Hometrust Bancshares, Inc. · NYSE:HTB
Hometrust Bancshares — Sandler O'Neill East Coast Financial Services Conference 2019
44 slides from Hometrust Bancshares's conference presentation, Nov 14, 2019
Slide 1: Sandler O'Neill East Coast Financial Services Conference: Positioned for Growth
Sandler O’Neill East Coast Financial Services Conference November 13-14, 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: 556 Locations: 41 (NC, SC, VA, TN) Stock Price: $26.37 Total Assets: $3.7 billion Price to TBV: 122% Total Loans: $2.5 billion Market Cap: $470 million Total Deposits: $2.
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 existing 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 – consoli
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 • Initiated quarterly c
Slide 7: Improving Earnings Performance
Improving Earnings Performance Dollars in thousands See Non-GAAP Disclosure Appendix Positioned for growth 7
Slide 8: ROA Trajectory – Adjusted Return on Assets
ROA Trajectory – Adjusted Return on Assets1 Normalized ROA Growth with Upward Momentum (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 Reducing Noninterest Expense Positioned for growth 9
Slide 10: Organic and M&A Growth Since 2012 Conversion
Organic and M&A Growth Since 2012 Conversion Merger with Bank of Commerce July 2014 Acquisition of 10 Bank of America Branches Nov 2014 Stock Conversion July 2012 Positioned for growth 10
Slide 11: Strong Footprint for Growth
Strong Footprint for Growth Positioned for growth 11
Slide 12: MSA Markets Within Our Footprint
MSA Markets Within Our Footprint 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 3.6% 3.0% 4.7% Asheville, NC 460,430 5.4% 3.4% 6
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 Directors of Asheville Market Equipment Finance Director of Treasury 1 Market President Raleigh Market 2 Relationship Managers and SBA Lending Services 1 Market President 1 Business Development 3 Relationship Managers 1 Business Banker
Slide 15: Loan Highlights
Loan Highlights Loan Portfolio Growth Fiscal 2019: Loan Portfolio Quarter-Ended 9/30/19: ▪ Organic loan growth of 10% ($229MM) ▪ Organic loan growth of 11% ($73MM) ▪ 97% growth in C&I loans and ▪ 68% annualized growth in Equipment Finance Equipment Finance ($144MM) ▪ 27% annualized growth in CRE ▪ 8
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 Dollars in millions 5-Year CAGR of 13% Positioned for growth 18
Slide 19: Commercial Real Estate Composition
Commercial Real Estate Composition ($927MM) Positioned for growth 19
Slide 20: Total Loan Production
Total Loan Production Dollars in thousands Positioned for growth 20
Slide 21: Commercial Loan Production by Type
Commercial Loan Production by Type Dollars in thousands Excludes municipal leases. Positioned for growth 21
Slide 22: Consumer Loan Production
Consumer Loan Production Dollars in thousands Since 2014, Indirect Auto has provided 15,000 additional in-market retail customers for cross-sale opportunities. Positioned for growth 22
Slide 23: Mortgage Loan Production
Mortgage Loan Production Dollars in thousands Positioned for growth 23
Slide 24: Drivers of Organic Loan Growth
Drivers of Organic Loan Growth 2013 Dollars in thousands ➢ Began Buildout of Commercial Banking Infrastructure ➢ Restructured Mortgage Loan Origination Process 2014 ➢ Added Indirect Auto LOB ➢ Hired New Chief Credit Officer 2015 ➢ Opened Two Commercial LPOs 2017 ➢ Expanded Mortgage LOB in Metro Mark
Slide 25: Deposit/Retail Highlights
Deposit/Retail Highlights Deposits – Fiscal 2019 Deposits – Quarter-Ended 9/30/19 ▪ 6% increase in total deposits ($131MM) ▪ Total deposit growth of 29% annualized ▪ Core deposits* make up 69% of total deposits ($167MM) ▪ Core deposit growth of 25% annualized ▪ Average cost of total deposits of .70%
Slide 26: Deposit Portfolio Mix
Deposit Portfolio Mix Dollars in Total Total Total thousands Deposits: Deposits: Deposits: $1,154,749 $2,048,451 $2,327,257 Positioned for growth 26
Slide 27: Deposit Composition
Deposit Composition Deposit Migration Deposit Composition 6/30/19 Cost of Funds Deposit balances as of fiscal year end; Cost of funds are averages for the fiscal year Positioned for growth 27
Slide 28: Growing Noninterest Income
Growing Noninterest Income ▪ New SBA Line of Business in FY 2018 ▪ Gain from loan sales - $1MM in FY 2018 ▪ Gain from loan sales - $3.4MM in FY 2019 ▪ Gain from loan sales - $1MM in 1Q FY 2020 ▪ Third party servicer to keep overhead low ▪ Mortgage Banking ▪ Expanded into 5 of our new metro markets ▪
Slide 29: Asset Quality
Asset Quality Dollars in thousands Net Charge-Offs and NCO / Average Loans Allowance for Loan Losses and ALL / Total Loans FY 20 FY 20 (1) Includes $6 million charge off for one commercial relationship. Excluding that charge-off, the company would have $669,000 in net recoveries for fiscal 2019. Non
Slide 30: Investment Portfolio Composition
Investment Portfolio Composition Investments: 6/30/19 ($414 MM) Yield: 2.92% Avg Repricing Term: 12 months Positioned for growth 30
Slide 31: 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 32: 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 33: Quarter Ended September 30, 2019 Highlights
Quarter Ended September 30, 2019 Highlights (Dollars in thousands, except per share amounts) Quarter Ended Change A. As Reported 09/30/2019 09/30/2018 Amount Percent 1. Net income $ 8,804 $ 7,790 $ 1,014 13% 2. Earnings per share (EPS) - diluted $ 0.49 $ 0.41 $ 0.08 20% 3. Return on assets (ROA) 0.9
Slide 34: Year Ended June 30, 2019 Highlights
Year Ended June 30, 2019 Highlights (Dollars in thousands, except per share amounts) Year Ended Change As Reported 06/30/2019 06/30/2018 Amount Percent Net Income $ 27,146 $ 8,235 $ 18,911 229.64% EPS - diluted $ 1.46 $ 0.44 $ 1.02 231.82% ROA 0.80% 0.25% 0.55% 220.00% Net interest margin (tax equiv
Slide 35: Balance Sheet Highlights
Balance Sheet Highlights (Dollars in thousands, except per share amounts) At Change 09/30/2019 06/30/2019 Amount Percent Total assets $ 3,655,309 $ 3,476,178 $ 179,131 5% Total loans 2,487,416 2,683,761 (196,345)(1) (7%) Core deposits 1,715,866 1,615,067 100,799 6% Total deposits 2,494,194 2,327,257
Slide 36: Market Price and Price to Tangible Book
Market Price and Price to Tangible Book Positioned for growth 36
Slide 37: Total Shareholder Return
Total Shareholder Return Positioned for growth 37
Slide 38: 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 39: 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 40: Non-GAAP Disclosure Appendix
Non-GAAP Disclosure Appendix Positionedgrowth for
Slide 41: 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 42: 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 42
Slide 43: 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 43
Slide 44: Non-GAAP Disclosure Reconciliation: Adjusted Net Income, EPS, 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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