HBT 8-K
HBT Financial, Inc. (HBT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8 - K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 30, 2020
HBT FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
|
Delaware |
001‑39085 |
37‑1117216 |
|
(State or other jurisdiction |
(Commission File Number) |
(IRS Employer |
|
|
|
|
|
401 North Hershey Road |
|
61704 |
|
(Address of principal executive |
|
(Zip Code) |
(888) 897‑2276
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
|
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
☐ |
Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12) |
|
☐ |
Pre-commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b)) |
|
☐ |
Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
|
Common Stock, par value $0.01 per share |
HBT |
The Nasdaq Stock Market LLC |
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b‑2 of the Securities Exchange Act of 1934 (§240.12b‑2 of this chapter). |
|
|
|
Emerging growth company ☒ |
|
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻ |
|
Item 2.02 Results of Operations and Financial Condition.
On April 30, 2020, HBT Financial, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2020 (the “Earnings Release”). A copy of the Earnings Release is furnished as Exhibit 99.1 to this Current Report on Form 8‑K (this “Report”).
The information set forth under Item 7.01 is also furnished pursuant to this Item 2.02.
Item 7.01. Regulation FD Disclosure
On April 30, 2020, the Company made available on its website a slide presentation regarding the Company's response to the COVID-19 pandemic and providing supplemental information related to its loan portfolio and other financial data. The slide presentation is furnished as Exhibit 99.2 to this Report.
The information contained in Items 2.02 and 7.01, including Exhibits 99.1 and 99.2 furnished herewith, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference into any registration statement or other documents pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
|
Exhibit Number |
Description of Exhibit |
|
|
|
|
99.1 |
Earnings Release issued April 30, 2020 for the First Quarter Ended March 31, 2020. |
|
|
|
|
99.2 |
Slide Presentation issued April 30, 2020 regarding COVID-19 response and impact overview. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
HBT FINANCIAL, INC. |
|
|
|
|
|
|
|
|
|
|
|
By: |
/s/ Matthew J. Doherty |
|
|
|
Name: Matthew J. Doherty |
|
|
|
Title: Chief Financial Officer |
|
|
|
|
|
Date: April 30, 2020 |
|
|
EXHIBIT 99.1
HBT FINANCIAL, INC. ANNOUNCES
FIRST QUARTER 2020 FINANCIAL RESULTS
First Quarter Highlights
|
· |
Net income of $6.2 million, or $0.23 per diluted share; return on average assets (ROAA) of 0.78%; return on average stockholders' equity (ROAE) of 7.29%; and return on average tangible common equity (ROATCE)(1) of 7.92% |
|
· |
Adjusted net income(1) of $8.4 million; or $0.30 per diluted share, adjusted ROAA(1) of 1.05%; adjusted ROAE(1) of 9.81%; and adjusted ROATCE(1) of 10.67% |
|
· |
$141 million in Paycheck Protection Program loans approved and funded subsequent to March 31, 2020 through April 24, 2020 |
(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures.
Bloomington, IL, April 30, 2020 – HBT Financial, Inc. (NASDAQ: HBT) (the “Company” or “HBT Financial”), the holding company for Heartland Bank and Trust Company and State Bank of Lincoln, today reported net income of $6.2 million, or $0.23 diluted earnings per share, for the first quarter of 2020. This compares to net income of $16.1 million, or $0.61 diluted earnings per share, for the fourth quarter of 2019, and net income of $18.7 million, or $1.04 diluted earnings per share, for the first quarter of 2019.
Fred L. Drake, Chairman and Chief Executive Officer of HBT Financial, said, “The COVID-19 pandemic has presented unprecedented challenges for our team and for our customers. However, for several generations, our banks have been a source of strength for our customers and communities during difficult times. Our top priority is supporting our employees and customers and maintaining the health and safety of all involved. Many of our employees have been able to work remotely and we took the difficult step of closing our lobbies, with visits limited to appointment only. Our team has worked hard to minimize customer impact and continue our commitment to excellent service. Our retail staff continues to assist our clients with essential banking needs, and our lenders are in regular contact with our borrowers, working closely with them for the best solutions under the current circumstances. Through April 24, 2020, we had funded $141 million of PPP (Payroll Protection Program) loans, for 1,129 businesses in our communities. HBT Financial is well positioned, with an attractive deposit base, strong capital levels and a track record of safety and soundness. We are committed to uphold our Midwestern values of hard work, perseverance and doing the right thing as we continue to support our stakeholders in this crisis.”
C Corp Equivalent Net Income
Prior to October 11, 2019, the Company operated as an S Corporation for U.S. federal and state income tax purposes. Effective October 11, 2019, the Company voluntarily revoked its S Corporation status and became a taxable entity (C Corporation). As such, any periods prior to October 11, 2019 only reflect state replacement taxes. To facilitate comparison, the Company reports its C Corp equivalent financial results, which do not reflect the additional shares issued in the initial public offering (the “IPO”) for periods prior to the IPO.
The Company reported C Corp equivalent net income of $15.1 million, or $0.58 diluted earnings per share, for the fourth quarter of 2019 and C Corp equivalent net income of $14.0 million, or $0.78 diluted earnings per share, for the first quarter of 2019.
HBT Financial, Inc.
Page 2 of 15
Adjusted Net Income
In addition to reporting C Corp equivalent results, the Company believes adjusted net income and adjusted earnings per share, which adjust for the additional C Corp equivalent tax expense for periods prior to October 11, 2019, net earnings (losses) from closed or sold operations, charges related to termination of certain employee benefit plans, realized gains (losses) on sales of securities, and mortgage servicing rights (“MSR”) fair value adjustments, provide investors with additional insight into its operational performance. The Company reported adjusted net income of $8.4 million, or $0.30 adjusted diluted earnings per share, for the first quarter of 2020. This compares to adjusted net income of $14.4 million, or $0.55 adjusted diluted earnings per share, for the fourth quarter of 2019, and adjusted net income of $14.4 million, or $0.80 adjusted diluted earnings per share, for the first quarter of 2019 (see "Reconciliation of Non-GAAP Financial Measures" tables).
Net Interest Income and Net Interest Margin
Net interest income for the first quarter of 2020 was $30.7 million, a decrease of 5.0% from $32.3 million for the fourth quarter of 2019. The decrease was primarily attributable to lower yields on loans and securities and a decrease in average interest-earning assets.
Relative to the first quarter of 2019, net interest income decreased $3.8 million, or 11.0%. The decline was primarily attributable to lower yields on average interest-earning assets.
Net interest margin for the first quarter of 2020 was 4.00%, including 5 basis points attributable to acquired loan discount accretion, compared to 4.12%, including 2 basis points attributable to acquired loan discount accretion, for the fourth quarter of 2019. The decrease was primarily attributable to a decline in average loan yields, lower average loan balances, and lower securities yields and balances.
Relative to the first quarter of 2019, net interest margin decreased from 4.44%, including 18 basis points attributable to acquired loan discount accretion, due primarily to lower loan yields and an increase in lower-yielding cash balances, partially offset by lower balances in time deposits and a lower cost of interest-bearing demand deposits.
The Federal Open Market Committee lowered its target federal funds rate 50 basis points on March 3, 2020 and 100 basis points on March 16, 2020. The Company expects the cumulative decrease of 150 basis points in the target federal funds rate in March 2020 to continue placing downward pressure on its net interest margin in 2020.
Noninterest Income
Noninterest income for the first quarter of 2020 was $5.3 million, a decrease of 49.2% from $10.3 million for the fourth quarter of 2019. First quarter 2020 results included a negative $2.2 million mortgage servicing rights (“MSR”) fair value adjustment compared to $0.6 million gain on the fair value adjustment of the MSR asset in the fourth quarter of 2019. Lower gains on foreclosed assets and reduced fees on customer-related interest rate swaps, included in other noninterest income, also contributed to noninterest income decline.
Relative to the first quarter of 2019, noninterest income decreased 29.9% from $7.5 million. The decline was primarily attributable to a larger negative MSR fair value adjustment and nonrecurring gains on sales of First Community Title Services, Inc. and HBT Insurance of $0.8 million in the first quarter 2019.
Noninterest Expense
Noninterest expense for the first quarter of 2020 was $23.3 million, compared with $22.0 million for the fourth quarter of 2019. The increase was primarily attributable to higher employee benefits expense, as first quarter of 2020 results included a $0.8 million charge for the supplemental executive retirement plan (SERP) which was terminated in June 2019. The SERP liability varies inversely with interest rates and resulted in a $0.4 million benefit in the fourth quarter of 2019. The SERP will be liquidated in June 2020. In addition, an increase in medical benefit expenses were partially offset by a decrease in the cash-settled stock appreciation rights (SAR) liability due primarily to changes in the Company’s stock price. The employee benefits expense related to the cash-settled SAR liability resulted in a benefit of $0.3 million in the first quarter of 2020, an expense of $0.4 million in the fourth quarter 2019, and a benefit of $0.1 million in the first quarter of 2019. FDIC insurance expense was higher in the first quarter of 2020 due to the
HBT Financial, Inc.
Page 3 of 15
impact of the application of small bank assessment credits in the fourth quarter of 2019. Other noninterest and occupancy expenses increased in the first quarter of 2020, but were largely offset by lower loan collection and servicing and furniture and equipment expenses.
