HBT Financial, Inc. Announces First Quarter 2023 Financial Results

First Quarter Highlights

  • Net income of $9.2 million, or $0.30 per diluted share; return on average assets (ROAA) of 0.78%; return on average stockholders' equity (ROAE) of 8.84%; and return on average tangible common equity (ROATCE)(1) of 10.45%
  • Adjusted net income(1) of $19.9 million; or $0.64 per diluted share; adjusted ROAA(1) of 1.69%; adjusted ROAE(1) of 19.08%; and adjusted ROATCE(1) of 22.55%
  • Completed merger with Town and Country Financial Corporation (“Town and Country”) on February 1, 2023
  • Asset quality remained strong with nonperforming assets to total assets of 0.20%
  • Net interest margin expanded 10 basis points to 4.20% from the fourth quarter of 2022

_______________________
(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.

BLOOMINGTON, Ill., April 26, 2023 (GLOBE NEWSWIRE) -- HBT Financial, Inc. (NASDAQ: HBT) (the “Company” or “HBT Financial” or “HBT”), the holding company for Heartland Bank and Trust Company, today reported net income of $9.2 million, or $0.30 diluted earnings per share, for the first quarter of 2023. This compares to net income of $13.1 million, or $0.46 diluted earnings per share, for the fourth quarter of 2022, and net income of $13.6 million, or $0.47 diluted earnings per share, for the first quarter of 2022.

Fred L. Drake, Chairman and Chief Executive Officer of HBT Financial, said, “It was a strong start to 2023 for HBT. We posted excellent financial results which were underpinned by two strengths that we have been focused on for many years. Asset quality remains strong with low levels of problem loans and net recoveries recorded during the quarter. In addition, our deposit base which is very granular and nearly 70% retail as of March 31, 2023 has remained stable in balances since December 31, 2022, and the increase in the cost of these deposits was in line with our expectations as our overall cost of funds increased only 19 basis points for the quarter. These strengths contributed to strong net income after adjusting for acquisition related expenses. In addition to our strong financial results, we completed a successful close of the Town and Country acquisition which is expected to provide profitable growth, scale and enhance the long-term value of our company. Finally, I am excited by the leadership changes we have recently announced, as I will transition to an Executive Chairman role and Lance Carter, who has been with the bank since 2001, will take over as Chief Executive Officer effective on May 24, 2023.”

Adjusted Net Income

In addition to reporting GAAP results, the Company believes adjusted net income and adjusted earnings per share, which adjust for acquisition expenses, branch closure expenses, gains (losses) on sale of closed branch premises, 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 fair value adjustments, provide investors with additional insight into its operational performance. The Company reported adjusted net income of $19.9 million, or $0.64 adjusted diluted earnings per share, for the first quarter of 2023. This compares to adjusted net income of $13.9 million, or $0.48 adjusted diluted earnings per share, for the fourth quarter of 2022, and adjusted net income of $12.2 million, or $0.42 adjusted diluted earnings per share, for the first quarter of 2022 (see "Reconciliation of Non-GAAP Financial Measures" tables).

Acquisition of Town and Country

On February 1, 2023, HBT Financial completed its previously announced acquisition of Town and Country, the holding company for Town and Country Bank. The acquisition further enhances HBT Financial’s footprint in Central Illinois and expands our footprint into metro-east St. Louis. After considering business combination accounting adjustments, Town and Country added total assets of $906 million, total loans held for investment of $635 million, and total deposits of $720 million.

Cash consideration of $38.0 million and stock consideration of approximately 3.4 million shares of HBT Financial common stock resulted in aggregate consideration of $109.4 million. The fair value of the shares of HBT Financial common stock issued as part of the consideration paid to the holders of Town and Country common stock was determined on the basis of the closing price of $21.12 per share on February 1, 2023. Goodwill of $30.6 million was recorded in the acquisition.

Acquisition-related expenses consisted of the following during the first quarter of 2023 and fourth quarter of 2022:

  Three Months Ended
  March 31, 2023 December 31, 2022
  (dollars in thousands)
Provision for credit losses $5,924  $ 
Salaries  3,518    
Data processing  1,855   304 
Marketing and customer relations  14    
Legal fees and other noninterest expense  1,753   326 
Total acquisition-related expenses $13,064  $630 
 

Net Interest Income and Net Interest Margin

Net interest income for the first quarter of 2023 was $46.8 million, an increase of 11.0% from $42.2 million for the fourth quarter of 2022. The increase was primarily attributable to the increase in earning assets following the Town and Country merger and higher yields on interest-earning assets. Partially offsetting these improvements were an increase in funding costs and a decrease in nonaccrual interest recoveries to $0.2 million during the first quarter of 2023 from $1.3 million during the fourth quarter of 2022.

