Company’s debt securities consist primarily of the following
Slide 12: Wealth Management Overview
Wealth Management Overview 11 Comprehensive Wealth Management Services ◼ Proprietary investment management solutions ◼ Financial planning ◼ Trust and estate administration 4.5 4.8 5.9 5.7 1.6 1.7 2.0 2.4 0.4 0.4 0.2 0.8 0.3 0.3 0.3 0.3 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 2019 2020 2021 2022 Asset Mana
Slide 13: Near-Term Outlook
Near - Term Outlook ◼ The below near - term outlook excludes the impact of the pending Town and Country acquisition ◼ Growth in net interest income and disciplined expense control positions the Company to achieve continued strong profitability ◼ Loan balances expected to be flat to showing modest gr
Slide 14: Our History
Our History – Long track record of organic and acquisitive growth Fred Drake named President and CEO of Heartland Bank and Trust Company and leads its entry into Bloomingt on - Normal 1992 1964 - 1982 George Drake purchases El Paso National Bank and assembles group of banks in rural communities in C
Slide 15: Town and Country Financial Corporation Merger Overview
◼ As of September 30, 2022, Town and Country had $896 million in assets, $654 million in loans, and $741 million in deposits ◼ Anticipated EPS accretion of 17% in first full year with cost savings (excluding transaction expenses and assuming transaction closes in first quarter of 2023) ◼ Short TBV d
Slide 16: Our Markets
Our Markets Full - service branch locations Chicago MSA 34% Iowa 4% Mid - sized Illinois markets 62% Deposits Chicago MSA 49% Iowa 12% Mid - sized Illinois markets 39% Chicago MSA 31% Iowa 7% Mid - sized Illinois markets 62% $2.6bn $3.6bn 58 locations 15 Illinois branches outside of the Chicago MSA
Slide 17: Business Strategy
Business Strategy ◼ Drake family involved in Central IL banking since 1920 ◼ Management lives and works in our communities ◼ Community banking and relationship - based approach stems from adherence to our Midwestern values ◼ Committed to providing products and services to support the unique needs of
Slide 18: Experienced executive management team with deep community ties
Experienced executive management team with deep community ties Fred L. Drake Chairman and CEO 39 years with Company 42 years in industry J. Lance Carter President and Chief Operating Officer 21 years with Company 29 years in industry Lawrence J. Horvath Chief Lending Officer 12 years with Company 37
Slide 19: Talented Board of Directors
Talented Board of Directors with deep financial services industry experience Fred L. Drake Chairman • Director since 1984 • CEO of HBT Financial • 39 years with Company • 42 years in industry J. Lance Carter Director • Director since 2011 • President and COO of HBT Financial • 21 years with Company
Slide 20: Investment Highlights
Investment Highlights 4 1 2 3 5 Track record of successfully integrating acquisitions Consistent performance through cycles Leading deposit share in mid - sized markets provides funding for stronger loan demand in higher growth areas Stable, low - cost deposit base well - positioned for rising rates
Slide 21: Consistent performance through cycles
Consistent performance through cycles… Drivers of profitability Pre - tax return on average assets (%) 0.00% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.25% 2.50% 2.75% 3.00% 2006 2007 2008 2009 2010 2011¹ 2012¹ 2013¹ 2014 2015 2016 2017 2018 2019 2020 2021 Source: S&P Global Market Intelligen
Slide 22: Tangible book value growth
4.69 5.38 6.10 6.91 10.15 12.56 12.93 14.72 15.33 16.25 16.23 17.27 17.80 10.54 11.12 12.29 13.13 12.08 (7.26) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 3Q19 3Q19 2019 2020 2021 2022 .. . . drives compelling tangible book value growth Tangible book value per share over time ($ per
Slide 23: Leading deposit share in mid-sized markets
Leading deposit share in mid - sized markets provides funding for stronger loan demand in higher growth areas County 4Q22 Deposits ($mm) Full - Service Branches Market share 2 Rank 2 McLean $661 9 16.1% 2 DeKalb 411 6 13.8% 4 Tazewell 265 5 7.2% 2 Cook 260 2 0.1% 52 Bureau 248 3 20.6% 1 Woodford 243
