Hometrust Bancshares, Inc. · NYSE:HTB
Hometrust Bancshares — Piper Sandler East Coast Financial Services Conference 2021
47 slides from Hometrust Bancshares's conference presentation, Nov 9, 2021
Slide 1: Piper Sandler East Coast Financial Services Conference November 10-11, 2021
Piper Sandler East Coast Financial Services Conference November 10-11, 2021
Slide 2: Forward-Looking Statements
2 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
Slide 3: HomeTrust Bancshares, Inc. Overview
3 HomeTrust Bancshares, Inc. Overview Headquarters: Asheville, NC Exchange/Ticker: NASDAQ: HTBI Founded: 1926 Number of Employees: 513 Locations: 33 (NC, SC, VA, TN) Stock Price: $31.17 Total Assets: $3.5 billion Price to TBV: 137% Total Loans: $2.7 billion Market Cap: $508 million Total Deposits: $
Slide 4: Overview: Franchise Highlights
4 HomeTrust Bancshares, Inc. Overview Franchise Highlights • 2nd largest publicly traded community bank holding company headquartered in NC • Only remaining bank headquartered in Asheville – Top 10 City in America • North Carolina ranked #2 on CNBC’s 2021 annual list of America’s Top States for Busi
Slide 5: Overview: Growth, M&A and Team Highlights
5 HomeTrust Bancshares, Inc. Overview • Proven ability to grow organically • 6% compounded annual organic growth rate of loan portfolio since 2012 conversion • 15% compounded annual organic growth rate of commercial loan portfolio • Proven ability to grow through M&A • 4 whole-bank acquisitions sinc
Slide 6: Strong Footprint for Growth
6 Strong Footprint for Growth NC SC VA TN Reflects footprint after announced closure of nine branch locations effective September 2021
Slide 7: Ready for what's next
Phase 2 Phase 4 Business Transformation 2022 - 2024 Phase 1 Geographic Expansion 2013 - 2015 Line of Business Ready for whats next.
Slide 8: Pyramid of Success
Pyramid of Success High Performance Deposit Growth Maturing Lines of Business Business Transformation Engaged Employees Enterprise Risk Management Franchise and Line of Business Investments Our Foundation Our Results Our Business Objectives 8
Slide 9: Recent Profitability Improvements/Balance Sheet Restructuring
Recent Profitability Improvements/Balance Sheet Restructuring Repayment of Long-term Borrowings $475 million in long-term debt retired in March and June 2021 Estimated 3.6 year earn back of the $22.7 million prepayment penalty $5.7 million in estimated annual interest expense reductions Branch Closu
Slide 10: Paycheck Protection Program (PPP)
10 Paycheck Protection Program (PPP) PPP Period Applications Funded Balance Net Fees 2020 290 $80.8 million $2.1 million 2021 179 $31.2 million $1.3 million Total 469 $112.0 million $3.4 million As of 9/30/21 118 $28.8 million $611,000 fees remaining Net fees deferred and amortized into interest inc
Slide 11: COVID-19 Payment Relief
11 COVID-19 Payment Relief (Dollars in thousands) $551,331 $91,244 $7,868 $5,757 $107 $1,003 $- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 • Payment and financial relief program for borrowers as a result of COVID-19 • Program included 90-day
Slide 12: COVID-19 Operational Impact Improvements Moving Forward
12 COVID-19 Operational Impact Improvements Moving Forward Call Center Lowered wait times for phone calls by allowing overflow to be routed to branches Reduced staffing to improve cost efficiency as customers continue their digital adoption and number of branch transactions decline Lowering future o
Slide 13: Digital Customer Experience
