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HBT Financial, Inc. Announces Second Quarter 2023 Financial Results

Second Quarter Highlights

  • Net income of $18.5 million, or $0.58 per diluted share; return on average assets (ROAA) of 1.49%; return on average stockholders' equity (ROAE) of 16.30%; and return on average tangible common equity (ROATCE)(1) of 19.91%
  • Adjusted net income(1) of $18.8 million; or $0.58 per diluted share; adjusted ROAA(1) of 1.51%; adjusted ROAE(1) of 16.57%; and adjusted ROATCE(1) of 20.23%
  • Asset quality remained strong with nonperforming assets to total assets of 0.21%
  • Net interest margin of 4.16% and net interest margin (tax equivalent basis)(1) of 4.22%

________________________
(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., July 24, 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 $18.5 million, or $0.58 diluted earnings per share, for the second quarter of 2023. This compares to net income of $9.2 million, or $0.30 diluted earnings per share, for the first quarter of 2023, and net income of $14.1 million, or $0.49 diluted earnings per share, for the second quarter of 2022.

J. Lance Carter, President and Chief Executive Officer of HBT Financial, said, “I had the honor of being named CEO of HBT Financial and Heartland Bank and Trust Company during the second quarter. I look forward to continuing to work closely with Fred Drake, Executive Chairman; the rest of Board of Directors; and our executive team to deliver the consistently solid financial performance to which we are accustomed. I am very pleased with our financial performance for the second quarter of 2023. With a ROAA of 1.49% and a ROATCE of 19.91%, we continue to produce strong returns. Our granular deposit base and excellent credit quality continue to support our strong results. Although we continue to see pressure on deposit pricing, we were able to maintain a solid net interest margin of 4.16%, down only 4 basis points from last quarter. We completed our system conversion for our Town and Country Financial Corporation (“Town and Country”) acquisition and have fully integrated the Town and Country team. We look forward to recognizing the enhanced long-term value provided by the increased scale and new markets that this acquisition has provided.”

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 $18.8 million, or $0.58 adjusted diluted earnings per share, for the second quarter of 2023. This compares to adjusted net income of $19.9 million, or $0.64 adjusted diluted earnings per share, for the first quarter of 2023, and adjusted net income of $13.8 million, or $0.48 adjusted diluted earnings per share, for the second quarter of 2022 (see "Reconciliation of Non-GAAP Financial Measures" tables).

Net Interest Income and Net Interest Margin

Net interest income for the second quarter of 2023 was $48.9 million, an increase of 4.3% from $46.8 million for the first quarter of 2023. The increase was primarily attributable to the increase in earning assets following the Town and Country merger completed on February 1, 2023 and higher yields on interest-earning assets. Partially offsetting this improvement was an increase in funding costs.

Relative to the second quarter of 2022, net interest income increased 42.2% from $34.4 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 second quarter of 2023 was 4.16%, compared to 4.20% for the first quarter of 2023, and net interest margin (tax equivalent basis) for the second quarter of 2023 was 4.22% compared to 4.26% for the first quarter of 2023. The decrease was primarily attributable to higher funding costs with the cost of funds increasing to 0.71% for the second quarter of 2023, compared to 0.47% for the first quarter of 2023, which outpaced the increased asset yields which rose by 19 basis points to 4.83%. Acquired loan discount accretion contributed 9 basis points to net interest margin during the second quarter of 2023 and 7 basis points during the first quarter of 2023.

Relative to the second quarter of 2022, net interest margin increased from 3.34%. This increase was primarily attributable to higher yields on interest-earning assets. Acquired loan discount accretion contributed 3 basis points to net interest margin, during the second quarter of 2022.

Noninterest Income

Noninterest income for the second quarter of 2023 was $9.9 million, an increase of 33.3% from $7.4 million for the first quarter of 2023. The increase was primarily attributable to the absence of realized losses on sales of securities of $1.0 million included in the first quarter of 2023 results as well as a $0.8 million change in the mortgage servicing rights fair value adjustment. Additionally, increases in card income of $0.2 million and mortgage servicing income of $0.2 million primarily reflect the addition of Town and Country’s operations for the first full quarter.

Relative to the second quarter of 2022, noninterest income increased 15.9% from $8.6 million. The increase was primarily attributable to the Town and Country merger with a $0.6 million increase in mortgage servicing income, a $0.2 million increase in card income, and a $0.1 million increase in service charges on deposit accounts.