Relative to the first quarter of 2019, noninterest expense increased 4.9% from $22.2 million. The increase was primarily due to higher employee benefits costs associated with the SERP charge in the first quarter of 2020 and an increase in medical benefit expenses, as higher salaries and data processing costs were offset by lower furniture and equipment, FDIC insurance, and loan collection and servicing expenses.
Loan Portfolio
Total loans outstanding, before allowance for loan losses, were $2.13 billion at March 31, 2020, compared with $2.16 billion at December 31, 2019 and $2.18 billion at March 31, 2019. The $30.9 million decline in loans from December 31, 2019 was primarily due to a $39.2 million reduction in CRE – non-owner occupied balances, a $9.0 million decline in municipal, consumer and other loans, and a $7.9 million reduction in commercial and industrial balances, which were partially offset by a $20.9 million increase in agricultural and farmland loans, primarily due to the addition of a new senior lender in one of our markets at the beginning of the year, and a $7.4 million increase in construction and land development loans.
Deposits
Total deposits were $2.73 billion at March 31, 2020, compared with $2.78 billion at December 31, 2019, and $2.82 billion at March 31, 2019. The $46.6 million decrease in total deposits from December 31, 2019 included expected outflows from a small number of retail deposit accounts that had increased by $40.2 million in the fourth quarter of 2019. Declines in time, noninterest-bearing, interest-bearing demand and money market balances more than offset a modest increase in savings deposit balances in the first quarter of 2020.
Asset Quality
Nonperforming loans totaled $15.4 million, or 0.72% of total loans, at March 31, 2020, compared with $19.0 million, or 0.88% of total loans, at December 31, 2019, and $13.9 million, or 0.64% of total loans, at March 31, 2019. The decline in nonperforming loans from the end of the prior quarter was primarily attributable to payoffs and paydowns.
The Company recorded a provision for loan losses of $4.4 million for the first quarter of 2020, compared with $0.1 million for the fourth quarter of 2019. The increase in provision for loan losses was primarily due to $3.3 million reserve build related to adjustments to qualitative factors to reflect the economic weakness resulting from the COVID-19 pandemic. The remaining $1.1 million of the provision was primarily due to a $1.3 million increase in a specific reserve related to one credit offset by a decrease in specific reserves related to several other credits.
Net charge-offs for the first quarter of 2020 were $0.6 million, or 0.11% of average loans on an annualized basis compared to $0.6 million, or 0.11% of average loans on an annualized basis, for the fourth quarter of 2019, and $0.3 million, or 0.05% of average loans on an annualized basis, for the first quarter of 2019.
The Company’s allowance for loan losses was 1.22% of total loans and 169.70% of nonperforming loans at March 31, 2020, compared with 1.03% of total loans and 117.06% of nonperforming loans at December 31, 2019.
HBT Financial, Inc.
Page 4 of 15
Capital
At March 31, 2020, the Company exceeded all regulatory capital requirements under Basel III and was considered to be ‘‘well-capitalized’’, as summarized in the following table:
|
|
|
Well Capitalized |
||
|
|
March 31, |
Regulatory |
||
|
|
2020 |
Requirements |
||
|
Total capital to risk-weighted assets |
15.03 |
% |
10.00 |
% |
|
Tier 1 capital to risk-weighted assets |
13.95 |
% |
8.00 |
% |
|
Common equity tier 1 capital ratio |
12.44 |
% |
6.50 |
% |
|
Tier 1 leverage ratio |
10.70 |
% |
5.00 |
% |
|
Total stockholders' equity to total assets |
10.58 |
% |
N/A |
|
|
Tangible common equity to tangible assets (1) |
9.81 |
% |
N/A |
|
(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures.
About HBT Financial, Inc.
HBT Financial, Inc. is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company and State Bank of Lincoln. The banks provide a comprehensive suite of business, commercial, wealth management, and retail banking products and services to individuals, businesses and municipal entities throughout Central and Northeastern Illinois through 64 branches. As of March 31, 2020, HBT had total assets of $3.2 billion, total loans of $2.1 billion, and total deposits of $2.7 billion. HBT is a longstanding Central Illinois company, with banking roots that can be traced back 100 years.
Non-GAAP Financial Measures
Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP. These non-GAAP financial measures include net interest income (tax-equivalent basis), net interest margin (tax-equivalent basis), originated loans and acquired loans and any ratios derived therefrom, efficiency ratio (tax-equivalent basis), tangible common equity to tangible assets, tangible book value per share, adjusted net income, adjusted return on average assets, adjusted return on average stockholders' equity, and adjusted return on average tangible common equity. Our management uses these non-GAAP financial measures, together with the related GAAP financial measures, in its analysis of our performance and in making business decisions. Management believes that it is a standard practice in the banking industry to present these non-GAAP financial measures, and accordingly believes that providing these measures may be useful for peer comparison purposes. These disclosures should not be viewed as substitutes for the results determined to be in accordance with GAAP; nor are they necessarily comparable to non-GAAP financial measures that may be presented by other companies. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures in the "Reconciliation of Non-GAAP Financial Measures" tables.
Forward-Looking Statements
Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company’s plans, objectives, future performance, goals, future earnings levels, and future loan growth. These statements are subject to many risks and uncertainties, that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to: the severity, magnitude and duration of the COVID-19 pandemic; the direct and indirect impacts of the COVID-19 pandemic and governmental responses to the pandemic on our operations and our customers’ businesses; the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect our capital levels and earnings, impair the ability of our borrowers to repay outstanding loans, impair collateral values and further increase our allowance for credit losses; our asset quality and any loan charge-offs; changes in interest rates and general economic, business and political conditions in the United States generally or in Illinois in particular, including in the financial markets; changes in business plans as
HBT Financial, Inc.
Page 5 of 15
circumstances warrant; risks relating to acquisitions; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe" or "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
CONTACT:
Matthew Keating
(310) 622-8230
HBT Financial, Inc.
Page 6 of 15
HBT Financial, Inc.
Consolidated Financial Summary
Consolidated Statements of Income
|
|
|
Three Months Ended |
|||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|||
|
|
|
2020 |
|
2019 |
|
2019 |
|||
|
INTEREST AND DIVIDEND INCOME |
|
(dollars in thousands, except per share amounts) |
|||||||
|
Loans, including fees: |
|
|
|
|
|
|
|
|
|
|
Taxable |
|
$ |
26,941 |
|
$ |
28,039 |
|
$ |
30,063 |
|
Federally tax exempt |
|
|
674 |
|
|
716 |
|
|
710 |
|
Securities: |
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
3,334 |
|
|
3,556 |
|
|
3,922 |
|
Federally tax exempt |
|
|
1,028 |
|
|
1,269 |
|
|
1,552 |
|
Interest-bearing deposits in bank |
|
|
729 |
|
|
1,006 |
|
|
687 |
|
Other interest and dividend income |
|
|
14 |
|
|
14 |
|
|
15 |
|
Total interest and dividend income |
|
|
32,720 |
|
|
34,600 |
|
|
36,949 |
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
1,595 |
|
|
1,838 |
|
|
1,983 |
|
Securities sold under agreements to repurchase |
|
|
20 |
|
|
24 |
|
|
14 |
|
Borrowings |
|
|
— |
|
|
2 |
|
|
3 |
|
Subordinated debentures |
|
|
443 |
|
|
460 |
|
|
497 |
|
Total interest expense |
|
|
2,058 |
|
|
2,324 |
|
|
2,497 |
|
Net interest income |
|
|
30,662 |
|
|
32,276 |
|
|
34,452 |
|
PROVISION FOR LOAN LOSSES |
|
|
4,355 |
|
|
138 |
|
|
776 |
|
Net interest income after provision for loan losses |
|
|
26,307 |
|
|
32,138 |
|
|
33,676 |
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
Card income |
|
|
1,792 |
|
|
1,952 |
|
|
1,832 |
|
Service charges on deposit accounts |
|
|
1,834 |
|
|
2,065 |
|
|
1,763 |
|
Wealth management fees |
|
|
1,814 |
|
|
1,911 |
|
|
1,747 |
|
Mortgage servicing |
|
|
724 |
|
|
801 |
|
|
729 |
|
Mortgage servicing rights fair value adjustment |
|
|
(2,171) |
|
|
582 |
|
|
(1,002) |
|
Gains on sale of mortgage loans |
|
|
536 |
|
|
915 |
|
|
525 |
|
Gains (losses) on securities |
|
|
(52) |
|
|
(47) |
|
|
79 |
|
Gains (losses) on foreclosed assets |
|
|
35 |
|
|
808 |
|
|
(17) |
|
Gains (losses) on other assets |
|
|
(3) |
|
|
— |
|
|
905 |
|
Title insurance activity |
|
|
— |
|
|
— |
|
|
129 |
|
Other noninterest income |
|
|
743 |
|
|
1,349 |
|
|
797 |
|
Total noninterest income |
|
|
5,252 |
|
|
10,336 |
|
|
7,487 |
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
Salaries |
|
|
12,754 |
|
|
12,581 |
|
|
12,522 |
|
Employee benefits |
|
|
2,434 |
|
|
1,663 |
|
|
1,244 |
|
Occupancy of bank premises |
|
|
1,828 |
|
|
1,607 |
|
|
1,837 |
|
Furniture and equipment |
|
|
603 |
|
|
763 |
|
|
789 |
|
Data processing |
|
|
1,586 |
|
|
1,547 |
|
|
1,162 |
|
Marketing and customer relations |
|
|
1,044 |
|
|
1,036 |
|
|
933 |
|
Amortization of intangible assets |
|
|
317 |
|
|
336 |
|
|
376 |
|
FDIC insurance |
|
|
36 |
|
|
(237) |
|
|
219 |
|
Loan collection and servicing |
|
|
348 |
|
|
732 |
|
|
742 |
|
Foreclosed assets |
|
|
89 |
|
|
151 |
|
|
164 |
|
Other noninterest expense |
|
|
2,268 |
|
|
1,771 |
|
|
2,224 |
|
Total noninterest expense |
|
|
23,307 |
|
|
21,950 |
|
|
22,212 |
|
INCOME BEFORE INCOME TAX EXPENSE |
|
|
8,252 |
|
|
20,524 |
|
|
18,951 |
|
INCOME TAX EXPENSE |
|
|
2,031 |
|
|
4,437 |
|
|
215 |
|
NET INCOME |
|
$ |
6,221 |
|
$ |
16,087 |
|
$ |
18,736 |
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE - BASIC |
|
$ |
0.23 |
|
$ |
0.61 |
|
$ |
1.04 |
|
EARNINGS PER SHARE - DILUTED |
|
$ |
0.23 |
|
$ |
0.61 |
|
$ |
1.04 |
|
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING |
|
|
27,457,306 |
|
|
26,211,282 |
|
|
18,027,512 |
|
|
|
|
|
|
|
|
|
|
|
|
PRO FORMA C CORP EQUIVALENT INFORMATION |
|
|
|
|
|
|
|
|
|
|
Historical income before income tax expense |
|
|
|
|
$ |
20,524 |
|
$ |
18,951 |
|
Pro forma C Corp equivalent income tax expense |
|
|
|
|
|
5,436 |
|
|
4,915 |
|
Pro forma C Corp equivalent net income |
|
|
|
|
$ |
15,088 |
|
$ |
14,036 |
|
|
|
|
|
|
|
|
|
|
|
|
PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - BASIC |
|
|
|
|
$ |
0.58 |
|
$ |
0.78 |
|
PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - DILUTED |
|
|
|
|
$ |
0.58 |
|
$ |
0.78 |
HBT Financial, Inc.
