HBT Financial, Inc. Announces Fourth Quarter 2023 Financial Results

Fourth Quarter Highlights

  • Net income of $18.4 million, or $0.58 per diluted share; return on average assets (ROAA) of 1.46%; return on average stockholders' equity (ROAE) of 15.68%; and return on average tangible common equity (ROATCE)(1) of 18.96%
  • Adjusted net income(1) of $19.3 million; or $0.60 per diluted share; adjusted ROAA(1) of 1.53%; adjusted ROAE(1) of 16.38%; and adjusted ROATCE(1) of 19.81%
  • Asset quality remained strong with nonperforming assets to total assets of 0.17%
  • Net interest margin of 3.93% and net interest margin (tax-equivalent basis)(1) of 3.99%

BLOOMINGTON, Ill., Jan. 24, 2024 (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 $18.4 million, or $0.58 diluted earnings per share, for the fourth quarter of 2023. This compares to net income of $19.7 million, or $0.62 diluted earnings per share, for the third quarter of 2023, and net income of $13.1 million, or $0.46 diluted earnings per share, for the fourth quarter of 2022.

J. Lance Carter, President and Chief Executive Officer of HBT Financial, said, “We had a very good fourth quarter to complete an excellent year.   We continued to produce strong profitability with an adjusted ROAA(1) of 1.53%, an adjusted ROATCE(1) of 19.81% and adjusted diluted earnings per share(1) of $0.60.   We were able to improve liquidity and increase deposits, excluding brokered deposits, by 4.2% for the quarter by bringing the majority of our wealth management customers’ deposits onto our balance sheet.   Even without our wealth management customers’ deposits, total deposits, excluding brokered deposits, increased by $29.4 million, or 0.7%.   Loan growth remained solid at 1.8% for the quarter while we maintained strong credit quality with non-performing assets at only 0.17% of total assets.   Although net interest margin (tax-equivalent basis)(1) declined to 3.99% in the quarter, we believe that the pace of net interest margin decreases will moderate in the first quarter of 2024.   With the recent drop in interest rates, our accumulated other comprehensive income (loss) increased by $21.3 million, which when coupled with strong earnings retention, drove a 9.3% increase in our tangible book value per share(1).   All capital metrics increased and can support continued organic growth or future acquisitions.   We believe this quarter continues to demonstrate our ability to produce strong profitability results, maintain a solid balance sheet, and enhance our franchise value.”
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(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.

Adjusted Net Income

In addition to reporting GAAP results, the Company believes non-GAAP measures such as 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 $19.3 million, or $0.60 adjusted diluted earnings per share, for the fourth quarter of 2023. This compares to adjusted net income of $20.3 million, or $0.63 adjusted diluted earnings per share, for the third quarter of 2023, and adjusted net income of $13.9 million, or $0.48 adjusted diluted earnings per share, for the fourth quarter of 2022 (see "Reconciliation of Non-GAAP Financial Measures" tables below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures).

Cash Dividend

On January 23, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.19 per share on the Company’s common stock (the “Dividend”). The Dividend is payable on February 13, 2024 to shareholders of record as of February 6, 2024. This represents an increase of $0.02 from the previous quarterly dividend of $0.17 per share.

Mr. Carter noted, “Our strong financial performance and balance sheet enable us to increase our quarterly dividend by $0.02 per share, or 11.8%, while maintaining sufficient capital to support the continued growth of the Company.”

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2023 was $47.1 million, a decrease of 2.5% from $48.3 million for the third quarter of 2023. The decrease was primarily attributable to an increase in funding costs which were partially offset by higher yields on loans and a more favorable interest-earning asset mix.

Relative to the fourth quarter of 2022, net interest income increased 11.6% from $42.2 million. The increase was primarily attributable to the increase in average interest-earning assets following the Town and Country Financial Corporation (“Town and Country”) merger completed in the first quarter of 2023 and higher yields on interest-earning assets which were partially offset by an increase in funding costs.

Net interest margin for the fourth quarter of 2023 was 3.93%, compared to 4.07% for the third quarter of 2023, and net interest margin (tax-equivalent basis)(1) for the fourth quarter of 2023 was 3.99% compared to 4.13% for the third quarter of 2023. The decrease was primarily attributable to higher funding costs with the cost of funds increasing to 1.26% for the fourth quarter of 2023, compared to 0.96% for the third quarter of 2023, partially offset by higher yields on loans and a more favorable interest-earning asset mix.

Relative to the fourth quarter of 2022, net interest margin decreased from 4.10%. This decrease was primarily attributable to higher funding costs.
____________________________________
(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.

Noninterest Income

Noninterest income for the fourth quarter of 2023 was $9.2 million, a decrease of 3.0% from $9.5 million for the third quarter of 2023. The decrease was primarily attributable to a negative mortgage servicing rights fair value adjustment of $1.2 million during the fourth quarter of 2023, partially offset by the absence of $0.8 million of losses realized on the sale of debt securities during the third quarter of 2023. Additionally, the $0.5 million increase in wealth management fees was primarily due to an increase in farmland brokerage commissions.

