Hometrust Bancshares, Inc. · NYSE:HTB
Hometrust Bancshares — Gulf South Bank Conference 2019
45 slides from Hometrust Bancshares's conference presentation, May 6, 2019
Slide 1: Gulf South Bank Conference May 6-7, 2019
Gulf South Bank Conference May 6 – 7, 2019 Positionedgrowth for
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such a
Slide 3: HomeTrust Bancshares, Inc. Overview
HomeTrust Bancshares, Inc. Overview Headquarters: Asheville, NC Exchange/Ticker: NASDAQ: HTBI Founded: 1926 Number of Employees: 560 Locations: 43 (NC, SC, VA, TN) Stock Price: $25.54 Total Assets: $3.5 billion Price to TBV: 123% Total Loans: $2.6 billion Market Cap: $466.5 million Total Deposits: $
Slide 4: Foundation for Growth and Performance
Foundation for Growth and Performance • Converted to stock in July 2012 raising $211.6MM • Added 7 larger growing markets in NC, SC, VA and East TN since conversion • 4 whole bank acquisitions • 3 new Commercial Loan Production Offices from “lift-outs” of existing commercial lending teams • Purchase
Slide 5: Foundation for Growth and Performance (cont.)
Foundation for Growth and Performance (cont.) • Reinvented business lines • Mortgage – streamlined origination process and increased rates to enhance gain on loan sales • Home Equity Lines of Credit – new origination platform focusing on retail branch originations • Retail Offices – consolidated 10
Slide 6: Current Focus
Current Focus p Foundation for growth and performance Value Creation for Shareholders • EPS growth • Increasing franchise value • Investing in the future with enhanced/new lines of business • Core deposit growth • Noninterest income growth • Opportunistic acquisition strategy • Reinitiating stock bu
Slide 7: Improving Earnings Performance
Improving Earnings Performance Dollars in thousands $30,000 $1.70 $26,477 $1.44 $1.38 $1.50 $25,000 $1.30 5-Year EPS CAGR of 19% $7,669 $25,886 $20,000 $1.10 $0.94 $18,808 $0.90 $17,111 $15,000 $0.70 $0.61 $0.70 $12,228 $0.44 $11,784 $10,000 $0.50 $8,256 $0.30 $5,000 $0.10 $- $(0.10) 2014 2015 2016
Slide 8: ROA Trajectory – Adjusted Return on Assets
ROA Trajectory – Adjusted Return on Assets1 0.90% Normalized ROA Growth with Upward Momentum 0.80% 0.80% 0.74% 0.70% 0.58% 0.60% 0.50% 0.49% 0.47% 0.45% 0.40% 0.30% 0.20% 0.10% 0.00% 2014 2015 2016 2017 2018 YTD 3Q FY19 (1) See Non-GAAP Disclosure Appendix Positioned for growth 8
Slide 9: Return On Assets – Positive Drivers
Return On Assets – Positive Drivers Improving Noninterest Income 0.75% 0.64% 0.65% 0.61% 0.53% 0.55% 0.52% 0.52% 0.50% 0.45% Positive Drivers of ROA since 2014: 0.35% ▪ Noninterest income growth 0.25% ▪ 2014 2015 2016 2017 2018 YTD Q3 Increased 126% from $8.7 million in 2014 to $19.7 FY19 million in
Slide 10: Organic and M&A Growth Since 2012 Conversion
Organic and M&A Growth Since 2012 Conversion $4,000 Merger with Bank Merger with Assets Loans Deposits of Commerce TriSummit Bank July 2014 January 2017 Acquisition of 10 $3,458 $3,500 Bank of America Branches $3,304 Nov 2014 $3,207 Mergers with BankGreenville July 2013 $3,000 Jefferson Federal Bank
Slide 11: Strong Footprint for Growth
Strong Footprint for Growth 613% Increase in Market Population since 2012 Positioned for growth 11
Slide 12: MSA Markets Within Our Footprint
MSA Markets Within Our Footprint 613% Increase in Market Population since 2012 2018 '18 - '23 Projected GDP Growth MSA Population Pop. Growth Unemployment - 2 Yr Charlotte, NC 2,537,416 7.2% 3.8% 6.9% Raleigh, NC 1,335,067 8.1% 3.7% 8.2% Greenville, SC 901,549 6.1% 2.9% 5.7% Knoxville, TN 877,102 3.
