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HBT Financial, Inc. Announces Fourth Quarter 2022 Financial Results

Globe Newswire 25-Jan-2023 7:05 AM

Fourth Quarter Highlights

  • Net income of $17.2 million, or $0.59 per diluted share; return on average assets (ROAA) of 1.60%; return on average stockholders' equity (ROAE) of 18.50%; and return on average tangible common equity (ROATCE)(1) of 20.17%
  • Adjusted net income(1) of $17.9 million; or $0.62 per diluted share; adjusted ROAA(1) of 1.67%; adjusted ROAE(1) of 19.31%; and adjusted ROATCE(1) of 21.05%
  • Asset quality remained strong with nonperforming assets to total assets of 0.12%
  • Net interest margin expanded 45 basis points to 4.10%

(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., Jan. 25, 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 $17.2 million, or $0.59 diluted earnings per share, for the fourth quarter of 2022. This compares to net income of $15.6 million, or $0.54 diluted earnings per share, for the third quarter of 2022, and net income of $13.6 million, or $0.47 diluted earnings per share, for the fourth quarter of 2021.

Fred L. Drake, Chairman and Chief Executive Officer of HBT Financial, said, "We had an excellent fourth quarter to complete 2022, thanks to growth in average earning assets, expanded net interest margin and solid non-interest income, resulting in increased book value and tangible book value per share. We expect to deliver good results again for our shareholders in 2023. We are excited to close the pending merger with Town and Country Financial Corporation (‘Town and Country') during the first quarter, which will add scale and efficiency, generate profitable growth and enhance the long-term value of our company. Town and Country has a long history in their markets and is a high performing bank – we look forward to teaming up to build future success."

"While the economy faces a lot of uncertainty, we are confident in our ability to manage through challenging times. Our bank has a strong foundation, with a proven executive team, an established core deposit base and a conservative, well-diversified loan portfolio."

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 $17.9 million, or $0.62 adjusted diluted earnings per share, for the fourth quarter of 2022. This compares to adjusted net income of $15.9 million, or $0.55 adjusted diluted earnings per share, for the third quarter of 2022, and adjusted net income of $14.2 million, or $0.49 adjusted diluted earnings per share, for the fourth quarter of 2021 (see "Reconciliation of Non-GAAP Financial Measures" tables).

Cash Dividend

On January 24, 2023, the Company's Board of Directors declared a quarterly cash dividend of $0.17 per share on the Company's common stock (the "Dividend"). The Dividend is payable on February 14, 2023 to shareholders of record as of February 7, 2023. This represents an increase of $0.01 from the previous quarterly dividend of $0.16 per share.

Mr. Drake noted, "We are very pleased that our strong financial performance and capital ratios have enabled us to further increase our quarterly cash dividend while maintaining sufficient capital to support the continued growth of the Company."

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2022 was $42.2 million, an increase of 12.8% from $37.4 million for the third quarter of 2022. The increase was primarily attributable to higher yields on interest-earning assets, with the yield on loans increasing 70 basis points to 5.61%, while the cost of funds only increased 11 basis points to 0.28%. Contributing to the increased loan interest income were higher nonaccrual interest recoveries which totaled $1.3 million during the fourth quarter of 2022 and $0.1 million during the third quarter of 2022.

Relative to the fourth quarter of 2021, net interest income increased 28.4% from $32.9 million. The increase was primarily attributable to higher yields on interest-earning assets, a more favorable asset mix, and nonaccrual interest recoveries. Partially offsetting these improvements was a decrease in PPP loan fees recognized as loan interest income which totaled $1.6 million during the fourth quarter of 2021. Additionally, nonaccrual interest recoveries totaled $0.5 million during the fourth quarter of 2021.

Net interest margin for the fourth quarter of 2022 was 4.10%, compared to 3.65% for the third quarter of 2022. The increase was primarily attributable to higher yields on interest-earning assets. The contribution of nonaccrual interest recoveries to net interest margin was 13 basis points during the fourth quarter of 2022 and 1 basis point during the third quarter of 2022. Additionally, acquired loan discount accretion contributed 2 basis points to net interest margin during the fourth quarter of 2022 and 2 basis points during the third quarter of 2022.

Relative to the fourth quarter of 2021, net interest margin increased from 3.17%. This increase was primarily attributable to higher yields on interest-earning assets and a more favorable mix of interest-earning assets. Nonaccrual interest recoveries contributed 5 basis points to net interest margin, and acquired loan discount accretion contributed 6 basis points to net interest margin, during the fourth quarter of 2021.

Noninterest Income

Noninterest income for the fourth quarter of 2022 was $7.9 million, a decrease of 4.2% from $8.2 million for the third quarter of 2022. The decrease was primarily attributable to the fourth quarter 2022 results including a negative $0.3 million mortgage servicing rights ("MSR") fair value adjustment, while the third quarter of 2022 included a positive $0.4 million MSR fair value adjustment. Partially offsetting this decline was a $0.4 million increase in wealth management fees, primarily due to increased farmland brokerage service fees.

