Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - HomeTrust Bancshares, Inc. | htbi-20160921xex99x1.htm |
| EX-2.1 - EXHIBIT 2.1 - HomeTrust Bancshares, Inc. | htbi-20160921exex2x1.htm |
| 8-K - 8-K - HomeTrust Bancshares, Inc. | htbi-20160921x8k.htm |
Acquisition of
TriSummit Bancorp, Inc.
September 21, 2016
2
Forward-Looking Statements
This presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements often include words such as “believe,” “expect,” “anticipate,” “estimate,”
and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking
statements are not historical facts but instead represent management’s current expectations and forecasts
regarding future events many of which are inherently uncertain and outside of our control. Actual results may
differ, possibly materially from those currently expected or projected in these forward-looking statements.
Factors that could cause actual results to differ materially from expected results include: expected cost savings,
synergies and other financial benefits from the pending acquisition by HomeTrust Bancshares, Inc.
(“HomeTrust,” “HTBI” “we,” “us,” or “our”), of TriSummit Bancorp, Inc. (“TriSummit”) and/or the combined
company might not be realized within the expected time frames or at all, and costs or difficulties relating to
integration matters might be greater than expected; the requisite regulatory approvals and approval of
TriSummit’s shareholders for the pending merger might not be obtained; increased competitive pressures;
changes in the interest rate environment; changes in general economic conditions and conditions within the
securities markets; legislative and regulatory changes; and other factors described in HomeTrust’s latest annual
Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange
Commission-which are available on our website at www.hometrustbanking.com and on the SEC’s website at
www.sec.gov. Any of the forward-looking statements that we make in this presentation or our SEC filings are
based upon management’s beliefs and assumptions at the time they are made and may turn out to be wrong
because of inaccurate assumptions we might make, because of the factors illustrated above or because of
other factors that we cannot foresee. We do not undertake and specifically disclaim any obligation to revise any
forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances
after the date of such statements. These risks could cause our actual results for fiscal 2017 and beyond to differ
materially from those expressed in any forward-looking statements by, or on behalf of, us and could negatively
affect our operating and stock performance.
3
Additional Information
HomeTrust Bancshares, Inc. will file a registration statement on Form S-4 with the SEC in connection with the
proposed transaction. The registration statement will include a proxy statement of TriSummit that also
constitutes a prospectus of HomeTrust, which will be sent to the shareholders of TriSummit. TriSummit
shareholders are advised to read the proxy statement/prospectus when it becomes available because it will
contain important information about HomeTrust, TriSummit and the proposed transaction. When filed, this
document and other documents relating to the merger filed by HomeTrust can be obtained free of charge
from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge by accessing
HomeTrust’s website at www.hometrustbanking.com under the tab “Investor Relations” and then under “SEC
Filings.” Alternatively, these documents, when available, can be obtained free of charge from HomeTrust upon
written request to HomeTrust Bancshares, Inc., Attn: Investor Relations, 10 Woodfin Street, Asheville, North
Carolina 28801 or by calling (828) 350-3049.
HomeTrust, TriSummit and certain of their respective directors and executive officers may be deemed to be
participants in the solicitation of proxies from TriSummit shareholders in connection with the proposed
transaction under the rules of the SEC. Information about the directors and executive officers of HomeTrust
may be found in the definitive proxy statement of HomeTrust filed with the SEC by HomeTrust on October 15,
2015. This definitive proxy statement can be obtained free of charge from the sources indicated
above. Information about the directors and executive officers of TriSummit will be included in the proxy
statement/prospectus when filed with the SEC. Additional information regarding the interests of these
participants will also be included in the proxy statement/prospectus regarding the proposed transaction when
it becomes available.
4
• HomeTrust Bancshares, Inc. will acquire TriSummit Bancorp, Inc. in a 50% stock / 50% cash
transaction
• TriSummit Bank will be merged into HomeTrust Bank (expected to close early calendar year 2017)
• Prior to close HTBI intends to redeem TriSummit’s $7.1 million of TARP Preferred Stock
Transaction
Structure
Transaction Overview
• $8.80 per TriSummit common share or $31.8 million in aggregate consideration(1)
–Price / Tangible Book Value (TBV) of 121%
–Price / 2018 EPS + cost saves of 8.2x
• Exchange Ratio: determined by HTBI’s 20-day VWAP(2) as of the 5th day of trading prior to closing;
VWAP will have a floor of $19.05 (0.2310x) and a cap of $20.96 (0.2099x)
– The floor represents 100% of HTBI’s 6/30/16 tangible book value and the cap represents 110%
Pricing
(1) Aggregate consideration is based upon 3,208,830 common shares and 402,627 common-equivalent preferred shares, for a total of 3,611,457 shares. 67,050 of stock warrants with an exercise price of $8 will be
converted or cashed out as well.