Page 7 of 15
HBT Financial, Inc.
Consolidated Financial Summary
Consolidated Balance Sheets
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|||
|
|
|
2020 |
|
2019 |
|
2019 |
|||
|
|
|
(dollars in thousands) |
|||||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
34,782 |
|
$ |
22,112 |
|
$ |
17,984 |
|
Interest-bearing deposits with banks |
|
|
230,654 |
|
|
261,859 |
|
|
142,518 |
|
Cash and cash equivalents |
|
|
265,436 |
|
|
283,971 |
|
|
160,502 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing time deposits with banks |
|
|
— |
|
|
248 |
|
|
248 |
|
Debt securities available-for-sale, at fair value |
|
|
615,565 |
|
|
592,404 |
|
|
681,233 |
|
Debt securities held-to-maturity |
|
|
79,741 |
|
|
88,477 |
|
|
116,745 |
|
Equity securities |
|
|
4,759 |
|
|
4,389 |
|
|
3,994 |
|
Restricted stock, at cost |
|
|
2,425 |
|
|
2,425 |
|
|
2,719 |
|
Loans held for sale |
|
|
4,805 |
|
|
4,531 |
|
|
2,496 |
|
|
|
|
|
|
|
|
|
|
|
|
Loans, before allowance for loan losses |
|
|
2,132,952 |
|
|
2,163,826 |
|
|
2,183,322 |
|
Allowance for loan losses |
|
|
(26,087) |
|
|
(22,299) |
|
|
(21,013) |
|
Loans, net of allowance for loan losses |
|
|
2,106,865 |
|
|
2,141,527 |
|
|
2,162,309 |
|
|
|
|
|
|
|
|
|
|
|
|
Bank premises and equipment, net |
|
|
54,135 |
|
|
53,987 |
|
|
54,185 |
|
Bank premises held for sale |
|
|
121 |
|
|
121 |
|
|
208 |
|
Foreclosed assets |
|
|
4,469 |
|
|
5,099 |
|
|
10,151 |
|
Goodwill |
|
|
23,620 |
|
|
23,620 |
|
|
23,620 |
|
Core deposit intangible assets, net |
|
|
3,713 |
|
|
4,030 |
|
|
5,077 |
|
Mortgage servicing rights, at fair value |
|
|
6,347 |
|
|
8,518 |
|
|
9,916 |
|
Investments in unconsolidated subsidiaries |
|
|
1,165 |
|
|
1,165 |
|
|
1,165 |
|
Accrued interest receivable |
|
|
12,096 |
|
|
13,951 |
|
|
15,256 |
|
Other assets |
|
|
27,847 |
|
|
16,640 |
|
|
7,843 |
|
Total assets |
|
$ |
3,213,109 |
|
$ |
3,245,103 |
|
$ |
3,257,667 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
$ |
676,341 |
|
$ |
689,116 |
|
$ |
661,527 |
|
Interest-bearing |
|
|
2,053,962 |
|
|
2,087,739 |
|
|
2,159,916 |
|
Total deposits |
|
|
2,730,303 |
|
|
2,776,855 |
|
|
2,821,443 |
|
|
|
|
|
|
|
|
|
|
|
|
Securities sold under agreements to repurchase |
|
|
40,811 |
|
|
44,433 |
|
|
40,528 |
|
Subordinated debentures |
|
|
37,599 |
|
|
37,583 |
|
|
37,533 |
|
Other liabilities |
|
|
64,583 |
|
|
53,314 |
|
|
29,570 |
|
Total liabilities |
|
|
2,873,296 |
|
|
2,912,185 |
|
|
2,929,074 |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
275 |
|
|
275 |
|
|
181 |
|
Surplus |
|
|
190,591 |
|
|
190,524 |
|
|
32,288 |
|
Retained earnings |
|
|
136,378 |
|
|
134,287 |
|
|
298,131 |
|
Accumulated other comprehensive income |
|
|
12,569 |
|
|
7,832 |
|
|
1,012 |
|
Less cost of treasury stock held |
|
|
— |
|
|
— |
|
|
(3,019) |
|
Total stockholders’ equity |
|
|
339,813 |
|
|
332,918 |
|
|
328,593 |
|
Total liabilities and stockholders’ equity |
|
$ |
3,213,109 |
|
$ |
3,245,103 |
|
$ |
3,257,667 |
|
|
|
|
|
|
|
|
|
|
|
|
SHARE INFORMATION |
|
|
|
|
|
|
|
|
|
|
Ending number shares of common stock outstanding |
|
|
27,457,306 |
|
|
27,457,306 |
|
|
18,027,512 |
HBT Financial, Inc.
Page 8 of 15
HBT Financial, Inc.
Consolidated Financial Summary
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|||
|
|
|
2020 |
|
2019 |
|
2019 |
|||
|
|
|
(dollars in thousands) |
|||||||
|
LOANS |
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
$ |
299,266 |
|
$ |
307,175 |
|
$ |
363,918 |
|
Agricultural and farmland |
|
|
228,701 |
|
|
207,776 |
|
|
207,817 |
|
Commercial real estate - owner occupied |
|
|
229,608 |
|
|
231,162 |
|
|
250,274 |
|
Commercial real estate - non-owner occupied |
|
|
540,515 |
|
|
579,757 |
|
|
556,386 |
|
Multi-family |
|
|
177,172 |
|
|
179,073 |
|
|
146,374 |
|
Construction and land development |
|
|
232,311 |
|
|
224,887 |
|
|
223,489 |
|
One-to-four family residential |
|
|
313,925 |
|
|
313,580 |
|
|
321,224 |
|
Municipal, consumer, and other |
|
|
111,454 |
|
|
120,416 |
|
|
113,840 |
|
Loans, before allowance for loan losses |
|
$ |
2,132,952 |
|
$ |
2,163,826 |
|
$ |
2,183,322 |
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|||
|
|
|
2020 |
|
2019 |
|
2020 |
|||
|
|
|
(dollars in thousands) |
|||||||
|
DEPOSITS |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
$ |
676,341 |
|
$ |
689,116 |
|
$ |
661,527 |
|
Interest-bearing demand |
|
|
810,074 |
|
|
814,639 |
|
|
819,313 |
|
Money market |
|
|
472,532 |
|
|
477,765 |
|
|
453,117 |
|
Savings |
|
|
444,137 |
|
|
438,927 |
|
|
435,353 |
|
Time |
|
|
327,219 |
|
|
356,408 |
|
|
452,133 |
|
Total deposits |
|
$ |
2,730,303 |
|
$ |
2,776,855 |
|
$ |
2,821,443 |
HBT Financial, Inc.
Page 9 of 15
HBT Financial, Inc.