Digital Customer Experience $- $50,000 $100,000 $150,000 $200,000 $250,000 Digital Payments with Zelle Mobile Deposit ATM Bill Payment Remote Capture Debit Card Digital Banking Transfers 23% 89% Increase in Customer Volume Since March 2020 31% 15% 9% 75% 339% 1) Reflects June 2021 monthly dollar amo
Slide 14: Asset Quality
Nonperforming Assets to Total Assets Net Charge-Offs (“NCO”) and NCO to Average Loans 0.00% 0.50% 1.00% 1.50% $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 2017 2018 2019 2020 2021* Q1 2022 ALL ALL/Tot. Loans *Increase reflects the adoption of CECL on July 1, 2020 0.00% 0.10% 0.2
Slide 15: CECL Adoption
15 CECL Adoption • Adopted as of July 1, 2020, CECL replaces the incurred loss methodology with a life of asset estimate concept • At adoption, recorded additional allowance for credit losses of $15.1 million ($0.3 million on commercial paper and $14.8 million on loan portfolio), additional deferred
Slide 16: Capital Management: Cash Dividend
16 Capital Management Cash Dividend $- $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 2019 2020 2021 2022 Annualized • Initiated quarterly cash dividend of $0.06 on November 21, 2018 • Increased to $0.07 in November 2019 • Increased to $0.08 in November 2020 • Increased to $0.09 in September 2021 P
Slide 17: Capital Management: Stock Buybacks
17 Capital Management Stock Buybacks Buybacks Outstanding Authorized (%) Number of Shares Total Cost ($) Average Cost Per Share ($) TBV ($) 1st (4/29/13) 4 846,400 13,299 15.71 17.91 2nd (12/2/13) 5 1,041,245 17,055 16.38 17.94 3rd (11/18/14) 5 989,183 15,589 15.76 17.60 4th (8/5/15) 5 1,023,266 16,
Slide 18: Lines of Business History
18 Lines of Business History 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Pre-Stock Conversion Retail / Consumer – Limited Offerings Mortgage – Old S&L Model Commercial – Very Limited Capabilities Stock Conversion July Converted from mutual to stock form with focus on commercial banking Equipme
Slide 19: Lines of Business Leadership
19 Lines of Business Leadership Commercial Mark DeMarcus • Commercial Banking Group Executive • 35 years banking experience in the Carolinas and Virginia • 22-year career at legacy Wachovia as Regional President, Corporate Banking Manager, treasury sales and credit administration Stephanie Barbier •
Slide 20: Maturing Lines of Business: Equipment Finance
20 Maturing Lines of Business • Historical/Current • Began in February 2018 • Implemented industry leading leasing core technology system and processes • Built out team with deep experience in equipment finance • Current portfolio of over $365 million with yield of 4.14% • Looking forward • Modified
Slide 21: Maturing Lines of Business: SBA Lending
21 Maturing Lines of Business • Historical/Current • Began in September 2017 • Originate SBA 7(a) and USDA B&I loans, selling the guaranteed portion (typically 75%) at a gain and retaining 25% in portfolio • Gain on sale of $6.1 million, $2.8 million and $3.4 million for FY 2021, 2020 and 2019, resp
Slide 22: Maturing Lines of Business: Mortgage Banking
22 Maturing Lines of Business • Historical/Current • Traditionally a strong product • Restructured mortgage loan origination process • Added 10 new mortgage loan officers since beginning of FY 2017 • Increased rates for better execution and higher gain on loan sales • Gain on sale of $10.5 million,
Slide 23: Maturing Lines of Business: HELOCs Originated for Sale
23 Maturing Lines of Business • Historical/Current • Partnered with third party to purchase HELOCs beginning in December 2014 - grew portfolio to $160 million by 2018 • Began to transition to origination of HELOCs with warehouse to sell to others in March 2019 • Gain on sale of loans • Reducing cred
