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HBT Financial, Inc. Announces Third Quarter 2022 Financial Results

Third Quarter Highlights

  • Net income of $15.6 million, or $0.54 per diluted share; return on average assets (ROAA) of 1.47%; return on average stockholders' equity (ROAE) of 16.27%; and return on average tangible common equity (ROATCE)(1) of 17.70%
  • Adjusted net income(1) of $15.9 million; or $0.55 per diluted share; adjusted ROAA(1) of 1.49%; adjusted ROAE(1) of 16.51%; and adjusted ROATCE(1) of 17.96%
  • Asset quality remained strong with nonperforming assets to total assets of 0.14%
  • Cost of total deposits remained low at 0.06%

(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., Oct. 24, 2022 (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 $15.6 million, or $0.54 diluted earnings per share, for the third quarter of 2022. This compares to net income of $14.1 million, or $0.49 diluted earnings per share, for the second quarter of 2022, and net income of $13.7 million, or $0.50 diluted earnings per share, for the third quarter of 2021.

Fred L. Drake, Chairman and Chief Executive Officer of HBT Financial, said, “We delivered another strong financial performance in the third quarter with earnings increasing from the prior quarter, while we continued to maintain exceptional asset quality and strong capital ratios. We generated our strongest loan growth of the year which enabled us to drive further improvement in our mix of earning assets. Combined with stable deposit costs, this resulted in significant expansion in our net interest margin. While continuing to generate strong financial results, we signed a merger agreement with Town and Country Financial Corporation (“Town and Country”) that we believe will create additional long-term value for shareholders. The transaction remains on track to close during the first quarter of 2023, and we look forward to welcoming our new customers and colleagues, and capitalizing on our expanded footprint in Illinois that we believe will enhance our ability to continue generating profitable growth in the years to come.”

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 $15.9 million, or $0.55 adjusted diluted earnings per share, for the third quarter of 2022. This compares to adjusted net income of $13.8 million, or $0.48 adjusted diluted earnings per share, for the second quarter of 2022, and adjusted net income of $14.5 million, or $0.53 adjusted diluted earnings per share, for the third quarter of 2021 (see "Reconciliation of Non-GAAP Financial Measures" tables).

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2022 was $37.4 million, an increase of 8.8% from $34.4 million for the second quarter of 2022. The increase was primarily attributable to higher yields on interest-earning assets, with the yield on loans increasing 27 basis points to 4.91%, and stable deposit costs, with cost of total deposits only increasing 1 basis point to 0.06%. Paycheck Protection Program (“PPP”) loan fees recognized as loan interest income totaled $0.1 million during the third quarter of 2022 and $0.6 million during the second quarter of 2022.

Relative to the third quarter of 2021, net interest income increased 21.7% from $30.7 million. The increase was primarily attributable to higher average balances of interest-earning assets following the NXT Bancorporation, Inc. (“NXT”) acquisition in the fourth quarter of 2021, a more favorable asset mix, and higher yields on interest-earning assets. PPP loan fees recognized as loan interest income totaled $3.0 million during the third quarter of 2021.

Net interest margin for the third quarter of 2022 was 3.65%, compared to 3.34% for the second quarter of 2022. The increase was primarily attributable to higher yields on interest-earning assets. The contribution of PPP loan fees to net interest margin was 1 basis point during the third quarter of 2022 and 6 basis points during the second quarter of 2022. Additionally, the contribution of acquired loan discount accretion to net interest margin was 2 basis points during the third quarter of 2022 and 3 basis points during the second quarter of 2022.

Relative to the third quarter of 2021, net interest margin increased from 3.18%. This increase was primarily attributable to a more favorable mix of interest-earning assets and higher yields on interest-earning assets. PPP loan fees recognized as loan interest income contributed 31 basis points to net interest margin and acquired loan discount accretion contributed 2 basis points to net interest margin during the third quarter of 2021.

Noninterest Income

Noninterest income for the third quarter of 2022 was $8.2 million, a decrease of 3.7% from $8.6 million for the second quarter of 2022. The decrease was primarily attributable to a $0.3 million decrease in wealth management fees, due to a decline in assets under management resulting from the 2022 market performance, and a $0.1 million decrease in card income due to lower debit and credit card transaction volume.

Relative to the third quarter of 2021, noninterest income decreased 1.9% from $8.4 million. A $0.9 million decrease in gains on sale of mortgage loans resulting from a lower level of mortgage refinancing activity was mostly offset by a $0.6 million improvement to gains (losses) on other assets, as the 2021 results included impairment losses of $0.6 million related to branches closed during 2021.