Consolidated Financial Summary
|
|
|
Three Months Ended |
|
||||||||||||||||||||||
|
|
|
March 31, 2020 |
|
December 31, 2019 |
|
March 31, 2019 |
|
||||||||||||||||||
|
|
|
Average |
|
|
|
|
* |
|
Average |
|
|
|
|
* |
|
Average |
|
|
|
|
* |
|
|||
|
|
|
Balance |
|
Interest |
|
Yield/Cost |
|
Balance |
|
Interest |
|
Yield/Cost |
|
Balance |
|
Interest |
|
Yield/Cost |
|
||||||
|
|
|
(dollars in thousands) |
|
||||||||||||||||||||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
2,141,031 |
|
$ |
27,615 |
|
5.16 |
% |
$ |
2,162,975 |
|
$ |
28,755 |
|
5.32 |
% |
$ |
2,164,330 |
|
$ |
30,773 |
|
5.69 |
% |
|
Securities |
|
|
668,572 |
|
|
4,362 |
|
2.61 |
|
|
700,441 |
|
|
4,825 |
|
2.76 |
|
|
806,504 |
|
|
5,474 |
|
2.71 |
|
|
Deposits with banks |
|
|
251,058 |
|
|
729 |
|
1.16 |
|
|
265,237 |
|
|
1,006 |
|
1.51 |
|
|
131,663 |
|
|
687 |
|
2.09 |
|
|
Other |
|
|
2,425 |
|
|
14 |
|
2.37 |
|
|
2,425 |
|
|
14 |
|
2.39 |
|
|
2,719 |
|
|
15 |
|
2.24 |
|
|
Total interest-earning assets |
|
|
3,063,086 |
|
$ |
32,720 |
|
4.27 |
% |
|
3,131,078 |
|
$ |
34,600 |
|
4.42 |
% |
|
3,105,216 |
|
$ |
36,949 |
|
4.76 |
% |
|
Allowance for loan losses |
|
|
(22,474) |
|
|
|
|
|
|
|
(22,766) |
|
|
|
|
|
|
|
(20,441) |
|
|
|
|
|
|
|
Noninterest-earning assets |
|
|
148,131 |
|
|
|
|
|
|
|
152,961 |
|
|
|
|
|
|
|
148,518 |
|
|
|
|
|
|
|
Total assets |
|
$ |
3,188,743 |
|
|
|
|
|
|
$ |
3,261,273 |
|
|
|
|
|
|
$ |
3,233,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
|
$ |
811,866 |
|
$ |
251 |
|
0.12 |
% |
$ |
820,390 |
|
$ |
299 |
|
0.15 |
% |
$ |
826,456 |
|
$ |
417 |
|
0.20 |
% |
|
Money market |
|
|
464,124 |
|
|
394 |
|
0.34 |
|
|
486,288 |
|
|
481 |
|
0.40 |
|
|
442,520 |
|
|
370 |
|
0.33 |
|
|
Savings |
|
|
434,276 |
|
|
70 |
|
0.06 |
|
|
434,241 |
|
|
71 |
|
0.07 |
|
|
424,986 |
|
|
68 |
|
0.06 |
|
|
Time |
|
|
341,770 |
|
|
880 |
|
1.03 |
|
|
359,731 |
|
|
987 |
|
1.10 |
|
|
432,877 |
|
|
1,128 |
|
1.04 |
|
|
Total interest-bearing deposits |
|
|
2,052,036 |
|
|
1,595 |
|
0.31 |
|
|
2,100,650 |
|
|
1,838 |
|
0.35 |
|
|
2,126,839 |
|
|
1,983 |
|
0.37 |
|
|
Securities sold under agreements to repurchase |
|
|
41,968 |
|
|
20 |
|
0.19 |
|
|
46,028 |
|
|
24 |
|
0.21 |
|
|
42,089 |
|
|
14 |
|
0.13 |
|
|
Borrowings |
|
|
221 |
|
|
— |
|
0.52 |
|
|
272 |
|
|
2 |
|
2.60 |
|
|
557 |
|
|
3 |
|
2.56 |
|
|
Subordinated debentures |
|
|
37,589 |
|
|
443 |
|
4.72 |
|
|
37,577 |
|
|
460 |
|
4.90 |
|
|
37,528 |
|
|
497 |
|
5.30 |
|
|
Total interest-bearing liabilities |
|
|
2,131,814 |
|
$ |
2,058 |
|
0.39 |
% |
|
2,184,527 |
|
$ |
2,324 |
|
0.43 |
% |
|
2,207,013 |
|
$ |
2,497 |
|
0.45 |
% |
|
Noninterest-bearing deposits |
|
|
670,714 |
|
|
|
|
|
|
|
699,373 |
|
|
|
|
|
|
|
650,630 |
|
|
|
|
|
|
|
Noninterest-bearing liabilities |
|
|
44,696 |
|
|
|
|
|
|
|
45,589 |
|
|
|
|
|
|
|
28,493 |
|
|
|
|
|
|
|
Total liabilities |
|
|
2,847,224 |
|
|
|
|
|
|
|
2,929,489 |
|
|
|
|
|
|
|
2,886,136 |
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
341,519 |
|
|
|
|
|
|
|
331,784 |
|
|
|
|
|
|
|
347,157 |
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
3,188,743 |
|
|
|
|
|
|
$ |
3,261,273 |
|
|
|
|
|
|
$ |
3,233,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income/Net interest margin (3) |
|
|
|
|
$ |
30,662 |
|
4.00 |
% |
|
|
|
$ |
32,276 |
|
4.12 |
% |
|
|
|
$ |
34,452 |
|
4.44 |
% |
|
Tax-equivalent adjustment (2) |
|
|
|
|
|
463 |
|
0.06 |
|
|
|
|
|
534 |
|
0.07 |
|
|
|
|
|
610 |
|
0.08 |
|
|
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (1) (2) |
|
|
|
|
$ |
31,125 |
|
4.06 |
% |
|
|
|
$ |
32,810 |
|
4.19 |
% |
|
|
|
$ |
35,062 |
|
4.52 |
% |
|
Net interest rate spread (4) |
|
|
|
|
|
|
|
3.88 |
% |
|
|
|
|
|
|
3.99 |
% |
|
|
|
|
|
|
4.31 |
% |
|
Net interest-earning assets (5) |
|
$ |
931,272 |
|
|
|
|
|
|
$ |
946,551 |
|
|
|
|
|
|
$ |
898,203 |
|
|
|
|
|
|
|
Ratio of interest-earning assets to interest-bearing liabilities |
|
|
1.44 |
|
|
|
|
|
|
|
1.43 |
|
|
|
|
|
|
|
1.41 |
|
|
|
|
|
|
|
Cost of total deposits |
|
|
|
|
|
|
|
0.23 |
% |
|
|
|
|
|
|
0.26 |
% |
|
|
|
|
|
|
0.29 |
% |
* Annualized measure.
|
(1) |
See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures. |
|
(2) |
On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%. |
|
(3) |
Net interest margin represents net interest income divided by average total interest-earning assets. |
|
(4) |
Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities |
|
(5) |
Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities. |
HBT Financial, Inc.
Page 10 of 15
HBT Financial, Inc.