(2) VWAP = Volume Weighted Average Price
Tax treatment
Required
Approvals
Board
Representation/
Management
• Tax-free reorganization at corporate level (stock / cash mix will be adjusted to ensure tax-free
reorganization)
• TriSummit shareholder approval
• Customary regulatory approvals
• R. Lynn Shipley, President and CEO of TriSummit Bancorp, Inc. will become President,
HomeTrust Tennessee
• Shipley will also become vice chairman of HTBI’s Tri-Cities Community Board
• All TriSummit directors are invited to join HTBI’s Tri-Cities Community Board
5
Financial Impact of Transaction
Transaction Highlights Pro Forma Consolidated Highlights(1)
• 2018 estimated EPS accretion > 30%
(based upon HTBI’s 6/30/16 year-end and 100%
phase-in of cost savings)
• 4.0% tangible book value dilution at close
• Earnback period is approximately 3.5 years
(utilizing the cross-over method -all transaction
expenses are realized upon close)
• Double-digit IRR - exceeds internal hurdles
and transaction thresholds
• HTBI remains well capitalized with pro forma
tangible common equity (TCE) and total risk-
based capital ratios of 11.4% and 13.5%,
respectively
• HTBI shareholders retain over 95% ownership
(1) Data as of 6/30/16 and includes estimated purchase accounting adjustments and deal charges.
Balance Sheet Summary ($M)
Total Assets 3,048$
Gross Loans 2,074
Total Deposits 2,104
Total Equity 370
Tangible Common Equity 344
Estimated Capital Ratios
TCE / TA 11.4%
Tier 1 Common Ratio 12.6%
Tier 1 Capital Ratio 12.6%
Total Capital Ratio 13.5%
6
Highlights
TriSummit Bancorp, Inc. – Company Overview
Source: Company Documents
(1) Profitability data as of the six months ended June 30, 2016.
(2) Common equity includes $4.0M of convertible preferred stock
Pro Forma Geographic Footprint
Consolidated Balance Sheet Summary ($000s)
June 30,
2016
Total Assets 353,800$
Gross Loans 246,000
Total Deposits 288,400
Total Equity 34,200
TARP Preferred 7,100
Common Equity (2) 27,100
Nonperforming assets/Total assets 0.80%
Nonperforming loans/Total loans 0.59%
Allow ance for loan losses/Nonperforming loans 169.72%
Consolidated Profitablility Summary ($000s)
June 30,
2016 (1) Annualized
6/30 YTD Net Income 779$ 1,558$
6/30 YTD Noninterest expense 5,367 10,734
ROAA 0.46% 0.46%
ROAE 4.67% 4.67%
TriSummit Date of Incorporation: February 2007
TriSummit
HTBI
7
Pro Forma Deposit Market Share
Source: SNL Financial; deposit market share data as of 6/30/15.
Rank Institution (ST)
Number of
Branches
Deposits in
Market
($000)
Market
Share (%)
1 First Horizon National Corp. (TN) 7 490,293 25.65
2 Regions Financial Corp. (AL) 5 420,429 21.99
3 BancTenn Corp. (TN) 7 256,816 13.43
4 BB&T Corp. (NC) 4 215,424 11.27
5 Citco Community Bancshares Inc. (TN) 5 171,530 8.97
Pro Forma Deposit M arket Share 3 110,927 5.80
6 First Bancorp Inc. (VA) 2 82,872 4.34
7 TriSummit Bancorp Inc. (TN) 2 75,712 3.96
8 SunTrust Banks Inc. (GA) 1 56,222 2.90
9 HomeTrust Bancshares Inc. (NC) 1 35,215 1.84
10 Capital Bank Finl Corp (NC) 2 29,374 1.54
Total For Institutions In Market 44 1,911,675 100.00
Kingsport / Sullivan Co., TN
Rank I stitution (ST)
Number of
Branches
Deposits in
Market
($000)
Market
Share (%)
Pro Forma Deposit Marke Share 3 217,552 25.60
1 First Horizon National Corp. (TN) 3 192,689 22.68
2 SunTrust Banks Inc. (GA) 2 162,270 19.10
3 HomeTrust Bancshares Inc. (NC) 2 158,524 18.66
4 Regions Financial Corp. (AL) 2 110,509 13.01
5 Andrew Johnson Bancshares Inc. (TN) 1 70,199 8.26
6 TriSummit Bancorp Inc. (TN) 1 59,028 6.95
7 Capital Bank Finl Corp (NC) 3 51,117 6.02
8 Citizens Bancorp Inc. (TN) 1 24,669 2.90
9 First Peoples Bancorp Inc. ( N) 2 19,574 2.30
10 U.S. Bancorp (MN) 1 1,081 0.13
Total For Institutions In M rket 18 849,660 100.00
Morristown / Hamble Co., TN
Rank Institution (ST)
Number of
Branches
Deposits in
Market
($000)
Market
Share (%)
1 First Horizon National Corp. (TN) 5 578,605 30.40
2 BancTenn Corp. (TN) 5 263,196 13.83
3 SunTrust Banks Inc. (GA) 4 207,984 10.93
Pro Forma Deposit M arket Share 5 157,793 8.29
4 Regions Financial Corp. (AL) 4 147,677 7.76
5 HomeTrust Bancshare Inc. (NC) 4 ,784 .30
6 Capital Bank Finl Corp (NC) 4 74,680 3.92
7 First Bancorp Inc. (VA) 2 73,821 3.88
8 Moutain Commerce Bancorp Inc. (TN) 1 69,151 3.63
9 BB&T Corp. (NC) 2 65,475 3.44
10 First Community Bancshares Inc (VA) 2 57,782 3.04
11 TriSummit Bancorp Inc. (TN) 1 57,009 3.00
Total For Institutions In Market 49 1,903,342 100.00
Johnson City / Washington Co., TN
8
Key Transaction Assumptions