Relative to the first quarter of 2022, net interest income increased 46.7% from $31.9 million. The increase was primarily attributable to higher yields on interest-earning assets and the increase in average interest-earning assets following the Town and Country merger.

Net interest margin for the first quarter of 2023 was 4.20%, compared to 4.10% for the fourth quarter of 2022. The increase was primarily attributable to higher yields on interest-earning assets and a more favorable mix of interest-earning assets, driven by the Town and Country merger and subsequent sale of the vast majority of the Town and Country securities portfolio, which was partially offset by higher funding costs. The contribution of nonaccrual interest recoveries to net interest margin was 2 basis points during the first quarter of 2023 and 13 basis points during the fourth quarter of 2022. Additionally, acquired loan discount accretion contributed 7 basis points to net interest margin during the first quarter of 2023 and 2 basis points during the fourth quarter of 2022.

Relative to the first quarter of 2022, net interest margin increased from 3.08%. This increase was primarily attributable to higher yields on interest-earning assets. Nonaccrual interest recoveries contributed 7 basis points to net interest margin, and acquired loan discount accretion contributed 1 basis point to net interest margin, during the first quarter of 2022.

Noninterest Income

Noninterest income for the first quarter of 2023 was $7.4 million, a decrease of 5.7% from $7.9 million for the fourth quarter of 2022. The decrease was primarily attributable to realized losses on sales of securities of $1.0 million as the vast majority of the securities portfolio acquired from Town and Country was sold with the sale proceeds used to reduce Federal Home Loan Bank borrowings. Partially offsetting these losses was a $0.5 million increase in mortgage servicing revenue, primarily due to the addition of Town and Country servicing portfolio which nearly doubled the size of our existing mortgage servicing portfolio.

Relative to the first quarter of 2022, noninterest income decreased 25.9% from $10.0 million. The decline was primarily due to a negative $0.6 million mortgage servicing rights fair value adjustment during the first quarter of 2023 compared to a positive $1.7 million MSR fair value adjustment during the first quarter of 2022. Additionally, the realized losses on sales of securities of $1.0 million were partially offset by increases in mortgage servicing revenue and credit and debit card income.

Noninterest Expense

Noninterest expense for the first quarter of 2023 was $35.9 million, an 8.5% increase from $33.1 million for the fourth quarter of 2022. The increase was primarily due to acquisition-related expenses of $7.1 million and higher base costs following the Town and Country merger. These increases were mostly offset by the absence of accruals for pending legal matters totaling $8.2 million that were included in the fourth quarter of 2022 results.

Relative to the first quarter of 2022, noninterest expense increased 48.7% from $24.2 million, also primarily attributable to acquisition-related expenses.

Loan Portfolio

Total loans outstanding, before allowance for credit losses, were $3.20 billion at March 31, 2023, compared with $2.62 billion at December 31, 2022 and $2.49 billion at March 31, 2022. The $575.3 million increase in total loans from December 31, 2022 included $635.4 million of loans acquired in the Town and Country merger. Excluding the impact of the Town and Country merger, the $60.1 million decrease in total loans was primarily driven by a variety of balance reductions across the portfolio, including $21.9 million of multi-family loans refinanced to the secondary market and $14.9 million of payoffs on loans exited due to the current credit environment. Additionally, significantly lower seasonal usage on grain elevator lines of credit presented a headwind to loan growth during the first quarter of 2023.

Deposits

Total deposits were $4.31 billion at March 31, 2023, compared with $3.59 billion at December 31, 2022 and $3.82 billion at March 31, 2022. The $723.5 million increase from December 31, 2022 included $720.4 million of deposits assumed in the Town and Country merger. Excluding the impact of the Town and Country merger, total deposits remained nearly unchanged, with a $30.5 million increase in noninterest-bearing deposits and a $13.8 million increase in time deposits mostly offset by a $28.6 million decrease in money market accounts and a $16.3 million decrease in savings accounts.

Adoption of CECL Methodology

On January 1, 2023, the Company adopted ASU 2016-13 (Topic 326), Measurement of Credit Losses on Financial Instruments, commonly referred to as the Current Expected Credit Loss (“CECL”) standard. Upon adoption of the CECL standard, a cumulative effect adjustment was recognized resulting in an after-tax decrease to retained earnings of $6.9 million as of January 1, 2023. This transition adjustment includes a $7.0 million impact due to the increase in the allowance for credit losses on loans, a $2.9 million impact due to the establishment of an allowance for credit losses on unfunded commitments, and a $2.7 million impact due to the tax effect of the transition adjustment.

