Slide 1: HBT Financial, Inc. Q2 2023 Results Presentation
STRICTLY PRIVATE AND CONFIDENTIAL HBT Financial, Inc. July 24, 2023 Q2 2023 Results Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements Readers should note that in addition to the historical information contained herein, this presentation contains, and future oral and written statements of HBT Financial, Inc. (the “Company” or “HBT”) and its management may contain, "forward-looking statements" within the m
Slide 3: Q2 2023 Highlights
Q2 2023 Highlights ◼ Net income of $18.5 million, or $0.58 per diluted share; return on average assets (ROAA) of 1.49% and return on average tangible common equity (ROATCE)1 of 19.91% Strong profitability ◼ Adjusted net income1 of $18.8 million, or $0.58 per diluted share; adjusted ROAA 1 of 1.51% a
Slide 4: Company Snapshot
Company Snapshot Overview Financial highlights ($mm) As of or for the period ended 2020 2021 2022 1H23 ✓ Company incorporated in 1982 from base of family-owned banks and completed its IPO in October 2019 Total assets $3,667 $4,314 $4,287 $4,976 ✓ Headquartered in Bloomington, Illinois, with operatio
Slide 5: Earnings Overview
Earnings Overview Non-GAAP Adjusted Highlights Relative to Previous Quarter ($000) 2Q23 Adjustments1 2Q231 ◼ Net interest income benefited from a full quarter’s impact Interest and dividend income $56,768 -- $56,768 of the Town and Country merger and asset repricing, but was partially offset by incr
Slide 6: Deposits Overview
Deposits Overview Deposit Base Highlights Interest Spot Interest ◼ Highly granular deposit base with cost increases in line with Costs* Rates2 expectations during the second quarter of 2023 2Q23 As of 6/30/23 ◼ Top 100 depositors, by balance, make up 13% of our deposit Interest-bearing demand 0.22%
Slide 7: Net Interest Margin
Net Interest Margin ◼ Second quarter 2023 net interest margin decreased 4 basis Percentage of Loans Maturing or Repricing points from the prior quarter, primarily attributable to higher 30.9% funding costs which outpaced an increase in asset yields 22.6% 21.2% 19.0% ◼ 37% of the loan portfolio matur
Slide 8: Loan Portfolio Overview: Commercial and Commercial Real Estate
Loan Portfolio Overview: Commercial and Commercial Real Estate Commercial Loan Portfolio Commercial Real Estate Portfolio ◼ $386 million C&I loans outstanding as of June 30, 2023 ◼ $1.59 billion portfolio as of June 30, 2023 ➢ For working capital, asset acquisition, and other business ➢ $883 million
Slide 9: Loan Portfolio Overview: Selected Portfolios
Loan Portfolio Overview: Selected Portfolios Agriculture and Farmland Municipal, Consumer and Other ◼ $260 million portfolio as of June 30, 2023 ◼ $220 million portfolio as of June 30, 2023 ◼ Borrower operations focus primarily on corn and soybean ➢ Loans to municipalities are primarily federally ta
Slide 10: Loan Portfolio Overview: ACL and Asset Quality
Loan Portfolio Overview: ACL and Asset Quality 2Q23 ACL Activity ($000) CECL Methodology and Oversight ◼ Discounted cash flow method utilized for majority of loan segments, except weighted average remaining maturity method used for consumer loans Watch List and ◼ Credit loss drivers determined by re
Slide 11: Wealth Management Overview
Wealth Management Overview Comprehensive Wealth Management Services Agricultural Services ◼ Proprietary investment management solutions ◼ Farm management services: Over 77,000 acres managed ◼ Financial planning ◼ Real estate brokerage including auction services ◼ Trust and estate administration ◼ Fa
Slide 12: Securities Portfolio Overview
Securities Portfolio Overview Securities Overview Key investment portfolio metrics ◼ Company’s debt securities consist primarily of the following ($000) AFS HTM Total types of fixed income instruments: Amortized Cost $913,908 $533,231 $1,447,139 ◼ Agency guaranteed MBS: MBS pass-throughs, CMOs, and