Noninterest Expense

Noninterest expense for the third quarter of 2022 was $24.0 million, a slight increase from $23.8 million for the second quarter of 2022. Decreases in data processing and marketing expenses were mostly offset by an increase in other noninterest expense, primarily resulting from legal and professional fees related to the pending acquisition of Town and Country.

Relative to the third quarter of 2021, noninterest expense increased 8.3% from $22.2 million. The increase was primarily attributable to a higher base level of noninterest expense following the NXT acquisition, primarily related to personnel costs and branch operations expenses.

Loan Portfolio

Total loans outstanding, before allowance for loan losses, were $2.58 billion at September 30, 2022, compared with $2.45 billion at June 30, 2022 and $2.15 billion at September 30, 2021. The $128.1 million increase in total loans from June 30, 2022 was primarily attributable to broad growth in all of our geographic markets and a moderation in payoffs and prepayments.

Deposits

Total deposits were $3.64 billion at September 30, 2022, compared with $3.70 billion at June 30, 2022 and $3.42 billion at September 30, 2021. The $58.5 million decrease from June 30, 2022 was primarily attributable to lower balances maintained in retail accounts and a seasonal decrease in public fund accounts following annual real estate tax collections.

Asset Quality

Nonperforming loans totaled $3.2 million, or 0.12% of total loans, at September 30, 2022, compared with $3.4 million, or 0.14% of total loans, at June 30, 2022, and $5.5 million, or 0.26% of total loans, at September 30, 2021.

The Company recorded a provision for loan losses of $0.4 million for the third quarter of 2022, compared to $0.1 million for the second quarter of 2022. The provision was primarily due to the increase in loans during the third quarter of 2022, resulting in a $1.1 million increase in required reserves, and a decrease in specific reserves on loans individually evaluated for impairment, resulting in a $0.7 million decrease in required reserves.

The Company had net charge-offs of $0.1 million, or 0.01% of average loans on an annualized basis, for the third quarter of 2022, compared to net recoveries of $0.1 million, or (0.01)% of average loans on an annualized basis, for the second quarter of 2022, and net recoveries of $21 thousand, or less than 1 basis point of average loans on an annualized basis, for the third quarter of 2021.

The Company’s allowance for loan losses was 0.97% of total loans and 781.66% of nonperforming loans at September 30, 2022, compared with 1.01% of total loans and 721.11% of nonperforming loans at June 30, 2022.

Capital

At September 30, 2022, the Company exceeded all regulatory capital requirements under Basel III as summarized in the following table:

  Well Capitalized
  Regulatory
 September 30, 2022Requirements
Total capital to risk-weighted assets16.34%10.00%
Tier 1 capital to risk-weighted assets14.26%8.00%
Common equity tier 1 capital ratio13.08%6.50%
Tier 1 leverage ratio10.44%5.00%
Total stockholders' equity to total assets8.52%N/A 
Tangible common equity to tangible assets (1)7.85%N/A 



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

Stock Repurchase Program

During the third quarter of 2022, the Company repurchased 78,571 shares of its common stock at a weighted average price of $18.22 under its stock repurchase program. The stock repurchase program has been paused until completion of the vote of Town and Country’s shareholders on the merger. The Company’s Board of Directors authorized the repurchase of up to $15 million of its common stock under its stock repurchase program in effect until January 1, 2023. As of September 30, 2022, the Company had $10.2 million remaining under the current stock repurchase authorization.

Pending Acquisition of Town and Country

On August 23, 2022, HBT and Town and Country, the holding company for Town and Country Bank, jointly announced the signing of a definitive agreement pursuant to which HBT will acquire Town and Country and Town and Country Bank. The acquisition will further enhance HBT’s footprint in Central Illinois as well as expand HBT’s footprint into metro-east St. Louis. Acquisition-related expenses were $0.5 million during the third quarter of 2022.

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 Central and Northeastern Illinois and Eastern Iowa through 58 full-service branches. As of September 30, 2022, HBT had total assets of $4.2 billion, total loans of $2.6 billion, and total deposits of $3.6 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, 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; (iv) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (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 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) the possibility that stockholders of Town and Country may not approve the merger agreement; (xiv) the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; (xv) potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; (xvi) the diversion of management time on transaction-related issues; (xvii) the ultimate timing, outcome and results of integrating the operations of Town and Country into those of HBT; (xviii) the effects of the merger on HBT’s future financial condition, results of operations, strategy and plans; (xix) regulatory approvals of the transaction; and (xx) the ability of the Company to manage the risks associated with the foregoing. 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 (the “SEC”).

