Hbt Financial, Inc. · NASDAQ:HBT
Hbt Financial — Q2 2022 Earnings Presentation
33 slides from Hbt Financial's earnings presentation, Jul 25, 2022
Slide 1: Q2 2022 Results Presentation
STRICTLY PRIVATE AND CONFIDENTIAL Q2 2022 Results Presentation July 25, 2022 HBT Financial, Inc.
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 o ral and written statements of HBT Financial, Inc. (the “Company”) and its management may contain, "forward - looking statements" within the meani
Slide 3: Q2 2022 Summary
Q2 2022 Summary Small decrease in total loans while credit quality remains very strong ◼ Total loans, excluding PPP loans, decreased 0.9%, primarily resulting from seasonal decline in line utilization in the grain elevator portfolio partially offset by growth in multi - family loans ◼ New loan produ
Slide 4: Company snapshot
C&I 10% CRE – Owner occupied 9% Agricultural & farm land 9% CRE – Non - owner occupied 27% C&D 14% Multi - family 11% 1 - 4 Family residential 13% Municipal, consumer & other 7% Company snapshot ✓ Company incorporated in 1982 from base of family - owned banks and completed its IPO in October 2019 ✓
Slide 5: Loan Portfolio Overview: Commercial and Commercial Real Estate
Loan Portfolio Overview: Commercial and Commercial Real Estate ◼ $1.26 billion portfolio as of June 30, 2022 ➢ $656 million in non - owner occupied CRE primarily supported by rental cash flow of the underlying properties ➢ $269 million in multi - family loans secured by 5+ unit apartment buildings ➢
Slide 6: Loan Portfolio Overview: Selected Portfolios
Loan Portfolio Overview: Selected Portfolios Agriculture and Farmland ◼ $230 million portfolio as of June 30, 2022 ◼ Significant increase in corn and soybean prices since 2020 improved borrower profitability and should reduce portfolio credit risk ◼ Federal crop insurance programs mitigate productio
Slide 7: Loan Portfolio Overview: Asset Quality and Reserves
Loan Portfolio Overview: Asset Quality and Reserves Non - performing Assets/Total Assets % and Net Charge - off % Allowance for Loan Losses to Total Loans % 6 ◼ Substandard loans decreased $12.1 million to $80.8 million and Pass - Watch loans decreased $45.3 million to $63.6 million as of June 30, 2
Slide 8: Securities Portfolio Overview
U.S. Treasury 11% Yield:1.38% U.S. Gov't Agency 10% Yield: 2.39% Municipal 21% Yield: 2.08% Agency RMBS 22% Yield: 2.57% Agency CMBS 31% Yield: 1.91% Corporate 5% Yield: 3.70% Securities Portfolio Overview ◼ Company’s debt securities consist primarily of the following types of fixed income instrumen
Slide 9: Net Interest Margin
◼ Second quarter 2022 net interest margin increased 26 basis points from the prior quarter primarily due to higher yields on ea rni ng assets ◼ 40% of the loan portfolio matures or reprices within the next 12 months ◼ Loan mix is 65% fixed rate and 35% variable rate; nearly all variable rate loans e
Slide 10: Wealth Management Overview
Wealth Management Overview 9 Comprehensive Wealth Management Services ◼ Proprietary investment management solutions ◼ Financial planning ◼ Trust and estate administration $4.5 $4.8 $5.9 $2.9 $1.6 $1.7 $2.0 $1.1 $0.4 $0.4 $0.2 $0.5 $0.3 $0.3 $0.3 $0.1 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 2019 2020 2021 1H 2
Slide 11: Near-Term Outlook
Near - Term Outlook ◼ Growth in net interest income and disciplined expense control should lead to continued strong profitability and return of capital to shareholders through quarterly dividend and share repurchases ◼ Loan growth in mid - single digits on an annualized basis expected in 3Q22 ➢ Loan
Slide 12: Our history – Long track record of organic and acquisitive growth
Our history – Long track record of organic and acquisitive growth 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 C
Slide 13: Our markets
Our markets Branch locations Chicago MSA 34% Iowa 4% Mid - sized Illinois markets 62% Deposits Chicago MSA 49% Iowa 11% Mid - sized Illinois markets 40% Chicago MSA 29% Iowa 7% Mid - sized Illinois markets 64% $2.5bn $3.7bn 61 branches 12 Source: S&P Global Market Intelligence Note: Financial data a
Slide 14: 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 15: Experienced executive management team with deep community ties