Slide 24: Stable, low-cost deposit base well-positioned for rising rates
0.17 0.21 0.29 0.14 0.07 0.06 0.32 0.56 0.83 0.46 0.19 0.20 2017 2018 2019 2020 2021 3Q22 YTD* HBT High Performing Peers Stable, low - cost deposit base well - positioned for rising rates Cost of deposits (%) remains consistently below peers Source: S&P Global Market Intelligence Note: 1 Represents
Slide 25: Track record of successfully integrating acquisitions
Track record of successfully integrating acquisitions BankPlus Morton, IL $231mm deposits 2007 2012 Bank of Illinois Normal, IL FDIC - assisted $176mm deposits Western Springs National Bank Western Springs, IL FDIC - assisted $184mm deposits 2011 Citizens First National Bank Princeton, IL FDIC - ass
Slide 26: Prudent risk management
Prudent risk management ◼ Risk management culture instilled by management ◼ Well - diversified loan portfolio across commercial, regulatory CRE, and residential ◼ Primarily originated across in - footprint borrowers ◼ Centralized credit underwriting group that evaluates all exposures over $750,000 t
Slide 27: Appendix
Appendix 26
Slide 28: Non-GAAP Reconciliations
Non - GAAP Reconciliations Adjusted net income and adjusted ROAA ($000) 2019 2020 2021 2022 Net income $66,865 $36,845 $56,271 $60,473 C - Cor p equivalent adjustment 1 (13,493) -- -- -- C - Corp equivalent net income 1 $53,372 $36,845 $56,271 $60,473 Adjustments: Acquisition expenses -- -- (1,416)
Slide 29: Non-GAAP Reconciliations (cont'd)
Non - GAAP Reconciliations (cont’d) ROATCE, adjusted return on average stockholders’ equity, and adjusted ROATCE ($000) 2019 2020 2021 2022 Total stockholders’ equity $341,544 $350,703 $380,080 $383,317 Less: goodwill (23,620) (23,620) (25,057) (29,322) Less: core deposit intangible assets (4,748) (
Slide 30: Non-GAAP Reconciliations (cont'd)
Non - GAAP Reconciliations (cont’d) ($000) 2018 2019 2020 2021 2022 Net interest income $129,442 $133,800 $117,605 $122,403 $145,874 Tax equivalent adjustment 2,661 2,309 1,943 2,028 2,499 Net interest income (tax - equivalent basis) $132,103 $136,109 $119,548 $124,431 $148,373 Average interest - ea
Slide 31: Non-GAAP Reconciliations (cont'd)
Non - GAAP Reconciliations (cont’d) Efficiency ratio (tax - equivalent basis) ($000) 2019 2020 2021 2022 Total noninterest expense $91,026 $91,956 $91,246 $99,507 Less: amortization of intangible assets (1,423) (1,232) (1,054) (873) Adjusted noninterest expense $89,603 $90,724 $90,192 $98,634 Net in
Slide 32: Non-GAAP Reconciliations (cont'd)
Non - GAAP Reconciliations (cont’d) Tangible book value per share and cumulative effect of dividends (2007 to 3Q19) ($mm) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 3Q19 Tangible book value per share Total equity $109 $120 $130 $143 $197 $262 $257 $287 $311 $326 $324 $340 $349 Less
Slide 33: Non-GAAP Reconciliations (cont'd)
Non - GAAP Reconciliations (cont’d) IPO adjusted tangible book value per share ($mm) IPO Adjusted 3Q19 2019 2020 2021 2022 Tangible book value per share Total equity $333 $364 $412 $378 Less goodwill (24) (24) (29) (29) Less core deposit intangible (4) (3) (2) (1) Tangible common equity $305 $338 $3
Slide 34: Non-GAAP Reconciliations (cont'd)
Non - GAAP Reconciliations (cont’d) ($000) 2019 2020 2021 2022 Tangible common equity Total equity $332,918 $363,917 $411,881 $377,649 Less goodwill (23,620) (23,620) (29,322) (29,322) Less core deposit intangible (4,030) (2,798) (1,943) (1,070) Tangible common equity $305,268 $337,499 $380,616 $347
Slide 35: Non-GAAP Reconciliations (cont'd)
Non - GAAP Reconciliations (cont’d) ($000) 2019 2020 2021 2022 Total deposits $2,776,855 $3,130,534 $3,738,185 $3,587,024 Less time deposits of $250,000 or more (44,754) (26,687) (59,512) (27,158) Less brokered deposits -- -- (4,238) -- Core deposits $2,732,101 $3,103,847 $3,674,435 $3,559,866 Core
Slide 36: HBT Financial, Inc.
HBT Financial, Inc.