Additionally, we also adopted the CECL standard using the prospective transition approach for purchased credit deteriorated (“PCD”) financial assets that were previously classified as purchased credit impaired (“PCI”) and accounted for under ASC 310-30. In accordance with the CECL standard, we did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. On January 1, 2023, the amortized cost basis of the PCD assets were adjusted to reflect the addition of $0.2 million to the allowance for credit losses. The remaining noncredit discount will be accreted into interest income at the effective interest rate as of January 1, 2023.

Asset Quality

Nonperforming loans totaled $6.5 million, or 0.20% of total loans, at March 31, 2023, compared with $2.2 million, or 0.08% of total loans, at December 31, 2022, and $2.5 million, or 0.10% of total loans, at March 31, 2022. The $4.4 million increase in nonperforming loans from December 31, 2022 was primarily attributable to the Town and Country merger, which added $3.8 million in nonaccrual loans as of March 31, 2023, consisting primarily of one-to-four family residential real estate loans.

The Company recorded a provision for credit losses of $6.2 million for the first quarter of 2023 including the recognition of an allowance for credit losses on non-PCD loans of $5.2 million and an allowance for credit losses on unfunded commitments of $0.7 million in connection with the Town and Country merger. The remaining provision for credit losses primarily reflects the establishment of an allowance for credit losses of $0.6 million on debt securities available-for-sale, related to one bank subordinated debt security, a $0.2 million decrease in specific reserves, and net recoveries of $0.1 million.

The Company had net recoveries of $0.1 million, or (0.02)% of average loans on an annualized basis, for the first quarter of 2023, compared to net recoveries of $0.9 million, or (0.14)% of average loans on an annualized basis, for the fourth quarter of 2022, and net recoveries of $1.2 million, or (0.19)% of average loans on an annualized basis, for the first quarter of 2022.

The Company’s allowance for credit losses was 1.21% of total loans and 595% of nonperforming loans at March 31, 2023, compared with 0.97% of total loans and 1,175% of nonperforming loans at December 31, 2022.

Stock Repurchase Program

During the first quarter of 2023, the Company repurchased 79,463 shares of its common stock at a weighted average price of $19.92 under its stock repurchase program. The Company’s Board of Directors have authorized the repurchase of up to $15 million of HBT Financial common stock under its stock repurchase program in effect until January 1, 2024. As of March 31, 2023, the Company had $13.4 million remaining under the current stock repurchase authorization.

About HBT Financial, Inc.

HBT Financial, Inc., headquartered in Bloomington, Illinois, is the holding company for Heartland Bank and Trust Company, and has banking roots that can be traced back to 1920. HBT provides a comprehensive suite of business, commercial, wealth management, and retail banking products and services to individuals, businesses and municipal entities throughout Illinois and Eastern Iowa through 68 full-service branches. As of March 31, 2023, HBT had total assets of $5.0 billion, total loans of $3.2 billion, and total deposits of $4.3 billion.

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), efficiency ratio (tax-equivalent basis), tangible common equity to tangible assets, tangible book value per share, return on average tangible common equity, adjusted net income, adjusted earnings per share, 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 contains, and future oral and written statements of the Company and its management may contain, "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. 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," "continue," or “should,” 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.

Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to: (i) the strength of the local, state, national and international economies (including effects of inflationary pressures and supply chain constraints); (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics (including the COVID-19 pandemic in the United States), acts of war or other threats thereof (including the Russian invasion of Ukraine), or other adverse external events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iii) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies, the FASB or the PCAOB (including the Company’s adoption of CECL methodology); (iv) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business and any changes in response to the recent failures of other banks; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of LIBOR phase-out); (vi) increased competition in the financial services sector, including from non-bank competitors such as credit unions and “fintech” companies, and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (ix) the loss of key executives or employees; (x) changes in consumer spending; (xi) unexpected outcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards; (xiii) fluctuations in the value of securities held in our securities portfolio; (xiv) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xv) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; (xvi) the level of non-performing assets on our balance sheets; (xvii) interruptions involving our information technology and communications systems or third-party servicers; (xviii) breaches or failures of our information security controls or cybersecurity-related incidents, and (xix) the ability of the Company to manage the risks associated with the foregoing as well as anticipated. 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. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.

CONTACT:
Peter Chapman
HBTIR@hbtbank.com
(888) 897-2276



HBT Financial, Inc.