Slide 13: Building a High-Performing Commercial Lending Team
Building a High-Performing Commercial Lending Team Changes in the past 7 years Commercial lenders in legacy markets – June 2012 6 Attrition in legacy markets (5) Hired/replaced in legacy markets 5 Acquired through bank acquisitions 21 Attrition after bank acquisitions (19) Hired/replaced in acquired
Slide 14: Adding Talent for Growth
Adding Talent for Growth Commercial and Line of Business Leaders Hunter Positioned for growth 14
Slide 15: Loan Highlights
Loan Highlights Loan Portfolio Growth Fiscal 2018: Loan Portfolio Growth – YTD Fiscal 2019: ▪ Organic loan growth of 8% ($171MM) ▪ Organic loan growth of 10% ($172MM) ▪ 24% growth in C&I loans ($28MM) ▪ 77% growth in C&I loans ($115MM) ▪ 17% growth in CRE ($127MM) ▪ 4% growth in CRE ($35MM) Recent H
Slide 16: New SBA Line of Business Strategy
New SBA Line of Business Strategy ▪ Originate SBA 7(a) and USDA B&I loan facilities to provide additional lending products for deeper customer service and have a more robust basket of tools from which to compete. ▪ SBA 7(a) and USDA B&I allows the Bank to offer non-traditional clients financing opti
Slide 17: New Equipment Finance Strategy
New Equipment Finance Strategy ▪ Offers a variety of solutions including leases, loans, and commercial finance agreements ▪ Target industries and equipment types include: manufacturing, machine tools, material handling, construction, transportation, and other essential use commercial equipment ▪ Typ
Slide 18: Loan Portfolio Composition
Loan Portfolio Composition Transitioning to a Commercial Bank Portfolio Increased commercial loan Loans: 3/31/19 portfolio by $1.1 billion or Dollars in millions 287% since 2013 Commercial 56% HELOCs &Consumer 20% 14% 1-4 Family 25% 25% 8% $3,000 6-Year CAGR of 25% 20% 34% $2,500 1-4 Family ($659MM)
Slide 19: Commercial Real Estate Composition
Commercial Real Estate Composition ($892MM) As of 3/31/19 13% 11% 5% 5% 29% 9% 11% 7% 10% Multifamily Owner Occupied Office Retail Hospitality Shopping Centers Industrial Healthcare Other Positioned for growth 19
Slide 20: Total Loan Production
Total Loan Production Total Loan Dollars in thousands Total Loan Production: Production: $1,042,182 $983,186 $20,228 1,000,000 $17,251 $28,453 $21,038 $84,707 $99,558 Nine Month YTD Loan Total Loan $49,794 $60,118 Production: Production: 800,000 $697,146 $766,236 $11,118 $113,353 Total Loan $305,153
Slide 21: Commercial Loan Production by Type
Commercial Loan Production by Type Dollars in thousands $250,000 $257,494 $200,000 $238,870 $234,102 $150,000 $192,803 $164,945 Originations $100,000 $137,660 $134,649 $22,933 $117,697 $112,349 $35,773 $18,960 $92,591 $50,000 $34,583 $77,871 $13,389 $47,955 $38,892 $- C&I Commercial Construction CRE
Slide 22: Consumer Loan Production
Consumer Loan Production Dollars in thousands $120,000 Since 2014, Indirect Auto has provided 15,000 additional in-market retail customers for cross-sale opportunities. $100,000 $80,000 $99,558 $84,707 $87,844 $60,000 Originations $60,118 $40,000 $54,777 $46,248 $53,010 $49,794 $54,598 $20,000 $49,8
Slide 23: Mortgage Loan Production
Mortgage Loan Production Dollars in thousands 350,000 90% 78% 80% 300,000 77% 66% 63% 70% 62% 62% 250,000 60% 200,000 50% $163,887 $170,895 150,000 40% Originations $124,070 $138,988 $119,020 $117,698 30% 100,000 20% 50,000 $134,258 $126,096 10% $91,963 $82,291 $74,353 $73,501 0 0% 2014 2015 2016 20
Slide 24: Drivers of Organic Loan Growth