Noninterest Expense

Noninterest expense for the second quarter of 2023 was $34.0 million, a 5.5% decrease from $35.9 million for the first quarter of 2023. Acquisition-related noninterest expenses totaled $0.6 million during the second quarter of 2023, compared to $7.1 million during the first quarter of 2023. Excluding acquisition-related noninterest expenses, the $4.6 million increase in noninterest expense was primarily attributable to $0.8 million of legal fees and $0.8 million of accruals related to pending legal matters previously disclosed and incurred during the second quarter of 2023 that were not present in the first quarter of 2023 results. Settlements have been reached with plaintiffs in these matters which are now pending final court approval. Additionally, the second quarter of 2023 results included a full quarter’s impact of Town and Country’s operations.

Relative to the second quarter of 2022, noninterest expense increased 42.5% from $23.8 million, primarily attributable to the addition of Town and Country’s operations, additional legal costs and settlement accrual.

Acquisition-related expenses during the first and second quarter of 2023 are summarized below. There were no acquisition-related expenses during the second quarter of 2022. We do not expect material acquisition-related expenses related to Town and Country in subsequent quarters.

  Three Months Ended
  June 30, 2023 March 31, 2023
  (dollars in thousands)
PROVISION FOR CREDIT LOSSES $  $5,924 
NONINTEREST EXPENSE        
Salaries  66   3,518 
Furniture and equipment  39    
Data processing  176   1,855 
Marketing and customer relations  10   14 
Loan collection and servicing  125    
Legal fees and other noninterest expense  211   1,753 
Total noninterest expense  627   7,140 
Total acquisition-related expenses $627  $13,064 
         

Loan Portfolio

Total loans outstanding, before allowance for credit losses, were $3.24 billion at June 30, 2023, compared with $3.20 billion at March 31, 2023 and $2.45 billion at June 30, 2022. The $49.1 million increase from March 31, 2023 was primarily attributable to a $52.8 million increase in commercial and industrial loans driven by new loan fundings and the purchase of $37.0 million of loans from two new strategic partners. The $53.9 million decrease in the construction and development loans was generally driven by the completion of a number of sizeable projects that are now amortizing and have been moved into other real estate loan categories, with the largest being a $29.5 million project that moved to the commercial real estate - non-owner occupied category. Additionally, we received a payoff on a $12.4 million substandard relationship in the commercial real estate - non-owner occupied category.

Deposits

Total deposits were $4.16 billion at June 30, 2023, compared with $4.31 billion at March 31, 2023 and $3.70 billion at June 30, 2022. The $146.0 million decrease from March 31, 2023 was primarily attributable to decreases in balances held in existing retail and business accounts partially offset by a seasonal increase in public fund account balances and the addition of $51.0 million of brokered deposits. Additionally, a higher than historical average net deposit inflow on March 31, 2023, as referenced in our first quarter of 2023 investor presentation, included $36 million related to one account which was withdrawn at the beginning of the second quarter of 2023.

Asset Quality

Nonperforming loans totaled $7.5 million, or 0.23% of total loans, at June 30, 2023, compared with $6.5 million, or 0.20% of total loans, at March 31, 2023, and $3.4 million, or 0.14% of total loans, at June 30, 2022. The $1.0 million increase in nonperforming loans from March 31, 2023 was primarily attributable to a $1.3 million increase in nonaccrual one-to-four family residential real estate loans.

The Company recorded a negative provision for credit losses of $0.2 million for the second quarter of 2023. The negative provision for credit losses primarily reflects a $1.1 million decrease in specific reserves, a $1.1 million increase in required reserves driven by growth of the loan portfolio and unfunded commitments, a $0.4 million decrease in required reserves resulting from changes in economic and qualitative factors, a $0.2 million increase in reserves on debt securities available-for-sale, related to one bank subordinated debt security, and net recoveries of $0.1 million.

The Company had net recoveries of $0.1 million, or (0.01)% of average loans on an annualized basis, for the second quarter of 2023, compared to net recoveries of $0.1 million, or (0.02)% of average loans on an annualized basis, for the first quarter of 2023, and net recoveries of $0.1 million, or (0.01)% of average loans on an annualized basis, for the second quarter of 2022.

The Company’s allowance for credit losses was 1.17% of total loans and 502% of nonperforming loans at June 30, 2023, compared with 1.21% of total loans and 595% of nonperforming loans at March 31, 2023.