Relative to the fourth quarter of 2022, noninterest income increased 16.7% from $7.9 million. The increase was primarily attributable to the Town and Country merger completed in the first quarter of 2023 which contributed to a $0.6 million increase in mortgage servicing income, a $0.4 million increase in wealth management fees, and a $0.1 million increase in card income.

Noninterest Expense

Noninterest expense for the fourth quarter of 2023 was $30.4 million, a 0.9% decrease from $30.7 million for the third quarter of 2023. The decrease was broad-based and the result of continued expense management discipline with a $0.5 million decrease in marketing expenses largely offset by a $0.4 million increase in other noninterest expense.

Relative to the fourth quarter of 2022, noninterest expense decreased 8.2% from $33.1 million, primarily attributable to the absence of $8.2 million of accruals related to settled legal matters previously disclosed and included in the fourth quarter of 2022 results, partially offset by the addition of Town and Country’s operations.

Acquisition-related expenses recognized are summarized below. No acquisition-related expenses were recognized subsequent to the second quarter of 2023, and we do not expect material acquisition-related expenses related to Town and Country in subsequent quarters.

 Three Months Ended Year Ended December 31,
(dollars in thousands)December 31,
2023
 September 30,
2023
 December 31,
2022
 2023 2022
      ��   
PROVISION FOR CREDIT LOSSES$ $ $ $5,924 $
NONINTEREST EXPENSE         
Salaries       3,584  
Furniture and equipment       39  
Data processing     304  2,031  304
Marketing and customer relations       24  
Loan collection and servicing       125  
Legal fees and other noninterest expense     326  1,964  788
Total noninterest expense     630  7,767  1,092
Total acquisition-related expenses$ $ $630 $13,691 $1,092

Loan Portfolio

Total loans outstanding, before allowance for credit losses, were $3.40 billion at December 31, 2023, compared with $3.34 billion at September 30, 2023 and $2.62 billion at December 31, 2022. The $61.6 million increase from September 30, 2023 was primarily attributable to higher line usage in our commercial and industrial portfolio as well as one larger new $23.0 million funding in our multifamily portfolio, both of which were partially offset by a reduction in our commercial real estate – non-owner occupied portfolio due to a variety of payoffs from real estate sales. Higher line usage in our commercial and industrial portfolio was driven in part by the seasonal increase in grain elevator line balances as well as $13.2 million drawn on two customers’ lines which were funded shortly before and paid off shortly after year-end.

Deposits

Total deposits were $4.40 billion at December 31, 2023, compared with $4.20 billion at September 30, 2023 and $3.59 billion at December 31, 2022. The $203.4 million increase from September 30, 2023 was primarily attributable to bringing the majority of our wealth management customer deposits on balance sheet, which increased money market deposits by $144.0 million, and a $29.9 million increase in brokered deposits.

Asset Quality

Nonperforming loans totaled $7.9 million, or 0.23% of total loans, at December 31, 2023, compared with $6.7 million, or 0.20% of total loans, at September 30, 2023, and $2.2 million, or 0.08% of total loans, at December 31, 2022. Additionally, of the $7.9 million of nonperforming loans held as of December 31, 2023, $2.6 million is either wholly or partially guaranteed by the U.S. Government. The $1.2 million increase in nonperforming loans from September 30, 2023 was primarily attributable to one commercial real estate - non-owner occupied retail credit moved to nonaccrual, partially offset by a reduction in one-to-four family residential nonaccrual loans.

The Company recorded a provision for credit losses of $1.1 million for the fourth quarter of 2023. The provision for credit losses primarily reflects a $0.9 million increase in required reserves resulting from changes in economic and qualitative factors, a $0.6 million increase in required reserves driven by growth and changes in the loan portfolio, and a $0.4 million decrease in specific reserve.

The Company had net charge-offs of $0.5 million, or 0.06% of average loans on an annualized basis, for the fourth quarter of 2023, compared to net recoveries of $0.1 million, or 0.01% of average loans on an annualized basis, for the third quarter of 2023, and net recoveries of $0.9 million, or 0.14% of average loans on an annualized basis, for the fourth quarter of 2022.

The Company’s allowance for credit losses was 1.18% of total loans and 510% of nonperforming loans at December 31, 2023, compared with 1.16% of total loans and 582% of nonperforming loans at September 30, 2023. In addition, the allowance for credit losses on unfunded lending-related commitments totaled $3.8 million as of December 31, 2023, compared with $4.4 million as of September 30, 2023.

