Hbt Financial, Inc. · NASDAQ:HBT
Hbt Financial — Q1 2021 Earnings Presentation
40 slides from Hbt Financial's earnings presentation, Apr 26, 2021
Slide 1: Q1 2021 Results Presentation
STRICTLY PRIVATE AND CONFIDENTIAL Q1 2021 Results Presentation A p r i l 2 6 , 2021 HBT Financial, Inc.
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements contained in this presentation are forward-looking statements. Forward-looking statements may include statements relating to our future plans, strategies and expectations, as well as the economic impact of COVID-19 and the related impacts on our future f
Slide 3: Q1 2021 highlights
Q1 2021 highlights Continued disciplined growth ◼ Total assets increased $199 million, or 5%, from Q4 2020 driven by strong deposit growth that was primarily invested in securities and cash ◼ Total deposits increased $225 million, or 7%, from Q4 2020 and the cost of total deposits declined 1 basis p
Slide 4: Company snapshot
C&I 18% CRE–Owner occupied 10% Agricultural & farm land 10% CRE–Non-owner occupied 23% C&D 10% Multi-family 10% 1-4 Family residential 13% Municipal, consumer & other 6% Company snapshot ✓ Company incorporated in 1982 from base of family-owned banks and completed its IPO in October 2019 ✓ Headquarte
Slide 5: Paycheck Protection Program (PPP) Details
Paycheck Protection Program (PPP) Details PPP Loans by Portfolio as of December 31, 2020 Portfolio Balance ($000) Commercial and industrial $153,860 Agricultural and farmland $3,049 Municipal, consumer, and other $6,587 Total PPP Loans $163,496 ◼ PPP loan balances, net of deferred origination fees,
Slide 6: Loan Portfolio Overview: Commercial Real Estate
Loan Portfolio Overview: Commercial Real Estate ◼ $969 million portfolio as of March 31, 2021 ➢ $517 million in non-owner occupied CRE primarily supported by rental cash flow of the underlying properties ➢ $236 million in multi-family loans secured by 5+ unit apartment buildings ➢ $215 million in co
Slide 7: Loan Portfolio Overview: Commercial
Loan Portfolio Overview: Commercial ◼ $413 million C&I loans outstanding as of March 31, 2021 ➢ For working capital, asset acquisition, and other business purposes ➢ Underwritten primarily based on borrower’s cash flow and majority further supported by collateral and personal guarantees; loans based
Slide 8: Loan Portfolio Overview: Agriculture and Farmland
Loan Portfolio Overview: Agriculture and Farmland ◼ $228 million portfolio as of March 31, 2021 ◼ Significant increase in corn and soybean prices since last quarter will improve borrower profitability and should reduce portfolio credit risk ◼ Federal crop insurance programs mitigate production risks
Slide 9: Loan Portfolio Overview: 1-4 Family Residential Mortgage
Loan Portfolio Overview: 1-4 Family Residential Mortgage ◼ $301 million in-house portfolio as of March 31, 2021 ◼ 3.5% is rated substandard 1st Mortgages Non-owner Occupied 50% 1st Mortgages Owner Occupied 28% HELOCs and 2nd Mortgages 22% 1-4 Family Residential Loan Mix ◼ $1.08 billion sold to the s
Slide 10: Loan Portfolio Overview: Municipal, Consumer and Other
Loan Portfolio Overview: Municipal, Consumer and Other ◼ $136 million portfolio as of March 31, 2021 ➢ Loans to municipalities are primarily federally tax-exempt ➢ Consumer loans include loans to individuals for consumer purposes and typically consist of small balance loans ◼ Commercial Tax-Exempt -
Slide 11: Loan Portfolio Overview: Asset Quality and Reserves
Loan Portfolio Overview: Asset Quality and Reserves ◼ At March 31, 2021, non-performing assets were $13.9 million, or 0.36% of total assets compared to $14.1 million, or 0.39% of total assets at December 31, 2020 ◼ Net recoveries were $326 thousand, or 0.06%, for the quarter ended March 31, 2021 ◼ S
Slide 12: Capital and Liquidity Overview
Capital and Liquidity Overview CET 1 Risk-based Capital Ratio (%) Leverage Ratio (%) Tangible Common Equity to Tangible Assets (%)1 Liquidity Sources ($000) 12.09 12.71 12.15 13.06 13.19 2017 2018 2019 2020 Q1 2021 9.94 10.80 10.38 9.94 9.85 2017 2018 2019 2020 Q1 2021 8.94 9.67 9.49 9.27 8.63 2017