Unaudited Consolidated Financial Summary

  As of or for the Three Months Ended
  March 31, December 31, March 31,
  2023 2022 2022
  (dollars in thousands, except per share data)
Interest and dividend income $51,779  $44,948  $33,335 
Interest expense  4,942   2,765   1,407 
Net interest income  46,837   42,183   31,928 
Provision for credit losses  6,210   (653)  (584)
Net interest income after provision for credit losses  40,627   42,836   32,512 
Noninterest income  7,437   7,889   10,043 
Noninterest expense  35,933   33,110   24,157 
Income before income tax expense  12,131   17,615   18,398 
Income tax expense  2,923   4,475   4,794 
Net income $9,208  $13,140  $13,604 
          
Earnings per share - Basic $0.30  $0.46  $0.47 
Earnings per share - Diluted  0.30   0.46   0.47 
          
Adjusted net income (1) $19,859  $13,886  $12,227 
Adjusted earnings per share - Basic (1)  0.64   0.48   0.42 
Adjusted earnings per share - Diluted (1)  0.64   0.48   0.42 
          
Book value per share $14.02  $12.99  $13.23 
Tangible book value per share (1)  11.45   11.94   12.16 
          
Shares of common stock outstanding  32,095,370   28,752,626   28,967,943 
Weighted average shares of common stock outstanding  30,977,204   28,752,626   28,986,593 
          
SUMMARY RATIOS         
Net interest margin *  4.20%  4.10%  3.08%
Net interest margin (tax equivalent basis) * (1) (2)  4.26   4.17   3.13 
          
Efficiency ratio  65.27%  65.85%  56.97%
Efficiency ratio (tax equivalent basis) (1) (2)  64.43   64.94   56.26 
          
Loan to deposit ratio  74.13%  73.05%  65.19%
          
Return on average assets *  0.78%  1.23%  1.27%
Return on average stockholders' equity *  8.84   14.17   13.58 
Return on average tangible common equity * (1)  10.45   15.45   14.71 
          
Adjusted return on average assets * (1)  1.69%  1.30%  1.14%
Adjusted return on average stockholders' equity * (1)  19.08   14.98   12.20 
Adjusted return on average tangible common equity * (1)  22.55   16.33   13.22 
          
CAPITAL         
Total capital to risk-weighted assets  15.11%  16.27%  16.86%
Tier 1 capital to risk-weighted assets  13.16   14.23   14.66 
Common equity tier 1 capital ratio  11.79   13.07   13.40 
Tier 1 leverage ratio  10.29   10.48   9.83 
Total stockholders' equity to total assets  8.98   8.72   8.81 
Tangible common equity to tangible assets (1)  7.45   8.06   8.16 
          
ASSET QUALITY         
Net charge-offs (recoveries) to average loans, before allowance for credit losses  (0.02)%  (0.14)%  (0.19)%
Allowance for credit losses to loans, before allowance for credit losses  1.21   0.97   0.99 
Nonperforming loans to loans, before allowance for credit losses  0.20   0.08   0.10 
Nonperforming assets to total assets  0.20   0.12   0.13 

* Annualized measure.
(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
(2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.


HBT Financial, Inc.
Unaudited Consolidated Financial Summary
Consolidated Statements of Income

  Three Months Ended
  March 31, December 31, March 31,
  2023 2022 2022
INTEREST AND DIVIDEND INCOME (dollars in thousands, except per share data)
Loans, including fees:         
Taxable $42,159  $35,839  $26,806 
Federally tax exempt  952   952   662 
Securities:         
Taxable  6,616   6,421   4,649 
Federally tax exempt  1,197   1,184   1,040 
Interest-bearing deposits in bank  739   504   159 
Other interest and dividend income  116   48   19 
Total interest and dividend income  51,779   44,948   33,335 
          
INTEREST EXPENSE         
Deposits  2,374   849   569 
Securities sold under agreements to repurchase  38   10   9 
Borrowings  1,297   880   1 
Subordinated notes  470   470   470 
Junior subordinated debentures issued to capital trusts  763   556   358 
Total interest expense  4,942   2,765   1,407 
Net interest income  46,837   42,183   31,928 
PROVISION FOR CREDIT LOSSES  6,210   (653)  (584)
Net interest income after provision for credit losses  40,627   42,836   32,512 
          
