HBT Financial, Inc. Announces Second Quarter 2022 Financial Results
*Second Quarter Highlights*· *Net income of $14.1 million, or $0.49 per diluted share; return on average assets (ROAA) of 1.32%; return on average stockholders' equity (ROAE) of 14.92%; and return on average tangible common equity (ROATCE)*^*(1)** of 16.25%*
· *Adjusted net income*^*(1)** of $13.8 million; or $0.48 per diluted share; adjusted ROAA*^*(1)** of 1.29%; adjusted ROAE*^*(1)** of 14.66%; and adjusted ROATCE*^*(1)** of 15.96%*
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(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
BLOOMINGTON, Ill., July 25, 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 $14.1 million, or $0.49 diluted earnings per share, for the second quarter of 2022. This compares to net income of $13.6 million, or $0.47 diluted earnings per share, for the first quarter of 2022, and net income of $13.7 million, or $0.50 diluted earnings per share, for the second quarter of 2021.
Fred L. Drake, Chairman and Chief Executive Officer of HBT Financial, said, “During the second quarter, we had significant expansion in our net interest margin, disciplined expense control, and continued strong asset quality, which enabled us to generate a higher level of earnings and returns compared to the prior quarter. Given our asset sensitive balance sheet, we expect to continue benefiting from higher interest rates, which along with our expectation for a higher level of loan growth in the second half of the year, should result in further increases in net interest income. As we look ahead, our franchise is built upon the foundation of a very stable deposit base and conservatively underwritten, well diversified loan portfolio that we believe will help us to effectively manage through any potential economic downturn and continue delivering strong financial performance. Combined with our exceptionally strong balance sheet, we believe our consistent financial performance will enable us to continue enhancing the value of our franchise and returning capital to our shareholders through our quarterly dividend and share repurchase program.”
*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 $13.8 million, or $0.48 adjusted diluted earnings per share, for the second quarter of 2022. This compares to adjusted net income of $12.2 million, or $0.42 adjusted diluted earnings per share, for the first quarter of 2022, and adjusted net income of $14.2 million, or $0.52 adjusted diluted earnings per share, for the second quarter of 2021 (see "Reconciliation of Non-GAAP Financial Measures" tables).
*Net Interest Income and Net Interest Margin*
Net interest income for the second quarter of 2022 was $34.4 million, an increase of 7.7% from $31.9 million for the first quarter of 2022. The increase was primarily attributable to higher yields on interest-earning assets. Paycheck Protection Program (“PPP”) loan fees recognized as loan interest income totaled $0.6 million during the second quarter of 2022 and $0.7 million during the first quarter of 2022. As of June 30, 2022, the remaining deferred PPP loan fees to be recognized as income totaled $0.1 million.
Relative to the second quarter of 2021, net interest income increased 15.7% from $29.7 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. PPP loan fees recognized as loan interest income totaled $2.4 million during the second quarter of 2021.
Net interest margin for the second quarter of 2022 was 3.34%, compared to 3.08% for the first 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 6 basis points during the second quarter of 2022 and 7 basis points during the first quarter of 2022. Additionally, the contribution of acquired loan discount accretion to net interest margin increased to 3 basis points during the second quarter of 2022 from 1 basis point during the first quarter of 2022.
Relative to the second quarter of 2021, net interest margin increased from 3.14%. This increase was primarily attributable to a more favorable mix of interest-earning assets. PPP loan fees recognized as loan interest income contributed 25 basis points to net interest margin and acquired loan discount accretion contributed 2 basis points to net interest margin during the second quarter of 2021.
*Noninterest Income*
Noninterest income for the second quarter of 2022 was $8.6 million, a decrease of 14.9% from $10.0 million for the first quarter of 2022. The decrease was primarily attributable to a positive $0.4 million mortgage servicing rights (“MSR”) fair value adjustment included in the second quarter of 2022 results, compared to a positive $1.7 million MSR fair value adjustment included in the first quarter of 2022 results. Additionally, card income increased by $0.3 million during the second quarter of 2022, primarily due to increased card transaction volume. The increase in card income was mostly offset by a $0.3 million decrease in gains on sale of mortgage loans primarily as a result of a lower level of mortgage refinancing activity.
Relative to the second quarter of 2021, noninterest income decreased 2.5% from $8.8 million, primarily due to a $1.2 million decrease in gains on sale of mortgage loans resulting from a lower level of mortgage refinancing activity. This decrease was mostly offset by increases in service charges on deposit accounts, wealth management fees, and card income.