Capital

Tangible common equity to tangible assets(1) increased to 8.19% as of December 31, 2023, from 7.64% as of September 30, 2023, and tangible book value per share(1) increased by $1.10 to $12.90 as of December 31, 2023, when compared to September 30, 2023. These increases were primarily due to an increase in our accumulated other comprehensive income (loss) as a result of the recent drop in interest rates as well as strong earnings retention.

During the fourth quarter of 2023, the Company repurchased 78,312 shares of its common stock at a weighted average price of $17.94 under its stock repurchase program. The Company’s Board of Directors authorized a new stock repurchase program that took effect upon the expiration of the Company’s prior stock repurchase program on January 1, 2024. The new stock repurchase program will be in effect until January 1, 2025 and authorizes the Company to repurchase up to $15 million of its common stock.
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(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.

January 2024 Bond Sales

In January 2024, the Company recognized $3.4 million of net losses on the sale of $66.8 million of municipal securities with the proceeds used to reduce wholesale funding sources. The book yield of the securities sold was 1.87% and the average life was 6.7 years.

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 67 full-service branches. As of December 31, 2023, HBT had total assets of $5.1 billion, total loans of $3.4 billion, and total deposits of $4.4 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 Israeli-Palestinian conflict and 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 the current expected credit losses (“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 and the recent and potential additional rate increases by the Federal Reserve); (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 
(309) 664-4556

HBT Financial, Inc.
Unaudited Consolidated Financial Summary

  As of or for the Three Months Ended Year Ended December 31,
(dollars in thousands, except per share data) December 31,
2023
 September 30,
2023
 December 31,
2022
  2023   2022 
Interest and dividend income $61,411  $59,041  $44,948  $228,999  $153,054 
Interest expense  14,327   10,762   2,765   37,927   7,180 
Net interest income  47,084   48,279   42,183   191,072   145,874 
Provision for credit losses  1,113   480   (653)  7,573   (706)
Net interest income after provision for credit losses  45,971   47,799   42,836   183,499   146,580 
Noninterest income  9,205   9,490   7,889   36,046   34,717 
Noninterest expense  30,387   30,671   33,110   130,964   105,107 
Income before income tax expense  24,789   26,618   17,615   88,581   76,190 
Income tax expense  6,343   6,903   4,475   22,739   19,734 
Net income $18,446  $19,715  $13,140  $65,842  $56,456 
           
Earnings per share - Diluted $0.58  $0.62  $0.46  $2.07  $1.95 
           
Adjusted net income (1) $19,272  $20,279  $13,886  $78,182  $55,805 
Adjusted earnings per share - Diluted (1)  0.60   0.63   0.48   2.46   1.93 
           
Book value per share $15.44  $14.36  $12.99     
Tangible book value per share (1)  12.90   11.80   11.94     
           
Shares of common stock outstanding  31,695,828   31,774,140   28,752,626     
Weighted average shares of common stock outstanding  31,708,381   31,829,250   28,752,626   31,626,308   28,853,697 
           
SUMMARY RATIOS          
Net interest margin *  3.93%  4.07%  4.10%  4.09%  3.54%
Net interest margin (tax-equivalent basis) * (1)(2)  3.99   4.13   4.17   4.15   3.60 
           
Efficiency ratio  52.70%  51.85%  65.85%  56.49%  57.72%
Efficiency ratio (tax-equivalent basis) (1)(2)  52.09   51.25   64.94   55.81   56.93 
           
Loan to deposit ratio  77.35%  79.63%  73.05%    
           
Return on average assets *  1.46%  1.58%  1.23%  1.34%  1.32%
Return on average stockholders' equity *  15.68   17.02   14.17   14.60   14.73 
Return on average tangible common equity * (1)  18.96   20.70   15.45   17.63   16.02 
           
Adjusted return on average assets * (1)  1.53%  1.62%  1.30%  1.59%  1.31%
Adjusted return on average stockholders' equity * (1)  16.38   17.51   14.98   17.34   14.56 
Adjusted return on average tangible common equity * (1)  19.81   21.29   16.33   20.94   15.83 
           
CAPITAL          
Total capital to risk-weighted assets  15.33%  15.09%  16.27%    
Tier 1 capital to risk-weighted assets  13.42   13.18   14.23     
Common equity tier 1 capital ratio  12.12   11.88   13.07     
Tier 1 leverage ratio  10.49   10.34   10.48     
Total stockholders' equity to total assets  9.65   9.14   8.72     
Tangible common equity to tangible assets (1)  8.19   7.64   8.06     
           
ASSET QUALITY          
Net charge-offs (recoveries) to average loans  0.06% (0.01)% (0.14)%  0.01% (0.08)%
Allowance for credit losses to loans, before allowance for credit losses  1.18   1.16   0.97     
Nonperforming loans to loans, before allowance for credit losses  0.23   0.20   0.08     
Nonperforming assets to total assets  0.17   0.16   0.12     
                 