NONINTEREST INCOME         
Card income  2,658   2,642   2,404 
Wealth management fees  2,338   2,485   2,289 
Service charges on deposit accounts  1,871   1,701   1,652 
Mortgage servicing  1,099   593   658 
Mortgage servicing rights fair value adjustment  (624)  (293)  1,729 
Gains on sale of mortgage loans  276   194   587 
Realized gains (losses) on sales of securities  (1,007)      
Unrealized gains (losses) on equity securities  (22)  33   (187)
Gains (losses) on foreclosed assets  (10)  (122)  40 
Gains (losses) on other assets     17   193 
Income on bank owned life insurance  115   42   40 
Other noninterest income  743   597   638 
Total noninterest income  7,437   7,889   10,043 
          
NONINTEREST EXPENSE         
Salaries  19,411   13,278   12,801 
Employee benefits  2,335   2,126   2,444 
Occupancy of bank premises  2,102   1,893   2,060 
Furniture and equipment  659   633   552 
Data processing  4,323   2,167   1,653 
Marketing and customer relations  836   867   851 
Amortization of intangible assets  510   140   245 
FDIC insurance  563   276   288 
Loan collection and servicing  278   278   157 
Foreclosed assets  61   33   132 
Other noninterest expense  4,855   11,419   2,974 
Total noninterest expense  35,933   33,110   24,157 
INCOME BEFORE INCOME TAX EXPENSE  12,131   17,615   18,398 
INCOME TAX EXPENSE  2,923   4,475   4,794 
NET INCOME $9,208  $13,140  $13,604 
          
EARNINGS PER SHARE - BASIC $0.30  $0.46  $0.47 
EARNINGS PER SHARE - DILUTED $0.30  $0.46  $0.47 
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING  30,977,204   28,752,626   28,986,593 


HBT Financial, Inc.
Unaudited Consolidated Financial Summary
Consolidated Balance Sheets

  March 31, December 31, March 31,
  2023 2022 2022
  (dollars in thousands)
ASSETS         
Cash and due from banks $35,244  $18,970  $30,761 
Interest-bearing deposits with banks  141,868   95,189   328,218 
Cash and cash equivalents  177,112   114,159   358,979 
          
Interest-bearing time deposits with banks  249      487 
Debt securities available-for-sale, at fair value  854,622   843,524   933,922 
Debt securities held-to-maturity  536,429   541,600   438,054 
Equity securities with readily determinable fair value  3,145   3,029   3,256 
Equity securities with no readily determinable fair value  1,980   1,977   1,927 
Restricted stock, at cost  4,991   7,965   2,739 
Loans held for sale  5,130   615   1,777 
          
Loans, before allowance for credit losses  3,195,540   2,620,253   2,487,785 
Allowance for credit losses  (38,776)  (25,333)  (24,508)
Loans, net of allowance for credit losses  3,156,764   2,594,920   2,463,277 
          
Bank owned life insurance  23,447   7,557   7,433 
Bank premises and equipment, net  65,119   50,469   52,005 
Bank premises held for sale  235   235   1,081 
Foreclosed assets  3,356   3,030   3,043 
Goodwill  59,876   29,322   29,322 
Intangible assets, net  22,842   1,070   1,698 
Mortgage servicing rights, at fair value  19,992   10,147   9,723 
Investments in unconsolidated subsidiaries  1,614   1,165   1,165 
Accrued interest receivable  20,301   19,506   13,527 
Other assets  56,617   56,444   25,550 
Total assets $5,013,821  $4,286,734  $4,348,965 
          
LIABILITIES AND STOCKHOLDERS' EQUITY         
Liabilities         
Deposits:         
Noninterest-bearing $1,218,888  $994,954  $1,069,231 
Interest-bearing  3,091,633   2,592,070   2,746,838 
Total deposits  4,310,521   3,587,024   3,816,069 
          
Securities sold under agreements to repurchase  34,919   43,081   50,834 
Federal Home Loan Bank advances  75,183   160,000    
Subordinated notes  39,415   39,395   39,336 
Junior subordinated debentures issued to capital trusts  52,746   37,780   37,731 
Other liabilities  50,939   45,822   21,840 
Total liabilities  4,563,723   3,913,102   3,965,810 
          
Stockholders' Equity         
Common stock  327   293   293 
Surplus  294,441   222,783   221,735 
Retained earnings  228,782   232,004   203,076 
Accumulated other comprehensive income (loss)  (62,175)  (71,759)  (36,100)
Treasury stock at cost  (11,277)  (9,689)  (5,849)
Total stockholders’ equity  450,098   373,632   383,155 
Total liabilities and stockholders’ equity $5,013,821  $4,286,734  $4,348,965 
          
SHARE INFORMATION         
Shares of common stock outstanding  32,095,370   28,752,626   28,967,943 