*Noninterest Expense*
Noninterest expense for the second quarter of 2022 was $23.8 million, a decrease of 1.3% from $24.2 million for the first quarter of 2022. The decrease was primarily attributable to a $0.5 million decrease in employee benefits expense as the first quarter of 2022 results included accelerated recognition of $0.6 million of stock compensation expense as a result of a modification to all existing restricted stock unit and performance restricted stock unit agreements to address treatment upon retirement. Total compensation costs related to the modified agreements remains the same.
Relative to the second quarter of 2021, noninterest expense increased 7.6% 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 $2.45 billion at June 30, 2022, compared with $2.49 billion at March 31, 2022 and $2.15 billion at June 30, 2021. The $36.0 million decrease in total loans from March 31, 2022 was primarily attributable to a $41.2 million seasonal decrease in grain elevator operating lines within the commercial and industrial portfolio and a $13.7 million decrease from the ongoing forgiveness of PPP loans. These decreases were partially offset by a $26.0 million increase in multi-family loans.
*Deposits*
Total deposits were $3.70 billion at June 30, 2022, compared with $3.82 billion at March 31, 2022 and $3.42 billion at June 30, 2021. The $114.1 million decrease from March 31, 2022 was primarily attributable to lower balances maintained in retail and business accounts, partially offset by a seasonal increase in public fund accounts as a result of real estate tax collections.
*Asset Quality*
Nonperforming loans totaled $3.4 million, or 0.14% of total loans, at June 30, 2022, compared with $2.5 million, or 0.10% of total loans, at March 31, 2022, and $7.4 million, or 0.34% of total loans, at June 30, 2021.
The Company recorded a provision for loan losses of $0.1 million for the second quarter of 2022, compared to a negative provision for loan losses of $0.6 million for the first quarter of 2022. The provision was primarily due to changes to qualitative factors reflecting a slight deterioration in the economic environment since the first quarter of 2022, resulting in a $0.4 million increase in required reserve; a decrease in specific reserves on loans individually evaluated for impairment, resulting in a $0.2 million decrease in required reserves; and $0.1 million of net recoveries during the quarter.
The Company had net recoveries of $0.1 million, or (0.01)% of average loans on an annualized basis, for the second quarter of 2022, compared to net recoveries of $1.2 million, or (0.19)% of average loans on an annualized basis, for the first quarter of 2022, and net charge-offs of $90 thousand, or 0.02% of average loans on an annualized basis, for the second quarter of 2021.
The Company’s allowance for loan losses was 1.01% of total loans and 721.11% of nonperforming loans at June 30, 2022, compared with 0.99% of total loans and 992.63% of nonperforming loans at March 31, 2022.
*Capital*
At June 30, 2022, the Company exceeded all regulatory capital requirements under Basel III as summarized in the following table:
Well Capitalized Regulatory June 30, 2022 Requirements
Total capital to risk-weighted assets 16.76% 10.00%
Tier 1 capital to risk-weighted assets 14.59% 8.00%
Common equity tier 1 capital ratio 13.36% 6.50%
Tier 1 leverage ratio 10.05% 5.00%
Total stockholders' equity to total assets 8.85% N/A
Tangible common equity to tangible assets ^(1) 8.18% N/A
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(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
*Stock Repurchase Program*
During the second quarter of 2022, the Company repurchased 136,746 shares of its common stock at a weighted average price of $17.61 under its stock repurchase program. 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 June 30, 2022, the Company had $11.6 million remaining under the current stock repurchase authorization.
*About HBT Financial, Inc.*
HBT Financial, Inc., headquartered in Bloomington, Illinois, is the holding company for Heartland Bank and Trust Company, and has banking roots that can be traced back to 1920. HBT provides a comprehensive suite of business, commercial, wealth management, and retail banking products and services to individuals, businesses and municipal entities throughout Central and Northeastern Illinois and Eastern Iowa through 61 branches. As of June 30, 2022, HBT had total assets of $4.2 billion, total loans of $2.5 billion, and total deposits of $3.7 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; and (xiii) 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.