Drivers of Organic Loan Growth 2013 Dollars in thousands ➢ Began Buildout of Commercial Banking $3,000,000 $300,000 Infrastructure ➢ Restructured Mortgage Loan Origination Process $250,000 $242,501 $2,500,000 2014 ➢ Added Indirect Auto LOB $200,000 ➢ Hired New Chief Credit Officer $2,550,000 $2,527,
Slide 25: Deposit/Retail Highlights
Deposit/Retail Highlights Deposits FY2018: Deposits YTD FY19: ▪ 6% core deposit* growth in fiscal 2018 ($94MM) ▪ 7% annualized increase in total deposits in FY2019 ▪ 19% growth in money market accounts ($112MM) ▪ Core deposits* make up 77% of total deposits ▪ Core deposits* make up 72% of total depo
Slide 26: Loan to Deposit Ratio
Loan to Deposit Ratio Higher ratio of 115% at 3/31/19 due to investment alternatives included in loan portfolio: ▪ $129 million in purchased HELOCs ▪ These loan types are often included in the 25% of loan portfolio ($659 million) in 1-4 family loans investment portfolio at other commercial banks ▪ $
Slide 27: Deposit Portfolio Mix
Deposit Portfolio Mix Dollars in $1,000,000 Total Total Total Total Total Total 90% thousands Deposits: Deposits: Deposits: Deposits: Deposits: Deposits: $1,154,749 $1,583,046 $1,872,126 $1,802,696 $2,048,451 $2,308,395 $900,000 80% 77.44% 76.50% $800,000 75.45% 72.07% 70% 69.18% $700,000 60% 59.94%
Slide 28: Deposit Composition
Deposit Composition Deposit Migration Deposit Composition 100% 3/31/19 Time Deposits 90% 22.2% 26.4% 31.6% 34.9% 35.5% $644,819 80% 38.1% 35.9% $778,720 Money Market/Savings 70% Checking Accounts 31.0% $884,856 60% 33.5% 50% 37.6% Dollars in thousands 38.3% 40.6% 40.6% 39.4% 40% Cost of Funds 0.80%
Slide 29: Growing Noninterest Income
Growing Noninterest Income ▪ New SBA Line of Business in FY 2018 ▪ Gains from loan sales - $1MM in FY 2018 ▪ Gains from loan sale - $2MM in first three quarters of FY 2019 ▪ Third party servicer to keep overhead low ▪ Mortgage Banking ▪ Expanded into 5 of our new metro markets ▪ Added 17 new mortgag
Slide 30: Asset Quality
Asset Quality Dollars in thousands Net Charge-Offs and NCO / Average Loans Allowance for Loan Losses and ALL / Total Loans 2,500 2,343 0.20% 25,000 2.00% 2,144 2,000 24,000 0.15% 1.50% 23,000 1,500 1,205 1,082 0.10% 22,000 1.00% 1,000 21,000 500 0.05% 141 0.50% 91 20,000 - 0.00% 2014 2015 2016 2017
Slide 31: Investment Portfolio Composition
Investment Portfolio Composition Investments: 3/31/19 ($442 MM) US Gov't Agency ($29 MM) MBS-Gov't Agcy/GSE ($76 MM) Munis ($28 MM) - 90% Taxable Corporate Bonds ($6 MM) FDIC Insured CDs in Other Banks ($56 MM) 1% Commercial Paper ($247 MM) - 60-Day Avg Life 6% 13% 17% Yield: 2.84% 7% Avg Repricing
Slide 32: Opportunistic Acquisition Strategy
Opportunistic Acquisition Strategy Goal – Leverage infrastructure and lines of business to accelerate earnings growth and value creation for shareholders ▪ Earnings accretion of 10% or more ▪ Strong core deposit base ▪ Asset size – Target of $300 million to $1.5 billion ▪ Geographic footprint – with
Slide 33: Capital Management
Capital Management First Ever Cash Dividend ▪ Initiated quarterly cash dividends of $0.06 payable to shareholders of record on November 21, 2018 ▪ Continuing quarterly cash dividend of $0.06 Stock Buy Backs (Dollars in thousands, except per share amounts) Percent of Outstanding Shares Number of Tang
Slide 34: Quarter Ended March 31, 2019 Highlights