HBT Financial, Inc.
Unaudited Consolidated Financial Summary

  March 31, December 31, March 31,
  2023 2022 2022
  (dollars in thousands)
LOANS            
Commercial and industrial $333,013  $266,757  $291,909 
Commercial real estate - owner occupied  317,103   218,503   237,000 
Commercial real estate - non-owner occupied  854,024   713,202   687,617 
Construction and land development  389,142   360,824   320,030 
Multi-family  362,672   287,865   243,447 
One-to-four family residential  482,732   338,253   327,791 
Agricultural and farmland  243,357   237,746   232,528 
Municipal, consumer, and other  213,497   197,103   147,463 
Loans, before allowance for credit losses $3,195,540  $2,620,253  $2,487,785 
             
PPP LOANS (included above)            
Commercial and industrial $25  $28  $16,184 
Agricultural and farmland        392 
Total PPP Loans $25  $28  $16,576 


  March 31, December 31, March 31,
  2023 2022 2022
  (dollars in thousands)
DEPOSITS            
Noninterest-bearing $1,218,888  $994,954  $1,069,231 
Interest-bearing demand  1,270,454   1,139,150   1,167,058 
Money market  662,088   555,425   597,464 
Savings  738,719   634,527   687,147 
Time  420,372   262,968   295,169 
Total deposits $4,310,521  $3,587,024  $3,816,069 


HBT Financial, Inc.
Unaudited Consolidated Financial Summary

  Three Months Ended 
  March 31, 2023 December 31, 2022 March 31, 2022 
  Average    Yield/ Average    Yield/ Average    Yield/ 
  Balance Interest Cost * Balance Interest Cost * Balance Interest Cost * 
  (dollars in thousands) 
ASSETS                         
Loans $3,012,320  $43,111 5.80%$2,600,746  $36,791 5.61%$2,507,006  $27,468 4.44%
Securities  1,411,613   7,813 2.24  1,396,401   7,605 2.16  1,321,918   5,689 1.75 
Deposits with banks  92,363   739 3.24  76,507   504 2.61  370,130   159 0.17 
Other  7,425   116 6.33  5,607   48 3.37  2,739   19 2.80 
Total interest-earning assets  4,523,721  $51,779 4.64% 4,079,261  $44,948 4.37% 4,201,793  $33,335 3.22%
Allowance for credit losses  (33,301)       (25,404)       (24,099)      
Noninterest-earning assets  274,870        188,942        165,752       
Total assets $4,765,290       $4,242,799       $4,343,446       
                          
LIABILITIES AND STOCKHOLDERS' EQUITY                         
Liabilities                         
Interest-bearing deposits:                         
Interest-bearing demand $1,230,644  $458 0.15%$1,125,877  $177 0.06%$1,143,829  $142 0.05%
Money market  634,608   935 0.60  572,718   379 0.26  598,271   121 0.08 
Savings  709,862   178 0.10  640,668   53 0.03  649,563   50 0.03 
Time  356,779   803 0.91  266,117   240 0.36  310,675   256 0.33 
Total interest-bearing deposits  2,931,893   2,374 0.33  2,605,380   849 0.13  2,702,338   569 0.09 
Securities sold under agreements to repurchase  39,619   38 0.38  51,703   10 0.08  53,054   9 0.07 
Borrowings  113,896   1,297 4.62  92,120   880 3.79  500   1 0.71 
Subordinated notes  39,403   470 4.83  39,384   470 4.73  39,325   470 4.84 
Junior subordinated debentures issued to capital trusts  47,586   763 6.50  37,770   556 5.84  37,721   358 3.85 
Total interest-bearing liabilities  3,172,397  $4,942 0.63% 2,826,357  $2,765 0.39% 2,832,938  $1,407 0.20%
Noninterest-bearing deposits  1,121,365        1,023,355        1,077,917       
Noninterest-bearing liabilities  49,316        25,220        26,302       
Total liabilities  4,343,078        3,874,932        3,937,157       
Stockholders' Equity  422,212        367,867        406,289       
Total liabilities and stockholders’ equity $4,765,290       $4,242,799       $4,343,446       
                          
Net interest income/Net interest margin (1)    $46,837 4.20%   $42,183 4.10%   $31,928 3.08%
Tax-equivalent adjustment (2)     702 0.06     698 0.07     529 0.05 
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (2) (3)    $47,539 4.26%   $42,881 4.17%   $32,457 3.13%
Net interest rate spread (4)       4.01%      3.98%      3.02%
Net interest-earning assets (5) $1,351,324       $1,252,904       $1,368,855       
Ratio of interest-earning assets to interest-bearing liabilities  1.43        1.44        1.48       
Cost of total deposits       0.24%      0.09%      0.06%
Cost of funds       0.47       0.28       0.15 