Important Information and Where to Find It

In connection with the proposed transaction, HBT and Town and Country filed materials with the SEC, including a Registration Statement on Form S-4 of HBT that includes a proxy statement of Town and Country and a prospectus of HBT. After the Registration Statement is declared effective by the SEC, HBT and Town and Country intend to mail a definitive proxy statement/prospectus to the stockholders of Town and Country. This press release is not a substitute for the proxy statement/prospectus or the Registration Statement or for any other document that HBT or Town and Country may file with the SEC and send to Town and Country’s stockholders in connection with the proposed transaction. TOWN AND COUNTRY’S STOCKHOLDERS ARE URGED TO CAREFULLY AND THOROUGHLY READ THE PROXY STATEMENT/PROSPECTUS AND THE REGISTRATION STATEMENT, AS MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY HBT OR TOWN AND COUNTRY WITH THE SEC, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT HBT, TOWN AND COUNTRY, THE PROPOSED TRANSACTION, THE RISKS RELATED THERETO AND RELATED MATTERS.

Investors will be able to obtain free copies of the Registration Statement and proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by HBT and Town and Country with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by HBT will be available free of charge from HBT’s website at https://ir.hbtfinancial.com or by contacting HBT’s Investor Relations Department at HBTIR@hbtbank.com.

Participants in the Proxy Solicitation

HBT, Town and Country and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Town and Country’s stockholders in connection with the proposed transaction. Information regarding the executive officers and directors of HBT is included in its definitive proxy statement for its 2022 annual meeting filed with the SEC on April 5, 2022. Information regarding the executive officers and directors of Town and Country and additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.

No Offer or Solicitation

This press release does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

CONTACT:
Tony Rossi
HBTIR@hbtbank.com
(310) 622-8221


HBT Financial, Inc.

Unaudited Consolidated Financial Summary
Consolidated Statements of Income

                
  Three Months Ended  Nine Months Ended
  September 30,  June 30,  September 30,  September 30, 
  2022 2022 2021 2022 2021
INTEREST AND DIVIDEND INCOME (dollars in thousands, except per share data)
Loans, including fees:               
Taxable $29,855  $27,843  $25,604  $84,504  $76,016 
Federally tax exempt  842   679   572   2,183   1,722 
Securities:               
Taxable  6,635   5,663   4,632   16,947   12,323 
Federally tax exempt  1,207   1,138   1,103   3,385   3,383 
Interest-bearing deposits in bank  458   420   190   1,037   385 
Other interest and dividend income  17   14   14   50   39 
Total interest and dividend income  39,014   35,757   32,115   108,106   93,868 
                
INTEREST EXPENSE               
Deposits  587   506   564   1,662   1,821 
Securities sold under agreements to repurchase  9   8   8   26   23 
Borrowings  85   1   1   87   2 
Subordinated notes  470   469   470   1,409   1,409 
Junior subordinated debentures issued to capital trusts  473   400   357   1,231   1,069 
Total interest expense  1,624   1,384   1,400   4,415   4,324 
Net interest income  37,390   34,373   30,715   103,691   89,544 
PROVISION FOR LOAN LOSSES  386   145   (1,667)  (53)  (7,234)
Net interest income after provision for loan losses  37,004   34,228   32,382   103,744   96,778 
                
NONINTEREST INCOME               
Card income  2,569   2,714   2,509   7,687   7,216 
Wealth management fees  2,059   2,322   2,036   6,670   6,013 
Service charges on deposit accounts  1,927   1,792   1,677   5,371   4,364 
Mortgage servicing  697   661   699   2,016   2,095 
Mortgage servicing rights fair value adjustment  351   366   40   2,446   1,425 
Gains on sale of mortgage loans  354   326   1,257   1,267   4,919 
Unrealized gains (losses) on equity securities  (107)  (153)  28   (447)  74 
Gains (losses) on foreclosed assets  (225)  (7)  (14)  (192)  126 
Gains (losses) on other assets  (31)  (43)  (672)  119   (719)
Income on bank owned life insurance  41   41      122    
Other noninterest income  599   532   832   1,769   2,461 
Total noninterest income  8,234   8,551   8,392   26,828   27,974 
                