Consolidated Financial Summary
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
|
|
2020 |
|
2019 |
|
2019 |
|
|||
|
|
|
(dollars in thousands) |
|
|||||||
|
NONPERFORMING ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
15,372 |
|
$ |
19,019 |
|
$ |
13,877 |
|
|
Past due 90 days or more, still accruing (1) |
|
|
— |
|
|
30 |
|
|
53 |
|
|
Total nonperforming loans |
|
|
15,372 |
|
|
19,049 |
|
|
13,930 |
|
|
Foreclosed assets |
|
|
4,469 |
|
|
5,099 |
|
|
10,151 |
|
|
Total nonperforming assets |
|
$ |
19,841 |
|
$ |
24,148 |
|
$ |
24,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONPERFORMING ASSETS (Originated) (2) |
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
10,041 |
|
$ |
10,811 |
|
$ |
8,619 |
|
|
Past due 90 days or more, still accruing |
|
|
— |
|
|
30 |
|
|
53 |
|
|
Total nonperforming loans (originated) |
|
|
10,041 |
|
|
10,841 |
|
|
8,672 |
|
|
Foreclosed assets |
|
|
965 |
|
|
1,022 |
|
|
1,439 |
|
|
Total nonperforming (originated) |
|
$ |
11,006 |
|
$ |
11,863 |
|
$ |
10,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONPERFORMING ASSETS (Acquired) (2) |
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual |
|
$ |
5,331 |
|
$ |
8,208 |
|
$ |
5,258 |
|
|
Past due 90 days or more, still accruing (1) |
|
|
— |
|
|
— |
|
|
— |
|
|
Total nonperforming loans (acquired) |
|
|
5,331 |
|
|
8,208 |
|
|
5,258 |
|
|
Foreclosed assets |
|
|
3,504 |
|
|
4,077 |
|
|
8,712 |
|
|
Total nonperforming assets (acquired) |
|
$ |
8,835 |
|
$ |
12,285 |
|
$ |
13,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
$ |
26,087 |
|
$ |
22,299 |
|
$ |
21,013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, before allowance for loan losses |
|
$ |
2,132,952 |
|
$ |
2,163,826 |
|
$ |
2,183,322 |
|
|
Loans, before allowance for loan losses (originated) (2) |
|
|
1,982,067 |
|
|
1,998,496 |
|
|
1,974,840 |
|
|
Loans, before allowance for loan losses (acquired) (2) |
|
|
150,885 |
|
|
165,330 |
|
|
208,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CREDIT QUALITY RATIOS |
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses to loans, before allowance for loan losses |
|
|
1.22 |
% |
|
1.03 |
% |
|
0.96 |
% |
|
Allowance for loan losses to nonperforming loans |
|
|
169.70 |
|
|
117.06 |
|
|
150.85 |
|
|
Nonperforming loans to loans, before allowance for loan losses |
|
|
0.72 |
|
|
0.88 |
|
|
0.64 |
|
|
Nonperforming assets to total assets |
|
|
0.62 |
|
|
0.74 |
|
|
0.74 |
|
|
Nonperforming assets to loans, before allowance for loan losses and foreclosed assets |
|
|
0.93 |
|
|
1.11 |
|
|
1.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CREDIT QUALITY RATIOS (Originated) (2) |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans to loans, before allowance for loan losses |
|
|
0.51 |
% |
|
0.54 |
% |
|
0.44 |
% |
|
Nonperforming assets to loans, before allowance for loan losses and foreclosed assets |
|
|
0.56 |
|
|
0.59 |
|
|
0.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CREDIT QUALITY RATIOS (Acquired) (2) |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans to loans, before allowance for loan losses |
|
|
3.53 |
% |
|
4.96 |
% |
|
2.52 |
% |
|
Nonperforming assets to loans, before allowance for loan losses and foreclosed assets |
|
|
5.72 |
|
|
7.25 |
|
|
6.43 |
|
|
(1) |
Excludes loans acquired with deteriorated credit quality that are past due 90 or more days, still accruing totaling $0.3 million, $0.1 million, and $2.5 million as of March 31, 2020, December 31, 2019, and March 31, 2019, respectively. |
|
(2) |
Originated loans and acquired loans along with the related credit quality ratios such as nonperforming loans to loans, before allowance for loan losses (originated and acquired) and nonperforming assets to loans, before allowance for loan losses and foreclosed assets (originated and acquired) are non-GAAP financial measures. Originated loans represent loans initially originated by the Company and acquired loans that were refinanced using the Company’s underwriting criteria. Acquired loans represent loans originated under the underwriting criteria used by a bank that was acquired by Heartland Bank and Trust Company or State Bank of Lincoln. We believe these non-GAAP financial measures provide investors with information regarding the credit quality of loans underwritten using the Company’s policies and procedures. |
HBT Financial, Inc.
Page 11 of 15
HBT Financial, Inc.
Consolidated Financial Summary
|
|
|
Three Months Ended |
|
|||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
|
|
2020 |
|
2019 |
|
2019 |
|
|||
|
ALLOWANCE FOR LOAN LOSSES |
|
(dollars in thousands) |
|
|||||||
|
Beginning balance |
|
$ |
22,299 |
|
$ |
22,761 |
|
$ |
20,509 |
|
|
Provision |
|
|
4,355 |
|
|
138 |
|
|
776 |
|
|
Charge-offs |
|
|
(1,221) |
|
|
(837) |
|
|
(533) |
|
|
Recoveries |
|
|
654 |
|
|
237 |
|
|
261 |
|
|
Ending balance |
|
$ |
26,087 |
|
$ |
22,299 |
|
$ |
21,013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (recoveries) |
|
$ |
567 |
|
$ |
600 |
|
$ |
272 |
|
|
Net charge-offs (recoveries) - (originated) (1) |
|
|
172 |
|
|
550 |
|
|
196 |
|
|
Net charge-offs (recoveries) - (acquired) (1) |
|
|
395 |
|
|
50 |
|
|
76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loans, before allowance for loan losses |
|
$ |
2,141,031 |
|
$ |
2,162,975 |
|
$ |
2,164,330 |
|
|
Average loans, before allowance for loan losses (originated) (1) |
|
|
1,984,066 |
|
|
1,988,658 |
|
|
1,946,035 |
|
|
Average loans, before allowance for loan losses (acquired) (1) |
|
|
156,965 |
|
|
174,317 |
|
|
218,295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs to average loans, before allowance for loan losses * |
|
|
0.11 |
% |
|
0.11 |
% |
|
0.05 |
% |
|
Net charge-offs to average loans, before allowance for loan losses (originated) * (1) |
|
|
0.03 |
|
|
0.11 |
|
|
0.04 |
|
|
Net charge-offs to average loans, before allowance for loan losses (acquired) * (1) |
|
|
1.01 |
|
|
0.11 |
|
|
0.14 |
|
* Annualized measure.
|
(1) |
Originated loans and acquired loans along with the related credit quality ratios such as net charge-offs (originated and acquired), average loans, before allowance for loan losses (originated and acquired), and net charge-offs to average loans, before allowance for loan losses (originated and acquired) are non-GAAP financial measures. Originated loans represent loans initially originated by the Company and acquired loans that were refinanced using the Company’s underwriting criteria. Acquired loans represent loans originated under the underwriting criteria used by a bank that was acquired by Heartland Bank and Trust Company or State Bank of Lincoln. We believe these non-GAAP financial measures provide investors with information regarding the credit quality of loans underwritten using the Company’s policies and procedures. |
HBT Financial, Inc.
Page 12 of 15
HBT Financial, Inc.
Consolidated Financial Summary
|
|
|
As of or for the Three Months Ended |
|
|||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
|
|
2020 |
|
2019 |
|
2019 |
|
|||
|
|
|
(dollars in thousands, except per share amounts) |
|
|||||||
|
EARNINGS AND PER SHARE INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
6,221 |
|
$ |
16,087 |
|
$ |
18,736 |
|
|
Earnings per share - Basic |
|
|
0.23 |
|
|
0.61 |
|
|
1.04 |
|
|
Earnings per share - Diluted |
|
|
0.23 |
|
|
0.61 |
|
|
1.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C Corp equivalent net income (1) |
|
|
N/A |
|
$ |
15,088 |
|
$ |
14,036 |
|
|
C Corp equivalent earnings per share - Basic (1) |
|
|
N/A |
|
|
0.58 |
|
|
0.78 |
|
|
C Corp equivalent earnings per share - Diluted (1) |
|
|
N/A |
|
|
0.58 |
|
|
0.78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
12.38 |
|
$ |
12.12 |
|
$ |
18.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending number shares of common stock outstanding |
|
|
27,457,306 |
|
|
27,457,306 |
|
|
18,027,512 |
|
|
Weighted average shares of common stock outstanding |
|
|
27,457,306 |
|
|
26,211,282 |
|
|
18,027,512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS |
|
|
|
|
|
|
|
|
|
|
|
Return on average assets * |
|
|
0.78 |
% |
|
1.97 |
% |
|
2.32 |
% |
|
Return on average stockholders' equity * |
|
|
7.29 |
|
|
19.39 |
|
|
21.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin * |
|
|
4.00 |
% |
|
4.12 |
% |
|
4.44 |
% |
|
Efficiency ratio |
|
|
64.01 |
|
|
50.72 |
|
|
52.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C Corp equivalent return on average assets * (1) |
|
|
N/A |
|
|
1.85 |
% |
|
1.74 |
% |
|
C Corp equivalent return on average stockholders' equity * (1) |
|
|
N/A |
|
|
18.19 |
|
|
16.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES |
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (2) |
|
$ |
8,379 |
|
$ |
14,417 |
|
$ |
14,359 |
|
|
Adjusted earnings per share - Basic (2) |
|
|
0.30 |
|
|
0.55 |
|
|
0.80 |
|
|
Adjusted earnings per share - Diluted (2) |
|
|
0.30 |
|
|
0.55 |
|
|
0.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per share (2) |
|
$ |
11.38 |
|
$ |
11.12 |
|
$ |
16.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin (tax equivalent basis) * (2) |
|
|
4.06 |
% |
|
4.19 |
% |
|
4.52 |
% |
|
Efficiency ratio (tax equivalent basis) (2) |
|
|
63.20 |
|
|
50.10 |
|
|
51.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted return on average assets * (2) |
|
|
1.05 |
% |
|
1.77 |
% |
|
1.78 |
% |
|
Adjusted return on average stockholders' equity * (2) |
|
|
9.81 |
|
|
17.38 |
|
|
16.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average tangible common equity * (2) |
|
|
7.92 |
% |
|
21.17 |
% |
|
23.55 |
% |
|
C Corp equivalent return on average tangible common equity * (1) (2) |
|
|
N/A |
|
|
19.86 |
|
|
17.64 |
|
|
Adjusted return on average tangible common equity * (2) |
|
|
10.67 |
|
|
18.97 |
|
|
18.05 |
|
* Annualized measure.
|
(1) |
Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent provision for income tax for such period. No such adjustment is necessary for periods subsequent to 2019. |
|
(2) |
See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures. |
N/A Not applicable.
HBT Financial, Inc.