(1) Note: 25% phase-in due to HTBI’s 6/30 year-end; only 50% of fiscal year 2017 remains after estimated close of 1/1/17.
Cost Savings • Expected noninterest expense savings of approximately 48%, with 25%(1)
being achieved during fiscal 2017 and 100% in fiscal 2018 (excludes
amortization of core deposit intangibles)
• Includes plan to consolidate three branch locations of combined institutions
• $3.6M after-tax per year fully phased-in
Revenue Enhancements • None included in pro forma projections
One-time Merger Related Costs • Approximately $6.0M after-tax
Loan Mark • Gross loan mark of 2.0%
• Current allowance for loan losses = 1.0% of total loans
Core Deposit Intangible • 1.1%, amortized using Sum-of-Years Digits methodology
Other Purchase Accounting Adjustments • Recovery of the DTA valuation allowance of $2.8 million
• $5.9M write-down of fixed assets and OREO
• $700K write-up on time deposits
• $125K write-up on borrowings
Estimated closing • Early calendar year 2017
9
Compelling Transaction
Significant market overlap – provides opportunities to increase efficiencies and scale the
infrastructure HTBI has established in the northeastern Tennessee market including the consolidation
of three branch locations of combined institutions
Shared community bank culture – customer-focused and strong values lowers execution risk
Experienced management team – strong regional relationships and HTBI brings significant M&A
and integration experience
Ability to expand TriSummit’s current relationships – Increased legal lending limit and enhanced
commercial and treasury management products will increase commercial lending, fee income, and
deposit opportunities
Financially attractive – allows HTBI to deploy excess capital and expected to enhance earnings by
over 30% after cost saves are fully phased-in
Extensive due diligence – HTBI performed extensive loan diligence with a third party expert
analyzing over 46% of the loan portfolio and line-by-line analysis of potential noninterest expense
savings
Transition to High Performing Community Bank
Phase I: Created a foundation for growth and performance
Phase II: Executing strategic plan with a sense of urgency
Phase III: Consistently improving performance - transaction accelerates HTBI’s performance
goals
10
HTBI Foundation for Growth and Performance
• Converted to stock in July 2012 and raised $211.6M
• Added 6 larger growing markets in NC, SC, VA and East TN
– 3 Acquisitions
– 2 New Commercial Loan Production Offices From “lift-outs” of existing commercial lending teams
– Purchased 10 Bank of America branches
– Added new markets with populations of more than 4.7 million to legacy markets of 900,000
• Added 22 new locations and $1 billion in assets
• Converted from a national bank charter to a state chartered bank in December 2015 to save an
expected $350,000 annually
• Enhanced Commercial Credit Department to support growth in commercial lending
• Hired/Replaced 23 new Commercial Market Presidents / Commercial Relationship Managers
• Hired a Director of Treasury Management and enhanced product offerings
• Added indirect auto lending as a line of business in 2014 and have grown portfolio to over $100 million
• Expanding the mortgage line of business in our new markets
• Consolidated six branch offices in October 2015 to save an expected $1.2 million annually
• Executed a branch optimization staffing strategy in May 2016 expected to save $375,000 annually
• Grown to the 6th largest community bank headquartered in NC
11
Execution of Growth Initiatives
Growth Market Strong Footprint for Growth
HTBI has targeted the Knoxville, Kingsport, Bristol,
Johnson City, TN MSA as a growth market and
continues to execute its plan to improve market share
Knoxville: 2016 unemployment at 3.5% down from
5.4% in 2015
Kingsport/Bristol: 2016 unemployment at 4.2% down
from 5.8% in 2015
Johnson City: 2016 unemployment at 4.2% down from
6.2% in 2015
Tennessee: named the Fourth Best State in the
Country for Business, Chief Executive Magazine, 2016
Best & Worst States for Business list
Knoxville in top five for 10 Best Cities for Small
Businesses, CNN Money, August 2015
Tennessee: named 2014 State of the Year for
economic development, Business Facilities, 2014
Source: June 30, 2016 U.S. Bureau of Labor Statistics, Chamber of Commerce of named cities, Tennessee Department of Economic & Community Development, Virginia Economic Development Partnership
12
Supplemental Information
13
HomeTrust Bancshares, Inc. – Company Overview
Source: SNL Financial and Company Filings.