NONINTEREST EXPENSE               
Salaries  12,752   12,936   11,835   38,489   36,486 
Employee benefits  1,771   1,984   1,455   6,199   4,549 
Occupancy of bank premises  1,979   1,741   1,610   5,780   5,011 
Furniture and equipment  668   623   657   1,843   1,883 
Data processing  1,631   1,990   1,767   5,274   5,176 
Marketing and customer relations  880   1,205   883   2,936   2,291 
Amortization of intangible assets  243   245   252   733   799 
FDIC insurance  302   298   279   888   763 
Loan collection and servicing  336   278   400   771   1,098 
Foreclosed assets  97   31   242   260   704 
Other noninterest expense  3,339   2,511   2,787   8,824   8,105 
Total noninterest expense  23,998   23,842   22,167   71,997   66,865 
INCOME BEFORE INCOME TAX EXPENSE  21,240   18,937   18,607   58,575   57,887 
INCOME TAX EXPENSE  5,613   4,852   4,892   15,259   15,210 
NET INCOME $15,627  $14,085  $13,715  $43,316  $42,677 
                
EARNINGS PER SHARE - BASIC $0.54  $0.49  $0.50  $1.50  $1.56 
EARNINGS PER SHARE - DILUTED $0.54  $0.49  $0.50  $1.49  $1.56 
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING  28,787,662   28,891,202   27,340,926   28,887,757   27,377,809 


HBT Financial, Inc.

Unaudited Consolidated Financial Summary
Consolidated Balance Sheets

          
  September 30,  June 30,  September 30, 
  2022 2022 2021
  (dollars in thousands)
ASSETS         
Cash and due from banks $22,169  $25,478  $36,508 
Interest-bearing deposits with banks  56,046   134,553   435,421 
Cash and cash equivalents  78,215   160,031   471,929 
          
Debt securities available-for-sale, at fair value  853,740   924,706   896,218 
Debt securities held-to-maturity  546,694   548,236   318,730 
Equity securities with readily determinable fair value  2,996   3,103   3,366 
Equity securities with no readily determinable fair value  1,977   1,952   1,867 
Restricted stock, at cost  4,050   2,813   2,739 
Loans held for sale  2,297   5,312   8,582 
          
Loans, before allowance for loan losses  2,579,928   2,451,826   2,147,812 
Allowance for loan losses  (25,060)  (24,734)  (24,861)
Loans, net of allowance for loan losses  2,554,868   2,427,092   2,122,951 
          
Bank owned life insurance  7,515   7,474    
Bank premises and equipment, net  50,854   51,433   49,337 
Bank premises held for sale  281   319   1,462 
Foreclosed assets  2,637   2,891   7,315 
Goodwill  29,322   29,322   23,620 
Core deposit intangible assets, net  1,210   1,453   1,999 
Mortgage servicing rights, at fair value  10,440   10,089   7,359 
Investments in unconsolidated subsidiaries  1,165   1,165   1,165 
Accrued interest receivable  16,881   14,263   13,376 
Other assets  48,182   32,324   16,211 
Total assets $4,213,324  $4,223,978  $3,948,226 
          
LIABILITIES AND STOCKHOLDERS' EQUITY         
Liabilities         
Deposits:         
Noninterest-bearing $1,017,710  $1,028,790  $1,003,723 
Interest-bearing  2,625,733   2,673,196   2,415,833 
Total deposits  3,643,443   3,701,986   3,419,556 
          
Securities sold under agreements to repurchase  48,130   51,091   47,957 
Federal Home Loan Bank advances  60,000       
Subordinated notes  39,376   39,356   39,297 
Junior subordinated debentures issued to capital trusts  37,763   37,747   37,698 
Other liabilities  25,539   19,989   24,897 
Total liabilities  3,854,251   3,850,169   3,569,405 
          
Stockholders' Equity         
Common stock  293   293   275 
Surplus  222,436   222,087   191,413 
Retained earnings  223,495   212,506   184,919 
Accumulated other comprehensive income (loss)  (77,462)  (52,820)  4,537 
Treasury stock at cost  (9,689)  (8,257)  (2,323)
Total stockholders’ equity  359,073   373,809   378,821 
Total liabilities and stockholders’ equity $4,213,324  $4,223,978  $3,948,226 
          
SHARE INFORMATION         
Shares of common stock outstanding  28,752,626   28,831,197   27,334,428 


HBT Financial, Inc.

