HBT Financial, Inc. is a bank holding company that has recently gone public. Because of this strategic fundraising move, the bank has become the subject of a great deal of attention recently, particularly by investors who have either purchased shares in the company or by those who are keeping it on the radar as a potential inclusion for portfolio diversification. It's important to have a good sense of how the company was established, who is in charge of the leadership, and what kind of track record has been established with regard to performance, as well as strategic planning for future development and growth. Here are 20 things that you probably didn't know about HBT Financial Inc that might be helpful in determining if investment in shares is right for you.
1. HBT Financial Inc. is an old established bank
This company has recently gone public, but it's been around for decades. HBT Financial was open for business upon its founding in 1920. The firm has offered business, retail and commercial banking services, and products to a variety of clients. It has served local governments, families, and businesses with a strong track record of success for what will be 100 years in 2020. The bank is headquartered in Bloomington, Illinois.
2. HBT Financial has evolved significantly over the past century
Although the company has been in business since 1920, it has undergone a series of progressive changes. Upon review of the bank's history of strategic growth and planning, it is obvious that they took the business of client service seriously and put it as a top priority. The expansion has taken place rather organically and the bank formally incorporated the business in 1982. It has taken a consistent and steady approach to growth and development avoiding risky or quick decisions to attempt to grow too quickly, which is a common mistake that financial institutions have made in the past. The bank has favored steady expansion under solid footing which has brought the firm into the position it's achieved currently.
3. HBT operates under two brands
HBT has expanded into a network of full-service branches. They operate under the Heartland Bank as well as the Lincoln Bank brands. There are a total of 61 full-service banking operations opened as well as three banking branches that offer limited banking services in the Northeastern and Central ports of the state of Illinois.
4. The valuation of the bank is solid
HBT Inc is on solid footing with their current company valuation. As of June 2019, the total value of its assets is estimated at $3.2 billion. The firm has a total of $2.2 billion in loans held for investment with deposits of $2.8 billion. Stockholders' equity in HBT Financial is approximately $340 million. This gives you an idea of the total asset base for the bank along with an overview of how the value is distributed.
5. The purpose of the IPO was to raise funds
HBT Financial Inc recently filed for an IPO with the end goal of raising $150 million. The strategy is a part of its overall plan to continue moderate growth, however, the purpose of the fundraising is not intended to augment their current growth plans. Instead, it is designated for the payment of existing shareholders. This is the statement made for the intention of the funding and where all proceeds of the IPO are designated.
6. There is a negative aspect of the IPO
There are two major considerations investors must make when considering the purchase of shares in HBT Financial Inc. The first is the fact that the purpose of the IPO falls into a gray area when it comes to strategic planning. Since the total amount raised will be used to pay shareholders, it will produce no significant growth, development, or expansion of the bank and its services. This doesn't point towards an increase in the valuation. The second consideration is the fact that the bank is using the IPO as a resource for paying shareholders and this, in turn, keeps the cash flow higher for use in areas of growth and development of the bank. Although none of the IPO proceeds are going to be used for expansion, they do have other funds available for this activity.
7. HBT Financial does have market and growth plans
An important question for investors who are considering the purchase of stock in HBT or any company for that matter, is the plan that a firm has for marketing and growth. The primary focus of HBT historically has been on the Chicago MSA. This makes up 45% of its loan book and 33% of the total deposits. The annual originated loan amounts have achieved a 16% positive growth for the Chicago MSA since 2016. This is due to experienced lenders' attraction to HBS during that period of time, because of merger deals of banks in the region. The outlook for the growth opportunity for HBT Financial is positive with the full expectation of the continuation of the historical pattern of market disruption due to M&A deals.
8. Acquisition is part of HBT Financial's growth strategy
As we review the past history of HBT, the firm has a good track record for making the acquisition of other banks. This is a part of their ongoing strategy of growth and development. The bank has made multiple acquisitions through the years and although the activities haven't received a lot of press, it's a fact that investors need to be aware of.
9. The honesty of HBT is a virtue and value
While the majority of other firms going public stipulate that a portion of the funds raised will be dedicated to further growth, HBT took a different approach in their announcement. While this represents a risk, on one hand, it does show transparency and a willingness to be forthcoming about their intentions and plans without the need to hide behind a veil of secrecy. What HBT has done in the past has worked very well to their credit an success, and the leadership is continuing to move forward with honesty and integrity, not withholding information for the sake of leading potential investors to believe in a pie in the sky philosophy for the sake of growth.
