Hometrust Bancshares, Inc. · NYSE:HTB
Hometrust Bancshares — KBW 2018 Community Bank Investor Conference
42 slides from Hometrust Bancshares's conference presentation, Jul 27, 2018
Slide 1: KBW 2018 Community Bank Investor Conference
KBW 2018 Community Bank Investor Conference July 31 – August 1, 2018 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 Number of Founded: 1926 520 Employees: Locations: 43 (NC, SC, VA, TN) Stock Price: $28.75 Total Assets: $3.3 billion Price to TBV: 144% Total Loans: $2.5 billion Market Cap: $547.4 million Average Daily Tot
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 pFoundation for growth and performance Value Creation for Shareholders • Investing in the future with enhanced/new lines of business • Core deposit growth • Noninterest income growth • Opportunistic acquisition strategy • EPS growth • Increasing franchise value Positioned for growth 6
Slide 7: Improving Earnings Performance
Improving Earnings Performance Dollars in thousands $30,000 $1.38 $1.40 $1.20 $25,000 $25,886 4-Year EPS CAGR of 33.08% $0.94 $1.00 $20,000 $0.80 $0.70 $17,111 $15,000 $0.61 $0.60 $0.44 $12,228 $11,784 $10,000 $0.40 $8,256 $5,000 $0.20 $- $- FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Net Income - Adjus
Slide 8: Organic and M&A Growth Since 2012 Conversion
Organic and M&A Growth Since 2012 Conversion $3,500 Merger with Merger with Bank TriSummit Bank $3,304 of Commerce January 2017 Assets Loans Deposits July 2014 $3,207 Acquisition of 10 Bank of America Branches $3,000 Nov 2014 $2,783 Mergers with $2,718 BankGreenville July 2013 Jefferson Federal $2,5
Slide 9: Strong Footprint for Growth
Strong Footprint for Growth 613% Increase in Market Population since 2012 Positioned for growth 9
Slide 10: 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% 3.4% 6.9% Raleigh, NC 1,335,067 8.1% 3.2% 8.2% Greenville, SC 901,549 6.1% 2.6% 5.7% Knoxville, TN 877,102 3.
Slide 11: Building a High-Performing Commercial Lending Team
Building a High-Performing Commercial Lending Team Changes in the past 6 years Commercial lenders in legacy markets – June 2012 6 Attrition in legacy markets (5) Hired/replaced in legacy markets 4 Acquired through bank acquisitions 21 Attrition after bank acquisitions (19) Hired/replaced in acquired
Slide 12: Adding Talent for Growth
Adding Talent for Growth Commercial and Line of Business Leaders Hunter Positioned for growth 12
Slide 13: Loan Highlights – Fiscal 2018
Loan Highlights – Fiscal 2018 Loan Portfolio Growth: . Organic loan growth of 8% ($171MM) in FY 2018 . 24% growth in C&I loans ($28MM) . 17% growth in CRE ($127MM) . 23% growth in indirect auto loans ($32MM) Recent Highlights/Enhancements: . Hired 13 new Commercial Market Presidents/Relationship Man
Slide 14: 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 15: 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 . Ty
Slide 16: Loan Portfolio Composition
Loan Portfolio Composition Transitioning to a Commercial Bank Portfolio Loans: 6/30/18 Increased commercial loan portfolio by $924 million or Dollars in millions 241% since 2013 Commercial 52% HELOCs &Consumer 22% 10% 1-4 Family 26% 8% 26% $3,000 5-Year CAGR of 16.71% 34% 22% $2,500 $2,000 1-4 Famil
Slide 17: Commercial Real Estate Composition
Commercial Real Estate Composition ($857MM) As of 6/30/18 13% 12% 4% 5% 27% 9% 10% 11% 9% Multifamily Owner Occupied Office Retail Hospitality Shopping Centers Industrial Healthcare Other Positioned for growth 17
Slide 18: 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 $49,794 Total Loan $60,118 Production: 800,000 $697,146 $11,118 Total Loan $305,153 Production: $289,983 $87,844 $528,376 600,000 $54
Slide 19: Commercial Loan Production by Type
Commercial Loan Production by Type Dollars in thousands $250,000 $257,494 $257,494 $200,000 $238,870 $234,102 $234,102 $150,000 $192,803 $164,945 $164,945 Originations $100,000 $137,660 $22,933 $112,349 $112,349 $35,773 $18,960 $92,591 $50,000 $34,583 $77,871 $77,871 $13,389 $47,955 $47,955 $- C&I C
Slide 20: Consumer Loan Production
Consumer Loan Production Dollars in thousands $120,000 Since 2014, Indirect Auto has provided 14,000 additional in-market retail customers for cross-sale opportunities. $100,000 $80,000 $99,558 $84,707 $84,707 $87,844 $87,844 $60,000 Originations $60,118 $60,118 $40,000 $53,010 $53,010 $49,794 $49,7
Slide 21: Mortgage Loan Production
Mortgage Loan Production Dollars in thousands 350,000 90% 78% 80% 300,000 66% 63% 70% 62% 62% 250,000 60% 200,000 50% $163,887 $163,887 $170,895 $170,895 150,000 40% Originations $124,070 $124,070 $138,988 $138,988 $117,698 $117,698 30% 100,000 20% 50,000 $134,258 $126,096 $126,096 10% $91,963 $91,9
Slide 22: 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 $242,501 Process $250,000 $2,500,000 2014 Added Indirect Auto LOB $200,000 $2,527,000 $2,527,000 Hired New Chief Credit Offi
Slide 23: Deposit/Retail Highlights – Fiscal 2018