Unaudited Consolidated Financial Summary

          
  September 30,  June 30,  September 30, 
  2022 2022 2021
  (dollars in thousands)
LOANS         
Commercial and industrial $240,671 $249,839 $261,763
Agricultural and farmland  245,234  230,370  229,718
Commercial real estate - owner occupied  226,524  228,997  203,096
Commercial real estate - non-owner occupied  718,089  656,093  579,860
Multi-family  260,630  269,452  215,245
Construction and land development  364,290  332,041  232,291
One-to-four family residential  328,667  325,047  294,612
Municipal, consumer, and other  195,823  159,987  131,227
Loans, before allowance for loan losses $2,579,928 $2,451,826 $2,147,812
          
PPP LOANS (included above)         
Commercial and industrial $65 $2,823 $55,374
Agricultural and farmland    9  3,462
Municipal, consumer, and other      985
Total PPP Loans $65 $2,832 $59,821


          
  September 30,  June 30,  September 30, 
  2022 2022 2021
  (dollars in thousands)
DEPOSITS         
Noninterest-bearing $1,017,710 $1,028,790 $1,003,723
Interest-bearing demand  1,131,284  1,162,292  1,013,678
Money market  584,202  581,058  519,343
Savings  641,139  654,953  611,050
Time  269,108  274,893  271,762
Total deposits $3,643,443 $3,701,986 $3,419,556


HBT Financial, Inc.

Unaudited Consolidated Financial Summary

                          
  Three Months Ended  
  September 30, 2022 June 30, 2022 September 30, 2021 
  Average      Average      Average      
  Balance Interest Yield/Cost* Balance Interest Yield/Cost* Balance Interest Yield/Cost* 
  (dollars in thousands) 
ASSETS                         
Loans $2,481,920  $30,697 4.91%$2,467,851  $28,522 4.64%$2,135,476  $26,176 4.86%
Securities  1,470,092   7,842 2.12  1,422,096   6,801 1.92  1,180,513   5,735 1.93 
Deposits with banks  105,030   458 1.73  240,692   420 0.70  513,158   190 0.15 
Other  2,936   17 2.25  2,809   14 2.07  2,739   14 2.00 
Total interest-earning assets  4,059,978  $39,014 3.81% 4,133,448  $35,757 3.47% 3,831,886  $32,115 3.33%
Allowance for loan losses  (24,717)       (24,579)       (26,470)      
Noninterest-earning assets  173,461        177,433        159,635       
Total assets $4,208,722       $4,286,302       $3,965,051       
                          
LIABILITIES AND STOCKHOLDERS' EQUITY                         
Liabilities                         
Interest-bearing deposits:                         
Interest-bearing demand $1,137,072  $144 0.05%$1,159,077  $144 0.05%$1,020,216  $129 0.05%
Money market  577,388   203 0.14  582,016   110 0.08  510,183   96 0.07 
Savings  649,752   53 0.03  661,661   52 0.03  608,436   48 0.03 
Time  271,870   187 0.27  284,880   200 0.28  275,224   291 0.42 
Total interest-bearing deposits  2,636,082   587 0.09  2,687,634   506 0.08  2,414,059   564 0.09 
Securities sold under agreements to repurchase  50,427   9 0.07  51,057   8 0.07  49,923   8 0.06 
Borrowings  11,967   85 2.80  440   1 1.34  326   1 0.46 
Subordinated notes  39,365   470 4.73  39,346   469 4.79  39,285   470 4.74 
Junior subordinated debentures issued to capital trusts  37,755   473 4.97  37,738   400 4.26  37,688   357 3.76 
Total interest-bearing liabilities  2,775,596  $1,624 0.23% 2,816,215  $1,384 0.20% 2,541,281  $1,400 0.22%
Noninterest-bearing deposits  1,031,407        1,072,883        1,016,384       
Noninterest-bearing liabilities  20,736        18,673        26,523       
Total liabilities  3,827,739        3,907,771        3,584,188       
Stockholders' Equity  380,983        378,531        380,863       
Total liabilities and stockholders’ equity $4,208,722       $4,286,302       $3,965,051       
                          
Net interest income/Net interest margin (1)    $37,390 3.65%   $34,373 3.34%   $30,715 3.18%
Tax-equivalent adjustment (2)     674 0.07     598 0.05     508 0.05 
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (2) (3)    $38,064 3.72%   $34,971 3.39%   $31,223 3.23%
Net interest rate spread (4)       3.58%      3.27%      3.11%
Net interest-earning assets (5) $1,284,382       $1,317,233       $1,290,605       
Ratio of interest-earning assets to interest-bearing liabilities  1.46        1.47        1.51       
Cost of total deposits       0.06%      0.05%      0.07%



* 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

                  
  Nine Months Ended  
  September 30, 2022 September 30, 2021 
  Average     Average     
  Balance Interest Yield/Cost* Balance Interest Yield/Cost* 
  (dollars in thousands)
ASSETS                 
Loans $2,485,501  $86,687 4.66%$2,217,463  $77,738 4.69%
Securities  1,405,245   20,332 1.93  1,102,808   15,706 1.90 
Deposits with banks  237,646   1,037 0.58  432,971   385 0.12 
Other  2,829   50 2.36  2,655   39 1.95 
Total interest-earning assets  4,131,221  $108,106 3.50% 3,755,897  $93,868 3.34%
Allowance for loan losses  (24,467)       (29,069)      
Noninterest-earning assets  172,243        157,287       
Total assets $4,278,997       $3,884,115       
                  