Experienced executive management team with deep community ties Fred L. Drake Chairman and CEO 39 years with Company 42 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 16: Talented Board of Directors with deep financial services industry experience
Talented Board of Directors with deep financial services industry experience Fred L. Drake Chairman • Director since 1984 • CEO of HBT Financial • 39 years with Company • 42 years in industry J. Lance Carter Director • Director since 2011 • President and COO of HBT Financial • 20 years with Company
Slide 17: Investment highlights
Investment highlights 4 1 2 3 5 Track record of successfully integrating acquisitions Consistent performance through cycles Leading deposit share in mid - sized markets provides funding for stronger loan demand in higher growth areas Stable, low - cost deposit base well - positioned for rising rates
Slide 18: 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 2021 Source: S&P Global Market Intelligen
Slide 19: 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 $16 per share. Total
Slide 20: Leading deposit share in mid-sized markets
Leading deposit share in mid - sized markets provides funding for stronger loan demand in higher growth areas County Deposits ($mm) Branches Market share 2 Rank 2 McLean $663 9 16.7% 2 DeKalb 428 6 13.8% 4 Cook 276 2 0.1% 53 Tazewell 264 5 7.6% 2 Bureau 260 4 21.0% 1 Woodford 248 6 26.6% 2 Logan 204
Slide 21: 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: 1 Represents median of 23 high performing major exchange - traded banks headquartered in the Midwest with $2 - 10bn in assets and a 2
Slide 22: 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 23: 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 24: Appendix
Appendix 23
Slide 25: Non-GAAP reconciliations
Non - GAAP reconciliations Adjusted net income and adjusted ROAA ($000) 2019 2020 2021 1H22 Net income $66,865 $36,845 $56,271 $27,689 C - Cor p equivalent adjustment 1 (13,493) -- -- -- C - Corp equivalent net income 1 $53,372 $36,845 $56,271 $27,689 Adjustments: Acquisition expenses -- -- (1,416)
Slide 26: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) Average tangible common equity and adjusted ROATCE ($000) 2019 2020 2021 1H22 Total stockholders’ equity $341,544 $350,703 $380,080 $392,334 Less: goodwill (23,620) (23,620) (25,057) (29,322) Less: core deposit intangible assets (4,748) (3,436) (2,333) (1,720) Ave
Slide 27: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) ($000) 2018 2019 2020 2021 1H22 Net interest income $129,442 $133,800 $117,605 $122,403 $66,301 Tax equivalent adjustment 2,661 2,309 1,943 2,028 1,127 Net interest income (tax - equivalent basis) $132,103 $136,109 $119,548 $124,431 $67,428 Average interest - earn
Slide 28: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) Efficiency ratio (tax - equivalent basis) ($000) 2019 2020 2021 1H22 Total noninterest expense $91,026 $91,956 $91,246 $47,999 Less: amortization of intangible assets (1,423) (1,232) (1,054) (490) Adjusted noninterest expense $89,603 $90,724 $90,192 $47,509 Net in
Slide 29: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) Tangible book value per share and cumulative effect of dividends (2007 to 3Q19) ($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 $349 Less
Slide 30: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) IPO adjusted tangible book value per share ($mm) IPO Adjusted 3Q19 2019 2020 2021 2Q22 Tangible book value per share Total equity $333 $364 $412 $374 Less goodwill (24) (24) (29) (29) Less core deposit intangible (4) (3) (2) (1) Tangible common equity $305 $338 $3
Slide 31: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) ($000) 2019 2020 2021 2Q22 Tangible common equity Total equity $332,918 $363,917 $411,881 $373,809 Less goodwill (23,620) (23,620) (29,322) (29,322) Less core deposit intangible (4,030) (2,798) (1,943) (1,453) Tangible common equity $305,268 $337,499 $380,616 $343
Slide 32: Non-GAAP reconciliations (cont'd)
Non - GAAP reconciliations (cont’d) ($000) 2019 2020 2021 2Q22 Total deposits $2,776,855 $3,130,534 $3,738,185 $3,701,986 Less time deposits of $250,000 or more (44,754) (26,687) (59,512) (25,369) Less brokered deposits -- -- (4,238) -- Core deposits $2,732,101 $3,103,847 $3,674,435 $3,676,617 Core
Slide 33: HBT Financial, Inc.
HBT Financial, Inc.