Stock Repurchase Program

During the second quarter of 2023, the Company repurchased 229,502 shares of its common stock at a weighted average price of $18.07 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 June 30, 2023, the Company had $9.3 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 67 full-service branches. As of June 30, 2023, HBT had total assets of $5.0 billion, total loans of $3.2 billion, and total deposits of $4.2 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  Six Months Ended
  June 30,  March 31,  June 30,  June 30, 
     2023    2023    2022    2023    2022
  (dollars in thousands, except per share data)
Interest and dividend income $56,768  $51,779  $35,757  $108,547  $69,092 
Interest expense  7,896   4,942   1,384   12,838   2,791 
Net interest income  48,872   46,837   34,373   95,709   66,301 
Provision for credit losses  (230)  6,210   145   5,980   (439)
Net interest income after provision for credit losses  49,102   40,627   34,228   89,729   66,740 
Noninterest income  9,914   7,437   8,551   17,351   18,594 
Noninterest expense  33,973   35,933   23,842   69,906   47,999 
Income before income tax expense  25,043   12,131   18,937   37,174   37,335 
Income tax expense  6,570   2,923   4,852   9,493   9,646 
Net income $18,473  $9,208  $14,085  $27,681  $27,689 
                
Earnings per share - Basic $0.58  $0.30  $0.49  $0.88  $0.96 
Earnings per share - Diluted  0.58   0.30   0.49   0.88   0.95 
                
Adjusted net income (1) $18,772  $19,859  $13,836  $38,631  $26,063 
Adjusted earnings per share - Basic (1)  0.59   0.64   0.48   1.23   0.90 
Adjusted earnings per share - Diluted (1)  0.58   0.64   0.48   1.22   0.90 
                
Book value per share $14.15  $14.02  $12.97       
Tangible book value per share (1)  11.58   11.45   11.90       
                
Shares of common stock outstanding  31,865,868   32,095,370   28,831,197       
Weighted average shares of common stock outstanding  31,980,133   30,977,204   28,891,202   31,481,439   28,938,634 
                
SUMMARY RATIOS               
Net interest margin *  4.16 % 4.20 % 3.34 % 4.18 % 3.21 
Net interest margin (tax equivalent basis) * (1)(2)  4.22   4.26   3.39   4.24   3.26 
                
Efficiency ratio  56.57 % 65.27 % 54.97 % 60.74 % 55.96 
Efficiency ratio (tax equivalent basis) (1)(2)  55.89   64.43   54.22   59.99   55.23 
                
Loan to deposit ratio  77.91 % 74.13 % 66.23 %     
                
Return on average assets *  1.49 % 0.78 % 1.32 % 1.15 % 1.29 
Return on average stockholders' equity *  16.30   8.84   14.92   12.73   14.23 
Return on average tangible common equity * (1)  19.91   10.45   16.25   15.31   15.45 
                
Adjusted return on average assets * (1)  1.51 % 1.69 % 1.29 % 1.60 % 1.22 
Adjusted return on average stockholders' equity * (1)  16.57   19.08   14.66   17.77   13.40 
Adjusted return on average tangible common equity * (1)  20.23   22.55   15.96   21.36   14.55 
                
CAPITAL               
Total capital to risk-weighted assets  15.03 % 15.11 % 16.76 %     
Tier 1 capital to risk-weighted assets  13.12   13.16   14.59       
Common equity tier 1 capital ratio  11.78   11.79   13.36       
Tier 1 leverage ratio  10.07   10.29   10.05       
Total stockholders' equity to total assets  9.06   8.98   8.85       
Tangible common equity to tangible assets (1)  7.54   7.45   8.18       
                
ASSET QUALITY               
Net charge-offs (recoveries) to average loans, before allowance for credit losses  (0.01)% (0.02)% (0.01)% (0.01)% (0.10)
Allowance for credit losses to loans, before allowance for credit losses  1.17   1.21   1.01       
Nonperforming loans to loans, before allowance for credit losses  0.23   0.20   0.14       
Nonperforming assets to total assets  0.21   0.20   0.15       

________________________
*   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  Six Months Ended
  June 30,  March 31,  June 30,  June 30, 
     2023    2023    2022    2023    2022
INTEREST AND DIVIDEND INCOME (dollars in thousands, except per share data)
Loans, including fees:               
Taxable $47,149  $42,159  $27,843  $89,308  $54,649 
Federally tax exempt  1,040   952   679   1,992   1,341 
Securities:               
Taxable  6,518   6,616   5,663   13,134   10,312 
Federally tax exempt  1,162   1,197   1,138   2,359   2,178 
Interest-bearing deposits in bank  781   739   420   1,520   579 
Other interest and dividend income  118   116   14   234   33 
Total interest and dividend income  56,768   51,779   35,757   108,547   69,092 
                
INTEREST EXPENSE               
Deposits  4,323   2,374   506   6,697   1,075 
Securities sold under agreements to repurchase  34   38   8   72   17 
Borrowings  2,189   1,297   1   3,486   2 
Subordinated notes  469   470   469   939   939 
Junior subordinated debentures issued to capital trusts  881   763   400   1,644   758 
Total interest expense  7,896   4,942   1,384   12,838   2,791 
Net interest income  48,872   46,837   34,373   95,709   66,301 
PROVISION FOR CREDIT LOSSES  (230)  6,210   145   5,980   (439)
Net interest income after provision for credit losses  49,102   40,627   34,228   89,729   66,740 
                
