Hbt Financial, Inc. · NASDAQ:HBT
Hbt Financial — Investor Presentation (May 2020)
39 slides from Hbt Financial's investor presentation, May 26, 2020
Slide 1: Investor Presentation May 2020
STRICTLY PRIVATE AND CONFIDENTIAL Investor Presentation M a y 2020 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 statements relating to our future plans, strategies and expectations, as well as the economic impact of COVID-19 and the related impacts on our future f
Slide 3: Company snapshot
C&I 14% CRE–Owner occupied 11% Agricultural & farm land 11% CRE–Non-owner occupied 25% C&D 11% Multi-family 8% 1-4 Family residential 15% Municipal, consumer & other 5% Company snapshot ✓ Company incorporated in 1982 from base of family-owned banks and completed its IPO in October 2019 ✓ Headquarter
Slide 4: Experienced executive management team with deep community ties
Experienced executive management team with deep community ties Fred L. Drake Chairman and CEO 37 years with Company 40 years in industry J. Lance Carter President and Chief Operating Officer 18 years with Company 26 years in industry Patrick F. Busch Chief Lending Officer, President of Heartland Ban
Slide 5: Our history
Our history Fred Drake named President and CEO of Heartland Bank and Trust Company and led its entry into Bloomington-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 HBT Fin
Slide 6: Our markets
Our markets Company branches outside of Chicago MSA Company branches in Chicago MSA Lake Kane DeKalb Cook Will Kendall LaSalle Bureau Grundy Ford McLean De Witt Logan Tazewell Peoria Marshall Woodford Champaign Exposure to mid-sized and metropolitan markets Branch locations Chicago MSA 34% Mid-sized
Slide 7: Our core operating principles
Our core operating principles Continue disciplined growth ◼ Grow conservatively in our core mid-sized markets and in the Chicago MSA via organic channels and through M&A ◼ Pursue strategically compelling and financially attractive growth opportunities that are consistent with our culture Uphold our
Slide 8: 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 o
Slide 9: 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 growth opportunity in the Chicago MSA Stable, low-cost deposit base Prudent risk management 8
Slide 10: Company's performance compares favorably to peers
Company’s performance compares favorably to peers . . . Cost of deposits 0.29% 0.84% Yield on loans 5.51% 5.27% Net interest margin (tax equivalent basis)2 4.38% 3.80% 77.9% 92.4% Loans-to-deposits 53.1% 56.8% Efficiency ratio (tax equivalent basis)2 Source: S&P Global Market Intelligence Note: Fina
Slide 11: Performance sustained through cycles
. . . and has been sustained 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 Source: S&P Global Market Intelligenc
Slide 12: Driving tangible book value growth
. . . driving 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”; 2 In 2019, HBT Financial issued and sold 9,429,794 shares of common stock at a price of $16 per share. Total proceeds rece
Slide 13: Leading market position in core mid-sized markets
Leading market position in core mid-sized markets . . . Top 3 deposit share rank in 6 of 7 largest core mid-sized markets in Central Illinois Company Market County % of Company deposits Deposits ($mm) Branches Market share Rank Population (000) Money Center share1 McLean $508 9 16.6% 2 172 13.0% DeK
Slide 14: Growth opportunity in the Chicago MSA
2016 2017 2018 2019 1Q20 $1,021 $1,039 Loans within the Chicago MSA ($ mm) 4.6% CAGR .. . . with growth opportunity in the Chicago MSA ◼ Entered market in 2011 with acquisition of Western Springs National Bank ◼ Chicago MSA is home to >9.5mm residents, with an annual GDP >$675bn ◼ Second largest MSA
Slide 15: Stable, low-cost deposit base