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* 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 Year Ended December 31,
(dollars in thousands, except per share data)December 31,
2023
 September 30,
2023
 December 31,
2022
  2023   2022 
INTEREST AND DIVIDEND INCOME         
Loans, including fees:         
Taxable$52,060  $49,640  $35,839  $191,008  $120,343 
Federally tax exempt 1,125   1,072   952   4,189   3,135 
Securities:         
Taxable 6,377   6,451   6,421   25,962   23,368 
Federally tax exempt 888   978   1,184   4,225   4,569 
Interest-bearing deposits in bank 786   714   504   3,020   1,541 
Other interest and dividend income 175   186   48   595   98 
Total interest and dividend income 61,411   59,041   44,948   228,999   153,054 
INTEREST EXPENSE         
Deposits 11,227   7,211   849   25,135   2,511 
Securities sold under agreements to repurchase 148   35   10   255   36 
Borrowings 1,534   2,108   880   7,128   967 
Subordinated notes 470   470   470   1,879   1,879 
Junior subordinated debentures issued to capital trusts 948   938   556   3,530   1,787 
Total interest expense 14,327   10,762   2,765   37,927   7,180 
Net interest income 47,084   48,279   42,183   191,072   145,874 
PROVISION FOR CREDIT LOSSES 1,113   480   (653)  7,573   (706)
Net interest income after provision for credit losses 45,971   47,799   42,836   183,499   146,580 
NONINTEREST INCOME         
Card income 2,717   2,763   2,642   11,043   10,329 
Wealth management fees 2,885   2,381   2,485   9,883   9,155 
Service charges on deposit accounts 2,016   2,040   1,701   7,846   7,072 
Mortgage servicing 1,156   1,169   593   4,678   2,609 
Mortgage servicing rights fair value adjustment (1,155)  23   (293)  (1,615)  2,153 
Gains on sale of mortgage loans 401   476   194   1,526   1,461 
Realized gains (losses) on sales of securities    (813)     (1,820)   
Unrealized gains (losses) on equity securities 221   (46)  33   160   (414)
Gains (losses) on foreclosed assets 58   550   (122)  501   (314)
Gains (losses) on other assets 5   52   17   166   136 
Income on bank owned life insurance 158   153   42   573   164 
Other noninterest income 743   742   597   3,105   2,366 
Total noninterest income 9,205   9,490   7,889   36,046   34,717 
NONINTEREST EXPENSE         
Salaries 15,738   15,644   13,278   67,453   51,767 
Employee benefits 2,379   2,616   2,126   10,037   8,325 
Occupancy of bank premises 2,458   2,573   1,893   9,918   7,673 
Furniture and equipment 655   667   633   2,790   2,476 
Data processing 2,565   2,581   2,167   12,352   7,441 
Marketing and customer relations 1,169   1,679   867   5,043   3,803 
Amortization of intangible assets 720   720   140   2,670   873 
FDIC insurance 575   512   276   2,280   1,164 
Loan collection and servicing 431   345   278   1,402   1,049 
Foreclosed assets 17   76   33   251   293 
Other noninterest expense 3,680   3,258   11,419   16,768   20,243 
Total noninterest expense 30,387   30,671   33,110   130,964   105,107 
INCOME BEFORE INCOME TAX EXPENSE 24,789   26,618   17,615   88,581   76,190 
INCOME TAX EXPENSE 6,343   6,903   4,475   22,739   19,734 
NET INCOME$18,446  $19,715  $13,140  $65,842  $56,456 
          
EARNINGS PER SHARE - BASIC$0.58  $0.62  $0.46  $2.08  $1.95 
EARNINGS PER SHARE - DILUTED$0.58  $0.62  $0.46  $2.07  $1.95 
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING 31,708,381   31,829,250   28,752,626   31,626,308   28,853,697 
                    

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

(dollars in thousands)December 31, 2023 September 30, 2023 December 31, 2022
ASSETS     
Cash and due from banks$26,256  $24,757  $18,970 
Interest-bearing deposits with banks 114,996   87,156   95,189 
Cash and cash equivalents 141,252   111,913   114,159 
      
Interest-bearing time deposits with banks 509   500    
Debt securities available-for-sale, at fair value 759,461   753,163   843,524 
Debt securities held-to-maturity 521,439   527,144   541,600 
Equity securities with readily determinable fair value 3,360   3,106   3,029 
Equity securities with no readily determinable fair value 2,505   2,300   1,977 
Restricted stock, at cost 7,160   11,165   7,965 
Loans held for sale 2,318   3,563   615 
      
Loans, before allowance for credit losses 3,404,417   3,342,786   2,620,253 
Allowance for credit losses (40,048)  (38,863)  (25,333)
Loans, net of allowance for credit losses 3,364,369   3,303,923   2,594,920 
      