LIABILITIES AND STOCKHOLDERS' EQUITY                 
Liabilities                 
Interest-bearing deposits:                 
Interest-bearing demand $1,146,635  $430 0.05%$1,012,557  $373 0.05%
Money market  585,815   434 0.10  498,441   279 0.07 
Savings  653,659   155 0.03  584,226   135 0.03 
Time  289,000   643 0.30  286,685   1,034 0.48 
Total interest-bearing deposits  2,675,109   1,662 0.08  2,381,909   1,821 0.10 
Securities sold under agreements to repurchase  51,503   26 0.07  47,827   23 0.06 
Borrowings  4,344   87 2.67  421   2 0.43 
Subordinated notes  39,345   1,409 4.79  39,265   1,409 4.80 
Junior subordinated debentures issued to capital trusts  37,738   1,231 4.36  37,671   1,069 3.79 
Total interest-bearing liabilities  2,808,039  $4,415 0.21% 2,507,093  $4,324 0.23%
Noninterest-bearing deposits  1,060,566        976,884       
Noninterest-bearing liabilities  21,883        30,205       
Total liabilities  3,890,488        3,514,182       
Stockholders' Equity  388,509        369,933       
Total liabilities and stockholders’ equity $4,278,997        3,884,115       
                  
Net interest income/Net interest margin (1)    $103,691 3.36%   $89,544 3.19%
Tax-equivalent adjustment (2)     1,801 0.05     1,514 0.05 
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (2) (3)    $105,492 3.41%   $91,058 3.24%
Net interest rate spread (4)       3.29%      3.11%
Net interest-earning assets (5) $1,323,182       $1,248,804       
Ratio of interest-earning assets to interest-bearing liabilities  1.47        1.50       
Cost of total deposits       0.06%      0.07%



* 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

             
  September 30,   June 30,   September 30,  
  2022  2022  2021 
  (dollars in thousands) 
NONPERFORMING ASSETS            
Nonaccrual $3,206  $3,248  $5,489 
Past due 90 days or more, still accruing (1)     182   39 
Total nonperforming loans  3,206   3,430   5,528 
Foreclosed assets  2,637   2,891   7,315 
Total nonperforming assets $5,843  $6,321  $12,843 
             
Allowance for loan losses $25,060  $24,734  $24,861 
Loans, before allowance for loan losses  2,579,928   2,451,826   2,147,812 
             
CREDIT QUALITY RATIOS            
Allowance for loan losses to loans, before allowance for loan losses  0.97%  1.01%  1.16%
Allowance for loan losses to nonaccrual loans  781.66   761.51   452.92 
Allowance for loan losses to nonperforming loans  781.66   721.11   449.73 
Nonaccrual loans to loans, before allowance for loan losses  0.12   0.13   0.26 
Nonperforming loans to loans, before allowance for loan losses  0.12   0.14   0.26 
Nonperforming assets to total assets  0.14   0.15   0.33 
Nonperforming assets to loans, before allowance for loan losses, and foreclosed assets  0.23   0.26   0.60 



(1) Excludes loans acquired with deteriorated credit quality that are past due 90 or more days, still accruing totaling $22 thousand, $23 thousand, and $27 thousand as of September 30, 2022, June 30, 2022 and September 30, 2021, respectively.

                 
  Three Months Ended  Nine Months Ended  
  September 30,  June 30,  September 30,  September 30,  
  2022 2022 2021 2022 2021 
ALLOWANCE FOR LOAN LOSSES (dollars in thousands) 
Beginning balance $24,734  $24,508  $26,507  $23,936  $31,838  
Provision  386   145   (1,667)  (53)  (7,234) 
Charge-offs  (222)  (159)  (278)  (515)  (875) 
Recoveries  162   240   299   1,692   1,132  
Ending balance $25,060  $24,734  $24,861  $25,060  $24,861  
                 
Net charge-offs (recoveries) $60  $(81) $(21) $(1,177) $(257) 
Average loans, before allowance for loan losses  2,481,920   2,467,851   2,135,476   2,485,501   2,217,463  
                 
Net charge-offs (recoveries) to average loans, before allowance for loan losses *  0.01 % (0.01)%  % (0.06)% (0.02)%



* Annualized measure.


HBT Financial, Inc.