*CONTACT:*
Tony Rossi
HBTIR@hbtbank.com
(310) 622-8221
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
*Consolidated Statements of Income*
*Three Months Ended * *Six Months Ended * *June 30, * *March 31, * *June 30, * *June 30, * * * *2022* * * *2022* * * *2021* * * *2022* * * *2021*
*INTEREST AND DIVIDEND INCOME* *(dollars in thousands, except per share data)*
Loans, including fees:
Taxable $ 27,843 $ 26,806 $ 25,278 $ 54,649 $ 50,412
Federally tax exempt 679 662 540 1,341 1,150
Securities:
Taxable 5,663 4,649 4,058 10,312 7,691
Federally tax exempt 1,138 1,040 1,144 2,178 2,280
Interest-bearing deposits in bank 420 159 115 579 195
Other interest and dividend income 14 19 12 33 25
*Total interest and dividend income* 35,757 33,335 31,147 69,092 61,753
*INTEREST EXPENSE*
Deposits 506 569 613 1,075 1,257
Securities sold under agreements to repurchase 8 9 8 17 15
Borrowings 1 1 — 2 1
Subordinated notes 469 470 469 939 939
Junior subordinated debentures issued to capital trusts 400 358 357 758 712
*Total interest expense* 1,384 1,407 1,447 2,791 2,924
*Net interest income* 34,373 31,928 29,700 66,301 58,829
*PROVISION FOR LOAN LOSSES* 145 (584 ) (2,162 ) (439 ) (5,567 )
*Net interest income after provision for loan losses* 34,228 32,512 31,862 66,740 64,396
*NONINTEREST INCOME*
Card income 2,714 2,404 2,449 5,118 4,707
Wealth management fees 2,322 2,289 2,005 4,611 3,977
Service charges on deposit accounts 1,792 1,652 1,390 3,444 2,687
Mortgage servicing 661 658 711 1,319 1,396
Mortgage servicing rights fair value adjustment 366 1,729 (310 ) 2,095 1,385
Gains on sale of mortgage loans 326 587 1,562 913 3,662
Unrealized gains (losses) on equity securities (153 ) (187 ) 6 (340 ) 46
Gains (losses) on foreclosed assets (7 ) 40 216 33 140
Gains (losses) on other assets (43 ) 193 (48 ) 150 (47 )
Income on bank owned life insurance 41 40 — 81 —
Other noninterest income 532 638 793 1,170 1,629
*Total noninterest income* 8,551 10,043 8,774 18,594 19,582
*NONINTEREST EXPENSE*
Salaries 12,936 12,801 12,173 25,737 24,651
Employee benefits 1,984 2,444 1,409 4,428 3,094
Occupancy of bank premises 1,741 2,060 1,463 3,801 3,401
Furniture and equipment 623 552 603 1,175 1,226
Data processing 1,990 1,653 1,721 3,643 3,409
Marketing and customer relations 1,205 851 843 2,056 1,408
Amortization of intangible assets 245 245 258 490 547
FDIC insurance 298 288 244 586 484
Loan collection and servicing 278 157 333 435 698
Foreclosed assets 31 132 319 163 462
Other noninterest expense 2,511 2,974 2,788 5,485 5,318
*Total noninterest expense* 23,842 24,157 22,154 47,999 44,698
*INCOME BEFORE INCOME TAX EXPENSE* 18,937 18,398 18,482 37,335 39,280
*INCOME TAX EXPENSE* 4,852 4,794 4,765 9,646 10,318
*NET INCOME* $ 14,085 $ 13,604 $ 13,717 $ 27,689 $ 28,962
*EARNINGS PER SHARE - BASIC* $ 0.49 $ 0.47 $ 0.50 $ 0.96 $ 1.06
*EARNINGS PER SHARE - DILUTED* $ 0.49 $ 0.47 $ 0.50 $ 0.95 $ 1.05
*WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING* 28,891,202 28,986,593 27,362,579 28,938,634 27,396,557
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
*Consolidated Balance Sheets*
*June 30, * *March 31, * * * *June 30, * *2022* * * *2022* * ** * *2021* *(dollars in thousands)*
*ASSETS*
Cash and due from banks $ 25,478 $ 30,761 $ 47,861
Interest-bearing deposits with banks 134,553 328,218 497,742
Cash and cash equivalents 160,031 358,979 545,603
Interest-bearing time deposits with banks — 487 —
Debt securities available-for-sale, at fair value 924,706 933,922 836,267
Debt securities held-to-maturity 548,236 438,054 309,132
Equity securities with readily determinable fair value 3,103 3,256 3,338
Equity securities with no readily determinable fair value 1,952 1,927 1,552
Restricted stock, at cost 2,813 2,739 2,739
Loans held for sale 5,312 1,777 5,951
Loans, before allowance for loan losses 2,451,826 2,487,785 2,152,119