Quarter Ended March 31, 2019 Highlights (Dollars in thousands, except per share amounts) Quarter Ended Change As Reported 03/31/2019 03/31/2018 Amount Percent Net Income (1) $ 3,302 $ 6,127 $ (2,825) (46%) EPS - diluted (1) $ 0.18 $ 0.32 $ (0.14) (44%) ROA (1) 0.39% 0.76% (0.37%) (49%) Net interest
Slide 35: Nine Months Ended March 31, 2019 Highlights
Nine Months Ended March 31, 2019 Highlights (Dollars in thousands, except per share amounts) Nine Months Ended Change As Reported 03/31/2019 03/31/2018 Amount Percent Net Income (2) $ 19,133 $ 11,847 $ 7,286 61.50% EPS - diluted $ 1.02 $ 0.65 $ 0.37 56.92% ROA 0.76% 0.40% 0.36% 90.00% Net interest m
Slide 36: Balance Sheet Highlights
Balance Sheet Highlights (Dollars in thousands, except per share amounts) At 03/31/2019 vs. 06/30/18 06/30/2018 vs. 06/30/17 03/31/2019 06/30/2018 06/30/2017 Amount Percent Amount Percent Total assets $ 3,457,737 $ 3,304,169 $ 3,206,533 $ 153,568 5% $ 97,636 3% Total loans 2,660,647 2,525,852 2,351,
Slide 37: Market Price and Price to Tangible Book
Market Price and Price to Tangible Book $30.0 150.0% 141% 5-Year CAGR of 10% $28.15 121% 130.0% $25.0 126% $24.40 $25.20 110.0% 93% $20.0 89% 97% 90.0% $18.50 $28.15 $15.0 70.0% $15.77 50.0% $10.0 30.0% $5.0 10.0% $- -10.0% 06/30/2014 06/30/2015 06/30/2016 06/30/2017 06/30/2018 03/31/2019 Market Pri
Slide 38: Total Shareholder Return
Total Shareholder Return Total Return Performance 280.0 260.0 240.0 220.0 200.0 180.0 160.0 140.0 120.0 100.0 07/11/12 06/30/13 06/30/14 06/30/15 06/30/2016 06/30/2017 06/30/2018 03/31/2019 HomeTrust Bancshares, Inc. NASDAQ Bank NASDAQ Composite Positioned for growth 38
Slide 39: Value Drivers for HTBI
Value Drivers for HTBI ✓ Proven ability to grow organically ✓ Proven ability to grow through M&A ✓ Footprint in attractive metro markets with strong growth ✓ Strong experienced team of revenue producers ✓ Diversified loan portfolio including equipment finance/C&I lending ✓ Strong asset quality and c
Slide 40: Investor Contacts
Investor Contacts Dana Stonestreet Chairman, President and CEO dana.stonestreet@htb.com Hunter Westbrook SEVP/Chief Operating Officer hunter.westbrook@htb.com Tony VunCannon EVP/Chief Financial Officer/Corporate Secretary/Treasurer tony.vuncannon@htb.com 10 Woodfin Street Asheville, NC 28801 (828) 2
Slide 41: Non-GAAP Disclosure Appendix
Non-GAAP Disclosure Appendix Positionedgrowth for
Slide 42: Non-GAAP Disclosure Reconciliation
Non-GAAP Disclosure Reconciliation In addition to results presented in accordance with generally accepted accounting principles utilized in the United States ("GAAP"), this presentation contains certain non-GAAP financial measures, which include: the efficiency ratio; tangible book value; tangible b
Slide 43: Non-GAAP Disclosure Reconciliation: Efficiency Ratio
Non-GAAP Disclosure Reconciliation Set forth below is a reconciliation to GAAP of our efficiency ratio: Positioned for growth 43
Slide 44: Non-GAAP Disclosure Reconciliation: Tangible Book Value
Non-GAAP Disclosure Reconciliation Set forth below is a reconciliation to GAAP of tangible book value, tangible book value per share, and share price to tangible book: Positioned for growth 44
Slide 45: Non-GAAP Disclosure Reconciliation: Net Income, EPS, ROE, ROA
Non-GAAP Disclosure Reconciliation Set forth to the right is a reconciliation to GAAP net income, EPS, ROE, and ROA as adjusted to exclude merger-related expenses, certain state tax expense, adjustments for the change in federal tax law, gain on sale of premises and equipment, impairment charges for
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