(1) Nonperforming assets excluding restructured loans (nonaccrual loans, real estate owned and repossessed assets) as a percent of total assets.
(2) See non-GAAP disclosure appendix.
Highlights Stock Performance
HTBI
91.2%
KRX
60.3%
NASDAQ
79.6%
61.8%
S&P 500
-10%
10%
30%
50%
70%
90%
110%
130%
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(
%
)
HTBI KRX NASDAQ S&P 500
(dollars in millions)
Chief Executive Officer Dana L. Stonestreet
Headquarters Asheville, NC
IPO Date July 11, 2012
Market Data
Price Close (8/31/16) $19.12
Price/Tangible Book 99%
Market Capitalization ($M) $344
Balance Sheet Highlights 6/30/16
Total Assets $2,718
Total Gross Loans 1,839
Total Deposits 1,803
Tangible Common Equity (TCE) 343
Total Equity 360
Most Recent Quarter Profitability
Net Income $3,302
ROAA 0.48%
ROAE 3.68%
Net Interest Margin 3.43%
Efficiency Ratio 75.2%
Capital Ratios
TCE Ratio 12.7%
Tier 1 Capital (to Total Adjusted Assets) Ratio 11.8%
Common Equity Tier 1 Capital Ratio 14.4%
Total Risk-Based Capital (to Risk-Weighted Assets) Ratio 15.4%
Asset Quality (1)
NPAs / Assets 0.90%
NPLs / Loans 1.01%
ALLL / NPLs 115%
(2)
(2)
(2)
14
Strong Capital Position
Capital Ratios
Capital Ratios (%)
• HTBI remains well-capitalized after several successful acquisitions
• Management continues to deploy capital through organic growth, stock buybacks, and
strategic partnerships with community banks
Source: SNL Financial; data as of 6/30/16.
11.8%
14.4% 14.4%
15.4%
10.3%
12.6% 12.6%
13.5%
5.0%
6.5%
8.0%
10.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
Tier 1 Leverage Capital Ratio Common Equity Tier 1 Ratio Tier 1 Risk-Based Capital Ratio Total Risk-Based Capital Ratio
HomeTrust Pro Forma Well-Capitalized
15
Pro Forma Loan Composition
Source: SNL Financial. Data as of 6/30/16.
Results in loan portfolio
growth of 13%
HTBI Loan Composition TriSummit Loan Composition Pro Forma
Amount % of Total Amount % of Total Amount % of Total
HTBI Loans ($000) (%) TriSummit Loans ($000) (%) Pro Forma Loans ($000) (%)
Commercial & Industrial 73,289$ 4.0% Commercial & Industrial 23,173$ 9.4% Commercial & Industrial 96,462$ 4.6%
Constr & Land Development 124,942 6.8% Constr & Land Development 27,307 11.1% Constr & Land Development 152,249 7.3%
Commercial RE 422,615 23.0% Commercial RE 85,357 34.7% Commercial RE 507,972 24.4%
Multifamily Loans 63,946 3.5% Multifamily Loans 22,200 9.0% Multifamily Loans 86,146 4.1%
1-4 Family Loans 629,484 34.2% 1-4 Family Loans 74,242 30.2% 1-4 Family Loans 703,726 33.8%
Consumer, Home Equity & Other 523,966 28.5% Consumer, Home Equity & Other 13,697 5.6% Consumer, Home Equity & Other 537,663 25.8%
Total Loans 1,838,242 100.0% Total Loans 245,976 100.0% Total Loans 2,084,218 100.0%
Yield on Loans (%) 4.39% Yield on Loans (%) 4.63% Yield on Loans (%) 4.42%
C&I
4% C&D
7%
CRE
23%
Multifam.