NONINTEREST INCOME               
Card income  2,905   2,658   2,714   5,563   5,118 
Wealth management fees  2,279   2,338   2,322   4,617   4,611 
Service charges on deposit accounts  1,919   1,871   1,792   3,790   3,444 
Mortgage servicing  1,254   1,099   661   2,353   1,319 
Mortgage servicing rights fair value adjustment  141   (624)  366   (483)  2,095 
Gains on sale of mortgage loans  373   276   326   649   913 
Realized gains (losses) on sales of securities     (1,007)     (1,007)   
Unrealized gains (losses) on equity securities  7   (22)  (153)  (15)  (340)
Gains (losses) on foreclosed assets  (97)  (10)  (7)  (107)  33 
Gains (losses) on other assets  109      (43)  109   150 
Income on bank owned life insurance  147   115   41   262   81 
Other noninterest income  877   743   532   1,620   1,170 
Total noninterest income  9,914   7,437   8,551   17,351   18,594 
                
NONINTEREST EXPENSE               
Salaries  16,660   19,411   12,936   36,071   25,737 
Employee benefits  2,707   2,335   1,984   5,042   4,428 
Occupancy of bank premises  2,785   2,102   1,741   4,887   3,801 
Furniture and equipment  809   659   623   1,468   1,175 
Data processing  2,883   4,323   1,990   7,206   3,643 
Marketing and customer relations  1,359   836   1,205   2,195   2,056 
Amortization of intangible assets  720   510   245   1,230   490 
FDIC insurance  630   563   298   1,193   586 
Loan collection and servicing  348   278   278   626   435 
Foreclosed assets  97   61   31   158   163 
Other noninterest expense  4,975   4,855   2,511   9,830   5,485 
Total noninterest expense  33,973   35,933   23,842   69,906   47,999 
INCOME BEFORE INCOME TAX EXPENSE  25,043   12,131   18,937   37,174   37,335 
INCOME TAX EXPENSE  6,570   2,923   4,852   9,493   9,646 
NET INCOME $18,473  $9,208  $14,085  $27,681  $27,689 
                
EARNINGS PER SHARE - BASIC $0.58  $0.30  $0.49  $0.88  $0.96 
EARNINGS PER SHARE - DILUTED $0.58  $0.30  $0.49  $0.88  $0.95 
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING  31,980,133   30,977,204   28,891,202   31,481,439   28,938,634 
                     


HBT Financial, Inc.
Unaudited Consolidated Financial Summary
Consolidated Balance Sheets
          
  June 30,  March 31,    June 30, 
  2023    2023    2022
  (dollars in thousands)
ASSETS         
Cash and due from banks $28,044  $35,244  $25,478 
Interest-bearing deposits with banks  81,764   141,868   134,553 
Cash and cash equivalents  109,808   177,112   160,031 
          
Interest-bearing time deposits with banks     249    
Debt securities available-for-sale, at fair value  822,788   854,622   924,706 
Debt securities held-to-maturity  533,231   536,429   548,236 
Equity securities with readily determinable fair value  3,152   3,145   3,103 
Equity securities with no readily determinable fair value  2,275   1,980   1,952 
Restricted stock, at cost  11,345   4,991   2,813 
Loans held for sale  8,829   5,130   5,312 
          
Loans, before allowance for credit losses  3,244,655   3,195,540   2,451,826 
Allowance for credit losses  (37,814)  (38,776)  (24,734)
Loans, net of allowance for credit losses  3,206,841   3,156,764   2,427,092 
          
Bank owned life insurance  23,594   23,447   7,474 
Bank premises and equipment, net  65,029   65,119   51,433 
Bank premises held for sale  35   235   319 
Foreclosed assets  3,080   3,356   2,891 
Goodwill  59,876   59,876   29,322 
Intangible assets, net  22,122   22,842   1,453 
Mortgage servicing rights, at fair value  20,133   19,992   10,089 
Investments in unconsolidated subsidiaries  1,614   1,614   1,165 
Accrued interest receivable  19,900   20,301   14,263 
Other assets  62,158   56,617   32,324 
Total assets $4,975,810  $5,013,821  $4,223,978 
          
LIABILITIES AND STOCKHOLDERS' EQUITY         
Liabilities         
Deposits:         
Noninterest-bearing $1,125,823  $1,218,888  $1,028,790 
Interest-bearing  3,038,700   3,091,633   2,673,196 
Total deposits  4,164,523   4,310,521   3,701,986 
          