18% 20% 12% 21% 2016 2Q19 2016 1Q19 0.17% 0.16% 0.16% 0.15% 0.17% 0.17% 0.18% 0.17% 0.17% 0.20% 0.24% 0.24% 0.29% 0.30% 0.29% 0.26% 0.23% 0.25% 0.24% 0.27% 0.27% 0.26% 0.30% 0.35% 0.36% 0.40% 0.51% 0.63% 0.70% 0.77%0.87% 0.89% 0.84% 0.74% Company cost of deposits High performing peers cost of deposi
Slide 16: Supported NIM trends
3.59% 3.72% 3.83% 3.80% 3.72% 2016 2017 2018 2019 1Q20 .. . . has supported NIM trends FTE NIM1 Source: S&P Global Market Intelligence; Note: Peer group NIMs shown on FTE basis when available; (data for peers as available through May 15, 2020); 1 Tax-equivalent basis metric; for reconciliation with
Slide 17: Track record of successfully integrating acquisitions
Track record of successfully integrating acquisitions BankPlus Morton, IL $231mm deposits 2007 2012 Bank of Illinois Normal, IL FDIC-assisted $176mm deposits Western Springs National Bank Western Springs, IL FDIC-assisted $184mm deposits 2011 Citizens First National Bank Princeton, IL FDIC-assisted
Slide 18: Prudent risk management
Prudent risk management Framework and key policies Balance sheet composition as of March 31, 2020 Originated and acquired loans1 ($mm) ◼ Risk management culture instilled by management ◼ Well-diversified loan portfolio across commercial, regulatory CRE, and residential ◼ Primarily originated across
Slide 19: Loan Portfolio Overview: Commercial Real Estate
Loan Portfolio Overview: Commercial Real Estate 18 ◼ $950 million portfolio as of March 31, 2020 ➢ $541 million in non-owner occupied CRE primarily supported by rental cash flow of the underlying properties ➢ $232 million in construction and land development loans primarily to developers to sell upo
Slide 20: Loan Portfolio Overview: Commercial
Loan Portfolio Overview: Commercial 19 ◼ $299 million C&I loans outstanding as of March 31, 2020 ➢ 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 21: Loan Portfolio Overview: Agriculture and Farmland
Loan Portfolio Overview: Agriculture and Farmland 20 ◼ $229 million portfolio as of March 31, 2020 ➢ 43% production, of which most is corn and soybeans ➢ 57% real estate loans secured by farmland ◼ Federal crop insurance programs mitigate production risks ◼ No customer accounts for more than 4% of a
Slide 22: Loan Portfolio Overview: 1-4 Family Residential Mortgage
Loan Portfolio Overview: 1-4 Family Residential Mortgage 21 ◼ $314 million in-house portfolio as of March 31, 2020 ◼ Loan modifications related to COVID-19 offered in the form of 3 months interest only payments, 2 months of payment deferrals, or short-term forbearance ➢ As of May 15, 2020, made 136
Slide 23: Loan Portfolio Overview: Asset Quality and Reserves
Loan Portfolio Overview: Asset Quality and Reserves 22 ◼ At March 31, 2020, non-performing assets were $19.8 million, or 0.62% of total assets compared to $24.1 million, or 0.74% of total assets at December 31, 2019 ◼ As of May 15, 2020, made 476 loan modifications related to COVID- 19 for $268 mill
Slide 24: Capital and Liquidity Overview
Capital and Liquidity Overview 23 CET 1 Risk-based Capital Ratio (%) Leverage Ratio (%) Tangible Common Equity to Tangible Assets (%)1 Liquidity Sources 12.21 12.09 12.71 12.15 12.44 2016 2017 2018 2019 1Q20 9.93 9.94 10.80 10.38 10.70 2016 2017 2018 2019 1Q20 8.94 8.94 9.67 9.49 9.81 2016 2017 2018
Slide 25: Impact of COVID-19 in Illinois
Impact of COVID-19 in Illinois 24 Source: U.S. CDC, and the Illinois Department of Public Health (IDPH); COVID-19 case data through May 19, 2020 Confirmed COVID-19 Cases in Illinois by County ◼ Illinois has the 3rd highest number of confirmed COVID-19 cases in the U.S. ◼ Some 66% of the state’s conf
Slide 26: COVID-19: Customer, Community, and Employee Support Efforts