Bank owned life insurance 23,905   23,747   7,557 
Bank premises and equipment, net 65,150   64,713   50,469 
Bank premises held for sale    35   235 
Foreclosed assets 852   1,519   3,030 
Goodwill 59,820   59,820   29,322 
Intangible assets, net 20,682   21,402   1,070 
Mortgage servicing rights, at fair value 19,001   20,156   10,147 
Investments in unconsolidated subsidiaries 1,614   1,614   1,165 
Accrued interest receivable 24,534   23,447   19,506 
Other assets 55,239   58,538   56,444 
Total assets$5,073,170  $4,991,768  $4,286,734 
      
LIABILITIES AND STOCKHOLDERS' EQUITY     
Liabilities     
Deposits:     
Noninterest-bearing$1,072,407  $1,086,877  $994,954 
Interest-bearing 3,329,030   3,111,191   2,592,070 
Total deposits 4,401,437   4,198,068   3,587,024 
      
Securities sold under agreements to repurchase 42,442   28,900   43,081 
Federal Home Loan Bank advances 12,623   177,650   160,000 
Subordinated notes 39,474   39,454   39,395 
Junior subordinated debentures issued to capital trusts 52,789   52,774   37,780 
Other liabilities 34,909   38,671   45,822 
Total liabilities 4,583,674   4,535,517   3,913,102 
      
Stockholders' Equity     
Common stock 327   327   293 
Surplus 295,877   295,483   222,783 
Retained earnings 269,051   256,050   232,004 
Accumulated other comprehensive income (loss) (57,163)  (78,432)  (71,759)
Treasury stock at cost (18,596)  (17,177)  (9,689)
Total stockholders’ equity 489,496   456,251   373,632 
Total liabilities and stockholders’ equity$5,073,170  $4,991,768  $4,286,734 
SHARES OF COMMON STOCK OUTSTANDING 31,695,828   31,774,140   28,752,626 
            

HBT Financial, Inc.
Unaudited Consolidated Financial Summary

(dollars in thousands)December 31, 2023 September 30, 2023 December 31, 2022
      
LOANS     
Commercial and industrial$427,800 $386,933 $266,757
Commercial real estate - owner occupied 295,842  297,242  218,503
Commercial real estate - non-owner occupied 880,681  901,929  713,202
Construction and land development 363,983  371,158  360,824
Multi-family 417,923  388,742  287,865
One-to-four family residential 491,508  488,655  338,253
Agricultural and farmland 287,294  275,239  237,746
Municipal, consumer, and other 239,386  232,888  197,103
Total loans$3,404,417 $3,342,786 $2,620,253


(dollars in thousands)December 31, 2023 September 30, 2023 December 31, 2022
      
DEPOSITS     
Noninterest-bearing deposits$1,072,407 $1,086,877 $994,954
Interest-bearing deposits:     
Interest-bearing demand 1,145,092  1,134,721  1,139,150
Money market 803,381  673,780  555,425
Savings 608,424  623,083  634,527
Time 627,253  564,634  262,968
Brokered 144,880  114,973  
Total interest-bearing deposits 3,329,030  3,111,191  2,592,070
Total deposits$4,401,437 $4,198,068 $3,587,024
         

HBT Financial, Inc.
Unaudited Consolidated Financial Summary

 Three Months Ended
 December 31, 2023 September 30, 2023 December 31, 2022
(dollars in thousands)Average Balance Interest Yield/Cost * Average Balance Interest Yield/Cost * Average Balance Interest Yield/Cost *
                  
ASSETS                 
Loans$3,374,451  $53,185 6.25% $3,296,703  $50,712 6.10% $2,600,746  $36,791 5.61%
Securities 1,282,773   7,265 2.25   1,324,686   7,429 2.22   1,396,401   7,605 2.16 
Deposits with banks 84,021   786 3.71   77,595   714 3.65   76,507   504 2.61 
Other 7,505   175 9.23   9,347   186 7.90   5,607   48 3.37 
Total interest-earning assets 4,748,750  $61,411 5.13%  4,708,331  $59,041 4.97%  4,079,261  $44,948 4.37%
Allowance for credit losses (38,844)      (38,317)      (25,404)    
Noninterest-earning assets 292,543       294,818       188,942     
Total assets$5,002,449      $4,964,832      $4,242,799     
                  