Relative to the fourth quarter of 2021, noninterest income decreased 15.7% from $9.4 million. The decline was primarily due to a $0.7 million decrease in gains on sale of mortgage loans. Additionally, the fourth quarter of 2021 results included a positive $0.3 million MSR fair value adjustment.

Noninterest Expense

Noninterest expense for the fourth quarter of 2022 was $27.5 million, a 14.6% increase from $24.0 million for the third quarter of 2022. The increase was primarily due to a $2.6 million accrual related to pending legal matters, a $0.5 million increase in salaries expense, and a $0.4 million increase in benefits expense driven by higher medical benefit costs.

Relative to the fourth quarter of 2021, noninterest expense increased 12.8% from $24.4 million, also primarily attributable to the accrual for pending legal matters and increased salaries and benefits expenses.

Loan Portfolio

Total loans outstanding, before allowance for loan losses, were $2.62 billion at December 31, 2022, compared with $2.58 billion at September 30, 2022 and $2.50 billion at December 31, 2021. The $40.3 million increase in total loans from September 30, 2022 was primarily attributable to growth in the multi-family and commercial and industrial categories. The $26.1 million increase in commercial and industrial loans was driven primarily by higher balances on lines of credit across a variety of industries.

Deposits

Total deposits were $3.59 billion at December 31, 2022, compared with $3.64 billion at September 30, 2022 and $3.74 billion at December 31, 2021. The $56.4 million decrease from September 30, 2022 was primarily attributable to lower balances maintained in public funds and business accounts, while balances maintained in retail accounts remained nearly unchanged.

Asset Quality

Nonperforming loans totaled $2.2 million, or 0.08% of total loans, at December 31, 2022, compared with $3.2 million, or 0.12% of total loans, at September 30, 2022, and $2.8 million, or 0.11% of total loans, at December 31, 2021.

The Company recorded a negative provision for loan losses of $0.7 million for the fourth quarter of 2022, compared to a provision for loan losses of $0.4 million for the third quarter of 2022. The negative provision was primarily due to $0.9 million of net recoveries, partially offset by a $0.3 million increase in required reserves, resulting primarily from the increase in loans during the fourth quarter of 2022.

The Company had net recoveries of $0.9 million, or (0.14)% of average loans on an annualized basis, for the fourth quarter of 2022, compared to net charge-offs of $0.1 million, or 0.01% of average loans on an annualized basis, for the third quarter of 2022, and net charge-offs of $0.1 million, or 0.01% of average loans on an annualized basis, for the fourth quarter of 2021.

The Company's allowance for loan losses was 0.97% of total loans and 1,175% of nonperforming loans at December 31, 2022, compared with 0.97% of total loans and 782% of nonperforming loans at September 30, 2022.

On January 1, 2023, the Company adopted ASU 2016-13 (Topic 326), Measurement of Credit Losses on Financial Instruments, commonly referenced as the Current Expected Credit Loss ("CECL") standard. Management is finalizing macroeconomic conditions and forecast assumptions to be used in our CECL model; however, we expect the initial allowance for credit losses and the reserve for unfunded commitments together to be approximately 25% to 50% above the existing allowance for loan loss levels. When finalized, this one-time increase will be recorded, net of tax, as an adjustment to beginning retained earnings. Ongoing impacts of the CECL methodology will be dependent upon changes in economic conditions and forecasts, the credit quality of our loan portfolio, originated and acquired loan portfolio composition, portfolio duration, and other factors.

Stock Repurchase Program

During the fourth quarter of 2022, the Company did not repurchase any shares of its common stock. The Company's Board of Directors authorized a new stock repurchase program that took effect upon the expiration of the Company's prior stock repurchase program on January 1, 2023. The new Program will be in effect until January 1, 2024 and authorizes the Company to repurchase up to $15 million of its common stock.

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 $0.6 million during the fourth quarter of 2022 and $0.5 million during the third quarter of 2022. The acquisition is expected to close on February 1, 2023.

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 December 31, 2022, HBT had total assets of $4.3 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 risk that a condition to closing of the pending Town and Country transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the pending transaction might be delayed or not occur at all; (xiv) potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; (xv) the diversion of management time on transaction-related issues; (xvi) the ultimate timing, outcome and results of integrating the operations of Town and Country into those of HBT; (xvii) the effects of the merger on HBT's future financial condition, results of operations, strategy and plans; and (xviii) 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 Financial and Town and Country filed a Registration Statement on Form S-4 of HBT Financial that includes a proxy statement of Town and Country and a prospectus of HBT Financial that has been distributed to the stockholders of Town and Country. This document is not a substitute for the proxy statement/prospectus or the Registration Statement or for any other document that HBT Financial or Town and Country may file with the SEC and/or send to Town and Country's stockholders in connection with the proposed transaction. TOWN AND COUNTRY'S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND THE REGISTRATION STATEMENT AND ALL OTHER RELEVANT DOCUMENTS FILED BY HBT FINANCIAL OR TOWN AND COUNTRY OR DISTRIBUTED TO TOWN AND COUNTRY STOCKHOLDERS BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT HBT FINANCIAL, TOWN AND COUNTRY AND THE PROPOSED TRANSACTION.