Allowance for loan losses (24,734 ) (24,508 ) (26,507 )
Loans, net of allowance for loan losses 2,427,092 2,463,277 2,125,612
Bank owned life insurance 7,474 7,433 —
Bank premises and equipment, net 51,433 52,005 51,900
Bank premises held for sale 319 1,081 121
Foreclosed assets 2,891 3,043 7,757
Goodwill 29,322 29,322 23,620
Core deposit intangible assets, net 1,453 1,698 2,251
Mortgage servicing rights, at fair value 10,089 9,723 7,319
Investments in unconsolidated subsidiaries 1,165 1,165 1,165
Accrued interest receivable 14,263 13,527 12,785
Other assets 32,324 25,550 16,565
*Total assets* $ 4,223,978 $ 4,348,965 $ 3,953,677
*LIABILITIES AND STOCKHOLDERS' EQUITY*
*Liabilities*
Deposits:
Noninterest-bearing $ 1,028,790 $ 1,069,231 $ 1,011,481
Interest-bearing 2,673,196 2,746,838 2,413,153
Total deposits 3,701,986 3,816,069 3,424,634
Securities sold under agreements to repurchase 51,091 50,834 46,756
Subordinated notes 39,356 39,336 39,277
Junior subordinated debentures issued to capital trusts 37,747 37,731 37,681
Other liabilities 19,989 21,840 32,135
*Total liabilities* 3,850,169 3,965,810 3,580,483
*Stockholders' Equity*
Common stock 293 293 275
Surplus 222,087 221,735 191,185
Retained earnings 212,506 203,076 175,328
Accumulated other comprehensive income (loss) (52,820 ) (36,100 ) 8,386
Treasury stock at cost (8,257 ) (5,849 ) (1,980 )
*Total stockholders’ equity* 373,809 383,155 373,194
*Total liabilities and stockholders’ equity* $ 4,223,978 $ 4,348,965 $ 3,953,677
*SHARE INFORMATION*
Shares of common stock outstanding 28,831,197 28,967,943 27,355,053
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
*June 30, * *March 31, * * * *June 30, * *2022* * * *2022* * * *2021* *(dollars in thousands)*
*LOANS*
Commercial and industrial $ 249,839 $ 291,909 $ 321,352
Agricultural and farmland 230,370 232,528 231,527
Commercial real estate - owner occupied 228,997 237,000 212,597
Commercial real estate - non-owner occupied 656,093 687,617 531,803
Multi-family 269,452 243,447 212,079
Construction and land development 332,041 320,030 204,619
One-to-four family residential 325,047 327,791 302,888
Municipal, consumer, and other 159,987 147,463 135,254
*Loans, before allowance for loan losses* $ 2,451,826 $ 2,487,785 $ 2,152,119
*PPP LOANS (included above)*
Commercial and industrial $ 2,823 $ 16,184 $ 115,538
Agricultural and farmland 9 392 8,711
Municipal, consumer, and other — — 1,273
*Total PPP Loans* $ 2,832 $ 16,576 $ 125,522
*June 30, * *March 31, * * * *June 30, * *2022* * * *2022* * * *2021* *(dollars in thousands)*
*DEPOSITS*
Noninterest-bearing $ 1,028,790 $ 1,069,231 $ 1,011,481
Interest-bearing demand 1,162,292 1,167,058 1,023,565
Money market 581,058 597,464 506,880
Savings 654,953 687,147 603,849
Time 274,893 295,169 278,859
*Total deposits* $ 3,701,986 $ 3,816,069 $ 3,424,634
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
*Three Months Ended * *June 30, 2022* *March 31, 2022* *June 30, 2021* *Average
Balance* *Interest* *Yield/
Cost** *Average
Balance* *Interest* *Yield/
Cost** *Average
Balance* *Interest* *Yield/
Cost** *(dollars in thousands)*
*ASSETS*
Loans $ 2,467,851 $ 28,522 4.64 % $ 2,507,006 $ 27,468 4.44 % $ 2,234,388 $ 25,818 4.63 %
Securities 1,422,096 6,801 1.92 1,321,918 5,689 1.75 1,121,104 5,202 1.86
Deposits with banks 240,692 420 0.70 370,130 159 0.17 438,001 115 0.11
Other 2,809 14 2.07 2,739 19 2.80 2,726 12 1.83
Total interest-earning assets 4,133,448 $ 35,757 3.47 % 4,201,793 $ 33,335 3.22 % 3,796,219 $ 31,147 3.29 %
Allowance for loan losses (24,579 ) (24,099 ) (28,939 )
Noninterest-earning assets 177,433 165,752 156,559
*Total assets* $ 4,286,302 $ 4,343,446 $ 3,923,839
*LIABILITIES AND STOCKHOLDERS' EQUITY*
*Liabilities*
Interest-bearing deposits:
Interest-bearing demand $ 1,159,077 $ 144 0.05 % $ 1,143,829 $ 142 0.05 % $ 1,019,488 $ 127 0.05 %
Money market 582,016 110 0.08 598,271 121 0.08 502,448 94 0.08