Unaudited Consolidated Financial Summary

                 
  As of or for the Three Months Ended  Nine Months Ended  
  September 30,  June 30,  September 30,  September 30,  
  2022 2022 2021 2022 2021 
  (dollars in thousands, except per share data) 
EARNINGS AND PER SHARE INFORMATION                
Net income $15,627 $14,085 $13,715 $43,316 $42,677 
Earnings per share - Basic  0.54  0.49  0.50  1.50  1.56 
Earnings per share - Diluted  0.54  0.49  0.50  1.49  1.56 
                 
Adjusted net income (1) $15,856 $13,836 $14,479 $41,919 $42,680 
Adjusted earnings per share - Basic (1)  0.55  0.48  0.53  1.45  1.56 
Adjusted earnings per share - Diluted (1)  0.55  0.48  0.53  1.45  1.56 
                 
Book value per share $12.49 $12.97 $13.86       
Tangible book value per share (1)  11.43  11.90  12.92       
                 
Shares of common stock outstanding  28,752,626  28,831,197  27,334,428       
Weighted average shares of common stock outstanding  28,787,662  28,891,202  27,340,926  28,887,757  27,377,809 
                 
SUMMARY RATIOS                
Net interest margin *  3.65% 3.34% 3.18% 3.36% 3.19%
Net interest margin (tax equivalent basis) * (1)(2)  3.72  3.39  3.23  3.41  3.24 
                 
Efficiency ratio  52.07% 54.97% 56.04% 54.60% 56.22%
Efficiency ratio (tax equivalent basis) (1)(2)  51.31  54.22  55.32  53.86  55.50 
                 
Loan to deposit ratio  70.81% 66.23% 62.81%      
                 
Return on average assets *  1.47% 1.32% 1.37% 1.35% 1.47%
Return on average stockholders' equity *  16.27  14.92  14.29  14.91  15.42 
Return on average tangible common equity * (1)  17.70  16.25  15.32  16.20  16.59 
                 
Adjusted return on average assets * (1)  1.49% 1.29% 1.45% 1.31% 1.47%
Adjusted return on average stockholders' equity * (1)  16.51  14.66  15.08  14.43  15.43 
Adjusted return on average tangible common equity * (1)  17.96  15.96  16.18  15.67  16.59 



* 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%.


Reconciliation of Non-GAAP Financial Measures –

Adjusted Net Income and Adjusted Return on Average Assets

                 
  Three Months Ended  Nine Months Ended  
  September 30,  June 30,  September 30,  September 30,  
  2022 2022 2021 2022 2021 
  (dollars in thousands) 
Net income $15,627  $14,085  $13,715  $43,316  $42,677  
Adjustments:                
Acquisition expenses  (462)     (380)  (462)  (537) 
Branch closure expenses        (644)     (748) 
Gains (losses) on sales of closed branch premises  (38)  (18)     141     
Mortgage servicing rights fair value adjustment  351   366   40   2,446   1,425  
Total adjustments  (149)  348   (984)  2,125   140  
Tax effect of adjustments  (80)  (99)  220   (728)  (143) 
Less adjustments, after tax effect  (229)  249   (764)  1,397   (3) 
Adjusted net income $15,856  $13,836  $14,479  $41,919  $42,680  
                 
Average assets $4,208,722  $4,286,302  $3,965,051  $4,278,997  $3,884,115  
                 
Return on average assets *  1.47 % 1.32 % 1.37 % 1.35 % 1.47 %
Adjusted return on average assets *  1.49   1.29   1.45   1.31   1.47  



* Annualized measure.


Reconciliation of Non-GAAP Financial Measures –

Adjusted Earnings Per Share

                
  Three Months Ended  Nine Months Ended
  September 30,  June 30,  September 30,  September 30, 
  2022 2022 2021 2022 2021
  (dollars in thousands, except per share data)
Numerator:               
Net income $15,627  $14,085  $13,715  $43,316  $42,677 
Earnings allocated to participating securities (1)  (17)  (17)  (25)  (51)  (81)
Numerator for earnings per share - basic and diluted $15,610  $14,068  $13,690  $43,265  $42,596 
                
Adjusted net income $15,856  $13,836  $14,479  $41,919  $42,680 
Earnings allocated to participating securities (1)  (17)  (17)  (27)  (49)  (81)
Numerator for adjusted earnings per share - basic and diluted $15,839  $13,819  $14,452  $41,870  $42,599 
                
Denominator:               
Weighted average common shares outstanding  28,787,662   28,891,202   27,340,926   28,887,757   27,377,809 
Dilutive effect of outstanding restricted stock units  72,643   53,674   13,921   56,761   11,412 
Weighted average common shares outstanding, including all dilutive potential shares  28,860,305   28,944,876   27,354,847   28,944,518   27,389,221 
                