Investors can 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 Financial and Town and Country with the SEC through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by HBT Financial are available free of charge from HBT Financial's website at https://ir.hbtfinancial.com or by contacting HBT Financial's Investor Relations Department at HBTIR@hbtbank.com.

No Offer or Solicitation

This document does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities 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.

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


HBT Financial, Inc.
Unaudited Consolidated Financial Summary

                  
  As of or for the Three Months Ended Year Ended 
  December 31, September 30, December 31, December 31, 
     2022
 2022 2021
 2022
 2021
 
  (dollars in thousands, except per share data) 
Interest and dividend income $44,948  $39,014  $34,355  $153,054  $128,223  
Interest expense  2,765   1,624   1,496   7,180   5,820  
Net interest income  42,183   37,390   32,859   145,874   122,403  
Provision for loan losses  (653)  386   (843)  (706)  (8,077) 
Net interest income after provision for loan losses  42,836   37,004   33,702   146,580   130,480  
Noninterest income  7,889   8,234   9,354   34,717   37,328  
Noninterest expense  27,510   23,998   24,381   99,507   91,246  
Income before income tax expense  23,215   21,240   18,675   81,790   76,562  
Income tax expense  6,058   5,613   5,081   21,317   20,291  
Net income $17,157  $15,627  $13,594  $60,473  $56,271  
                  
Earnings per share - Basic $0.60  $0.54  $0.47  $2.09  $2.02  
Earnings per share - Diluted  0.59   0.54   0.47   2.09   2.02  
                  
Adjusted net income (1) $17,903  $15,856  $14,160  $59,822  $56,840  
Adjusted earnings per share - Basic (1)  0.62   0.55   0.49   2.07   2.04  
Adjusted earnings per share - Diluted (1)  0.62   0.55   0.49   2.07   2.04  
                  
Book value per share $13.13  $12.49  $14.21        
Tangible book value per share (1)  12.08   11.43   13.13        
                  
Shares of common stock outstanding  28,752,626   28,752,626   28,986,061        
Weighted average shares of common stock outstanding  28,752,626   28,787,662   29,036,164   28,853,697   27,795,806  
                  
SUMMARY RATIOS                 
Net interest margin *  4.10 % 3.65 % 3.17 % 3.54 % 3.18 %
Net interest margin (tax equivalent basis) * (1)(2)  4.17   3.72   3.22   3.60   3.23  
                  
Efficiency ratio  54.66 % 52.07 % 57.15 % 54.62 % 56.46 %
Efficiency ratio (tax equivalent basis) (1)(2)  53.91   51.31   56.47   53.87   55.76  
                  
Loan to deposit ratio  73.05 % 70.81 % 66.87 %      
                  
Return on average assets *  1.60 % 1.47 % 1.26 % 1.42 % 1.41 %
Return on average stockholders' equity *  18.50   16.27   13.15   15.78   14.81  
Return on average tangible common equity * (1)  20.17   17.70   14.24   17.15   15.95  
                  
Adjusted return on average assets * (1)  1.67 % 1.49 % 1.32 % 1.40 % 1.43 %
Adjusted return on average stockholders' equity * (1)  19.31   16.51   13.70   15.61   14.95  
Adjusted return on average tangible common equity * (1)  21.05   17.96   14.83   16.97   16.12  
                  
CAPITAL                 
Total capital to risk-weighted assets  16.45 % 16.34 % 16.88 %      
Tier 1 capital to risk-weighted assets  14.41   14.26   14.66        
Common equity tier 1 capital ratio  13.25   13.08   13.37        
Tier 1 leverage ratio  10.58   10.44   9.84        
Total stockholders' equity to total assets  8.83   8.52   9.55        
Tangible common equity to tangible assets (1)  8.18   7.85   8.89        
                  
ASSET QUALITY                 
Net charge-offs (recoveries) to average loans, before allowance for loan losses  (0.14)% 0.01 % 0.01 % (0.08)% (0.01)%
Allowance for loan losses to loans, before allowance for loan losses  0.97   0.97   0.96        
Nonperforming loans to loans, before allowance for loan losses  0.08   0.12   0.11        
Nonperforming assets to total assets  0.12   0.14   0.14        



