Hbt Financial, Inc. · NASDAQ:HBT
Hbt Financial — Q4 2021 Earnings Presentation
43 slides from Hbt Financial's earnings presentation, Jan 27, 2022
Slide 1: Q4 2021 Results Presentation
STRICTLY PRIVATE AND CONFIDENTIAL Q4 2021 Results Presentation January 27, 2022 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 stateme nts relating to our future plans, strategies and expectations, as well as the economic impact of COVID - 19 and the related impacts on our
Slide 3: Q4 2021 highlights
Q4 2021 highlights Growth accelerates ◼ Total assets increased $367 million, or 9.3%, from Q3 2021 reflecting the addition of $234 million of assets from the closing of the NXT Bancorporation acquisition on October 1, 2021 ◼ Total loans, excluding the impact of acquired NXT and PPP loans, increased
Slide 4: Company snapshot
C&I 12% CRE – Owner occupied 9% Agricultural & farm land 10% CRE – Non - owner occupied 27% C&D 12% Multi - family 11% 1 - 4 Family residential 13% Municipal, consumer & other 6% Company snapshot ✓ Company incorporated in 1982 from base of family - owned banks and completed its IPO in October 2019 ✓
Slide 5: Strong Loan and Deposit Growth
Strong Loan and Deposit Growth 4 Change in loans during Q4 2021 ($mm) Change in deposits during Q4 2021 ($mm) Q4 2021 loan growth ◼ T otal loans, excluding the impact of acquired NXT and PPP loans, increased 9.0% from Q3 2021, with growth in every category ➢ Commercial and industrial (+15%) ➢ Agricu
Slide 6: Loan Portfolio Overview: Commercial Real Estate
Loan Portfolio Overview: Commercial Real Estate ◼ $1,246 million portfolio as of December 31, 2021 ➢ $684 million in non - owner occupied CRE primarily supported by rental cash flow of the underlying properties ➢ $264 million in multi - family loans secured by 5+ unit apartment buildings ➢ $298 mill
Slide 7: Loan Portfolio Overview: Commercial
Loan Portfolio Overview: Commercial ◼ $287 million C&I loans outstanding as of December 31, 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 ba
Slide 8: Loan Portfolio Overview: Agriculture and Farmland
Loan Portfolio Overview: Agriculture and Farmland ◼ $248 million portfolio as of December 31, 2021 ◼ Significant increase in corn and soybean prices since 2020 improved borrower profitability and should reduce portfolio credit risk ◼ Federal crop insurance programs mitigate production risks ◼ No cus
Slide 9: Loan Portfolio Overview: 1-4 Family Residential Mortgage
Loan Portfolio Overview: 1 - 4 Family Residential Mortgage ◼ $328 million in - house portfolio as of December 31, 2021 ◼ 2.3% is rated substandard 1st Mortgages Non - owner Occupied 52% 1st Mortgages Owner Occupied 28% HELOCs and 2nd Mortgages 20% 1 - 4 Family Residential Loan Mix ◼ $1.04 billion so
Slide 10: Loan Portfolio Overview: Municipal, Consumer and Other
Loan Portfolio Overview: Municipal, Consumer and Other ◼ $157 million portfolio as of December 31, 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 - E
Slide 11: Paycheck Protection Program (PPP) Details
Paycheck Protection Program (PPP) Details PPP Loans by Portfolio as of September 30, 2021 Portfolio Balance ($000) Commercial and industrial $28,404 Agricultural and farmland $913 Municipal, consumer, and other $171 Total PPP Loans $29,488 ◼ PPP loan balances, net of deferred origination fees, total
Slide 12: Loan Portfolio Overview: Asset Quality and Reserves
Loan Portfolio Overview: Asset Quality and Reserves ◼ At December 31, 2021, non - performing assets were $6.1 million, or 0.14% of total assets compared to $12.8 million, or 0.33% of total assets at September 30, 2021 ◼ Net charge - offs were $82 thousand, or 0.01%, for the quarter ended December 31
Slide 13: Revolving Line Utilization Remains Below Historical Levels