Earnings per share - Basic $0.54  $0.49  $0.50  $1.50  $1.56 
Earnings per share - Diluted $0.54  $0.49  $0.50  $1.49  $1.56 
                
Adjusted earnings per share - Basic $0.55  $0.48  $0.53  $1.45  $1.56 
Adjusted earnings per share - Diluted $0.55  $0.48  $0.53  $1.45  $1.56 



(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  Nine Months Ended  
  September 30,  June 30,  September 30,  September 30,  
  2022 2022 2021 2022 2021 
  (dollars in thousands) 
Net interest income (tax equivalent basis)                
Net interest income $37,390 $34,373 $30,715 $103,691 $89,544 
Tax-equivalent adjustment (1)  674  598  508  1,801  1,514 
Net interest income (tax equivalent basis) (1) $38,064 $34,971 $31,223 $105,492 $91,058 
                 
Net interest margin (tax equivalent basis)                
Net interest margin *  3.65% 3.34% 3.18% 3.36% 3.19%
Tax-equivalent adjustment * (1)  0.07  0.05  0.05  0.05  0.05 
Net interest margin (tax equivalent basis) * (1)  3.72% 3.39% 3.23% 3.41% 3.24%
                 
Average interest-earning assets $4,059,978 $4,133,448 $3,831,886 $4,131,221 $3,755,897 



* 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  Nine Months Ended  
  September 30,  June 30,  September 30,  September 30,  
  2022 2022 2021 2022 2021 
  (dollars in thousands) 
Efficiency ratio (tax equivalent basis)                
Total noninterest expense $23,998 $23,842 $22,167 $71,997 $66,865 
Less: amortization of intangible assets  243  245  252  733  799 
Adjusted noninterest expense $23,755 $23,597 $21,915 $71,264 $66,066 
                 
Net interest income $37,390 $34,373 $30,715 $103,691 $89,544 
Total noninterest income  8,234  8,551  8,392  26,828  27,974 
Operating revenue  45,624  42,924  39,107  130,519  117,518 
Tax-equivalent adjustment (1)  674  598  508  1,801  1,514 
Operating revenue (tax equivalent basis) (1) $46,298 $43,522 $39,615 $132,320 $119,032 
                 
Efficiency ratio  52.07% 54.97% 56.04% 54.60% 56.22%
Efficiency ratio (tax equivalent basis) (1)  51.31  54.22  55.32  53.86  55.50 



(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

           
  September 30,  June 30,  September 30,  
  2022 2022 2021 
  (dollars in thousands, except per share data) 
Tangible common equity          
Total stockholders' equity $359,073 $373,809 $378,821 
Less: Goodwill  29,322  29,322  23,620 
Less: Core deposit intangible assets, net  1,210  1,453  1,999 
Tangible common equity $328,541 $343,034 $353,202 
           
Tangible assets          
Total assets $4,213,324 $4,223,978 $3,948,226 
Less: Goodwill  29,322  29,322  23,620 
Less: Core deposit intangible assets, net  1,210  1,453  1,999 
Tangible assets $4,182,792 $4,193,203 $3,922,607 
           
Total stockholders' equity to total assets  8.52% 8.85% 9.59%
Tangible common equity to tangible assets  7.85  8.18  9.00 
           
Shares of common stock outstanding  28,752,626  28,831,197  27,334,428 
           
Book value per share $12.49 $12.97 $13.86 
Tangible book value per share  11.43  11.90  12.92 


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  Nine Months Ended  
  September 30,  June 30,  September 30,  September 30,  
  2022 2022 2021 2022 2021 
  (dollars in thousands) 
Average tangible common equity                
Total stockholders' equity $380,983 $378,531 $380,863 $388,509 $369,933 
Less: Goodwill  29,322  29,322  23,620  29,322  23,620 
Less: Core deposit intangible assets, net  1,356  1,597  2,152  1,597  2,414 
Average tangible common equity $350,305 $347,612 $355,091 $357,590 $343,899 
                 
Net income $15,627 $14,085 $13,715 $43,316 $42,677 
Adjusted net income  15,856  13,836  14,479  41,919  42,680 
                 
Return on average stockholders' equity *  16.27% 14.92% 14.29% 14.91% 15.42%
Return on average tangible common equity *  17.70  16.25  15.32  16.20  16.59 
                 
Adjusted return on average stockholders' equity *  16.51% 14.66% 15.08% 14.43% 15.43%
Adjusted return on average tangible common equity *  17.96  15.96  16.18  15.67  16.59 



* Annualized measure.


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