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


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

                
  Three Months Ended Year Ended
  December 31, September 30, December 31, December 31,
     2022
 2022
 2021
 2022
 2021
INTEREST AND DIVIDEND INCOME (dollars in thousands, except per share data)
Loans, including fees:               
Taxable $35,839  $29,855  $27,884  $120,343  $103,900 
Federally tax exempt  952   842   662   3,135   2,384 
Securities:               
Taxable  6,421   6,635   4,625   23,368   16,948 
Federally tax exempt  1,184   1,207   1,017   4,569   4,400 
Interest-bearing deposits in bank  504   458   142   1,541   527 
Other interest and dividend income  48   17   25   98   64 
Total interest and dividend income  44,948   39,014   34,355   153,054   128,223 
                
INTEREST EXPENSE               
Deposits  849   587   651   2,511   2,472 
Securities sold under agreements to repurchase  10   9   11   36   34 
Borrowings  880   85   7   967   9 
Subordinated notes  470   470   470   1,879   1,879 
Junior subordinated debentures issued to capital trusts  556   473   357   1,787   1,426 
Total interest expense  2,765   1,624   1,496   7,180   5,820 
Net interest income  42,183   37,390   32,859   145,874   122,403 
PROVISION FOR LOAN LOSSES  (653)  386   (843)  (706)  (8,077)
Net interest income after provision for loan losses  42,836   37,004   33,702   146,580   130,480 
                
NONINTEREST INCOME               
Card income  2,642   2,569   2,518   10,329   9,734 
Wealth management fees  2,485   2,059   2,371   9,155   8,384 
Service charges on deposit accounts  1,701   1,927   1,716   7,072   6,080 
Mortgage servicing  593   697   730   2,609   2,825 
Mortgage servicing rights fair value adjustment  (293)  351   265   2,153   1,690 
Gains on sale of mortgage loans  194   354   927   1,461   5,846 
Unrealized gains (losses) on equity securities  33   (107)  33   (414)  107 
Gains (losses) on foreclosed assets  (122)  (225)  184   (314)  310 
Gains (losses) on other assets  17   (31)  (4)  136   (723)
Income on bank owned life insurance  42   41   41   164   41 
Other noninterest income  597   599   573   2,366   3,034 
Total noninterest income  7,889   8,234   9,354   34,717   37,328 
                
NONINTEREST EXPENSE               
Salaries  13,278   12,752   12,486   51,767   48,972 
Employee benefits  2,126   1,771   1,964   8,325   6,513 
Occupancy of bank premises  1,893   1,979   1,777   7,673   6,788 
Furniture and equipment  633   668   793   2,476   2,676 
Data processing  2,167   1,631   2,153   7,441   7,329 
Marketing and customer relations  867   880   1,085   3,803   3,376 
Amortization of intangible assets  140   243   255   873   1,054 
FDIC insurance  276   302   280   1,164   1,043 
Loan collection and servicing  278   336   219   1,049   1,317 
Foreclosed assets  33   97   204   293   908 
Other noninterest expense  5,819   3,339   3,165   14,643   11,270 
Total noninterest expense  27,510   23,998   24,381   99,507   91,246 
INCOME BEFORE INCOME TAX EXPENSE  23,215   21,240   18,675   81,790   76,562 
INCOME TAX EXPENSE  6,058   5,613   5,081   21,317   20,291 
NET INCOME $17,157  $15,627  $13,594  $60,473  $56,271 
                
EARNINGS PER SHARE - BASIC $0.60  $0.54  $0.47  $2.09  $2.02 
EARNINGS PER SHARE - DILUTED $0.59  $0.54  $0.47  $2.09  $2.02 
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING  28,752,626   28,787,662   29,036,164   28,853,697   27,795,806 
                     


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

          
  December 31, September 30, December 31,
  2022
 2022
 2021
  (dollars in thousands)
ASSETS         
Cash and due from banks $18,970  $22,169  $23,387 
Interest-bearing deposits with banks  95,189   56,046   385,881 
Cash and cash equivalents  114,159   78,215   409,268 
          
Interest-bearing time deposits with banks        490 
Debt securities available-for-sale, at fair value  843,524   853,740   942,168 
Debt securities held-to-maturity  541,600   546,694   336,185 
Equity securities with readily determinable fair value  3,029   2,996   3,443 
Equity securities with no readily determinable fair value  1,977   1,977   1,927 
Restricted stock, at cost  7,965   4,050   2,739 
Loans held for sale  615   2,297   4,942 
          
Loans, before allowance for loan losses  2,620,253   2,579,928   2,499,689 
Allowance for loan losses  (25,333)  (25,060)  (23,936)
Loans, net of allowance for loan losses  2,594,920   2,554,868   2,475,753 
          