Securities sold under agreements to repurchase  38,729   34,919   51,091 
Federal Home Loan Bank advances  177,572   75,183    
Subordinated notes  39,435   39,415   39,356 
Junior subordinated debentures issued to capital trusts  52,760   52,746   37,747 
Other liabilities  51,939   50,939   19,989 
Total liabilities  4,524,958   4,563,723   3,850,169 
          
Stockholders' Equity         
Common stock  327   327   293 
Surplus  294,875   294,441   222,087 
Retained earnings  241,777   228,782   212,506 
Accumulated other comprehensive income (loss)  (70,662)  (62,175)  (52,820)
Treasury stock at cost  (15,465)  (11,277)  (8,257)
Total stockholders’ equity  450,852   450,098   373,809 
Total liabilities and stockholders’ equity $4,975,810  $5,013,821  $4,223,978 
          
SHARE INFORMATION         
Shares of common stock outstanding  31,865,868   32,095,370   28,831,197 
             


HBT Financial, Inc.
Unaudited Consolidated Financial Summary
             
  June 30,  March 31,    June 30, 
  2023    2023    2022
  (dollars in thousands)
LOANS            
Commercial and industrial $385,768  $333,013  $249,839 
Commercial real estate - owner occupied  303,522   317,103   228,997 
Commercial real estate - non-owner occupied  882,598   854,024   656,093 
Construction and land development  335,262   389,142   332,041 
Multi-family  375,536   362,672   269,452 
One-to-four family residential  482,442   482,732   325,047 
Agricultural and farmland  259,858   243,357   230,370 
Municipal, consumer, and other  219,669   213,497   159,987 
Loans, before allowance for credit losses $3,244,655  $3,195,540  $2,451,826 
             
PPP LOANS (included above)            
Commercial and industrial $22  $25  $2,823 
Agricultural and farmland        9 
Total PPP Loans $22  $25  $2,832 


  June 30,  March 31,    June 30, 
  2023    2023    2022
  (dollars in thousands)
DEPOSITS            
Noninterest-bearing $1,125,823  $1,218,888  $1,028,790 
Interest-bearing demand  1,181,187   1,270,454   1,162,292 
Money market  730,652   662,088   581,058 
Savings  657,506   738,719   654,953 
Time  469,355   420,372   274,893 
Total deposits $4,164,523  $4,310,521  $3,701,986 


HBT Financial, Inc.
Unaudited Consolidated Financial Summary
                          
  Three Months Ended  
  June 30, 2023 March 31, 2023 June 30, 2022 
  Average
Balance
 Interest Yield/
Cost*
 Average
Balance
 Interest Yield/
Cost*
 Average
Balance
 Interest Yield/
Cost*
 
  (dollars in thousands) 
ASSETS                         
Loans $3,238,774  $48,189 5.97%$3,012,320  $43,111 5.80%$2,467,851  $28,522 4.64%
Securities  1,384,180   7,680 2.23  1,411,613   7,813 2.24  1,422,096   6,801 1.92 
Deposits with banks  84,366   781 3.71  92,363   739 3.24  240,692   420 0.70 
Other  8,577   118 5.52  7,425   116 6.33  2,809   14 2.07 
Total interest-earning assets  4,715,897  $56,768 4.83% 4,523,721  $51,779 4.64% 4,133,448  $35,757 3.47%
Allowance for credit losses  (39,484)       (33,301)       (24,579)      
Noninterest-earning assets  299,622        274,870        177,433       
Total assets $4,976,035       $4,765,290       $4,286,302       
                          
LIABILITIES AND STOCKHOLDERS' EQUITY                         
Liabilities                         
Interest-bearing deposits:                         
Interest-bearing demand $1,224,285  $683 0.22%$1,230,644  $458 0.15%$1,159,077  $144 0.05%
Money market  675,530   1,516 0.90  634,608   935 0.60  582,016   110 0.08 
Savings  687,014   189 0.11  709,862   178 0.10  661,661   52 0.03 
Time  447,146   1,935 1.74  356,779   803 0.91  284,880   200 0.28 
Total interest-bearing deposits  3,033,975   4,323 0.57  2,931,893   2,374 0.33  2,687,634   506 0.08 
Securities sold under agreements to repurchase  34,170   34 0.40  39,619   38 0.38  51,057   8 0.07 
Borrowings  173,040   2,189 5.07  113,896   1,297 4.62  440   1 1.34 
Subordinated notes  39,424   469 4.78  39,403   470 4.83  39,346   469 4.79 
Junior subordinated debentures issued to capital trusts  52,752   881 6.70  47,586   763 6.50  37,738   400 4.26 
Total interest-bearing liabilities  3,333,361  $7,896 0.95% 3,172,397  $4,942 0.63% 2,816,215  $1,384 0.20%
Noninterest-bearing deposits  1,145,089        1,121,365        1,072,883       
Noninterest-bearing liabilities  43,080        49,316        18,673       
Total liabilities  4,521,530        4,343,078        3,907,771       
Stockholders' Equity  454,505        422,212        378,531       
Total liabilities and stockholders’ equity $4,976,035       $4,765,290       $4,286,302       
                          