Revolving Line Utilization Remains Below Historical Levels ◼ Revolving line utilization rate ticked up to 44% at December 31, 2021 compared to 41% at September 30, 2021 ◼ Revolving line utilization at December 31, 2021 was 6 percentage points below the recent peak of 50% at March 31, 2019 Revolving
Slide 14: Securities Portfolio Overview
U.S. Treasury 9% Yield:1.25% U.S. Gov't Agency 11% Yield: 1.58% Municipal 24% Yield: 1.98% Agency RMBS 16% Yield: 1.67% Agency CMBS 35% Yield: 1.78% Corporate 5% Yield: 3.54% Securities Portfolio Overview ◼ Company’s debt securities consist primarily of the following types of fixed income instrument
Slide 15: Net Interest Margin
◼ The low interest rate environment has pressured the net interest margin ◼ 40% of the loan portfolio matures or reprices within the next 12 months ◼ Loan mix is 65% fixed rate and 35% variable rate; 77% of variable rate loans have floors and 86% of those loans have hit thei r f loors Net Interest M
Slide 16: Wealth Management Overview
Wealth Management Overview 15 Comprehensive Wealth Management Services ◼ Proprietary investment management solutions ◼ Financial planning ◼ Trust and estate administration $4.4 $4.5 $4.8 $5.9 $1.6 $1.6 $1.7 $2.0 $0.4 $0.4 $0.4 $0.2 $0.4 $0.3 $0.3 $0.3 $0.6 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 2018 2019 202
Slide 17: 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 13.37 2017 2018 2019 2020 2021 9.94 10.80 10.38 9.94 9.84 2017 2018 2019 2020 2021 8.94 9.67 9.49 9.27 8.89 2017 201
Slide 18: Near-Term Outlook
Near - Term Outlook ◼ Loan balances (excluding the impact of PPP loans) expected to grow in the mid - single digits during 2022 with growth weaker in 1Q 22 and improving as demand improves along with a more sustained economic recovery ➢ Disruption in the Chicago banking market following consolidatio
Slide 19: Our history
Our history 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 Central IL M.B. Drake starts bank in Central IL 1920 HB
Slide 20: NXT Bancorporation Acquisition Overview
◼ On October 1, 2021, HBT closed the NXT acquisition adding $234 million of assets, $195 million of loans, and $182 million of deposits ◼ Provides opportunity to utilize existing excess liquidity to replace higher cost acquired deposits and to repurchase loan participations sold ◼ Increases loan - t
Slide 21: Our markets
Our markets Branch locations Chicago MSA 33% Iowa 5% Mid - sized Illinois markets 62% Deposits Chicago MSA 48% Iowa 11% Mid - sized Illinois markets 41% Loans Chicago MSA 29% Iowa 7% Mid - sized Illinois markets 64% Branches $2.5bn $3.7bn 61 branches Note: Financial data as of December 31, 2021 20 S
Slide 22: 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 23: Our core operating principles
Our core operating principles Continue disciplined growth ◼ Continued organic growth in our core mid - sized markets with increased growth opportunities in the Chicago MSA and Iowa ◼ Pursue strategically compelling and financially attractive M&A opportunities that are consistent with our culture Uph
Slide 24: 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 20 years with Company 28 years in industry Patrick F. Busch Chief Lending Officer, President of Heartland Ban
Slide 25: 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 • 38 years with Company • 41 years in industry J. Lance Carter Director • Director since 2011 • President and COO of HBT Financial • 20 years with Company
Slide 26: 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 additional growth opportunity in the Chicago MSA and Iowa Stable, low - cost deposit base well - positioned for rising
Slide 27: 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 3Q21 YTD Source: S&P Global Market Intell
Slide 28: 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 $16 per share. Total