Bank owned life insurance  7,557   7,515   7,393 
Bank premises and equipment, net  50,469   50,854   52,483 
Bank premises held for sale  235   281   1,452 
Foreclosed assets  3,030   2,637   3,278 
Goodwill  29,322   29,322   29,322 
Core deposit intangible assets, net  1,070   1,210   1,943 
Mortgage servicing rights, at fair value  10,147   10,440   7,994 
Investments in unconsolidated subsidiaries  1,165   1,165   1,165 
Accrued interest receivable  19,506   16,881   14,901 
Other assets  47,461   48,182   17,408 
Total assets $4,277,751  $4,213,324  $4,314,254 
          
LIABILITIES AND STOCKHOLDERS' EQUITY         
Liabilities         
Deposits:         
Noninterest-bearing $994,954  $1,017,710  $1,087,659 
Interest-bearing  2,592,070   2,625,733   2,650,526 
Total deposits  3,587,024   3,643,443   3,738,185 
          
Securities sold under agreements to repurchase  43,081   48,130   61,256 
Federal Home Loan Bank advances  160,000   60,000    
Subordinated notes  39,395   39,376   39,316 
Junior subordinated debentures issued to capital trusts  37,780   37,763   37,714 
Other liabilities  32,822   25,539   25,902 
Total liabilities  3,900,102   3,854,251   3,902,373 
          
Stockholders' Equity         
Common stock  293   293   293 
Surplus  222,783   222,436   220,891 
Retained earnings  236,021   223,495   194,132 
Accumulated other comprehensive income (loss)  (71,759)  (77,462)  1,471 
Treasury stock at cost  (9,689)  (9,689)  (4,906)
Total stockholders' equity  377,649   359,073   411,881 
Total liabilities and stockholders' equity $4,277,751  $4,213,324  $4,314,254 
          
SHARE INFORMATION         
Shares of common stock outstanding  28,752,626   28,752,626   28,986,061 
             


HBT Financial, Inc.
Unaudited Consolidated Financial Summary

          
  December 31, September 30, December 31,
  2022 2022 2021
  (dollars in thousands)
LOANS         
Commercial and industrial $266,757 $240,671 $286,946
Agricultural and farmland  237,746  245,234  247,796
Commercial real estate - owner occupied  218,503  226,524  234,544
Commercial real estate - non-owner occupied  713,202  718,089  684,023
Multi-family  287,865  260,630  263,911
Construction and land development  360,824  364,290  298,048
One-to-four family residential  338,253  328,667  327,837
Municipal, consumer, and other  197,103  195,823  156,584
Loans, before allowance for loan losses $2,620,253 $2,579,928 $2,499,689
          
PPP LOANS (included above)         
Commercial and industrial $28 $65 $28,404
Agricultural and farmland      913
Municipal, consumer, and other      171
Total PPP Loans $28 $65 $29,488


          
  December 31, September 30, December 31,
  2022 2022 2021
  (dollars in thousands)
DEPOSITS         
Noninterest-bearing $994,954 $1,017,710 $1,087,659
Interest-bearing demand  1,139,150  1,131,284  1,105,949
Money market  555,425  584,202  583,198
Savings  634,527  641,139  633,171
Time  262,968  269,108  328,208
Total deposits $3,587,024 $3,643,443 $3,738,185
          


HBT Financial, Inc.
Unaudited Consolidated Financial Summary

                          
  Three Months Ended 
  December 31, 2022 September 30, 2022 December 31, 2021 
  Average      Average      Average      
  Balance Interest Yield/Cost* Balance Interest Yield/Cost* Balance Interest Yield/Cost* 
  (dollars in thousands) 
ASSETS                         
Loans $2,600,746  $36,791 5.61%$2,481,920  $30,697 4.91%$2,432,025  $28,546 4.66%
Securities  1,396,401   7,605 2.16  1,470,092   7,842 2.12  1,285,672   5,642 1.74 
Deposits with banks  76,507   504 2.61  105,030   458 1.73  392,729   142 0.14 
Other  5,607   48 3.37  2,936   17 2.25  4,821   25 2.10 
Total interest-earning assets  4,079,261  $44,948 4.37% 4,059,978  $39,014 3.81% 4,115,247  $34,355 3.31%
Allowance for loan losses  (25,404)       (24,717)       (24,826)      
Noninterest-earning assets  188,844        173,461        176,242       
Total assets $4,242,701       $4,208,722       $4,266,663       
                          