LIABILITIES AND STOCKHOLDERS' EQUITY                 
Liabilities                 
Interest-bearing deposits:                 
Interest-bearing demand$1,140,438  $1,228 0.43% $1,160,654  $761 0.26% $1,125,877  $177 0.06%
Money market 684,197   2,885 1.67   682,772   2,026 1.18   572,718   379 0.26 
Savings 610,767   417 0.27   639,384   249 0.15   640,668   53 0.03 
Time 599,293   4,773 3.16   519,683   3,275 2.50   266,117   240 0.36 
Brokered 140,963   1,924 5.42   66,776   900 5.34        
Total interest-bearing deposits 3,175,658   11,227 1.40   3,069,269   7,211 0.93   2,605,380   849 0.13 
Securities sold under agreements to repurchase 34,282   148 1.71   33,807   35 0.41   51,703   10 0.08 
Borrowings 114,220   1,534 5.33   157,908   2,108 5.30   92,120   880 3.79 
Subordinated notes 39,464   470 4.72   39,444   470 4.72   39,384   470 4.73 
Junior subordinated debentures issued to capital trusts 52,782   948 7.13   52,767   938 7.05   37,770   556 5.84 
Total interest-bearing liabilities 3,416,406  $14,327 1.66%  3,353,195  $10,762 1.27%  2,826,357  $2,765 0.39%
Noninterest-bearing deposits 1,081,795       1,105,472       1,023,355     
Noninterest-bearing liabilities 37,440       46,564       25,220     
Total liabilities 4,535,641       4,505,231       3,874,932     
Stockholders' Equity 466,808       459,601       367,867     
Total liabilities and stockholders’ equity$5,002,449      $4,964,832      $4,242,799     
                  
Net interest income/Net interest margin(1)  $47,084 3.93%   $48,279 4.07%   $42,183 4.10%
Tax-equivalent adjustment(2)   666 0.06     675 0.06     698 0.07 
Net interest income (tax-equivalent basis)/
Net interest margin (tax-equivalent basis)(2) (3)
  $47,750 3.99%   $48,954 4.13%   $42,881 4.17%
Net interest rate spread(4)    3.47%     3.70%     3.98%
Net interest-earning assets(5)$1,332,344      $1,355,136      $1,252,904     
Ratio of interest-earning assets to interest-bearing liabilities 1.39       1.40       1.44     
Cost of total deposits    1.05%     0.69%     0.09%
Cost of funds    1.26      0.96      0.28 

____________________________________

* 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

 Year Ended
 December 31, 2023 December 31, 2022
(dollars in thousands)Average Balance Interest Yield/Cost Average Balance Interest Yield/Cost
            
ASSETS           
Loans$3,231,736  $195,197 6.04% $2,514,549  $123,478 4.91%
Securities 1,350,528   30,187 2.24   1,403,016   27,937 1.99 
Deposits with banks 84,544   3,020 3.57   197,030   1,541 0.78 
Other 8,217   595 7.24   3,529   98 2.77 
Total interest-earning assets 4,675,025  $228,999 4.90%  4,118,124  $153,054 3.72%
Allowance for credit losses (37,504)      (24,703)    
Noninterest-earning assets 290,383       176,452     
Total assets$4,927,904      $4,269,873     
            
LIABILITIES AND STOCKHOLDERS' EQUITY           
Liabilities           
Interest-bearing deposits:           
Interest-bearing demand$1,188,680  $3,130 0.26% $1,141,402  $607 0.05%
Money market 669,118   7,352 1.10   582,514   813 0.14 
Savings 661,424   1,033 0.16   650,385   208 0.03 
Time 481,466   10,784 2.24   283,232   883 0.31 
Brokered 52,724   2,836 5.38        
Total interest-bearing deposits 3,053,412   25,135 0.82   2,657,533   2,511 0.09 
Securities sold under agreements to repurchase 35,450   255 0.72   51,554   36 0.07 
Borrowings 139,817   7,128 5.10   26,468   967 3.65 
Subordinated notes 39,434   1,879 4.76   39,355   1,879 4.77 
Junior subordinated debentures issued to capital trusts 51,489   3,530 6.86   37,746   1,787 4.73 
Total interest-bearing liabilities 3,319,602  $37,927 1.14%  2,812,656  $7,180 0.26%
Noninterest-bearing deposits 1,113,300       1,051,187     
Noninterest-bearing liabilities 44,074       22,724     
Total liabilities 4,476,976       3,886,567     
Stockholders' Equity 450,928       383,306     
Total liabilities and stockholders’ equity$4,927,904       4,269,873     
            
Net interest income/Net interest margin(1)  $191,072 4.09%   $145,874 3.54%
Tax-equivalent adjustment(2)   2,758 0.06     2,499 0.06 
Net interest income (tax-equivalent basis)/
Net interest margin (tax-equivalent basis)(2) (3)
  $193,830 4.15%   $148,373 3.60%
Net interest rate spread(4)    3.76%     3.46%
Net interest-earning assets(5)$1,355,423      $1,305,468     
Ratio of interest-earning assets to interest-bearing liabilities 1.41       1.46     
Cost of total deposits    0.60%     0.07%
Cost of funds    0.86      0.19 

____________________________________
(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

(dollars in thousands)December 31, 2023 September 30, 2023 December 31, 2022
      
NONPERFORMING ASSETS     
Nonaccrual$7,820  $6,678  $2,155 
Past due 90 days or more, still accruing(1) 37      1 
Total nonperforming loans 7,857   6,678   2,156 
Foreclosed assets 852   1,519   3,030 
Total nonperforming assets$8,709  $8,197  $5,186 
      
