HBT - HBT Financial: My Top Bank For 2023 New Addition To Buy-And-Hold Bank Portfolio

Summary

• $4.2 Billion HBT Financial does business in Illinois and Iowa. Though over 100 years old, it did not go public until late 2019.
• Though among the nation's best banks based on Risk-Adjusted Return on Equity, HBT sells at a ~35% discount to other High-Quality banks; it pays a 3.27% dividend (32% payout).
• What I like: Controlled company (controlling family), low-cost core deposits, buybacks, strong credit history, loan mix, history of accretive acquisitions, and investment exposure to the nation's breadbasket.
• I also like that the Small- and Mid-Cap bank sector is currently selling at a median Price to Forward Earnings of 10.6x, a ratio favorable to history.
• HBT's current valuation offers a meaningful margin of safety at a time when risks facing banks are formidable: Inflation/Interest Rates, Economy, Unemployment.

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