Net interest income/Net interest margin (1)    $48,872 4.16%   $46,837 4.20%   $34,373 3.34%
Tax-equivalent adjustment (2)     715 0.06     702 0.06     598 0.05 
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (2) (3)    $49,587 4.22%   $47,539 4.26%   $34,971 3.39%
Net interest rate spread (4)       3.88%      4.01%      3.27%
Net interest-earning assets (5) $1,382,536       $1,351,324       $1,317,233       
Ratio of interest-earning assets to interest-bearing liabilities  1.41        1.43        1.47       
Cost of total deposits       0.41%      0.24%      0.05%
Cost of funds       0.71       0.47       0.14 

________________________
*   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
                  
  Six Months Ended  
  June 30, 2023 June 30, 2022 
              
  Average
Balance
 Interest Yield/
Cost *
 Average
Balance
 Interest Yield/
Cost *
 
  (dollars in thousands)
ASSETS                 
Loans $3,126,173  $91,300 5.89%$2,487,320  $55,990 4.54%
Securities  1,397,821   15,493 2.24  1,372,284   12,490 1.84 
Deposits with banks  88,343   1,520 3.47  305,053   579 0.38 
Other  8,004   234 5.89  2,775   33 2.43 
Total interest-earning assets  4,620,341  $108,547 4.74% 4,167,432  $69,092 3.34%
Allowance for credit losses  (36,410)       (24,340)      
Noninterest-earning assets  287,314        171,624       
Total assets $4,871,245       $4,314,716       
                  
LIABILITIES AND STOCKHOLDERS' EQUITY                 
Liabilities                 
Interest-bearing deposits:                 
Interest-bearing demand $1,227,447  $1,141 0.19%$1,151,495  $286 0.05%
Money market  655,182   2,451 0.75  590,098   231 0.08 
Savings  698,375   367 0.11  655,645   102 0.03 
Time  402,212   2,738 1.37  297,706   456 0.31 
Total interest-bearing deposits  2,983,216   6,697 0.45  2,694,944   1,075 0.08 
Securities sold under agreements to repurchase  36,879   72 0.39  52,050   17 0.07 
Borrowings  143,632   3,486 4.89  470   2 1.01 
Subordinated notes  39,414   939 4.81  39,335   939 4.82 
Junior subordinated debentures issued to capital trusts  50,183   1,644 6.61  37,730   758 4.05 
Total interest-bearing liabilities  3,253,324  $12,838 0.80% 2,824,529  $2,791 0.20%
Noninterest-bearing deposits  1,133,292        1,075,387       
Noninterest-bearing liabilities  46,181        22,466       
Total liabilities  4,432,797        3,922,382       
Stockholders' Equity  438,448        392,334       
Total liabilities and stockholders’ equity $4,871,245        4,314,716       
                  
Net interest income/Net interest margin (1)    $95,709 4.18%   $66,301 3.21%
Tax-equivalent adjustment (2)     1,417 0.06     1,127 0.05 
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (2) (3)    $97,126 4.24%   $67,428 3.26%
Net interest rate spread (4)       3.94%      3.14%
Net interest-earning assets (5) $1,367,017       $1,342,903       
Ratio of interest-earning assets to interest-bearing liabilities  1.42        1.48       
Cost of total deposits       0.33%      0.06%
Cost of funds       0.59       0.14 

________________________
*       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
              
  June 30,  March 31,  June 30,  
  2023    2023    2022 
  (dollars in thousands) 
NONPERFORMING ASSETS             
Nonaccrual $7,534  $6,508  $3,248  
Past due 90 days or more, still accruing (1)  1   10   182  
Total nonperforming loans  7,535   6,518   3,430  
Foreclosed assets  3,080   3,356   2,891  
Total nonperforming assets $10,615  $9,874  $6,321  
              
Allowance for credit losses $37,814  $38,776  $24,734  
Loans, before allowance for credit losses  3,244,655   3,195,540   2,451,826  
              