* Annualized measure.
(1) Net interest margin represents net interest income divided by average total interest-earning assets.
(2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.
(3) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
(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.
Unaudited Consolidated Financial Summary

  March 31, December 31, March 31,
  2023 2022 2022
  (dollars in thousands)
NONPERFORMING ASSETS            
Nonaccrual $6,508  $2,155  $2,461 
Past due 90 days or more, still accruing (1)  10   1   8 
Total nonperforming loans  6,518   2,156   2,469 
Foreclosed assets  3,356   3,030   3,043 
Total nonperforming assets $9,874  $5,186  $5,512 
             
Allowance for credit losses $38,776  $25,333  $24,508 
Loans, before allowance for credit losses  3,195,540   2,620,253   2,487,785 
             
CREDIT QUALITY RATIOS            
Allowance for credit losses to loans, before allowance for credit losses  1.21%  0.97%  0.99%
Allowance for credit losses to nonaccrual loans  595.82   1,175.55   995.86 
Allowance for credit losses to nonperforming loans  594.91   1,175.00   992.63 
Nonaccrual loans to loans, before allowance for credit losses  0.20   0.08   0.10 
Nonperforming loans to loans, before allowance for credit losses  0.20   0.08   0.10 
Nonperforming assets to total assets  0.20   0.12   0.13 
Nonperforming assets to loans, before allowance for credit losses, and foreclosed assets  0.31   0.20   0.22 

(1) Prior to 2023, excludes loans acquired with deteriorated credit quality that are past due 90 or more days and accruing. Such loans totaled $145 thousand as of December 31, 2022 and $25 thousand as of March 31, 2022.

 


  Three Months Ended
  March 31, December 31, March 31,
  2023 2022 2022
ALLOWANCE FOR CREDIT LOSSES ON LOANS (dollars in thousands)
Beginning balance $25,333  $25,060  $23,936 
Adoption of ASC 326  6,983       
PCD allowance established in acquisition  1,247       
Provision for credit losses  5,101   (653)  (584)
Charge-offs  (142)  (169)  (134)
Recoveries  254   1,095   1,290 
Ending balance $38,776  $25,333  $24,508 
          
Net charge-offs (recoveries) $(112) $(926) $(1,156)
Average loans, before allowance for credit losses  3,012,320   2,600,746   2,507,006 
          
Net charge-offs (recoveries) to average loans, before allowance for credit losses *  (0.02)%  (0.14)%  (0.19)%

* Annualized measure.

 


  Three Months Ended
  March 31, December 31, March 31,
  2023 2022 2022
PROVISION FOR CREDIT LOSSES (dollars in thousands)
Loans (1) $5,101  $(653) $(584)
Unfunded lending-related commitments (1)  509       
Debt securities  600       
Total provision for credit losses $6,210  $(653) $(584)

(1) Includes recognition of an allowance for credit losses on non-PCD loans of $5.2 million and an allowance for credit losses on unfunded commitments of $0.7 million in connection with the Town and Country merger.

 


Reconciliation of Non-GAAP Financial Measures –
Adjusted Net Income and Adjusted Return on Average Assets
  Three Months Ended
  March 31, December 31, March 31,
  2023 2022 2022
  (dollars in thousands)
Net income $9,208  $13,140  $13,604 
Adjustments:         
Acquisition expenses (1)  (13,064)  (630)   
Gains (losses) on sales of closed branch premises        197 
Realized gains (losses) on sales of securities  (1,007)      
Mortgage servicing rights fair value adjustment  (624)  (293)  1,729 
Total adjustments  (14,695)  (923)  1,926 
Tax effect of adjustments  4,044   177   (549)
Less adjustments, after tax effect  (10,651)  (746)  1,377 
Adjusted net income $19,859  $13,886  $12,227 
          
Average assets $4,765,290  $4,242,799  $4,343,446 
          
Return on average assets *  0.78%  1.23%  1.27%
Adjusted return on average assets *  1.69   1.30   1.14 

* Annualized measure.
(1) Includes recognition of an allowance for credit losses on non-PCD loans of $5.2 million and an allowance for credit losses on unfunded commitments of $0.7 million in connection with the Town and Country merger.