LIABILITIES AND STOCKHOLDERS' EQUITY                         
Liabilities                         
Interest-bearing deposits:                         
Interest-bearing demand $1,125,877  $177 0.06%$1,137,072  $144 0.05%$1,061,481  $145 0.05%
Money market  572,718   379 0.26  577,388   203 0.14  589,396   158 0.11 
Savings  640,668   53 0.03  649,752   53 0.03  630,489   53 0.03 
Time  266,117   240 0.36  271,870   187 0.27  322,800   295 0.36 
Total interest-bearing deposits  2,605,380   849 0.13  2,636,082   587 0.09  2,604,166   651 0.10 
Securities sold under agreements to repurchase  51,703   10 0.08  50,427   9 0.07  56,861   11 0.08 
Borrowings  92,120   880 3.79  11,967   85 2.80  5,309   7 0.57 
Subordinated notes  39,384   470 4.73  39,365   470 4.73  39,305   470 4.74 
Junior subordinated debentures issued to capital trusts  37,770   556 5.84  37,755   473 4.97  37,704   357 3.76 
Total interest-bearing liabilities  2,826,357  $2,765 0.39% 2,775,596  $1,624 0.23% 2,743,345  $1,496 0.22%
Noninterest-bearing deposits  1,023,355        1,031,407        1,087,468       
Noninterest-bearing liabilities  25,078        20,736        25,660       
Total liabilities  3,874,790        3,827,739        3,856,473       
Stockholders' Equity  367,911        380,983        410,190       
Total liabilities and stockholders' equity $4,242,701       $4,208,722       $4,266,663       
                          
Net interest income/Net interest margin (1)    $42,183 4.10%   $37,390 3.65%   $32,859 3.17%
Tax-equivalent adjustment (2)     698 0.07     674 0.07     514 0.05 
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (2) (3)    $42,881 4.17%   $38,064 3.72%   $33,373 3.22%
Net interest rate spread (4)       3.98%      3.58%      3.09%
Net interest-earning assets (5) $1,252,904       $1,284,382       $1,371,902       
Ratio of interest-earning assets to interest-bearing liabilities  1.44        1.46        1.50       
Cost of total deposits       0.09%      0.06%      0.07%
Cost of funds       0.28       0.17       0.15 



*   Annualized measure.
(1)   Net interest margin represents net interest income divided by average total interest-earning assets.
(2)   On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.
(3)   See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
(4)   Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(5)   Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.


HBT Financial, Inc.
Unaudited Consolidated Financial Summary

                  
  Year Ended 
  December 31, 2022 December 31, 2021 
  Average     Average     
  Balance Interest Yield/Cost Balance Interest Yield/Cost 
  (dollars in thousands)
ASSETS                 
Loans $2,514,549  $123,478 4.91%$2,271,544  $106,284 4.68%
Securities  1,403,016   27,937 1.99  1,148,900   21,348 1.86 
Deposits with banks  197,030   1,541 0.78  422,828   527 0.12 
Other  3,529   98 2.77  3,201   64 2.01 
Total interest-earning assets  4,118,124  $153,054 3.72% 3,846,473  $128,223 3.33%
Allowance for loan losses  (24,703)       (27,999)      
Noninterest-earning assets  176,427        162,064       
Total assets $4,269,848       $3,980,538       
                  
LIABILITIES AND STOCKHOLDERS' EQUITY                 
Liabilities                 
Interest-bearing deposits:                 
Interest-bearing demand $1,141,402  $607 0.05%$1,024,888  $518 0.05%
Money market  582,514   813 0.14  521,366   437 0.08 
Savings  650,385   208 0.03  595,887   188 0.03 
Time  283,232   883 0.31  295,788   1,329 0.45 
Total interest-bearing deposits  2,657,533   2,511 0.09  2,437,929   2,472 0.10 
Securities sold under agreements to repurchase  51,554   36 0.07  50,104   34 0.07 
Borrowings  26,468   967 3.65  1,653   9 0.54 
Subordinated notes  39,355   1,879 4.77  39,275   1,879 4.78 
Junior subordinated debentures issued to capital trusts  37,746   1,787 4.73  37,680   1,426 3.79 
Total interest-bearing liabilities  2,812,656  $7,180 0.26% 2,566,641  $5,820 0.23%
Noninterest-bearing deposits  1,051,187        1,004,757       
Noninterest-bearing liabilities  22,688        29,060       
Total liabilities  3,886,531        3,600,458       
Stockholders' Equity  383,317        380,080       
Total liabilities and stockholders' equity $4,269,848        3,980,538       
                  
Net interest income/Net interest margin (1)    $145,874 3.54%   $122,403 3.18%
Tax-equivalent adjustment (2)     2,499 0.06     2,028 0.05 
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (2) (3)    $148,373 3.60%   $124,431 3.23%
Net interest rate spread (4)       3.46%      3.10%
Net interest-earning assets (5) $1,305,468       $1,279,832       
Ratio of interest-earning assets to interest-bearing liabilities  1.46        1.50       
Cost of total deposits       0.07%      0.07%
Cost of funds       0.19       0.16 



(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

           
  December 31, September 30, December 31, 
  2022 2022 2021 
  (dollars in thousands) 
NONPERFORMING ASSETS          
Nonaccrual $2,155 $3,206 $2,763 
Past due 90 days or more, still accruing (1)  1    16 
Total nonperforming loans  2,156  3,206  2,779 
Foreclosed assets  3,030  2,637  3,278 
Total nonperforming assets $5,186 $5,843 $6,057 
           