CREDIT QUALITY RATIOS             
Allowance for credit losses to loans, before allowance for credit losses  1.17 % 1.21 % 1.01 %
Allowance for credit losses to nonaccrual loans  501.91   595.82   761.51  
Allowance for credit losses to nonperforming loans  501.84   594.91   721.11  
Nonaccrual loans to loans, before allowance for credit losses  0.23   0.20   0.13  
Nonperforming loans to loans, before allowance for credit losses  0.23   0.20   0.14  
Nonperforming assets to total assets  0.21   0.20   0.15  
Nonperforming assets to loans, before allowance for credit losses, and foreclosed assets  0.33   0.31   0.26  

________________________
(1)   Prior to 2023, excludes loans acquired with deteriorated credit quality that are past due 90 or more days and accruing. Such loans totaled $23 thousand as of June 30, 2022.

  Three Months Ended  Six Months Ended  
  June 30,  March 31,  June 30,  June 30,  
     2023     2023    2022    2023    2022 
ALLOWANCE FOR CREDIT LOSSES ON LOANS (dollars in thousands) 
Beginning balance $38,776  $25,333  $24,508  $25,333  $23,936  
Adoption of ASC 326     6,983      6,983     
PCD allowance established in acquisition     1,247      1,247     
Provision for credit losses  (1,080)  5,101   145   4,021   (439) 
Charge-offs  (179)  (142)  (159)  (321)  (293) 
Recoveries  297   254   240   551   1,530  
Ending balance $37,814  $38,776  $24,734  $37,814  $24,734  
                 
Net charge-offs (recoveries) $(118) $(112) $(81) $(230) $(1,237) 
Average loans, before allowance for credit losses  3,238,774   3,012,320   2,467,851   3,126,173   2,487,320  
                 
Net charge-offs (recoveries) to average loans, before allowance for credit losses *  (0.01)% (0.02)% (0.01)% (0.01)% (0.10)%

________________________
*   Annualized measure.

  Three Months Ended  Six Months Ended
  June 30,  March 31,  June 30,  June 30, 
     2023    2023    2022    2023    2022
PROVISION FOR CREDIT LOSSES (dollars in thousands)
Loans (1) $(1,080) $5,101  $145  $4,021  $(439)
Unfunded lending-related commitments (1)  650   509      1,159    
Debt securities  200   600      800    
Total provision for credit losses $(230) $6,210  $145  $5,980  $(439)

________________________
(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  Six Months Ended  
  June 30,  March 31,  June 30,  June 30,  
     2023    2023    2022    2023    2022 
  (dollars in thousands) 
Net income $18,473  $9,208  $14,085  $27,681  $27,689  
Adjustments:                
Acquisition expenses (1)  (627)  (13,064)     (13,691)    
Gains (losses) on sales of closed branch premises  75      (18)  75   179  
Realized gains (losses) on sales of securities     (1,007)     (1,007)    
Mortgage servicing rights fair value adjustment  141   (624)  366   (483)  2,095  
Total adjustments  (411)  (14,695)  348   (15,106)  2,274  
Tax effect of adjustments  112   4,044   (99)  4,156   (648) 
Less adjustments, after tax effect  (299)  (10,651)  249   (10,950)  1,626  
Adjusted net income $18,772  $19,859  $13,836  $38,631  $26,063  
                 
Average assets $4,976,035  $4,765,290  $4,286,302  $4,871,245  $4,314,716  
                 
Return on average assets *  1.49 % 0.78 % 1.32 % 1.15 % 1.29 %
Adjusted return on average assets *  1.51   1.69   1.29   1.60   1.22  

________________________
*       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  Six Months Ended
  June 30,  March 31,  June 30,  June 30, 
     2023    2023    2022    2023    2022
  (dollars in thousands, except per share data)
Numerator:               
Net income $18,473  $9,208  $14,085  $27,681  $27,689 
Earnings allocated to participating securities (1)  (11)  (5)  (17)  (16)  (34)
Numerator for earnings per share - basic and diluted $18,462  $9,203  $14,068  $27,665  $27,655 
                
Adjusted net income $18,772  $19,859  $13,836  $38,631  $26,063 
Earnings allocated to participating securities (1)  (10)  (13)  (17)  (23)  (32)
Numerator for adjusted earnings per share - basic and diluted $18,762  $19,846  $13,819  $38,608  $26,031 
                
Denominator:               
Weighted average common shares outstanding  31,980,133   30,977,204   28,891,202   31,481,439   28,938,634 
Dilutive effect of outstanding restricted stock units  99,850   69,947   53,674   84,981   48,688 
Weighted average common shares outstanding, including all dilutive potential shares  32,079,983   31,047,151   28,944,876   31,566,420   28,987,322 
                
