Hbt Financial, Inc. · NASDAQ:HBT
Hbt Financial — Q2 2021 Earnings Presentation
44 slides from Hbt Financial's earnings presentation, Jul 26, 2021
Slide 1: Q2 2021 Results Presentation
STRICTLY PRIVATE AND CONFIDENTIAL Q2 2021 Results Presentation J u l y 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: Important Information and Where to Find It
Important Information and Where to Find It In connection with the proposed acquisition of NXT, HBT and NXT intend to file materials with the SEC, including a Registration Statement on Form S-4 of HBT that will include a joint proxy statement/prospectus of HBT and NXT. After the Registration Statemen
Slide 4: Q2 2021 highlights
Q2 2021 highlights Continued disciplined growth ◼ Total assets increased $89 million, or 2%, from Q1 2021 driven by deposit growth that was primarily invested in securities and cash ◼ Total deposits increased $69 million, or 2%, from Q1 2021 and the cost of total deposits declined 1 basis point to j
Slide 5: Company snapshot
C&I 15% CRE–Owner occupied 10% Agricultural & farm land 11% CRE–Non-owner occupied 25% C&D 9% Multi-family 10% 1-4 Family residential 14% Municipal, consumer & other 6% Company snapshot ✓ Company incorporated in 1982 from base of family-owned banks and completed its IPO in October 2019 ✓ Headquarter
Slide 6: Paycheck Protection Program (PPP) Details
Paycheck Protection Program (PPP) Details PPP Loans by Portfolio as of March 31, 2021 Portfolio Balance ($000) Commercial and industrial $115,538 Agricultural and farmland $8,711 Municipal, consumer, and other $1,273 Total PPP Loans $125,522 ◼ PPP loan balances, net of deferred origination fees, tot
Slide 7: Loan Portfolio Overview: Commercial Real Estate
Loan Portfolio Overview: Commercial Real Estate ◼ $949 million portfolio as of June 30, 2021 ➢ $532 million in non-owner occupied CRE primarily supported by rental cash flow of the underlying properties ➢ $212 million in multi-family loans secured by 5+ unit apartment buildings ➢ $205 million in con
Slide 8: Loan Portfolio Overview: Commercial
Loan Portfolio Overview: Commercial ◼ $321 million C&I loans outstanding as of June 30, 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 9: Loan Portfolio Overview: Agriculture and Farmland
Loan Portfolio Overview: Agriculture and Farmland ◼ $232 million portfolio as of June 30, 2021 ◼ Significant increase in corn and soybean prices compared to 2020 will improve borrower profitability and should reduce portfolio credit risk ◼ Federal crop insurance programs mitigate production risks ◼
Slide 10: Loan Portfolio Overview: 1-4 Family Residential Mortgage
Loan Portfolio Overview: 1-4 Family Residential Mortgage ◼ $303 million in-house portfolio as of June 30, 2021 ◼ 3.2% 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 ◼ $1.06 billion sold to the se
Slide 11: Loan Portfolio Overview: Municipal, Consumer and Other
Loan Portfolio Overview: Municipal, Consumer and Other ◼ $135 million portfolio as of June 30, 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 12: Loan Portfolio Overview: Asset Quality and Reserves
Loan Portfolio Overview: Asset Quality and Reserves ◼ At June 30, 2021, non-performing assets were $15.2 million, or 0.38% of total assets compared to $13.9 million, or 0.36% of total assets at March 31, 2021 ◼ Net charge-offs were $90 thousand, or 0.02%, for the quarter ended June 30, 2021 ◼ Substa
Slide 13: Securities Portfolio Overview
U.S. Treasury 5% Yield:1.33% U.S. Gov't Agency 12% Yield: 1.69% Municipal 27% Yield: 2.06% Agency RMBS 15% Yield: 1.83% Agency CMBS 35% Yield: 1.90% Corporate 6% Yield: 3.45% Securities Portfolio Overview ◼ Company’s debt securities consist primarily of the following types of fixed income instrument
Slide 14: Wealth Management Overview
Wealth Management Overview 13 Comprehensive Wealth Management Services ◼ Proprietary investment management solutions ◼ Financial planning ◼ Trust and estate administration $4.4 $4.5 $4.8 $2.8 $1.6 $1.6 $1.7 $0.8 $0.4 $0.4 $0.4 $0.2 $0.4 $0.3 $0.3 $0.2 $0.6 $0 $1 $2 $3 $4 $5 $6 $7 $8 2018 2019 2020 1
Slide 15: NXT Bancorporation Acquisition Overview
NXT Bancorporation Acquisition Overview Key Highlights and Strategic Rationale ◼ Expands HBT footprint into higher growth Eastern Iowa markets with similar demographics to communities where HBT has had its greatest success ◼ Adds talented team of community bankers with relationship-based approach an
Slide 16: 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 14.25 2017 2018 2019 2020 Q2 2021 9.94 10.80 10.38 9.94 9.67 2017 2018 2019 2020 Q2 2021 8.94 9.67 9.49 9.27 8.84 2017
Slide 17: Near-Term Outlook
Near-Term Outlook ◼ Loan balances (excluding the impact of PPP loans) expected to grow in the low single-digits on an annualized basis as demand improves along with a more sustained economic recovery during the second half of 2021 ◼ Focused on supporting net interest income ➢ NIM pressure (excluding
Slide 18: 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 19: 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 20: 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 21: 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 22: 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 23: Talented Board of Directors with deep financial services industry experience