Slide 13: Securities Portfolio Overview
U.S. Gov't Agency 13% Yield: 1.66% Municipal 29% Yield: 2.09% Agency RMBS 18% Yield: 1.95% Agency CMBS 34% Yield: 1.75% Corporate 6% Yield: 3.46% Securities Portfolio Overview ◼ Company’s debt securities consist primarily of the following types of fixed income instruments: ◼ Agency MBS: MBS pass-thr
Slide 14: Near-Term Outlook
Near-Term Outlook ◼ Loan balances (excluding the impact of PPP loans) expected to remain relatively flat until demand improves with a more sustained economic recovery ◼ Focused on supporting net interest income ➢ NIM pressure (excluding the impact of PPP loans) expected to continue to moderate in Q2
Slide 15: Our history
Our history Fred Drake named President and CEO of Heartland Bank and Trust Company and led its entry into Bloomington-Normal 1992 1964 - 1982 George Drake purchases El Paso National Bank and assembles group of banks in rural communities in Central IL M.B. Drake starts bank in Central IL 1920 HBT Fin
Slide 16: Our markets
Our markets Company branches outside of Chicago MSA Company branches in Chicago MSA Lake Kane DeKalb Cook Will Kendall LaSalle Bureau Grundy Ford McLean De Witt Logan Tazewell Peoria Marshall Woodford Champaign Exposure to mid-sized and metropolitan markets Branch locations Chicago MSA 35% Mid-sized
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 o
Slide 18: Our core operating principles
Our core operating principles Continue disciplined growth ◼ Grow conservatively in our core mid-sized markets and in the Chicago MSA via organic channels and through M&A ◼ Pursue strategically compelling and financially attractive growth opportunities that are consistent with our culture Uphold our
Slide 19: Experienced executive management team with deep community ties
Experienced executive management team with deep community ties Fred L. Drake Chairman and CEO 38 years with Company 41 years in industry J. Lance Carter President and Chief Operating Officer 19 years with Company 27 years in industry Patrick F. Busch Chief Lending Officer, President of Heartland Ban
Slide 20: Investment highlights
Investment highlights 4 1 2 3 5 Track record of successfully integrating acquisitions Consistent performance through cycles Leading market position in core mid-sized markets, with growth opportunity in the Chicago MSA Stable, low-cost deposit base Prudent risk management 19
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 Source: S&P Global Market Intelligence; For
Slide 22: Drives compelling tangible book value growth
. . . drives compelling tangible book value growth Tangible book value per share over time ($ per share)1 1 For reconciliation with GAAP metric, see “Non-GAAP reconciliations”; 2 In 2019, HBT Financial issued and sold 9,429,794 shares of common stock at a price of $16 per share. Total proceeds recei
Slide 23: Leading market position in core mid-sized markets
Leading market position in core mid-sized markets . . . Top 3 deposit share rank in 6 of 7 largest core mid-sized markets in Central Illinois Company Market County % of Company deposits Deposits ($mm) Branches Market share Rank Population (000) Money Center share1 McLean $570 9 16.3% 2 171 10.5% DeK
Slide 24: Growth opportunity in the Chicago MSA
Loans within the Chicago MSA ($mm) CAGR of 6.4% .. . . with growth opportunity in the Chicago MSA ◼ Entered market in 2011 with acquisition of Western Springs National Bank ◼ Chicago MSA is home to >9.5mm residents, with an annual GDP >$675bn ◼ Second largest MSA in the country for middle market bus
Slide 25: Stable, low-cost deposit base
18% 19% 10% 15% 2016 2Q19 2016 1Q19 0.17% 0.16% 0.16%0.15% 0.17% 0.17% 0.18% 0.17% 0.17% 0.20% 0.23% 0.24% 0.29% 0.30% 0.29% 0.26% 0.24% 0.14% 0.11% 0.09% 0.08% 0.27% 0.28% 0.26% 0.27% 0.26% 0.30% 0.36% 0.36% 0.40% 0.51% 0.61% 0.70% 0.76% 0.85% 0.89% 0.81% 0.70% 0.48% 0.35% 0.32% Company cost of dep
Slide 26: Has supported NIM trends