Savings 661,661 52 0.03 649,563 50 0.03 601,615 46 0.03
Time 284,880 200 0.28 310,675 256 0.33 290,865 346 0.48
Total interest-bearing deposits 2,687,634 506 0.08 2,702,338 569 0.09 2,414,416 613 0.10
Securities sold under agreements to repurchase 51,057 8 0.07 53,054 9 0.07 47,170 8 0.07
Borrowings 440 1 1.34 500 1 0.71 440 — 0.39
Subordinated notes 39,346 469 4.79 39,325 470 4.84 39,265 469 4.80
Junior subordinated debentures issued to capital trusts 37,738 400 4.26 37,721 358 3.85 37,671 357 3.80
Total interest-bearing liabilities 2,816,215 $ 1,384 0.20 % 2,832,938 $ 1,407 0.20 % 2,538,962 $ 1,447 0.23 %
Noninterest-bearing deposits 1,072,883 1,077,917 992,699
Noninterest-bearing liabilities 18,673 26,302 26,988
*Total liabilities* 3,907,771 3,937,157 3,558,649
*Stockholders' Equity* 378,531 406,289 365,190
*Total liabilities and stockholders’ equity* $ 4,286,302 $ 4,343,446 $ 3,923,839
Net interest income/Net interest margin ^(1) $ 34,373 3.34 % $ 31,928 3.08 % $ 29,700 3.14 %
Tax-equivalent adjustment ^(2) 598 0.05 529 0.05 503 0.05
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis)^ (2) (3) $ 34,971 3.39 % $ 32,457 3.13 % $ 30,203 3.19 %
Net interest rate spread ^(4) 3.27 % 3.02 % 3.06 %
Net interest-earning assets ^(5) $ 1,317,233 $ 1,368,855 $ 1,257,257
Ratio of interest-earning assets to interest-bearing liabilities 1.47 1.48 1.50
Cost of total deposits 0.05 % 0.06 % 0.07 %
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* Annualized measure.
(1) Net interest margin represents net interest income divided by average total interest-earning assets.
(2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.
(3) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
(4) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(5) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
*Six Months Ended * * * *June 30, 2022* *June 30, 2021* *Average* *Average* *Balance* *Interest* *Yield/Cost** *Balance* *Interest* *Yield/Cost** * * *(dollars in thousands)*
*ASSETS*
Loans $ 2,487,320 $ 55,990 4.54 % $ 2,259,136 $ 51,562 4.60 %
Securities 1,372,284 12,490 1.84 1,063,312 9,971 1.89
Deposits with banks 305,053 579 0.38 392,213 195 0.10
Other 2,775 33 2.43 2,612 25 1.93
Total interest-earning assets 4,167,432 $ 69,092 3.34 % 3,717,273 $ 61,753 3.35 %
Allowance for loan losses (24,340 ) (30,390 )
Noninterest-earning assets 171,624 156,093
*Total assets* $ 4,314,716 $ 3,842,976
*LIABILITIES AND STOCKHOLDERS' EQUITY*
*Liabilities*
Interest-bearing deposits:
Interest-bearing demand $ 1,151,495 $ 286 0.05 % $ 1,008,664 $ 244 0.05 %
Money market 590,098 231 0.08 492,472 183 0.07
Savings 655,645 102 0.03 571,921 87 0.03
Time 297,706 456 0.31 292,509 743 0.51
Total interest-bearing deposits 2,694,944 1,075 0.08 2,365,566 1,257 0.11
Securities sold under agreements to repurchase 52,050 17 0.07 46,761 15 0.06
Borrowings 470 2 1.01 470 1 0.42
Subordinated notes 39,335 939 4.82 39,255 939 4.83
Junior subordinated debentures issued to capital trusts 37,730 758 4.05 37,663 712 3.81
Total interest-bearing liabilities 2,824,529 $ 2,791 0.20 % 2,489,715 $ 2,924 0.24 %
Noninterest-bearing deposits 1,075,387 956,806
Noninterest-bearing liabilities 22,466 32,077
*Total liabilities* 3,922,382 3,478,598
*Stockholders' Equity* 392,334 364,378
*Total liabilities and stockholders’ equity* $ 4,314,716 3,842,976
Net interest income/Net interest margin ^(1) $ 66,301 3.21 % $ 58,829 3.19 %
Tax-equivalent adjustment ^(2) 1,127 0.05 1,006 0.06
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) ^(2) (3) $ 67,428 3.26 % $ 59,835 3.25 %
Net interest rate spread ^(4) 3.14 % 3.11 %
Net interest-earning assets ^(5) $ 1,342,903 $ 1,227,558
Ratio of interest-earning assets to interest-bearing liabilities 1.48 1.49
Cost of total deposits 0.06 % 0.08 %
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* Annualized measure.