Talented Board of Directors with deep financial services industry experience Fred L. Drake Chairman • CEO of HBT Financial • 38 years with Company • 41 years in industry J. Lance Carter Director • President and COO of HBT Financial • 19 years with Company • 27 years in industry Patrick F. Busch Dire
Slide 24: 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 23
Slide 25: 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 26: Drives 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 $16 per share. Total proceeds recei
Slide 27: Leading market position in core mid-sized markets
Leading market position in core mid-sized markets . . . Top 3 deposit share rank in 6 of 7 largest core mid-sized markets in Central Illinois Company Market County % of Company deposits Deposits ($mm) Branches Market share Rank Population (000) Money Center share1 McLean $570 9 16.3% 2 171 10.5% DeK
Slide 28: Growth opportunity in the Chicago MSA
Loans within the Chicago MSA ($mm) CAGR of 5.4% .. . . 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 29: Stable, low-cost deposit base
18% 19% 9% 13% 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% 0.07% 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% 0.24% Company
Slide 30: 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 July 15, 2021); 1 Tax-equivalent basis metric; for reconciliation with GAAP metric
Slide 31: 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 $184mm deposits 2011 Citizens First National Bank Princeton, IL FDIC-assisted
Slide 32: Prudent risk management
Prudent risk management Framework and key policies Balance sheet composition as of June 30, 2021 Originated and acquired loans1 ($mm) ◼ Risk management culture instilled by management ◼ Well-diversified loan portfolio across commercial, regulatory CRE, and residential ◼ Primarily originated across i
Slide 33: Appendix
Appendix 32
Slide 34: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted net income and adjusted ROAA ($000) 2018 2019 2020 2Q21 1H21 Net income $63,799 $66,865 $36,845 $13,717 $28,962 C-Corp equivalent adjustment 2 (15,502) (13,493) -- -- -- C-Corp equivalent net income 2 $48,297 $53,372 $36,845 $13,717 $28,962 Adjustments: Acquisition
Slide 35: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) Average tangible common equity and adjusted ROATCE ($000) 2018 2019 2020 2Q21 1H21 Total stockholders’ equity $330,214 $341,544 $350,703 $365,190 $364,378 Less: goodwill (23,620) (23,620) (23,620) (23,620) (23,620) Less: core deposit intangible assets (6,256) (4,748
Slide 36: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2017 2018 2019 2020 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 1H21 Net interest income $120,998 $129,442 $133,800 $117,605 $30,662 $28,908 $28,871 $29,164 $29,129 $29,700 $58,829 Tax equivalent adjustment 5,527 2,661 2,309 1,943 463 483 495 502 503 503 1,006 Net interest
Slide 37: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) Efficiency ratio (tax-equivalent basis) ($000) 2018 2019 2020 2Q21 1H21 Total noninterest expense $90,317 $91,026 $91,956 $22,154 $44,698 Less: amortization of intangible assets (1,559) (1,423) (1,232) (258) (547) Adjusted noninterest expense $88,758 $89,603 $90,724
Slide 38: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2017 2018 2019 2020 2Q21 1H21 Net charge-offs (recoveries) $3,082 $4,953 $1,614 $993 $90 $(236) Net charge-offs (recoveries) -(originated) 1 2,500 3,137 732 345 (214) (534) Net charge-offs (recoveries) -(acquired) 1 582 1,816 882 648 304 298 Average loans, be
Slide 39: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2017 2018 2019 2020 2Q21 Non-performing loans 2 $22,102 $15,913 $19,049 $9,960 $7,406 Foreclosed assets 16,545 9,559 5,099 4,168 7,757 Non-performing assets 2 $38,647 $25,472 $24,148 $14,128 $15,163 Loans, before allowance for loan losses $2,115,946 $2,144,25
Slide 40: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) Tangible book value per share and cumulative effect of dividends (2007 to 3Q19) ($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 $349 Less go
Slide 41: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) IPO adjusted tangible book value per share ($mm) IPO Adjusted 3Q19 2019 2020 2Q21 Tangible book value per share Total equity $333 $364 $373 Less goodwill (24) (24) (24) Less core deposit intangible (4) (3) (2) Tangible common equity $305 $338 $347 Shares outstanding
Slide 42: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2017 2018 2019 2020 2Q21 Tangible common equity Total equity $323,916 $340,396 $332,918 $363,917 $373,194 Less goodwill (23,620) (23,620) (23,620) (23,620) (23,620) Less core deposit intangible (7,012) (5,453) (4,030) (2,798) (2,251) Tangible common equity $2
Slide 43: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2018 2019 2020 2Q21 Total deposits $2,795,970 $2,776,855 $3,130,534 $3,424,634 Less time deposits of $250,000 or more (36,875) (44,754) (26,687) (22,821) Less brokered deposits -- -- -- -- Core deposits $2,759,095 $2,732,101 $3,103,847 $3,401,813 Core deposit
Slide 44: HBT Financial, Inc.
HBT Financial, Inc.