Nonperforming loans that are wholly or partially guaranteed by the U.S. Government$2,641  $1,968  $133 
      
Allowance for credit losses$40,048  $38,863  $25,333 
Loans, before allowance for credit losses 3,404,417   3,342,786   2,620,253 
      
CREDIT QUALITY RATIOS     
Allowance for credit losses to loans, before allowance for credit losses 1.18%  1.16%  0.97%
Allowance for credit losses to nonaccrual loans 512.12   581.96   1,175.55 
Allowance for credit losses to nonperforming loans 509.71   581.96   1,175.00 
Nonaccrual loans to loans, before allowance for credit losses 0.23   0.20   0.08 
Nonperforming loans to loans, before allowance for credit losses 0.23   0.20   0.08 
Nonperforming assets to total assets 0.17   0.16   0.12 
Nonperforming assets to loans, before allowance for credit losses, and foreclosed assets 0.26   0.25   0.20 

____________________________________
(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.


HBT Financial, Inc.
Unaudited Consolidated Financial Summary

 Three Months Ended Year Ended December 31,
(dollars in thousands)December 31,
2023
 September 30,
2023
 December 31,
2022
  2023   2022 
          
ALLOWANCE FOR CREDIT LOSSES         
Beginning balance$38,863  $37,814  $25,060  $25,333  $23,936 
Adoption of ASC 326          6,983    
PCD allowance established in acquisition          1,247    
Provision for credit losses 1,661   983   (653)  6,665   (706)
Charge-offs (626)  (412)  (169)  (1,359)  (684)
Recoveries 150   478   1,095   1,179   2,787 
Ending balance$40,048  $38,863  $25,333  $40,048  $25,333 
          
Net charge-offs (recoveries)$476  $(66) $(926) $180  $(2,103)
Average loans 3,374,451   3,296,703   2,600,746   3,231,736   2,514,549 
          
Net charge-offs (recoveries) to average loans * 0.06% (0.01)% (0.14)%  0.01% (0.08)%

____________________________________

* Annualized measure.

 Three Months Ended Year Ended December 31,
(dollars in thousands)December 31,
2023
 September 30,
2023
 December 31,
2022
  2023  2022 
          
PROVISION FOR CREDIT LOSSES         
Loans (1)$1,661  $983  $(653) $6,665 $(706)
Unfunded lending-related commitments (1) (548)  297      908   
Debt securities    (800)        
Total provision for credit losses$1,113  $480  $(653) $7,573 $(706)

____________________________________
(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 during the first quarter of 2023.
   

Reconciliation of Non-GAAP Financial Measures –
Adjusted Net Income and Adjusted Return on Average Assets

  Three Months Ended Year Ended December 31,
(dollars in thousands) December 31,
2023
 September 30,
2023
 December 31,
2022
  2023   2022 
           
Net income $18,446  $19,715  $13,140  $65,842  $56,456 
Adjustments:          
Acquisition expenses (1)        (630)  (13,691)  (1,092)
Gains (losses) on sales of closed branch premises           75   141 
Realized gains (losses) on sales of securities     (813)     (1,820)   
Mortgage servicing rights fair value adjustment  (1,155)  23   (293)  (1,615)  2,153 
Total adjustments  (1,155)  (790)  (923)  (17,051)  1,202 
Tax effect of adjustments  329   226   177   4,711   (551)
Total adjustments after tax effect  (826)  (564)  (746)  (12,340)  651 
Adjusted net income $19,272  $20,279  $13,886  $78,182  $55,805 
           
Average assets $5,002,449  $4,964,832  $4,242,799  $4,927,904  $4,269,873 
           
Return on average assets *  1.46%  1.58%  1.23%  1.34%  1.32%
Adjusted return on average assets *  1.53   1.62   1.30   1.59   1.31 

____________________________________

* 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 during the first quarter of 2023.

Reconciliation of Non-GAAP Financial Measures –
Adjusted Earnings Per Share

  Three Months Ended Year Ended December 31,
(dollars in thousands, except per share amounts) December 31,
2023
 September 30,
2023
 December 31,
2022
  2023   2022 
           
Numerator:          
Net income $18,446  $19,715  $13,140  $65,842  $56,456 
Earnings allocated to participating securities (1)  (10)  (10)  (15)  (36)  (66)
Numerator for earnings per share - basic and diluted $18,436  $19,705  $13,125  $65,806  $56,390 
           
Adjusted net income $19,272  $20,279  $13,886  $78,182  $55,805 
Earnings allocated to participating securities (1)  (9)  (10)  (16)  (42)  (65)
Numerator for adjusted earnings per share - basic and diluted $19,263  $20,269  $13,870  $78,140  $55,740 
           