Slide 24: Maturing Lines of Business: Business and Commercial Banking
24 Maturing Lines of Business • Historical/Current • New line of business • Looking forward • Adding seasoned bankers to grow portfolio of loans and deposits • Enhance debit card revenue • Bundled products through Treasury Management Services Business Banking Commercial Banking • Historical/Current
Slide 25: Core Technology Upgrade
25 Core Technology Upgrade • Successful conversion and upgrade of our core technology systems in February 2020 • Leading to better operational alignment and process improvements to achieve more cost efficiencies • Strategic technological transformations to ensure future readiness • Open architecture
Slide 26: Organic and M&A Growth Since 2012 Conversion
$1,720,056 $1,583,323 $2,074,454 $2,783,114 $2,717,677 $3,206,533 $3,304,169 $3,476,178 $3,722,852 $3,524,723 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 Assets Loans Deposits Mergers with BankGreenville July 2013 Jefferson Federal Bank May 2014 Merger wi
Slide 27: Adjusted Earnings Performance
27 Adjusted Earnings Performance (Dollars in thousands, except per share data) See Non-GAAP Disclosure Appendix Fiscal Year $12,228 $17,111 $25,886 $26,821 $22,783 $34,190 $10,527 $31,581 $0.70 $0.94 $1.38 $1.46 $1.30 $2.06 $2.60 $- $0.25 $0.50 $0.75 $1.00 $1.25 $1.50 $1.75 $2.00 $2.25 $2.50 $2.75 $
Slide 28: Adjusted Return on Assets
Adjusted Return on Assets 0.45% 0.58% 0.80% 0.79% 0.63% 0.92% 1.20% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 2016 2017 2018 2019 2020 2021 Q1 2022 Annualized 28 Fiscal Year See Non-GAAP Disclosure Appendix
Slide 29: Increasing Noninterest Income
Increasing Noninterest Income 29 (Dollars in thousands) $14,291 $16,107 $18,972 $22,940 $30,332 $39,821 $10,352 $31,056 0.52% 0.53% 0.58% 0.67% 0.84% 1.08% 1.18% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% $- $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 2016 2017 2018 2
Slide 30: Loan Portfolio Composition
30 Loan Portfolio Composition $6 23 ,7 01 $6 84 ,0 89 $6 64 ,2 89 $6 60 ,5 91 $4 73 ,6 93 $4 06 ,5 49 $4 58 ,8 85 $5 18 ,3 90 $5 54 ,9 15 $5 01 ,8 73 $4 33 ,6 49 $3 58 ,6 83 $7 49 ,8 73 $1 ,1 49 ,9 36 $1 ,3 07 ,4 12 $1 ,5 42 ,7 22 $1 ,7 80 ,8 91 $1 ,9 21 ,3 85 $- $500,000 $1,000,000 $1,500,000 $2,00
Slide 31: Non-Owner Occupied CRE Composition
31 Non-Owner Occupied CRE Composition 13% 12% 11% 16%12% 3% 13% 9% 11% As of June 30, 2021 Multifamily Office Other Retail Hospitality Shopping Centers Restaurants Industrial Healthcare Other Total balance of $875 million.
Slide 32: Equipment Finance Composition
32 Equipment Finance Composition 23% 1% 21% 12% 8% 2% 8% 10% 4% 11% Industry and Equipment Type Construction Municipal Over the Road Tractors Light, Medium, Heavy Vehicles Manufacturing Material Handling Forestry Healthcare - Medical Office / Recycling / Other Trailers - All Trailers As of June 30,
Slide 33: Equipment Finance Composition by Geography
33 Equipment Finance Composition As of June 30, 2021 76% 24% National East of Mississippi West of Mississippi 54% 46% Southeast Footprint Southeast Outside Southeast Reflects borrower location
Slide 34: Total Loan Production
34 Total Loan Production* $325,537 $524,264 $520,786 $377,213 $430,458 $650,892 $124,070 $170,895 $163,887 $166,466 $155,299 $205,590 $11,118 $17,251 $41,266 $169,973 $191,476 $212,049 $54,598 $49,794 $60,118 $72,999 $73,351 $90,389 $87,844 $84,707 $99,558 $55,610 $50,380 $50,407 $- $28,453 $61,687
Slide 35: Commercial Loan Production by Type
35 Commercial Loan Production by Type (Dollars in thousands) $2 2, 93 3 $1 64 ,9 45 $1 37 ,6 60 $9 2, 59 1 $1 92 ,8 03 $2 38 ,8 70 $7 7, 87 1 $2 34 ,1 02 $2 57 ,4 94 $1 96 ,7 43 $1 73 ,9 04 $1 54 ,8 98 $2 09 ,3 37 $1 72 ,6 18 $2 12 ,5 07 $2 34 ,0 85 $3 48 ,5 99 $2 47 ,2 32 $- $50,000 $100,000 $150,0