3.74% 3.83% 3.52% 2017 2018 2019 2020 3.82% .. . . has supported NIM trends FTE NIM1* Source: S&P Global Market Intelligence; Note: Peer group NIMs shown on FTE basis when available; (data for peers as available as of April 16, 2021); 1 Tax-equivalent basis metric; for reconciliation with GAAP metri
Slide 27: 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 $184mm deposits 2011 Citizens First National Bank Princeton, IL FDIC-assisted
Slide 28: Prudent risk management
Prudent risk management Framework and key policies Balance sheet composition as of March 31, 2021 Originated and acquired loans1 ($mm) ◼ Risk management culture instilled by management ◼ Well-diversified loan portfolio across commercial, regulatory CRE, and residential ◼ Primarily originated across
Slide 29: Appendix
Appendix 28
Slide 30: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted net income and adjusted ROAA ($000) 2017 2018 2019 2020 1Q21 Net income $56,103 $63,799 $66,865 $36,845 $15,245 C-Corp equivalent adjustment 2 (18,809) (15,502) (13,493) -- -- C-Corp equivalent net income 2 $37,294 $48,297 $53,372 $36,845 $15,245 Adjustments: Net ea
Slide 31: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) Average tangible common equity and adjusted ROATCE ($000) 2017 2018 2019 2020 1Q21 Total stockholders’ equity $338,317 $330,214 $341,544 $350,703 $363,557 Less: goodwill (23,620) (23,620) (23,620) (23,620) (23,620) Less: core deposit intangible assets (7,943) (6,256
Slide 32: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2017 2018 2019 2020 1Q20 2Q20 3Q20 4Q20 1Q21 Net interest income $120,998 $129,442 $133,800 $117,605 $30,662 $28,908 $28,871 $29,164 $29,129 Tax equivalent adjustment 5,527 2,661 2,309 1,943 463 483 495 502 503 Net interest income (tax-equivalent basis) $126,
Slide 33: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) Efficiency ratio (tax-equivalent basis) ($000) 2017 2018 2019 2020 1Q21 Total noninterest expense $94,057 $90,317 $91,026 $91,956 $22,544 Less: amortization of intangible assets (1,916) (1,559) (1,423) (1,232) (289) Adjusted noninterest expense $92,141 $88,758 $89,6
Slide 34: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2016 2017 2018 2019 2020 1Q21 Net charge-offs (recoveries) $4,974 $3,082 $4,953 $1,614 $993 $(326) Net charge-offs (recoveries) -(originated) 1 1,245 2,500 3,137 732 345 (320) Net charge-offs (recoveries) -(acquired) 1 3,729 582 1,816 882 648 (6) Average loan
Slide 35: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2017 2018 2019 2020 1Q21 Non-performing loans 2 $22,102 $15,913 $19,049 $9,960 $9,116 Foreclosed assets 16,545 9,559 5,099 4,168 4,748 Non-performing assets 2 $38,647 $25,472 $24,148 $14,128 $13,864 Loans, before allowance for loan losses $2,115,946 $2,144,25
Slide 36: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) Tangible book value per share and cumulative effect of dividends (2007 to 3Q19) ($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 $349 Less go
Slide 37: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) IPO adjusted tangible book value per share ($mm) IPO Adjusted 3Q19 2019 2020 1Q21 Tangible book value per share Total equity $333 $364 $357 Less goodwill (24) (24) (24) Less core deposit intangible (4) (3) (3) Tangible common equity $305 $338 $331 Shares outstanding
Slide 38: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2016 2017 2018 2019 2020 1Q21 Tangible common equity Total equity $326,246 $323,916 $340,396 $332,918 $363,917 $357,406 Less goodwill (23,620) (23,620) (23,620) (23,620) (23,620) (23,620) Less core deposit intangible (8,928) (7,012) (5,453) (4,030) (2,798) (2
Slide 39: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2017 2018 2019 2020 1Q21 Total deposits $2,855,685 $2,795,970 $2,776,855 $3,130,534 $3,355,966 Less time deposits of $250,000 or more (42,830) (36,875) (44,754) (26,687) (21,900) Less brokered deposits -- -- -- -- -- Core deposits $2,812,855 $2,759,095 $2,732
Slide 40: HBT Financial, Inc.
HBT Financial, Inc.