(1) Net interest margin represents net interest income divided by average total interest-earning assets.
(2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.
(3) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
(4) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(5) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
*June 30, * *March 31, * *June 30, * *2022* * * *2022* * * *2021* * * *(dollars in thousands)*
*NONPERFORMING ASSETS*
Nonaccrual $ 3,248 $ 2,461 $ 6,823
Past due 90 days or more, still accruing ^(1) 182 8 583
*Total nonperforming loans* 3,430 2,469 7,406
Foreclosed assets 2,891 3,043 7,757
*Total nonperforming assets* $ 6,321 $ 5,512 $ 15,163
Allowance for loan losses $ 24,734 $ 24,508 $ 26,507
Loans, before allowance for loan losses 2,451,826 2,487,785 2,152,119
*CREDIT QUALITY RATIOS*
Allowance for loan losses to loans, before allowance for loan losses 1.01 % 0.99 % 1.23 %
Allowance for loan losses to nonaccrual loans 761.51 995.86 388.49
Allowance for loan losses to nonperforming loans 721.11 992.63 357.91
Nonaccrual loans to loans, before allowance for loan losses 0.13 0.10 0.32
Nonperforming loans to loans, before allowance for loan losses 0.14 0.10 0.34
Nonperforming assets to total assets 0.15 0.13 0.38
Nonperforming assets to loans, before allowance for loan losses and foreclosed assets 0.26 0.22 0.70
--------------------
(1) Excludes loans acquired with deteriorated credit quality that are past due 90 or more days, still accruing totaling $23 thousand, $25 thousand, and $27 thousand as of June 30, 2022, March 31, 2022 and June 30, 2021, respectively. *Three Months Ended * *Six Months Ended * *June 30, * *March 31, * *June 30, * *June 30, * * * *2022* * * *2022* * * *2021* * * *2022* * * *2021*
*ALLOWANCE FOR LOAN LOSSES* *(dollars in thousands)*
Beginning balance $ 24,508 $ 23,936 $ 28,759 $ 23,936 $ 31,838
Provision 145 (584 ) (2,162 ) (439 ) (5,567 )
Charge-offs (159 ) (134 ) (402 ) (293 ) (597 )
Recoveries 240 1,290 312 1,530 833
*Ending balance* $ 24,734 $ 24,508 $ 26,507 $ 24,734 $ 26,507
Net charge-offs (recoveries) $ (81 ) $ (1,156 ) $ 90 $ (1,237 ) $ (236 )
Average loans, before allowance for loan losses 2,467,851 2,507,006 2,234,388 2,487,320 2,259,136
Net charge-offs (recoveries) to average loans, before allowance for loan losses * (0.01 ) % (0.19 ) % 0.02 % (0.10 ) % (0.02 ) %
--------------------
* Annualized measure.*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
*As of or for the Three Months Ended * *Six Months Ended * *June 30, * *March 31, * *June 30, * *June 30, * * * *2022* * * *2022* * * *2021* * * *2022* * * *2021* *(dollars in thousands, except per share data)*
*EARNINGS AND PER SHARE INFORMATION*
Net income $ 14,085 $ 13,604 $ 13,717 $ 27,689 $ 28,962
Earnings per share - Basic 0.49 0.47 0.50 0.96 1.06
Earnings per share - Diluted 0.49 0.47 0.50 0.95 1.05
Adjusted net income ^(1) $ 13,836 $ 12,227 $ 14,168 $ 26,063 $ 28,201
Adjusted earnings per share - Basic ^(1) 0.48 0.42 0.52 0.90 1.03
Adjusted earnings per share - Diluted ^(1) 0.48 0.42 0.52 0.90 1.03
Book value per share $ 12.97 $ 13.23 $ 13.64
Tangible book value per share ^(1) 11.90 12.16 12.70
Shares of common stock outstanding 28,831,197 28,967,943 27,355,053
Weighted average shares of common stock outstanding 28,891,202 28,986,593 27,362,579 28,938,634 27,396,557
*SUMMARY RATIOS*
Net interest margin * 3.34 % 3.08 % 3.14 % 3.21 % 3.19 %
Net interest margin (tax equivalent basis) * ^(1)(2) 3.39 3.13 3.19 3.26 3.25