 


Reconciliation of Non-GAAP Financial Measures –
Adjusted Earnings Per Share
  Three Months Ended
  March 31, December 31, March 31,
  2023 2022 2022
  (dollars in thousands, except per share data)
Numerator:         
Net income $9,208  $13,140  $13,604 
Earnings allocated to participating securities (1)  (5)  (15)  (17)
Numerator for earnings per share - basic and diluted $9,203  $13,125  $13,587 
          
Adjusted net income $19,859  $13,886  $12,227 
Earnings allocated to participating securities (1)  (13)  (16)  (15)
Numerator for adjusted earnings per share - basic and diluted $19,846  $13,870  $12,212 
          
Denominator:         
Weighted average common shares outstanding  30,977,204   28,752,626   28,986,593 
Dilutive effect of outstanding restricted stock units  69,947   91,905   43,646 
Weighted average common shares outstanding, including all dilutive potential shares  31,047,151   28,844,531   29,030,239 
          
Earnings per share - Basic $0.30  $0.46  $0.47 
Earnings per share - Diluted $0.30  $0.46  $0.47 
          
Adjusted earnings per share - Basic $0.64  $0.48  $0.42 
Adjusted earnings per share - Diluted $0.64  $0.48  $0.42 

(1) The Company has granted certain 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.

 


Reconciliation of Non-GAAP Financial Measures –
Net Interest Income and Net Interest Margin (Tax Equivalent Basis)
  Three Months Ended
  March 31, December 31, March 31,
  2023 2022 2022
  (dollars in thousands)
Net interest income (tax equivalent basis)            
Net interest income $46,837  $42,183  $31,928 
Tax-equivalent adjustment (1)  702   698   529 
Net interest income (tax equivalent basis) (1) $47,539  $42,881  $32,457 
             
Net interest margin (tax equivalent basis)            
Net interest margin *  4.20%  4.10%  3.08%
Tax-equivalent adjustment * (1)  0.06   0.07   0.05 
Net interest margin (tax equivalent basis) * (1)  4.26%  4.17%  3.13%
             
Average interest-earning assets $4,523,721  $4,079,261  $4,201,793 

* 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,
  2023 2022 2022
  (dollars in thousands)
Efficiency ratio (tax equivalent basis)            
Total noninterest expense $35,933  $33,110  $24,157 
Less: amortization of intangible assets  510   140   245 
Adjusted noninterest expense $35,423  $32,970  $23,912 
             
Net interest income $46,837  $42,183  $31,928 
Total noninterest income  7,437   7,889   10,043 
Operating revenue  54,274   50,072   41,971 
Tax-equivalent adjustment (1)  702   698   529 
Operating revenue (tax equivalent basis) (1) $54,976  $50,770  $42,500 
             
Efficiency ratio  65.27%  65.85%  56.97%
Efficiency ratio (tax equivalent basis) (1)  64.43   64.94   56.26 

(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,
  2023 2022 2022
  (dollars in thousands, except per share data)
Tangible common equity            
Total stockholders' equity $450,098  $373,632  $383,155 
Less: Goodwill  59,876   29,322   29,322 
Less: Intangible assets, net  22,842   1,070   1,698 
Tangible common equity $367,380  $343,240  $352,135 
             
Tangible assets            
Total assets $5,013,821  $4,286,734  $4,348,965 
Less: Goodwill  59,876   29,322   29,322 
Less: Intangible assets, net  22,842   1,070   1,698 
Tangible assets $4,931,103  $4,256,342  $4,317,945 
             
Total stockholders' equity to total assets  8.98%  8.72%  8.81%
Tangible common equity to tangible assets  7.45   8.06   8.16 
             
Shares of common stock outstanding  32,095,370   28,752,626   28,967,943 
             
Book value per share $14.02  $12.99  $13.23 
Tangible book value per share  11.45   11.94   12.16 


Reconciliation of Non-GAAP Financial Measures –
Return on Average Tangible Common Equity,
Adjusted Return on Average Stockholders' Equity and Adjusted Return on Tangible Common Equity
  Three Months Ended
  March 31, December 31, March 31,
  2023 2022 2022
  (dollars in thousands)
Average tangible common equity            
Total stockholders' equity $422,212  $367,867  $406,289 
Less: Goodwill  49,352   29,322   29,322 
Less: Intangible assets, net  15,635   1,134   1,844 
Average tangible common equity $357,225  $337,411  $375,123 
             
Net income $9,208  $13,140  $13,604 
Adjusted net income  19,859   13,886   12,227 
             
Return on average stockholders' equity *  8.84%  14.17%  13.58%
Return on average tangible common equity *  10.45   15.45   14.71 
             
Adjusted return on average stockholders' equity *  19.08%  14.98%  12.20%
Adjusted return on average tangible common equity *  22.55   16.33   13.22 

* Annualized measure.

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