Denominator:          
Weighted average common shares outstanding  31,708,381   31,829,250   28,752,626   31,626,308   28,853,697 
Dilutive effect of outstanding restricted stock units  139,332   137,187   91,905   111,839   65,619 
Weighted average common shares outstanding, including all dilutive potential shares  31,847,713   31,966,437   28,844,531   31,738,147   28,919,316 
           
Earnings per share - Basic $0.58  $0.62  $0.46  $2.08  $1.95 
Earnings per share - Diluted $0.58  $0.62  $0.46  $2.07  $1.95 
           
Adjusted earnings per share - Basic $0.61  $0.64  $0.48  $2.47  $1.93 
Adjusted earnings per share - Diluted $0.60  $0.63  $0.48  $2.46  $1.93 

____________________________________
(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 Year Ended December 31,
(dollars in thousands) December 31,
2023
 September 30,
2023
 December 31,
2022
  2023   2022 
           
Net interest income (tax-equivalent basis)          
Net interest income $47,084  $48,279  $42,183  $191,072  $145,874 
Tax-equivalent adjustment (1)  666   675   698   2,758   2,499 
Net interest income (tax-equivalent basis) (1) $47,750  $48,954  $42,881  $193,830  $148,373 
           
Net interest margin (tax-equivalent basis)          
Net interest margin *  3.93%  4.07%  4.10%  4.09%  3.54%
Tax-equivalent adjustment * (1)  0.06   0.06   0.07   0.06   0.06 
Net interest margin (tax-equivalent basis) * (1)  3.99%  4.13%  4.17%  4.15%  3.60%
           
Average interest-earning assets $4,748,750  $4,708,331  $4,079,261  $4,675,025  $4,118,124 

____________________________________

* 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 Year Ended December 31,
(dollars in thousands) December 31,
2023
 September 30,
2023
 December 31,
2022
  2023   2022 
           
Efficiency ratio (tax-equivalent basis)          
Total noninterest expense $30,387  $30,671  $33,110  $130,964  $105,107 
Less: amortization of intangible assets  720   720   140   2,670   873 
Noninterest expense excluding amortization of intangible assets $29,667  $29,951  $32,970  $128,294  $104,234 
           
Net interest income $47,084  $48,279  $42,183  $191,072  $145,874 
Total noninterest income  9,205   9,490   7,889   36,046   34,717 
Operating revenue  56,289   57,769   50,072   227,118   180,591 
Tax-equivalent adjustment (1)  666   675   698   2,758   2,499 
Operating revenue (tax-equivalent basis) (1) $56,955  $58,444  $50,770  $229,876  $183,090 
           
Efficiency ratio  52.70%  51.85%  65.85%  56.49%  57.72%
Efficiency ratio (tax-equivalent basis) (1)  52.09   51.25   64.94   55.81   56.93 

____________________________________
(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

(dollars in thousands, except per share data) December 31, 2023 September 30, 2023 December 31, 2022
       
Tangible Common Equity      
Total stockholders' equity $489,496  $456,251  $373,632 
Less: Goodwill  59,820   59,820   29,322 
Less: Intangible assets, net  20,682   21,402   1,070 
Tangible common equity $408,994  $375,029  $343,240 
       
Tangible Assets      
Total assets $5,073,170  $4,991,768  $4,286,734 
Less: Goodwill  59,820   59,820   29,322 
Less: Intangible assets, net  20,682   21,402   1,070 
Tangible assets $4,992,668  $4,910,546  $4,256,342 
       
Total stockholders' equity to total assets  9.65%  9.14%  8.72%
Tangible common equity to tangible assets  8.19   7.64   8.06 
       
Shares of common stock outstanding  31,695,828   31,774,140   28,752,626 
       
Book value per share $15.44  $14.36  $12.99 
Tangible book value per share  12.90   11.80   11.94 
             

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 Year Ended December 31,
(dollars in thousands) December 31,
2023
 September 30,
2023
 December 31,
2022
  2023   2022 
           
Average Tangible Common Equity          
Total stockholders' equity $466,808  $459,601  $367,867  $450,928  $383,306 
Less: Goodwill  59,820   59,875   29,322   57,266   29,322 
Less: Intangible assets, net  21,060   21,793   1,134   20,272   1,480 
Average tangible common equity $385,928  $377,933  $337,411  $373,390  $352,504 
           
Net income $18,446  $19,715  $13,140  $65,842  $56,456 
Adjusted net income  19,272   20,279   13,886   78,182   55,805 
           
Return on average stockholders' equity *  15.68%  17.02%  14.17%  14.60%  14.73%
Return on average tangible common equity *  18.96   20.70   15.45   17.63   16.02 
           
Adjusted return on average stockholders' equity *  16.38%  17.51%  14.98%  17.34%  14.56%
Adjusted return on average tangible common equity *  19.81   21.29   16.33   20.94   15.83 

____________________________________

* Annualized measure.


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