Allowance for loan losses $25,333 $25,060 $23,936 
Loans, before allowance for loan losses  2,620,253  2,579,928  2,499,689 
           
CREDIT QUALITY RATIOS          
Allowance for loan losses to loans, before allowance for loan losses  0.97% 0.97% 0.96%
Allowance for loan losses to nonaccrual loans  1,175.55  781.66  866.30 
Allowance for loan losses to nonperforming loans  1,175.00  781.66  861.32 
Nonaccrual loans to loans, before allowance for loan losses  0.08  0.12  0.11 
Nonperforming loans to loans, before allowance for loan losses  0.08  0.12  0.11 
Nonperforming assets to total assets  0.12  0.14  0.14 
Nonperforming assets to loans, before allowance for loan losses, and foreclosed assets  0.20  0.23  0.24 



(1)   Excludes loans acquired with deteriorated credit quality that are past due 90 or more days, still accruing totaling $145 thousand, $22 thousand, and $32 thousand as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively.

                 
  Three Months Ended Year Ended 
  December 31, September 30, December 31, December 31, 
     2022
 2022
 2021
 2022
 2021
 
ALLOWANCE FOR LOAN LOSSES (dollars in thousands) 
Beginning balance $25,060  $24,734  $24,861  $23,936  $31,838  
Provision  (653)  386   (843)  (706)  (8,077) 
Charge-offs  (169)  (222)  (539)  (684)  (1,414) 
Recoveries  1,095   162   457   2,787   1,589  
Ending balance $25,333  $25,060  $23,936  $25,333  $23,936  
                 
Net charge-offs (recoveries) $(926) $60  $82  $(2,103) $(175) 
Average loans, before allowance for loan losses  2,600,746   2,481,920   2,432,025   2,514,549   2,271,544  
                 
Net charge-offs (recoveries) to average loans, before allowance for loan losses *  (0.14)% 0.01 % 0.01 % (0.08)% (0.01)%



*   Annualized measure.


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

                 
  Three Months Ended Year Ended 
  December 31, September 30, December 31, December 31, 
     2022
 2022
 2021
 2022
 2021
 
  (dollars in thousands) 
Net income $17,157  $15,627  $13,594  $60,473  $56,271  
Adjustments:                
Acquisition expenses  (630)  (462)  (879)  (1,092)  (1,416) 
Branch closure expenses              (748) 
Gains (losses) on sales of closed branch premises     (38)     141     
Mortgage servicing rights fair value adjustment  (293)  351   265   2,153   1,690  
Total adjustments  (923)  (149)  (614)  1,202   (474) 
Tax effect of adjustments  177   (80)  48   (551)  (95) 
Less adjustments, after tax effect  (746)  (229)  (566)  651   (569) 
Adjusted net income $17,903  $15,856  $14,160  $59,822  $56,840  
                 
Average assets $4,242,701  $4,208,722  $4,266,663  $4,269,848  $3,980,538  
                 
Return on average assets *  1.60 % 1.47 % 1.26 % 1.42 % 1.41 %
Adjusted return on average assets *  1.67   1.49   1.32   1.40   1.43  



*   Annualized measure.


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

                
  Three Months Ended Year Ended
  December 31, September 30, December 31, December 31,
     2022
 2022
 2021
 2022
 2021
  (dollars in thousands, except per share data)
Numerator:               
Net income $17,157  $15,627  $13,594  $60,473  $56,271 
Earnings allocated to participating securities (1)  (20)  (17)  (23)  (71)  (104)
Numerator for earnings per share - basic and diluted $17,137  $15,610  $13,571  $60,402  $56,167 
                
Adjusted net income $17,903  $15,856  $14,160  $59,822  $56,840 
Earnings allocated to participating securities (1)  (21)  (17)  (24)  (70)  (105)
Numerator for adjusted earnings per share - basic and diluted $17,882  $15,839  $14,136  $59,752  $56,735 
                
Denominator:               
Weighted average common shares outstanding  28,752,626   28,787,662   29,036,164   28,853,697   27,795,806 
Dilutive effect of outstanding restricted stock units  91,905   72,643   27,577   65,619   15,487 
Weighted average common shares outstanding, including all dilutive potential shares  28,844,531   28,860,305   29,063,741   28,919,316   27,811,293 
                
Earnings per share - Basic $0.60  $0.54  $0.47  $2.09  $2.02 
Earnings per share - Diluted $0.59  $0.54  $0.47  $2.09  $2.02 
                
Adjusted earnings per share - Basic $0.62  $0.55  $0.49  $2.07  $2.04 
Adjusted earnings per share - Diluted $0.62  $0.55  $0.49  $2.07  $2.04 



(1)   The Company has granted certain restricted stock units that contain non-forfeitable rights to dividend equivalents. Such restricted stock units are considered participating securities. As such, we have included these restricted stock units in the calculation of basic earnings per share and calculate basic earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings.