Page 13 of 15
Reconciliation of Non-GAAP Financial Measures –
Adjusted Net Income and Adjusted Return on Average Assets
|
|
|
Three Months Ended |
|
|||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
|
|
2020 |
|
2019 |
|
2019 |
|
|||
|
|
|
(dollars in thousands) |
|
|||||||
|
Net income |
|
$ |
6,221 |
|
$ |
16,087 |
|
$ |
18,736 |
|
|
C Corp equivalent adjustment (2) |
|
|
— |
|
|
(999) |
|
|
(4,700) |
|
|
C Corp equivalent net income (2) |
|
|
6,221 |
|
|
15,088 |
|
|
14,036 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Net earnings (losses) from closed or sold operations, including gains on sale (1) |
|
|
— |
|
|
(9) |
|
|
550 |
|
|
Charges related to termination of certain employee benefit plans |
|
|
(848) |
|
|
365 |
|
|
— |
|
|
Mortgage servicing rights fair value adjustment |
|
|
(2,171) |
|
|
582 |
|
|
(1,002) |
|
|
Total adjustments |
|
|
(3,019) |
|
|
938 |
|
|
(452) |
|
|
Tax effect of adjustments |
|
|
861 |
|
|
(267) |
|
|
129 |
|
|
Less adjustments after tax effect |
|
|
(2,158) |
|
|
671 |
|
|
(323) |
|
|
Adjusted net income |
|
$ |
8,379 |
|
$ |
14,417 |
|
$ |
14,359 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
|
$ |
3,188,743 |
|
$ |
3,261,273 |
|
$ |
3,233,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets * |
|
|
0.78 |
% |
|
1.97 |
% |
|
2.32 |
% |
|
C Corp equivalent return on average assets * (2) |
|
|
N/A |
|
|
1.85 |
|
|
1.74 |
|
|
Adjusted return on average assets * |
|
|
1.05 |
|
|
1.77 |
|
|
1.78 |
|
* Annualized measure.
|
(1) |
Closed or sold operations include HB Credit Company, HBT Insurance, and First Community Title Services, Inc. |
|
(2) |
Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent provision for income tax for such period. No such adjustment is necessary for periods subsequent to 2019. |
N/A Not applicable.
Reconciliation of Non-GAAP Financial Measures –
Adjusted Earnings Per Share
|
|
|
Three Months Ended |
|||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|||
|
|
|
2020 |
|
2019 |
|
2019 |
|||
|
|
|
(dollars in thousands, except per share amounts) |
|||||||
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
6,221 |
|
$ |
16,087 |
|
$ |
18,736 |
|
Earnings allocated to unvested restricted stock units (1) |
|
|
(15) |
|
|
— |
|
|
— |
|
Numerator for earnings per share - basic and diluted |
|
$ |
6,206 |
|
$ |
16,087 |
|
$ |
18,736 |
|
|
|
|
|
|
|
|
|
|
|
|
C Corp equivalent net income (3) |
|
|
N/A |
|
$ |
15,088 |
|
$ |
14,036 |
|
Earnings allocated to unvested restricted stock units (1) (3) |
|
|
N/A |
|
|
— |
|
|
— |
|
Numerator for C Corp equivalent earnings per share - basic and diluted (3) |
|
|
N/A |
|
$ |
15,088 |
|
$ |
14,036 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income |
|
$ |
8,379 |
|
$ |
14,417 |
|
$ |
14,359 |
|
Earnings allocated to unvested restricted stock units (1) |
|
|
(19) |
|
|
— |
|
|
— |
|
Numerator for adjusted earnings per share - basic and diluted |
|
$ |
8,360 |
|
$ |
14,417 |
|
$ |
14,359 |
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
27,457,306 |
|
|
26,211,282 |
|
|
18,027,512 |
|
Dilutive effect of outstanding restricted stock units (2) |
|
|
— |
|
|
— |
|
|
— |
|
Weighted average common shares outstanding, including all dilutive potential shares |
|
|
27,457,306 |
|
|
26,211,282 |
|
|
18,027,512 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Basic |
|
$ |
0.23 |
|
$ |
0.61 |
|
$ |
1.04 |
|
Earnings per share - Diluted |
|
$ |
0.23 |
|
$ |
0.61 |
|
$ |
1.04 |
|
|
|
|
|
|
|
|
|
|
|
|
C Corp equivalent earnings per share - Basic (3) |
|
|
N/A |
|
$ |
0.58 |
|
$ |
0.78 |
|
C Corp equivalent earnings per share - Diluted (3) |
|
|
N/A |
|
$ |
0.58 |
|
$ |
0.78 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per share - Basic |
|
$ |
0.30 |
|
$ |
0.55 |
|
$ |
0.80 |
|
Adjusted earnings per share - Diluted |
|
$ |
0.30 |
|
$ |
0.55 |
|
$ |
0.80 |
|
(1) |
The Company has granted restricted stock units that contain non-forfeitable rights to dividend equivalents. Such restricted stock units are considered participating securities. As such, we have included these restricted stock units in the calculation of basic earnings per share and calculate basic earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. |
|
(2) |
Restricted stock units were anti-dilutive and excluded from the calculation of common stock equivalents during the three months ended March 31, 2020. There were no restricted stock units outstanding during the three months ended December 31, 2019 and March 31, 2019. |
|
(3) |
Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent provision for income tax for such period. No such adjustment is necessary for periods subsequent to 2019. |
N/A Not applicable.
HBT Financial, Inc.
Page 14 of 15
Reconciliation of Non-GAAP Financial Measures –
Net Interest Margin (Tax Equivalent Basis)
|
|
|
Three Months Ended |
|
|||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
|
|
2020 |
|
2019 |
|
2019 |
|
|||
|
|
|
(dollars in thousands) |
|
|||||||
|
Net interest income (tax equivalent basis) |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
30,662 |
|
$ |
32,276 |
|
$ |
34,452 |
|
|
Tax-equivalent adjustment (1) |
|
|
463 |
|
|
534 |
|
|
610 |
|
|
Net interest income (tax equivalent basis) (1) |
|
$ |
31,125 |
|
$ |
32,810 |
|
$ |
35,062 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin (tax equivalent basis) |
|
|
|
|
|
|
|
|
|
|
|
Net interest margin * |
|
|
4.00 |
% |
|
4.12 |
% |
|
4.44 |
% |
|
Tax-equivalent adjustment * (1) |
|
|
0.06 |
|
|
0.07 |
|
|
0.08 |
|
|
Net interest margin (tax equivalent basis) * (1) |
|
|
4.06 |
% |
|
4.19 |
% |
|
4.52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average interest-earning assets |
|
$ |
3,063,086 |
|
$ |
3,131,078 |
|
$ |
3,105,216 |
|
* Annualized measure.
|
(1) |
On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%. |
Reconciliation of Non-GAAP Financial Measures –
Efficiency Ratio (Tax Equivalent Basis)
|
|
|
Three Months Ended |
|
|||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
|
|
2020 |
|
2019 |
|
2019 |
|
|||
|
|
|
(dollars in thousands) |
|
|||||||
|
Efficiency ratio (tax equivalent basis) |
|
|
|
|
|
|
|
|
|
|
|
Total noninterest expense |
|
$ |
23,307 |
|
$ |
21,950 |
|
$ |
22,212 |
|
|
Less: amortization of intangible assets |
|
|
317 |
|
|
336 |
|
|
376 |
|
|
Adjusted noninterest expense |
|
$ |
22,990 |
|
$ |
21,614 |
|
$ |
21,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
30,662 |
|
$ |
32,276 |
|
$ |
34,452 |
|
|
Total noninterest income |
|
|
5,252 |
|
|
10,336 |
|
|
7,487 |
|
|
Operating revenue |
|
|
35,914 |
|
|
42,612 |
|
|
41,939 |
|
|
Tax-equivalent adjustment (1) |
|
|
463 |
|
|
534 |
|
|
610 |
|
|
Operating revenue (tax equivalent basis) (1) |
|
$ |
36,377 |
|
$ |
43,146 |
|
$ |
42,549 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio |
|
|
64.01 |
% |
|
50.72 |
% |
|
52.07 |
% |
|
Efficiency ratio (tax equivalent basis) (1) |
|
|
63.20 |
|
|
50.10 |
|
|
51.32 |
|
|
(1) |
On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%. |
Reconciliation of Non-GAAP Financial Measures –
Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
|
|
2020 |
|
2019 |
|
2019 |
|
|||
|
|
|
(dollars in thousands) |
|
|||||||
|
Tangible Common Equity |
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
$ |
339,813 |
|
$ |
332,918 |
|
$ |
328,593 |
|
|
Less: Goodwill |
|
|
23,620 |
|
|
23,620 |
|
|
23,620 |
|
|
Less: Core deposit intangible assets, net |
|
|
3,713 |
|
|
4,030 |
|
|
5,077 |
|
|
Tangible common equity |
|
$ |
312,480 |
|
$ |
305,268 |
|
$ |
299,896 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible assets |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
3,213,109 |
|
$ |
3,245,103 |
|
$ |
3,257,667 |
|
|
Less: Goodwill |
|
|
23,620 |
|
|
23,620 |
|
|
23,620 |
|
|
Less: Core deposit intangible assets, net |
|
|
3,713 |
|
|
4,030 |
|
|
5,077 |
|
|
Tangible assets |
|
$ |
3,185,776 |
|
$ |
3,217,453 |
|
$ |
3,228,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity to total assets |
|
|
10.58 |
% |
|
10.26 |
% |
|
10.09 |
% |
|
Tangible common equity to tangible assets |
|
|
9.81 |
|
|
9.49 |
|
|
9.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending number shares of common stock outstanding |
|
|
27,457,306 |
|
|
27,457,306 |
|
|
18,027,512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
12.38 |
|
$ |
12.12 |
|
$ |
18.23 |
|
|
Tangible book value per share |
|
|
11.38 |
|
|
11.12 |
|
|
16.64 |
|
HBT Financial, Inc.