Earnings per share - Basic $0.58  $0.30  $0.49  $0.88  $0.96 
Earnings per share - Diluted $0.58  $0.30  $0.49  $0.88  $0.95 
                
Adjusted earnings per share - Basic $0.59  $0.64  $0.48  $1.23  $0.90 
Adjusted earnings per share - Diluted $0.58  $0.64  $0.48  $1.22  $0.90 

________________________
(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  Six Months Ended  
  June 30,  March 31,  June 30,  June 30,  
     2023    2023    2022    2023    2022 
  (dollars in thousands) 
Net interest income (tax equivalent basis)                     
Net interest income $48,872  $46,837  $34,373  $95,709  $66,301  
Tax-equivalent adjustment (1)  715   702   598   1,417   1,127  
Net interest income (tax equivalent basis) (1) $49,587  $47,539  $34,971  $97,126  $67,428  
                      
Net interest margin (tax equivalent basis)                     
Net interest margin *  4.16 % 4.20 % 3.34 % 4.18 % 3.21 %
Tax-equivalent adjustment * (1)  0.06   0.06   0.05   0.06   0.05  
Net interest margin (tax equivalent basis) * (1)  4.22 % 4.26 % 3.39 % 4.24 % 3.26 %
                      
Average interest-earning assets $4,715,897  $4,523,721  $4,133,448  $4,620,341  $4,167,432  

________________________
*   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  Six Months Ended  
  June 30,  March 31,  June 30,  June 30,  
     2023    2023    2022    2023    2022 
  (dollars in thousands) 
Efficiency ratio (tax equivalent basis)                     
Total noninterest expense $33,973  $35,933  $23,842  $69,906  $47,999  
Less: amortization of intangible assets  720   510   245   1,230   490  
Adjusted noninterest expense $33,253  $35,423  $23,597  $68,676  $47,509  
                      
Net interest income $48,872  $46,837  $34,373  $95,709  $66,301  
Total noninterest income  9,914   7,437   8,551   17,351   18,594  
Operating revenue  58,786   54,274   42,924   113,060   84,895  
Tax-equivalent adjustment (1)  715   702   598   1,417   1,127  
Operating revenue (tax equivalent basis) (1) $59,501  $54,976  $43,522  $114,477  $86,022  
                      
Efficiency ratio  56.57 % 65.27 % 54.97 % 60.74 % 55.96 %
Efficiency ratio (tax equivalent basis) (1)  55.89   64.43   54.22   59.99   55.23  

________________________
(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
              
  June 30,  March 31,    June 30,  
  2023    2023    2022 
  (dollars in thousands, except per share data) 
Tangible common equity             
Total stockholders' equity $450,852  $450,098  $373,809  
Less: Goodwill  59,876   59,876   29,322  
Less: Intangible assets, net  22,122   22,842   1,453  
Tangible common equity $368,854  $367,380  $343,034  
              
Tangible assets             
Total assets $4,975,810  $5,013,821  $4,223,978  
Less: Goodwill  59,876   59,876   29,322  
Less: Intangible assets, net  22,122   22,842   1,453  
Tangible assets $4,893,812  $4,931,103  $4,193,203  
              
Total stockholders' equity to total assets  9.06 % 8.98 % 8.85 %
Tangible common equity to tangible assets  7.54   7.45   8.18  
              
Shares of common stock outstanding  31,865,868   32,095,370   28,831,197  
              
Book value per share $14.15  $14.02  $12.97  
Tangible book value per share  11.58   11.45   11.90  


 
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  Six Months Ended  
  June 30,  March 31,  June 30,  June 30,  
     2023    2023    2022    2023    2022 
  (dollars in thousands) 
Average tangible common equity                     
Total stockholders' equity $454,505  $422,212  $378,531  $438,448  $392,334  
Less: Goodwill  59,876   49,352   29,322   54,643   29,322  
Less: Intangible assets, net  22,520   15,635   1,597   19,097   1,720  
Average tangible common equity $372,109  $357,225  $347,612  $364,708  $361,292  
                      
Net income $18,473  $9,208  $14,085  $27,681  $27,689  
Adjusted net income  18,772   19,859   13,836   38,631   26,063  
                      
Return on average stockholders' equity *  16.30 % 8.84 % 14.92 % 12.73 % 14.23 %
Return on average tangible common equity *  19.91   10.45   16.25   15.31   15.45  
                      
Adjusted return on average stockholders' equity *  16.57 % 19.08 % 14.66 % 17.77 % 13.40 %
Adjusted return on average tangible common equity *  20.23   22.55   15.96   21.36   14.55  

________________________
*       Annualized measure.


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