Slide 13: Capital and Liquidity Overview
Capital and Liquidity Overview CET 1 Risk-based Capital Ratio (%) Capital and Liquidity Highlights ◼ Overall capital levels remain strong and well above regulatory 13.37 requirements. 13.06 13.07 12.15 11.78 ◼ Tangible common equity to tangible assets decreased during the first half of 2023 primaril
Slide 14: Near-Term Outlook
Near-Term Outlook ◼ Completed Town and Country core conversion and substantially all cost savings have been fully realized as of May 2023 ◼ Loan growth in mid-single digits on an annualized basis expected for remainder of 2023 ◼ Excluding brokered deposits, deposits are up through July 20, 2023; how
Slide 15: Our History – Long track record of organic and acquisitive growth
Our History – Long track record of organic and acquisitive growth 1920 1982 1992 1999 - 2008 2010-2015 2019 2021 M.B. Drake HBT Financial, Inc. Fred Drake named Entry into several new Wave of Completion Entry into starts bank in incorporates as a multi- President and markets in Central IL FDIC- of I
Slide 16: Our Markets
Our Markets Full-service branch locations Deposits Iowa 3% Chicago MSA 28% $4.2bn Central Illinois 69% Iowa Loans 9% Central $3.2bn Illinois 51% Chicago MSA 40% Central Illinois branches Full-service Branches Chicago MSA branches Iowa Iowa branches 4 Chicago MSA 18 67 Central Illinois locations 45 S
Slide 17: Business Strategy
Business Strategy Small enough to know you, big enough to serve you Deploy excess deposit Maintain a prudent Pursue strategic Preserve strong ties to funding into loan approach to credit acquisitions and sustain our communities growth opportunities underwriting strong profitability ◼ Drake family in
Slide 18: Experienced executive management team with deep community ties
Experienced executive management team with deep community ties Fred L. Drake J. Lance Carter Peter Chapman Executive Chairman President and Chief Financial Officer 40 years with Company Chief Executive Officer Joined HBT in Oct. 2022 43 years in industry 21 years with Company 29 years in industry 29
Slide 19: Talented Board of Directors with deep financial services industry experience
Talented Board of Directors with deep financial services industry experience Fred L. Drake J. Lance Carter Patrick F. Busch Roger A. Baker Executive Chairman Director Director Director • Director since 1984 • Director since 2011 • Director since 1998 • Director since 2022 • 40 years with Company • P
Slide 20: Investment Highlights
Investment Highlights Consistent performance through cycles drives 1 long-term tangible book value growth Strong, granular, low-cost deposit base provides 2 funding for loan growth opportunities Track record of successfully integrating 3 acquisitions 4 Prudent risk management 19
Slide 21: Consistent performance through cycles
1 Consistent performance through cycles. . . Drivers of profitability Pre-tax return on average assets (%) 3.00% Company Company Adjusted1 High Performing Peer Median2 Strong, low-cost deposits supported by our leading market 2.75% 1 share in our Central Illinois 2.50% markets 2.25% 2.00% Relationsh
Slide 22: Drives long-term tangible book value growth
1 . . . drives long-term tangible book value growth Tangible book value per share over time ($ per share)1 Town and Country acquisition dilution in 1Q23 estimated to be $0.68 when including acquisition expenses (7.26) 17.27 17.80 15.33 16.25 16.23 14.72 12.56 12.93 12.29 13.13 11.94 10.54 11.12 11.5
Slide 23: Strong, granular, low-cost deposit base
2 Strong, granular, low-cost deposit base. . . Cost of deposits (%) remains consistently below peers HBT High Performing Peers 1 1.14 0.86 0.60 0.48 0.34 0.36 0.29 0.24 0.17 0.21 0.20 0.14 0.07 0.07 2017 2018 2019 2020 2021 2022 1Q23 With a lower deposit beta than peers since beginning of current in
