Hbt Financial, Inc. · NASDAQ:HBT
Hbt Financial — Q3 2022 Earnings Presentation
35 slides from Hbt Financial's earnings presentation, Oct 24, 2022
Slide 1: Q3 2022 Results Presentation
STRICTLY PRIVATE AND CONFIDENTIAL Q3 2022 Results Presentation October 24, 2022 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”) and its management may contain, "forward - looking statements" within the meani
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 materials with the SEC, including a Registration Statement on Form S - 4 of HBT that includes a proxy statement of Town and Country and a prospectus of HBT. After the Registration S
Slide 4: Q3 2022 Highlights
Q3 2022 Highlights M&A continues to enhance value of HBT franchise ◼ Pending merger with Town and Country Financial Corporation (expected to close in 1Q23) ➢ Highly accretive to EPS (17% in first full year of cost savings) 2 ➢ Expands HBT’s Illinois footprint while adding exposure to St. Louis MSA ➢
Slide 5: Company snapshot
C&I 9% CRE – Owner occupied 9% Agricultural & farm land 9% CRE – Non - owner occupied 28% C&D 14% Multi - family 10% 1 - 4 Family residential 13% Municipal, consumer & other 8% Company snapshot ✓ Company incorporated in 1982 from base of family - owned banks and completed its IPO in October 2019 ✓ H
Slide 6: Loan Portfolio Overview: Commercial and Commercial Real Estate
Loan Portfolio Overview: Commercial and Commercial Real Estate ◼ $1.34 billion portfolio as of September 30, 2022 ➢ $718 million in non - owner occupied CRE primarily supported by rental cash flow of the underlying properties ➢ $261 million in multi - family loans secured by 5+ unit apartment buildi
Slide 7: Loan Portfolio Overview: Selected Portfolios
Loan Portfolio Overview: Selected Portfolios Agriculture and Farmland ◼ $245 million portfolio as of September 30, 2022 ◼ Significant increase in corn and soybean prices since 2020 improved borrower profitability and should reduce portfolio credit risk ◼ Federal crop insurance programs mitigate prod
Slide 8: 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 % 7 ◼ Substandard loans decreased $8.4 million to $72.4 million and Pass - Watch loans decreased $5.8 million to $57.8 million as of September 30
Slide 9: Securities Portfolio Overview
U.S. Treasury 11% Yield:1.38% U.S. Gov't Agency 10% Yield: 2.44% Municipal 22% Yield: 2.07% Agency RMBS 22% Yield: 2.67% Agency CMBS 31% Yield: 1.85% Corporate 4% Yield: 3.98% Securities Portfolio Overview ◼ Company’s debt securities consist primarily of the following types of fixed income instrumen
Slide 10: Net Interest Margin
◼ Third quarter 2022 net interest margin increased 31 basis points from the prior quarter primarily due to higher yields on ear nin g assets ◼ 40% of the loan portfolio matures or reprices within the next 12 months ◼ Loan mix is 65% fixed rate and 35% variable rate, and 78% of variable rate loans ha
Slide 11: Wealth Management Overview
Wealth Management Overview 10 Comprehensive Wealth Management Services ◼ Proprietary investment management solutions ◼ Financial planning ◼ Trust and estate administration $4.5 $4.8 $5.9 $4.3 $1.6 $1.7 $2.0 $1.7 $0.4 $0.4 $0.2 $0.5 $0.3 $0.3 $0.3 $0.2 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 2019 2020 2021 3Q2
Slide 12: Near-Term Outlook
Near - Term Outlook ◼ Growth in net interest income and disciplined expense control positions the Company to achieve continued strong profitability ◼ Loan growth in mid to upper single digits on an annualized basis expected in 4Q22 ➢ Continued growth expected in all markets, although at a slower pac
Slide 13: 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 14: Town and Country Financial Corporation Merger Overview
◼ As of June 30, 2022, Town and Country had $876 million in assets, $625 million in loans, and $738 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 diluti
Slide 15: 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 $3.6bn 58 locations 14 Illinois branches outside of the Chicago MSA
Slide 16: Business strategy
Business strategy ◼ Drake family involved in Central IL banking since 1920 ◼ Management lives and works in our communities ◼ Community banking and relationship - based approach stems from adherence to our Midwestern values ◼ Committed to providing products and services to support the unique needs of
Slide 17: Experienced executive management team with deep community ties
Experienced executive management team with deep community ties Fred L. Drake Chairman and CEO 39 years with Company 42 years in industry J. Lance Carter President and Chief Operating Officer 21 years with Company 28 years in industry Patrick F. Busch Chief Lending Officer, President of Heartland Ban