Efficiency ratio 54.97 % 56.97 % 56.91 % 55.96 % 56.31 %
Efficiency ratio (tax equivalent basis) ^(1)(2) 54.22 56.26 56.18 55.23 55.59
Loan to deposit ratio 66.23 % 65.19 % 62.84 %
Return on average assets * 1.32 % 1.27 % 1.40 % 1.29 % 1.52 %
Return on average stockholders' equity * 14.92 13.58 15.07 14.23 16.03
Return on average tangible common equity * ^(1) 16.25 14.71 16.22 15.45 17.27
Adjusted return on average assets * ^(1) 1.29 % 1.14 % 1.45 % 1.22 % 1.48 %
Adjusted return on average stockholders' equity * ^(1) 14.66 12.20 15.56 13.40 15.61
Adjusted return on average tangible common equity * ^(1) 15.96 13.22 16.76 14.55 16.81
--------------------
* 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 * *Six Months Ended * *June 30, * *March 31, * *June 30, * *June 30, * * * *2022* * * *2022* * * *2021* * * *2022* * * *2021* *(dollars in thousands)*
Net income $ 14,085 $ 13,604 $ 13,717 $ 27,689 $ 28,962
Adjustments:
Acquisition expenses — — (157 ) — (157 )
Branch closure expenses — — (104 ) — (104 )
Gains (losses) on sales of closed branch premises (18 ) 197 — 179 —
Mortgage servicing rights fair value adjustment 366 1,729 (310 ) 2,095 1,385
Total adjustments 348 1,926 (571 ) 2,274 1,124
Tax effect of adjustments (99 ) (549 ) 120 (648 ) (363 )
Less adjustments, after tax effect 249 1,377 (451 ) 1,626 761
Adjusted net income $ 13,836 $ 12,227 $ 14,168 $ 26,063 $ 28,201
Average assets $ 4,286,302 $ 4,343,446 $ 3,923,839 $ 4,314,716 $ 3,842,976
Return on average assets * 1.32 % 1.27 % 1.40 % 1.29 % 1.52 %
Adjusted return on average assets * 1.29 1.14 1.45 1.22 1.48
--------------------
* Annualized measure.
*Reconciliation of Non-GAAP Financial Measures – *
*Adjusted Earnings Per Share*
*Three Months Ended * *Six Months Ended * *June 30, * *March 31, * *June 30, * *June 30, * * * *2022* * * *2022* * * *2021* * * *2022* * * *2021* *(dollars in thousands, except per share data)*
*Numerator:*
Net income $ 14,085 $ 13,604 $ 13,717 $ 27,689 $ 28,962
Earnings allocated to participating securities ^(1) (17 ) (17 ) (25 ) (34 ) (56 )
Numerator for earnings per share - basic and diluted $ 14,068 $ 13,587 $ 13,692 $ 27,655 $ 28,906
Adjusted net income $ 13,836 $ 12,227 $ 14,168 $ 26,063 $ 28,201
Earnings allocated to participating securities ^(1) (17 ) (15 ) (26 ) (32 ) (54 )
Numerator for adjusted earnings per share - basic and diluted $ 13,819 $ 12,212 $ 14,142 $ 26,031 $ 28,147
*Denominator:*
Weighted average common shares outstanding 28,891,202 28,986,593 27,362,579 28,938,634 27,396,557
Dilutive effect of outstanding restricted stock units 53,674 43,646 17,701 48,688 10,137
Weighted average common shares outstanding, including all dilutive potential shares 28,944,876 29,030,239 27,380,280 28,987,322 27,406,694
*Earnings per share - Basic* $ 0.49 $ 0.47 $ 0.50 $ 0.96 $ 1.06
*Earnings per share - Diluted* $ 0.49 $ 0.47 $ 0.50 $ 0.95 $ 1.05
*Adjusted earnings per share - Basic* $ 0.48 $ 0.42 $ 0.52 $ 0.90 $ 1.03
*Adjusted earnings per share - Diluted* $ 0.48 $ 0.42 $ 0.52 $ 0.90 $ 1.03
--------------------
(1) The Company has granted certain restricted stock units that contain non-forfeitable rights to dividend equivalents. Such restricted stock units are considered participating securities. As such, we have included these restricted stock units in the calculation of basic earnings per share and calculate basic earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings.