Page 15 of 15
Reconciliation of Non-GAAP Financial Measures –
Adjusted Return on Average Stockholders' Equity and Adjusted Return on Tangible Common Equity
|
|
|
Three Months Ended |
|
|||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
|
|
2020 |
|
2019 |
|
2019 |
|
|||
|
|
|
(dollars in thousands) |
|
|||||||
|
Average Tangible Common Equity |
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
$ |
341,519 |
|
$ |
331,784 |
|
$ |
347,157 |
|
|
Less: Goodwill |
|
|
23,620 |
|
|
23,620 |
|
|
23,620 |
|
|
Less: Core deposit intangible assets, net |
|
|
3,898 |
|
|
4,224 |
|
|
5,301 |
|
|
Average tangible common equity |
|
$ |
314,001 |
|
$ |
303,940 |
|
$ |
318,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
6,221 |
|
$ |
16,087 |
|
$ |
18,736 |
|
|
C Corp equivalent net income (1) |
|
|
N/A |
|
|
15,088 |
|
|
14,036 |
|
|
Adjusted net income |
|
|
8,379 |
|
|
14,417 |
|
|
14,359 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average stockholders' equity * |
|
|
7.29 |
% |
|
19.39 |
% |
|
21.59 |
% |
|
C Corp equivalent return on average stockholders' equity * (1) |
|
|
N/A |
|
|
18.19 |
|
|
16.17 |
|
|
Adjusted return on average stockholders' equity * |
|
|
9.81 |
|
|
17.38 |
|
|
16.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average tangible common equity * |
|
|
7.92 |
% |
|
21.17 |
% |
|
23.55 |
% |
|
C Corp equivalent return on average tangible common equity * (1) |
|
|
N/A |
|
|
19.86 |
|
|
17.64 |
|
|
Adjusted return on average tangible common equity * |
|
|
10.67 |
|
|
18.97 |
|
|
18.05 |
|
* Annualized measure.
|
(1) |
Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent provision for income tax for such period. No such adjustment is necessary for periods subsequent to 2019. |
N/A Not applicable.
Exhibit 99.2
| STRICTLY PRIVATE AND CONFIDENTIAL COVID-19 Response and Impact Overview A p r i l 2020 HBT Financial, Inc. |
| 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 financial results, near-term loan growth, net interest margin, mortgage banking profits, wealth management fees, expenses, asset quality, capital levels and continued earnings. Forward looking statements are generally identifiable by use of the words ‘‘believe,’’ “may,” “will,” “should,” “could,” “expect,” “estimate,” “intend,” “anticipate,” “project,” “plan” or similar expressions. Forward looking statements are frequently based on assumptions that may or may not materialize and are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause actual results to differ materially from the results anticipated or projected and which could materially and adversely affect our operating results, financial condition or prospects include, but are not limited to: the severity, magnitude and duration of the COVID-19 pandemic; the direct and indirect impacts of the COVID-19 pandemic and governmental responses to the pandemic on our operations and our customers’ businesses; the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect our capital levels and earnings, impair the ability of our borrowers to repay outstanding loans, impair collateral values and further increase our allowance for credit losses; our asset quality and any loan charge-offs; the composition of our loan portfolio; time and effort necessary to resolve nonperforming assets; environmental liability associated with our lending activities; the effects of the current low interest rate environment or changes in interest rates on our net interest income, net interest margin, our investments, and our loan originations, and our modelling estimates relating to interest rate changes; our access to sources of liquidity and capital to address our liquidity needs; our inability to receive dividends from the chartered banks we own (the “Banks”), pay dividends to our common stockholders or satisfy obligations as they become due; the effects of problems encountered by other financial institutions; our ability to achieve organic loan and deposit growth and the composition of such growth; our ability to attract and retain skilled employees or changes in our management personnel; any failure or interruption of our information and communications systems; our ability to identify and address cybersecurity risks; the effects of the failure of any component of our business infrastructure provided by a third party; our ability to keep pace with technological changes; our ability to successfully develop and commercialize new or enhanced products and services; current and future business, economic and market conditions in the United States generally or in Illinois in particular; the geographic concentration of our operations in the State of Illinois; our ability to effectively compete with other financial services companies and the effects of competition in the financial services industry on our business; our ability to attract and retain customer deposits; our ability to maintain our Banks’ reputations; possible impairment of our goodwill and other intangible assets; the impact of, and changes in applicable laws, regulations and accounting standards and policies; our prior status as an “S Corporation” under the applicable provisions of the Internal Revenue Code of 1986, as amended; possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations; the effectiveness of our risk management and internal disclosure controls and procedures; market perceptions associated with certain aspects of our business; the one-time and incremental costs of operating as a standalone public company; our ability to meet our obligations as a public company, including our obligations under Section 404 of Sarbanes-Oxley; and damage to our reputation from any of the factors described above or elsewhere in this presentation. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update any forward-looking statement in the future, or to reflect circumstances and events that occur after the date on which the forward-looking statement was made. Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures. While HBT Financial, Inc. (“HBT” or the “Company”) believes these are useful measures for investors, they are not presented in accordance with GAAP. You should not consider non-GAAP measures in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Because not all companies use identical calculations, the presentation herein of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. For a reconciliation of the non-GAAP measures we use to the most comparable GAAP measures, see the Appendix to this presentation. 1 |
| COVID-19 Response Overview 4 1 2 3 Capital and Liquidity Overview Customer, Community, and Employee Support Efforts Impact of COVID-19 in Illinois Loan Portfolio Overview 2 Net Interest Margin 5 Near-Term Outlook 6 |
| Customer, Community, and Employee Support Efforts 3 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 Initiatives ◼ Keeping customers updated via our COVID-19 Response web page and email communications ◼ Offering loan payment deferrals to customers experiencing financial hardship due to COVID-19 ◼ Participating in the SBA’s Paycheck Protection Program (PPP) ◼ Waiving or refunding overdraft and ATM fees, as well as time deposit early withdrawal penalties, to customers experiencing financial hardship due to COVID-19 ◼ Maintaining regular business hours at branches and the call center to serve customers ◼ Limiting branch lobby service to appointment only; only four out of 64 branch locations closed temporarily ◼ Providing faster turnaround for increased online deposit account opening demand ◼ Providing access to 20+ digital courses for students in grades K-12 on critical topics including financial education, mental wellness, compassion, digital wellness, and more Employee Programs ◼ Executive leaders and HR department communicating frequently with employees around COVID-19 risks, including the addition of an employee reference page on Company intranet ◼ Enabling work from home for many employees and adjusting branch services to ensure a safe environment ◼ Social distancing employees who need to report to the office, postponing nonessential travel and group training events, and mandating meetings be held by conference call ◼ Providing up to 120 hours emergency paid time off for employees impacted by the virus to limit financial hardships related to time off and pay ◼ Providing employees and their families access to a free confidential counseling service |
| Impact of COVID-19 in Illinois 4 Source: Company reports, U.S. CDC, and the Illinois Department of Public Health (IDPH); COVID-19 case data through April 22, 2020 Confirmed COVID-19 Cases in Illinois by County Gross Loan Mix by MSA, 1Q20 ($2.13 billion balance) Chicago 49% Bloomington- Normal 24% Champaign- Urbana 10% Peoria 8% Lincoln 5% Ottawa- Peru 4% ◼ Illinois has the 6th highest number of confirmed COVID-19 cases in U.S. ◼ Some 70% of Illinois’ confirmed COVID-19 cases are in Cook County ◼ The impact of COVID-19 is more moderate in markets outside Cook County and adjacent counties ◼ Stay-at-home order previously set to expire on April 30th, but modified version recently extended through May 31st |