Reconciliation of Non-GAAP Financial Measures –
Net Interest Income and Net Interest Margin (Tax Equivalent Basis)

                 
  Three Months Ended Year Ended 
  December 31, September 30, December 31, December 31, 
     2022 2022 2021 2022 2021 
  (dollars in thousands) 
Net interest income (tax equivalent basis)                
Net interest income $42,183 $37,390 $32,859 $145,874 $122,403 
Tax-equivalent adjustment (1)  698  674  514  2,499  2,028 
Net interest income (tax equivalent basis) (1) $42,881 $38,064 $33,373 $148,373 $124,431 
                 
Net interest margin (tax equivalent basis)                
Net interest margin *  4.10% 3.65% 3.17% 3.54% 3.18%
Tax-equivalent adjustment * (1)  0.07  0.07  0.05  0.06  0.05 
Net interest margin (tax equivalent basis) * (1)  4.17% 3.72% 3.22% 3.60% 3.23%
                 
Average interest-earning assets $4,079,261 $4,059,978 $4,115,247 $4,118,124 $3,846,473 



*   Annualized measure.
(1)   On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.


Reconciliation of Non-GAAP Financial Measures –
Efficiency Ratio (Tax Equivalent Basis)

                 
  Three Months Ended Year Ended 
  December 31, September 30, December 31, December 31, 
     2022 2022 2021 2022 2021 
  (dollars in thousands) 
Efficiency ratio (tax equivalent basis)                
Total noninterest expense $27,510 $23,998 $24,381 $99,507 $91,246 
Less: amortization of intangible assets  140  243  255  873  1,054 
Adjusted noninterest expense $27,370 $23,755 $24,126 $98,634 $90,192 
                 
Net interest income $42,183 $37,390 $32,859 $145,874 $122,403 
Total noninterest income  7,889  8,234  9,354  34,717  37,328 
Operating revenue  50,072  45,624  42,213  180,591  159,731 
Tax-equivalent adjustment (1)  698  674  514  2,499  2,028 
Operating revenue (tax equivalent basis) (1) $50,770 $46,298 $42,727 $183,090 $161,759 
                 
Efficiency ratio  54.66% 52.07% 57.15% 54.62% 56.46%
Efficiency ratio (tax equivalent basis) (1)  53.91  51.31  56.47  53.87  55.76 



(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

           
  December 31, September 30, December 31, 
  2022 2022 2021 
  (dollars in thousands, except per share data) 
Tangible common equity          
Total stockholders' equity $377,649 $359,073 $411,881 
Less: Goodwill  29,322  29,322  29,322 
Less: Core deposit intangible assets, net  1,070  1,210  1,943 
Tangible common equity $347,257 $328,541 $380,616 
           
Tangible assets          
Total assets $4,277,751 $4,213,324 $4,314,254 
Less: Goodwill  29,322  29,322  29,322 
Less: Core deposit intangible assets, net  1,070  1,210  1,943 
Tangible assets $4,247,359 $4,182,792 $4,282,989 
           
Total stockholders' equity to total assets  8.83% 8.52% 9.55%
Tangible common equity to tangible assets  8.18  7.85  8.89 
           
Shares of common stock outstanding  28,752,626  28,752,626  28,986,061 
           
Book value per share $13.13 $12.49 $14.21 
Tangible book value per share  12.08  11.43  13.13 
           


Reconciliation of Non-GAAP Financial Measures –
Return on Average Tangible Common Equity,
Adjusted Return on Average Stockholders' Equity and Adjusted Return on Tangible Common Equity

                 
  Three Months Ended Year Ended 
  December 31, September 30, December 31, December 31, 
     2022 2022 2021 2022 2021 
  (dollars in thousands) 
Average tangible common equity                
Total stockholders' equity $367,911 $380,983 $410,190 $383,317 $380,080 
Less: Goodwill  29,322  29,322  29,322  29,322  25,057 
Less: Core deposit intangible assets, net  1,134  1,356  2,092  1,480  2,333 
Average tangible common equity $337,455 $350,305 $378,776 $352,515 $352,690 
                 
Net income $17,157 $15,627 $13,594 $60,473 $56,271 
Adjusted net income  17,903  15,856  14,160  59,822  56,840 
                 
Return on average stockholders' equity *  18.50% 16.27% 13.15% 15.78% 14.81%
Return on average tangible common equity *  20.17  17.70  14.24  17.15  15.95 
                 
Adjusted return on average stockholders' equity *  19.31% 16.51% 13.70% 15.61% 14.95%
Adjusted return on average tangible common equity *  21.05  17.96  14.83  16.97  16.12 



*   Annualized measure.

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