4%
1-4 Family
34%
Cons., HE &
Other
29%
C&I
9%
C&D
11%
CRE
35%
Multifam.
9%
1-4 Family
30%
Cons., HE &
Other
6%
C&I
5% C&D
7%
CRE
24%
Multifam.
4%1-4 Family
34%
Cons., HE &
Other
26%
16
Pro Forma Deposit Composition
Source: SNL Financial and Company filings. Data as of 6/30/16.
Over $700M of transaction
accounts combined
HTBI deposit composition has
been transformed from a thrift
to a community bank
composition since 2012
HTBI Deposit Composition TriSummit Deposit Composition Pro Forma
Amount % of Total Amount % of Total Amount % of Total
HTBI Deposits ($000) (%) TriSummit Deposits ($000) (%) Pro Forma Deposits ($000) (%)
Transaction Accounts 628,910$ 34.9% Transaction Accounts 72,004$ 25.0% Transaction Accounts 700,914$ 33.5%
MMDA & Savings 731,137 40.6% MMDA & Savings 83,078 28.8% MMDA & Savings 814,215 38.9%
Retail Time Deposits 268,249 14.9% Retail Time Deposits 42,286 14.7% Retail Time Deposits 310,535 14.8%
Jumbo Time Deposits 174,400 9.7% Jumbo Time Deposits 91,086 31.6% Jumbo Time Deposits 265,486 12.7%
Total Deposits 1,802,696 100.0% Total Deposits 288,454 100.0% Total Deposits 2,091,150 100.0%
Cost of Deposits (%) 0.24% Cost of Deposits (%) 0.51% Cost of Deposits (%) 0.28%
Trans.
35%
MMDA &
Sav.
41%
Retail Time
15%
Jumbo Time
10%
Trans.
25%
MMDA &
Sav.
29%
Retail Time
15%
Jumbo Time
32%
Trans.
34%
MMDA &
Sav.
39%
Retail Time
15%
Jumbo Time
13%
17
Investor Contacts
Dana Stonestreet
Chairman, President & CEO
dana.stonestreet@hometrustbanking.com
Hunter Westbrook
EVP/Chief Banking Officer
hunter.westbrook@hometrustbanking.com
Tony VunCannon
EVP/Chief Financial Officer/Treasurer
tony.vuncannon@hometrustbanking.com
10 Woodfin Street
Asheville, NC 28801
(828) 259-3939
www.hometrustbanking.com
18
19
Non-GAAP Disclosure Reconciliation
As of
(dollars in millions) June 30, 2016
Total stockholder equity 360$
Less: goodwill, core deposits, net of taxes (17)
Tangible equity 343$
Total assets 2,718$
Less: goodwill, core deposits, net of taxes (17)
Total tangible assets 2,701$
Tangible equity to tangible assets 12.7%
In addition to results presented in accordance with generally accepted accounting principles utilized in the United States ("GAAP”),
this presentation contains certain non-GAAP financial measures which include: the ratios of price to tangible book and tangible
common equity to tangible assets excludes goodwill and other intangible assets, net of tax benefits, in determining tangible book
value, tangible assets, and tangible common equity. Management believes that the presentation of these measures excluding the
impact of such items is consistent with the capital treatment by our bank regulatory agencies, which excludes intangible assets from
the calculation of risk-based capital ratios, and provides useful supplemental information that is helpful to assess management’s
success in utilizing our tangible capital as well as understanding our capital strength. Management also believes that providing these
measures facilitates comparison of the quality and composition of the Company's capital over time and in comparison to its
competitors. These non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not
audited. Further, these non-GAAP financial measures should not be considered in isolation or as a substitute for book value per share
or total stockholders' equity determined in accordance with GAAP and may not be comparable to similarly titled measures reported
by other companies. Reconciliations of the GAAP and non-GAAP financial measures is presented below.
As of
( llars in millions, except per share data) August 31, 2016
Total stockholder equity 363$
Less: goodwill, core deposits, net of taxes (17)
Tangible equity 346$
Common shares outstanding 17,999,150
Tangible book value per share 19.22$
Stock Price 19.12$
Price to tangible book value 99%
Set forth below is a reconciliation to GAAP of tangible
book value and tangible book value per share:
Set forth below is a reconciliation to GAAP of tangible equity to
tangible assets: