Highlands Bankshares, Inc. · OTC:HBSI
Highlands Bankshares — OTCQX Banks Investor Conference 2017
21 slides from Highlands Bankshares's conference presentation, Mar 15, 2017
Slide 1: OTCQX Banks Investor Conference March 15, 2017
OTCQX BanksInvestor Conference March 15, 2017
Slide 2: Forward-Looking Statements
This presentation contains forward-looking statements, as defined by federal securities laws, including statements about Highlands and its financial outlook. These statements are based on management's current expectations and are provided to assist investors in understanding our operations and busin
Slide 3: Snapshot of Highlands Bankshares
3 hubank.com | Snapshot of Highlands Bankshares Market Data Ticker HLND Price (as of 3/09/2017) $6.65 Market Cap $54.5MM P/E NM P/BV1 127% Avg. Daily Vol. (30d) 1,250 Insider Ownership 16.3% Institutional Ownership 42.7% Fourth Quarter 2016 Assets $612.7MM Loans $409.7MM Deposits $489.9MM Common Equ
Slide 4: History: Pre-Crisis, Crisis, Post-Crisis
Originated in response to local consolidationFavorable market reception led to early success in both profitability and growthExpanded out of market without prior out of market experience or contactsFollowing expansion, profitability and growth declined below industry averagesOver time, shareholder r
Slide 5: Key Performance Indicators: Net Income and Return on Assets
Net Income Note: Net Income and Return on Assets exclude offsetting DTA adjustments during the period.Note: 1Q17 results represent management's estimation for the period. hubank.com | 5 Key Performance Indicators Return on Assets $MM Pre-crisis net income and return on assets was below the company's
Slide 6: Key Performance Indicators: Past Due Loans and NPAs
Note: 1Q17 results represent management's estimation for the period. hubank.com | 6 Key Performance Indicators Past Due Loans NPAs / Loans and OREO Pre-crisis past dues and credit related costs were more than double industry averagesApproval criteria was outside the industry normConcentrations in lo
Slide 7: Key Performance Indicators: Efficiency Ratio and Assets per Employee
Efficiency Ratio Note: 1Q17 results represent management's estimation for the period. hubank.com | 7 Key Performance Indicators Assets per Employee Pre-crisis efficiency ratio was higher than industry averagesStaffing levels were not monitored or managed to workload creating a low Assets per Employe
Slide 8: Management Team
hubank.com | 8 Management Team Title Major Experience Years inBanking Years atHLND Ray Skinner Chief Banking Officer American Savings, National Commerce 27 1 Kevin Pack CEO - Highlands Home Mortgage National Commerce 25 1 Brian Lowery Chief Credit Officer National Commerce 28 1 Vicki Andrews EVP Ban
Slide 9: Focus on increasing the value of our common stock
At our core, we are investors focused on increasing the value of our common stock not necessarily our deposits, loans, assets, revenues, or earnings.“In assessing performance, what matters isn’t the absolute rate of return but the return relative to peers and the market. You really only need to know
Slide 10: Business Model: Simple, Focused, and Disciplined
Target Customer Small to mid-sized private businessesTheir owners and managementProfessionalsOther individuals Strategy Provide a differentiated, relationship-based, and highly personal banking experienceSeek low cost deposits and ancillary deposit servicesOperate with industry leading efficiencyInv
Slide 11: Market Areas: High Country
Recognized as #1 bank past three yearsRecently hired David Lecka as Market Executive who joined having been City President for United CommunityRecently added an additional Commercial Relationship Officer, Financial Advisor, and Mortgage AdvisorEstablished local advisory board comprised of accomplish
Slide 12: Market Areas: Knoxville
Knoxville hubank.com | 12 Market Areas Recently hired Amy Pangelinan as Market Executive who joined having been a Commercial Relationship Officer at Atlantic Capital, Pinnacle, and BB&TEntered the market a decade ago with no brand recognition or contacts so limited success to dateRecently "redenovoe
Slide 13: Market Areas: Southwest Virginia
Southwest Virginia hubank.com | 13 Market Areas #1 deposit market share and recognized as #1 bank in Smyth CountyMark Farris serves as Market Executive and is a career Highlands employeeRecently added a Branch Manager and Personal Banker from Wells Fargo - the largest single branch in the areaEstabl
Slide 14: Market Areas: Tri-Cities
Recognized as #1 bank in Bristol marketRecently hired Mike Hill as Market Executive who joined having been First Citizens' Market ExecutiveRecently added an additional Commercial Relationship Officer and Financial AdvisorEstablished local advisory board comprised of accomplished business leaders500,
Slide 15: HLND Trading Comps
hubank.com | 15 HLND Trading Comps Banks headquartered in NC, SC, TN, and VA between $400MM and $1B in assets, equity/assets between 8 - 10.5%, nonperforming assets/assets < 1%, and return on assets > 0.50% Note: Market data as of March 2, 2017.Note: HLND data is management's estimation of 2017 earn
Slide 16: HLND Investment Thesis
hubank.com | 16 HLND Investment Thesis Quality ManagementNew management team comprised principally from the former National CommerceAdding three new board members with successful CEO/COO value creation experienceInsiders own 16.3% of the companyShareholder-friendly culture committed to prudent capit
Slide 17: hubank.com
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Slide 18: Appendix
Appendix hubank.com | 18
Slide 19: Balance Sheet Mix
hubank.com | * Balance Sheet Mix hubank.com | 19 Balance Sheet Mix
Slide 20: Loan Mix
hubank.com | 20 Loan Mix 4Q15 1Q16 2Q16 3Q16 4Q16 Commercial / Agricultural 6.2 6.1 5.9 5.6 5.6 Commercial / Real Estate 18.1 17.1 16.7 16.7 16.5 Total Commercial 24.3 23.2 22.6 22.4 22.1 1-4 Family 36.9 37.1 36.8 36.3 35.3 HELOC 1.0 1.0 1.0 1.1 2.2 Construction / Land / Farmland 5.0 4.9 4.8 4.9 4.6
Slide 21: Customer Funding Mix
hubank.com | 21 Customer Funding Mix Percentage of Average Assets 4Q15 1Q16 2Q16 3Q16 4Q16 Noninterest Bearing 21.1 20.9 20.1 21.9 22.2 Interest Bearing 7.7 7.5 7.5 8.3 8.3 Total Checking 28.8 28.4 27.6 30.2 30.5 MMA 11.8 11.8 11.5 11.4 11.9 Savings 14.6 15.0 15.0 14.9 14.8 Total Core Deposits 55.2
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