*Reconciliation of Non-GAAP Financial Measures – *
*Net Interest Income and Net Interest Margin (Tax Equivalent Basis)*
*Three Months Ended * *Six Months Ended * *June 30, * *March 31, * *June 30, * *June 30, * * * *2022* * * *2022* * * *2021* * * *2022* * * *2021* *(dollars in thousands)*
*Net interest income (tax equivalent basis)*
Net interest income $ 34,373 $ 31,928 $ 29,700 $ 66,301 $ 58,829
Tax-equivalent adjustment ^(1) 598 529 503 1,127 1,006
Net interest income (tax equivalent basis) ^(1) $ 34,971 $ 32,457 $ 30,203 $ 67,428 $ 59,835
*Net interest margin (tax equivalent basis)*
Net interest margin * 3.34 % 3.08 % 3.14 % 3.21 % 3.19 %
Tax-equivalent adjustment * ^(1) 0.05 0.05 0.05 0.05 0.06
Net interest margin (tax equivalent basis) * ^(1) 3.39 % 3.13 % 3.19 % 3.26 % 3.25 %
Average interest-earning assets $ 4,133,448 $ 4,201,793 $ 3,796,219 $ 4,167,432 $ 3,717,273
--------------------
* Annualized measure.
(1) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.
*Reconciliation of Non-GAAP Financial Measures – *
*Efficiency Ratio (Tax Equivalent Basis)*
*Three Months Ended * *Six Months Ended * *June 30, * *March 31, * *June 30, * *June 30, * * * *2022* * * *2022* * * *2021* * * *2022* * * *2021* *(dollars in thousands)*
*Efficiency ratio (tax equivalent basis)*
Total noninterest expense $ 23,842 $ 24,157 $ 22,154 $ 47,999 $ 44,698
Less: amortization of intangible assets 245 245 258 490 547
*Adjusted noninterest expense* $ 23,597 $ 23,912 $ 21,896 $ 47,509 $ 44,151
Net interest income $ 34,373 $ 31,928 $ 29,700 $ 66,301 $ 58,829
Total noninterest income 8,551 10,043 8,774 18,594 19,582
*Operating revenue* 42,924 41,971 38,474 84,895 78,411
Tax-equivalent adjustment ^(1) 598 529 503 1,127 1,006
*Operating revenue (tax equivalent basis) *^*(1)* $ 43,522 $ 42,500 $ 38,977 $ 86,022 $ 79,417
Efficiency ratio 54.97 % 56.97 % 56.91 % 55.96 % 56.31 %
Efficiency ratio (tax equivalent basis) ^(1) 54.22 56.26 56.18 55.23 55.59
--------------------
(1) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.
*Reconciliation of Non-GAAP Financial Measures – *
*Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share*
*June 30, * *March 31, * * * *June 30, * *2022* * * *2022* * * *2021* *(dollars in thousands, except per share data)*
*Tangible common equity*
Total stockholders' equity $ 373,809 $ 383,155 $ 373,194
Less: Goodwill 29,322 29,322 23,620
Less: Core deposit intangible assets, net 1,453 1,698 2,251
*Tangible common equity* $ 343,034 $ 352,135 $ 347,323
*Tangible assets*
Total assets $ 4,223,978 $ 4,348,965 $ 3,953,677
Less: Goodwill 29,322 29,322 23,620
Less: Core deposit intangible assets, net 1,453 1,698 2,251
*Tangible assets* $ 4,193,203 $ 4,317,945 $ 3,927,806
Total stockholders' equity to total assets 8.85 % 8.81 % 9.44 %
Tangible common equity to tangible assets 8.18 8.16 8.84
Shares of common stock outstanding 28,831,197 28,967,943 27,355,053
Book value per share $ 12.97 $ 13.23 $ 13.64
Tangible book value per share 11.90 12.16 12.70
*Reconciliation of Non-GAAP Financial Measures – *
*Return on Average Tangible Common Equity, *
*Adjusted Return on Average Stockholders' Equity and Adjusted Return on Tangible Common Equity*
*Three Months Ended * *Six Months Ended * *June 30, * *March 31, * *June 30, * *June 30, * * * *2022* * * *2022* * * *2021* * * *2022* * * *2021* *(dollars in thousands)*
*Average tangible common equity*
Total stockholders' equity $ 378,531 $ 406,289 $ 365,190 $ 392,334 $ 364,378
Less: Goodwill 29,322 29,322 23,620 29,322 23,620
Less: Core deposit intangible assets, net 1,597 1,844 2,410 1,720 2,547
*Average tangible common equity* $ 347,612 $ 375,123 $ 339,160 $ 361,292 $ 338,211
Net income $ 14,085 $ 13,604 $ 13,717 $ 27,689 $ 28,962
Adjusted net income 13,836 12,227 14,168 26,063 28,201
Return on average stockholders' equity * 14.92 % 13.58 % 15.07 % 14.23 % 16.03 %
Return on average tangible common equity * 16.25 14.71 16.22 15.45 17.27
Adjusted return on average stockholders' equity * 14.66 % 12.20 % 15.56 % 13.40 % 15.61 %
Adjusted return on average tangible common equity * 15.96 13.22 16.76 14.55 16.81
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* Annualized measure.