| Loan Portfolio Overview: Commercial Real Estate 5 ◼ $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 upon completion or for long- term investment ➢ $177 million in multi-family loans secured by 5+ unit apartment buildings ◼ Vast majority of loans originated to experienced real estate developers within our markets ◼ Guarantees required on majority of originated loans ◼ Loan modifications offered in the form of 3 months interest only payments or one month payment deferrals ➢ As of 4/24/2020, made 115 loan modifications for $131 million or 14% of CRE portfolio Multi-Family 26% Retail 14% Office 13% Warehouse/ Manufacturing 12% Senior Living Facilities 9% 1-4 Family Construction 8% Land and lots 6% Medical 3% Other* 4% Hotels 3% Auto Repair & Dealers 2% * Includes restaurant/bar exposure of $10.8 million or 1.1% of CRE loans Commercial Real Estate Loan Mix |
| Loan Portfolio Overview: Commercial 6 ◼ $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 based primarily in-market ◼ $230 million owner-occupied CRE outstanding as of March 31, 2020 ➢ Primarily underwritten based on cash flow of business occupying properties and supported by personal guarantees; loans based primarily in-market ◼ No material change in draws on lines of credit ◼ Loan modifications offered in the form of 3 months interest only payments or one month payment deferrals ➢ As of 4/24/2020, made 135 loan modifications for $69 million or 13% of Commercial portfolio Auto Repair & Dealers 16% Health Care and Social Assistance 15% Wholesale Trade 13% Other 11% Real Estate and Rental and Leasing 10% Construction 8% Retail Trade- Other 7% Entertainment and Recreation 5% Professional Services 4% Manufacturing 4% Restaurants 4% Finance 3% Commercial Loan Mix |
| Loan Portfolio Overview: Agriculture and Farmland 7 ◼ $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 ag portfolio ◼ Nearly 80% of agricultural borrowers have been with the Company for at least 10 years, and over half of the customers for more than 20 years ◼ Loan modifications offered in the form of 3 months interest only payments or one month payment deferrals ➢ As of 4/24/2020, made 5 loan modifications for $4 million or 2% of Agriculture and Farmland portfolio Agriculture and Farmland Loan Mix Farmland 57% Crops 35% Equipment finance 5% Livestock 3% |
| Loan Portfolio Overview: 1-4 Family Residential Mortgage 8 ◼ $314 million in-house portfolio as of March 31, 2020 ◼ Loan modifications offered in the form of 3 months interest only payments, 2 months of payment deferrals, or forbearance ➢ As of 4/24/2020, made 94 loan modifications for $11 million or 4% of in-house residential portfolio Non-owner Occupied 48% HELOCs and 2nd Mortgages 27% 1st Mortgages 25% 1-4 Family Residential Loan Mix ◼ $1.13 billion sold to the secondary market with servicing retained as of March 31, 2020 ◼ Loan modifications offered in the form of forbearance ➢ As of 4/24/2020, made 127 loan modifications for $16 million or 1% of secondary market residential portfolio ◼ Q2 2020 residential mortgage origination volume is expected to increase due to strong refinance activity In-house 1-4 Family Residential Mortgage Portfolio Secondary Market 1-4 Family Residential Mortgage Portfolio Residential Mortgage Loan Origination Volume ($s mm) $0 $10 $20 $30 $40 $50 $60 1Q19 2Q19 3Q19 4Q19 1Q20 |
| Loan Portfolio Overview: Asset Quality and Reserves 9 ◼ 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 4/24/20, completed 360 payment modifications on loans with balances totaling $215 million, which represents 10% of total loans ◼ Net charge offs were $0.6 million, or 0.11% on an annualized basis for the three months ended March 31, 2020 compared to $0.6 million, or 0.11% on an annualized basis for the three months ended December 31, 2019 Non-performing assets/ Total assets % and Net charge-off % ◼ Allowance for loan losses totaled $26.1 million, or 1.22% of loans before allowance, at March 31, 2020 compared to $22.3 million, or 1.03% at December 31, 2019 ◼ Allocation for the quarter ended March 31, 2020 included $3.3 million of reserve build related to changes in certain qualitative factors for loan portfolios that we believe could be impacted by COVID-19 ◼ In addition to our allowance for loan losses, we had $3.0 million in credit-related discounts on acquired loans at March 31, 2020 compared to $3.2 million at December 31, 2019 Asset quality impact from COVID-19 is modest so far Augmenting allowance for loan losses Allowance for loan losses to total loans (%) 1.16 1.17 0.78 0.74 0.62 0.23 0.15 0.23 0.07 0.11 2016 2017 2018 2019 1Q20 NPAs/ Total Assets % NCO % 0.94 0.93 0.96 1.03 1.22 2016 2017 2018 2019 1Q20 |
| Capital and Liquidity Overview 10 CET 1 Risk-based Capital Ratio (%) Leverage Ratio (%) Tangible Common Equity to Tangible Assets (%)1 Liquidity Sources 12.21 12.09 12.71 12.15 12.44 2016 2017 2018 2019 1Q20 9.93 9.94 10.80 10.38 10.70 2016 2017 2018 2019 1Q20 8.94 8.94 9.67 9.49 9.81 2016 2017 2018 2019 1Q20 Liquidity Source As of 3/31/20 ($ thousands) Balance of Cash and Cash Equivalents $265,436 Market Value of Unpledged Securities 410,178 Available FHLB Advance Capacity 335,687 Available Fed Fund Lines of Credit 90,000 Total Estimated Liquidity $1,101,301 1 For reconciliation with GAAP metric, see “Non-GAAP reconciliations” |
| Net Interest Margin 11 ◼ The 150-basis point reduction in the target federal funds rate in March 2020 is expected to continue placing downward pressure on the net interest margin in 2020 ◼ 50% of the loan portfolio matures or reprices within the next 12 months ◼ 41% of variable rate loans have floors and 70% of those loans have hit their floors Net Interest Margin trends (%) 3.87% 3.83% 4.16% 4.31% 4.00% 4.04% 4.01% 4.25% 4.38% 4.06% 2016 2017 2018 2019 1Q20 7bps 13bps 16bps 25bps FTE NIM1 GAAP NIM Accretion of acquired loan discounts contribution to Company GAAP NIM 5bps 1 Tax-equivalent basis metric; for reconciliation with GAAP metric, see “Non-GAAP reconciliations” Fixed Rate versus Variable Rate Loan Mix Fixed Rate 57% Variable Rate 43% |
| Near-Term Outlook 12 ◼ Active participant in the Paycheck Protection Program (PPP); through April 24, 2020: ➢ 1,129 loans approved and funded for $141 million ➢ Average loan size of $125 thousand and median loan size of $48 thousand ➢ Fees of $5.6 million expected for loans funded ➢ Round two applications are in process (587 loans for $34 million) ◼ Loan pipelines are lower year-over-year and near-term loan growth (excluding the impact of PPP loans) is expected to moderate due to the economic impact of COVID-19 ◼ NIM pressure (excluding the impact of PPP loans) is expected to persist in Q2 2020 as the full impact of the move lower in interest rates takes hold ◼ Mortgage banking profits are expected to increase in Q2 2020 due to greater refinancing activity and higher spreads ◼ Wealth management fees are expected to decline modestly from the equity market’s recent drop ◼ Expenses are expected to remain well-controlled ◼ Conservative underwriting philosophy helps to mitigate near-term asset quality pressure ◼ As an emerging growth company relying on the extended transition period for new or revised accounting standards, the Current Expected Credit Loss (CECL) standard will be effective for the company in 2023 ◼ We believe our strong capital levels and continued earnings should allow the company to continue supporting clients and its current cash dividend |
| Appendix 13 |
| Non-GAAP Reconciliations 14 Net Interest Margin (Tax Equivalent Basis) Net interest income (tax equivalent basis) Q1 2020 2019 2018 2017 2016 ($ thousands) Net interest income $ 30,662 $ 133,800 $ 129,442 $ 120,998 $ 121,101 Tax-equivalent adjustment (2) 463 2,309 2,661 5,527 5,468 Net interest income (tax equivalent basis) (2) $ 31,125 $ 136,109 $ 132,103 $ 126,525 $ 126,569 Net interest margin (tax equivalent basis) Net interest margin (1) 4.00 % 4.31 % 4.16 % 3.83 % 3.87 % Tax-equivalent adjustment (1) (2) 0.06 0.07 0.09 0.18 0.17 Net interest margin (tax equivalent basis) (1) (2) 4.06 % 4.38 % 4.25 % 4.01 % 4.04 % Average interest-earning assets $ 3,063,086 $ 3,105,863 $ 3,109,289 $ 3,157,195 $ 3,131,763 (1) Annualized measure. (2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%. |
| Non-GAAP Reconciliations 15 Tangible Common Equity Q1 2020 2019 2018 2017 2016 Total stockholders' equity ($ thousands) $ 339,813 $ 332,918 $ 340,396 $ 323,916 $ 326,246 Less: Goodwill 23,620 23,620 23,620 23,620 23,620 Less: Core deposit intangible assets, net 3,713 4,030 5,453 7,012 8,928 Tangible common equity $ 312,480 $ 305,268 $ 311,323 $ 293,284 $ 293,698 Tangible assets Q1 2020 2019 2018 2017 2016 Total assets ($ thousands) $ 3,213,109 $ 3,245,103 $ 3,249,569 $ 3,312,875 $ 3,317,124 Less: Goodwill 23,620 23,620 23,620 23,620 23,620 Less: Core deposit intangible assets, net 3,713 4,030 5,453 7,012 8,928 Tangible assets $ 3,185,776 $ 3,217,453 $ 3,220,496 $ 3,282,243 $ 3,284,576 Total stockholders' equity to total assets 10.58 % 10.26 % 10.48 % 9.78 % 9.84 % Tangible common equity to tangible assets 9.81 9.49 9.67 8.94 8.94 Tangible Common Equity to Tangible Assets |
| HBT Financial, Inc. |