COVID-19: Customer, Community, and Employee Support Efforts 25 Initial Response ◼ Business Continuity Plan (BCP) activated ◼ Executive leaders began meeting daily to discuss COVID-19 considerations ◼ Enhanced disinfecting and cleaning protocols implemented at all facilities Customer and Community In
Slide 27: Near-Term Outlook
Near-Term Outlook 26 ◼ Active participant in the Paycheck Protection Program (PPP); through May 15, 2020: ➢ Approved and funded $179 million of PPP loans to 2,048 businesses representing approximately 23,000 employees ➢ Average loan size of $87,000 and median loan size of $28,000 ➢ Fees of $7.3 mill
Slide 28: Appendix
Appendix 27
Slide 29: Non-GAAP reconciliations
Non-GAAP reconciliations Adjusted net income and adjusted ROAA ($000) 2017 2018 2019 1Q20 Net income $56,103 $63,799 $66,865 $6,221 C-Corp equivalent adjustment 2 (18,809) (15,502) (13,493) -- C-Corp equivalent net income 2 $37,294 $48,297 $53,372 $6,221 Adjustments: Net earnings (losses) from close
Slide 30: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) Average tangible common equity and adjusted ROATCE ($000) 2017 2018 2019 1Q20 Total stockholders’ equity $338,317 $330,214 $341,544 $341,519 Less: goodwill (23,620) (23,620) (23,620) (23,620) Less: core deposit intangible assets (7,943) (6,256) (4,748) (3,898) Avera
Slide 31: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2016 2017 2018 2019 1Q20 Net interest income $121,101 $120,998 $129,442 $133,800 $30,662 Tax equivalent adjustment 5,468 5,527 2,661 2,309 463 Net interest income (tax-equivalent basis) $126,569 $126,525 $132,103 $136,109 $31,125 Average interest-earnings ass
Slide 32: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) Efficiency ratio (tax-equivalent basis) ($000) 2017 2018 2019 1Q20 Total noninterest expense $94,057 $90,317 $91,026 $23,307 Less: amortization of intangible assets (1,916) (1,559) (1,423) (317) Adjusted noninterest expense $92,141 $88,758 $89,603 $22,990 Net intere
Slide 33: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2016 2017 2018 2019 1Q20 Net charge-offs $4,974 $3,082 $4,953 $1,614 567 Net charge-offs (originated) 1 1,245 2,500 3,137 732 172 Net charge-offs (acquired) 1 3,729 582 1,816 882 395 Average loans, before allowance for loan losses $2,132,405 $2,091,863 $2,131
Slide 34: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2017 2018 2019 1Q20 Non-performing loans 2 $22,102 $15,913 $19,049 $15,372 Foreclosed assets 16,545 9,559 5,099 4,469 Non-performing assets 2 $38,647 $25,472 $24,148 $19,841 Loans, before allowance for loan losses $2,115,946 $2,144,257 $2,163,826 $2,132,952 N
Slide 35: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) Tangible book value per share and cumulative effect of dividends (2007 to 3Q19) ($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 $349 Less go
Slide 36: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) IPO adjusted tangible book value per share ($mm) IPO Adjusted 3Q19 2019 1Q20 Tangible book value per share Total equity $333 340 Less goodwill (24) (24) Less core deposit intangible (4) (4) Tangible common equity $305 $312 Shares outstanding (mm) 27.46 27.46 Book va
Slide 37: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2016 2017 2018 2019 1Q20 Tangible common equity Total equity $326,246 $323,916 $340,396 $332,918 $339,813 Less goodwill (23,620) (23,620) (23,620) (23,620) (23,620) Less core deposit intangible (8,928) (7,012) (5,453) (4,030) (3,713) Tangible common equity $2
Slide 38: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) ($000) 2017 2018 2019 1Q20 Total deposits $2,855,685 $2,795,970 $2,776,855 $2,730,303 Less time deposits of $250,000 or more (42,830) (36,875) (44,754) (28,060) Less brokered deposits -- -- -- -- Core deposits $2,812,855 $2,759,095 $2,732,101 $2,702,243 Core deposit
Slide 39: HBT Financial, Inc.
HBT Financial, Inc.