Deposit/Retail Highlights – Fiscal 2018 Deposit Growth: . 6% core deposit* growth in fiscal 2018 ($94MM) . 19% growth in money market accounts . Core deposits* make up 77% of total deposits . Average cost of total deposits at .37% for fiscal 2018 Customer/Household Trends in fiscal 2018: . 5% growth
Slide 24: 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 $2,196,253 $900,000 80% 76.50% 77.44% 75.45% $800,000 70% 69.18% $700,000 60% 59.94% $600,0
Slide 25: Deposit Composition
Deposit Composition Deposit Migration Deposit Composition 100% 6/30/18 19.1% Time Deposits 90% 22.2% 26.4% 31.6% $516,152 34.9% 80% 38.1% 35.9% $789,186 Money Market/Savings 70% Checking Accounts 28.8% $890,915 31.0% 60% 33.5% 50% 37.6% Dollars in thousands 40.6% 40.6% 39.4% 40% Cost of Funds 0.70%
Slide 26: Growing Noninterest Income
Growing Noninterest Income . New SBA Line of Business in FY 2018 . Gains from loan sales - $1MM in start-up year . Third party servicer to keep overhead low . Mortgage Banking . Expanded into 5 of our new metro markets . Added 12 new mortgage loan officers in the last 12 months . Increasing rates to
Slide 27: Asset Quality
Asset Quality Dollars in thousands Net Charge-Offs and NCO / Average Loans Allowance for Loan Losses and ALL / Total Loans 2,500 0.20% 24,000 2.00% 23,500 2,000 0.15% 23,000 1.50% 22,500 1,500 22,000 0.10% 1.00% 1,000 21,500 0.05% 21,000 500 20,500 0.50% $91 $91 20,000 - 0.00% 2014 2015 2016 2017 20
Slide 28: Investment Portfolio Composition
Investment Portfolio Composition Investments: 6/30/18 ($451 MM) US Gov't Agency ($48 MM) MBS-Gov't Agcy/GSE ($70 MM) Munis ($28 MM) - 90% Taxable Corporate Bonds ($9 MM) FDIC Insured CDs in Other Banks ($67 MM) Commercial Paper ($229 MM) - 30-Day Avg Life 2% 6% 15% 15% Yield: 2.25% 11% Avg Repricing
Slide 29: 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 30: Stock Buy Backs
Stock Buy Backs (Dollars in thousands, except per share amounts) Percent of Outstanding Shares Number of Tangible Authorized to Shares Avg Cost / Book be Purchased Purchased Total Cost Share Value 1st Buy Back (completed 4/29/13) 4% 846,400 $ 13,299 $ 15.71 $ 17.91 2nd Buy Back (completed 12/2/13) 5
Slide 31: Quarter Ended June 30, 2018 Highlights
Quarter Ended June 30, 2018 Highlights (Dollars in thousands, except per share amounts) Quarter Ended Change As Reported 06/30/2018 06/30/2017 Amount Percent Net Income (2) $ 7,207 $ 4,766 $ 2,441 51% EPS - diluted $ 0.38 $ 0.25 $ 0.13 52% ROA 0.88% 0.61% 0.27% 44% Net interest margin (tax equivalen
Slide 32: Year Ended June 30, 2018 Highlights
Year Ended June 30, 2018 Highlights (Dollars in thousands, except per share amounts) Year Ended Change As Reported 06/30/2018 06/30/2017 Amount Percent Net Income (2) $ 8,235 $ 11,847 $ (3,612) (30%) EPS - diluted $ 0.44 $ 0.65 $ (0.21) (32%) ROA 0.25% 0.40% (0.15%) (38%) Net interest margin (tax eq
Slide 33: Balance Sheet Highlights
Balance Sheet Highlights (Dollars in thousands, except per share amounts) 06/30/2018 06/30/2017 Amount Percent Total assets $ 3,304,169 $ 3,206,533 $ 97,636 3% Total loans 2,525,852 2,351,470 174,382 7% Core deposits 1,680,101 1,586,305 93,796 6% Total deposits 2,196,253 2,048,451 147,802 7% Stockho
Slide 34: Market Price and Price to Tangible Book
Market Price and Price to Tangible Book $30.0 141.0% 150.0% 4-Year CAGR of 15.59% $28.15 126.0% 130.0% $25.0 $24.40 110.0% 92.8% 97.1% 89.2% $20.0 90.0% $18.50 $16.76 $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 Market Price per Sha
Slide 35: 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 HomeTrust Bancshares, Inc. NASDAQ Bank NASDAQ Composite Positioned for growth 35
Slide 36: 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 37: Investor Contacts
Investor Contacts Dana Stonestreet Chairman, President and CEO dana.stonestreet@hometrustbanking.com Hunter Westbrook EVP/Chief Banking Officer hunter.westbrook@hometrustbanking.com Tony VunCannon EVP/Chief Financial Officer/Treasurer tony.vuncannon@hometrustbanking.com 10 Woodfin Street Asheville,
Slide 38: Non-GAAP Disclosure Appendix
Non-GAAP Disclosure Appendix Positionedgrowth for
Slide 39: 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 40: Non-GAAP Disclosure Reconciliation
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 40
Slide 41: Non-GAAP Disclosure Reconciliation
Non-GAAP Disclosure Reconciliation Set forth to the right is a reconciliation to GAAP net income, ROA, and EPS as adjusted to exclude merger-related expenses, certain state tax expense, adjustments for the change in federal tax law, and gain on sale of premises and equipment: Positioned for growth 4
Slide 42: Non-GAAP Disclosure Reconciliation
Non-GAAP Disclosure Reconciliation Set forth to the right is a reconciliation to GAAP net income and EPS 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 branch con
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