10. HBT Financial raised the IPO terms
The first proposal made by HBT Financial Inc was a goal to raise $150 million at the IPO. The leadership increased this amount to $170 million, then to an expectation of $181.4 million which was the last expectation prior to the launch of the initial public offering. When HBT went public, the company was listed on the Nasdaq Stock Exchange under the ticker symbol HBT. The price of shares ranged between $17 and $19 for common shares at the offering. This equals 31.5% of the outstanding shares with an expected profit of $181.4 million.
11. Management of the IPO
The underwriters taking the lead at HBT Financial Inc's IPO are JP Morgan, and Keefe, Bruyette & Woods. These are the firms serving as joint book-running managements for the IPO. They are joined by other co-managers for the offering. These include Raymond James, Sandler O'Neill + Partners, LP, along with Davidson & Co. The group is led by JP Morgan and Keefe, Bruyette & Woods.
12. Other services offered by HBT Financial Inc.
In addition to traditional banking and loan origination and servicing, HBT provides other services. The firm also offers wealth management services and residential mortgage banking. The total amount of noninterest income for HBT Financial amounted to 16.2% of its total revenue for teh residential mortgage and wealth management services. This is a significant percentage.
13. HBT Financial meets special exemption requirements
HBT Financial is a banking firm that meets special qualifications for an exemption. It qualifies under the U.S. Jobs Act as an emerging growth company. This makes HBT eligible for exemption from specific SEC disclosure requirements.
14. HBT put up millions of stock shares for sale
HBT Financial offered 8,300,000 shares of its common stock for purchase by investors at a price between $17 and $19 per share. They also added an extra 1,2455 shares to the offering with the option for underwriters for purchase with a 30-day option, which granted the underwriters discounts and commissions on the purchase. An official prospectus will be made available to anyone who would like to have one for review, free of charge. It is available at the SEC's website at www.sec.gov under the name of the registrant which is HBT Financial Inc.
15. HBT Financial is a parent company
HBT Financial is the holding company for Heartland Bank and Trust Company, and also for the State Bank of Lincoln. Together these banks offer a variety of banking services and products which include services to individuals, businesses, governments, offering products for business, wealth management, commercial and retail.
16. The Heartland Bank and Trust Company is professionally staffed
We were impressed with the credentials and experience of the staff employed at Heartland Bank and Trust Company, a subsidiary operating under HBT Financial Inc. We wanted to further explore the quality of staff running the wealth management operation. Each member from the senior leadership/executive portion of the division down to the majority of the wealth advisement specialists hold credentials of MBA, JD, CFP, and so forth.
17. HBF is involved in the local communities
Upon closer examination of the bios submitted for the wealth investment management, we also noticed that most are heavily involved with their local communities. For example, Mike Wemple, a Wealth Investment Advisor participates in a variety of local non-profit fundraising projects, and he also works with the Meals on Wheels Program and goes out with a team of volunteers to hand deliver meals to elderly and disabled persona who can't help themselves. This is just an example of the commitment and dedication to social and civic issues we found. This is a typical example of the kind of person that works on the staff of HBF.
18. What makes HBF unique
One of the biggest questions in the minds of potential investors is what makes a company unique, and sets it apart from others in the same category. For HBF Financial Inc, it happens to be within their transparency and willingness to openly and honestly share their strategic plans. There are no smoke and mirror games and from all appearances, they're straightforward in their approach to doing business, and even in fundraising.
19. Centralization is their strength
HBF serves the businesses and citizens of the state of Illinois. Their coverage of this area is immense with a total of 64 branches. The firm has not expanded its coverage into all states in the country, but rather, has taken teh approach of focusing upon serving one specific part of the country and that is the state of Illinois. They've built their reputation upon being a solid local bank offering a wide range of services for their clientele and with a history that is approaching the 100-year mark.
20 A solid investment option
HBF is one of the more solid options for investment in stock. The firm is steady in making progress towards its goals without lofty aspirations that could lead to an extended risk for shareholders. This is an investment opportunity that makes the most sense for investors who are looking for a lower risk option over a long-term investment period. It's not likely that the IPO proceeds will enhance the current expansion or forward progress of the firm, but that wasn't the intention behind going public.HBF is a down to earth firm serving the heartland as indicated by the name, and it is likely to continue making moderate and steady advancement in growth and development.
Written by Allen Lee
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