Slide 24: Provides funding for loan growth opportunities
2 . . . provides funding for loan growth opportunities Leading Deposit Market Position Loan Growth Opportunities ◼ Top 2 deposit share rank in 6 of 8 largest Central Illinois markets Chicago MSA in which the Company operates1 ◼ Entered market in 2011 with acquisition of Western Springs National ◼ De
Slide 25: Track record of successfully integrating acquisitions
3 Track record of successfully integrating acquisitions 2007 2010 2012 2015 2023 BankPlus Bank of Illinois Farmer City State Bank National Bancorp, Inc. Town and Country Morton, IL Normal, IL Farmer City, IL (American Midwest Bank) Financial Corporation $231mm deposits FDIC-assisted $70mm deposits S
Slide 26: Prudent risk management
4 Prudent risk management Comprehensive Enterprise Risk Management Disciplined Credit Risk Management Strategy and Risk Management ◼ Risk management culture instilled by management ◼ Majority of directors are independent, with varied experiences ◼ Well-diversified loan portfolio across commercial, r
Slide 27: Appendix
Appendix 26
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted net income and adjusted ROAA ($000) 2020 2021 2022 1H23 Net income $36,845 $56,271 $56,456 $27,681 Adjustments: Acquisition expenses 1 -- (1,416) (1,092) (13,691) Branch closure expenses -- (748) -- -- Charges related to termination of certain employee benefit plans
Slide 29: Non-GAAP Reconciliations (cont'd)
Non-GAAP Reconciliations (cont’d) ROATCE, adjusted return on average stockholders’ equity, and adjusted ROATCE ($000) 2020 2021 2022 1H23 Total stockholders’ equity $350,703 $380,080 $383,306 $438,448 Less: goodwill (23,620) (25,057) (29,322) (54,643) Less: core deposit intangible assets (3,436) (2,
Slide 30: Non-GAAP Reconciliations (cont'd)
Non-GAAP Reconciliations (cont’d) Net interest income (tax-equivalent basis) ($000) 2019 2020 2021 2022 1H23 Net interest income $133,800 $117,605 $122,403 $145,874 $95,709 Tax equivalent adjustment 2,309 1,943 2,028 2,499 1,417 Net interest income (tax-equivalent basis) $136,109 $119,548 $124,431 $
Slide 31: Non-GAAP Reconciliations (cont'd)
Non-GAAP Reconciliations (cont’d) Efficiency ratio (tax-equivalent basis) ($000) 2020 2021 2022 1H23 Total noninterest expense $91,956 $91,246 $105,107 $69,906 Less: amortization of intangible assets (1,232) (1,054) (873) (1,230) Adjusted noninterest expense $90,724 $90,192 $104,234 $68,676 Net inte
Slide 32: Non-GAAP Reconciliations (cont'd)
Non-GAAP Reconciliations (cont’d) Tangible book value per share and cumulative effect of dividends (2007 to 3Q19) ($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: g
Slide 33: Non-GAAP Reconciliations (cont'd)
Non-GAAP Reconciliations (cont’d) IPO adjusted tangible book value per share ($000) 3Q19 Tangible common equity Total equity $348,936 Less: goodwill (23,620) Less: core deposit intangible (4,366) Tangible common equity 320,950 Net proceeds from initial public offering 138,493 Use of proceeds from in
Slide 34: Non-GAAP Reconciliations (cont'd)
Non-GAAP Reconciliations (cont’d) Tangible common equity to tangible assets ($000) 2019 2020 2021 2022 2Q23 Tangible common equity Total equity $332,918 $363,917 $411,881 $373,632 $450,852 Less: goodwill (23,620) (23,620) (29,322) (29,322) (59,876) Less: core deposit intangible (4,030) (2,798) (1,94
Slide 35: Non-GAAP Reconciliations (cont'd)
Non-GAAP Reconciliations (cont’d) Core deposits ($000) 2020 2021 2022 2Q23 Total deposits $3,130,534 $3,738,185 $3,587,024 $4,164,523 Less: time deposits of $250,000 or more (26,687) (59,512) (27,158) (78,705) Less: brokered deposits -- (4,238) -- (51,010) Core deposits $3,103,847 $3,674,435 $3,559,
Slide 36: HBT Financial, Inc.
HBT Financial, Inc.