Slide 36: Consumer Loan Production
36 Consumer Loan Production (Dollars in thousands) $5 4, 59 8 $8 7, 84 4 $4 9, 79 4 $8 4, 70 7 $6 0, 11 8 $9 9, 55 8 $7 2, 99 9 $5 5, 61 0 $7 3, 35 1 $5 0, 38 0 $9 0, 38 9 $5 0, 40 7 $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 HELOC-Originated for Investment/Consumer Indirect Auto O rig in
Slide 37: Mortgage Loan Production
37 Mortgage Loan Production $9 1, 96 3 $1 34 ,2 58 $1 26 ,0 96 $1 22 ,9 50 $2 23 ,9 37 $4 10 ,2 66 $1 24 ,0 70 $1 70 ,8 95 $1 63 ,8 87 $1 65 ,3 59 $1 54 ,5 49 $2 05 ,5 90 62% 63% 78% 77% 59% 47% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% $- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000
Slide 38: Deposit Portfolio Mix
Deposit Portfolio Mix FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Time Deposits $442,649 $462,146 $516,152 $712,190 $739,142 $472,777 Core Deposits* $1,360,047 $1,586,305 $1,680,101 $1,615,068 $2,046,614 $2,482,764 $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 Total Deposits
Slide 39: Deposit Composition and Migration
24.6% 22.6% 23.5% 30.6% 26.6% 16.0% 40.6% 39.4% 40.6% 37.3% 37.1% 40.6% 34.9% 38.1% 35.9% 32.1% 36.3% 43.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2016 2017 2018 2019 2020 2021 Time Deposits Money Market/Savings Checking Accounts Deposit Composition – June 30, 2021 Deposit Migration 0.28% 0.28%
Slide 40: Market Price and Price to Tangible Book
40 Market Price and Price to Tangible Book $18.50 $24.40 $28.15 $25.14 $16.00 $27.90 97% 126% 141% 119% 71% 125% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0% $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 2016 2017 2018 2019 2020 2021 Market Price per Share Price to Tangible Book Fiscal Year See
Slide 41: Quarter Highlights
(Dollars in thousands, except per share amounts) Earnings (GAAP) 9/30/2021 9/30/2020 Amount Percent Net income 10,527$ 5,753$ 4,774$ 83% Earnings per share (EPS) - di luted 0.65$ 0.35$ 0.30$ 86% Return on assets (ROA) 1.20% 0.62% 0.58% 94% Net interest margin (tax-equiva lent) 3.41% 3.00% 0.41% 14%
Slide 42: Balance Sheet Highlights
42 Balance Sheet Highlights (Dollars in thousands, except per share amounts) 9/30/2021 9/30/2020 Amount Percent Total assets 3,481,360$ 3,674,034$ (192,674)$ (5%) Total loans, net 2,685,236 2,726,264 (41,028) (2%) Core deposits 2,541,703 2,096,882 444,821 21% Total deposits 2,987,284 2,742,046 245,2
Slide 43: Investor Contacts
43 Investor Contacts Dana Stonestreet Chairman and CEO dana.stonestreet@htb.com Hunter Westbrook President and Chief Operating Officer hunter.westbrook@htb.com Tony VunCannon EVP/Chief Financial Officer/Corporate Secretary/Treasurer tony.vuncannon@htb.com 10 Woodfin Street Asheville, NC 28801 (828)
Slide 44: Non-GAAP Disclosure Appendix
Non-GAAP Disclosure Appendix
Slide 45: Non-GAAP financial measures explanation
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 book value per share; net income exc
Slide 46: Non-GAAP Disclosure Reconciliation
46 Non-GAAP Disclosure Reconciliation Set forth below is a reconciliation to GAAP of our efficiency ratio: Set forth below is a reconciliation to GAAP of tangible book value, tangible book value per share, and book value per share:
Slide 47: Non-GAAP Disclosure Reconciliation
47 Non-GAAP Disclosure Reconciliation Set forth below is a reconciliation to GAAP net income, EPS, ROE, and ROA 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, branch closure and restruc
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