Slide 18: Talented Board of Directors
Talented Board of Directors with deep financial services industry experience Fred L. Drake Chairman • Director since 1984 • CEO of HBT Financial • 39 years with Company • 42 years in industry J. Lance Carter Director • Director since 2011 • President and COO of HBT Financial • 21 years with Company
Slide 19: Investment highlights
Investment highlights 4 1 2 3 5 Track record of successfully integrating acquisitions Consistent performance through cycles Leading deposit share in mid - sized markets provides funding for stronger loan demand in higher growth areas Stable, low - cost deposit base well - positioned for rising rates
Slide 20: Consistent performance through cycles
Consistent performance through cycles… Drivers of profitability Pre - tax return on average assets (%) 0.00% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.25% 2.50% 2.75% 3.00% 2006 2007 2008 2009 2010 2011¹ 2012¹ 2013¹ 2014 2015 2016 2017 2018 2019 2020 2021 Source: S&P Global Market Intelligen
Slide 21: Drives compelling tangible book value growth
. . . drives compelling tangible book value growth Tangible book value per share over time ($ per share) 1 1 For reconciliation with GAAP metric, see “Non - GAAP reconciliations” in Appendix; 2 In 2019, HBT Financial issued and sold 9,429,794 shares of common stock at a price of $16 per share. Total
Slide 22: Leading deposit share in mid-sized markets
Leading deposit share in mid - sized markets provides funding for stronger loan demand in higher growth areas County Deposits ($mm) Full - Service Branches Market share 2 Rank 2 McLean $653 9 16.1% 2 DeKalb 415 6 13.8% 4 Cook 274 2 0.1% 52 Tazewell 267 5 7.2% 2 Bureau 249 3 20.6% 1 Woodford 243 5 26
Slide 23: Stable, low-cost deposit base well-positioned for rising rates
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 median of 23 high performing major exchange - traded banks headquartered in the Midwest with $2 - 10bn in assets and a 2
Slide 24: 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 25: 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 $500,000 t
Slide 26: Appendix
Appendix 25
Slide 27: Non-GAAP reconciliations
Non - GAAP reconciliations Adjusted net income and adjusted ROAA ($000) 2019 2020 2021 3Q22 YTD Net income $66,865 $36,845 $56,271 $43,316 C - Cor p equivalent adjustment 1 (13,493) -- -- -- C - Corp equivalent net income 1 $53,372 $36,845 $56,271 $43,316 Adjustments: Acquisition expenses -- -- (1,4
Slide 28: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) Average tangible common equity and adjusted ROATCE ($000) 2019 2020 2021 3Q22 YTD Total stockholders’ equity $341,544 $350,703 $380,080 $388,509 Less: goodwill (23,620) (23,620) (25,057) (29,322) Less: core deposit intangible assets (4,748) (3,436) (2,333) (1,597)
Slide 29: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) ($000) 2018 2019 2020 2021 3Q22 YTD Net interest income $129,442 $133,800 $117,605 $122,403 $103,691 Tax equivalent adjustment 2,661 2,309 1,943 2,028 1,801 Net interest income (tax - equivalent basis) $132,103 $136,109 $119,548 $124,431 $105,492 Average interest
Slide 30: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) Efficiency ratio (tax - equivalent basis) ($000) 2019 2020 2021 3Q22 YTD Total noninterest expense $91,026 $91,956 $91,246 $71,997 Less: amortization of intangible assets (1,423) (1,232) (1,054) (733) Adjusted noninterest expense $89,603 $90,724 $90,192 $71,264 Ne
Slide 31: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) Tangible book value per share and cumulative effect of dividends (2007 to 3Q19) ($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 $349 Less
Slide 32: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) IPO adjusted tangible book value per share ($mm) IPO Adjusted 3Q19 2019 2020 2021 3Q22 Tangible book value per share Total equity $333 $364 $412 $359 Less goodwill (24) (24) (29) (29) Less core deposit intangible (4) (3) (2) (1) Tangible common equity $305 $338 $3
Slide 33: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) ($000) 2019 2020 2021 3Q22 Tangible common equity Total equity $332,918 $363,917 $411,881 $359,073 Less goodwill (23,620) (23,620) (29,322) (29,322) Less core deposit intangible (4,030) (2,798) (1,943) (1,210) Tangible common equity $305,268 $337,499 $380,616 $328
Slide 34: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) ($000) 2019 2020 2021 3Q22 Total deposits $2,776,855 $3,130,534 $3,738,185 $3,643,443 Less time deposits of $250,000 or more (44,754) (26,687) (59,512) (25,829) Less brokered deposits -- -- (4,238) -- Core deposits $2,732,101 $3,103,847 $3,674,435 $3,617,614 Core
Slide 35: HBT Financial, Inc.
HBT Financial, Inc.