Slide 29: Leading market position in core mid-sized markets
Leading market position in core mid - sized markets . . . Top 3 deposit share rank in 6 of 7 largest core mid - sized markets in Central Illinois 1 Company Market County % of Company deposits Deposits ($mm) Branches Market share Rank Population (000) Money Center share 2 McLean $635 9 16.7% 2 171 10
Slide 30: Growth opportunity in the Chicago MSA and Iowa
. . . with growth opportunity in the Chicago MSA and Iowa ◼ Loans totalling $1.2 billion as of December 31, 2021, growing $0.3 billion since December 31, 2016 (CAGR of 5.9%) ◼ Entered market in 2011 with acquisition of Western Springs National Bank ◼ Chicago MSA is home to >9.4mm residents, with an
Slide 31: 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: Peer data as available on January 16, 2022; 1 Represents median of 23 high performing major exchange - traded banks headquartered in
Slide 32: Track record of successfully integrating acquisitions
Farmer City State Bank Farmer City, IL $70mm deposits Citizens First National Bank Princeton, IL FDIC - assisted $808mm deposits Track record of successfully integrating acquisitions BankPlus Morton, IL $231mm deposits 2007 2012 Bank of Illinois Normal, IL FDIC - assisted $176mm deposits Western Spr
Slide 33: 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 34: Appendix
Appendix HBT _ Financial 33
Slide 35: Non-GAAP reconciliations
Non - GAAP reconciliations Adjusted net income and adjusted ROAA ($000) 2018 2019 2020 2021 4Q21 Net income $63,799 $66,865 $36,845 $56,271 $13,594 C - Cor p equivalent adjustment 1 (15,502) (13,493) -- -- -- C - Corp equivalent net income 1 $48,297 $53,372 $36,845 $56,271 $13,594 Adjustments: Acqui
Slide 36: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) Average tangible common equity and adjusted ROATCE ($000) 2018 2019 2020 2021 4Q21 Total stockholders’ equity $330,214 $341,544 $350,703 $380,080 $410,190 Less: goodwill (23,620) (23,620) (23,620) (25,057) (29,322) Less: core deposit intangible assets (6,256) (4,7
Slide 37: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) ($000) 2017 2018 2019 2020 2021 Net interest income $120,998 $129,442 $133,800 $117,605 $122,403 Tax equivalent adjustment 5,527 2,661 2,309 1,943 2,028 Net interest income (tax - equivalent basis) $126,525 $132,103 $136,109 $119,548 $124,431 Average interest - ea
Slide 38: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) Efficiency ratio (tax - equivalent basis) ($000) 2018 2019 2020 2021 4Q21 Total noninterest expense $90,317 $91,026 $91,956 $91,246 $24,381 Less: amortization of intangible assets (1,559) (1,423) (1,232) (1,054) (255) Adjusted noninterest expense $88,758 $89,603 $
Slide 39: 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 $349 Less
Slide 40: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) IPO adjusted tangible book value per share ($mm) IPO Adjusted 3Q19 2019 2020 2021 Tangible book value per share Total equity $333 $364 $412 Less goodwill (24) (24) (29) Less core deposit intangible (4) (3) (2) Tangible common equity $305 $338 $381 Shares outstandi
Slide 41: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) ($000) 2017 2018 2019 2020 2021 Tangible common equity Total equity $323,916 $340,396 $332,918 $363,917 $411,881 Less goodwill (23,620) (23,620) (23,620) (23,620) (29,322) Less core deposit intangible (7,012) (5,453) (4,030) (2,798) (1,943) Tangible common equity
Slide 42: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) ($000) 2018 2019 2020 2021 Total deposits $2,795,970 $2,776,855 $3,130,534 $3,738,185 Less time deposits of $250,000 or more (36,875) (44,754) (26,687) (59,512) Less brokered deposits -- -- -- (4,238) Core deposits $2,759,095 $2,732,101 $3,103,847 $3,674,435 Core
Slide 43: HBT Financial, Inc.
HBT Financial, Inc.